Maryland § 2-211

§ 2-211.

    (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.