EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXIS TING 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.
*sb0747*
SENATE BILL 747
L6 4lr1734
CF HB 165
By: Senators Guzzone and Benson
Introduced and read first time: February 1, 2024
Assigned to: Budget and Taxation
Committee Report: Favorable with amendments
Senate action: Adopted
Read second time: February 26, 2024
CHAPTER ______
AN ACT concerning 1
Local Government – Annual Audit Reporting Requirements – Alterations 2
FOR the purpose of requiring a certain amount of State aid to be discontinued if a county, 3
municipality, or special taxing district does not submit a certain audit report within 4
a certain period of time after the deadline for the report, subject to a certain 5
condition; and generally relating to local government reporting requirements. 6
BY repealing and reenacting, without amendments, 7
Article – Local Government 8
Section 16–304 9
Annotated Code of Maryland 10
(2013 Volume and 2023 Supplement) 11
BY repealing and reenacting, with amendments, 12
Article – Local Government 13
Section 16–306 14
Annotated Code of Maryland 15
(2013 Volume and 2023 Supplement) 16
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 17
That the Laws of Maryland read as follows: 18
Article – Local Government 19
16–304. 20 2 SENATE BILL 747
(a) (1) Except as provided in paragraph (2) of this subsection, on or before 1
October 31 after the close of its fiscal year, each county, municipality, and special taxing 2
district shall file with the Department of Legislative Services a financial report for that 3
fiscal year. 4
(2) (i) A county, municipality, or special taxing district with a 5
population of over 400,000 may file its financial report on or before December 31 after the 6
close of its fiscal year. 7
(ii) Unless subparagraph (i) of this paragraph applies, Howard 8
County may file its financial report on or before November 30 after the close of its fiscal 9
year. 10
(iii) Allegany County, Calvert County, Caroline County, Charles 11
County, Frederick County, Garrett County, Queen Anne’s County, St. Mary’s County, 12
Somerset County, Talbot County, and Wicomico County may file the county’s financial 13
report on or before December 31 after the close of the county’s fiscal year. 14
(b) The financial report required under subsection (a) of this section shall be: 15
(1) prepared on the form established by the Department of Legislative 16
Services; and 17
(2) verified by the chief executive officer of the county, municipality, or 18
special taxing district. 19
(c) If a county, municipality, or special taxing district does not comply with 20
subsection (a) of this section, the Comptroller, on notice from the Executive Director of the 21
Department of Legislative Services, may order the discontinuance of all money, grants, or 22
State aid that the county, municipality, or special taxing district is entitled to receive under 23
State law, including money from: 24
(1) the income tax; 25
(2) the tax on racing; 26
(3) the recordation tax; 27
(4) the admissions and amusement tax; and 28
(5) the license tax. 29
16–306. 30
(a) The county, municipality, or special taxing district shall report the results of 31
the audit required under § 16–305 of this subtitle to the Legislative Auditor: 32 SENATE BILL 747 3
(1) on the form and in the manner that the Legislative Auditor requires; 1
and 2
(2) on or before the date the financial report of the county, municipality, or 3
special taxing district must be filed under § 16–304(a) of this subtitle. 4
(b) An audit report filed by a county, municipality, or special taxing district with 5
the Legislative Auditor shall include financial statements of the county, municipality, or 6
special taxing district that are: 7
(1) prepared in accordance with generally accepted accounting principles; 8
and 9
(2) audited in accordance with generally accepted auditing standards. 10
(c) An audit report filed with the Legislative Auditor is a public record. 11
(d) [If] EXCEPT AS PROVIDED IN SUBSECTION (E) OF THIS SECTION , IF a 12
county, municipality, or special taxing district does not comply with subsection (a) or (b) of 13
this section, the Comptroller, on notice from the Executive Director of the Department of 14
Legislative Services, may order the discontinuance of all money, grants, or State aid that 15
the county, municipality, or special taxing district is entitled to receive under State law 16
that are distributed by the Comptroller, the clerks of the court, or any other unit of State 17
government. 18
(E) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , IF A COUNTY, 19
MUNICIPALITY, OR SPECIAL TAXING DI STRICT DOES NOT COMP LY WITH SUBSECTION 20
(A) OR (B) OF THIS SECTION WITH IN 1 2 CALENDAR YEAR YEARS AFTER THE 21
DEADLINE DESCRIBED I N SUBSECTION (A)(2) OF THIS SECTION , THE EXECUTIVE 22
DIRECTOR OF THE DEPARTMENT OF LEGISLATIVE SERVICES SHALL NOTIFY THE 23
COMPTROLLER AND THE COMPTROLLER SHALL ORD ER THE DISCONTINUANC E OF 24
20% OF ALL STATE AID FOR POLICE AID, THE CURRENT FISCAL YEAR FOR HIGHWAY 25
USER REVENUES , AND DISPARITY GRANTS THAT THE COUNTY , MUNICIPALITY, OR 26
SPECIAL TAXING DISTR ICT IS OTHERWISE ENTITLED TO RECEIVE UNDER STATE LAW 27
THAT IS DISTRIBUTED BY THE COMPTROLLER , THE CLERKS OF THE CO URT, OR ANY 28
OTHER UNIT OF STATE GOVERNMENT . 29
(2) (I) A DISCONTINUANCE OF FU NDS UNDER PARAGRAPH (1) OF 30
THIS SUBSECTION SHAL L REMAIN IN EFFECT F OR A COUNTY , MUNICIPALITY, OR 31
SPECIAL TAXING DISTR ICT UNTIL THE COUNTY , MUNICIPALITY, OR SPECIAL TAXING 32
DISTRICT SUBMITS THE AUDIT REPORT REQUIRE D UNDER THIS SECTION . 33
(II) 1. SUBJECT TO SUBSUBPARA GRAPH 2 OF THIS 34
SUBPARAGRAPH , THE EXECUTIVE DIRECTOR OF THE DEPARTMENT OF 35 4 SENATE BILL 747
LEGISLATIVE SERVICES SHALL NOTIFY THE COMPTROLLER AND THE 1
COMPTROLLER SHALL ORD ER THE CONTINUANCE REINSTATEMENT OF THE FUNDS 2
DISCONTINUED UNDER P ARAGRAPH (1) OF THIS SUBSECTION P ROMPTLY AFTER THE 3
COUNTY, MUNICIPALITY, OR SPECIAL TAXING DI STRICT SUBMITS THE A UDIT 4
REPORT REQUIRED UNDE R THIS SECTION. 5
2. A. IF A CONTINUANCE REINSTATEMENT OF FUNDS 6
IS ORDERED UNDER SUB SUBPARAGRAPH 1 OF THIS SUBPARAGRA PH, ONLY THE 7
DISCONTINUED FUNDS F OR THE CURRENT FISCA L YEAR SHALL BE RELE ASED. 8
B. FOR ANY FISCAL YEAR I N WHICH IF A COUNTY, 9
MUNICIPALITY, OR SPECIAL TAXING DI STRICT FAILED TO SUB MIT THE AUDIT 10
REPORT REQUIRED UNDE R THIS SECTION IN THE SAME FISCAL Y EAR IN WHICH IT 11
WAS DUE, THE DISCONTINUED FUN DS FOR THAT FISCAL Y EAR SHALL REVERT TO 12
THE GENERAL FUND OF THE STATE. 13
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply beginning 14
with the fiscal year 2024 audits that are required to be submitted under § 16–306 of the 15
Local Government Article. 16
SECTION 2. 3. AND BE IT FURTHER ENACTED, That this Act shall tak e effect 17
July 1, 2024. 18
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.