# Health - General (GHG) ## Title 24. Miscellaneous Provisions ### Subtitle 6. Community Mental Health, Addiction, and Developmental Disabilities Facilities Capital Program #### Section 24-601 (a) In this subtitle the following words have the meanings indicated. (b) "Facility" means: (1) A public community mental health facility, addiction facility, or developmental disabilities facility that is wholly owned by and operated under the authority of a county or a municipal corporation, or both; or (2) A nonprofit community mental health facility, addiction facility, or developmental disabilities facility that is wholly owned by and operated under the authority of a nonprofit organization. (c) "Nonprofit organization" means: (1) A bona fide religious organization, no part of the earnings of which inures to the benefit of any individual or is used for any purpose other than the maintenance and operation of the facility, the purchase of equipment to be used in the facility, or the expansion of the facility; or (2) An organization: (i) That is chartered as a nonprofit corporation and classified by the Internal Revenue Service as nonprofit; and (ii) No part of the earnings of which inures to the benefit of any individual or is used for any purpose other than the maintenance and operation of the facility, the purchase of equipment to be used in the facility, or the expansion of the facility. (d) "Wholly owned" includes leased, if: (1) (i) The lease is for a minimum term of 30 years following project completion; or (ii) The lease agreement extends the right of purchase to the lessee; and (2) (i) The lessor consents to the recording, in the land records of the political subdivision in which the facility is located, of a notice of the State's right of recovery, as provided under Sec. 24-606 of this subtitle; or (ii) The lease agreement is with the State for a State-owned building or State-owned property. #### Section 24-602 The Board of Public Works, upon recommendation of the Secretary of the Department, may make grants to qualified applicants for the construction, acquisition, renovation, and equipping of community mental health facilities, addiction facilities, and developmental disabilities facilities, including the plans, specifications, site improvements, surveys, and applicable architects' and engineers' fees. #### Section 24-603 (a) (1) Any county, municipal corporation, or nonprofit organization sponsoring a project involving the construction, acquisition, renovation, or equipping of a facility in the State may apply to the Department for a State grant to be applied toward the cost of that project. (2) The application shall be directed to the Secretary of the Department. (3) On approval of a project and the project plans by the Department, the Secretary shall promptly report the application to the Board of Public Works, together with the Secretary's recommendation that the Board make funds available as provided in this subtitle. (b) Before the Department approves any project, the applicant shall file with the Department: (1) A statement listing the personnel employed or to be employed at the facility and showing all remuneration and perquisites for personal services and all other expenses paid or to be paid to these personnel, as well as all other expenses incurred or to be incurred in operating the facility; and (2) The schedule of rates charged or to be charged for services rendered. #### Section 24-604 (a) The allocation and use of State funds under this subtitle are subject to the following terms and conditions. (b) (1) State funds may be used only for the construction, acquisition, renovation, and equipping of facilities including the reports, plans, specifications, site improvements, surveys, and other related programs. (2) Any federal grant that is available for this purpose shall be applied first to the cost of construction, acquisition, renovation, or equipping of a facility. (3) A State grant shall provide up to 75% of the eligible cost remaining after the federal grant has been applied. (4) For projects designated under federal regulations, State plans, or the departmental regulations as eligible for poverty area funding, State grants shall amount to up to 90% of the eligible cost remaining after the federal grant has been applied. (5) For purposes of this subtitle, community development block grant funds shall be considered as local matching funds and may not be considered as federal grant funds. (c) The amount of the State grant for any project shall be determined after consideration of all eligible applications, the total of unallocated State funds available at the time the application is received, and the priorities of area need as may be established by the Department. (d) (1) No portion of the proceeds of a State grant may be used: (i) For the furtherance of sectarian religious instruction; or (ii) In connection with the design, acquisition, or construction of any building used or to be used as a place of sectarian religious worship or instruction, or in connection with any program or department of divinity for any religious denomination. (2) On the request of the Board of Public Works, the applicant shall submit evidence satisfactory to the Board that none of the proceeds of the grant have been or are being used for a purpose prohibited by this subtitle. #### Section 24-605 (a) The Board of Public Works shall make allocations from funds available under this subtitle in accordance with this subtitle. (b) The Board shall certify the allocations to the proper State officers, and the Treasurer shall make payments to the applicant, when needed, for the construction, acquisition, renovation, or equipping of a facility. (c) The Board may adopt regulations for receiving and considering applications and for disbursing funds to applicants. #### Section 24-606 (a) In accordance with this section, the State: (1) Shall have the right to recover funds disbursed under this subtitle; and (2) May not: (i) Recover funds disbursed under this subtitle from the federal government if the federal government is the lessor of real property on which a project is constructed or a facility is operated; or (ii) Create a lien against real property that is leased from the federal government on which a project is constructed or a facility is operated. (b) Subject to subsection (a)(2) of this section, in the event of failure to complete a project or failure to commence operation of a facility, the State may recover from the recipient of the funds disbursed for the project or facility or the owner of the property an amount equal to the amount of State funds disbursed for the project, together with all costs and reasonable attorneys' fees incurred by the State in the recovery proceedings. (c) Subject to subsection (a)(2) of this section, if, within 30 years after completion of a project, a community mental health facility, addiction facility, or developmental disabilities facility with respect to which funds have been paid under this subtitle is sold or transferred to any person, agency, or organization that would not qualify as an applicant under this subtitle, or that is not approved as a transferee by the Board of Public Works, or if, within the same period, a community mental health facility, addiction facility, or developmental disabilities facility ceases to be a "facility" as defined in this subtitle, then the State may recover from either the transferor or transferee or, in the case of a community mental health facility, addiction facility, or developmental disabilities facility that has ceased to be a "facility" as defined in this subtitle, from the owner, an amount bearing the same ratio to the then current fair market value of so much of the property as constituted an approved project as the amount of the State participation bore to the total eligible cost of the approved project, together with all costs and reasonable attorneys' fees incurred by the State in the recovery proceedings. (d) (1) The Department shall cause notice of the State's right of recovery to be recorded in the land records of the county or Baltimore City in which the property is located before the State makes any funds available for the approved project. (2) The recording of the notice shall not create any lien against the property; however, subject to subsection (a)(2) of this section, it shall constitute notice to any potential transferee, potential creditor, or other interested party of the possibility that the State may obtain a lien under this subtitle. (e) (1) In the event of a failure to complete the project or commence operations of the facility as described in subsection (b) of this section, or in the event of an alleged sale or transfer as described in subsection (c) of this section, or in the event that a property is alleged to have ceased to be a "facility" as defined in this subtitle, the Secretary of the Board of Public Works may authorize the Department to file, in the circuit court of the county or Baltimore City in which the property is located, a claim under this subtitle (styled as a civil action against the owner of the property and any other interested parties, including any transferor that the State wishes to make a party), together with a sworn affidavit stating facts on which the allegations of default are based, as well as a detailed justification of the amount claimed. (2) If the circuit court determines from the State's initial filing that there is probable cause to believe that a default has occurred, the court shall authorize a temporary lien on the property, in the amount of the State's claim, plus any additional amount estimated to be necessary to cover the costs and reasonable attorney's fees incurred by the State, or other amounts as the court determines to be reasonable, pending full determination of the State's claim. (3) The temporary lien takes effect on the date of the court's authorization if the State records a notice of temporary lien in the land records of the county or Baltimore City in which the property is located within 10 days thereafter; otherwise, the temporary lien takes effect on the date a notice of temporary lien is recorded. While the temporary lien is in effect, neither the owner nor any person who acquired an interest in the property after the State first made funds available in connection with the property under this subtitle may take any action that would affect the title to the property or institute any proceedings to enforce a security interest or other similar rights in the property, without the prior written consent of the State. (4) The owner of the property or any other interested party may obtain release of this temporary lien at any time by filing with the court a bond securing the payment in full of the State's claim any additional amount necessary to cover the costs and reasonable attorneys' fees incurred by the State. The owner or other interested party may cause the release to be recorded in the land records. (f) (1) Proceedings to determine the State's right to recover and the amount of its recovery under this subtitle shall have priority over other civil proceedings in the circuit courts. (2) At the conclusion of full adversary proceedings on the issue of default and on any disputes over the amount of the State's recovery, the circuit court shall, if it finds that a default has occurred, issue a final judgment for the amount it finds to be recoverable by the State. All parties involved in the default, including in every case the owner of the property, shall be held jointly and severally liable to the State for the amount of the judgment. This amount, if it remains unpaid after the expiration of 30 days following the court's final order, shall be a lien on the property, superior (except as the State may by written subordination agreement provide otherwise) to the lien or other interest of any mortgagee, pledgee, purchaser, or judgment creditor whose interest became perfected against third persons after the State first made funds available in connection with the property under this subtitle. (3) This lien takes effect on the 31st day following the court's final order if the State records a notice of lien in the land records of the county or Baltimore City in which the property is located on or before the 41st day following the final order; otherwise, the lien takes effect on the date a notice of lien is recorded. At the time this lien takes effect, any temporary lien then in effect shall be automatically and fully released, and the recorded notice of this lien shall constitute notice of the release of the temporary lien. (4) This lien may be enforced and foreclosed in accordance with the procedures prescribed in the Maryland Rules, except that neither the State nor any agent appointed by the State to sell the property need file a bond. (5) The owner or any other interested party may obtain release of this lien at any time by paying the State the full amount of the judgment rendered by the circuit court, together with interest from the date of judgment. On payment in full, the State shall cause a release to be recorded in the land records. (6) If the circuit court finds that there has been no default or if the full amount of the court's judgment is paid to the State within 30 days after the court's final order, any temporary lien then in effect shall be released immediately and the State shall cause a release to be recorded in the land records. (g) (1) All funds recovered as a result of the State's right of recovery shall be deposited in the Annuity Bond Fund and applied to the debt service requirements of the State. (2) The Board of Public Works may waive the State's right of recovery if the Board determines that there is good cause for releasing the transferor, transferee, or owner from this obligation. #### Section 24-607 (a) The Department shall adopt regulations to implement the provisions of this subtitle. (b) The regulations shall include requirements for annual financial statements from each facility for at least the term of the bond used to finance any project at the facility. --- Md. Code Ann., Health-Gen. (as displayed at mgaleg.maryland.gov, October 16, 2026)