HOUSE BILL 804
Q7 1lr1636
CF 1lr2059
By: Delegate Palakovich Carr
Introduced and read first time: January 29, 2021
Assigned to: Ways and Means
A BILL ENTITLED
1 AN ACT concerning
2 Taxes – Whistleblower Reward Program and Statute of Limitations for Tax
3 Collections
4 FOR the purpose of establishing a certain whistleblower reward program within the Office
5 of the Comptroller; providing that a certain whistleblower who voluntarily provides
6 certain information to the Comptroller shall be entitled to receive a certain monetary
7 award under certain circumstances; providing that the determination of the amount
8 of the award shall be solely in the discretion of the Comptroller; requiring the
9 Comptroller to consider certain factors in determining the amount of the award;
10 authorizing a determination of the Comptroller under this Act to be challenged in
11 accordance with certain provisions of law under certain circumstances; prohibiting a
12 contract with the Comptroller or certain agencies from being required in order for a
13 whistleblower to receive an award under this Act; requiring a whistleblower to be
14 represented by counsel under certain circumstances; requiring a whistleblower to
15 disclose certain information before the payment of an award claimed anonymously;
16 requiring the Comptroller to provide certain notification to the whistleblower or the
17 whistleblower’s attorney in a certain manner under certain circumstances; providing
18 that certain information is not subject to disclosure under the Maryland Public
19 Information Act; prohibiting the Comptroller from disclosing certain information
20 except under certain circumstances; authorizing the provision of certain information
21 to certain regulatory and law enforcement authorities under certain circumstances
22 and subject to certain conditions; prohibiting certain employers, contractors, or
23 agents from taking certain adverse actions against an individual because of certain
24 lawful acts by that individual; authorizing an individual who is subject to certain
25 adverse actions to bring an action for certain relief; prohibiting the waiver of certain
26 rights and remedies provided under this Act; prohibiting an action to recover certain
27 salary and wages earned by a whistleblower under certain circumstances; requiring
28 the Comptroller to report certain information on the whistleblower enforcement
29 program to the General Assembly on or before a certain date each year; requiring
30 the Comptroller to adopt certain regulations; altering the period of time after which
31 certain taxes may not be collected; making a stylistic change; defining certain terms;
EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb0804*
2 HOUSE BILL 804
1 providing for the application and construction of certain provisions of this Act; and
2 generally relating to the collection and enforcement of State taxes.
3 BY adding to
4 Article – Tax – General
5 Section 1–401 through 1–408 to be under the new subtitle “Subtitle 4. Whistleblower
6 Reward Program”
7 Annotated Code of Maryland
8 (2016 Replacement Volume and 2020 Supplement)
9 BY repealing and reenacting, with amendments,
10 Article – Tax – General
11 Section 13–1103
12 Annotated Code of Maryland
13 (2016 Replacement Volume and 2020 Supplement)
14 SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
15 That the Laws of Maryland read as follows:
16 Article – Tax – General
17 SUBTITLE 4. WHISTLEBLOWER REWARD PROGRAM.
18 1–401.
19 (A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS
20 INDICATED.
21 (B)“COVERED ENFORCEMENT ACTION” MEANS AN ENFORCEMENT ACTION
22 BROUGHT BY THE COMPTROLLER UNDER THIS ARTICLE THAT CONCERNS:
23 (1) (I) THE INCOME TAX LIABILITY OF AN INDIVIDUAL TAXPAYER
24 OR A COUPLE THAT IS MARRIED AND FILES JOINTLY WHOSE FEDERAL ADJUSTED
25 GROSS INCOME IS AT LEAST $250,000; OR
26 (II)
THE TAX LIABILITY OF A BUSINESS THE ANNUAL GROSS
27 RECEIPTS OF WHICH ARE AT LEAST $2,000,000; AND
28 (2) TAXES, PENALTIES, AND INTEREST IN DISPUTE EXCEEDING
29 $250,000.
30 (C) “ORIGINAL INFORMATION” MEANS INFORMATION THAT:
31 (1)
IS DERIVED FROM THE INDEPENDENT KNOWLEDGE OR ANALYSIS
32 OF A WHISTLEBLOWER;
HOUSE BILL 804 3
1 (2) IS NOT KNOWN TO THE COMPTROLLER FROM ANY OTHER SOURCE,
2 UNLESS THE WHISTLEBLOWER IS THE ORIGINAL SOURCE OF THE INFORMATION;
3 (3) IS NOT EXCLUSIVELY DERIVED FROM AN ALLEGATION MADE IN A
4 JUDICIAL OR ADMINISTRATIVE HEARING, IN A GOVERNMENTAL REPORT, HEARING,
5 AUDIT, OR INVESTIGATION OR FROM THE NEWS MEDIA, UNLESS THE
6 WHISTLEBLOWER IS A SOURCE OF THE INFORMATION; AND
7 (4) IS PROVIDED TO THE COMPTROLLER FOR THE FIRST TIME ON OR
8 AFTER OCTOBER 1, 2021.
9 (D) “RELATED ACTION” MEANS ANY JUDICIAL OR ADMINISTRATIVE ACTION
10 BROUGHT BY A STATE OR LOCAL AGENCY OR ENTITY BASED ON THE ORIGINAL
11 INFORMATION PROVIDED BY A WHISTLEBLOWER TO THE COMPTROLLER UNDER
12 THIS SUBTITLE.
13 (E) (1) “WHISTLEBLOWER” MEANS AN INDIVIDUAL OR ENTITY WHO
14 PROVIDES, OR TWO OR MORE INDIVIDUALS OR ENTITIES ACTING JOINTLY WHO
15 PROVIDE, IN ACCORDANCE WITH THIS SUBTITLE, INFORMATION TO THE
16 COMPTROLLER RELATING TO A VIOLATION OF STATE TAX LAW, INCLUDING A RULE
17 OR REGULATION, THAT HAS OCCURRED, IS ONGOING, OR IS ABOUT TO OCCUR.
18 (2) “WHISTLEBLOWER” INCLUDES AN INDIVIDUAL WHO PROVIDES
19 INFORMATION TO A LAW ENFORCEMENT AGENCY BEFORE PROVIDING THE
20 INFORMATION TO THE COMPTROLLER.
21 1–402.
22 (A) SUBJECT TO THE LIMITATIONS OF THIS SUBTITLE AND EXCEPT AS
23 PROVIDED IN SUBSECTION (B) OF THIS SECTION, A WHISTLEBLOWER WHO
24 VOLUNTARILY PROVIDES ORIGINAL INFORMATION TO THE COMPTROLLER THAT
25 WAS THE BASIS FOR A SUCCESSFUL COVERED ENFORCEMENT ACTION, OR A
26 RELATED ACTION, SHALL BE ENTITLED TO RECEIVE A MONETARY AWARD OF AT
27 LEAST 15% BUT NOT EXCEEDING 30% OF THE TAXES, PENALTIES, AND INTEREST
28 COLLECTED THROUGH THE ENFORCEMENT ACTION.
29 (B) A WHISTLEBLOWER WHO PROVIDES INFORMATION TO THE
30 COMPTROLLER THAT IS RELATED TO ORIGINAL INFORMATION PREVIOUSLY
31 REPORTED TO THE COMPTROLLER BY ANOTHER WHISTLEBLOWER WHO IS ELIGIBLE
32 FOR AN AWARD UNDER SUBSECTION (A) OF THIS SECTION MAY NOT BE ENTITLED TO
33 AN AWARD UNLESS THE INFORMATION PROVIDED BY THE WHISTLEBLOWER
4 HOUSE BILL 804
1 MATERIALLY ADDS TO THE INFORMATION PREVIOUSLY REPORTED TO THE
2 COMPTROLLER.
3 1–403.
4 (A) (1) THE DETERMINATION OF THE AMOUNT OF AN AWARD MADE IN
5 ACCORDANCE WITH § 1–402 OF THIS SUBTITLE SHALL BE SOLELY IN THE
6 DISCRETION OF THE COMPTROLLER.
7 (2) IN
DETERMINING THE AMOUNT OF THE AWARD, THE
8 COMPTROLLER SHALL CONSIDER:
9 (I)
THE SIGNIFICANCE OF THE INFORMATION PROVIDED BY
10 THE WHISTLEBLOWER TO THE SUCCESS OF THE COVERED ENFORCEMENT ACTION
11 OR RELATED ACTION;
12 (II) THE DEGREE OF ASSISTANCE PROVIDED BY THE
13 WHISTLEBLOWER AND ANY LEGAL REPRESENTATIVE OF THE WHISTLEBLOWER IN
14 THE COVERED ENFORCEMENT ACTION OR RELATED ACTION;
15 (III) THE AMOUNT OF THE UNPAID TAXES OWED THE STATE THAT
16 MAY BE RECOVERED UNDER THE COVERED ENFORCEMENT ACTION;
17 (IV)
THE INTEREST OF THE STATE IN DETERRING VIOLATIONS
18 OF THIS ARTICLE AND PROMOTING THE REPORTING BY WHISTLEBLOWERS OF
19 INFORMATION RELATING TO THOSE VIOLATIONS; AND
20 (V) ANY ADDITIONAL RELEVANT FACTORS THAT THE
21 COMPTROLLER MAY ESTABLISH BY REGULATION.
22 (3) IF THE WHISTLEBLOWER PLANNED OR INITIATED THE ACTIONS
23 THAT RESULTED IN AN UNDERPAYMENT OF TAXES AT ISSUE UNDER THE COVERED
24 ENFORCEMENT ACTION, THE COMPTROLLER MAY REDUCE AN AWARD UNDER THIS
25 SUBTITLE.
26 (B)AN AWARD MAY NOT BE PROVIDED TO A WHISTLEBLOWER IF THE
27 COMPTROLLER DETERMINES THAT THE WHISTLEBLOWER:
28 (1) IS, OR WAS AT THE TIME THAT THE WHISTLEBLOWER ACQUIRED
29 THE ORIGINAL INFORMATION PROVIDED TO THE COMPTROLLER, A MEMBER, AN
30 OFFICER, OR AN EMPLOYEE OF A FEDERAL, STATE, OR LOCAL LAW ENFORCEMENT
31 AGENCY RESPONSIBLE FOR THE ENFORCEMENT OF TAX–RELATED MATTERS;
HOUSE BILL 804 5
1 (2) WAS CONVICTED OF A CRIMINAL VIOLATION RELATED TO THE
2 COVERED ENFORCEMENT ACTION FOR WHICH THE WHISTLEBLOWER OTHERWISE
3 COULD RECEIVE AN AWARD UNDER THIS SECTION; OR
4 (3) WHEN SUBMITTING INFORMATION UNDER THIS SUBTITLE,
5 KNOWINGLY AND WILLFULLY MADE FALSE, FICTITIOUS, OR FRAUDULENT
6 STATEMENTS TO THE COMPTROLLER OR USED ANY FALSE WRITING OR DOCUMENT
7 KNOWING THE WRITING OR DOCUMENT CONTAINED A FALSE, FICTITIOUS, OR
8 FRAUDULENT STATEMENT OR ENTRY.
9 (C) A DETERMINATION OF THE COMPTROLLER UNDER THIS SECTION MAY
10 BE CHALLENGED IN ACCORDANCE WITH TITLE 10, SUBTITLE 2 OF THE STATE
11 GOVERNMENT ARTICLE IF THE CHALLENGE IS BROUGHT WITHIN 45 DAYS OF THE
12 DATE OF THE DETERMINATION.
13 1–404.
14 (A) A CONTRACT WITH THE COMPTROLLER, THE OFFICE OF THE
15 ATTORNEY GENERAL, OR ANY OTHER AGENCY MAY NOT BE REQUIRED IN ORDER
16 FOR A WHISTLEBLOWER TO RECEIVE AN AWARD UNDER THIS SUBTITLE.
17 (B) (1) A WHISTLEBLOWER WHO MAKES A CLAIM FOR AN AWARD UNDER
18 THIS SUBTITLE MAY BE REPRESENTED BY COUNSEL.
19 (2) (I) A WHISTLEBLOWER WHO ANONYMOUSLY MAKES A CLAIM
20 FOR AN AWARD UNDER THIS SUBTITLE SHALL BE REPRESENTED BY COUNSEL IF THE
21 WHISTLEBLOWER ANONYMOUSLY SUBMITS THE INFORMATION ON WHICH THE
22 CLAIM IS BASED.
23 (II)
BEFORE PAYMENT OF AN AWARD CLAIMED IN ACCORDANCE
24 WITH SUBPARAGRAPH (I) OF THIS PARAGRAPH, THE WHISTLEBLOWER SHALL
25 DISCLOSE THE WHISTLEBLOWER’S IDENTITY AND PROVIDE ANY OTHER
26 INFORMATION THAT THE COMPTROLLER MAY REQUIRE, DIRECTLY OR THROUGH
27 COUNSEL.
28 (C) (1) WITHIN 15 DAYS AFTER RECEIVING ORIGINAL INFORMATION
29 PROVIDED BY A WHISTLEBLOWER, THE COMPTROLLER SHALL PROVIDE WRITTEN
30 NOTICE TO THE WHISTLEBLOWER OR, IF THE WHISTLEBLOWER IS REPRESENTED BY
31 COUNSEL, THE WHISTLEBLOWER’S ATTORNEY THAT:
32 (I)ACKNOWLEDGES THAT THE ORIGINAL INFORMATION HAS
33 BEEN RECEIVED BY THE COMPTROLLER; AND
6 HOUSE BILL 804
1 (II) INDICATES THE NAME OF THE INDIVIDUAL IN THE
2 COMPTROLLER’S OFFICE WHO SHALL SERVE AS A CONTACT WITH THE
3 WHISTLEBLOWER.
4 (2) UNLESS AN INVESTIGATION OR COVERED ENFORCEMENT ACTION
5 IS TERMINATED BY THE COMPTROLLER, THE COMPTROLLER SHALL:
6 (I) WITHIN 90 DAYS AFTER NOTICE IS PROVIDED UNDER
7 PARAGRAPH (1) OF THIS SUBSECTION, NOTIFY THE WHISTLEBLOWER OF THE
8 STATUS OF THE INVESTIGATION AND ANY ACTION TAKEN BY THE COMPTROLLER
9 SINCE THE RECEIPT OF THE ORIGINAL INFORMATION;
10 (II) AT LEAST EVERY 120 DAYS AFTER NOTICE IS PROVIDED
11 UNDER ITEM (I) OF THIS PARAGRAPH, NOTIFY THE WHISTLEBLOWER OF THE STATUS
12 OF THE INVESTIGATION AND ANY ACTION TAKEN BY THE COMPTROLLER SINCE THE
13 PREVIOUS NOTICE; AND
14 (III) NOTIFY THE WHISTLEBLOWER OF THE STATUS OF THE
15 INVESTIGATION AND ANY ACTION TAKEN BY THE COMPTROLLER AT ANY TIME AS
16 DETERMINED TO BE APPROPRIATE BY THE COMPTROLLER.
17 (D) (1) INFORMATION THAT COULD REASONABLY BE EXPECTED TO
18 REVEAL THE IDENTITY OF THE WHISTLEBLOWER IS NOT SUBJECT TO DISCLOSURE
19 UNDER THE PUBLIC INFORMATION ACT.
20 (2) EXCEPT AS PROVIDED IN PARAGRAPH (3) OF THIS SUBSECTION,
21 THE COMPTROLLER MAY NOT DISCLOSE ANY INFORMATION THAT COULD
22 REASONABLY BE EXPECTED TO REVEAL THE IDENTITY OF THE WHISTLEBLOWER
23 UNLESS THAT INFORMATION IS REQUIRED TO BE DISCLOSED TO A PARTY IN
24 CONNECTION WITH AN ACTION OR PROCEEDING BROUGHT BY THE COMPTROLLER
25 OR A LAWFULLY ISSUED SUBPOENA BY A FEDERAL OR STATE LAW ENFORCEMENT
26 AUTHORITY, OR OTHERWISE BY COURT ORDER.
27 (3) (I)SUBJECT TO SUBPARAGRAPH (II) OF THIS PARAGRAPH, AS
28 DETERMINED BY THE COMPTROLLER TO BE NECESSARY TO ACCOMPLISH THE
29 PURPOSES OF THIS ARTICLE, INFORMATION THAT COULD BE EXPECTED TO REVEAL
30 THE IDENTITY OF A WHISTLEBLOWER MAY BE MADE AVAILABLE TO APPROPRIATE
31 REGULATORY AND LAW ENFORCEMENT AUTHORITIES OF THIS STATE, ANOTHER
32 STATE, THE FEDERAL GOVERNMENT, A FOREIGN GOVERNMENT, OR
33 SELF–REGULATORY ORGANIZATIONS.
34 (II)
AN AUTHORITY TO WHICH THE COMPTROLLER MAKES
35 INFORMATION AVAILABLE IN ACCORDANCE WITH SUBPARAGRAPH (I) OF THIS
HOUSE BILL 804 7
1 PARAGRAPH SHALL AGREE TO MAINTAIN THAT INFORMATION IN ACCORDANCE WITH
2 ANY ASSURANCES OF CONFIDENTIALITY THAT THE COMPTROLLER DEEMS
3 APPROPRIATE.
4 1–405.
5 (A) A CURRENT OR PROSPECTIVE EMPLOYER, CONTRACTOR, OR AGENT
6 MAY NOT DISCHARGE, DEMOTE, SUSPEND, THREATEN, OR HARASS, DIRECTLY OR
7 INDIRECTLY, OR IN ANY OTHER MANNER DISCRIMINATE OR RETALIATE AGAINST AN
8 INDIVIDUAL IN THE TERMS AND CONDITIONS OF EMPLOYMENT BECAUSE OF A
9 LAWFUL ACT DONE BY THAT INDIVIDUAL:
10 (1) IN PROVIDING INFORMATION TO THE COMPTROLLER OR A LAW
11 ENFORCEMENT AGENCY CONCERNING A POSSIBLE VIOLATION OF STATE TAX LAW,
12 INCLUDING A RULE OR REGULATION, THAT HAS OCCURRED, IS ONGOING, OR IS
13 ABOUT TO OCCUR;
14 (2) IN INITIATING, TESTIFYING IN, OR ASSISTING IN AN
15 INVESTIGATION OR JUDICIAL OR ADMINISTRATIVE ACTION OF THE COMPTROLLER
16 OR LAW ENFORCEMENT AGENCY OR A RELATED ACTION;
17 (3) IN REPORTING A VIOLATION OF THIS TITLE TO ANOTHER
18 GOVERNMENTAL ENTITY OR TO A DIRECTOR, SUPERVISOR, OR COMPLIANCE
19 OFFICER OF THE EMPLOYER, CONTRACTOR, OR AGENT; OR
20 (4) IN REFUSING OR DECLINING ANY AGREEMENT THAT WOULD
21 PROVIDE FOR ARBITRATION OF CLAIMS ARISING UNDER THIS ARTICLE.
22 (B) (1) AN INDIVIDUAL WHO IS DISCHARGED, DEMOTED, SUSPENDED,
23 THREATENED, HARASSED, OR IN ANY OTHER MANNER DISCRIMINATED OR
24 RETALIATED AGAINST IN THE TERMS AND CONDITIONS OF EMPLOYMENT OR IS
25 OTHERWISE HARMED OR PENALIZED BY AN EMPLOYER OR A PROSPECTIVE
26 EMPLOYER IN VIOLATION OF SUBSECTION (A) OF THIS SECTION SHALL BE ENTITLED
27 TO ALL RELIEF NECESSARY TO MAKE THE INDIVIDUAL WHOLE, INCLUDING:
28 (I) AN INJUNCTION TO RESTRAIN CONTINUED
29 DISCRIMINATION;
30 (II) HIRING, CONTRACTING, OR REINSTATEMENT TO THE
31 POSITION THAT THE INDIVIDUAL WOULD HAVE HAD BUT FOR THE DISCRIMINATION
32 OR TO AN EQUIVALENT POSITION;
8 HOUSE BILL 804
1 (III) REINSTATEMENT OF FULL FRINGE BENEFITS AND
2 SENIORITY RIGHTS;
3 (IV)
COMPENSATION FOR LOST WAGES, BENEFITS, AND OTHER
4 REMUNERATION, PLUS INTEREST;
5 (V) REMOVAL OF ANY ADVERSE PERSONNEL RECORD ENTRIES
6 BASED ON OR RELATED TO THE VIOLATION; AND
7 (VI)
COMPENSATION FOR ANY SPECIAL DAMAGES SUSTAINED AS
8 A RESULT OF THE DISCRIMINATION, INCLUDING LITIGATION COSTS AND
9 REASONABLE ATTORNEY’S FEES.
10 (2) AN INDIVIDUAL SEEKING RELIEF UNDER THIS SUBSECTION MAY
11 BRING AN ACTION IN THE APPROPRIATE CIRCUIT COURT FOR RELIEF.
12 (3) NOTHING IN THIS SUBSECTION MAY BE CONSTRUED TO LIMIT THE
13 RIGHTS, PRIVILEGES, OR REMEDIES OF A WHISTLEBLOWER UNDER FEDERAL OR
14 STATE LAW OR UNDER A COLLECTIVE BARGAINING AGREEMENT.
15 (C) (1)THE RIGHTS AND REMEDIES PROVIDED FOR UNDER THIS SECTION
16 MAY NOT BE WAIVED BY AN AGREEMENT, A POLICY FORM, OR A CONDITION OF
17 EMPLOYMENT.
18 (2)SALARY AND WAGES EARNED BY A WHISTLEBLOWER DURING THE
19 WHISTLEBLOWER’S EMPLOYMENT AND ANY CONSIDERATION PROVIDED TO THE
20 WHISTLEBLOWER IN CONNECTION WITH THE WHISTLEBLOWER’S SEVERANCE FROM
21 EMPLOYMENT MAY NOT BE RECOVERED BY ANY ACTION BROUGHT BY THE
22 EMPLOYER IF THE SALARY, WAGES, OR CONSIDERATION IS RELATED TO ORIGINAL
23 INFORMATION PROVIDED BY THE WHISTLEBLOWER OR THE COVERED
24 ENFORCEMENT ACTION.
25 1–406.
26 NOTHING IN THIS SUBTITLE MAY BE CONSTRUED TO:
27 (1)
PREEMPT, LIMIT, OR RESTRICT THE AUTHORITY OR DISCRETION
28 OF THE COMPTROLLER TO INVESTIGATE OR ENFORCE A VIOLATION OF THIS
29 ARTICLE;
30 (2) LIMIT ANY POWER OTHERWISE GRANTED IN THIS ARTICLE OR
31 OTHER LAWS TO THE COMPTROLLER, ATTORNEY GENERAL, STATE AGENCIES, OR
HOUSE BILL 804 9
1 LOCAL GOVERNMENTS TO INVESTIGATE OR ENFORCE POSSIBLE VIOLATIONS OF
2 THIS ARTICLE;
3 (3) AUTHORIZE A PRIVATE RIGHT OF ACTION INVOLVING A
4 VIOLATION OF THIS ARTICLE, EXCEPT AS SPECIFICALLY AUTHORIZED IN THIS
5