Can a Maryland business license be suspended because the owner was convicted of a drug crime?

Plain-English summary

The Drug Enforcement Act of 1990 (Chapter 410, House Bill 515), a Maryland law, added a new tool: when someone who holds a State license is convicted of a controlled dangerous substances offense, the licensing agency has to be notified and may take disciplinary action against that license. The Governor's public safety office asked the Attorney General a narrow but practical question: does that sanction reach the owner of a sole proprietorship who holds a business entity license, or only people licensed in their own individual professional, occupational, or employment capacity?

The Attorney General concluded the sanctions applied only to individuals, not to sole proprietors holding a business license. Two things drove that reading. First, the statute defined "license" as an authorization "[i]ssued to or granted to an individual" and "[r]equired for engaging in employment or an occupation or profession," and in Maryland legislative drafting the word "individual" means a natural person, not a business entity. A business permit authorizes a specific business to operate; it does not authorize its owner to practice an occupation, and a sole proprietor who wants to practice a regulated profession still has to be separately licensed as an individual for that profession. Second, the legislative history pointed the same way. The bill as introduced covered all business permits and treated business licensees differently from individuals, but the final conference-committee version narrowed the definition to licenses "issued to an individual." The opinion read that change as a deliberate decision to cut business entities out of the sanction provisions.

Currency note

This opinion was issued in 1990. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Maryland has since recodified much of this material. The license sanction provisions were placed in Article 41 in 1990; the State's general provisions on licenses and occupations have been reorganized over the years into the Business Occupations and Professions Article and other codes, so the exact section numbers here no longer track the current code. The opinion was also the Attorney General's assessment of the 1990 Act, not a court decision. Read the analysis and the specific citations as the law as it stood in 1990, and check current statutes before relying on any of it.

Common questions

If someone who owns a licensed business is convicted of a drug offense, could the business lose its license under this 1990 law?
Not under the Drug Enforcement Act's license sanction provisions, according to this opinion. The Attorney General read those provisions to reach only individuals licensed to engage in an occupation or profession, not the business entity licenses held by sole proprietors.

What did the sanction provisions actually do?
They required a licensing agency to be notified when a person holding a State license was convicted of a controlled dangerous substances offense, and authorized the agency to take disciplinary action against that person's license based on the conviction. The question in this opinion was who counted as a covered "license" holder.

What is the difference between an "individual" license and a "business entity" license here?
An individual (or "natural person") license authorizes a specific person to work in an occupation or profession. A business entity license, held by a sole proprietor, authorizes a particular business to operate. The opinion pointed out that even a sole proprietor who runs a regulated business still has to hold a separate individual license to personally practice the regulated occupation.

Why did the sole proprietor's business permit fall outside the sanction?
Because the statute defined a covered "license" as one issued to an "individual" and required for "engaging in employment or an occupation or profession." The Attorney General read "individual" to mean a natural person, and concluded that a business permit does not authorize its owner to engage in employment or an occupation, so it did not fit the definition.

Background and statutory framework

The Drug Enforcement Act of 1990, Chapter 410 of the Laws of Maryland, was set to take effect on January 1, 1991. Among other things it created a license sanction scheme: notice to the licensing agency when a State licensee was convicted of a controlled dangerous substances offense, and authority for the agency to discipline that licensee. Peter C. Cobb, the Governor's Executive Assistant for Public Safety, asked whether that scheme reached sole proprietors holding business entity licenses or only individuals licensed in their own professional or occupational capacity.

The analysis started with the statutory text. As enacted, Article 41, §1-403(c) defined "license" as a legal authorization "[i]ssued to or granted to an individual by a licensing authority" and "[r]equired for engaging in employment or an occupation or profession," with specific carve-ins and carve-outs (commercial drivers' licenses in, ordinary motor vehicle licenses and certain securities registrations out). Drawing on dictionary definitions and the Maryland Style Manual for Statutory Law, which instructs drafters to use "individual" when a provision is meant to apply only to human beings, the opinion concluded that "individual" here meant natural persons. It reinforced the point by noting that a business permit authorizes a specific business to operate rather than authorizing the owner to engage in an occupation, and that a sole proprietor who wants to practice a regulated profession must still be licensed individually for it.

The legislative history sealed the reading. House Bill 515 as introduced defined "license" broadly enough to include all business permits, and it treated "individual" licensees and "business licensees" differently, subjecting individuals to the sanction provisions while requiring business licensees only to maintain a drug- and alcohol-free workplace. The House Judiciary Committee dropped the workplace provisions and rewrote the definition; the Senate Judicial Proceedings Committee returned to a version based on the original bill; and the final conference-committee version limited the definition to licenses issued to "an individual" to engage in "employment, an occupation, or [a] profession." The opinion treated the addition of that "individual" limitation as strong evidence of an intent to narrow the definition and exclude business entities, invoking the interpretive rule that every part of a statute is presumed to have meaning. The bottom line: the license sanction provisions of Chapter 410 applied only to individuals licensed to engage in employment or an occupation or profession, not to sole proprietors who hold business entity licenses.

Citations and references

Statutes:

• Chapter 410 (House Bill 515) of the Laws of Maryland 1990, the Drug Enforcement Act of 1990
• Article 41, §1-403(c), the statutory definition of "license" (including the securities exemption at §1-403(c)(3)(ii))
• §5-504(c) of the Business and Occupations Article, on the need for a separate permit for each business
• BOP §§13-307 and 13-402, illustrating that operating a regulated business still requires an individual professional license
• Title 16, Subtitle 8, and Title 16 of the Transportation Article, and Title 11 of the Corporations and Associations Article (the Maryland Securities Act), referenced in the "license" definition

Cases:

• Morris v. Prince George's County, 319 Md. 597, 573 A.2d 1346 (1990), the Court of Appeals' statement of Maryland's approach to statutory construction
• Baltimore City v. United Five and Ten Cent Stores, Inc., 250 Md. 361, 368, 243 A.2d 521 (1968), for the rule that every part of a statute must be given meaning
• Shermco Industries v. Secretary of the Air Force, 452 F. Supp. 306, 314 (N.D. Tex. 1978), holding "individual" in the federal Privacy Act does not apply to a proprietorship
• Budget Service Co. v. Better Homes of Virginia, Inc., 804 F.2d 289, 292 (4th Cir. 1986), and Nelson v. U.S. Fire Insurance Co., 66 Cal. Rptr. 115, 118 (Cal. App. 1968), examples where "individual" was read to include business entities
• St. Michael's Convalescent v. State of Colo., 643 F.2d 1369 (9th Cir. 1981), and Northern Rent-A-Car, Inc. v. Conway, 464 A.2d 750 (Vt. 1983)

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/1990/Volume75_1990.pdf (this opinion appears at printed pages 157-162 of the bound annual volume; Maryland's site does not publish a standalone PDF of this opinion)

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

DRUG ENFORCEMENT ACT

Licenses — Sanction Provisions of the Act Are Not Applicable to Sole Proprietorships

October 11, 1990

Peter C. Cobb, Esquire
Executive Assistant to the
Governor for Public Safety

 You have requested our opinion concerning the scope of Chapter 410 (House Bill 515) of the Laws of Maryland 1990, the Drug Enforcement Act of 1990.1 Specifically, you have asked whether the license sanction provisions of Chapter 410, which require notification when a holder of a State license is convicted of a controlled dangerous substances offense and authorize licensing agencies to take disciplinary action against licensees on the basis of such convictions, apply to the owners of sole proprietorships for which a business entity license is required, as well as to individuals licensed in their individual professional, occupational, or employment capacity.2

For the reasons that follow, we conclude that the license sanction provisions were not intended to apply to sole proprietorships.

I

Scope of License Sanction Provisions in Chapter 410

 In a recent case, Morris v. Prince George's County, 319 Md. 597, 573 A.2d 1346 (1990), the Court of Appeals reiterated its recent approach to statutory construction, emphasizing a realistic effort to discern the General Assembly's underlying objective:

          Obviously, "'what the legislature has written in an effort to achieve a goal is a natural ingredient of analysis to determine that goal.'" ... And sometimes it may not be necessary to go further than the scrutiny of statutory language, for the language itself may be sufficiently expressive of the legislative purpose or goal.

          But our endeavor is always to seek out the legislative purpose, the general aim or policy, the ends to be accomplished, the evils to be redressed by a particular enactment.... In the conduct of that enterprise, we are not limited to study of the statutory language.... The "meaning of the plainest language" is controlled by the context in which it appears.... Thus, we always are free to look at the context within which statutory language appears.... Even when the words of a statute carry a definite meaning, we are not "precluded from consulting legislative history as part of the process of determining the legislative purpose or goal" of the law.

319 Md. at 603-04 (citations omitted). In considering Chapter 410, we conclude that both the language of the statute and its legislative history indicate an intent to exclude sole proprietorships from the coverage of the license sanction provisions.

As enacted, Chapter 410 defines "license" as follows:

           (1) "License" means a license, permit, certification, registration, or other legal authorization:

               (i) Issued to or granted to an individual by a licensing authority; and

             (ii) Required for engaging in employment or an occupation or profession.

          (2) "License" includes a commercial driver's license issued under Title 16, Subtitle 8 of the Transportation Article.

         (3) Except as provided in paragraph (2) of this subsection, "license" does not include:

              (i) A license to drive a motor vehicle issued by the Motor Vehicle Administration under Title 16 of the Transportation Article; or

               (ii) The registration of an agent, issuer agent, or investment advisor representative under the Maryland Securities Act (Title 11 of the Corporations and Associations Article) and regulations adopted under that act.

Article 41, §1-403(c).

 The dictionary definitions of the term "individual" indicate that it typically refers to natural persons and not to business entities. Webster's Third New International Dictionary (1986), for instance, states that the term "individual" refers to a "single human being as contrasted with a social group or institution." And Black's Law Dictionary (5th ed. 1979) states that the term "denotes a single person as distinguished from a group or class, and also, very commonly, a private or natural person as distinguished from a partnership, corporation, or association."

  Black's Law Dictionary goes on to point out that the term "individual" "may, in proper cases, include artificial persons," and, indeed, the term has on occasion been read by courts in other jurisdictions to include corporations and other business entities. See, e.g., Budget Service Co. v. Better Homes of Virginia, Inc., 804 F.2d 289, 292 (4th Cir. 1986); Nelson v. U.S. Fire Insurance Co., 66 Cal. Rptr. 115, 118 (Cal. App. 1968). For purposes of legislative drafting in Maryland, however, the term is not given such a broad reading: "If [a statutory] reference is intended to apply only to human beings, use 'individual'." Maryland Style Manual for Statutory Law 90 (1985). Thus, use of the term "individual" in Article 41, §1-403(c) supports the conclusion that only natural persons were to be included. See Shermco Industries v. Secretary of the Air Force, 452 F. Supp. 306, 314 (N.D. Tex. 1978), rev'd on other grounds 613 F.2d 1314 (5th Cir. 1980) (term "individual" in federal Privacy Act does not apply to "proprietorship"). See also St. Michael's Convalescent v. State of Colo., 643 F.2d 1369 (9th Cir. 1981); Northern Rent-A-Car, Inc. v. Conway, 464 A.2d 750 (Vt. 1983).

 The remaining language of the statutory definition also supports the conclusion that the license sanctions were intended to apply only to natural persons and not to sole proprietors. Businesses, including sole proprietorships, are not generally thought of as "engaging in employment or an occupation or profession." Even if the owning of a business of a certain type is viewed as "an occupation or employment" of the sole proprietor, a business permit does not authorize the sole proprietor to engage in that employment or occupation. Instead, it authorizes a specific business to operate. Additional businesses, even if owned by the same sole proprietor, require additional permits. See, e.g., §5-504(c) of the Business and Occupations Article ("BOP" Article).

In addition, if the sole proprietor wishes to actually practice a regulated occupation or profession that is to be the object of the business, he or she must be licensed as an individual for that occupation or profession as well; the holding of a business permit alone does not suffice. See, e.g., BOP §§13-307 and 13-402. Thus, a business permit, when issued to a sole proprietor, does not fall within Chapter 410's definition of "license."

 This conclusion is supported by the legislative history of the provision. When House Bill 515 was introduced, the bill defined "license" as follows:

          (1) A license, permit, certification, or charter issued by a State licensing authority; or

         (2) A license registered with the Department of Assessments and Taxation as a foreign corporation doing business in Maryland.

See Laws of Maryland 1990 at 1670-71.

 This definition clearly included all business permits, including those for sole proprietorships. However, the bill treated "individual" licensees and "business licensees" differently. An "individual" applying for a license or renewal was subject to the license sanction provisions. A "business licensee," on the other hand, would have been required merely to establish and maintain a drug and alcohol-free workplace.3

 The House Judiciary Committee adopted amendments that eliminated the drug and alcohol-free workplace provisions applicable to business licensees and changed the definition of "license" so that it covered a long list of specific licenses. The Senate Judicial Proceedings Committee, however, while leaving out the drug and alcohol-free workplace provisions, returned to a definition of "license" based on the one in the original bill (except that it omitted a reference to charters).

 The final version, arrived at in conference committee, also is based on the original definition but was amended to apply only if issued to "an individual" to engage in "employment, an occupation, or [a] profession." The addition of this limitation strongly suggests an intent to cut back on the scope of the definition in comparison to the earlier definition, which had included licenses issued to business entities. "All parts of a statute must have been intended to have meaning ... and must be so interpreted." Baltimore City v. United Five and Ten Cent Stores, Inc., 250 Md. 361, 368, 243 A.2d 521 (1968).4

II

Conclusion

In summary, it is our opinion that the license sanction provisions of Chapter 410 apply only to individuals licensed to engage in employment or an occupation or profession. They do not apply to sole proprietors who hold business entity licenses.5

                                              J. Joseph Curran, Jr.
                                              Attorney General

                                              Kathryn M. Rowe
                                              Assistant Attorney General

                                              Jack Schwartz
                                              Chief Counsel
                                                Opinions & Advice

1
Chapter 410 will become effective on January 1, 1991.

2
For the sake of clarity, holders of business entity licenses will be referred to in this opinion as "sole proprietors"; individuals licensed as individuals will be referred to as "natural persons." Cf. note 5 below.

3
"Business licensee" was defined as "a corporation, partnership, association, or entity other than an individual which receives a license, permit, certification, or charter from a State licensing authority." "State licensing authority," in turn, was defined as "an agency of the State of Maryland which issues licenses to individuals." Because this latter definition made the "business licensee" definition meaningless, the Administration proposed an amendment to remove reference to individuals in the licensing authority definition. This amendment was adopted by the House and became part of Chapter 410.

4
In addition, the history of the "securities" exemption, Article 41, §1-403(c)(3)(ii), reflects the legislative intent to limit the license sanction provisions to individuals, as distinct from business entities in any form. Testimony from a representative of the securities industry suggested the impracticability of applying sanctions to the thousands of individuals and business entities, many located out of state, licensed by the Securities Commissioner. The General Assembly, recognizing the validity of this concern, added the exemption in §1-403(c)(3)(ii). But the exemption is worded in terms of individuals only — "agent, issuer agent, or investment advisor representative." Surely the General Assembly was not trying to solve only half of the problem. Its choice of wording in this exemption implies a legislative recognition that business entities like broker-dealers and investment advisors were already outside the scope of the act and did not require an express exemption.

5
This conclusion should not be taken to suggest that we discern any general distinction between the legal rights and obligations of an individual and those of the individual's sole proprietorship. In most contexts, there will be no such distinction. Our conclusion is limited to our understanding of the legislative objective underlying Chapter 410.