Ch. 202                                    2003 LAWS OF MARYLAND

purpose of transferring funds from the State Reserve Fund - Economic Development
Opportunities Fund for projects approved by the Legislative Policy Committee.

(8) This section shall not apply to budget amendments for the sole
purpose of appropriating funds for Information Technology Investment Fund projects
approved by the budget committees.

SECTION 26. AND BE IT FURTHER ENACTED, That in the expenditure of
federal funds appropriated in this budget or subsequent to the enactment of this
budget by the budget amendment process:

(1)     State agencies shall administer these federal funds in a manner that
recognizes that federal funds are taxpayer dollars that require prudent fiscal
management, careful application to the purposes for which they are directed, and
strict attention to budgetary and accounting procedures established for the
administration of all public funds.

(2)     For fiscal 2004, except with respect to capital appropriations, to the
extent consistent with federal requirements:

(a)     when expenditures or encumbrances may be charged to either
State or federal fund sources, federal funds shall be charged before State funds are
charged; this policy does not apply to the Department of Human Resources with
respect to federal funds to be carried forward into future years for child care, child
welfare, or welfare reform activities or to the Department of Health and Mental
Hygiene with respect to funds to be carried forward into future years for the purpose
of reducing the waiting list for community services for individuals with
developmental disabilities, or with respect to funds to be carried forward into future
years for HIV/AIDS-related activities;

(b)     when additional federal funds are sought or otherwise become
available in the course of the fiscal year, agencies shall consider, in consultation with
the Department of Budget and Management, whether opportunities exist to use these
federal revenues to support existing operations rather than to expand programs or
establish new ones; and

(c)      the Department of Budget and Management shall take
appropriate actions to effectively establish these as policies of the State with respect
to administration of federal funds by executive agencies.

SECTION 27. AND BE IT FURTHER ENACTED, That the amount of funds
appropriated to the various State departments and agencies in Comptroller object
0182 (Employee Transit Expenses) for the use of Baltimore area transit services by
State employees are to be transferred to the Department of Transportation—
Maryland Transit Administration (J00H01.01) on July 1, 2003 and may not be
expended for any other purpose.

SECTION 27. AND BE IT FURTHER ENACTED, That:

(1) The employees of the Executive Branch shall continue to receive free
transportation on Maryland Transit Administration (MTA) buses, express buses,

- 1738 -