EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0439*
SENATE BILL 439
F2, P2 5lr2188
CF 5lr2939
By: Senator Lam (By Request – Joint Audit and Evaluation Committee)
Introduced and read first time: January 21, 2025
Assigned to: Finance and Education, Energy, and the Environment
A BILL ENTITLED
AN ACT concerning 1
Higher Education – High Impact Economic Development Activities – Alterations 2
FOR the purpose of altering the definition of “high impact economic development activity” 3
to exclude cost savings related to the reduction in the number of University System 4
of Maryland employees; requiring the Board of Regents of the University System of 5
Maryland to report certain information relating to high impact economic 6
development activities; repealing the authorization for an official or employee of a 7
public institution of higher education to be a certain employee of an entity supporting 8
a high impact economic development activity; making high impact economic 9
development activity entities subject to State procurement law; and generally 10
relating to the University System of Maryland. 11
BY repealing and reenacting, with amendments, 12
Article – Education 13
Section 12–104.1 and 12–113(c) 14
Annotated Code of Maryland 15
(2022 Replacement Volume and 2024 Supplement) 16
BY repealing and reenacting, without amendments, 17
Article – Education 18
Section 12–113(a) 19
Annotated Code of Maryland 20
(2022 Replacement Volume and 2024 Supplement) 21
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 22
That the Laws of Maryland read as follows: 23
Article – Education 24
12–104.1. 25
2 SENATE BILL 439
(a) (1) In this section, “high impact economic development activity” means an 1
initiative, transaction, or other undertaking by the University System of Maryland or one 2
of its constituent institutions to create or facilitate: 3
[(1)] (I) 20 or more new jobs in the State of Maryland; 4
[(2)] (II) The award or completion of at least $1,000,000 in externally 5
funded research or other projects; 6
[(3)] (III) The establishment or relocation of one or more new companies to 7
be registered or incorporated in the State and doing business in the State; 8
[(4)] (IV) The production of at least $1,000,000 of annual gross revenue; 9
[(5)] (V) The licensing and potential commercialization of a promising 10
new technology or other product; or 11
[(6)] (VI) An academic program to meet workforce demand in a 12
documented labor shortage field. 13
(2) “HIGH IMPACT DEVELOPME NT ACTIVITY” DOES NOT INCLUDE 14
COST SAVINGS RELATED TO T HE REDUCTION IN THE NUMBER OF UNIVERSITY 15
EMPLOYEES. 16
(b) To promote the economic interests of the State as mandated in §§ 10–205(c) 17
and 15–107 of this article, the University System of Maryland shall utilize its powers as a 18
public corporation established in § 12–104 of this subtitle to undertake high impact 19
economic development activities that support: 20
(1) Job creation and workforce development; 21
(2) Technology transfer, commercialization, and entrepreneurship; and 22
(3) Increased sponsored research funding and other revenues. 23
(c) In order for an activity to qualify as a high impact economic development 24
activity: 25
(1) The president of a constituent institution, or the president’s designee, 26
shall forward a request to the Chancellor for certification that the activity meets the criteria 27
defined in subsection (a) of this section; and 28
(2) The Chancellor, or the Chancellor’s designee, shall notify the Board of 29
Regents and the Board of Public Works of any certified activity for review. 30
SENATE BILL 439 3
(d) (1) Notwithstanding any other provision of law, for any high impact 1
economic development activity within the scope of § 5–310 or § 10–305 of the State Finance 2
and Procurement Article, the Board of Regents shall be fully responsible for administering 3
the review and comment process prescribed in those sections. 4
(2) In administering the review and comment process prescribed in §§ 5
5–310 and 10–305 of the State Finance and Procurement Article, the Board of Regents shall 6
include in that process the appropriate legislative committees and units of State 7
government, which may include: 8
(i) Committees of the General Assembly; 9
(ii) The Board of Public Works; 10
(iii) The Maryland Historic Trust; 11
(iv) The Department of Planning; 12
(v) The Department of the Environment; and 13
(vi) The Department of Natural Resources. 14
(3) The Board of Regents shall adopt policies and procedures to ensure that 15
the notice and opportunity for review are conducted in a manner that provides a reasonable 16
period to complete while not impairing the institution’s capacity for the expeditious and 17
successful pursuit of a high impact economic development activity. 18
(e) (1) On or before October 1 of each year, the Board of Regents shall report 19
to the Board of Public Works and, in accordance with § 2–1257 of the State Government 20
Article, the Senate Finance Committee, the House Economic Matters Committee, the 21
Senate Budget and Taxation Committee, and the House Appropriations Committee on the 22
high impact economic development activities undertaken under this section during the 23
preceding fiscal year. 24
(2) THE REPORT REQUIRED U NDER PARAGRAPH (1) OF THIS 25
SUBSECTION SHALL INC LUDE: 26
(I) THE AMOUNT OF STATE OR UNIVERSITY FUNDS USED ON 27
EACH HIGH IMPACT ECONOM IC DEVELOPMENT ACTIV ITY DURING THE PRECE DING 28
YEAR; 29
(II) THE NET BENEFIT OF EA CH HIGH IMPACT ECONOMIC 30
DEVELOPMENT ACTIVITY ; AND 31
4 SENATE BILL 439
(III) WHETHER THE BOARD OF REGENTS BELIEVES THAT EACH 1
HIGH IMPACT ECONOMIC DEVELOPMENT ACTIVITY IS IN THE BEST INTEREST OF THE 2
STATE. 3
12–113. 4
(a) Consistent with § 15–107 of this article and any other applicable law, the 5
Board of Regents may establish, invest in, finance, and operate businesses or business 6
entities when the Board finds that doing so would further one or more goals of the 7
University and is related to the mission of the University. 8
(c) (1) Subject to the requirements of this section, an institution may 9
establish, invest in, finance, or operate a corporation, foundation, consortium, or other 10
entity that is intended to support a high impact economic development activity, as defined 11
in § 12–104.1 of this subtitle. 12
[(2) Notwithstanding the provisions of §§ 5–501 through 5–504 of the 13
General Provisions Article and subject to § 5–525 of the General Provisions Article, an 14
official or employee of a public institution of higher education may be a director, official, or 15
employee of an entity intended to support a high impact economic development activity, if 16
the individual’s participation advances the interests of the institution. 17
(3) Division II of the State Finance and Procurement Article does not apply 18
to transactions between an entity established, financed, or operated under this subsection 19
and the institution or consortium of institutions that established, financed, or operated the 20
entity.] 21
[(4)] (2) (i) The Board of Regents shall adopt policies and procedures 22
governing the establishment of high impact economic development entities to ensure that 23
the institution’s participation in the entity furthers the interests of the institution, the 24
University System of Maryland, and the State. 25
(ii) The policies and procedures under subparagraph (i) of this 26
paragraph shall include requirements for: 27
1. Recognition of the entity by the Board of Regents; 28
2. An annual audit of the entity by an independent certified 29
public accountant; and 30
3. Adequate safeguards with regard to conflicts of interest, 31
proper contracting practices, and other fundamental ethical and business practice 32
standards. 33
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 34
1, 2025. 35