ANNOTATED CODE OF MARYLAND
HUMAN SERVICES
TITLE 11.
MARYLAND LEGAL SERVICES CORPORATION
Subtitle 1. Definitions; General Provisions.
Subtitle 2. Organization and Administration of Corporation.
Subtitle 3. Board of Directors.
11-301. Established; membership.
11-402. Maryland Legal Services Corporation Fund.
11-403. Disposition of money and property.
11-404. Issuance of stock prohibited.
11-405. Restrictions on disposition of corporate earnings.
11-406. Disposition of assets on liquidation.
11-408. Audits by Legislative Auditor.
11-501. Financial assistance to grantees.
11-505. Financial audit or review.
11-601. Standards for quality service.
11-602. Application for legal assistance.
11-603. Income eligibility limits.
11-604. Attorney-client privilege.
11-701. Fraudulently obtaining legal assistance.
Subtitle 1. Definitions; General Provisions.
§ 11-101. Definitions.
(a) In general .- In this title the following words have the meanings indicated.
(b) Board.- "Board" means the Board of Directors of the Maryland Legal Services Corporation.
(c) Corporation. - "Corporation" means the Maryland Legal Services Corporation.
(d) Eligible client. - "Eligible client" means a person who is unable to afford legal assistance as determined under § 11-603 of this title.
(e) Fund. - "Fund" means the Maryland Legal Services Corporation Fund.
(f) Grantee. –
(1) "Grantee" means a nonprofit organization that:
(i) is qualified under § 501(c)(3) of the Internal Revenue Code;
(ii) provides legal assistance to eligible clients; and
(iii) receives financial assistance under § 11-501 of this title from the Corporation.
(2) "Grantee" includes:
(i) the Legal Aid Bureau, Inc.;
(ii) the
(iii) the Maryland Volunteer Lawyers Service, Inc.
(g) Internal Revenue Code. - "Internal Revenue Code" means:
(1) Title 26 of the
(2) regulations adopted under Title 26 of the United States Code.
(h) Legal assistance. -
(1) "Legal assistance" means the legal representation of eligible clients by grantees.
(2) "Legal assistance" includes:
(i) training;
(ii) research;
(iii) coordination with private attorneys; and
(iv) other activities necessary to ensure the delivery of quality legal services.
[An. Code 1957, art. 10, § 45C (intro. lang.), (a)-(c), (d)-(g); CJ § 7-408(a); 2007, ch. 3, § 2.]
§ 11-102. Legislative findings.
The General Assembly finds and declares that:
(1) there is a need to provide equal access to the system of justice for individuals seeking redress of grievances;
(2) reduction of federal funds has diminished the availability of legal services provided by existing statewide legal services programs;
(3) there is a need to continue and expand legal assistance to those who would otherwise be unable to afford adequate legal counsel;
(4) the availability of legal services reaffirms faith in our government of laws;
(5) the funding of legal assistance programs for those who are unable to afford legal counsel will serve the ends of justice and the general welfare of the public; and
(6) attorneys providing legal assistance must have full freedom to protect the best interests of their clients in keeping with the Maryland Rules of Professional Conduct and the high standards of the legal profession. [An. Code 1957, art. 10, § 45B; 2007, ch. 3, § 2.]
Subtitle 2. Organization and Administration of Corporation.
§ 11-201. Established; purpose.
(a) Established. -
(1) There is a Maryland Legal Services Corporation.
(2) The Corporation is a nonstock corporation.
(b) Purpose. - The purpose of the Corporation is to receive and distribute funds to grantees that provide legal assistance to eligible clients in civil proceedings or matters. [An. Code 1957, art. 10, § 45D(a); 2007, ch. 3, § 2.]
§ 11-202. Office; status.
(a) Principal office and designated agent. -
(1) The Corporation shall maintain:
(i) its principal office in the State; and
(ii) a designated agent to accept service of process.
(2) The Corporation shall file the name and address of the designated agent with the State Department of Assessments and Taxation.
(b) Tax exempt status. - The Corporation is exempt from any special tax, property tax, recordation tax, or transfer tax imposed by the State or a political subdivision of the State.
(c) Corporation not a unit or instrumentality of the State. - Except as otherwise provided in this title, the Corporation is not a unit or instrumentality of the State. [An. Code 1957, art. 10, § 45D(b)-(d); 2007, ch. 3, § 2.]
§ 11-203. Executive director.
(a) Appointment. - The Board shall appoint an executive director of the Corporation.
(b) Duties .-
(1) The executive director is the chief executive officer of the Corporation.
(2) Subject to this title and policies established by the Board, the executive director has the authority and responsibility for:
(i) administering the affairs of the Corporation;
(ii) appointing and removing employees as necessary to carry out the purposes of this title;
(iii) making grants;
(iv) entering into contracts;
(v) exercising powers incident to the office of the executive director; and
(vi) performing other duties that the Board prescribes.
(c) Salary. - The executive director is entitled to a salary as provided in the budget of the Corporation.
(d) Removal. - The executive director may be removed by a majority of the Board. [An. Code 1957, art. 10, § 45F(a); 2007, ch. 3, § 2.]
§ 11-204. Employees.
(a) Political considerations prohibited. - A political test or political qualification may not be used in selecting, appointing, promoting, or taking any other personnel action with respect to an officer, agent, or employee of the Corporation.
(b) Salaries. - Employees of the Corporation are entitled to salaries as provided in the budget of the Corporation.
(c) Status. - Employees of the Corporation are not employees of the State. [An. Code 1957, art. 10, § 45F(b); 2007, ch. 3, § 2.]
§ 11-205. General powers.
To the extent consistent with this title, the Corporation shall exercise the powers granted to a nonstock corporation under Title 5, Subtitle 2 of the Corporations and Associations Article. [An. Code 1957, art. 10, § 45G(a); 2007, ch. 3, § 2.]
§ 11-206. Indemnification.
The Corporation shall indemnify the members of the Board and the officers, agents, and employees of the Corporation to the extent authorized under the Maryland General Corporation Law. [An. Code 1957, art. 10, § 45G(h); 2007, ch. 3, § 2.]
§ 11-207. Annual report.
(a) Required.-
(1) The Corporation shall publish an annual report.
(2) The Corporation shall submit the annual report to the Governor and, subject to § 2-1246 of the State Government Article, the General Assembly.
(b) Contents of report.- The report shall include a description of services provided.
[An. Code 1957, art. 10, § 45G(g)(3); 2007, ch. 3, § 2.]
Subtitle 3. Board of Directors.
§ 11-301. Established; membership.
(a) Established.- There is a Board of Directors of the Corporation.
(b) Composition; appointment of members.-
(1) The Board consists of:
(i) nine voting members appointed by the Governor with the advice and consent of the Senate; and
(ii) the executive director, who is a nonvoting ex officio member.
(2) Voting members shall be residents of the State and shall represent the different geographical regions of the State.
(3) Five voting members shall be lawyers admitted to the Bar in the State and four voting members shall be nonlawyers.
(c) Status.- A voting member of the Board is not an officer or employee of the State.
(d) Tenure; vacancies.-
(1) The term of office of a voting member is 3 years.
(2) At the end of a term a voting member continues to serve until a successor is appointed and qualifies.
(3) The terms of voting members are staggered as required by the terms provided for members of the Board on October 1, 2007.
(4) If a vacancy occurs during the term of a voting member, the Governor shall fill the vacancy.
(5) A voting member who is appointed after a term has begun serves only for the rest of the term and until a successor is appointed and qualifies.
(6) A voting member may not be reappointed for more than 2 consecutive terms immediately following the member's initial term.
(e) Removal.-
(1) A voting member may be removed by a vote of seven members.
(2) A voting member may only be removed for:
(i) malfeasance in office;
(ii) persistent neglect of or inability to discharge duties; or
(iii) offenses involving moral turpitude.
[An. Code 1957, art. 10, §§ 45E(a)-(c), (f), 45F(a)(1); 2007, ch. 3, § 2.]
§ 11-302. Officers.
(a) Chair.- From among its voting members, the Board annually shall elect a chair.
(b) Other officers.- From among its members, the Board shall appoint a secretary, a treasurer, and other officers. [An. Code 1957, art. 10, § 45E(d), (e); 2007, ch. 3, § 2.]
§ 11-303. Compensation.
A member of the Board:
(1) may not receive compensation as a member of the Board; but
(2) is entitled to reimbursement for necessary expenses incurred in connection with service on the Board as provided in the budget of the Corporation. [An. Code 1957, art. 10, § 45E(g); 2007, ch. 3, § 2.]
§ 11-304. Meetings.
(a) Quarterly meetings.- The Board shall meet at least 4 times a year.
(b) Public meetings.- Except as provided in § 10-508 of the State Government Article, a meeting of the Board shall be open to the public. [An. Code 1957, art. 10, § 45E(h), (i); 2007, ch. 3, § 2.]
§ 11-401. Financing.
(a) Appropriation in the State budget.- In the State operating budget or in any supplemental budget that the Governor submits to the General Assembly, the Governor shall appropriate at least $500,000 each year to the Maryland Legal Services Corporation Fund established under § 11-402 of this subtitle.
(b) Transfer from abandoned property funds.-
(1) To support or add to the appropriation under subsection (a) of this section, on July 1 of each year, the Governor may transfer to the Fund up to $500,000 from the portion of abandoned property funds deposited in the General Fund of the State under § 17-317 of the Commercial Law Article.
(2) If, after deducting all costs of administering the abandoned property fund, the balance in the portion of abandoned property funds deposited in the General Fund of the State under § 17-317 of the Commercial Law Article is less than $500,000, only the balance may be transferred in accordance with paragraph (1) of this subsection.
(c)
§ 11-402. Maryland Legal Services Corporation Fund.
(a) Established.- There is a Maryland Legal Services Corporation Fund.
(b) Administration.- The Administrative Office of the Courts shall administer the Fund.
(c) Status.- The Fund is a special, nonlapsing fund that is not subject to § 7-302 of the State Finance and Procurement Article.
(d) Composition.- The Fund consists of:
(1) money deposited to the Fund from the surcharge assessed in civil cases under §§ 7-202 and 7-301 of the Courts Article;
(2) money appropriated to the Fund under § 11-401 of this subtitle;
(3) interest on attorney trust accounts paid to the Fund under § 10-303 of the Business Occupations and Professions Article; and
(4) investment earnings of the Fund.
(e) Use of Fund.- The Corporation shall use the Fund to provide funding for civil legal services to indigents under this title.
(f) Investment.- The Treasurer shall:
(1) invest and reinvest the Fund in the same manner as other State funds; and
(2) credit any investment earnings to the Fund.
(g) Expenditures.- Expenditures from the Fund shall be made in accordance with an appropriation requested by the Judicial Branch of the State government under § 7-108 of the State Finance and Procurement Article and approved by the General Assembly in the State budget or by the budget amendment procedure under § 7-208.1 of the State Finance and Procurement Article. [An. Code 1957, art. 10, § 45-O(c); CJ § 7-408(b)-(g); 2007, ch. 3, § 2.]
§ 11-403. Disposition of money and property.
The Corporation shall accept and use any money or property received by gift, devise, bequest, or otherwise to further the purposes of this title. [An. Code 1957, art. 10, § 45G(c); 2007, ch. 3, § 2.]
§ 11-404. Issuance of stock prohibited.
The Corporation may not issue stock or declare or pay dividends. [An. Code 1957, art. 10, § 45H(a); 2007, ch. 3, § 2.]
§ 11-405. Restrictions on disposition of corporate earnings.
(a) Net earnings.-
(1) This subsection does not apply to reasonable compensation paid for services rendered to or for the Corporation.
(2) Net earnings of the Corporation may not inure to the benefit of any individual.
(b) Corporate assets.- An individual may not share in the distribution of corporate assets on dissolution of the Corporation. [An. Code 1957, art. 10, § 45H(c); 2007, ch. 3, § 2.]
§ 11-406. Disposition of assets on liquidation.
On the liquidation, dissolution, or winding up of the Corporation, after payment of the obligations and liabilities of the Corporation, all of the assets of the Corporation shall be transferred to one or more corporations or associations that:
(1) have a character or purpose similar to the Corporation's;
(2) are selected by the Board; and
(3) qualify under § 501(c)(3) of the Internal Revenue Code.
[An. Code 1957, art. 10, § 45H(f); 2007, ch. 3, § 2.]
§ 11-407. Annual audits.
(a) Required.-
(1) The accounts of the Corporation shall be audited annually.
(2) The audits shall be conducted in accordance with generally accepted auditing standards by an independent certified public accountant.
(b) Procedures.-
(1) An audit under this section shall be conducted where the accounts of the Corporation are normally kept.
(2) If owned or in use by the Corporation and necessary to facilitate the audit, the Corporation shall make available to the auditor all:
(i) books;
(ii) accounts;
(iii) financial records;
(iv) reports;
(v) files; and
(vi) other papers or property.
(3) Full facilities for verifying transactions with the balances and securities held by depositories, fiscal agents, and custodians shall be available to the auditors.
(c) Report.- The report of the annual audit shall:
(1) be submitted to the Governor, the Department of Budget and Management and, subject to § 2-1246 of the State Government Article, the General Assembly; and
(2) be available for public inspection during business hours at the principal office of the Corporation. [An. Code 1957, art. 10, § 45K(a); 2007, ch. 3, § 2.]
§ 11-408. Audits by Legislative Auditor.
(a) Authorized.-
(1) The audit authorized by this section is in addition to the annual audit required by § 11-407 of this subtitle.
(2) For any fiscal year during which State funds are available to finance any portion of the operations of the Corporation, the Legislative Auditor may audit the financial transactions of the Corporation.
(b) Procedures.-
(1) An audit under this section shall be conducted where the accounts of the Corporation are normally kept.
(2) If owned or in use by the Corporation and necessary to facilitate the audit, the Corporation shall make available to the Legislative Auditor all:
(i) books;
(ii) accounts;
(iii) financial records;
(iv) reports;
(v) files; and
(vi) other papers or property.
(3) Full facilities for verifying transactions with the balances and securities held by depositories, fiscal agents, and custodians shall be available to the Legislative Auditor.
(4) Unless the Legislative Auditor requires a longer period of retention, the items listed in paragraph (2) of this subsection shall remain in the possession and custody of the Corporation for 3 years.
(c) Report.- The legislative audit shall be submitted to the General Assembly and the Governor, with any recommendations the Legislative Auditor considers advisable. [An. Code 1957, art. 10, § 45K(b); 2007, ch. 3, § 2.]
§ 11-501. Financial assistance to grantees.
The Corporation shall make grants of financial assistance to grantees for the purpose of providing legal assistance to eligible clients. [An. Code 1957, art. 10, § 45G(b); 2007, ch. 3, § 2.]
§ 11-502. Grants.
(a) Duty of Corporation in providing.- The Corporation shall ensure that grants and contracts are made to:
(1) provide the most stable, economical, and effective delivery of legal assistance; and
(2) provide access to legal assistance to eligible clients in all areas of the State.
(b) Political considerations prohibited.- The Corporation may not use a political test or political qualifications to select or monitor a grantee under this title.
(c) Termination or suspension of financial assistance.-
(1) This subsection does not apply to a suspension or termination of financial assistance or a denial of an application for refunding because of a lack of available funds.
(2) The Corporation shall prescribe procedures in accordance with this subsection to govern:
(i) the suspension or termination of financial assistance; and
(ii) the denial of an application for refunding.
(3) The procedures shall ensure that financial assistance committed may not be suspended or terminated and an application for refunding may not be denied unless the grantee has been given:
(i) reasonable notice; and
(ii) an opportunity for a timely, full, and fair hearing conducted by an independent hearing examiner. [An. Code 1957, art. 10, § 45G(d), (g)(4); 2007, ch. 3, § 2.]
§ 11-503. Duties of grantees.
(a) Consideration of client needs.- In applying for and spending grant money from the Corporation, grantees shall consider the relative needs for service of clients, particularly the needs of eligible clients who have special difficulties of access to legal services or who have special legal problems, including elderly individuals and individuals with disabilities.
(b) Restrictions on use of funds.- Funds provided to grantees under this title may not be used:
(1) to provide legal assistance for a fee-generating case;
(2) to provide legal assistance for the defense of a criminal prosecution;
(3) to provide legal assistance in a civil action to a person who has been convicted of a criminal charge if the civil action:
(i) arises out of an alleged act or failure to act; and
(ii) is brought against an official of the court or a law enforcement official to challenge the validity of the criminal conviction;
(4) to influence the issuance, amendment, or revocation of an executive order or similar promulgation by a federal, State, or local unit, or to influence the passage or defeat of legislation by the United States Congress, or by a State or local legislative body, or a State proposal by referendum or petition;
(5) to contribute to or be made available to a political party or association or the campaign of a candidate for public or party office; or
(6) to provide representation in a class action suit. [An. Code 1957, art. 10, § 45J; 2007, ch. 3, § 2.]
§ 11-504. Reports and records.
(a) Reports.- The Corporation may require a grantee to submit any reports the Corporation considers necessary regarding activities carried out under this title.
(b) Records.-
(1) The Corporation may require grantees to keep records regarding funds provided by the Corporation.
(2) The Corporation shall have access to the records at all reasonable times to ensure compliance with the grant or contract or the terms and conditions on which financial assistance was provided. [An. Code 1957, art. 10, § 45G(g)(1)-(2); 2007, ch. 3, § 2.]
§ 11-505. Financial audit or review.
(a) Required.- Each year, the Corporation shall require:
(1) a financial audit by an independent certified public accountant of each grantee whose grant income from the Corporation in the most recently completed fiscal year was $50,000 or more; or
(2) a financial review by an independent certified public accountant of each grantee whose grant income from the Corporation in the most recently completed fiscal year was less than $50,000.
(b) Report.- The report of each audit or review shall be:
(1) submitted to the Governor;
(2) made available to the Legislative Auditor; and
(3) kept for at least 5 years at the principal office of the Corporation. [An. Code 1957, art. 10, § 45K(c); 2007, ch. 3, § 2.]
§ 11-601. Standards for quality service.
The Corporation shall seek to ensure that a grantee providing legal assistance to eligible clients:
(1) maintains the highest quality of service and professional standards;
(2) preserves attorney-client relationships; and
(3) protects the integrity of the adversary process from any impairment. [An. Code 1957, art. 10, § 45G(f); 2007, ch. 3, § 2.]
§ 11-602. Application for legal assistance.
Each application for legal assistance shall be in writing and accompanied by an affidavit stating that the information contained in the application is true and correct. [An. Code 1957, art. 10, § 45L; 2007, ch. 3, § 2.]
§ 11-603. Income eligibility limits.
(a) Establishment.-
(1) The Corporation shall establish maximum income levels for client eligibility.
(2) The income levels shall be based on the financial ability of a client to pay for competent private counsel and all other necessary expenses of representation.
(b) Considerations.- The maximum income levels established under this section and eligibility guidelines established by each grantee to implement this section shall take into consideration:
(1) the size of the client's family;
(2) cost of living variations, including differences between urban and rural areas;
(3) the assets and income of the client;
(4) the fixed debts and medical expenses of the client; and
(5) other factors relevant to the client's ability to pay for the legal services the client requires.
(c) Limitation on maximum income levels.- The Corporation may not set the maximum income levels for eligibility under this section at a level greater than 50% of the median family income for the State as certified annually by the United States Department of Health and Human Services. [An. Code 1957, art. 10, § 45G(e); 2007, ch. 3, § 2.]
§ 11-604. Attorney-client privilege.
Notwithstanding any other provision of this title, information subject to the attorney-client privilege is confidential and may not be disclosed to any person unless the privilege is waived by the client or a court orders the disclosure. [An. Code 1957, art. 10, § 45N; 2007, ch. 3, § 2.]
§ 11-701. Fraudulently obtaining legal assistance.
(a) Prohibited.- A person may not obtain, attempt to obtain, or aid another person in obtaining or attempting to obtain legal assistance to which the person is not entitled by:
(1) willfully making a false statement or representation;
(2) willfully failing to disclose a material change in financial condition;
(3) impersonating another; or
(4) any other fraudulent means.
(b) Penalty.-
(1) A person who violates this section is guilty of a misdemeanor and on conviction is subject to imprisonment not exceeding 3 years or a fine not exceeding $1,000 or both.
(2) (i) A person convicted under this section shall make full restitution of the value of the legal assistance unlawfully received.
(ii) The person shall be given notice and the opportunity for a hearing on the amount and terms of the payment. [An. Code 1957, art. 10, § 45M; 2007, ch. 3, § 2.]
§ 11-702. Acts of the Corporation.
The Corporation may not:
(1) participate in litigation, unless:
(i) the Corporation or a grantee is a party; or
(ii) a grantee is representing an eligible client in litigation in which the interpretation of this title or a guideline established by the Corporation under this title is an issue;
(2) interfere with a lawyer's professional responsibilities to clients under the Maryland Rules of Professional Conduct;
(3) compete directly or indirectly with any grantee;
(4) contribute or make available the Corporation's funds or services to a political party or association or the campaign of a candidate for public or party office;
(5) except as provided in §§ 501(h) and 4911 of the Internal Revenue Code:
(i) carry on propaganda or otherwise attempt to influence legislation; and
(ii) participate or intervene in a political campaign on behalf of a candidate for public office, including publishing or distributing statements;
(6) notwithstanding any other provision of this title, conduct or carry on activities not authorized for an organization:
(i) qualified under § 501(c)(3) of the Internal Revenue Code; or
(ii) to which contributions are deductible under § 170(c)(2) of the Internal Revenue Code. [An. Code 1957, art. 10, § 45H(b), (d), (e); 2007, ch. 3, § 2.]
§ 11-801. Short title.
This title may be cited as the "Maryland Legal Services Corporation Act". [An. Code 1957, art. 10, § 45A; 2007, ch. 3, § 3.]