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.
*sb0439*
SENATE BILL 439
F2, P2 5lr2188
CF HB 1054
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
Committee Report: Favorable with amendments
Senate action: Adopted
Read second time: February 24, 2025
CHAPTER ______
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 or Morgan State University employees; requiring the Board of Regents 5
of the University System of Maryland and the Board of Regents of Morgan State 6
University to report certain information relating to high impact economic 7
development activities; repealing the authorization for an official or employee of a 8
public institution of higher education to be a certain employee of an entity supporting 9
a high impact economic development activity; making high impact economic 10
development activity entities subject to State procurement law; and generally 11
relating to the University System of Maryland and Morgan State University. 12
BY repealing and reenacting, with amendments, 13
Article – Education 14
Section 12–104.1 and 12–113(c) 12–104.1, 12–113(c), and 14–104.1 15
Annotated Code of Maryland 16
(2022 Replacement Volume and 2024 Supplement) 17
BY repealing and reenacting, without amendments, 18
Article – Education 19
Section 12–113(a) 20
Annotated Code of Maryland 21
(2022 Replacement Volume and 2024 Supplement) 22
2 SENATE BILL 439
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 1
That the Laws of Maryland read as follows: 2
Article – Education 3
12–104.1. 4
(a) (1) In this section, “high impact economic development activity” means an 5
initiative, transaction, or other undertaking by the University System of Maryland or one 6
of its constituent institutions to create or facilitate: 7
[(1)] (I) 20 or more new jobs in the State of Maryland; 8
[(2)] (II) The award or completion of at least $1,000,000 in externally 9
funded research or other projects; 10
[(3)] (III) The establishment or relocation of one or more new companies to 11
be registered or incorporated in the State and doing business in the State; 12
[(4)] (IV) The production of at least $1,000,000 of annual gross revenue; 13
[(5)] (V) The licensing and potential commercialization of a promising 14
new technology or other product; or 15
[(6)] (VI) An academic program to meet workforce demand in a 16
documented labor shortage field. 17
(2) “HIGH IMPACT DEVELOPME NT ACTIVITY” DOES NOT INCLUDE 18
COST SAVINGS RELATED TO THE RED UCTION IN THE NUMBER OF UNIVERSITY 19
EMPLOYEES. 20
(b) To promote the economic interests of the State as mandated in §§ 10–205(c) 21
and 15–107 of this article, the University System of Maryland shall utilize its powers as a 22
public corporation established in § 12–104 of this subtitle to undertake high impact 23
economic development activities that support: 24
(1) Job creation and workforce development; 25
(2) Technology transfer, commercialization, and entrepreneurship; and 26
(3) Increased sponsored research funding and other revenues. 27
(c) In order for an activity to qualify as a high impact economic development 28
activity: 29
SENATE BILL 439 3
(1) The president of a constituent institution, or the president’s designee, 1
shall forward a request to the Chancellor for certification that the activity meets the criteria 2
defined in subsection (a) of this section; and 3
(2) The Chancellor, or the Chancellor’s designee, shall notify the Board of 4
Regents and the Board of Public Works of any certified activity for review. 5
(d) (1) Notwithstanding any other provision of law, for any high impact 6
economic development activity within the scope of § 5–310 or § 10–305 of the State Finance 7
and Procurement Article, the Board of Regents shall be fully responsible for administering 8
the review and comment process prescribed in those sections. 9
(2) In administering the review and comment process prescribed in §§ 10
5–310 and 10–305 of the State Finance and Procurement Article, the Board of Regents shall 11
include in that process the appropriate legislative committees and units of State 12
government, which may include: 13
(i) Committees of the General Assembly; 14
(ii) The Board of Public Works; 15
(iii) The Maryland Historic Trust; 16
(iv) The Department of Planning; 17
(v) The Department of the Environment; and 18
(vi) The Department of Natural Resources. 19
(3) The Board of Regents shall adopt policies and procedures to ensure that 20
the notice and opportunity for review are conducted in a manner that provides a reasonable 21
period to complete while not impairing the institution’s capacity for the expeditious and 22
successful pursuit of a high impact economic development activity. 23
(e) (1) On or before October 1 of each year, the Board of Regents shall report 24
to the Board of Public Works and, in accordance with § 2–1257 of the State Government 25
Article, the Senate Finance Committee, the House Economic Matters Committee, the 26
Senate Budget and Taxation Committee, and the House Appropriations Committee on the 27
high impact economic development activities undertaken under this section during the 28
preceding fiscal year. 29
(2) THE REPORT REQUIRED U NDER PARAGRAPH (1) OF THIS 30
SUBSECTION SHALL INC LUDE: 31
4 SENATE BILL 439
(I) THE AMOUNT OF STATE OR UNIVERSITY FUNDS USED ON 1
EACH HIGH IMPACT ECO NOMIC DEVELOPMENT AC TIVITY DURING THE P RECEDING 2
YEAR; 3
(II) THE NET BENEFIT OF EA CH HIGH IMPACT ECONO MIC 4
DEVELOPMENT ACTIVITY ; AND 5
(III) WHETHER THE BOARD OF REGENTS BELIEVES THAT EACH 6
HIGH IMPACT ECONOMIC DEVELOPMENT ACTIVITY IS IN THE BEST INTER EST OF THE 7
STATE. 8
12–113. 9
(a) Consistent with § 15–107 of this article and any other applicable law, the 10
Board of Regents may establish, invest in, finance, and operate businesses or business 11
entities when the Board finds that doing so would further one or more goals of the 12
University and is related to the mission of the University. 13
(c) (1) Subject to the requirements of this section, an institution may 14
establish, invest in, finance, or operate a corporation, foundation, consortium, or other 15
entity that is intended to support a high impact economic development activity, as defined 16
in § 12–104.1 of this subtitle. 17
[(2) Notwithstanding the provisions of §§ 5–501 through 5–504 of the 18
General Provisions Article and subject to § 5–525 of the General Provisions Article, an 19
official or employee of a public institution of higher education may be a director, official, or 20
employee of an entity intended to support a high impact economic development activity, if 21
the individual’s participation advances the interests of the institution. 22
(3) Division II of the State Finance and Procurement Article does not apply 23
to transactions between an entity established, financed, or operated under this subsection 24
and the institution or consortium of institutions that established, financed, or operated the 25
entity.] 26
[(4)] (2) (i) The Board of Regents shall adopt policies and procedures 27
governing the establishment of high impact economic development entities to ensure that 28
the institution’s participation in the entity furthers the interests of the institution, the 29
University System of Maryland, and the State. 30
(ii) The policies and procedures under subparagraph (i) of this 31
paragraph shall include requirements for: 32
1. Recognition of the entity by the Board of Regents; 33
2. An annual audit of the entity by an independent certified 34
public accountant; and 35 SENATE BILL 439 5
3. THE LEGISLATIVE AUDITOR TO AUDIT ALL 1
EXPENDITURES AND ACC OUNTS OF THE ENTITY DURING AN AUDIT COND UCTED 2
UNDER § 12–105 OF THIS SUBTITLE AND IN ACCORDANCE WITH §§ 2–1220 THROUGH 3
2–1227 OF THE STATE GOVERNMENT ARTICLE; AND 4
4. Adequate safeguards with regard to conflicts of interest, 5
proper contracting practices, and other fundamental ethical and business practice 6
standards. 7
14–104.1. 8
(a) (1) In this section, “high impact economic development activity” means an 9
initiative, transaction, or other undertaking by Morgan State University to create or 10
facilitate: 11
[(1)] (I) 20 or more new jobs in the State; 12
[(2)] (II) The award or completion of at least $1,000,000 in externally 13
funded research or other projects; 14
[(3)] (III) The establishment or relocation of one or more new companies to 15
be registered or incorporated in the State and doing business in the State; 16
[(4)] (IV) The production of at least $1,000,000 of annual gross revenue; 17
[(5)] (V) The licensing and potential commercialization of a promising 18
new technology or other product; or 19
[(6)] (VI) An academic program to meet workforce demand in a 20
documented labor shortage field. 21
(2) “HIGH IMPACT ECONOMIC DEVELOPMENT ACTIVITY” DOES NOT 22
INCLUDE COST SAVINGS RELATED TO THE REDUC TION IN THE NUMBER O F 23
UNIVERSITY EMPLOYEES . 24
(b) To promote the economic interests of the State as mandated in §§ 10–205(c) 25
and 15–107 of this article, the Morgan State University shall utilize its powers as a public 26
corporation established in § 14–104 of this subtitle to undertake high impact economic 27
development activities that support: 28
(1) Job creation and workforce development; 29
(2) Technology transfer, commercialization, and entrepreneurship; and 30
(3) Increased sponsored research funding and other revenues. 31 6 SENATE BILL 439
(c) In order for an activity to qualify as a high impact economic development 1
activity: 2
(1) The President or the President’s designee shall certify that the activity 3
meets the criteria defined in subsection (a) of this section; and 4
(2) The President or the President’s designee shall notify the Board of 5
Regents and the Board of Public Works of any certified activity for review. 6
(d) (1) Notwithstanding any other provision of law, for any high impact 7
economic activity within the scope of § 5–310 or § 10–305 of the State Finance and 8
Procurement Article, the Board of Regents shall be fully responsible for administering the 9
review and comment process prescribed in those sections. 10
(2) In administering the review and comment process prescribed in §§ 11
5–310 and 10–305 of the State Finance and Procurement Article, the Board of Regents shall 12
include in the process the appropriate legislative committees and units of State 13
government, which may include: 14
(i) Committees of the General Assembly; 15
(ii) The Board of Public Works; 16
(iii) The Maryland Historical Trust; 17
(iv) The Department of Planning; 18
(v) The Department of the Environment; and 19
(vi) The Department of Natural Resources. 20
(3) The Board of Regents shall adopt policies and procedures to ensure that 21
the notice and opportunity for review are conducted in a manner that provides a reasonable 22
period to complete while not impairing the institution’s capacity for the expeditious and 23
successful pursuit of a high impact economic development activity. 24
(e) (1) On or before October 1 of each year, the Board of Regents shall report 25
to the Board of Public Works and, in accordance with § 2–1257 of the State Government 26
Article, the Senate Finance Committee, the House Economic Matters Committee, the 27
Senate Budget and Taxation Committee, and the House Appropriations Committee on the 28
high impact economic development activities undertaken under this section during the 29
preceding fiscal year. 30
(2) THE REPORT REQUIRED U NDER PARAGRAPH (1) OF THIS 31
SUBSECTION SHALL INC LUDE: 32
SENATE BILL 439 7
(I) THE AMOUNT OF STATE OR UNIVERSITY FUNDS USED ON 1
EACH HIGH IMPACT ECO NOMIC DEVELOPMENT AC TIVITY DURING THE PR ECEDING 2
YEAR; 3
(II) THE NET BENEFIT OF EA CH HIGH IMPACT ECONO MIC 4
DEVELOPMENT ACTIVITY ; AND 5
(III) WHETHER THE BOARD OF REGENTS BELIEVES THAT EACH 6
HIGH IMPACT ECONOMIC DEVELOPMENT ACTIVITY IS IN THE BEST INTER EST OF THE 7
STATE. 8
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 9
1, 2025. 10
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.