EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0765*
SENATE BILL 765
C8 4lr2896
By: Senator Hayes
Introduced and read first time: February 1, 2024
Assigned to: Finance
A BILL ENTITLED
AN ACT concerning 1
Economic Development – Business Diversity Incubator Program and Fund – 2
Established 3
FOR the purpose of establishing the Business Diversity Incubator Program and Fund in 4
the Department of Commerce to provide grants to certain business entities to 5
establish certain business incubators; and generally relating to the establishment of 6
the Business Diversity Incubator Program and Fund. 7
BY repealing and reenacting, without amendments, 8
Article – Economic Development 9
Section 1–101(a) and (c) 10
Annotated Code of Maryland 11
(2018 Replacement Volume and 2023 Supplement) 12
BY adding to 13
Article – Economic Development 14
Section 5–2501 through 5–2506 to be under the new subtitle “Subtitle 25. Business 15
Diversity Incubator Program” 16
Annotated Code of Maryland 17
(2018 Replacement Volume and 2023 Supplement) 18
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 19
That the Laws of Maryland read as follows: 20
Article – Economic Development 21
1–101. 22
(a) In this division the following words have the meanings indicated. 23
(c) “Department” means the Department of Commerce. 24 2 SENATE BILL 765
SUBTITLE 25. BUSINESS DIVERSITY INCUBATOR PROGRAM. 1
5–2501. 2
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 3
INDICATED. 4
(B) “FUND” MEANS THE BUSINESS DIVERSITY INCUBATOR FUND. 5
(C) “PROGRAM” MEANS THE BUSINESS DIVERSITY INCUBATOR PROGRAM. 6
(D) “QUALIFIED INCUBATOR ” MEANS A FOR–PROFIT ORGANIZATION , 7
NONPROFIT ORGANIZATI ON, B CORPORATION , PUBLIC–PRIVATE PARTNERSHIP , OR 8
SOCIAL ENTERPRISE IN THE STATE THAT: 9
(1) PRIMARILY SERVES OR WILL PRIMARILY SE RVE BUSINESSES IN 10
THE STATE; 11
(2) REQUIRES OR WILL REQ UIRE PARTICIPATING B USINESSES TO 12
ENGAGE IN A FORMAL I NCUBATOR PROGRAM DES IGNED TO ADVANCE EAR LY–STAGE 13
BUSINESSES; 14
(3) IS STAFFED OR WILL B E STAFFED BY AT LEAS T ONE INDIVIDUAL 15
DEDICATED TO MENTORIN G BUSINESSES AND GUI DING BUSINESSES THROUGH THE 16
PROGRAM; 17
(4) IS DIRECTED BY AN IN DIVIDUAL WHO HAS COM PLETED A 18
TRAINING PROGRAM FOC USED ON OPERATING A BUSINESS INCUBATOR T ARGETING 19
SOCIALLY AND ECONOMI CALLY DISADVANTAGED ENTREPRENEURS , OR HELPING 20
SOCIALLY AND ECONOMI CALLY DISADVANTAGED ENTREPRENEURS SECURE 21
INVESTMENT, THAT INCLUDED TOPICS SUCH AS: 22
(I) DIVERSITY, EQUITY, AND INCLUSION SOLUTIONS; 23
(II) BUILDING WEALTH IN D IVERSE COMMUNITIES ; 24
(III) NAVIGATING DIVERSE T ECH ENTREPRENEURSHIP ; 25
(IV) RISK, LEGAL ISSUES , AND SECURITIES AND EXCHANGE 26
COMMISSION REGULATION S; 27
(V) THE DUE DILIGENCE PR OCESS FOR EARLY –STAGE 28
INVESTMENTS ; 29 SENATE BILL 765 3
(VI) ACCOUNTING , TAXES, AND EXITS FOR COMPAN IES AND 1
FOUNDERS; 2
(VII) UNDERSTANDING AND MI TIGATING CONSCIOUS A ND 3
UNCONSCIOUS BIAS ; AND 4
(VIII) CORPORATE BOARD GOVE RNANCE, HUMAN RESOURCES , 5
PROCUREMENT , PRODUCT DEVELOPMENT , AND CORPORATE INNOVA TION; AND 6
(5) WAS ESTABLISHED ON O R AFTER JANUARY 1, 2012. 7
5–2502. 8
(A) (1) THERE IS A BUSINESS DIVERSITY INCUBATOR PROGRAM IN THE 9
DEPARTMENT . 10
(2) THE PURPOSE OF THE PROGRAM IS TO PROVIDE GRANTS TO 11
QUALIFIED INCUBATORS TO ESTABLISH DIVERSE AND EFFECTIVE BUSINE SS 12
INCUBATORS IN THE STATE. 13
(B) (1) THE DEPARTMENT SHALL ADMINISTER THE PROGRAM. 14
(2) THE DEPARTMENT SHALL HIRE AT LEAST ONE FULL–TIME 15
COORDINATOR TO ADMIN ISTER THE PROGRAM. 16
5–2503. 17
(A) EACH FISCAL YEAR, THE DEPARTMENT SHALL AWARD GRANTS IN 18
ACCORDANCE WITH THIS SECTION. 19
(B) (1) THE DEPARTMENT MAY AWARD A GRANT UN DER THE PROGRAM 20
FOR: 21
(I) PLANNING THE ESTABLI SHMENT OF A QUALIFIE D 22
INCUBATOR OR PLANNIN G FOR A QUALIFIED IN CUBATOR’S LONG–TERM 23
SUSTAINABILITY ; 24
(II) CAPITAL IMPROVEMENTS , SECURING REAL ESTATE , 25
RENOVATIONS , AND THE PURCHASE OF CAPITAL EQUIPMENT TO ESTABLISH OR 26
GROW A QUALIFIED INC UBATOR; OR 27
(III) OPERATING AND PROGRA M EXPENSES ASSOCIATE D WITH 28
SUPPORTING PROGRAMS . 29
4 SENATE BILL 765
(2) EXCEPT IN THE FIRST Y EAR OF A GRANT , GRANTS AWARDED 1
UNDER THE PROGRAM MAY NOT BE US ED TO SUPPORT MORE T HAN 25% OF THE 2
OPERATING EXPENSES O F A QUALIFIED INCUBA TOR. 3
(3) (I) SUBJECT TO SUBPARAGRA PH (II) OF THIS PARAGRAPH , 4
GRANTS AWARDED UNDER THE PROGRAM SHALL RENEW AND BE AWARDED TO A 5
QUALIFIED INCUBATOR EACH FISCAL YEAR OF THE PROGRAM WITHOUT FURTHER 6
APPLICATION. 7
(II) THE RENEWAL OF A GRANT I S SUBJECT TO THE QUA LIFIED 8
INCUBATOR’S COMPLIANCE WITH TH E TERMS OF THE GRANT INCLUDING ECONOMIC 9
IMPACT METRICS PROPO SED IN THE APPLICATI ON FOR THE GRANT AND ON A 10
COMPETITIVE BASIS WI TH OTHER QUALIFIED I NCUBATORS APPL YING FOR 11
FUNDING. 12
(4) FOR ANY FISCAL YEAR , AN ORGANIZATION MAY NOT RECEIVE A 13
GRANT UNDER THE PROGRAM THAT IS LESS THAN $100,000 OR EXCEEDS $400,000. 14
(C) (1) THE DEPARTMENT SHALL ESTABLISH A CO MPETITIVE 15
APPLICATION PROCESS FOR GRANTS MADE UNDE R THE PROGRAM. 16
(2) THE DEPARTMENT SHALL AWARD AT LEAST HALF OF THE MONEY 17
APPROPRIATED TO THE PROGRAM TO ORGANIZATI ONS THAT PARTICIPATE IN § 18
14–302 OF THE STATE FINANCE AND PROCUREMENT ARTICLE AND GIVE 19
PREFERENCE TO QUALIF IED INCUBATORS THAT : 20
(I) HAVE A P ROGRAM MANAGED BY SO CIALLY OR 21
ECONOMICALLY DISADVA NTAGED INDIVIDUALS ; 22
(II) ARE LOCATED IN A FED ERALLY RECOGNIZED HU B ZONE, A 23
STATE QUALIFIED OPPOR TUNITY ZONE, OR AN UNDERSERVED CO MMUNITY; 24
(III) HAVE EXPERIENCE SUPP ORTING COMPANIES IN THE 25
START–UP STAGE; 26
(IV) SERVE COMPANIES LED BY SOCIALLY OR ECONO MICALLY 27
DISADVANTAGED INDIVI DUALS AND HAVE AN EC ONOMIC IMPACT ON UND ERSERVED 28
COMMUNITIES ; OR 29
(V) HAVE ESTABLISHED A P RESENCE IN AN UNDERS ERVED 30
COMMUNITY . 31
5–2504. 32
SENATE BILL 765 5
(A) (1) THE DEPARTMENT AND A GRANT RECIPIEN T SHALL EXECUTE A 1
PROGRAM AGREEMENT . 2
(2) THE GRANT RECIPIENT S HALL COMPLY WITH THE TERMS OF THE 3
PROGRAM AGREEMENT . 4
(3) THE DEPARTMENT MAY EXERCISE ANY REM EDY AUTHORIZED BY 5
LAW IF THE GRANT REC IPIENT: 6
(I) VIOLATES ANY PROVISI ON OF THE PROGRAM AGREEMENT ; 7
OR 8
(II) DOES NOT MEET ANY RE QUIREMENT UNDER THIS SECTION. 9
(B) (1) ON OR BEFORE SEPTEMBER 1, 2025, AND EACH SEPTEMBER 1 10
THEREAFTER, AN ORGANIZATION THAT RECEIVES A GRANT UND ER THE PROGRAM 11
SHALL REPORT TO THE DEPARTMENT DOCUMENTING HOW THE ORGANIZATION 12
USED THE GRANT MONEY RECEIVED IN THE IMME DIATELY PRECEDING FISCAL YEAR. 13
(2) THE REPORT REQUIRED U NDER PARAGRAPH (1) OF THIS 14
SUBSECTION SHALL INC LUDE: 15
(I) INFORMATION ABOUT THE USE OF THE GRANT ; 16
(II) THE ECONOMIC IMPACT OF THE GRANT; AND 17
(III) ANY OTHER INFORMATIO N THE DEPARTMENT CONSIDERS 18
NECESSARY TO DETERMI NE THE EFFECTIVENESS AND IMPACT OF THE PROGRAM. 19
(3) ON OR BEFORE DECEMBER 31, 2025, AND EVERY YEAR 20
THEREAFTER , THE DEPARTMENT SHALL REPORT TO THE GENERAL ASSEMBLY, IN 21
ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE, ON THE 22
FOLLOWING INFORMATIO N FOR THE PRECEDING FISCAL YEAR: 23
(I) THE NUMBER OF GRANTS AWARDED UNDER THE PROGRAM; 24
(II) THE AMOUNT OF EACH G RANT AWARDED UNDER T HIS 25
SECTION; AND 26
(III) THE NAME AND LOCATIO N OF EACH ORGANIZATI ON 27
AWARDED A GRANT UNDE R THE PROGRAM. 28
5–2505. 29
6 SENATE BILL 765
(A) THERE IS A BUSINESS DIVERSITY INCUBATOR FUND. 1
(B) THE PURPOSE OF THE FUND IS TO FUND GRANT S AWARDED UNDER THE 2
PROGRAM IN ACCORDANCE WITH THIS SECTION . 3
(C) THE DEPARTMENT SHALL ADMINISTER THE FUND. 4
(D) THE FUND IS A SPECIAL, NONLAPSING FUND THAT IS NOT SUBJECT TO 5
REVERSION UNDER § 7–302 OF THE STATE FINANCE AND PROCUREMENT ARTICLE. 6
(E) THE STATE TREASURER SHALL HOLD THE FUND SEPARATELY , AND THE 7
COMPTROLLER SHALL ACC OUNT FOR THE FUND. 8
(F) THE FUND CONSISTS OF : 9
(1) MONEY APPROPRIATED I N THE STATE BUDGET TO THE FUND; AND 10
(2) ANY OTHER MONEY FROM ANY OTHER SOURC E ACCEPTED FOR 11
THE BENEFIT OF THE FUND. 12
(G) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION , 13
THE FUND MAY BE USED ONLY TO PROVIDE GRANTS UN DER THE PROGRAM. 14
(2) UP TO 15% OF THE ANNUAL APPROP RIATION TO THE FUND MAY 15
BE USED FOR THE ADMINISTRA TION OF THE FUND AND THE PROGRAM. 16
(H) FOR EACH OF FISCAL YE ARS 2026 THROUGH 2031, THE GOVERNOR MAY 17
INCLUDE IN THE ANNUA L BUDGET BILL AN APP ROPRIATION OF $5,000,000 TO THE 18
FUND. 19
(I) THE STATE TREASURER SHALL INVES T THE MONEY OF THE FUND IN 20
THE SAME MANNER AS O THER STATE MONEY MAY BE IN VESTED. 21
5–2506. 22
NOTHING IN THIS SUBTITLE MAY BE CONSTRUED TO PROHIBIT AN 23
ORGANIZATION FROM RE CEIVING FUNDS FROM A GOVERNMENT SOURCE OT HER 24
THAN THE PROGRAM. 25
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 26
1, 2024. It shall remain effective for a period of 7 years and, at the end of June 30, 2031, 27
this Act, with no further action required by the General Assembly, shall be abrogated and 28
of no further force and effect. 29