# Correctional Services (GCS)

## Title 3. Division of Correction

### Subtitle 5. Maryland Correctional Enterprises

#### Section 3-501

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

(b) "Chief Executive Officer" means the Chief Executive Officer of Maryland Correctional Enterprises.

(c) "Contracting unit" means a unit of State government that is:

  (1) authorized to contract for goods and services; or

  (2) responsible for procurement of goods and services.

(d) "Management Council" means the Maryland Correctional Enterprises Management Council.

(e) "Political subdivision" means a county, municipal corporation, or special taxing district.

#### Section 3-502

The purpose of this subtitle is to establish a Maryland Correctional Enterprises organization in the Division that:

(1) is financially self-supporting, generates revenue for its operations and capital investments, and reimburses the Division at a reasonable rate for services exchanged between the Division and Maryland Correctional Enterprises;

(2) provides meaningful work experiences for incarcerated individuals that are intended to allow incarcerated individuals to improve work habits, attitudes, and skills for the purpose of improving the employability of the incarcerated individuals on release;

(3) seeks to develop industries that provide full-time work experience or rehabilitation programs for all eligible incarcerated individuals;

(4) operates correctional industries in an environment that resembles as closely as possible the environment of private sector business operations; and

(5) makes the Division responsible for and accountable to the Secretary and the Governor for the Maryland Correctional Enterprises program.

#### Section 3-503

There is a Maryland Correctional Enterprises organization in the Division.

#### Section 3-504

The Division may exercise any authority necessary to perform properly any of its duties or functions under this subtitle.

#### Section 3-505

The Secretary shall appoint a Chief Executive Officer with the approval of the Management Council.

#### Section 3-506

(a)

  (1) The Chief Executive Officer:

    (i) shall determine the personnel requirements of Maryland Correctional Enterprises;

    (ii) is the appointing authority for all personnel of Maryland Correctional Enterprises; and

    (iii) may hire individuals and incarcerated individuals consistent with existing policies and procedures of Maryland Correctional Enterprises as of July 1, 2012.

  (2) The number of positions for Maryland Correctional Enterprises shall be included within the total personnel allocations provided for the Department.

(b) Special appointment positions in Maryland Correctional Enterprises are managerial, supervisory, and confidential positions.

#### Section 3-507

(a) The Department shall include the budget for Maryland Correctional Enterprises in the Department's budget.

(b)

  (1) Maryland Correctional Enterprises may establish a revolving fund to contain an amount that the Treasurer approves.

  (2)

    (i) Subject to the provisions of subparagraph (ii) of this paragraph, the revolving fund may be used for general operating expenses and the purchase of capital assets.

    (ii) The revolving fund may be used to provide financial assistance, up to $250,000 in a fiscal year, to the Division of Correction to establish and operate employment readiness training programs and transitional services to rehabilitate incarcerated individuals currently or previously employed by Maryland Correctional Enterprises.

  (3) The revolving fund established under paragraph (1) of this subsection is not subject to Sec. 7-302 of the State Finance and Procurement Article.

  (4) Maryland Correctional Enterprises shall submit an annual statement to the Comptroller and the Treasurer that provides an accurate and detailed accounting of all receipts and disbursements from the revolving fund.

(c) General Fund money may be appropriated to Maryland Correctional Enterprises to be used for the direct expenses of training incarcerated individuals.

#### Section 3-508

(a) The Division shall:

  (1) formulate an accounting and record system that at all times indicates the source, nature, and extent of purchases and sales of Maryland Correctional Enterprises; and

  (2) maintain accounting records and prepare financial statements in accordance with generally accepted accounting principles for enterprise fund type activities.

(b) The financial statements required under subsection (a)(2) of this section shall be prepared and available for audit purposes not later than 60 days after the close of each fiscal year.

#### Section 3-509

(a) Annually, the Division shall submit a complete financial and operational report of Maryland Correctional Enterprises and the Maryland Correctional Enterprises revolving fund to:

  (1) the Governor;

  (2) the Secretary; and

  (3) the Secretary of Budget and Management.

(b) The report required under subsection (a) of this section shall:

  (1) be in the same general form as a report by the Division on its operations and programs;

  (2) include information about present and projected personnel and compensation requirements of Maryland Correctional Enterprises;

  (3) list the job classifications for incarcerated individual labor in each department and facility under the authority of Maryland Correctional Enterprises;

  (4) list the daily wage scale at each prison for each job classification under the authority of Maryland Correctional Enterprises;

  (5) list the total number of incarcerated individuals currently employed at facilities under the authority of Maryland Correctional Enterprises, disaggregated by facility; and

  (6) list the race, age, and sex of incarcerated individuals currently employed at facilities under the authority of Maryland Correctional Enterprises, disaggregated by job classification and wage scale.

(c) The Governor, the Secretary, and the Secretary of Budget and Management may include data from the report submitted under this section in the preparation of the budget and capital improvement bill.

#### Section 3-511

(a) The Commissioner and the Chief Executive Officer may develop programs to provide services or produce goods used by:

  (1) units of State government;

  (2) political subdivisions of the State;

  (3) units of the federal government;

  (4) units of other states; or

  (5) political subdivisions of other states.

(b)

  (1) The Commissioner and the Chief Executive Officer, with the approval of the Secretary, may develop training programs to provide construction and construction-related services, as defined in Title 11, Subtitle 1 of the State Finance and Procurement Article, for State correctional facilities.

  (2) The training programs will be developed in consultation with the Maryland and District of Columbia Building Trades Councils.

  (3) The programs established under paragraph (1) of this subsection are not subject to:

    (i) the provisions of Sec. 3-515 of this subtitle; or

    (ii) except for Sec. 11-101 of the State Finance and Procurement Article, the provisions of Division II of the State Finance and Procurement Article.

  (4) A construction project under paragraph (1) of this subsection may not exceed $500,000 in total costs per unrelated project as determined by the Secretary.

(c)

  (1) In this subsection, "personal information" means an individual's:

    (i) Social Security number; or

    (ii) credit card or financial information.

  (2) A program may not allow an incarcerated individual to have access to the personal information of another.

#### Section 3-512

(a) In accordance with subsection (b) of this section and after consulting with the Department of General Services, other contracting units, and political subdivisions, the Division and Maryland Correctional Enterprises shall establish uniform standards for quality, quantity, style, design, delivery, scheduling, and pricing.

(b)

  (1) The uniform standards developed under subsection (a) of this section shall be designed to reflect planned and forecasted product lines and production operations of Maryland Correctional Enterprises, commensurate with the production ability of Maryland Correctional Enterprises.

  (2) After review by the Management Council, Maryland Correctional Enterprises shall send the standards to the appropriate contracting units for inclusion in annual goods and service procurement contracts.

#### Section 3-513

(a) In accordance with subsection (b)(1) of this section, the Commissioner and Chief Executive Officer shall develop programs to provide incarcerated individuals with occupational experience to complement personnel development plans of the State Department of Education and other units of State government serving incarcerated individuals in the Division.

(b)

  (1) In establishing programs required under subsection (a) of this section, the Commissioner and Chief Executive Officer shall consult with:

    (i) the Assistant Secretary for the Division of Employment and Training, Maryland Department of Labor;

    (ii) the Assistant State Superintendent for the Division of Career Technology and Adult Learning, State Department of Education;

    (iii) the Commissioner of the Division of Labor and Industry, Maryland Department of Labor; and

    (iv) the Director of the Correctional Education Program, State Department of Education.

  (2) The individuals listed in paragraph (1) of this subsection shall provide appropriate assistance to the Commissioner and Chief Executive Officer in carrying out this section.

#### Section 3-514

(a) The Commissioner and Chief Executive Officer shall establish the compensation rate for incarcerated individual labor in Maryland Correctional Enterprises, taking into consideration other wage payments and incentives in other programs.

(b) After review by the Management Council, and after consideration of any recommendation by the Chief Executive Officer, the Commissioner shall adopt regulations in accordance with Title 10, Subtitle 1 of the State Government Article that govern the method and time of compensation payments.

#### Section 3-515

(a) A unit of State government shall purchase from Maryland Correctional Enterprises any goods or services that are available from Maryland Correctional Enterprises and that Maryland Correctional Enterprises can provide at a price not exceeding the prevailing average market price as determined by the Pricing and Selection Committee for Preferred Providers.

(b) The Pricing and Selection Committee for Preferred Providers shall review and verify the prevailing average market prices, as proposed by Maryland Correctional Enterprises:

  (1) when changes are made to the pricing of existing goods and services that are available from Maryland Correctional Enterprises; and

  (2) for new goods or services that Maryland Correctional Enterprises intends to make available.

(c)

  (1) The contracting unit shall inform each unit of State government for which it procures goods or services within 60 days after the award of a contract.

  (2) Quarterly, each unit that requires goods or services for its operations shall inform Maryland Correctional Enterprises of its anticipated orders during the next 3-month period.

  (3) If Maryland Correctional Enterprises is unable to provide any of the goods or services under the contract, Maryland Correctional Enterprises shall notify the contracting unit so that appropriate alternative action may be taken to meet the needs of units of State government for which the contracting unit procures goods or services.

(d) The Board of Public Works:

  (1) shall suspend the application of subsection (a) of this section if the Board of Public Works finds that the purposes of Division II of the State Finance and Procurement Article are being unduly eroded due to the volume and scope of activities and sales by Maryland Correctional Enterprises; and

  (2) may suspend the application of subsection (a) of this section for data entry services that involve information that is protected from disclosure under Title 4 of the General Provisions Article.

#### Section 3-516

(a) Except as authorized under subsection (b) of this section, goods and services of Maryland Correctional Enterprises may not be sold on the open market.

(b) Goods and services of Maryland Correctional Enterprises may be sold on the open market:

  (1) if they are produced or provided by an individual on parole or in a work release program;

  (2) if the sale is made to a charitable, civic, educational, fraternal, or religious agency, association, or institution for its own use and not for resale within 1 year of the purchase;

  (3) to a person for national defense purposes if not prohibited by an act of Congress;

  (4) if they are surplus goods remaining after meeting the forecasted requirements of units of State government and political subdivisions and the goods remain unsold 1 year after being produced;

  (5) for use by a contractor or subcontractor in performance of a contract with a unit of State government or any other governmental unit in the State;

  (6) as allowed under the Private Sector/Prison Industry Enhancement Certification Program of the United States Department of Justice, Bureau of Justice Assistance; or

  (7) if they are related to the preparation or distribution of food or services related to agriculture or seafood processing, when the following conditions are met:

    (i) the State labor pools are diminished; and

    (ii) it has been determined that incarcerated individual labor is the available source.

(c)

  (1) The Secretary and the Secretary of Labor shall adopt regulations that specify how to determine the need for incarcerated individual labor under subsection (b)(7) of this section.

  (2) Wages paid to incarcerated individuals under subsection (b)(7) of this section may not be less than wages paid for similar work in the private sector of the same locality as determined by the Secretary of Labor.

  (3) Incarcerated individual labor under subsection (b)(7) of this section applies only to incarcerated individuals at the minimum, prerelease, and work release security levels.

#### Section 3-517

There is a Maryland Correctional Enterprises Management Council in the Division.

#### Section 3-518

(a) The Management Council consists of the following 15 members:

  (1) the Commissioner;

  (2) a representative of the Comptroller of the Treasury, appointed by the State Comptroller;

  (3) the Chief Executive Officer;

  (4) a member of the House of Delegates, appointed by the Speaker of the House of Delegates;

  (5) a member of the Senate, appointed by the President of the Senate;

  (6) a representative of the University System of Maryland, appointed by the Chancellor;

  (7) a representative of the State Department of Education, appointed by the Governor;

  (8) a representative of the Maryland Department of Labor, appointed by the Governor;

  (9) a representative of the Governor's Office of Crime Prevention and Policy, appointed by the Governor;

  (10) two representatives of organized labor, one from the public sector and one from the private sector, appointed by the Governor in accordance with subsection (b) of this section;

  (11) a judge, appointed by the Chief Justice of the Supreme Court of Maryland;

  (12) two representatives of the business community selected from the fields of manufacturing, services, finance, and information technology, appointed by the Governor in accordance with subsection (b) of this section; and

  (13) one representative of a nonprofit organization, appointed by the Governor in accordance with subsection (b) of this section.

(b)

  (1) The term of a member appointed under subsection (a)(10), (12), and (13) of this section is 3 years.

  (2) At the end of a term the member continues to serve until a successor is appointed and qualifies.

  (3) A member appointed after a term has begun serves only for the rest of the term and until a successor is appointed and qualifies.

#### Section 3-519

(a) The Management Council annually shall elect a Chairperson.

(b) The manner of election shall be as the Management Council determines.

#### Section 3-520

(a) The Management Council shall determine the times and places of its meetings.

(b) Eight members of the Management Council constitute a quorum.

(c) A member of the Management Council:

  (1) may not receive compensation for membership on the Management Council; but

  (2) is entitled to reimbursement for expenses under the Standard State Travel Regulations, as provided in the State budget.

(d) Except as provided in subsection (e) of this section, the State, the Management Council, and the members and employees of the Management Council may not be held liable for any act or omission of the Management Council or any member or employee of the Management Council in connection with the performance of their duties.

(e) Subsection (d) of this section does not apply in the case of willful malfeasance or breach of trust by the State, the Management Council, or any member or employee of the Management Council.

(f) The Secretary shall employ staff for the Management Council to be paid out of funds from Maryland Correctional Enterprises, in accordance with the State budget.

(g)

  (1) For fiscal year 2000 and each fiscal year thereafter, the Management Council shall prepare a budget for submission to the Secretary.

  (2) The Secretary shall request an appropriation for the Management Council in the annual State budget sufficient for the operation of the Council.

#### Section 3-521

(a)

  (1) The Management Council shall:

    (i) advise Maryland Correctional Enterprises on its specific proposals to establish new industries and improve the quality and quantity of job training programs; and

    (ii) recommend the establishment and maintenance of industrial plants and service centers to be used for implementing the programs developed by the Commissioner and Chief Executive Officer under Sec. 3-511 of this subtitle.

  (2) Maryland Correctional Enterprises shall operate industrial plants and service centers recommended under paragraph (1)(ii) of this subsection primarily with incarcerated individuals in a manner that benefits the State and the training of incarcerated individuals by producing goods or providing services that are practical and adaptable for a prison industry.

(b) The Management Council shall:

  (1) review the operation of the programs of Maryland Correctional Enterprises to determine whether:

    (i) there is undue competition with private enterprise and recommend necessary adjustments to prevent undue competition; and

    (ii) there is any negative impact on workers in the State, including wage depression or job displacement;

  (2) review the standards for goods and services and the pricing schedules as recommended by the Chief Executive Officer; and

  (3) review the occupational health and safety record of programs and other working conditions of incarcerated individuals in the programs of Maryland Correctional Enterprises.

(c) The Management Council shall:

  (1) review the success of Maryland Correctional Enterprises in:

    (i) meeting the employability development needs of incarcerated individuals; and

    (ii) coordinating work programs with other rehabilitative programs;

  (2) solicit and review information pertaining to concerns of participating incarcerated individuals; and

  (3) recommend changes as necessary to meet the goals and objectives of Maryland Correctional Enterprises.

(d) The Management Council shall:

  (1) solicit ideas, proposals, and suggestions from business representatives, nonprofit organizations, government entities, and members of the public as to how Maryland Correctional Enterprises could enhance the work experience of incarcerated individuals and increase the ability of incarcerated individuals to obtain gainful employment after release;

  (2) review and recommend opportunities with private sector employers to expand the Prison Industries Enhancement Program;

  (3) review and identify ways to improve the business practices of Maryland Correctional Enterprises in its sales, marketing, inventory, warehousing, and product line operations;

  (4) monitor customer satisfaction with price, quality, delivery, and after delivery service; and

  (5) review and comment on the operating and capital budgets of Maryland Correctional Enterprises, including cash forecasts.

#### Section 3-522

On or before October 1 of each year, the Management Council shall submit to the Governor and, subject to Sec. 2-1257 of the State Government Article, to the General Assembly an annual report summarizing the Management Council's activities and recommendations.

#### Section 3-523

All State and local governmental units shall cooperate with the Management Council in the discharge of its powers and duties, including requests for information associated with its purpose under this subtitle.

#### Section 3-524

There is a Customer Council created to advise the Chief Executive Officer.

#### Section 3-525

The Customer Council shall consist of the following 10 members:

(1) the Chief Executive Officer;

(2) one representative from each of the following State agencies, appointed by the Secretary of the respective agency:

  (i) the Department of Budget and Management;

  (ii) the Department of General Services;

  (iii) the Maryland Department of Health;

  (iv) the Department of Human Services;

  (v) the Department of Transportation; and

  (vi) the Maryland Higher Education Commission; and

(3) three customers recommended by the Chief Executive Officer and appointed by the Governor.

#### Section 3-526

The Chief Executive Officer shall serve as chairperson of the Customer Council.

#### Section 3-527

(a) The Customer Council shall meet quarterly.

(b) A member of the Customer Council:

  (1) may not receive compensation for membership on the Customer Council; but

  (2) is entitled to reimbursement for expenses under the Standard State Travel Regulations, as provided in the State budget.

#### Section 3-528

(a) The Customer Council shall:

  (1) review the products and services of Maryland Correctional Enterprises;

  (2) advise the Chief Executive Officer on quality, availability, style, design, delivery, scheduling, and pricing;

  (3) recommend new products and services;

  (4) annually review the catalog of Maryland Correctional Enterprises products and recommend changes to improve the catalog;

  (5) recommend sales, marketing, and customer satisfaction initiatives;

  (6) annually review the Maryland Correctional Enterprises business plan; and

  (7) serve as a forum for raising and discussing issues related to any product or service offered by Maryland Correctional Enterprises.

(b) The Chief Executive Officer shall present a summary of Customer Council activities and recommendations to the Management Council, as provided in Sec. 3-521(b) of this subtitle following each meeting.

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Md. Code Ann., Corr. Servs. (as displayed at mgaleg.maryland.gov, October 16, 2026)