Arbitration Reform for State Employees Act of 2026

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING 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.
*hb0604*

HOUSE BILL 604
P4 CONSTITUTIONAL AMENDMENT 6lr2434
HB 159/25 – APP CF SB 28
By: Delegate Solomon
Introduced and read first time: January 28, 2026
Assigned to: Government, Labor, and Elections
Committee Report: Favorable with amendments
House action: Adopted
Read second time: March 6, 2026

CHAPTER ______

AN ACT concerning 1

Arbitration Reform for State Employees Act of 2026 2

FOR the purpose of altering the collective bargaining process for certain State employees, 3
including by requiring the selection of a neutral arbitrator to oversee all certain 4
aspects of collective bargaining, establishing a process of arbitration in the event of 5
impasse in negotiations between certain parties, and providing that certain decisions 6
of a neutral arbitrator are advisory; altering the matters that are required to b e 7
included in collective bargaining; requiring that each budget bill submitted by the 8
Governor contain the appropriations necessary to implement all terms and 9
conditions of employment in certain memoranda of understanding for the next 10
ensuing fiscal year; and generally relating to collective bargaining for State 11
employees. 12

BY repealing and reenacting, with amendments, 13
Article – State Finance and Procurement 14
Section 7–108 15
Annotated Code of Maryland 16
(2021 Replacement Volume and 2025 Supplement) 17

BY repealing and reenacting, with amendments, 18
Article – State Personnel and Pensions 19
Section 3–103, 3–501, 3–502, and 3–603 20
Annotated Code of Maryland 21
(2024 Replacement Volume and 2025 Supplement) 22

2 HOUSE BILL 604

BY adding to 1
Article – State Personnel and Pensions 2
Section 3–503 3
Annotated Code of Maryland 4
(2024 Replacement Volume and 2025 Supplement) 5

BY proposing an amendment to the Maryland Constitution 6
Article III – Legislative Department 7
Section 52 8

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 9
That the Laws of Maryland read as follows: 10

Article – State Finance and Procurement 11

7–108. 12

(a) In accordance with the Maryland Constitution and other law, the Governor 13
shall include in each budget bill: 14

(1) an appropriation to pay the principal of and interest on the State debt; 15

(2) without revision, the appropriations requested for public schools, as 16
certified by the State Superintendent of Schools; 17

(3) without revision, the appropriations requested for the Legislative 18
Branch of the State government, as certified by the presiding officers of the General 19
Assembly; 20

(4) without revision, the appropriations requested for the Judicial Branch 21
of the State government, as certified by the Chief Justice of the Supreme Court of Maryland; 22

(5) the appropriations requested by the Governor for the Executive Branch 23
of the State government; 24

(6) the appropriations required by law to be included with the 25
appropriations for the Executive Branch; 26

(7) appropriations for the salaries required by law to be paid by the State; 27

(8) without revision, appropriations for the Accountability and 28
Implementation Board, as jointly certified by the presiding officers of the General Assembly 29
and the Governor; and 30

(9) any other appropriations required by the Mary land Constitution or 31
other law to be included in the budget bill. 32

HOUSE BILL 604 3

(b) The Governor shall use the current salary plan of the Secretary of Budget and 1
Management as the basis for the appropriations to pay those salaries to which the plan 2
applies. 3

(C) IN ADDITION TO THE APPROPRIATIONS REQUIRED UNDER SUBSECTION 4
(A) OF THIS SECTION , THE GOVERNOR SHALL INCLUDE IN EACH ANNUAL BUD GET 5
BILL THE APPROPRIATI ONS NECESSARY TO IMP LEMENT AND FUND ALL TERMS 6
WITHIN EACH MEMORANDUM OF UNDERSTANDING BETWEEN: 7

(1) THE STATE AND EACH EXCLUSIVE REPRESENTATIVE OF IT S 8
EMPLOYEES; 9

(2) STATE INSTITUTIONS OF HIGHER EDUCATION , INCLUDING THE 10
UNIVERSITY SYSTEM OF MARYLAND, AND EACH EXCLUSIVE R EPRESENTATIVE OF 11
THEIR EMPLOYEES; AND 12

(3) THE MARYLAND ENVIRONMENTAL SERVICE AND EACH 13
EXCLUSIVE REPRESENTATIVE OF ITS EMPLOYEES. 14

Article – State Personnel and Pensions 15

3–103. 16

This title and any agreement under this title do not limit or otherwise interfere with 17
the powers of the Governor or the Maryland General Assembly [under] EXCEPT TO 18
OPERATE IN ACCORDANCE WITH AND HAVE THE EFFECT REQUIRED BY Article III, § 19
52 of the Maryland Constitution. 20

3–501. 21

(a) (1) The following individuals or entities shall designate one or more 22
representatives to participate as a party in collectiv e bargaining on behalf of the State or 23
the following institutions: 24

(i) on behalf of the State, the Governor; 25

(ii) on behalf of the Maryland Environmental Service, the Board of 26
Directors of the Service; 27

(iii) on behalf of the University System of Maryland, the Chancellor; 28
and 29

(iv) on behalf of Morgan State University, St. Mary’s College of 30
Maryland, or Baltimore City Community College, the governing board of the institution. 31

4 HOUSE BILL 604

(2) The exclusive representative shall designate one or more 1
representatives to participate as a party in collective bargaining on behalf of the exclusive 2
representative. 3

(b) (1) [The] SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 4
parties shall meet at reasonable times [and] BETWEEN JULY 1 AND SEPTEMBER 30 TO 5
engage in collective bargaining in good faith [, including facilitating the meaningful use of 6
a fact finder under subsection (c)(3) of this section,] and to conclude a written memorandum 7
of understanding or other written understanding as defined under § 3–101(d)(1)(i)2 of this 8
title. 9

(2) (I) THIS PARAGRAPH DOES NOT APPLY TO: 10

1. A BARGAINING UNIT IN A STATE INSTITUTION OF 11
HIGHER EDUCATION, INCLUDING THE UNIVERSITY SYSTEM OF MARYLAND; OR 12

2. A BARGAINING UNIT FO R THE UNIFORMED FIRE 13
EMPLOYEES OF THE BWI AIRPORT FIRE AND RESCUE DEPARTMENT. 14

(II) 1. FOR EACH BARGAINING U NIT, WHENEVER A 15
MEMORANDUM OF UNDERS TANDING IS TO BE NEG OTIATED, REOPENED, OR 16
AMENDED, EITHER PARTY MAY REQ UEST A NEUTRAL ARBIT RATOR FOR THE 17
NEGOTIATIONS ON OR AFTER JULY 1. 18

2. IF NEGOTIATIONS HAVE NOT CONCLUDED BY 19
SEPTEMBER 1, THE PARTIES SHALL SELECT A NEUTRAL ARBITRATOR ON OR BEFORE 20
SEPTEMBER 15. 21

(III) THE ARBITRATOR SHALL BE SELECTED FROM A LIST OF 15 22
ARBITRATORS PROVIDED BY THE AMERICAN ARBITRATION ASSOCIATION’S LABOR 23
ARBITRATION PANEL. 24

(IV) THE LIST SHALL CONSIS T OF QUALIFIED , NATIONWIDE 25
ARBITRATORS WHO ARE MEMBERS OF THE NATIONAL ACADEMY OF ARBITRATION. 26

(V) THE PARTIES SHALL SEL ECT THE ARBITRATOR B Y 27
ALTERNATELY STRIKING NAMES FROM THE LIST UNTIL ONE NAME REMAINS. 28

(VI) THE SELECTED ARBITRAT OR MUST BE ABLE AND 29
AVAILABLE TO PERFORM THE DUTIES AND TO HO LD HEARINGS, BOTH IN PERSON 30
AND THROUGH REMOTE COMMUNICATION, CONSISTENT WITH THIS TITLE. 31

(VII) THE ARBITRATOR SHALL HAVE THE POWERS AND 32
RESPONSIBILITIES UNDER § 3–503 OF THIS SUBTITLE. 33

HOUSE BILL 604 5

(VIII) THE SELECTED ARBITRAT OR SHALL ACCEPT THE 1
APPOINTMENT BY THE E ARLIER OF SEPTEMBER 30 OR 15 DAYS AFTER THE DAY A 2
PARTY REQUESTS AN AR BITRATOR BE SELECTED, OR THE PARTIES MAY A GREE TO 3
MAKE AN ALTERNATIVE APPOINTMENT FROM: 4

1. THE LIST ORIGINALLY PROVIDED BY THE AMERICAN 5
ARBITRATION ASSOCIATION; OR 6

2. A LIST OF NATIONWIDE ARBITRATORS PROVIDED BY 7
THE FEDERAL MEDIATION AND CONCILIATION SERVICE. 8

(3) THE PARTIES SHALL MAK E A REASONABLE EFFOR T TO BEGIN 9
NEGOTIATIONS ON OR NEAR JULY 1, INCLUDING THE EXCHANGE OF INFORMATION 10
NECESSARY TO RESPONS IBLY CONDUCT AND CON CLUDE NEGOTIATIONS B Y 11
SEPTEMBER 30. 12

(c) [(1) THIS SUBSECTION APPLI ES ONLY WITH RESPECT TO A STATE 13
INSTITUTION OF HIGHE R EDUCATION , INCLUDING THE UNIVERSITY SYSTEM OF 14
MARYLAND. 15

(2) The parties shall make every reasonable effort to conclude negotiations 16
in a timely manner for inclusion by the principal unit in its budget request to the Governor. 17

(2) (3) (i) The parties shall conclude negotiations before January 1 18
for any item requiring an appropriation of funds for the fiscal year that begins on the 19
following July 1. 20

(ii) In the budget bill submitted to the General Assembly, the 21
Governor shall include any amounts in the budgets of the principal units required to 22
accommodate any additional cost resulting from the negotiations, including the actuarial 23
impact of any legislative changes to any of the State pension or retirement systems that 24
are required, as a result of the negotiations, for the fiscal year beginning the following July 25
1 if the legislative changes have been negotiated to become effective in that fiscal year. 26

(3) (i) This paragraph does not apply to negotiations between the State 27
and the exclusive representative of the uniformed fir e employees of the BWI Airport Fire 28
and Rescue Department. 29

(ii) (4) If the parties do not conclude negotiations for the next 30
fiscal year before October 25, either party may request that a fact finder be employed to 31
resolve the issues. 32

(iii) (5) The fact finder shall be employed no later than November 33
1. 34

6 HOUSE BILL 604

(iv) (6) A fact finder shall be a neutral party appointed by 1
alternate striking from a list by the parties provided: 2

1. (I) by the Federal Mediation and Conciliation Service; or 3

2. (II) under the Labor Arbitration Rules of the American 4
Arbitration Association. 5

(v) (7) The fact finder: 6

1. (I) may give notice and hold hearings in accordance with the 7
Administrative Procedure Act; 8

2. (II) may administer oaths and take testimony and other 9
evidence; 10

3. (III) may issue subpoenas; and 11

4. (IV) before November 20, shall make written 12
recommendations regarding wages, hours, and working conditions, and any other terms or 13
conditions of employment that may be in dispute. 14

(vi) (8) The written recommendations of the fact finder shall be 15
delivered to the Governor, the exclusive representative, the President of the Senate, and 16
the Speaker of the House of Delegates by the Secretary on or before December 1.] 17

[(4) (i)](D) (1) This [paragraph] SUBSECTION applies only to 18
negotiations between the State and the exclusive representative of the uniformed fire 19
employees of the BWI Airport Fire and Rescue Department. 20

[(ii)] (2) The parties shall reach an agreement by September 30 of 21
the year in which a collective bargaining agreement will expire. 22

[(iii)] (3) An impasse is reached during the negotiations if the 23
parties do not reach an agreement: 24

[1.] (I) by stating that they mutually agree they are at an 25
impasse; or 26

[2.] (II) on or before October 1 of the year in which a 27
collective bargaining agreement will expire. 28

[(iv)] (4) If an impasse is reached under [subparagraph (iii) of this 29
paragraph] PARAGRAPH (3) OF THIS SUBSECTION, each party shall submit its last, best, 30
and final offer to the other party within 48 hours after the impasse is reached. 31

HOUSE BILL 604 7

[(v) 1.] (5) (I) Unless the impasse has been resolved, the 1
parties shall meet within 5 business days after the impasse is reached under 2
[subparagraph (iii) of this paragraph] PARAGRAPH (3) OF THIS SUBSECTION to select an 3
arbitrator from a list of 15 arbitrators provided by the American Arbitration Association’s 4
labor arbitration panel. 5

[2.] (II) The parties shall select the arbitrator by alternately 6
striking a name from the list until one name remains. 7

[3.] (III) If the selected arbitrator is unable to fulfill the 8
responsibilities of the arbitration, the selection process shall be repeated using a new list 9
of arbitrators until an arbitrator is selected. 10

[4.] (IV) The parties shall submit the dispute and the last, 11
best, and final offers to the arbitrator within 5 business days after the arbitrator is selected. 12

[(vi) 1.] (6) (I) The arbitrator shall hold formal hearings as 13
necessary in order to resolve the impasse. 14

[2.] (II) During the first 21 days immediately following the 15
appointment of the arbitrator and before holding any formal hearings, the arbitrator may, 16
if determined appropriate by the arbitrator, attempt to resolve the impasse by acting as a 17
neutral mediator between the parties. 18

[(vii)] (7) The arbitrator shall select one party’s last, best, and final 19
offer on or before December 15. 20

[(viii) 1.] (8) (I) Subject to [subsubparagraph 2 of this 21
subparagraph] SUBPARAGRAPH (II) OF THIS PARAGRAPH, the decision of the arbitrator 22
is binding on the parties. 23

[2.] (II) A decision of an arbitrator under this paragraph 24
related to wages is subject to the limitations of the State budget. 25

[(ix)] (9) The parties shall equally share the costs of the services of 26
the arbitrator. 27

(d) (E) (1) A memorandum of understanding [that incorporates all matters 28
of agreement reached by the parties ] REACHED BY MUTUAL AG REEMENT shall be 29
executed by the exclusive representative and: 30

(i) for a memorandum of understanding relating to the State, the 31
Governor or the Governor’s designee; 32

(ii) for a memorandum of understanding relating to the Maryland 33
Environmental Service, the Board of Directors of the Service; 34
8 HOUSE BILL 604

(iii) for a memorandum of understanding r elating to a system 1
institution, the Chancellor or the Chancellor’s designee; and 2

(iv) for a memorandum of understanding relating to Morgan State 3
University, St. Mary’s College of Maryland, or Baltimore City Community College, the 4
governing board of the institution or the governing board’s designee. 5

(2) (I) THIS PARAGRAPH DOES N OT APPLY TO MATTERS 6
INVOLVING A STATE INSTITUTION OF HIGHER EDUCATION , INCLUDING THE 7
UNIVERSITY SYSTEM OF MARYLAND. 8

(II) To the extent [these] matters INCORPORATED IN A 9
MEMORANDUM OF UNDERSTANDING require legislative approval or the appropriation of 10
funds, the matters shall be [recommended] REFERRED to the General Assembly for 11
LEGISLATIVE approval or for the appropriation of funds AS REQUIRED UNDER ARTICLE 12
III, § 52 OF THE MARYLAND CONSTITUTION. 13

(3) To the extent matters involving a State institution of higher education 14
require legislative approval OR THE APPROPRIATION OF FUNDS , the legislation 15
MATTERS shall be [recommended] REFERRED to the Governor [for submission to ] AND 16
the General Assembly FOR LEGISLATIVE APPR OVAL OR THE APPROPRI ATION OF 17
FUNDS. 18

(e) (F) (1) Except as provided in paragraph (2) of this subsection, 19
negotiations for a memorandum of understanding shall be considered closed sessions under 20
§ 3–305 of the General Provisions Article. 21

(2) An exclusive representative may not be considered a public body under 22
§ 3–101 of the General Provisions Article. 23

(f) (G) (1) The terms of a memorandum of understanding executed by the 24
Governor or the Governor’s designee and an exclusive representative of a bargaining unit 25
for skilled service or professional service employees in the State Personnel Management 26
System are not applicable to employees of a State institution of higher education. 27

(2) The te rms of a memorandum of understanding executed by the 28
Chancellor or the governing board of Morgan State University, St. Mary’s College of 29
Maryland, or Baltimore City Community College, or their respective designees, and the 30
exclusive representative of a bargaining unit for employees of a State institution of higher 31
education are not applicable to skilled service or professional service employees in the State 32
Personnel Management System. 33

3–502. 34

(a) Collective bargaining shall include all matters relating to: 35
HOUSE BILL 604 9

(1) wages, hours, FRINGE BENEFITS OTHER THAN PENSION BENEFITS, 1
HEALTH BENEFITS, and other terms and conditions of employment; and 2

(2) the time and manner of access to a new employee program in 3
accordance with § 22–207 of the State Government Article. 4

(b) Notwithstanding subsection (a) of this section, the representatives of the 5
State, the Maryland Environmental Service, a system institution, Morgan State 6
University, St. Mary’s College of Maryland, and Baltimore City Community College: 7

(1) may not be required to negotiate over any matter that is inconsistent 8
with applicable law; and 9

(2) may negotiate and reach agreement with regard to any such matter 10
THAT IS INCONSISTENT WITH APPLICABLE LAW only if it is understood that , WITH 11
RESPECT TO THE MATTER, the agreement [with respect to such matter ] OR 12
MEMORANDUM OF UNDERSTANDING cannot become effective unless the applicable law 13
is amended by the General Assembly. 14

3–503. 15

(A) THIS SECTION DOES NOT APPLY WITH RESPECT T O A STATE 16
INSTITUTION OF HIGHE R EDUCATION, INCLUDING THE UNIVERSITY SYSTEM OF 17
MARYLAND. 18

(A) (B) (1) A NEUTRAL ARBITRATOR SELECTED UNDER § 3–501(B) OF 19
THIS SUBTITLE: 20

(I) MAY MEDIATE OR AID IN THE RESOLUTION OF ANY DISPUTE 21
BETWEEN THE PARTIES REGARDING THE CONDUCT OF NEGOTIATIONS; 22

(II) MAY RECEIVE FROM THE PARTIES COPIES OF INFORMATION 23
REQUESTS PRESENTED A ND RESPONSES RECEIVE D TO MEDIATE OR AID IN THE 24
RESOLUTION OF DISPUTES THAT ARISE BETWEE N THE PARTIES CONSIS TENT WITH 25
THIS TITLE; AND 26

(III) MAY DIRECT PRODUCTIO N OF ESTIMATES OF REVENUES 27
AND EXPENDITURES COM PILED BY THE STATE BOARD OF REVENUE ESTIMATES, 28
THE BUREAU OF REVENUE ESTIMATES, OR THE CONSENSUS REVENUE 29
MONITORING AND FORECASTING GROUP. 30

(2) (I) THE OPINIONS AND GUID ANCE ISSUED BY THE N EUTRAL 31
ARBITRATOR UNDER THIS SUBSECTION SHALL BE ADVISORY ON THE PART IES AND 32
THE GOVERNOR. 33
10 HOUSE BILL 604

(II) THE USE OF A NEUTRAL ARBITRATOR DOES NOT DIMINISH 1
OR LIMIT THE RIGHTS OF ANY PARTY TO FILE AND PURSUE A COMPLAINT OF UNFAIR 2
LABOR PRACTICES BEFORE THE BOARD. 3

(B) (C) (1) IF EITHER PAR TY DECLARES AN IMPAS SE ON OR AFTER 4
OCTOBER 1, ARBITRATION SHALL PROCEED AS DESCRIBED IN THIS SUBSECTION. 5

(2) (I) ON THE FIFTH BUSINESS DAY AFTER THE IMPASS E IS 6
DECLARED, EACH PARTY SHALL SUBMIT TO THE NEUTRAL ARBITRATOR, IN WRITING 7
AND WITH A COPY TO T HE OTHER PARTY , A LAST , BEST, AND FINAL OFFER , 8
INCLUDING: 9

1. ALL PROVISIONS IN THE EXISTING MEMORANDUM OF 10
UNDERSTANDING NOT TO BE MODIFIED; 11

2. ALL NEW, AMENDED, OR MODIFIED MEMORANDUM OF 12
UNDERSTANDING PROVISIONS AGREED TO BY TH E PARTIES BEFORE THE IMPASSE 13
WAS DECLARED THAT AR E TO BE INCLUDED THR OUGH WRITTEN MUTUAL 14
AGREEMENT; AND 15

3. SUBJECT TO SUBPARAGR APH (II) OF THIS 16
PARAGRAPH, DETAILED FURTHER PRO VISIONS THAT A PARTY IS PROPOSING FOR 17
INCLUSION IN A MEMORANDUM OF UNDERSTANDING. 18

(II) FURTHER PROVISIONS AR E LIMITED TO SPECIFI C 19
PROPOSALS THAT WERE SUBMITTED IN WRITING TO THE OTHER PARTY A ND WERE 20
THE SUBJECT OF COLLECTIVE BARGAINING BETWEEN THE PARTIES UP TO THE TIME 21
OF IMPASSE , INCLUDING PROPOSALS THAT THE PARTIES HAV E DECIDED TO 22
INCLUDE IN THE MEMORANDUM OF UNDERSTANDING THROUGH WRITTEN MUTUAL 23
AGREEMENT. 24

(3) THE NEUTRAL ARBITRATO R ACTING AS A MEDIAT OR SHALL 25
ATTEMPT TO RESOLVE THE IMPASSE BEFORE A FORMAL HEARING ON THE IMPASSE. 26

(4) (I) WITHIN 30 CALENDAR DAYS AFTER A DECLARED IMPASSE, 27
THE NEUTRAL ARBITRAT OR SHALL HOLD A FORM AL HEARING AT WHICH THE 28
PARTIES MAY SUBMIT , IN WRITING OR ORAL T ESTIMONY, ALL INFORMATION OR 29
DATA SUPPORTING THE FINAL POSITIONS. 30

(II) ABSENT MUTUAL AGREEMENT BETWEEN THE PARTI ES, OR 31
AS OTHERWISE ORDERED BY TH E NEUTRAL ARBITRATOR , THE FORMAL HEARING 32
SHALL CONCLUDE WITHIN 45 CALENDAR DAYS AFTER THE IMPASSE DATE. 33

HOUSE BILL 604 11

(5) (I) EXCEPT AS PROVIDED IN SUBPARAGRAPH (II) OF THIS 1
PARAGRAPH, THE ARBITRATION SHAL L CONCLUDE WITH A WR ITTEN AWARD THAT 2
SUSTAINS IN ITS ENTI RETY THE LAST , BEST, AND FINAL OFFER OF O NE OF THE 3
PARTIES. 4

(II) BEFORE A WRITTEN AWAR D IS ISSUED , BY WRITTEN 5
AGREEMENT SIGNED BY THE REPRESENTATIVES OF THE PARTIES PARTICIPATING IN 6
THE ARBITRATION, THE PARTIES MAY DIRECT THE NEUTRAL ARBITRATOR TO RULE 7
ON SPECIFICALLY IDENTIFIED TOPICS OF BARGAINING. 8

(6) (I) THE NEUTRAL ARBITRATO R SHALL ISSUE A PREL IMINARY 9
WRITTEN AWARD ON OR BEFORE DECEMBER 5. 10

(II) THE PRELIMINARY WRITT EN AWARD SHALL ADDRE SS ALL 11
PROVISIONS THAT EACH PARTY PROPOSED IN ITS RESPECTIVE FINAL POSITION FOR 12
INCLUSION IN A MEMORANDUM OF UNDERSTANDING. 13

(III) WITHIN 5 BUSINESS DAYS AFTER RECEIPT OF THE 14
PRELIMINARY WRITTEN AWARD, THE PARTIES SHALL REVIEW THE AWARD AND MAY 15
SEVERALLY OR MUTUALLY REQUEST CHANGES OR ADJUSTMENTS IN THE AWARD. 16

(IV) ON OR BEFORE DECEMBER 15, THE NEUTRAL ARBITRATOR 17
SHALL ISSUE A FINAL WRITTEN AWARD IN WHICH THE ARBITRATOR: 18

1. SHALL ORDER IMPLEMENTATION OF THE LAST, BEST, 19
AND FINAL OFFER OF E ITHER PARTY IN ITS E NTIRETY, INCORPORATING ANY 20
VOLUNTARILY AGREED–TO TERMS BETWEEN THE PARTIES; AND 21

2. SHALL INCLUDE: 22

A. ANY VOLUNTARILY AGREED–TO TERMS BETWEEN THE 23
PARTIES; AND 24

B. ANY PRIOR TERM THAT BY AGREEMENT IS NOT TO BE 25
CHANGED FOR THE NEXT FISCAL YEAR. 26

(V) AFTER DECEMBER 15, IF REQUESTED BY EITH ER PARTY , 27
THE NEUTRAL ARBITRAT OR SHALL ISSUE BY JANUARY 20 OF THE IMMEDIATELY 28
FOLLOWING YEAR A STATEMENT OF REASONS FOR THE FINAL WRITTEN AWARD. 29

(7) THE NEUTRAL ARBITRATO R SHALL CONSIDER THE FOLLOWING 30
WHEN DEVELOPING A WRITTEN AWARD: 31

12 HOUSE BILL 604

(I) THE LAWFUL AUTHORITY OF THE EMP LOYER, INCLUDING 1
THE OBLIGATION OF TH E EMPLOYER TO USE SP ECIAL FUNDS ONLY FOR 2
AUTHORIZED PURPOSES UNDER LIMITATIONS IMPOSED BY FEDERAL OR STATE LAW; 3

(II) STIPULATIONS OF THE PARTIES; 4

(III) THE INTERESTS AND WELFARE OF THE PUBLIC; 5

(IV) THE FINANCIAL ABILIT Y OF THE EMPLOYER TO MEET 6
COSTS, WITHOUT THE PREMISE THAT THE EMPLOYER MA Y NEED TO INCREASE O R 7
IMPOSE NEW TAXES, FEES, OR CHARGES, OR DEVELOP OTHER SOURCES OF REVENUE 8
OR TRANSFER FUNDS FROM THE REVENUE STABILIZATION ACCOUNT ESTABLISHED 9
UNDER § 7–311 OF THE STATE FINANCE AND PROCUREMENT ARTICLE; 10

(V) THE PRESENT AND FUTU RE GENERAL ECONOMIC 11
CONDITION OF THE STATE OR STATE INSTITUTIONS OF HIGHER EDUCATION; 12

(VI) COMPARISONS OF WAGES , HOURS, AND CONDITIONS OF 13
EMPLOYMENT OF THE EMPLOYEES INVOLVED WITH ARBITRATION WITH THE WAGES, 14
HOURS, AND CONDITIONS OF EM PLOYMENT OF OTHER EM PLOYEES PERFORMING 15
SIMILAR SERVICES IN PUBLIC EMPLOYMENT IN ADJACENT STATES; 16

(VII) COMPARISONS OF COLLE CTIVE BARGAINING PAT TERNS IN 17
OTHER STATES AND AMONG COUNTY EMPLOYEES IN THE STATE; 18

(VIII) CONSUMER PRICES FOR GOODS AND SERVICES AS DEFINED 19
BY PUBLIC AND PRIVATE SOURCES; 20

(IX) THE OVERALL COMPENSA TION PRESENTLY RECEI VED BY 21
THE EMPLOYEES, INCLUDING DIRECT WAGE COMPENSATION, VACATION, HOLIDAYS, 22
EXCUSED TIME OFF , INSURANCE AND PENSIO NS COSTS , MEDICAL AND 23
HOSPITALIZATION BENEFITS, THE CONTINUITY AND S TABILITY OF EMPLOYME NT, 24
AND ALL OTHER RECEIVED BENEFITS; 25

(X) CHANGES IN ANY OF TH E FOREGOING CIRCUMST ANCES 26
DURING THE PENDENCY OF THE ARBITRATION; AND 27

(XI) OTHER FACTORS THAT ARE NORMALLY OR TRADITIONALLY 28
TAKEN INTO CONSIDERA TION IN THE DETERMIN ATION OF WAGES , HOURS, AND 29
CONDITIONS OF EMPLOY MENT THROUGH VOLUNTA RY COLLECTIVE BARGAI NING, 30
MEDIATION, ARBITRATION, OR OTHERWISE BETWEEN THE PARTIES IN PUBLIC 31
SERVICE OR PRIVATE EMPLOYMENT. 32

HOUSE BILL 604 13

(8) A WRITTEN AWARD REQUIR ED UNDER THIS SUBSEC TION SHALL 1
INCLUDE A STATEMENT , PREPARED IN CONSULTA TION WITH BOTH PARTI ES, 2
DETAILING THE MULTIYEAR FISCAL IMPACT TO THE GENERAL FUND OF THE STATE 3
FROM PARAGRAPH (7)(IV) AND (V) OF THIS SUBSECTION. 4

(C) (D) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 5
DECISION OF THE NEUT RAL ARBITRATOR SHALL BE FINAL AND BINDING ON THE 6
PARTIES. 7

(2) A DECISION AS TO A MATTER REQUIRING A CHANGE IN LAW OR AN 8
APPROPRIATION OF FUNDS I S CONTINGENT ON THE ENACTMENT OF LEGISLATION 9
MAKING THE CHANGE IN LAW OR APPROVAL OF THE APPR OPRIATION BY THE 10
GENERAL ASSEMBLY IN ACCORDANCE WITH ARTICLE III, § 52 OF THE MARYLAND 11
CONSTITUTION. 12

(3) A DECISION OF AN ARBIT RATOR UNDER T HIS SUBSECTION 13
RELATED TO WAGES IS SUBJECT TO THE LIMITATIONS OF THE STATE BUDGET. 14

(D) (E) THE STATE, A STATE INSTITUTION OF HIGHER EDUCATION, AND 15
THE MARYLAND ENVIRONMENTAL SERVICE AND THE GOVERNOR SHALL TAKE ALL 16
ACTIONS NECESSARY TO CARRY OUT AND EFFECTUATE THE FINAL WRITTEN AWARD 17
AND PLACE INTO EFFECT THE MEMORANDUM OF UNDERSTANDING. 18

(E) (F) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , THE 19
PARTIES AT ANY TIME MAY AMEND OR MODIFY THE FINAL WRITTEN AWARD AND, BY 20
CONSENT, THE AMENDMENTS OR MODIFICATIONS SHALL BE APPROVED BY THE 21
PARTIES AND PLACED I N A SUPPLEMENTAL WRI TTEN AWARD BY THE NE UTRAL 22
ARBITRATOR THAT SHALL BE FINAL AND BINDING. 23

(2) A SUPPLEMENTAL WRITTEN AWARD UNDER PARAGRAP H (1) OF 24
THIS SUBSECTION SHAL L TAKE EFFECT ON THE DATE OF THE ORDER OF THE 25
NEUTRAL ARBITRATOR A ND MAY NOT REQUIRE R ATIFICATION UNDER § 3–601 OF 26
THIS TITLE. 27

(F) (G) A DEADLINE IN THIS SECTION MAY BE MODIFIED, BASED ON GOOD 28
CAUSE, BY MUTUAL AGREEMENT OF THE PARTIES OR BY ORDER OF THE NEUTRAL 29
ARBITRATOR. 30

(G) (H) (1) THE COSTS OF THE SERV ICES OF THE NEUTRAL 31
ARBITRATOR SHALL BE SHARED EQUALLY BY THE PARTIES. 32

(2) ALL OTHER COSTS INCURRED BY EITHER PARTY TO COMPLY WITH 33
THIS SECTION SHALL B E THE RESPONSIBILITY OF THE PARTY INCURRI NG THE 34
COSTS. 35
14 HOUSE BILL 604

3–603. 1

(a) A memorandum of understanding [agreed to and ratified under § 3–601 of this 2
subtitle] may not expire until it is succeeded by a memorandum of understanding that is 3
agreed to and ratified or adopted by arbitration under this title. 4

(b) Notwithstanding § 3 –601(b) of this subtitle, all terms of a memorandum of 5
understanding shall continue in force and effect without change until a successor 6
memorandum of understanding is agreed to and ratified. 7

(c) (1) Based on a verified complaint by an exclusive representati ve, the 8
exclusive representative may file an action in a circuit court against the State, the 9
Maryland Environmental Service, a system institution, Morgan State University, St. 10
Mary’s College of Maryland, or Baltimore City Community College to enforce the terms of 11
this section. 12

(2) On receipt of an action submitted by the exclusive representative, the 13
court shall issue a status quo order without a finding of irreparable harm to maintain a 14
memorandum of understanding and the terms in effect pending a final order in the action. 15

SECTION 2. AND BE IT FURTHER ENACTED, (Three –fifths of all the members 16
elected to each of the two Houses concurring), That it be proposed that the Maryland 17
Constitution read as follows: 18

Article III – Legislative Department 19

52. 20

(1) The General Assembly shall not appropriate any money out of the Treasury 21
except in accordance with the provisions of this section. 22

(2) Every appropriation bill shall be either a Budget Bill, or a Supplementary 23
Appropriation Bill, as hereinafter provided. 24

(3) On the third Wednesday in January in each year, (except in the case of a newly 25
elected Governor, and then not later than ten days after the convening of the General 26
Assembly), unless such time shall be extended by the General Assembly, the Governor shall 27
submit to the General Assembly a Budget for the next ensuing fiscal year. Each Budget 28
shall contain a complete plan of proposed expenditures and estimated revenues for said 29
fiscal year and shall show the estimated surplus or deficit of revenues at the end o f the 30
preceding fiscal year. EACH BUDGET SUBMITTED BY THE GOVERNOR SHALL ALSO 31
CONTAIN THE PROPOSED APPROPRIATIONS NECESSARY TO IMPLEMENT ALL TERMS 32
AND CONDITIONS OF EM PLOYMENT IN EACH MEM ORANDUM OF UNDERSTAN DING 33
CONCLUDED WITH THE STATE AND ANY INSTITUTION OF HIGHER EDUCATION 34
INCLUDING THE UNIVERSITY SYSTEM OF MARYLAND, WHETHER REACHED 35
HOUSE BILL 604 15

THROUGH MUTUAL AGREE MENT OR ARBITRATION THAT IS BINDING ON T HE 1
PARTIES, THE GOVERNOR, STATE INSTITUTIONS OF HIGHER EDUCATION, AND THE 2
MARYLAND ENVIRONMENTAL SERVICE, FOR THE NEXT ENSUING FISCAL YEAR FOR 3
STATE EMPLOYEES IN TH E VARIOUS BRANCHES A ND DEPARTMENTS OF STATE 4
GOVERNMENT, INCLUDING HIGHER EDUCATION. Accompanying each Budget shall be a 5
statement showing: (a) the revenues and expenditures for the preceding fiscal year; (b) the 6
current assets, liabilities, reserves and surplus or deficit of the State; (c) the debts and 7
funds of the State; (d) an estimate of the State’s financial condition as of the beginning and 8
end of the preceding fiscal year; (e) CHANGES IN WAGES , HOURS, FRINGE BENEFITS, 9
HEALTH BENEFITS , AND OTHER TERMS AND CONDITIONS OF EMPLOY MENT FOR 10
STATE EMPLOYEES INCLU DED IN EACH MEMORAND UM OF UNDERSTANDING 11
COVERING STATE EMPLOYEES FOR T HE NEXT ENSUING FISC AL YEAR; AND (F) any 12
explanation the Governor may desire to m ake as to the important features of the Budget 13
and any suggestions as to methods for reduction or increase of the State’s revenue. 14

(4) Each Budget shall embrace an estimate of all appropriations in such form and 15
detail as the Governor shall determine or as may be prescribed by law, as follows: (a) for 16
the General Assembly as certified to the Governor in the manner hereinafter provided; (b) 17
for the Executive Department; (c) for the Judiciary Department, as provided by law, as 18
certified to the Governor; (d) to pay and discharge the principal and interest of the debt of 19
the State in conformity with Section 34 of Article III of the Constitution, and all laws 20
enacted in pursuance thereof; (e) for the salaries AND FRINGE BENEFITS payable by the 21
State and under t he Constitution and laws of the State , INCLUDING THOSE SALARIES 22
AND BENEFITS COMMITT ED UNDER EACH MEMORA NDUM OF UNDERSTANDIN G 23
COVERING STATE EMPLOYEES; (f) for the establishment and maintenance throughout 24
the State of a thorough and efficient system of pub lic schools in conformity with Article 8 25
of the Constitution and with the laws of the State; and (g) for such other purposes as are 26
set forth in the Constitution or laws of the State. 27

(5) The Governor shall deliver to the presiding officer of each House the Budget 28
and a bill for all the proposed appropriations of the Budget classified and in such form and 29
detail as the Governor shall determine or as may be prescribed by law; and the presiding 30
officer of each House shall promptly cause said bill to be intr oduced therein, and such bill 31
shall be known as the “Budget Bill.” The Governor may, with the consent of the General 32
Assembly, before final action thereon by the General Assembly, amend or supplement said 33
Budget to correct an oversight, provide funds contingent on passage of pending legislation 34
or, in case of an emergency, by delivering such an amendment or supplement to the 35
presiding officers of both Houses; and such amendment or supplement shall thereby become 36
a part of said Budget Bill as an addition to the items of said bill or as a modification of or a 37
substitute for any item of said bill such amendment or supplement may affect. 38

(5a) The Budget and the Budget Bill as submitted by the Governor to the General 39
Assembly shall have a figure for the total o f all proposed appropriations and a figure for 40
the total of all estimated revenues available to pay the appropriations, and the figure for 41
total proposed appropriations shall not exceed the figure for total estimated revenues. 42
Neither the Governor in submi tting an amendment or supplement to the Budget Bill nor 43
16 HOUSE BILL 604

the General Assembly in amending the Budget Bill shall thereby cause the figure for total 1
proposed appropriations to exceed the figure for total estimated revenues, including any 2
revisions, and in the Budget Bill as enacted the figure for total estimated revenues always 3
shall be equal to or exceed the figure for total appropriations. 4

(6) The General Assembly shall not amend the Budget Bill so as to affect either 5
the obligations of the State under Sec tion 34 of Article III of the Constitution, or the 6
provisions made by the laws of the State for the establishment and maintenance of a system 7
of public schools or the payment of any salaries required to be paid by the State of Maryland 8
by the Constitution. 9

(6a) In enacting a balanced Budget Bill each fiscal year as required under this 10
Section, the General Assembly may amend the bill by increasing or diminishing the items 11
therein relating to the General Assembly, and by increasing or diminishing the items 12
therein relating to the judiciary, but except as hereinbefore specified, may not alter the bill 13
except to strike out or reduce items therein, provided, however, that the salary or 14
compensation of any public officer may not be decreased during the public officer’s term of 15
office. When passed by both Houses, the Budget Bill shall be presented to the Governor for 16
approval or disapproval according to Section 17 of Article II of this Constitution. 17

(6b) In enacting a balanced Budget Bill as required under this Section for fiscal 18
year 2024 and each fiscal year thereafter, the General Assembly may amend the bill by 19
increasing, diminishing, or adding items therein relating to the General Assembly, by 20
increasing, diminishing, or adding items therein relating to the judiciary, and by 21
increasing, diminishing, or adding items therein relating to the Executive Department, 22
provided that the total of the appropriation for the Executive Department approved by the 23
General Assembly does not exceed the total proposed appropria tion for the Executive 24
Department submitted by the Governor. The salary or compensation of any public officer 25
may not be decreased during the public officer’s term of office. When passed by both Houses, 26
the Budget Bill shall be a law immediately without further action by the Governor. 27

(7) The Governor and such representatives of the executive departments, boards, 28
officers and commissions of the State expending or applying for State’s moneys, as have 29
been designated by the Governor for this purpose, shall have the right, and when requested 30
by either House of the General Assembly, it shall be their duty to appear and be heard with 31
respect to any Budget Bill during the consideration thereof, and to answer inquiries relative 32
thereto. 33

(8) Supplementary Approp riation Bill. Either House may consider other 34
appropriations but both Houses shall not finally act upon such appropriations until after 35
the Budget Bill has been finally acted upon by both Houses, and no such other 36
appropriation shall be valid except in acc ordance with the provisions following: (a) Every 37
such appropriation shall be embodied in a separate bill limited to some single work, object 38
or purpose therein stated and called herein a Supplementary Appropriation Bill; (b) Each 39
Supplementary Appropriatio n Bill shall provide the revenue necessary to pay the 40
appropriation thereby made by a tax, direct or indirect, to be levied and collected as shall 41
be directed in said bill; (c) No Supplementary Appropriation Bill shall become a law unless 42
HOUSE BILL 604 17

it be passed in e ach House by a vote of a majority of the whole number of the members 1
elected, and the yeas and nays recorded on its final passage; (d) Each Supplementary 2
Appropriation Bill shall be presented to the Governor of the State as provided in Section 3
17 of Articl e 2 of the Constitution and thereafter all the provisions of said section shall 4
apply. 5

(9) Nothing in this section shall be construed as preventing the General Assembly 6
from passing at any time, in accordance with the provisions of Section 28 of Article 3 of the 7
Constitution and subject to the Governor’s power of approval as provided in Section 17 of 8
Article 2 of the Constitution, an appropriation bill to provide for the payment of any 9
obligation of the State within the protection of Section 10 of Article 1 of the Constitution of 10
the United States. 11

(10) If the Budget Bill shall not have been finally acted upon by the Legislature 12
seven days before the expiration of the regular session, the Governor shall issue a 13
proclamation extending the session for some further period as may, in the Governor’s 14
judgment, be necessary for the passage of such bill; but no matter other than such bill shall 15
be considered during such extended session except a provision for the cost thereof. 16

(11) For the purpose of making up the Budget, the Governor shall require from the 17
proper State officials (including all executive departments, all executive and administrative 18
offices, bureaus, boards, commissions and agencies that expend or supervise the 19
expenditure of, and all institutio ns applying, for State moneys and appropriations) such 20
itemized estimates and other information, in such form and at such times as directed by 21
the Governor. An estimate for a program required to be funded by a law which will be in 22
effect during the fiscal year covered by the Budget and which was enacted before July 1 of 23
the fiscal year prior to that date shall provide a level of funding not less than that prescribed 24
in the law. The estimates for the Legislative Department, certified by the presiding officer 25
of each House, of the Judiciary, as provided by law, certified by the Chief Justice of the 26
Supreme Court of Maryland, and for the public schools, as provided by law, shall be 27
transmitted to the Governor, in such form and at such times as directed by the G overnor, 28
and shall be included in the Budget without revision. 29

(12) The Governor may provide for public hearings on all estimates and may 30
require the attendance at such hearings of representatives of all agencies, and for all 31
institutions applying for St ate moneys. After such public hearings the Governor may, in 32
the Governor’s discretion, revise all estimates except those for the legislative and judiciary 33
departments, and for the public schools, as provided by law, and except that the Governor 34
may not red uce an estimate for a program below a level of funding prescribed by a law 35
which will be in effect during the fiscal year covered by the Budget, and which was enacted 36
before July 1 of the fiscal year prior thereto. 37

(13) The General Assembly may, from time to time, enact such laws not 38
inconsistent with this section, as may be necessary and proper to carry out its provisions. 39

(14) In the event of any inconsistency between any of the provisions of this Section 40
and any of the other provisions of the Cons titution, the provisions of this Section shall 41
18 HOUSE BILL 604

prevail. But nothing herein shall in any manner affect the provisions of Section 34 of Article 1
3 of the Constitution or of any laws heretofore or hereafter passed in pursuance thereof, or 2
be construed as preventing the Governor from calling extraordinary sessions of the General 3
Assembly, as provided by Section 16 of Article 2, or as preventing the General Assembly at 4
such extraordinary sessions from considering any emergency appropriation or 5
appropriations. 6

(15) If any item of any appropriation bill passed under the provisions of this 7
Section shall be held invalid upon any ground, such invalidity shall not affect the legality 8
of the bill or of any other item of such bill or bills. 9

SECTION 3. AND BE IT FURTHE R ENACTED, That the General Assembly 10
determines that the amendment to the Maryland Constitution proposed by Section 2 of this 11
Act affects multiple jurisdictions and that the provisions of Article XIV, § 1 of the Maryland 12
Constitution concerning local approval of constitutional amendments do not apply. 13

SECTION 4. AND BE IT FURTHER ENACTED, That: 14

(a) The amendment to the Maryland Constitution proposed by Section 2 of this 15
Act shall be submitted to the qualified voters of the State at the next general election to be 16
held in November 2026 for adoption or rejection in accordance with Article XIV of the 17
Maryland Constitution. 18

(b) (1) At that general election, the vote on the proposed amendment to the 19
Constitution shall be by ballot, and on each ballot there shall be printed the words “For the 20
Constitutional Amendment” and “Against the Constitutional Amendment”, as now 21
provided by law. 22

(2) At that general election, a question substantially similar to the 23
following shall be submitted to the qualified voters of the State: 24

“Question ___ – Constitutional Amendment 25

Providing that each budget submitted by the Governor shall include expenditures 26
necessary to implement wages, hours, fringe benefits, health benefits, and other terms and 27
conditions of employment for State employees concluded in each memorandum of 28
understanding covering State employees.”. 29

(c) Immediately after the election, all returns shall be made to the Governor of 30
the vote for and against the proposed amendment, as directed by Article XIV of the 31
Maryland Constitution, and further proceedings held in accordance with Article XIV. 32

SECTION 5. AND BE IT FURTHER ENACTED, That Section 1 of this Act is 33
contingent on the passage of Section 2 of this Act, a constitutional amendment, and its 34
ratification by voters of the State. 35

HOUSE BILL 604 19

SECTION 6. AND BE IT FURTHER ENACTED, That, subject to Section 5 of this 1
Act, Section 1 of this Act shall take effect on the proclamation of the Governor that the 2
constitutional amendment, having received a majority of the votes c ast at the general 3
election, has been adopted by the people of Maryland. 4

Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.