Corporations and Associations - Limitations on Election and Ballot Issue Activities (Maryland Corporate Power Reset Act)

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb1378*

HOUSE BILL 1378
C1, G1 6lr2443

By: Delegates Terrasa, Lehman, and Ruth
Introduced and read first time: February 13, 2026
Assigned to: Government, Labor, and Elections

A BILL ENTITLED

AN ACT concerning 1

Corporations and Associations – Limitations on Election and Ballot Issue 2
Activities 3
(Maryland Corporate Power Reset Act) 4

FOR the purpose of prohibiting certain domestic or foreign entities formed, organized, or 5
authorized in the State from engaging in certain election activities or ballot issue 6
activities; requiring the State Department of Assessments and Taxation to adopt 7
regulations that provide for the determination of violations, procedures for forfeiture 8
and reinstatement of charter privileges, disgorgement, due process, and coordination 9
with the Office of the Attorney General; and generally relating to the election activity 10
or ballot issue activity of entities in the State. 11

BY adding to 12
Article – Corporations and Associations 13
Section 1–601 through 1–605 to be under the new subtitle “Subtitle 6. Limitation on 14
Election and Ballot Issue Activity”; and 2–101(c), 4–201.1, 4A–203.2, 5–704, 15
7–106, 9A–108, and 12–106 16
Annotated Code of Maryland 17
(2025 Replacement Volume) 18

BY repealing and reenacting, with amendments, 19
Article – Corporations and Associations 20
Section 8–601.1 and 10–108 21
Annotated Code of Maryland 22
(2025 Replacement Volume) 23

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 24
That the Laws of Maryland read as follows: 25

Article – Corporations and Associations 26

2 HOUSE BILL 1378

SUBTITLE 6. LIMITATION ON ELECTION AND BALLOT ISSUE ACTIVITY. 1

1–601. 2

(A) IN THIS SUBTITLE THE FO LLOWING WORDS HAVE T HE MEANINGS 3
INDICATED. 4

(B) (1) “ARTIFICIAL PERSON POWERS” MEANS THE SAME POWERS AS AN 5
INDIVIDUAL TO DO ALL THINGS NECESSARY OR CONVENIENT TO CARRY OUT LAWFUL 6
BUSINESS OR CHARITABLE, COOPERATIVE, OR ORGANIZATIONAL PURPOSES. 7

(2) “ARTIFICIAL PERSON POW ERS” DOES NOT INCLUDE THE POWER 8
TO DIRECTLY OR INDIR ECTLY ENGAGE IN ELEC TION ACTIVITY OR BAL LOT ISSUE 9
ACTIVITY. 10

(C) “BALLOT ISSUE ACTIVITY ” MEANS PAYING , CONTRIBUTING, OR 11
EXPENDING MONEY OR A NYTHING OF VALUE TO SUPPORT OR OPPOSE AN Y 12
INITIATIVE, REFERENDUM, RECALL, CONSTITUTIONAL AMEND MENT, CHARTER 13
AMENDMENT, OR OTHER QUESTION TH AT IS CERTIFIED OR S UBMITTED TO THE 14
ELECTORS OF THE STATE OR A POLITICAL SUBDIVISION OF THE STATE. 15

(D) “CHARTER PRIVILEGE ” MEANS ANY BE NEFIT THAT EXISTS ON LY 16
BECAUSE THE STATE HAS GRANTED THE BENEFIT TO AN ARTIFICIAL PER SON, 17
INCLUDING: 18

(1) ENTITIES OF LIMITED LIABILITY OR PERPETUAL DURATION; 19

(2) SUCCESSION IN ENTITY NAME; OR 20

(3) ANY STATUTORY LIMITAT ION ON THE PERSONAL LIABILITY OF 21
OWNERS, DIRECTORS, OFFICERS, MEMBERS, MANAGERS, PARTNERS, OR TRUSTEES. 22

(E) “DISGORGEMENT” MEANS A PAYMENT TO T HE STATE OF AN AMOUNT 23
EQUAL TO THE MONEY O R THING OF VALUE EXP ENDED, CONTRIBUTED, OR 24
TRANSFERRED FOR ELECTION ACTIVITY OR BALLOT ISSUE ACTIVITY. 25

(F) (1) “ELECTION ACTIVITY ” MEANS PAYING , CONTRIBUTING, OR 26
EXPENDING MONEY OR ANYTHING OF VALUE TO SUPPORT OR OPPOSE: 27

(I) A CANDIDATE; 28

(II) A POLITICAL PARTY; 29

HOUSE BILL 1378 3

(III) A POLITICAL COMMITTEE; OR 1

(IV) A NEWS ORGANIZATION THA T IS OWNED OR CONTRO LLED 2
BY A CANDIDATE, POLITICAL PARTY, OR POLITICAL COMMITTEE. 3

(2) “ELECTION ACTIVITY ” DOES NOT INCLUDE PAY ING, 4
CONTRIBUTING, OR EXPENDING MONEY OR ANYTHING OF VALUE ON ANY BONA FIDE 5
NEWS STORY , COMMENTARY, OR EDI TORIAL DISTRIBUTED T HROUGH THE 6
FACILITIES OF AN INDEPENDENT NEWS ORGANIZATION. 7

1–602. 8

(A) THE GENERAL ASSEMBLY FINDS THAT: 9

(1) ALL POLITICAL POWER I N THE STATE IS INHERENT IN THE 10
PEOPLE, AND THE CREATION OF AN ARTIFICIAL PERSON IS A PRIVILEGE GRANTED 11
BY THE STATE AND NOT A NATURAL RIGHT; 12

(2) UNDER § 1–102(E) OF THIS TITLE, THE CHARTER OF EVERY 13
ARTIFICIAL PERSON FO RMED UNDER THE LAWS OF THE STATE IS SUBJECT TO 14
REPEAL OR MODIFICATION BY THE LAWS OF THE STATE; 15

(3) THE GENERAL ASSEMBLY RETAINS FULL AUTHORITY TO DEFINE, 16
REVISE, LIMIT, OR WITHDRAW THE POWE RS AND PRIVILEGES GR ANTED TO AN 17
ARTIFICIAL PERSON WHEN REQUIRED FOR THE PUBLIC GOOD; 18

(4) BROAD STATUTORY PROVISIONS IN STATE LAW THAT AUTHORIZE 19
ARTIFICIAL PERSONS T O DO ALL THINGS NECE SSARY OR CON VENIENT TO CARRY 20
OUT LAWFUL PURPOSES HAVE BEEN CONSTRUED TO INCLUDE PARTICIPA TION IN 21
ELECTION AND BALLOT ISSUE ACTIVITY BUT THIS AUTHORITY W AS NEVER 22
INTENDED UNDER STATE LAW; AND 23

(5) EVERY ARTIFICIAL PERS ON FORMED UNDER THE LAWS OF THE 24
STATE IS SUBJECT TO THE MODIFICATION OF THE LAWS OF THE STATE AND HAS NO 25
VESTED RIGHT TO THE CONTINUATION OF ANY GRANT OF POWER. 26

(B) THE PURPOSE OF THIS S UBTITLE IS TO REVOKE ANY PRIOR IMPL IED 27
AUTHORITY FOR ARTIFI CIAL PERSONS TO ENGA GE IN ELECTION ACTIV ITY OR 28
BALLOT ISSUE ACTIVITY AND G RANT ONLY THOSE POWE RS NECESSARY OR 29
CONVENIENT FOR: 30

(1) LAWFUL BUSINESS; 31

4 HOUSE BILL 1378

(2) CHARITABLE, COOPERATIVE, OR ORGANIZATIONAL PURPOSES; 1

(3) ESTABLISHING A UNIFOR M RULE ACROSS ALL FO RMS OF 2
BUSINESS; 3

(4) PRESERVING THE RIGHTS OF NATURAL PERSONS; OR 4

(5) ENSURING THAT NO AUTH ORITY REVOKED IN THI S SUBTITLE IS 5
REVIVED BY IMPLICATION OR JUDICIAL CONSTRUCTION. 6

1–603. 7

(A) THIS SUBTITLE APPLIES TO DOMESTIC OR FOREIGN ARTIFICIAL 8
PERSONS FORMED, ORGANIZED, OR AUTHORIZED UNDER THE LAWS OF THE STATE, 9
INCLUDING: 10

(1) CORPORATIONS; 11

(2) NONSTOCK CORPORATIONS; 12

(3) PROFESSIONAL CORPORATIONS; 13

(4) LIMITED LIABILITY COMPANIES; 14

(5) LIMITED PARTNERSHIPS; 15

(6) LIMITED LIABILITY PARTNERSHIPS; 16

(7) REAL ESTATE INVESTMENT TRUSTS; 17

(8) STATUTORY TRUSTS; 18

(9) BUSINESS TRUSTS; AND 19

(10) REAL ESTATE INVESTMEN T TRUSTS , STATUTORY TRUSTS , 20
BUSINESS TRUSTS , OR SIMILAR ARRANGEME NTS TO THE EXTENT STATE LAW 21
GRANTS LIMITED LIABILITY, PERPETUAL DURATION, SUCCESSION IN NAME, OR ANY 22
OTHER CHARTER PRIVILEGE. 23

(B) THIS SUBTITLE DOES NOT APPLY TO: 24

(1) NATURAL PERSONS ACTING IN AN INDIVIDUAL CAPACITY; OR 25

HOUSE BILL 1378 5

(2) ANY AGENCY, INSTRUMENTALITY, OR POLITICAL SUBDIVISION OF 1
THE STATE. 2

(C) NOTHING IN THIS SUBTI TLE RESTRICTS THE LA WFUL ACTIVITIES OF 3
POLITICAL COMMITTEES ORGANIZED UNDER LAW. 4

1–604. 5

(A) (1) NOTWITHSTANDING § 1–403 OF THIS TITLE OR ANY OTHER 6
PROVISION OF LAW , AN ARTIFICIAL PERSON MAY NOT ENGAGE IN EL ECTION 7
ACTIVITY OR BALLOT ISSUE ACTIVITY. 8

(2) IF AN ARTIFICIAL PERS ON ENGAGES IN ELECTI ON ACTIVITY OR 9
BALLOT ISSUE ACTIVITY, THE ACTIVITY SHALL BE CONSIDERED ULTRA VIRES, VOID, 10
AND UNENFORCEABLE. 11

(B) AN ELECTION ACTIVITY OR BALLOT ISSUE ACTIVITY MAY N OT BE 12
RATIFIED, VALIDATED, OR GIVEN EFFECT BY ESTOPPEL, RELIANCE, OR ANY OTHER 13
EQUITABLE DOCTRINE. 14

1–605. 15

(A) THE DEPARTMENT SHALL ADOP T PROCEDURES AND REG ULATIONS 16
NECESSARY TO IMPLEMENT AND ENFORCE THIS SUBTITLE. 17

(B) A REGULATION ADOPTED UNDER THIS SECTION SHALL PROVIDE FOR: 18

(1) ADMINISTRATIVE DETERMINATION OF VIOLATIONS; AND 19

(2) PROCEDURES FOR: 20

(I) FORFEITURE AND REINST ATEMENT OF CHARTER 21
PRIVILEGES; 22

(II) CERTIFICATION OF COMP LIANCE FOLLOWING 23
DISGORGEMENT; 24

(III) NOTICE AND OPPORTUNIT Y TO BE HEARD THAT I S 25
CONSISTENT WITH DUE PROCESS; AND 26

(IV) COORDINATION WITH THE OFFICE OF THE ATTORNEY 27
GENERAL. 28

6 HOUSE BILL 1378

2–101. 1

(C) NOTWITHSTANDING ANY O THER PROVISION OF LA W, A CORPORATION 2
FORMED UNDER THIS TITLE IS SUBJECT TO TITLE 1, SUBTITLE 6 OF THIS ARTICLE. 3

4–201.1. 4

NOTWITHSTANDING ANY OTHER PROVISION OF LAW, A CLOSE CORPORATION 5
IS SUBJECT TO TITLE 1, SUBTITLE 6 OF THIS ARTICLE. 6

4A–203.2. 7

NOTWITHSTANDING ANY O THER PROVISION OF LA W, A LIMITED LIABILITY 8
COMPANY IS SUBJECT TO TITLE 1, SUBTITLE 6 OF THIS ARTICLE. 9

5–704. 10

NOTWITHSTANDING ANY O THER PROVISION OF LA W, A CORPORATION 11
FORMED UNDER THIS TITLE IS SUBJECT TO TITLE 1, SUBTITLE 6 OF THIS ARTICLE. 12

7–106. 13

NOTWITHSTANDING ANY O THER PROVISION OF LA W, A FOREIGN 14
CORPORATION REGISTERED UNDER THIS TITLE IS SUBJECT TO TITLE 1, SUBTITLE 15
6 OF THIS ARTICLE. 16

8–601.1. 17

(A) Sections 2 –113, 2 –116 through 2 –118, 2 –201(c), 2 –309(a) and (e), 2 –313, 18
2–502(e), 2 –503(b), 2 –504(f), and 2 –701 through 2 –707 of this article and, except as 19
otherwise provided in § 8–601 of this subtitle or in the declaration of trust, § 2–405.1 of this 20
article shall apply to real estate investment trusts. 21

(B) NOTWITHSTANDING ANY O THER PROVISION OF LA W, A REAL ESTATE 22
INVESTMENT TRUST IS SUBJECT TO TITLE 1, SUBTITLE 6 OF THIS ARTICLE. 23

9A–108. 24

NOTWITHSTANDING ANY O THER PROVISION OF LA W, A PARTNERSHIP IS 25
SUBJECT TO TITLE 1, SUBTITLE 6 OF THIS ARTICLE. 26

10–108. 27

HOUSE BILL 1378 7

(A) The provisions of Title 9A of this article with respect to partnerships shall 1
apply to limited partnerships except to the extent that those provisions are inconsistent 2
with or are modified by the provisions of this title. 3

(B) NOTWITHSTANDING ANY O THER PROVISION OF LA W, A LIMITED 4
PARTNERSHIP IS SUBJECT TO TITLE 1, SUBTITLE 6 OF THIS ARTICLE. 5

12–106. 6

NOTWITHSTANDING ANY OTHER PROVISION OF LAW, A STATUTORY TRUST IS 7
SUBJECT TO TITLE 1, SUBTITLE 6 OF THIS ARTICLE. 8

SECTION 2. AND BE IT FURTHER ENACTED, That a presently existing obligation 9
or contract right may not be impaired in any way by this Act. 10

SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 11
October 1, 2026. 12