State Procurement - Procurement Preferences - Reauthorization and Revisions

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.
*hb1578*

HOUSE BILL 1578
P2 6lr0309

By: Chair, Government, Labor, and Elections Committee (By Request –
Departmental – Maryland Department of Social and Economic Mobility)
Introduced and read first time: February 13, 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

State Procurement – Procurement Preferences – Reauthorization and Revisions 2

FOR the purpose of altering the termination date for certain provisions of law governing 3
the Minority Business Enterprise Program and its application to cannabis licensing, 4
public–private partnerships, offshore wind projects, video lottery terminals, and 5
sports wagering licensees; altering the date by which certain reports, studies, and 6
guidelines must be submitted; altering certain reporting requirements and 7
timelines; requiring the O ffice of Small, Minority, and Women Business Affairs to 8
establish a certification review process; altering the membership of the Governor’s 9
Subcabinet on Socioeconomic Procurement Participation; and generally relating to 10
State procurement preferences. 11

BY repealing 12
Article – State Finance and Procurement 13
Section 14–301.1 14
Annotated Code of Maryland 15
(2021 Replacement Volume and 2025 Supplement) 16

BY repealing and reenacting, with amendments, 17
Article – Alcoholic Beverages and Cannabis 18
Section 36–404(i) 19
Annotated Code of Maryland 20
(2024 Replacement Volume and 2025 Supplement) 21

2 HOUSE BILL 1578

BY repealing and reenacting, with amendments, 1
Article – Public Utilities 2
Section 7–704.1(j) 3
Annotated Code of Maryland 4
(2025 Replacement Volume and 2025 Supplement) 5

BY repealing and reenacting, with amendments, 6
Article – State Finance and Procurement 7
Section 10A –404, 14 –302(a)(10)(iv)2.B. and (v) and (12), 14 –303(b)(13) and (20), 8
14–305(a)(1), (2)(vi), and (4), (b)(1) and (4), and (c), 14 –308(c), 14 –309, 9
14–501(d), 14–502.1(c), 14–503, 14–504.1(a), 14–505, and 14–604 10
Annotated Code of Maryland 11
(2021 Replacement Volume and 2025 Supplement) 12

BY adding to 13
Article – State Finance and Procurement 14
Section 14–301.1 and 14–305(c) 15
Annotated Code of Maryland 16
(2021 Replacement Volume and 2025 Supplement) 17

BY repealing and reenacting, without amendments, 18
Article – State Finance and Procurement 19
Section 14–501(a) 20
Annotated Code of Maryland 21
(2021 Replacement Volume and 2025 Supplement) 22

BY adding to 23
Article – State Government 24
Section 9–1A–10(a) 25
Annotated Code of Maryland 26
(2021 Replacement Volume and 2025 Supplement) 27

BY repealing and reenacting, with amendments, 28
Article – State Government 29
Section 9–1A–10(a)(1)(i)1., (b), and (c), 9–1E–07(b), and 9–4114 30
Annotated Code of Maryland 31
(2021 Replacement Volume and 2025 Supplement) 32

BY repealing and reenacting, with amendments, 33
Chapter 553 of the Acts of the General Assembly of 2020, as amended by Chapters 34
137 and 138 of the Acts of the General Assembly of 2023 and Chapters 620 35
and 621 of the Acts of the General Assembly of 2025 36
Section 4 and 5 37

BY repealing and reenacting, with amendments, 38
HOUSE BILL 1578 3

Chapter 728 of the Acts of the General Assembly of 2021, as amended by Chapters 1
137 and 138 of the Acts of the General Assembly of 2023 and Chapters 620 2
and 621 of the Acts of the General Assembly of 2025 3
Section 2 and 3 4

BY repealing and reenacting, with amendments, 5
Chapter 154 of the Acts of the General Assembly of 2012, as amended by Chapters 6
200 and 201 of the Acts of the General Assembly of 2013 , Chapter 340 of the 7
Acts of the General Assembly of 2017, Chapter 117 of the Acts of the General 8
Assembly of 2022, Chapters 137 and 138 of the Acts of the General Assembly 9
of 2023, and Chapters 620 and 621 of the Acts of the General Assembly of 2025 10
Section 2 11

BY repealing and reenacting, with amendments, 12
Chapter 641 of the Acts of the General Assembly of 2022, as amended by Chapters 13
137 and 138 of the Acts of the General Assembly of 2023 and Chapters 620 14
and 621 of the Acts of the General Assembly of 2025 15
Section 2(b) and (d) 16

BY repealing and reenacting, with amendments, 17
Chapter 641 of the Acts of the General Assembly of 2022, as amended by Chapters 18
137 and 138 of the Acts of the General Assembly of 2023 and Chapters 620 19
and 621 of the Acts of the General Assembly of 2025 20
Section 2(c) 21

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 22
That Section(s) 14–301.1 of Article – State Finance and Procurement of the Annotated Code 23
of Maryland be repealed. 24

SECTION 2. AND BE IT FURTHER ENACT ED, That the Laws of Maryland read 25
as follows: 26

Article – Alcoholic Beverages and Cannabis 27

36–404. 28

(i) (1) THE FINDINGS AND EVID ENCE RELIED ON BY TH E GENERAL 29
ASSEMBLY FOR THE CONT INUATION OF THE MINORITY BUSINESS ENTERPRISE 30
PROGRAM UNDER TITLE 14, SUBTITLE 3 OF THE STATE FINANCE AND 31
PROCUREMENT ARTICLE ARE INCORPORATED IN THIS SUBSECTION. 32

[(1)] (2) To the extent practicable and authorized by the U.S. 33
Constitution, a cannabis licensee shall comply with the State’s Minority Business 34
Enterprise Program. 35

4 HOUSE BILL 1578

[(2)] (3) The Administration, in consultation with the certification agency 1
designated by the Board of Public Works under § 14 –303(b) of the State Finance and 2
Procurement Article, the [Governor’s] Office of Small, Minority, and Women Business 3
Affairs, the General Assembly, and the Office of the Attorney General, shall review the 4
disparity study required by Chapter 26 of the Acts of 2022, AND ANY FUTURE DISPARITY 5
STUDIES OR RELATED ANALYSES, to evaluate whether application of the State’s Minority 6
Business Enterprise Program to cannabis licenses would comply with the City of Richmond 7
v. J.A. Croson Co., 488 U.S. 469, and any subsequent federal or constitutional 8
requirements. 9

[(3)] (4) On or before 6 months after the issuance of a cannabis license 10
under § 36 –401 of this subtitle, the [Governor’s] Office of Small, Minority, and Women 11
Business Affairs, in consultation with the Office of the Attorney General and the Office of 12
Social Equity within the Administration and the cannabis licensee, shall establish a clear 13
plan for setting reasonable and appropriate minority business enterprise participation 14
goals and procedures for the procurement of goods and services related to cannabis, 15
including the cultivation, manufacturing, and dispensing of cannabis. 16

[(4)] (5) To the extent practicable, the goals and procedures specified in 17
paragraph [(3)] (4) of this subsection shall be based on the requirements of Title 14, 18
Subtitle 3 of the State Finance and Procurement Article and the regulations implementing 19
that subtitle. 20

(6) ON AND AFTER JULY 1, 2031, THE PROVISIONS OF TH IS 21
SUBSECTION AND ANY R EGULATIONS ADOPTED I N ACCORDANCE WITH TH IS 22
SUBSECTION SHALL BE OF NO EFFECT AND MAY NOT BE ENFORCED. 23

Article – Public Utilities 24

7–704.1. 25

(j) (1) The findings and evidence relied on by the General Assembly for the 26
continuation of the Minority Business Enterprise Program under Title 14, Subtitle 3 of the 27
State Finance and Procurement Article are incorporated in this subsection. 28

(2) To the extent practicable and authorized by the United States 29
Constitution, approved applicants for a proposed offshore wind project shall comply with 30
the State’s Minority Business Enterprise Program. 31

(3) (i) On or before 6 months after the issuance of an order approving 32
an OREC application, the [Governor’s] Office of Small, Minority, and Women Business 33
Affairs, in consultation with the Office of the Attorney General and an approved applicant, 34
shall establish a cle ar plan for setting reasonable and appropriate minority business 35
enterprise participation goals and procedures for each phase of the qualified offshore wind 36
project. 37

HOUSE BILL 1578 5

(ii) To the extent practicable, the goals and procedures specified in 1
subparagraph (i) of this paragraph shall be based on the requirements of Title 14, Subtitle 2
3 of the State Finance and Procurement Article and the regulations implementing that 3
subtitle. 4

(iii) Every 6 months following the issuance of an order approving an 5
OREC application, an approved applicant shall submit a report on its progress establishing 6
and implementing minority business enterprise goals and procedures to the Commission. 7

(4) On and after July 1, [2026] 2031, the provisions of this subsection and 8
any regulations adopted in accordance with this subsection shall be of no effect and may 9
not be enforced. 10

Article – State Finance and Procurement 11

10A–404. 12

(a) The findings and evidence relied on by the General Assembly for the 13
continuation of the Minority Business Enterprise Program under Title 14, Subtitle 3 of this 14
article are hereby incorporated. 15

(b) To the extent practicable and permitted by the United States Constitution, 16
the provisions of the Minority Business Enterprise Program under Title 14, Subtitle 3 o f 17
this article shall apply to public–private partnerships established under this title. 18

(c) (1) The Board of Public Works may not approve a public –private 19
partnership agreement under § 10A –203 of this title until the reporting agency, in 20
consultation with the [Governor’s] Office of Small, Minority, and Women Business Affairs, 21
the Office of the Attorney General, and the private entity, if permissible, establishes 22
reasonable and appropriate minority business enterprise participation goals and 23
procedures for the project. 24

(2) To the extent practicable, goals and procedures established under 25
paragraph (1) of this subsection shall be based on the requirements of Title 14, Subtitle 3 26
of this article, including the implementation of regulations adopted under §§ 14–302 and 27
14–303 of this article. 28

(D) ON AND AFTER JULY 1, 2031, THE PROVISIONS OF TH IS SECTION AND 29
ANY REGULATIONS ADOPTED IN ACCORDANCE WITH THIS SECTION SHALL BE OF NO 30
EFFECT AND MAY NOT BE ENFORCED. 31

14–301.1. 32

THE GENERAL ASSEMBLY FINDS THE FOLLOWING: 33

6 HOUSE BILL 1578

(1) THE STATE OF MARYLAND SEEKS TO ENSURE THAT ALL CITIZENS 1
OF THE STATE HAVE EQUAL ACCE SS TO BUSINESS FORMA TION AND BUSINESS 2
GROWTH OPPORTUNITIES; 3

(2) THE ELIMINATION OF DISCRIMINATION AGAINST MINORITY– AND 4
WOMEN–OWNED BUSINESSES IS OF PA RAMOUNT IMPORTANCE T O THE FUTURE 5
WELFARE OF ALL MARYLANDERS AND THE STATE; 6

(3) THE GENERAL ASSEMBLY HAS ACCEPTED AND CAREFULLY 7
REVIEWED THE DISPARITY STUDY ENTITLED “STATE OF MARYLAND 2025 MINORITY 8
BUSINESS ENTERPRISE DISPARITY STUDY” (THE STUDY) AND FI NDS THAT THE 9
STUDY PROVIDES A STRO NG BASIS IN EVIDENCE DEMONSTRATING PERSIS TENT 10
INTENTIONAL DISCRIMI NATION AGAINST MINOR ITY– AND WOMEN –OWNED 11
BUSINESSES; 12

(4) BASED ON THE REVIEW BY THE GENERAL ASSEMBLY OF THE 13
STUDY, THE GENERAL ASSEMBLY FINDS THAT: 14

(I) BASED ON RIGOROUS EC ONOMETRICS ANALYSES THAT 15
CONTROL FOR KEY FACT ORS, THERE ARE SUBSTANTIA L AND STATISTICALLY 16
SIGNIFICANT ADVERSE DISPARITIES THAT ARE CONSISTENT WITH DISCRIMINATION 17
AGAINST MINORITIES A ND NONMINORITY WOMEN IN WAGES , FIRM FORMATION , 18
ENTREPRENEURIAL EARNINGS, AND ACCESS TO CAPITA L IN THE PRIVATE SEC TOR 19
IN THE SAME GEOGRAPH IC MARKETS AND INDUS TRY CATEGORIES IN WH ICH THE 20
STATE DOES BUSINESS; 21

(II) A THOROUGH EXAMINATION OF THE LITERATURE REVEALS 22
SEVERE AND PERSISTEN T INTENTIONAL DISPAR ITIES AND DISCRIMINATIO N IN 23
ACCESS TO PRIVATE BUSINESS CAPITAL MARKETS THAT IN SOME CASES HAVE BEEN 24
CAUSED BY GOVERNMENT POLICIES; 25

(III) THE STATE WOULD BECOME A PASSIVE PARTICIPANT IN 26
PRIVATE SECTOR RACIA L AND GENDER DISCRIM INATION IF IT CEASED OR 27
CURTAILED REMEDIAL EFFORTS OF THE STATE, INCLUDING THE OPERAT ION OF 28
THE MINORITY BUSINESS ENTERPRISE PROGRAM; 29

(IV) THERE ARE SUBSTANTIA L, ADVERSE, AND STATISTICALLY 30
SIGNIFICANT DISPARITIES THAT ARE CONSISTENT WITH DISCRIMINATION AGAINST 31
MINORITIES AND NONMINORITY WOMEN IN STATE PROCUREMENT; 32

(V) THESE SUBSTANTIAL , ADVERSE, AND STATISTICALLY 33
SIGNIFICANT DISPARITIES ARE CONSISTENT W ITH DISCRIMINATION A GAINST ALL 34
HOUSE BILL 1578 7

INDIVIDUAL MINORITY GROUPS AND FOR NONMINORITY WOME N IN MOST MAJOR 1
INDUSTRY CATEGORIES IN STATE PROCUREMENT; 2

(VI) THERE IS SIGNIFICANT EVIDENCE THAT DISCRIMINATION IN 3
THE PRIVATE SECTOR H AS DEPRESSED FIRM FO RMATION AND FIRM GRO WTH 4
AMONG MINORITY AND NONMINORITY WOMEN ENTREPRENEURS, DECREASING THE 5
AVAILABILITY OF MINORITIES AND NONMI NORITY WO MEN MINORITY– AND 6
WOMEN–OWNED FIRMS FOR PUBLIC AND PRIVATE CONTRACTING; AND 7

(VII) THERE IS POWERFUL AN D PERSUASIVE EVIDENC E, BOTH 8
STATISTICAL AND QUAL ITATIVE, OF INTENTIONAL DISCR IMINATION, INCLUDING 9
DISCRIMINATION BY GOVERNMENT ACTORS, AGAINST MINORITY AND NONMINORITY 10
WOMEN BUSINESS OWNERS IN BOTH THE PUBLIC AND PRIVATE SECTORS; 11

(5) AS A RESULT OF ONGOI NG DISCRIMINATION AN D THE 12
PRESENT–DAY EFFECTS OF PAST DISCRIMINATION, MINORITY– AND WOMEN–OWNED 13
BUSINESSES COMBINED CONTINUE TO BE SIGNI FICANTLY UN DERUTILIZED 14
RELATIVE TO THE AVAI LABILITY OF MINORITIES AND NONMI NORITY WOMEN 15
MINORITY– AND WOMEN –OWNED BUSINESSES TO PERFORM WORK IN T HE 16
OVERWHELMING MAJORIT Y OF THE PROCUREMENT CATEGORIES IN WHICH THE 17
STATE DOES BUSINESS; 18

(6) MINORITY PRIME CONTR ACTORS ALSO ARE SUBJECT TO 19
DISCRIMINATION AND C ONFRONT ESPECIALLY D AUNTING BARRIERS IN 20
ATTEMPTING TO COMPET E WITH VERY LARGE AN D LONG –ESTABLISHED 21
NONMINORITY COMPANIES; 22

(7) DESPITE THE FACT THA T THE STATE HAS EMPLOYED , AND 23
CONTINUES TO EMPLOY , NUMEROUS AND ROBUST RACE –NEUTRAL REMEDIES , 24
INCLUDING AGGRESSIVE OUTREACH AND ADVERTISING, TRAINING AND EDUCATION, 25
SMALL BUSINESS PROGR AMS, EFFORTS TO IMPROVE A CCESS TO CAPITAL , AND 26
OTHER EFFORTS, THERE IS A STRONG BA SIS IN EVIDENCE THAT DISCRIMINATION 27
PERSISTS EVEN IN PUBLIC SECTOR PROCUREMENT IN WHICH THESE EFFORTS HAVE 28
BEEN EMPLOYED; 29

(8) NOTWITHSTANDING THE LEVELS OF PARTICIPAT ION ACHIEVED 30
WHEN RACE–CONSCIOUS MEASURES A RE USED, THERE IS CONCERN THA T, IN THE 31
ABSENCE OF MINORITY BUSINESS ENTERPRISE PARTICIPATION GOALS FOR STATE 32
PROCUREMENT, THERE WOULD BE A SUB STANTIAL DECREASE IN THE OVERALL 33
UTILIZATION OF MINORITY– AND WOMEN–OWNED BUSINESSES; 34

(9) THIS SUBTITLE ENSURES THAT RACE–NEUTRAL EFFORTS WILL BE 35
USED TO THE MAXIMUM EXTENT FEASIBLE AND THAT RACE–CONSCIOUS MEASURES 36
8 HOUSE BILL 1578

WILL BE USED ONLY WHERE NECESSARY TO ELIMINATE DISCRIMINATION THAT WAS 1
NOT ALLEVIATED BY RACE–NEUTRAL EFFORTS; 2

(10) THIS SUBTITLE CONTINUES AND ENHANCES EFFORTS TO ENSURE 3
THAT THE STATE LIMITS THE BURD EN ON NONMINORITY , MALE–OWNED 4
BUSINESSES AS MUCH AS POSSIBLE BY ENSURING THAT ALL GOALS ARE DEVELOPED 5
USING THE BEST AVAIL ABLE DATA , WAIVERS ARE AVAILABL E WHENEVER 6
CONTRACTORS MAKE GOO D FAITH EFFORTS , AND THAT NONMINORITY MEN MAY 7
QUALIFY FOR CERTIFIC ATION IF NONMINORITY MEN ARE SOCIALLY AND 8
ECONOMICALLY DISADVANTAGED; 9

(11) THIS SUBTITLE ENSURE S THAT THE OPERATION OF THE 10
MINORITY BUSINESS ENTERPRISE PROGRAM IS CONSISTENT WITH THE STUDY 11
DATA AND NARROWLY TA ILORED TO THE COMPEL LING INTERESTS OF TH E STATE; 12
AND 13

(12) STATE EFFORTS TO SUPPORT REDUCE DISCRIMINATION SUPPORT 14
THE DEVELOPMENT OF C OMPETITIVELY VIABLE MINORITY– AND WOMEN –OWNED 15
BUSINESS ENTERPRISES WILL HELP REDUCE DIS CRIMINATION, CREATE AND 16
CREATE JOBS FOR ALL CITIZEN S OF MARYLAND, HELP GROW THE MARYLAND 17
ECONOMY, AND FOSTER COMPETITION THAT WILL REDUCE THE COST OF GOODS AND 18
SERVICES PROCURED BY THE STATE. 19

14–302. 20

(a) (10) (iv) 2. The head of the unit shall: 21

B. forward one copy of the waiver determination to the 22
[Governor’s] Office of Small, Minority, and Women Business Affairs. 23

(v) On or before July 31 of each year, each unit shall submit directly 24
to the Board of Public Works and the [Governor’s] Office of Small, Minority, and Women 25
Business Affairs an annual report of waivers requested and waivers granted under this 26
paragraph. 27

(12) (i) This paragraph applies after execution of a contract with an 28
expected degree of minority business enterprise participation. 29

(ii) The minority business enterprise participation schedule, 30
including any amendment, shall be attached to and made a part of the executed contract. 31

(iii) 1. A. Except as provided in subsubsubparagraph B of this 32
subsubparagraph, for purposes of this subparagraph, good cause for removal of a certified 33
minority business enterprise after contract execution includes documen ted 34
HOUSE BILL 1578 9

nonperformance by the minority business enterprise or election by the certified minority 1
business enterprise to cease work on the contract. 2

B. Failure of a certified minority business enterprise to 3
provide a bond requested by a contractor in violation of § 13–227 of this article may not be 4
considered nonperformance by the minority business enterprise. 5

2. A contractor may not terminate or otherwise cancel the 6
contract of a certified minority business enterprise subcontractor listed in the minor ity 7
business enterprise participation schedule without showing good cause and obtaining the 8
prior written consent of the minority business enterprise liaison and approval of the head 9
of the unit. 10

3. The unit shall send a copy of the written consent obtained 11
under subsubparagraph 2 of this subparagraph to the [Governor’s] Office of Small, 12
Minority, and Women Business Affairs. 13

(iv) A minority business enterprise participation schedule may be 14
amended to modify minority business enterprise participation after the date of contract 15
execution only if: 16

1. it is in the best interest of the State; 17

2. it is approved by the head of the unit; and 18

3. the contract is amended. 19

14–303. 20

(b) These regulations shall include: 21

(13) provisions requiring a submission to the unit by minority business 22
enterprises acknowledging all payments received or any other information requested based 23
on criteria established by the [Governor’s] Office of Small, Minority, and Women Business 24
Affairs under a contract governed by this subtitle; 25

(20) a requirement that each unit work with the [Governor’s] Office of 26
Small, Minority, and Women Business Affairs to designate certain procurements as being 27
excluded from the requirements of § 14–302(a) of this subtitle; 28

14–305. 29

(a) (1) Within [90] 60 days after the end of the fiscal year, each unit shall 30
report to the [Governor’s] Office of Small, Minority, and Women Business Affairs and the 31
certification agency. 32

(2) A report under this subsection shall for the preceding fiscal year: 33
10 HOUSE BILL 1578

(vi) contain other such information as required by the [Governor’s] 1
Office of Small, Minority, and Women Business Affairs and the certification agency and 2
approved by the Board. 3

(4) A report under this subsection shall be in a form prescribed by the 4
[Governor’s] Office of Small, Minority, and Women Business Affairs and the certification 5
agency and approved by the Board. 6

(b) (1) On or before [December 31 of ] THE 15TH 5TH DAY OF A REGULAR 7
LEGISLATIVE SESSION each year, the [Governor’s] Office of Small, Minority, and Women 8
Business Affairs shall submit to the Board of Public Works and, subject to § 2 –1257 of the 9
State Government Article, to the Legislative Policy Committee and the Joint Committee on 10
Fair Practices and State Personnel Oversight a report summarizing the information the 11
Office receives under subsection (a) of this section. 12

(4) (i) [Beginning with the report submitted under paragraph (1) of this 13
subsection on December 31, 2023, and each year thereafter, the Governor’s] THE Office of 14
Small, Minority, and Women Business Affairs shall include in the report SUBMITTED 15
UNDER PARAGRAPH (1) OF THIS SUBSECTION an attestation that all units required to 16
report under subsection (a) of this section are represented in the report. 17

(ii) To ensure accuracy of the attestation made under subparagraph 18
(i) of this paragraph, on or before December 31, 2023, and every 3 years thereafter, the 19
[Governor’s] Office of Small, Minority, and Women Business Affairs shall conduct an audit 20
of the Executive Branch of State government to determine what entities are included in the 21
definition of “unit” under § 11–101 of this article. 22

(C) (1) EXCEPT FOR THE QUARTE R IN WHICH A UNIT IS SUBMITTING AN 23
ANNUAL REPORT UNDER THIS SECTION, EACH UNIT SHALL REPORT QUARTERLY TO 24
THE OFFICE OF SMALL, MINORITY, AND WOMEN BUSINESS AFFAIRS: 25

(I) MINORITY BUSINESS EN TERPRISE PARTICIPATI ON DATA 26
UNDER SUBSECTION (A)(2)(I) OF THIS SECTION; 27

(II) MINORITY BUSINESS ENTERPRISE PROGRAM COMPLIANCE 28
ASSESSMENTS UNDER SUBSECTION (A)(2)(V) OF THIS SECTION; AND 29

(III) ANY OTHER INFORMATION REQUESTED BASED ON CRITERIA 30
ESTABLISHED BY THE OFFICE OF SMALL, MINORITY, AND WOMEN BUSINESS 31
AFFAIRS UNDER A CONTRACT RELATED TO CONTRACTS GOVERNED BY THIS 32
SUBTITLE. 33

HOUSE BILL 1578 11

(2) THE REPORT REQUIRED U NDER THIS SUBSECTION MAY BE 1
PREPARED IN CONJUNCT ION WITH THE ANNUAL REPORT REQUIRED UNDE R § 2
9–4120 OF THE STATE GOVERNMENT ARTICLE. 3

[(c)] (D) (1) In this subsection, “mitigating factors” includes documented 4
nonperformance or unavailability of a minority business enterprise designated for a 5
contract. 6

(2) The [Governor’s] Office of Small, Minority, and Women Business 7
Affairs and the Office of State Procurement in the Department o f General Services, in 8
consultation with the Office of the Attorney General and the Board of Public Works, shall 9
adopt by regulation criteria used to determine that a prime contractor has persistently 10
failed to meet contract goals in the absence of mitigating factors. 11

(3) The criteria adopted under paragraph (2) of this subsection shall 12
include the results of the compliance assessments made under subsection (a)(2)(v) of this 13
section. 14

(4) The [Governor’s] Office of Small, Minority, and Women Business 15
Affairs shall refer prime contractors identified under the criteria adopted under paragraph 16
(2) of this subsection to the Office of the Attorney General for debarment under § 17
16–203(d)(4) of this article. 18

14–308. 19

(c) The [Governor’s] Office of Small, Minority, and Women Business Affairs shall 20
make available a fraud hotline for reporting violations of this section. 21

14–309. 22

The provisions of §§ 14 –301 through 14 –305 of this subtitle, and any regulations 23
adopted under those sections, shall be of no effec t and may not be enforced after July 1, 24
[2026] 2031. 25

14–501. 26

(a) In this subtitle the following words have the meanings indicated. 27

(d) “Small business” means: 28

(1) a certified minority business enterprise, as defined in § 14 –301 of this 29
title, that meets the criteria specified under item (3) of this subsection; 30

(2) a veteran–owned small business enterprise, as defined in § 14 –601 of 31
this title, that meets the criteria specified under item (3) of this subsection; [or] 32

12 HOUSE BILL 1578

(3) a business, other than a broker, that meets the following criteria: 1

(i) the business is independently owned and operated; 2

(ii) the business is not a subsidiary of another business; 3

(iii) the business is not dominant in its field of operation; and 4

(iv) 1. A. the w holesale operations of the business did not 5
employ more than 50 persons in its most recently completed 3 fiscal years; 6

B. the retail operations of the business did not employ more 7
than 25 persons in its most recently completed 3 fiscal years; 8

C. the manufacturing operations of the business did not 9
employ more than 100 persons in its most recently completed 3 fiscal years; 10

D. the service operations of the business did not employ more 11
than 100 persons in its most recently completed 3 fiscal years; 12

E. the construction operations of the business did not employ 13
more than 50 persons in its most recently completed 3 fiscal years; and 14

F. the architectural and engineering services of the business 15
did not employ more than 100 persons in its most recently completed 3 fiscal years; or 16

2. A. the gross sales of the wholesale operations of the 17
business did not exceed an average of $4,000,000 in its most recently completed 3 fiscal 18
years; 19

B. the gross sales of the retail operations of the business did 20
not exceed an average of $3,000,000 in its most recently completed 3 fiscal years; 21

C. the gross sales of the manufacturing operations of the 22
business did not exceed an average of $2,000,000 in its most recently completed 3 fiscal 23
years; 24

D. the gross sales of the service operations of the business did 25
not exceed an average of $10,000,000 in its most recently completed 3 fiscal years; 26

E. the gross sales of the construction operations of the 27
business did not exceed an average of $7, 000,000 in its most recently completed 3 fiscal 28
years; and 29

F. the gross sales of the architectural and engineering 30
services of the business did not exceed an average of $4,500,000 in its most recently 31
completed 3 fiscal years; OR 32
HOUSE BILL 1578 13

(4) A JOINT VENTUR E OF TWO OR MORE PER SONS ASSOCIATED TO 1
CARRY OUT A SINGLE B USINESS ACTIVITY FOR A LIMITED PURPOSE OR TIME THAT 2
MEETS THE CRITERIA SPECIFIED UNDER ITEM (3) OF THIS SUBSECTION. 3

14–502.1. 4

(c) (1) A procurement may be exempt from designation under subsection (b) of 5
this section if the [Governor’s] Office of Small, Minority, and Women Business Affairs 6
certifies, concurrently with review of any waiver determinations for certified minority 7
business enterprise participation contract goals, that it is not practicable to do so. 8

(2) The Office of State Procurement in the Department of General Services 9
shall assist the [Governor’s] Office of Small, Minority, and Women Business Affairs in 10
establishing procedures and guidelines for the exemption of procurements under paragraph 11
(1) of this subsection. 12

14–503. 13

(a) (1) The [Governor’s] Office of Small, Minority, and Women Business 14
Affairs shall adopt regulations to establish procedures for compiling and maintaining a 15
comprehensive bidder’s list of qualified small businesses that shall be posted on the 16
Internet. 17

(2) THE OFFICE OF SMALL, MINORITY, AND WOMEN BUSINESS 18
AFFAIRS SHALL ADOPT R EGULATIONS TO ESTABL ISH A CERTIFICATION REVIEW 19
PROCESS. 20

(b) The [Governor’s] Office of Small, Minority, and Women Business Affairs shall: 21

(1) establish guidelines for S mall Business Reserve Program 22
administration; 23

(2) ensure agency compliance with the Small Business Reserve Program; 24

(3) provide training and technical assistance to agency personnel; and 25

(4) collect data regarding the State’s utilization of small business reserve 26
vendors. 27

(c) Each unit shall ensure compliance with the regulations set forth in subsection 28
(a) of this section. 29

14–504.1. 30

14 HOUSE BILL 1578

(a) The certification agency, in consultation with the [Governor’s] Office of Small, 1
Minority, and Women Business Affairs, shall develop an outreach program to increase the 2
participation of small businesses that are owned by economically disadvantaged 3
individuals participating in the Small Business Reserve Program. 4

14–505. 5

(a) Within 60 days after the enactment of the budget bill by the General 6
Assembly, each unit shall submit a report to the [Governor’s] Office of Small, Minority, and 7
Women Business Affairs that complies with the reporting requirements set forth in 8
COMAR 21.11.01.06. 9

(b) (1) Within [90] 60 days after the end of each fiscal year, each unit shall 10
submit a report to the [Governor’s] Office of Small, Minority, and Women Business Affairs 11
that complies with the requirements of paragraph (2) of this subsection. 12

(2) For the preceding fiscal year, the report shall: 13

(i) state the total number and the dollar value of awards the unit 14
made to small businesses under designated small business reserve contracts; 15

(ii) state the total number and the dollar value of aw ards the unit 16
made to small businesses under nondesignated small business reserve contracts, including 17
purchase card procurements; 18

(iii) state the total dollar value of awards the unit made under 19
procurement contracts; and 20

(iv) contain other such information as required by the [Governor’s] 21
Office of Small, Minority, and Women Business Affairs. 22

(C) (1) EXCEPT FOR THE QUARTE R IN WHICH A UNIT IS SUBMITTING AN 23
ANNUAL REPORT UNDER THIS SECTION, EACH UNIT SHALL REPORT QUARTERLY TO 24
THE OFFICE OF SMALL, MINORITY, AND WOMEN BUSINESS AFFAIRS: 25

(I) SMALL BUSINESS RESERVE ANNUAL DESIGN ATED AND 26
NONDESIGNATED ACHIEV EMENT AWARDS UNDER S UBSECTION (B) OF THIS 27
SECTION; AND 28

(II) ANY OTHER INFORMATION REQUESTED BASED ON CRITERIA 29
ESTABLISHED BY THE OFFICE OF SMALL, MINORITY, AND WOMEN BUSINESS 30
AFFAIRS UNDER A DESIGNATED O R UNDESIGNATED CONTR ACT AS RELATED TO 31
CONTRACTS GOVERNED BY THIS SUBTITLE. 32

HOUSE BILL 1578 15

(2) THE REPORT REQUIRED U NDER THIS SUBSECTION MAY BE 1
PREPARED IN CONJUNCT ION WITH THE ANNUAL REPORT REQUIRED UNDER § 2
9–4120 OF THE STATE GOVERNMENT ARTICLE. 3

[(c)] (D) On or before [December 31 ] THE 15TH 5TH DAY OF A REGULAR 4
LEGISLATIVE SESSION of each year, the [Governor’s] Office of Small, Minority, and 5
Women Business Affairs shall submit to the Board of Public Works and, subject to § 2–1257 6
of the State Government Article, to the Legislative Policy Committee a report summarizing 7
the information the Office receives under subsection (b) of this section. 8

14–604. 9

(A) The [Governor’s] Office of Small, Minority, and Women Business Affairs shall: 10

(1) adopt regulations to implement this subtitle; 11

(2) establish procedures for tracking and reporting participation of 12
veteran–owned small business enterprises under this subtitle; and 13

(3) on or before [December 1 ] THE 15TH 5TH DAY OF A REGULAR 14
LEGISLATIVE SESSION of each year, report to the Legislative Policy Committee on: 15

(i) the number and dollar value of contracts awarded to 16
veteran–owned small business enterprises under this su btitle, including the total dollar 17
value of payments made to veteran –owned small business enterprises under existing 18
contracts; and 19

(ii) an evaluation of the effectiveness of the program under this 20
subtitle. 21

(B) (1) WITHIN 60 DAYS AFTER THE END O F EA CH FISCAL YEAR , AND 22
EACH QUARTER THEREAFTER, EACH UNIT SHALL SUBMIT A REPORT TO THE OFFICE 23
OF SMALL, MINORITY, AND WOMEN BUSINESS AFFAIRS ON: 24

(I) THE INFORMATION REQUIRED UNDER SUBSECTION (A)(3)(I) 25
OF THIS SECTION; AND 26

(II) ANY OTHER INFORMATION REQUESTED BY THE OFFICE. 27

(2) A REPORT SUBMITTED UND ER THIS SUBSECTION M AY BE 28
PREPARED IN CONJUNCT ION WITH THE ANNUAL REPORT REQUIRED UNDE R § 29
9–4120 OF THE STATE GOVERNMENT ARTICLE. 30

Article – State Government 31

16 HOUSE BILL 1578

9–1A–10. 1

(A) (1) THE FINDINGS AND EVIDENCE RELIED ON B Y THE GENERAL 2
ASSEMBLY FOR THE CONT INUATION OF THE MINORITY BUSINESS ENTERPRISE 3
PROGRAM UNDER TITLE 14, SUBTITLE 3 OF THE STATE FINANCE AND 4
PROCUREMENT ARTICLE ARE INCORPORATED IN THIS SECTION. 5

(2) TO THE EXTENT PRACTICABLE AND AUTHORIZED BY THE UNITED 6
STATES CONSTITUTION, A LICENSEE SHALL COMPLY WITH THE STATE’S MINORITY 7
BUSINESS ENTERPRISE PROGRAM. 8

(a) (B) (1) (i) An applicant or a licensee is subject to: 9

1. THE REQUIREMENT TO P UT FORTH A GOOD FAIT H 10
EFFORT TO MEET the minority business participation goal established for a unit by the 11
Special Secretary for the Office of Small, Minority, and Women Business Affairs under § 12
14–302(a)(1)(ii) of the State Finance and Procurement Article; and 13

2. any other corresponding provisions of law under Title 14, 14
Subtitle 3 of the State Finance and Procurement Article. 15

(ii) The minority business participation goal shall apply to: 16

1. construction related to video lottery terminals; and 17

2. procurement related to the operation of video lottery 18
terminals, including procurement of equipment and ongoing services. 19

(2) If the county in which a video lottery facility will be located has higher 20
minority business participation requirements than the State as described in paragraph (1) 21
of this subsection, the applicant shall meet the county’s minority business participation 22
requirements to the extent possible. 23

(3) A county in which a video lottery facility will be located may impose 24
local business, local minority business participation, and local hiring requirements to the 25
extent authorized by local law and permitted by the United States Constitution. 26

(4) Any collective bargaining agreement or agreements, including a project 27
labor agreement or a ne utrality agreement, entered into by an applicant or licensee may 28
not negate the requirements of this subsection. 29

(5) If an applicant for employment at a video lottery facility believes that 30
the applicant has been discriminated against in the employment process, the applicant may 31
appeal the employment decision to the local human relations board in the county where the 32
facility is located. 33

HOUSE BILL 1578 17

(6) Notwithstanding any collective bargaining agreement or agreements, a 1
licensee shall: 2

(i) provide health insurance coverage for its employees; and 3

(ii) give a preference to hiring qualified employees from the 4
communities within 10 miles of the video lottery facility. 5

(7) A licensee shall: 6

(i) provide retirement benefits for its employees; and 7

(ii) if the licensee is a racetrack licensee, provide retirement benefits 8
to its video lottery operation employees that are equivalent to the level of benefits provided 9
to the racetrack employees who are eligible under the Maryland Racetrack Employees 10
Pension Fund. 11

(8) Notwithstanding any collective bargaining agreement or agreements, if 12
the licensee is a racetrack location, the licensee shall provide health insurance coverage to 13
all employees of the racetrack, including the employees of the racetrack on the backstretch 14
of the racetrack. 15

(b) (C) (1) The Commission shall ensure that a video lottery operation 16
licensee complies with the requirements of subsection (a)(1) (B)(1) and (2) of this section 17
as a condition of holding the video lottery operation license. 18

(2) The [Governor’s] Office of Small, Minority, and Women Business 19
Affairs shall monitor a licensee’s compliance with subsection (a)(1) (B)(1) and (2) of this 20
section. 21

(3) The [Governor’s] Office of Small, Minority, and Women Business 22
Affairs shall report to the Commission at least every 6 months on the compliance of 23
licensees with subsection (a)(1) (B)(1) and (2) of this section. 24

(4) If the [Governor’s] Office of Small, Minority, and Women Business 25
Affairs reports that a licensee is not in compli ance with subsection (a)(1) (B)(1) and (2) of 26
this section, the Commission may take immediate action to ensure the compliance of the 27
licensee. 28

(c) (D) On or after July 1, [2026] 2031, the provisions of subsections (a)(1) 29
(B)(1) and (2) and (b) (C) of this section and any regulations adopted under subsections 30
(a)(1) (B)(1) and (2) and (b) (C) of this section shall be of no effect and may not be enforced. 31

9–1E–07. 32

18 HOUSE BILL 1578

(b) (1) The findings and evidence relied on by the General Assembly for the 1
continuation of the Minority Business Enterprise Program under Title 14, Subtitle 3 of the 2
State Finance and Procurement Article are incorporated in this subsection. 3

(2) To the extent practicable and authorized by the United States 4
Constitution, a sport s wagering licensee shall comply with the State’s Minority Business 5
Enterprise Program. 6

(3) (i) On or before 6 months after the issuance of a sports wagering 7
license under this subtitle, the [Governor’s] Office of Small, Minority, and Women Business 8
Affairs, in consultation with the Office of the Attorney General and the sports wagering 9
licensee, shall establish a clear plan for setting reasonable and appropriate minority 10
business enterprise participation goals and procedures for the procurement of goods and 11
services related to sports wagering, including procurement of construction, equipment, and 12
ongoing services. 13

(ii) To the extent practicable, the goals and procedures specified in 14
subparagraph (i) of this paragraph shall be based on the requirements of Title 14, Subtitle 15
3 of the State Finance and Procurement Article and the regulations implementing that 16
subtitle. 17

(4) On or after July 1, [2026] 2031, the provisions of this subsection and 18
any regulations adopted under this subsection shall be of no effect and may not be enforced. 19

9–4114. 20

(a) There is a Governor’s Subcabinet on Socioeconomic Procurement 21
Participation. 22

(b) The Governor’s Subcabinet is composed of: 23

(1) the [Special] Secretary of [the Governor’s Office of Small, Minority, and 24
Women Business Affairs] SOCIAL AND ECONOMIC MOBILITY, who shall serve as chair 25
of the Subcabinet; 26

(2) the Secretary of Budget and Management, or the Secretary’s designee; 27

(3) the Secretary of Commerce, or the Secretary’s designee; 28

(4) the Secretary of General Services, or the Secretary’s designee; 29

(5) the Secretary of Health, or the Secretary’s designee; 30

(6) the Secretary of Housing and Community Development, or the 31
Secretary’s designee; 32

(7) the Secretary of Human Services, or the Secretary’s designee; 33
HOUSE BILL 1578 19

(8) the Secretary of Information Technology, or the Secretary’s designee; 1

(9) THE SECRETARY OF LABOR, OR THE SECRETARY’S DESIGNEE; 2

[(9)] (10) the Secretary of Public Safety and Correctional Services, or the 3
Secretary’s designee; 4

[(10)] (11) the Secretary of Transportation, or the Secretary’s designee; 5

[(11)] (12) the Secretary of Veterans and Military Families, or the 6
Secretary’s Designee; 7

[(12)] (13) the Chief Procurement Officer for the State, or the Chief 8
Procurement Officer’s designee; 9

[(13)] (14) the Minority Business Enterprise Ombudsman, or the 10
Ombudsman’s designee; and 11

[(14)] (15) any other head of a department or agency that is accountable to 12
the Governor, as deemed necessary by the Governor. 13

(c) The Governor’s Subcabinet shall: 14

(1) meet: 15

(i) a minimum of once each quarter; and 16

(ii) at a frequency deemed appropriate by the chair; 17

(2) study socioeconomic procurement programs in other states to identify 18
successes and best practices; 19

(3) develop accountability measures for procurement forecasts, strategic 20
plans, Procurement Review Group processes, and liaison officer accountability; 21

(4) work with the Office of State Procurement to implement process 22
improvements that directly impact socioeconomic procurement businesses’ ability to fairly 23
compete for and understand State contracting opportunities; 24

(5) identify and recommend statutory and regulatory reforms to 25
strengthen and improve the State’s socioeconomic procurement programs; and 26

(6) recommend actions to make improvements to the Small Business 27
Reserve Program, the Minority Business Enterprise Program, and the Veteran Small 28
Business Enterprise Program. 29
20 HOUSE BILL 1578

(d) On or before December 31, 2025, and each December 1 thereafter, the 1
Governor’s Subcabinet shall report to the Governor on the Governor’s Subcabinet’s 2
activities, progress, and recommendations. 3

Chapter 553 of the Acts of 2020, as amended by Chapters 137 and 138 of the Acts 4
of 2023 and Chapters 620 and 621 of the Acts of 2025 5

SECTION 4. AND BE IT FURTHER ENACTED, That the certification agency 6
designated by the Board of Public Works under § 14 –303(b) of the State Finance and 7
Procurement Article to certify and decertify minority business enterprises, in consultation 8
with the Office of the Attorney General and the [Governor’s] Office of Small, Minority, and 9
Women Business Affairs, shall initiate an analysis of the Minority Business Enterprise 10
Program requirements of § 10A–404 of the State Finance and Procurement Article and the 11
disparity study submitted in accordance with this Act to evaluate compliance with the 12
requirements of any federal and constitutional requirements and submit a report on the 13
analysis to the Legislative Policy Committee of the General Assembly, in accordance wi th 14
§ 2–1257 of the State Government Article, on or before September 30, [2025] 2030. 15

SECTION 5. AND BE IT FURTHER ENACTED, That the certification agency 16
designated by the Board of Public Works under § 14 –303(b) of the State Finance and 17
Procurement Article to certify and decertify minority business enterprises, in consultation 18
with the Office of the Attorney General and the [Governor’s] Office of Small, Minority, and 19
Women Business Affairs, shall initiate an analysis of the disparity study submitted in 20
accordance with this Act to determine if it applies to the type of work that will be likely to 21
be performed by an approved applicant with respect to an offshore wind project under § 22
7–704.1(i) of the Public Utilities Article as enacted by Section 2 of this A ct and submit a 23
report on the analysis to the Legislative Policy Committee of the General Assembly, in 24
accordance with § 2 –1257 of the State Government Article, on or before September 30, 25
[2025] 2030. 26

Chapter 728 of the Acts of 2021, as amended by Chapters 137 and 138 of the Acts 27
of 2023 and Chapters 620 and 621 of the Acts of 2025 28

SECTION 2. AND BE IT FURTHER ENACTED, That on or before July 1, [2026] 29
2031, the Special Secretary for the Office of Small, Minority, and Women Business Affairs, 30
in consultat ion with the Secretary of Transportation and the Attorney General, shall 31
establish policies and guidelines for the implementation of this Act. 32

SECTION 3. AND BE IT FURTHER ENACTED, That, on or before December 31, 33
[2026] 2031, the [Governor’s] Office of Small, Minority, and Women Business Affairs shall 34
report to the General Assembly, in accordance with § 2 –1257 of the State Government 35
Article, on the establishment of minority business enterprise subgoals in accordance with 36
this Act, including: 37

HOUSE BILL 1578 21

(1) whether the establishment of minority business enterprise subgoals 1
was practicable based on the type of capital project; and 2

(2) whether any changes should be made to the capital minority business 3
enterprise subgoal framework established by this Act. 4

Chapter 154 of the Acts of 2012, as amended by Chapters 200 and 201 of the Acts 5
of 2013, Chapter 340 of the Acts of 2017, Chapter 117 of the Acts of 2022, 6
Chapters 137 and 138 of the Acts of 2023, and Chapters 620 and 621 of the Acts of 7
2025 8

SECTION 2. AND BE IT FURTHER ENACTED, That the Certification Agency, in 9
consultation with the General Assembly and the Office of the Attorney General, shall 10
initiate a study of the Minority Business Enterprise Program to evaluate the Program’s 11
continued compliance wit h the requirements of the Croson decision and any subsequent 12
federal or constitutional requirements. In preparation for the study, the Board of Public 13
Works may adopt regulations authorizing a unit of State government to require bidders 14
and offerors to sub mit information necessary for the conduct of the study. The Board of 15
Public Works may designate that certain information received in accordance with 16
regulations adopted under this section shall be confidential. Notwithstanding that certain 17
information may be designated by the Board of Public Works as confidential, the 18
Certification Agency may provide the information to any person that is under contract with 19
the Certification Agency to assist in conducting the study. The study shall also evaluate 20
race–neutral programs and other methods that can be used to address the needs of minority 21
businesses. The final report on the study shall be submitted to the Legislative Policy 22
Committee of the General Assembly, in accordance with § 2–1257 of the State Government 23
Article, on or before September 30, [2025] 2030, so that the General Assembly may review 24
the report before the [2026] 2031 Session. 25

Chapter 641 of the Acts of 2022, as amended by Chapters 137 and 138 of the Acts 26
of 2023 and Chapters 620 and 621 of the Acts of 2025 27

SECTION 2. AND BE IT FURTHER ENACTED, That: 28

(b) The certification agency and the [Governor’s] Office of Small, Minority, and 29
Women Business Affairs shall submit the findings of the study required under subsection 30
(a) of this section to the Leg islative Policy Committee, in accordance with § 2 –1257 of the 31
State Government Article, on or before December 31, [2026] 2031, so that the General 32
Assembly may review the findings before the [2027] 2032 Session. 33

[(c)] (B) The State Retirement and Pension System shall provide to the 34
certification agency any information deemed necessary to assess the need for remedial 35
measures to assist minority and women –owned businesses in the brokerage and 36
investment management services industry and market. 37

22 HOUSE BILL 1578

(d) The [Governor’s] Office of Small, Minority, and Women Business Affairs, in 1
consultation with the certification agency and the Office of the Attorney General, shall 2
develop race – and gender –neutral approaches to address the needs of minority and 3
women–owned businesses in the brokerage and investment management services industry 4
and market and submit its report to the Legislative Policy Committee, in accordance with 5
§ 2–1257 of the State Government Article, on or before December 31, [2026] 2031, so that 6
the General Assembly may review, consider, and adopt race – and gender –neutral 7
alternatives to remedial measures that are not race and gender neutral. 8

SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect June 9
1, 2026. 10

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