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.
Italics indicate opposite chamber/conference committee amendments.
*hb0819*
HOUSE BILL 819
P2, F2 (5lr1117)
ENROLLED BILL
— Health and Government Operations/Budget and Taxation —
Introduced by Delegates Guzzone, Edelson, Embry, Hill, Kerr, R. Lewis, Shetty,
White Holland, and Woods Woods, Alston, Bagnall, Bhandari, Chisholm,
Cullison, Hutchinson, S. Johnson, Kaiser, Kipke, Lopez, Martinez,
M. Morgan, Pena–Melnyk, Reilly, Rosenberg, Ross, Szeliga, Taveras, and
Woorman
Read and Examined by Proofreaders:
_______________________________________________
Proofreader.
_______________________________________________
Proofreader.
Sealed with the Great Seal and presented to the Governor, for his approval this
_______ day of _______________ at ________________________ o’clock, ________M.
______________________________________________
Speaker.
CHAPTER ______
AN ACT concerning 1
Procurement – Employee Stock Ownership Plan Preference – Pilot 2
FOR the purpose of establishing a preference program for certain procurements by 3
authorizing the Maryland Stadium Authority, the University System of Maryland, 4
Morgan State University, St. Mary’s College of Maryland, and Baltimore City 5
Community College to establish a certain preference program for certain 6
procurements; establishing authorizing the establishment of a certain price 7
preference evaluation factor for certain bids and proposals by an entity that utilizes 8
certain employee stock ownership plans; requiring contractors to provide certain 9
information to a unit regarding the use of an employee stock ownership plan; and 10 2 HOUSE BILL 819
generally relating to procurement preferences for entities that utilize an employee 1
stock ownership plan. 2
BY repealing and reenacting, with amendments, 3
Article – State Finance and Procurement 4
Section 11–203(c) 5
Annotated Code of Maryland 6
(2021 Replacement Volume and 2024 Supplement) 7
BY repealing and reenacting, without amendments, 8
Article – State Finance and Procurement 9
Section 11–203(e)(1), (2), and (7) 10
Annotated Code of Maryland 11
(2021 Replacement Volume and 2024 Supplement) 12
BY repealing and reenacting, with amendments, 13
Article – State Finance and Procurement 14
Section 11–203(e)(5) 15
Annotated Code of Maryland 16
(2021 Replacement Volume and 2024 Supplement) 17
(As enacted by Chapters 575 and 576 of the Acts of the General Assembly of 2023) 18
BY adding to 19
Article – State Finance and Procurement 20
Section 14–801 through 14–806 to be under the new subtitle “Subtitle 8. Employee 21
Stock Ownership Plan Preference Program” 22
Annotated Code of Maryland 23
(2021 Replacement Volume and 2024 Supplement) 24
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 25
That the Laws of Maryland read as follows: 26
Article – State Finance and Procurement 27
11–203. 28
(c) Except as provided in Title 12, Subtitle 4 and Title 14, [Subtitle 3] 29
SUBTITLES 3 AND 8 of this article and except for §§ 15–112 and 15–113 of this article, this 30
Division II does not apply to the Maryland Stadium Authority. 31
(e) (1) In this subsection, “University” means the University System of 32
Maryland, Morgan State University, or St. Mary’s College of Maryland. 33
(2) Except as otherwise provided in this subsection, this Division II does 34
not apply to the University System of Maryland, Morgan State University, St. Mary’s 35
College of Maryland, or Baltimore City Community College. 36
HOUSE BILL 819 3
(5) (i) Except as provided in paragraph (7) of this subsection, the 1
following provisions of Division II of this article apply to a University and to Baltimore City 2
Community College: 3
1. § 11–205 of this subtitle (“Collusion”); 4
2. § 11–205.1 of this subtitle (“Falsification, concealment, 5
etc., of material facts”); 6
3. § 13–219 of this article (“Required clauses – 7
Nondiscrimination clause”); 8
4. § 13–225 of this article (“Retainage”); 9
5. Title 14, Subtitle 3 of this article (“Minority Business 10
Participation”); 11
6. Title 14, Subtitle 7 of this article (“Certified Local Farm 12
and Fish Program”); 13
7. TITLE 14, SUBTITLE 8 OF THIS ARTICLE (“EMPLOYEE 14
STOCK OWNERSHIP PLAN PREFERENCE PROGRAM”); 15
[7.] 8. Title 15, Subtitle 1 of this article (“Procurement Contract 16
Administration”); 17
[8.] 9. § 15–226 of this article (“Policy established; timing of 18
payments; notice upon nonpayment; disputes; appeals”); and 19
[9.] 10. Title 16 of this article (“Suspension and Debarment 20
of Contractors”). 21
(II) EXCEPT AS PROVIDED IN PARAGRAPH (7) OF THIS 22
SUBSECTION, TITLE 14, SUBTITLE 8 OF THIS ARTICLE (“EMPLOYEE STOCK 23
OWNERSHIP PLAN PREFERENCE PROGRAM”) APPLIES TO MORGAN STATE 24
UNIVERSITY, ST. MARY’S COLLEGE OF MARYLAND, AND BALTIMORE CITY 25
COMMUNITY COLLEGE. 26
(ii) (III) If a procurement violates the provisions of this subsection 27
or policies adopted in accordance with this subsection, the procurement contract is void or 28
voidable in accordance with the provisions of § 11–204 of this subtitle. 29
(7) Except with regard to the provisions of § 15–113 of this article, 30
paragraphs (3), (4), and (5) of this subsection do not apply to: 31
4 HOUSE BILL 819
(i) procurement by a University or Baltimore City Community 1
College from: 2
1. another unit; 3
2. a political subdivision of the State; 4
3. an agency of a political subdivision of the State; 5
4. a government, including the government of another state, 6
of the United States, or of another country; 7
5. an agency or political subdivision of a government; or 8
6. a bistate, multistate, bicounty, or multicounty 9
governmental agency; 10
(ii) procurement by a University in support of enterprise activities 11
for the purpose of: 12
1. direct resale; 13
2. remanufacture and subsequent resale; or 14
3. procurement by the University for overseas programs; or 15
(iii) procurement by the University System of Maryland for: 16
1. services of managers to invest, in accordance with the 17
management and investment policies adopted by the Board of Regents of the University 18
System of Maryland, gift and endowment assets received by the University System of 19
Maryland in accordance with § 12–104(e) of the Education Article; or 20
2. expenditures to manage, maintain, and enhance, in 21
accordance with the management and investment policies adopted by the Board of Regents 22
of the University System of Maryland, the value of gift and endowment assets received by 23
the University System of Maryland in accordance with § 12–104(e) of the Education Article. 24
SUBTITLE 8. EMPLOYEE STOCK OWNERSHIP PLAN PREFERENCE PROGRAM. 25
14–801. 26
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 27
INDICATED. 28
HOUSE BILL 819 5
(B) “COVERED PROCUREMENT ” MEANS A PROCUREMENT THAT IS VALUED 1
AT LESS THAN $80,000,000. 2
(C) “ESOP BIDDER” MEANS A RESPONSIBLE BIDDER WHO UTILIZES AN 3
EMPLOYEE STOCK OWNER SHIP PLAN APPROVED U NDER § 401(A) OF THE INTERNAL 4
REVENUE CODE. ESOP EVALUATION FACTOR ” MEANS A PREFERENCE F OR AN 5
ESOP OFFEROR THAT A UNIT MAY INCLUDE IN THE E VALUATION OF PROPOSA LS. 6
(D) “ESOP OFFEROR” MEANS A RESPONSIBLE OFFEROR WHO UTILIZES AN 7
EMPLOYEE STOCK OWNER SHIP PLAN APPROVED U NDER § 401(A) OF THE INTERNAL 8
REVENUE CODE. 9
(E) “NON–ESOP BIDDER” MEANS A RESPONSIBLE BIDDER WHO DOES NOT 10
UTILIZE AN EMPLOYEE STOCK OWNERSHIP PLAN APPROVED UNDER § 401(A) OF THE 11
INTERNAL REVENUE CODE. 12
(F) “NON–ESOP OFFEROR” MEANS A RESPONSIBLE OFFEROR WHO DOES 13
NOT UTILIZE AN EMPLO YEE STOCK OWNERSHIP PLAN APPROVED UNDER § 401(A) OF 14
THE INTERNAL REVENUE CODE. 15
(G) “PERCENTAGE PREFERENCE ” MEANS: 16
(1) THE PERCENT OF THE L OWEST RESPONSIVE BID SUBMITTED BY A 17
NON–ESOP BIDDER BY WHICH A RE SPONSIVE BID SUBMITT ED BY AN ESOP BIDDER 18
MAY: 19
(I) EXCEED THE LOWEST B ID; AND 20
(II) BE AWARDED A COVERED PROCUREMENT CONTRACT IN 21
ACCORDANCE WITH THIS SUBTITLE; OR 22
(2) THE PERCENT OF THE L OWEST RESPONSIVE COS T PROPOSAL 23
SUBMITTED BY A NON –ESOP OFFEROR BY WHICH A R ESPONSIVE PROPOSAL 24
SUBMITTED BY AN ESOP OFFEROR MAY : 25
(I) EXCEED THE LOWEST CO ST; AND 26
(II) BE AWARDED A COVERED PROCUREMENT CONTRACT IN 27
ACCORDANCE WITH THIS SUBTITLE. 28
(H) (E) “UNIT” MEANS THE MARYLAND STADIUM AUTHORITY, A 29
UNIVERSITY, OR THE BALTIMORE CITY COMMUNITY COLLEGE. 30
6 HOUSE BILL 819
(I) (F) “UNIVERSITY” MEANS THE UNIVERSITY SYSTEM OF MARYLAND, 1
MORGAN STATE UNIVERSITY, OR ST. MARY’S COLLEGE OF MARYLAND. 2
14–802. 3
THIS SUBTITLE APPLIES TO A COVERED PROCURE MENT OF: 4
(1) THE MARYLAND STADIUM AUTHORITY; 5
(2) A UNIVERSITY; OR 6
(3) BALTIMORE CITY COMMUNITY COLLEGE. 7
14–803. 8
SUBJECT TO THE APPROV AL OF THE BOARD, EACH UNIT SHALL MAY 9
ESTABLISH A PERCENTAGE PREFERE NCE AN EVALUATION FACTOR , NOT TO EXCEED 10
5% 10%. 11
14–804. 12
(A) A UNIT SHALL AWARD IF A UNIT AWARDS A COVERED PROCUREMEN T 13
CONTRACT USING COMPETITIVE SE ALED BIDS UNDER § 13–103 OF THIS ARTICLE , 14
THE UNIT MAY AWARD T HE CONTRACT TO AN ESOP BIDDER IF THE ESOP BIDDER: 15
(1) SUBMITS THE LOWEST R ESPONSIVE BID; OR 16
(2) DOES NOT SUBMIT THE LOWEST RESPONSIVE BI D BUT THE 17
DIFFERENCE BE TWEEN THE BID AND TH E LOWEST RESPONSIVE BID SUBMITTED BY 18
A NON–ESOP BIDDER DOES NOT EXCE ED THE PERCENTAGE PR EFERENCE 19
ESTABLISHED UNDER § 14–803 OF THIS SUBTITLE. 20
(B) A UNIT SHALL AWARD IF A UNIT AWARDS A COVERED PROCUREMEN T 21
CONTRACT USING COMPETITIVE SEALED PROPOSALS UND ER § 13–104 OF THIS 22
ARTICLE, THE UNIT MAY AWARD T HE CONTRACT TO AN ESOP OFFEROR IF THE 23
ESOP OFFEROR: 24
(1) SUBMITS THE RESPONSI VE PROPOSAL THAT IS MOST 25
ADVANTAGEOUS TO THE UNIT AFTER FACTORING IN THE PRICE PREFERE NCE; OR 26
(2) DOES NOT SUBMIT THE RESPON SIVE PROPOSAL THAT I S MOST 27
ADVANTAGEOUS TO THE UNIT BUT THE DIFFERE NCE BETWEEN THAT PRO POSAL AND 28
THE LOWEST RESPONSIV E PROPOSAL SUBMITTED BY A NON–ESOP OFFEROR DOES 29 HOUSE BILL 819 7
NOT EXCEED THE PERCE NTAGE PREFERENCE EST ABLISHED UNDER § 14–803 OF 1
THIS SUBTITLE. 2
(A) A UNIT MAY INCLUDE AN ESOP EVALUATION FACTOR IN THE 3
TECHNICAL EVALUATION FOR A COMPETITIVE SE ALED PROPOSAL UNDER § 13–104 4
OF THIS ARTICLE FOR A CONTRACT SUBJECT T O THIS SUBTITLE. 5
(B) AN ESOP EVALUATION FACTOR MA Y BE: 6
(1) IF A POINT SYSTEM IS USED FOR EVA LUATION OF PROPOSALS , UP 7
TO THE PERCENTAGE OF THE TOTAL ALLOCABLE TECHNICAL POINTS AUT HORIZED 8
UNDER § 14–803 OF THIS SUBTITLE; OR 9
(2) IF A POINT SYSTEM IS NOT USED FOR EVALUAT ION OF PROPOSALS , 10
RANKED IN ITS RELATI VE ORDER OF IMPORTAN CE. 11
14–805. 12
(A) A CONTRACTOR THAT IS A WARDED A CONTRACT FO R A COVERED 13
PROCUREMENT SHALL PR OVIDE TO A UNIT , AS A CONDITION OF RE CEIVING THE 14
CONTRACT, WRITTEN VERIFICATION OF THE IRS DETERMINATION LETTER FOR THE 15
CONTRACTOR ’S EMPLOYEE STOCK OWN ERSHIP PLAN. 16
(B) THE WRITTEN VERIFICAT ION REQUIRED UNDER S UBSECTION (A) OF 17
THIS SECTION SHALL B E PROVIDED BY A CONT RACTOR TO THE UNIT R ESPONSIBLE 18
FOR THE PROJECT WITH THE SUBMISSION OF A BID OR PROPOSAL. 19
14–806. 20
ON OR BEFORE DECEMBER 1, 2028, THE MARYLAND STADIUM AUTHORITY, 21
BALTIMORE CITY COMMUNITY COLLEGE, THE UNIVERSITY SYSTEM OF MARYLAND, 22
MORGAN STATE UNIVERSITY, AND ST. MARY’S COLLEGE OF MARYLAND SHALL 23
SUBMIT A REPORT , IN ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT 24
ARTICLE, TO THE LEGISLATIVE POLICY COMMITTEE, THE SENATE BUDGET AND 25
TAXATION COMMITTEE, AND THE HOUSE HEALTH AND GOVERNMENT OPERATIONS 26
COMMITTEE, ON: 27
(1) THE NUMBER AND DOLLA R VALUE OF CONTRACTS AWARDED IN 28
ACCORDANCE WITH THIS SUBTITLE TO ESOP BIDDERS AND ESOP OFFERORS 29
DURING FISCAL YEARS 2026, 2027, AND 2028; AND 30
(2) THE AMOUNT OF PRICE PREFERENCE APPLIED T O ALL 31
CONTRACTS AWARDED IN ACCORDANCE WITH THIS SUBTITLE; AND 32
8 HOUSE BILL 819
(3) AN EVALUATION OF THE EFFECTIVENESS OF THE EMPLOYEE 1
STOCK OWNERSHIP PLAN PREFERENCE PROGRAM. 2
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply to 3
procurement contracts solicited on or before June 30, 2030. 4
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 5
1, 2025. It shall remain effective for a period of 5 years and, at the end of June 30, 2030, 6
this Act, with no further action required by the General Assembly, shall be abrogated and 7
of no further force and effect. 8
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.