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.
*sb0453*
SENATE BILL 453
P2 5lr2934
CF HB 507
By: Senator King
Introduced and read first time: January 21, 2025
Assigned to: Budget and Taxation
Committee Report: Favorable
Senate action: Adopted
Read second time: February 21, 2025
CHAPTER ______
AN ACT concerning 1
State Contracts – Prohibited Provisions 2
FOR the purpose of clarifying a prohibition on including in State contracts provisions 3
pertaining to limitations of liability for damage to certain property; clarifying a 4
prohibition on including in State contracts provisions limiting the recovery of costs 5
related to the use of replacement contractors under certain circumstances; and 6
generally relating to prohibited provisions in State contracts. 7
BY repealing and reenacting, with amendments, 8
Article – State Finance and Procurement 9
Section 2–901 10
Annotated Code of Maryland 11
(2021 Replacement Volume and 2024 Supplement) 12
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 13
That the Laws of Maryland read as follows: 14
Article – State Finance and Procurement 15
2–901. 16
(a) In this section, “State contract” means any agreement entered into by the 17
State. 18
2 SENATE BILL 453
(a–1) This section does not apply to a State contract relating to the purchase, 1
redevelopment, or operation of a racing facility or training facility site as those terms are 2
defined under § 10–601 of the Economic Development Article. 3
(b) Except as required by State or federal law, a State contract may not include: 4
(1) a provision that requires the State to indemnify, defend, or hold 5
harmless another person without an appropriation of State funds for that purpose; 6
(2) a provision by which the State agrees to binding arbitration or any 7
other binding extrajudicial dispute resolution process; 8
(3) a provision that names a jurisdiction or venue for any action or dispute 9
against the State other than a court of proper jurisdiction in the State; 10
(4) a provision that requires the State to agree to limit the liability for any 11
direct loss to the State for bodily injury, death, or damage to REAL PROPERTY OR 12
TANGIBLE PERSONAL property of the State caused by the negligence, intentional or willful 13
misconduct, fraudulent act, recklessness, or other tortious conduct of a person or a person’s 14
employees or agents or a provision that would otherwise impose an indemnification 15
obligation on the State; 16
(5) a provision that requires the State to be bound by a term or condition 17
that: 18
(i) is unknown to the State at the time of signing a contract; 19
(ii) may be unilaterally changed by the other party; or 20
(iii) is electronically accepted by a State employee without authority; 21
(6) a provision that provides for a person other than the Attorney General 22
of Maryland to serve as legal counsel for the State, unless provided under § 6–106 of the 23
State Government Article; 24
(7) a provision that is inconsistent with the State’s obligations under Title 25
3 or 4 of the General Provisions Article; 26
(8) a provision prohibited under § 7–237 of this article; 27
(9) a provision for automatic renewal that obligates the State to allocate 28
funding in subsequent fiscal years; or 29
(10) a provision that limits the State’s ability to recover the DIFFERENCE 30
IN THE cost of a replacement contractor TO PERFORM THE SERVI CES NOT PERFORMED 31
BY THE ORIGINAL CONT RACTOR, TO THE EXTENT THAT T HE SUM OF THE AMOUNT 32 SENATE BILL 453 3
PAID TO THE REPLACEM ENT CONTRACTO R AND THE AMOUNT PAID TO THE 1
ORIGINAL CONTRACTOR EXCEED THE COSTS PRO VIDED FOR IN THE CON TRACT WITH 2
THE ORIGINAL CONTRAC TOR. 3
(c) If a State contract contains a provision listed under subsection (b) of this 4
section, the provision is void ab initio and the contract containing that provision shall be 5
enforceable as if it did not contain the provision. 6
(d) A State contract that contains a provision listed under subsection (b) of this 7
section shall be governed by and construed in accordance with State law, notwithstanding 8
any term or condition to the contrary in the contract. 9
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 10
October 1, 2025. 11
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.