Title 12. Organization and Supervision of State Procurement — Subtitle 2. Supervision of Capital Expenditures and Real Property Leases
Statutes in effect as of October 1, 2026.
Md. Code Ann., State Fin. & Proc. § 12-201 (2026)
Title 12. Organization and Supervision of State Procurement
Subtitle 2. Supervision of Capital Expenditures and Real Property Leases
§ 12–201LinkCopy Citation
This subtitle is broadly applicable to all procurements by the State.
Md. Code Ann., State Fin. & Proc. § 12-202 (2026)
Title 12. Organization and Supervision of State Procurement
Subtitle 2. Supervision of Capital Expenditures and Real Property Leases
§ 12–202LinkCopy Citation
(a)
This section does not apply to capital expenditures:
(1)
for public school construction under Title 5, Subtitle 3 of the Education Article; or
(2)
by the Department of Transportation or the Maryland Transportation Authority, in connection with State roads, bridges, or highways.
(b)
Before execution, a contract for a capital expenditure other than in connection with a State correctional facility, St. Mary’s College of Maryland, Morgan State University, or the University System of Maryland shall be:
(1)
reviewed by the Secretary of General Services; and
(2)
except as provided in § 12-203 of this subtitle and § 13-108 of this article, after that review, approved by the Board.
(c)
Before execution, a contract for a capital expenditure in connection with a State correctional facility shall be:
(1)
reviewed by the Secretary of Public Safety and Correctional Services; and
(2)
except as provided in § 12-203 of this subtitle, after that review, approved by the Board.
(d)
Before execution, a contract for a capital expenditure in connection with the University System of Maryland shall be:
(1)
subject to the provisions of Title 4, Subtitle 4 of this article;
(2)
approved by the Board of Regents of the University System of Maryland; and
(3)
approved by the Board of Public Works.
(e)
Before execution, a contract for a capital expenditure in connection with St. Mary’s College of Maryland shall be:
(1)
subject to the provisions of Title 4, Subtitle 4 of this article;
(2)
approved by the Board of Trustees of St. Mary’s College of Maryland; and
(3)
approved by the Board of Public Works.
(f)
Before execution, a contract for a capital expenditure in connection with Morgan State University shall be:
(1)
subject to the provisions of Title 4, Subtitle 4 of this article;
(2)
approved by the Board of Regents of Morgan State University; and
(3)
approved by the Board of Public Works.
(g)
The Board shall supervise the expenditure of any money that the General Assembly appropriates for:
(1)
buildings;
(2)
equipment;
(3)
new construction; or
(4)
any other capital expenditure.
Md. Code Ann., State Fin. & Proc. § 12-203 (2026)
Title 12. Organization and Supervision of State Procurement
Subtitle 2. Supervision of Capital Expenditures and Real Property Leases
§ 12–203LinkCopy Citation
(a)
(1)
The Board may adopt regulations that allow a unit of the State government to enter into a contract or make a change order related to a capital project without approval.
(2)
These regulations shall:
(i)
comply with this section; and
(ii)
be subject to the approval of the Joint Committee on Administrative, Executive, and Legislative Review.
(b)
(1)
Regulations adopted under this section shall:
(i)
establish an expenditure or use classification to determine which contracts or change orders may be made without Board approval;
(ii)
set an amount for each classification and require a unit of the State government to obtain approval of the Board if the annual dollar value of a contract and its change orders exceeds that amount; and
(iii)
require a unit of the State government to establish a reporting system approved by the Board to inform the Board about contracts or change orders entered into without Board approval.
(2)
The amount established by the Board under paragraph (1)(ii) of this subsection shall be an amount that:
(i)
frees the Board from direct review of relatively insignificant items; but
(ii)
does not impair the strong public policy favoring direct review by the Board for items that have a substantial fiscal impact.
Md. Code Ann., State Fin. & Proc. § 12-204 (2026)
Title 12. Organization and Supervision of State Procurement
Subtitle 2. Supervision of Capital Expenditures and Real Property Leases
§ 12–204LinkCopy Citation
(a)
This section does not apply to a lease entered into on or before May 31, 1967, unless the lease is renewed after that date.
(b)
(1)
Except as otherwise provided in this section and § 13–108 of this article, before a unit executes or renews a lease of land, buildings, or office space, the Board shall approve the lease or lease renewal.
(2)
After review by the Secretary of General Services, the Board may designate the location of any unit.
(c)
(1)
Subject to paragraph (2) of this subsection, the Board may adopt regulations, in accordance with Title 10, Subtitle 1 of the State Government Article, that allow a unit to execute or renew a lease without Board approval.
(2)
These regulations are subject to the approval of:
(i)
the General Assembly; or
(ii)
while the General Assembly is not in session, the Legislative Policy Committee.
(3)
Regulations adopted under this section shall:
(i)
establish an expenditure or use classification to determine which leases or lease renewals may be entered into without Board approval;
(ii)
set an amount for each classification and require a unit to obtain approval if a lease or lease renewal exceeds that amount; and
(iii)
require a unit to establish a reporting system approved by the Board to inform the Board about leases or lease renewals entered into without Board approval.
(d)
(1)
Subject to paragraph (2) of this subsection, the Board may not approve a lease that:
(i)
transfers ownership of the property to the lessee on or before the termination of the lease;
(ii)
allows the lessee to purchase the property below fair market value or for a fixed amount;
(iii)
is for a term that is 75% or more of the estimated useful economic life of the property; or
(iv)
has payments with a present value that is 90% or more of the fair market value of the property.
(2)
The Board may approve a lease described in paragraph (1) of this subsection if:
(i)
the Capital Debt Affordability Committee has certified to the Governor and the General Assembly that the total amount of new State debt to be incurred by the lease may prudently be authorized; or
(ii)
the General Assembly has approved the lease in the budget for the requesting unit.
Md. Code Ann., State Fin. & Proc. § 12-205 (2026)
Title 12. Organization and Supervision of State Procurement
Subtitle 2. Supervision of Capital Expenditures and Real Property Leases
§ 12–205LinkCopy Citation
(a)
This section does not apply to a lease entered into on or before May 31, 1967, unless the lease is renewed after that date.
(b)
An appropriation may not be obligated or spent for the lease of a building or part of a building to be occupied by the State or a unit of the State government for a State purpose at an annual rent that exceeds 15% of the fair market value of the leased premises on the date of the lease.