Senate Bill 144 would establish a legal framework to recognize limited worker cooperative associations in Maryland, sponsor Sen. Mary Washington told the Senate Judicial Proceedings Committee on Jan. 9.

Washington said the bill standardizes governance and addresses taxation, workers’ compensation and financing barriers that worker cooperatives now face because they often incorporate under other entity types. The senator said the measure reflects work with the State Bar Association’s business law section, the comptroller’s office and the Maryland Insurance Administration over several years.

Proponents said the statute would aid conversions — allowing employees to buy and operate existing businesses democratically — and support economic resilience in rural and urban areas. Charlotte Davis, executive director of the Maryland Rural Council and board chair of the Keystone Development Center (Maryland’s USDA-funded Cooperative Development Center), said cooperatives have long been a rural solution — from electric co-ops to broadband — and that LWCAs would help retain local jobs when owners retire.

James Daley Johnson, a certified cooperative developer who advised on the bill, testified that the absence of an appropriate statute has complicated worker buyouts and start-ups in Maryland. He described nationwide growth in worker cooperatives and said similar laws have helped other jurisdictions facilitate conversions and new starts.

Sen. West, a committee member, asked the sponsor to consult further with the business law section on a few “modest amendments” they raised after last year’s session; Washington said she would engage with those stakeholders and consider amendments but did not commit to adopting specific language at the hearing.

The sponsor asked for a favorable report; the committee concluded the hearing without a recorded vote.