Public Funding - Nonprofit Entities - Reporting
HB 129 would require certain nonprofit entities to file annual reports with the Comptroller when at least 50% of their yearly funding comes from specified public sources. Those sources include grants from the State, counties, or municipalities; the State capital budget; local impact grants; and charges for use of projects that were funded by those public sources. The reporting requirement would apply to nonprofits incorporated in Maryland or otherwise qualified to do business in the state that are recognized by the IRS as tax-exempt under section 501(c).
The report would have to identify the amount of public funding received, describe how the funding was used, and include any additional information the Comptroller requires. The Comptroller would then be required to compile the reported information and submit a summary to the General Assembly each year by January 31. The bill would take effect July 1, 2026, and would add a new section to the State Finance and Procurement Article.
The bill would create a new reporting framework in the State Finance and Procurement Article for nonprofits that rely heavily on public funding. It would not directly change tax-exempt status or funding eligibility, but it would impose disclosure obligations on affected nonprofit entities and create a new annual reporting duty for the Comptroller to transmit summarized information to the legislature. The practical effect would be increased transparency and administrative oversight for nonprofits receiving significant state or local public support.
No committee transcripts or recorded votes were provided, so there is no direct evidence of debate or support levels in the available record. The bill was introduced and assigned to Appropriations, but the last action shown is that it was withdrawn by the sponsor. That suggests the proposal did not advance to a recorded vote and may not have had an opportunity for formal committee consideration.
The main likely point of contention is the scope of the reporting mandate for nonprofits that receive substantial public funding, especially organizations that may view the requirement as burdensome or as an expansion of state oversight. Supporters would likely frame the bill as a transparency measure for entities using public dollars, while opponents might argue that the 50% threshold, the breadth of covered funding sources, and the Comptroller’s authority to require additional information could create compliance costs or discourage nonprofit participation in public projects. Because there were no transcripts or votes, the specific positions of legislators or stakeholders are not documented in the provided materials.