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SB 401

Relating to State School Fund adjustments for children in poverty; declaring an emergency.

2025 Regular Session Introduced by Fred Girod

Creates an independent MARC Rail Authority with broad control to plan, finance, build, operate, and bond for MARC projects, shifting funding from MDOT.

In committee upon adjournment.
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WeVote Research Nonpartisan
Bill Summary · SB 401

SB 401 — Transportation: Maryland Area Rail Commuter (MARC) Rail Authority (MARC Rail Authority Act of 2025)

Status: Favorable with Amendments (Budget & Taxation)
Introduced: Jan 20, 2025 (reported effective date in bill text: takes effect July 1, 2025)

Purpose / Intent

Establish a standalone Maryland Area Rail Commuter (MARC) Rail Authority (MRA) to assume wide-ranging responsibility for planning, financing, constructing, operating, maintaining and repairing MARC commuter-rail facilities and projects. The bill moves MARC program funding, revenue management, and capital finance authority out of (or apart from) direct Maryland Department of Transportation (MDOT) execution and creates an independent authority and dedicated fund to support MARC railroad facilities projects.

Key provisions

  • Establishes the MARC Rail Authority (MRA) as a new State entity under a new Subtitle 13 (Art. — Transportation).
  • Governance and staffing
    • Secretary of Transportation serves as Chair.
    • Additional appointed members with specified qualifications; terms generally 4 years; compensation/reimbursement as in State budget.
    • Secretary designates an executive director; MRA entitled to State-budgeted staff and MDOT personnel as needed.
  • Powers and duties (acting on behalf of MDOT)
    • Supervise, finance, construct, operate, maintain and repair MARC railroad facilities projects (e.g., Brunswick, Camden, Penn lines and service extensions).
    • Acquire, hold, dispose of property; enter contracts and agreements; adopt rules; apply for/receive federal grants; condemn property (with related statutory limits).
    • Contract with Maryland Transit Administration (MTA) to delegate operations/maintenance and pay MTA from fare revenue if appropriate; contract to allow MTA police to exercise authority on MRA property.
    • Adhere to Open Meetings Act; provide public meeting information and video with IT assistance.
    • Adopt and submit an annual six‑year financial forecast (detailed components required).
  • Finance, bonds, and fund
    • Creates the MARC Rail Authority Fund (MRAF). All rentals, fares, fees and other revenues from MARC projects are deposited to MRAF (unless pledged elsewhere under financing agreements).
    • MRA authorized to issue revenue bonds and related obligations to finance MARC railroad facilities projects. Revenue bonds are payable only from pledged revenues and are explicitly not to constitute State debt (per the bill).
    • Bonds/related income exempt from State and local taxation.
    • MRAF pledged to pay bond principal, interest, paying agents’ charges, and related redemption/purchase prices per bond trust agreements.
    • By April 1, 2026, MRA must report to the General Assembly with a recommendation on the maximum aggregate amount of revenue bonds that may be outstanding in a fiscal year.
  • Funding relationships
    • MDOT required to allocate annually the revenue needed to support MARC operating and capital budgets (and to transition existing MARC operations and contracts to MRA where permissible).
    • MARC fares and service charges may be used only to support MRA (except as required by existing financing agreements).

Who is affected

  • MDOT: transitions certain MARC responsibilities and personnel to MRA; TTF budgeting/allocations change.
  • Maryland Transit Administration (MTA): may be contracted by MRA to perform operations/maintenance and receive fare-based payments.
  • MARC riders and fare payers: fares will support MRA operations and associated bond financings.
  • State finances: Transportation Trust Fund (TTF) expenditures/revenues shift; MRAF and MRA special‑fund activity and issuing of revenue bonds will change capital financing dynamics.
  • Property owners along MARC projects (condemnation authority) and participants in federal grant programs.

Fiscal and procedural/timeline notes

  • Effective date: July 1, 2025.
  • Fiscal timing: Fiscal Note (Dept. of Legislative Services) projects significant increases in special‑fund revenues/expenditures for MRA beginning FY2026; TTF expenditures decrease (transfers of project responsibility) but TTF will still be used to pay at least some MRA expenses. MARC fare revenues to TTF decline as they are reallocated/used for MRA purposes.
  • Potential impacts: changes to MDOT capital plans and statewide debt‑affordability considerations; MRA bond issuance authority could materially alter how MARC projects are financed (bonds are not State debt per bill language).
  • Reporting: MRA must submit a bond‑related recommendation report by April 1, 2026, and adopt/submit an annual six‑year financial forecast (finalized by Sept 1 each year).

Bottom line

SB 401 sets up an independent MARC Rail Authority with broad operational, property and financing authority (including issuance of revenue bonds and creation of a dedicated fund). It centralizes MARC revenue and borrowing for commuter‑rail projects under MRA control, changes the flow of fare and capital funding away from current MDOT-only management, and could meaningfully affect state transportation finances and capital planning beginning in FY2026.

Compiled from official sources — confirm details with the bill’s official record.

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