HB 378
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Third Reader
House Bill 378 (Delegate D.M. Davis)
Judiciary Judicial Proceedings
Local Government Tort Claims Act – Definition of Local Government
This bill alters the definition of “local government” under the Local Government Tort
Claims Act (LGTCA) to include the Maryland Association of Counties (MACo) Pooled
OPEB Trust Fund.
Fiscal Summary
State Effect: The bill is not expected to materially affect State finances or operations.
Local Effect: Minimal decrease in local expenditures. Revenues are not affected.
Small Business Effect: None.
Analysis
Current Law: LGTCA defines local government to include counties, municipal
corporations, Baltimore City, and various agencies and authorities of local governments
such as community colleges, county public libraries, special taxing districts, nonprofit
community service corporations, sanitary districts, housing authorities, and commercial
district management authorities. Pursuant to Chapter 131 of 2015, for causes of action
arising on or after October 1, 2015, LGTCA limits the liability of a local government to
$400,000 per individual claim and $800,000 per total claims that arise from the same
occurrence for damages from tortious acts or omissions (including intentional and
constitutional torts). It further establishes that the local government is liable for the tortious
acts or omissions of its employees acting within the scope of employment. Thus, LGTCA
prevents local governments from asserting a common law claim of governmental immunity
from liability for such acts or omissions of its employees.
Local Expenditures: Local expenditures for local governments that are members of the
MACo Pooled OPEB Trust Fund decrease minimally due to reduced costs for insurance
coverage.
State law allows governments to invest funds toward their long-term retiree health care
liabilities when those funds are withdrawn from the ordinary annual budgeting process and
placed into a trust. MACo created the Pooled OPEB Trust Fund to assist and serve its
members who may not have sufficient investments to merit establishing their own trusts
with the necessary investment advisors and other associated personnel, services, and
requirements. Current members of the trust include various smaller local governments and
affiliated entities, such as libraries and sanitary commissions. The trustees of the fund are
local government employees and oversee the investment strategy for the pooled funds.
Pooling funds in the trust allows its members to share overhead costs and receive more
favorable investment rates. One of the overhead costs is insurance costs for the trustees
(primarily “errors and omissions” insurance). MACo advises that the private market
charges thousands of dollars each year for this insurance, and the trust will be able to obtain
less expensive coverage, with savings of a few thousand dollars annually, through the Local
Government Insurance Trust (LGIT). However, in order to obtain coverage through LGIT,
the trust must be a “local government” under LGTCA.
Additional Information
Prior Introductions: HB 1617 of 2020 was referred to the House Rules and Executive
Nominations Committee, but no further action was taken.
Designated Cross File: None.
Information Source(s): Judiciary (Administrative Office of the Courts); Maryland
Association of Counties; Department of Legislative Services
Fiscal Note History: First Reader - January 12, 2021
rh/jkb Third Reader - February 24, 2021
Analysis by: Amy A. Devadas Direct Inquiries to:
(410) 946-5510
(301) 970-5510
HB 378/ Page 2


Statutes affected:
Text - First - Local Government Tort Claims Act – Definition of Local Government: 5-301 Courts and Judicial Proceedings
Text - Third - Local Government Tort Claims Act – Definition of Local Government: 5-301 Courts and Judicial Proceedings