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Maryland Code, State Finance and Procurement § 2-211

Current as of January 01, 2025 | Updated by Findlaw Staff

(a)(1) In this section the following words have the meanings indicated.

(2)(i) “Grant” means a legal instrument of financial assistance between a State grant-making entity and a nonprofit organization exempt from taxation under § 501(c) of the Internal Revenue Code that is:

1. used to enter into a relationship the principal purpose of which is to transfer anything of value from the State grant-making entity to the grant recipient to carry out a public purpose authorized by law and not to acquire property or services for the direct benefit or use of the State grant-making entity;

2. used to provide for one or more payments in reimbursement for services or other performance under the agreement on a scheduled or other incremental basis;

3. distinguished from a cooperative agreement in that it does not provide for substantial involvement between the State grant-making entity and the grant recipient in carrying out the activity contemplated by the award; and

4. executed, renewed, or extended on or after June 1, 2023.

(ii) “Grant” does not include an instrument that provides only:

1. direct government cash assistance to an individual;

2. a subsidy;

3. a loan;

4. a loan guarantee;

5. insurance; or

6. State funding that is required annually and is calculated through a formula set in statute.

(3) “Payment” includes all required processing and authorization by the Comptroller, as provided under State regulations.

(4) “Proper invoice” means a bill, a written document, or an electronic transmission readable by the State grant-making entity, provided by a grant recipient, that:

(i) requests an amount that is due and payable by law under a written grant agreement; and

(ii) meets the requirements of subsection (e) of this section.

(b) This section does not apply to grants:

(1) made by a unit in the Judicial Branch of State government; or

(2) funded from general obligation bond proceeds or from a General Fund capital appropriation to the Board of Public Works.

(c) It is the policy of the State to make a payment under a grant agreement within 37 days after:

(1) the day on which the payment becomes due under the grant agreement; or

(2) if later, the day on which the State grant-making entity receives a proper invoice.

(d)(1) Except as provided in paragraph (3) of this subsection, a grant-making entity shall be liable for interest that shall accrue at the rate of 9% a year on any amount:

(i) that is due and payable by law and under a written grant agreement; and

(ii) for which the grant-making entity has received, and failed to submit to the Comptroller within 30 days of its receipt, a proper invoice.

(2) Interest shall accrue beginning on the 38th day after the day on which the State grant-making entity receives a proper invoice.

(3) A State grant-making entity is not liable for interest:

(i) unless within 30 days after the date on the State's check for the amount on which the interest accrued, the grant recipient submits an invoice for the interest;

(ii) if the State grant-making entity has initiated legal proceedings to dispute the amount owed to the grant recipient;

(iii) accruing more than 1 year after the 31st day after the State grant-making entity receives an invoice; or

(iv) on an amount that represents unpaid interest.

(4) Interest for which a State grant-making entity is liable under this subsection:

(i) shall be paid from the State grant-making entity's operating budget; and

(ii) may not be paid from funds appropriated to fund a grant.

(e) A proper invoice, required as payment documentation, shall include without error:

(1) the grant recipient's federal employer identification number or Social Security number;

(2) the grant agreement identification number or another adequate description of the grant agreement; and

(3) any documentation required by regulation or the grant agreement.

(f) For the purposes of determining a payment due date and the date on which interest will begin to accrue if a payment is late, an invoice shall be deemed to be received:

(1) for invoices that are mailed, when a proper invoice is received by the State grant-making entity, as of the date the State grant-making entity annotates the invoice with the date and time of receipt; or

(2) for invoices electronically transmitted, on the date the transmission is received by the State grant-making entity, or the next business day if received after 5 p.m.

(g)(1) On receipt of an invoice, a State grant-making entity shall:

(i) mark the invoice with the date the invoice was received; and

(ii) review the invoice as soon as practicable to determine whether the invoice is a proper invoice.

(2) If the State grant-making entity determines that the invoice is a proper invoice and submits the invoice to the Comptroller, the Comptroller shall make payment within 5 business days.

(3)(i) If the State grant-making entity determines that the invoice is not a proper invoice, the State grant-making entity shall notify the grant recipient of all defects that prevent processing and specify all reasons why the invoice is not proper within 2 business days after the determination.

(ii) It is the responsibility of the grant recipient to submit a corrected invoice.

(4) State grant-making entities:

(i) may use media that produce tangible recordings of information to expedite the payment process, rather than delaying the process by requiring original paper documents; and

(ii) shall provide adequate safeguards and controls to ensure the integrity of the data and to prevent duplicate processing.

(5) Failure by a State grant-making entity to comply with the procedural requirements of this subsection does not constitute a late payment.

(6) This section does not create liability on the Comptroller for interest accrued on a late payment.

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Cite this article: FindLaw.com - Maryland Code, State Finance and Procurement § 2-211 - last updated January 01, 2025 | https://codes.findlaw.com/md/state-finance-and-procurement/md-code-state-fin-and-proc-sect-2-211/

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