MSBA Sections continue advocating for the legal profession in Annapolis. Here are a few bill updates:

Business Law Section

SB400 – Corporations and Associations – Definitions, Emergencies, and Outstanding Stock – Revisions

Position: Support

The Section’s Committee on Corporation Law drafted SB400 to address several revisions and clarifications to corporations and REITs. The proposed legislation:

• Provides statutory authority to adopt emergency bylaw provisions because of a catastrophic event.
• Grants statutory power for limited corporate acts during an emergency event if a corporation has not adopted emergency bylaw provisions, including notice provisions, remote communication, and immunity for corporate actions taken in “good faith” during an emergency.
• Clarifies the timing of when shares of stock are no longer deemed to be outstanding following a redemption or repurchase of the shares of stock by a corporation.
• Permits a limited partnership to also serve as a resident agent for a Maryland corporation and other Maryland entities.
• Clarifies the requirements for principal offices for limited liability companies and limited liability partnerships.

HB 271 – Limited Liability Companies – Articles of Organization – Required Information.

Position: Oppose

The Section opposes HB 271, requiring the name and home address of each individual member of an LLC who is authorized to act on behalf of the LLC to be published in the company’s articles of organization upon information, and to be fined up to $5,000 and found guilty of a misdemeanor if a person knowingly files articles of organization with incorrect information. A minority of states require public disclosure of the names of a limited liability company’s members with authority to form the company, and only a few require the disclosure of the person’s address. Delaware and Virginia do not require such public disclosures. Enactment of such an intrusive mandate would make Maryland an outlier and decrease its attractiveness as a destination to launch and grow businesses – to the detriment of Maryland’s tax base and its residents. The bill also offers no protection through a non-public database that is included in the language of the U.S. Corporate Transparency Act.

Estates and Trusts Section

HB 271 – Limited Liability Companies – Articles of Organization – Required Information.

Position: Oppose

The Estates and Trusts Section joins the Business Law Section in opposing HB 271. Many Maryland clients create LLCs for estate planning purposes, often naming several family members as managing members, and have privacy concerns that those names and home addresses would be available to the public. Given the potential fines and violations for failing to make the required updates to the articles, the Section anticipates advising clients to create their family LLCs in another jurisdiction such as Delaware that lacks such restrictions if HB271 were adopted.

SB75 – Maryland Uniform Transfers to Minors Act – Transfers as Custodian for the Benefit of a Minor – Authorization of Court

Position: Support

The Section drafted SB75 that proposes to increase the amount that person representatives of estates and trustees of trusts can transfer to an UTMA custodian for a minor’s benefit, without petitioning for court approval, from $10,000 to $25,000. The proposed increase would save time, legal fees, and court costs for the recipients of distributions and would help to preserve more of the estate assets for the minor’s use.

Criminal Law

HB118 – Correctional Services – Geriatric and Medical Parole

Position: Favorable with Amendment

The Section supports with amendment HB118, requiring the Maryland Parole Commission to consider the age of an incarcerated person and the totality of circumstances when evaluating a request for medical parole. With an increasing aging population, the question of medical and geriatric parole has important implications for the individuals involved, for public safety, and for the ability of the correctional system to efficiently function. The Section proposes an amendment to limit persons who could request an independent medical evaluation to the applicant, their attorney, or someone actively involved in the application, as the incarcerated individual is only permitted one such evaluation.

Family Law

SB365 – Family Law – Custody Evaluators – Qualifications and Training

Position: Oppose

SB365 specifies certain qualifications and training necessary for an individual to be appointed or approved by a court as a custody evaluator, and specifies that certain expert evidence is admissible in certain child custody and visitation proceedings under certain circumstances. SB365 would substantially increase the number of mandated custody evaluations, leading to higher fees and a slowdown in cases until the evaluation can be completed. The list of proposed training subjects in the bill is overly narrowing, excluding other necessary subjects. Moving the educational and training requirements for custody evaluators out of the Maryland Rules and into statute, while leaving other aspects related to custody evaluators in the Maryland Rules, will create confusion and a much slower process for any updates to the law. Read the full section testimony drafted by Lindsay Parvis and Michelle Smith from the Section Council.

HB311/SB174 – Child Support – Suspension of Driver’s Licenses

Position: Support

HB311/SB174  revamps the Maryland Child Support Enforcement Agency’s procedures for referring delinquent child support cases for license suspension. It prohibits the Agency’s use of an automated lottery system to decide which cases to refer to the MVA each month, instead creating a judicial process whereby the Agency would have to petition the court for approval to suspend an obligor’s driver’s license in appropriate cases. This bill also explicitly lists specific circumstances in which it would be inappropriate to seek license suspension, such as when the obligor now has custody of the minor child, is disabled, or requires the use of a car for employment. This new system would allow far more control, caution, and deliberation when using driver’s license suspension as an enforcement tool, ensuring that this remedy is only sought in cases where it would be appropriate and effective.

The MSBA actively shapes practice-based legislation and policy to realize the best possible outcomes for Maryland’s lawyers and legal professionals. Visit MSBA Advocacy to learn more.