EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*sb0673*
SENATE BILL 673
P2 4lr2069
CF HB 962
By: Senator Charles
Introduced and read first time: January 29, 2024
Assigned to: Budget and Taxation
Committee Report: Favorable with amendments
Senate action: Adopted
Read second time: March 2, 2024
CHAPTER ______
AN ACT concerning 1
State Procurement – Small and Minority Business Reserve Program – Goals and 2
Outreach Program 3
(Parran J. Mitchell MBE Prime Contracting Act) 4
FOR the purpose of altering the Small Business Reserve Program to be the Small and 5
Minority Business Reserve Program; requiring a unit of State government, to the 6
extent practicable, to structure its procurement procedures to achieve a certain 7
minimum percentage of the unit’s total dollar value of certain contracts to be made 8
directly to certified minority business enterprises; requiring a certain study to 9
include the Small and Minority Business Reserve Program altering a certain 10
participation goal for certain small businesses for certain procurement contracts; 11
requiring the certification agency, in consultation with the Governor’s Office of 12
Small, Minority, and Women Business Affairs to develop a certain outreach program; 13
altering the content of certain unit reports; and generally relating to the Small and 14
Minority Business Reserve Program. 15
BY repealing and reenacting, without amendments, 16
Article – State Finance and Procurement 17
Section 14–301(a), (b), and (d) (c), (d), and (e) 18
Annotated Code of Maryland 19
(2021 Replacement Volume and 2023 Supplement) 20
BY repealing and reenacting, with amendments, 21
Article – State Finance and Procurement 22
Section 14–501, 14–502, and 14–505 23 2 SENATE BILL 673
Annotated Code of Maryland 1
(2021 Replacement Volume and 2023 Supplement) 2
BY adding to 3
Article – State Finance and Procurement 4
Section 14–504.1 5
Annotated Code of Maryland 6
(2021 Replacement Volume and 2023 Supplement) 7
BY repealing and reenacting, with amendments, 8
Article – State Finance and Procurement 9
Section 14–501, 14–502, 14–502.1, and 14–503 through 14–505 to be under the 10
amended subtitle “Subtitle 5. Small and Minority Business Reserve Program” 11
Annotated Code of Maryland 12
(2021 Replacement Volume and 2023 Supplement) 13
BY repealing and reenacting, with amendments, 14
Chapter 154 of the Acts of the General Assembly of 2012, as amended by Chapters 15
200 and 201 of the Acts of the General Assembly of 2013, Chapter 340 of the 16
Acts of the General Assembly of 2017, Chapter 117 of the Acts of the General 17
Assembly of 2022, and Chapters 137 and 138 of the Acts of the General 18
Assembly of 2023 19
Section 2 20
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 21
That the Laws of Maryland read as follows: 22
Article – State Finance and Procurement 23
14–301. 24
(a) In this subtitle the following words have the meanings indicated. 25
(b) “Certification” means the determination that a legal entity is a minority 26
business enterprise for the purposes of this subtitle. 27
(c) “Certification agency” means the agency designated by the Board of Public 28
Works under § 14–303(b) of this subtitle to certify and decertify minority business 29
enterprises. 30
(d) “Certified minority business enterprise” means a minority business enterprise 31
that holds a certification. 32
(e) “Economically disadvantaged individual” means a socially disadvantaged 33
individual whose ability to compete in the free enterprise system has been impaired due to 34
diminished capital and credit opportunities as compared to others in the same or similar 35
line of business who are not socially disadvantaged. 36 SENATE BILL 673 3
Subtitle 5. Small AND MINORITY Business Reserve Program. 1
14–501. 2
(a) In this subtitle the following words have the meanings indicated. 3
(B) “CERTIFIED MINORITY BU SINESS ENTERPRISE ” HAS THE MEANING 4
STATED IN § 14–301 OF THIS TITLE. 5
(B) “CERTIFICATION AGENCY ” HAS THE MEANING STAT ED IN § 14–301 OF 6
THIS TITLE. 7
(C) “ECONOMICALLY DISADVAN TAGED INDIVIDUAL ” HAS THE MEANING 8
STATED IN § 14–301 OF THIS TITLE. 9
[(b)] (C) (D) “Small business” means: 10
(1) a certified minority business enterprise[, as defined in § 14–301 of this 11
title,] that meets the criteria specified under item (3) of this subsection; 12
(2) a veteran–owned small business enterprise, as defined in § 14–601 of 13
this title, that meets the criteria specified under item (3) of this subsection; or 14
(3) a business, other than a broker, that meets the following criteria: 15
(i) the business is independently owned and operated; 16
(ii) the business is not a subsidiary of another business; 17
(iii) the business is not dominant in its field of operation; and 18
(iv) 1. A. the wholesale operations of the business did not 19
employ more than 50 persons in its most recently completed 3 fiscal years; 20
B. the retail operations of the business did not employ more 21
than 25 persons in its most recently completed 3 fiscal years; 22
C. the manufacturing operations of the business did not 23
employ more than 100 persons in its most recently completed 3 fiscal years; 24
D. the service operations of the business did not employ more 25
than 100 persons in its most recently completed 3 fiscal years; 26
E. the construction operations of the business did not employ 27
more than 50 persons in its most recently completed 3 fiscal years; and 28 4 SENATE BILL 673
F. the architectural and engineering services of the business 1
did not employ more than 100 persons in its most recently completed 3 fiscal years; or 2
2. A. the gross sales of the wholesale operations of the 3
business did not exceed an average of $4,000,000 in its most recently completed 3 fiscal 4
years; 5
B. the gross sales of the retail operations of the business did 6
not exceed an average of $3,000,000 in its most recently completed 3 fiscal years; 7
C. the gross sales of the manufacturing operations of the 8
business did not exceed an average of $2,000,000 in its most recently completed 3 fiscal 9
years; 10
D. the gross sales of the service operations of the business did 11
not exceed an average of $10,000,000 in its most recently completed 3 fiscal years; 12
E. the gross sales of the construction operations of the 13
business did not exceed an average of $7,000,000 in its most recently completed 3 fiscal 14
years; and 15
F. the gross sales of the architectural and engineering 16
services of the business did not exceed an average of $4,500,000 in its most recently 17
completed 3 fiscal years. 18
[(c)] (D) (E) “Small AND MINORITY business reserve” means those procurements 19
that are limited to responses from small businesses OR CERTIFIED MINORIT Y BUSINESS 20
ENTERPRISES under [§ 14–502(b)] § 14–502(C) of this subtitle. 21
14–502. 22
(a) Except as provided in subsection (d) of this section, this subtitle applies to all 23
procurements by a unit. 24
(b) This section does not apply to procurements subject to Subtitle 1 of this title. 25
(c) To the extent practicable, a unit shall structure its procurement procedures to 26
achieve a minimum of: 27
(1) 15% 20% of the unit’s total dollar value of goods, supplies, services, 28
maintenance, construction, construction–related services, and architectural and 29
engineering service contracts to be made directly to small businesses; AND 30
(2) 10% OF THE UNIT’S TOTAL DOLLAR VALUE OF GOODS, SUPPLIES, 31
SERVICES, MAINTENANCE , CONSTRUCTION , CONSTRUCTION –RELATED SERVICES , 32 SENATE BILL 673 5
AND ARCHITECTURAL AN D ENGINEERING SERVIC E CONTRACTS TO BE MA DE 1
DIRECTLY TO CERTIFIE D MINORITY BUSINESS ENTERPRISES . 2
(d) The total dollar value of procurements by a unit does not include the value of 3
contracts to which this section does not apply because of a conflict with federal law. 4
(e) A unit may apply toward the unit’s overall annual Small AND MINORITY 5
Business Reserve payment achievement only those payments resulting from a procurement 6
that is designated a Small AND MINORITY Business Reserve procurement ACHIEVEMENT 7
AWARDS MADE TO A SMA LL BUSINESS UNDER DE SIGNATED SMALL BUSIN ESS 8
RESERVE CONT RACTS AS WELL AS AWA RDS MADE TO A SMALL BUSINESS UNDER 9
NONDESIGNATED SMALL BUSINESS RESERVE CON TRACTS. 10
(f) (1) The Special Secretary for the Office of Small, Minority, and Women 11
Business Affairs, in consultation with the Attorney General, shall establish standards and 12
guidelines for participation in the Small AND MINORITY Business Reserve Program every 13
5 years. 14
(2) The standards and guidelines established under paragraph (1) of this 15
subsection shall allow for the registration of businesses for participation in the Small AND 16
MINORITY Business Reserve Program without the need to file any additional paperwork 17
other than evidence that the business: 18
(i) is a small business under this subtitle; and 19
(ii) 1. is certified as a minority business enterprise under 20
Subtitle 3 of this title; 21
2. is certified under the federal Disadvantaged Business 22
Enterprise Program; or 23
3. is qualified as a small business under Subtitle 2 of this 24
title. 25
14–502.1. 26
(a) (1) This section applies to a procurement by any unit or agency of the 27
Executive Branch of State government for goods, supplies, services, maintenance, 28
construction, construction–related services, architectural services, or engineering services. 29
(2) This section does not apply to: 30
(i) procurements made under Subtitle 1 of this title; 31
6 SENATE BILL 673
(ii) procurements involving expenditures of federal dollars, to the 1
extent that inclusion in the small business reserve program conflicts with federal law or 2
grant provisions; 3
(iii) procurements with a total dollar value under $50,000; 4
(iv) the procurement of human, social, cultural, or educational 5
services; or 6
(v) term and master contracts exempted under subsection (c) of this 7
section. 8
(b) (1) A procurement with a total dollar value between $50,000 and $500,000 9
shall be designated for the small AND MINORITY business reserve. 10
(2) Each unit or agency shall implement this subsection in a manner 11
consistent with all applicable statutes, including the requirements of Subtitle 3 of this title. 12
(c) (1) A procurement may be exempt from designation under subsection (b) of 13
this section if the Governor’s Office of Small, Minority, and Women Business Affairs 14
certifies, concurrently with review of any waiver determinations for certified minority 15
business enterprise participation contract goals, that it is not practicable to do so. 16
(2) The Office of State Procurement in the Department of General Services 17
shall assist the Governor’s Office of Small, Minority, and Women Business Affairs in 18
establishing procedures and guidelines for the exemption of procurements under paragraph 19
(1) of this subsection. 20
14–503. 21
(a) The Governor’s Office of Small, Minority, and Women Business Affairs shall 22
adopt regulations to establish procedures for compiling and maintaining a comprehensive 23
bidder’s list of qualified small businesses AND CERTIFIED MINORI TY BUSINESS 24
ENTERPRISES that shall be posted on the Internet. 25
(b) The Governor’s Office of Small, Minority, and Women Business Affairs shall: 26
(1) establish guidelines for Small AND MINORITY Business Reserve 27
Program administration; 28
(2) ensure agency compliance with the Small AND MINORITY Business 29
Reserve Program; 30
(3) provide training and technical assistance to agency personnel; and 31
SENATE BILL 673 7
(4) collect data regarding the State’s utilization of small AND MINORITY 1
business reserve vendors. 2
(c) Each unit shall ensure compliance with the regulations set forth in subsection 3
(a) of this section. 4
14–504. 5
(a) Any procurement by a unit of goods, supplies, services, maintenance, 6
construction, construction–related services, architectural services, and engineering 7
services shall be eligible for designation for the small AND MINORITY business reserve. 8
(b) A solicitation for procurement that has been designated for a small AND 9
MINORITY business reserve shall be published in the same manner as required for an 10
invitation for bids as set forth in § 13–103(c) of this article. 11
(c) The procurement officer of a unit shall award a procurement contract 12
designated for a small AND MINORITY business reserve to the small business OR 13
CERTIFIED MINORITY B USINESS ENTERPRISE that submits a responsive bid that: 14
(1) is the lowest bid price; 15
(2) if the invitation for bids so provides, is the lowest evaluated bid price; 16
or 17
(3) is the bid or proposal most favorable to the State within the small 18
business reserve. 19
14–505. 20
(a) Within 60 days after the enactment of the budget bill by the General 21
Assembly, each unit shall submit a report to the Governor’s Office of Small, Minority, and 22
Women Business Affairs that complies with the reporting requirements set forth in 23
COMAR 21.11.01.06. 24
(b) (1) Within 90 days after the end of each fiscal year, each unit shall submit 25
a report to the Governor’s Office of Small, Minority, and Women Business Affairs that 26
complies with the requirements of paragraph (2) of this subsection. 27
(2) For the preceding fiscal year, the report shall: 28
(i) state the total number and the dollar value of payments the unit 29
made [to small businesses] under designated small AND MINORITY business reserve 30
contracts TO: 31
1. SMALL BUSINESSES ; AND 32 8 SENATE BILL 673
2. CERTIFIED MINORITY B USINESS ENTERPRISES ; 1
(ii) state the total number and the dollar value of payments the unit 2
made [to small businesses] under nondesignated small AND MINORITY business reserve 3
contracts, including purchase card procurements, TO: 4
1. SMALL BUSINESSES ; AND 5
2. CERTIFIED MINORITY B USINESS ENTERPRISES ; 6
(iii) state the total dollar value of payments the unit made under 7
procurement contracts; and 8
(iv) contain other such information as required by the Governor’s 9
Office of Small, Minority, and Women Business Affairs. 10
(c) On or before December 31 of each year, the Governor’s Office of Small, 11
Minority, and Women Business Affairs shall submit to the Board of Public Works and, 12
subject to § 2–1257 of the State Government Article, to the Legislative Policy Committee a 13
report summarizing the information the Office receives under subsection (b) of this section. 14
14–504.1. 15
(A) THE CERTIFICATION AGE NCY, IN CONSULTATION WITH THE 16
GOVERNOR’S OFFICE OF SMALL, MINORITY, AND WOMEN BUSINESS AFFAIRS, 17
SHALL DEVELOP AN OUTREACH PROGRAM TO INCREASE THE PARTICI PATION OF 18
SMALL BUSINESSES THA T ARE OWNED BY ECONO MICALLY DISADVANTAGE D 19
INDIVIDUALS PARTICIP ATING IN THE SMALL BUSINESS RESERVE PROGRAM. 20
(B) ON OR BEFORE DECEMBER 1 EACH YEAR, THE CERTIFICATION AG ENCY 21
SHALL SUBMIT TO THE BOARD OF PUBLIC WORKS AND, SUBJECT TO § 2–1257 OF 22
THE STATE GOVERNMENT ARTICLE, TO THE LEGISLATIVE POLICY COMMITTEE A 23
REPORT ON: 24
(1) THE STATUS OF THE OU TREACH PROGRAM REQUI RED UNDER 25
SUBSECTION (A) OF THIS SECTION; AND 26
(2) THE TOTAL NUMBER AND DOLLAR VALUE OF AWAR DS MADE TO 27
SMALL BUSINESSES OWN ED BY ECONOMICALLY D ISADVANTAGED INDIVID UALS 28
UNDER DESIGNATED SMA LL BUSINESS RESERVE CONTRACTS. 29
14–505. 30
SENATE BILL 673 9
(a) Within 60 days after the enactment of the budget bill by the General 1
Assembly, each unit shall submit a report to the Governor’s Office of Small, Minority, and 2
Women Business Affairs that complies with the reporting requirements set forth in 3
COMAR 21.11.01.06. 4
(b) (1) Within 90 days after the end of each fiscal year, each unit shall submit 5
a report to the Governor’s Office of Small, Minority, and Women Business Affairs that 6
complies with the requirements of paragraph (2) of this subsection. 7
(2) For the preceding fiscal year, the report shall: 8
(i) state the total number and the dollar value of [payments] 9
AWARDS the unit made to small businesses under designated small business reserve 10
contracts; 11
(ii) state the total number and the dollar value of [payments] 12
AWARDS the unit made to small businesses under nondesignated small business reserve 13
contracts, including purchase card procurements; 14
(iii) state the total dollar value of [payments] AWARDS the unit made 15
under procurement contracts; and 16
(iv) contain other such information as required by the Governor’s 17
Office of Small, Minority, and Women Business Affairs. 18
(c) On or before December 31 of each year, the Governor’s Office of Small, 19
Minority, and Women Business Affairs shall submit to the Board of Public Works and, 20
subject to § 2–1257 of the State Government Article, to the Legislative Policy Committee a 21
report summarizing the information the Office receives under subsection (b) of this section. 22
Chapter 154 of the Acts of 2012, as amended by Chapters 200 and 201 of the Acts 23
of 2013, Chapter 340 of the Acts of 2017, Chapter 117 of the Acts of 2022, and 24
Chapters 137 and 138 of the Acts of 2023 25
SECTION 2. AND BE IT FURTHER ENACTED, That the Certification Agency, in 26
consultation with the General Assembly and the Office of the Attorney General, shall 27
initiate a study of the Minority Business Enterprise Program AND THE SMALL AND 28
MINORITY BUSINESS RESERVE PROGRAM to evaluate the [Program’s] PROGRAMS’ 29
continued compliance with the requirements of the Croson decision and any subsequent 30
federal or constitutional requirements. In preparation for the study, the Board of Public 31
Works may adopt regulations authorizing a unit of State government to require bidders 32
and offerors to submit information necessary for the conduct of the study. The Board of 33
Public Works may designate that certain information received in accordance with 34
regulations adopted under this section shall be confidential. Notwithstanding that certain 35
information may be designated by the Board of Public Works as confidential, the 36
Certification Agency may provide the information to any person that is under contract with 37 10 SENATE BILL 673
the Certification Agency to assist in conducting the study. The study shall also evaluate 1
race–neutral programs and other methods that can be used to address the needs of minority 2
businesses. The final report on the study shall be submitted to the Legislative Policy 3
Committee of the General Assembly, in accordance with § 2–1257 of the State Government 4
Article, on or before September 30, 2024, so that the General Assembly may review the 5
report before the 2025 Session. 6
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 7
1, 2024. It shall remain effective for a period of 1 year and, at the end of June 30, 2025, this 8
Act, with no further action required by the General Assembly, shall be abrogated and of no 9
further force and effect October 1, 2024. 10
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.