§ 2-211
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/md/state-finance-and-procurement/2-211A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
§2–211.
(1)In this section the following words have the meanings indicated.
(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.
(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.
(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.
(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.