Maryland 2025 Regular Session

Maryland House Bill HB819 Latest Draft

Bill / Enrolled Version Filed 04/07/2025

                             
 
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.