EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*sb0765*
SENATE BILL 765
C8 4lr2896
CF HB 1490
By: Senator Hayes
Introduced and read first time: February 1, 2024
Assigned to: Finance
Committee Report: Favorable
Senate action: Adopted
Read second time: February 29, 2024
CHAPTER ______
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 ASSEMBL Y OF MARYLAND, 19
That the Laws of Maryland read as follows: 20
Article – Economic Development 21 2 SENATE BILL 765
1–101. 1
(a) In this division the following words have the meanings indicated. 2
(c) “Department” means the Department of Commerce. 3
SUBTITLE 25. BUSINESS DIVERSITY INCUBATOR PROGRAM. 4
5–2501. 5
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 6
INDICATED. 7
(B) “FUND” MEANS THE BUSINESS DIVERSITY INCUBATOR FUND. 8
(C) “PROGRAM” MEANS THE BUSINESS DIVERSITY INCUBATOR PROGRAM. 9
(D) “QUALIFIED INCUBATOR ” MEANS A FOR–PROFIT ORGANIZATION , 10
NONPROFIT ORGANIZATI ON, B CORPORATION , PUBLIC–PRIVATE PARTNERSHIP , OR 11
SOCIAL ENTERPRISE IN THE STATE THAT: 12
(1) PRIMARILY SERVES OR WILL PRIMARILY SERVE BUSINESSES IN 13
THE STATE; 14
(2) REQUIRES OR WI LL REQUIRE PARTICIPA TING BUSINESSES TO 15
ENGAGE IN A FORMAL I NCUBATOR PROGRAM DES IGNED TO ADVANCE EAR LY–STAGE 16
BUSINESSES; 17
(3) IS STAFFED OR WILL B E STAFFED BY AT LEAS T ONE INDIVIDUAL 18
DEDICATED TO MENTORI NG BUSINESSES AND GU IDING BUSINESSES THROUGH THE 19
PROGRAM; 20
(4) IS DIRECTED BY AN IN DIVIDUAL WHO HAS COM PLETED A 21
TRAINING PROGRAM FOC USED ON OPERATING A BUSINESS INCUBATOR T ARGETING 22
SOCIALLY AND ECONOMI CALLY DISADVANTAGED ENTREPRENEURS , OR HELPING 23
SOCIALLY AND ECONOMI CALLY DISADVANTAGED ENTREPRENEURS SECURE 24
INVESTMENT, THAT INCLUDED TOPICS SUCH AS: 25
(I) DIVERSITY, EQUITY, AND INCLUSION SOLUTIONS; 26
(II) BUILDING WEALTH IN D IVERSE COMMUNITIES ; 27
(III) NAVIGATING DIVERSE T ECH ENTREPRENEURSHIP ; 28
SENATE BILL 765 3
(IV) RISK, LEGAL ISSUES , AND SECURITIES AND EXCHANGE 1
COMMISSION REGULATION S; 2
(V) THE DUE DILIGENCE PR OCESS FOR EARLY –STAGE 3
INVESTMENTS ; 4
(VI) ACCOUNTING , TAXES, AND EXITS FOR COMPAN IES AND 5
FOUNDERS; 6
(VII) UNDERSTANDING AND MI TIGATING CONSCIOUS A ND 7
UNCONSCIOUS BIAS ; AND 8
(VIII) CORPORATE BOARD GOVE RNANCE, HUMAN RESOURCES , 9
PROCUREMENT , PRODUCT DEVELOPMENT , AND CORPORATE INNOVA TION; AND 10
(5) WAS ESTABLISHED ON O R AFTER JANUARY 1, 2012. 11
5–2502. 12
(A) (1) THERE IS A BUSINESS DIVERSITY INCUBATOR PROGRAM IN THE 13
DEPARTMENT . 14
(2) THE PURPOSE OF THE PROGRAM IS TO PROVIDE GRANTS TO 15
QUALIFIED INCUBATORS TO ESTABLISH DIVERSE AND EFFECTIVE BUSINE SS 16
INCUBATORS IN THE STATE. 17
(B) (1) THE DEPARTMENT SHALL ADMINISTER THE PROGRAM. 18
(2) THE DEPARTMENT SHALL HIRE AT LEAST ONE FULL–TIME 19
COORDINATOR TO ADMIN ISTER THE PROGRAM. 20
5–2503. 21
(A) EACH FISCAL YEAR, THE DEPARTMENT SHALL AWARD GRANTS IN 22
ACCORDANCE WITH THIS SECTION. 23
(B) (1) THE DEPARTMENT MAY AWARD A GRANT UN DER THE PROGRAM 24
FOR: 25
(I) PLANNING THE ESTABLISHMENT OF A QUALIFIED 26
INCUBATOR OR PLANNIN G FOR A QUALIFIED IN CUBATOR’S LONG–TERM 27
SUSTAINABILITY ; 28
4 SENATE BILL 765
(II) CAPITAL IMPROVEMENTS , SECURING REAL ESTATE , 1
RENOVATIONS , AND THE PURCHASE OF CAPITAL EQUIPMENT TO ESTABLISH OR 2
GROW A QUALIFIED INCUBATOR; OR 3
(III) OPERATING AND PROGRA M EXPENSES ASSOCIATE D WITH 4
SUPPORTING PROGRAMS . 5
(2) EXCEPT IN THE FIRST Y EAR OF A GRANT , GRANTS AWARDED 6
UNDER THE PROGRAM MAY NOT BE US ED TO SUPPORT MORE T HAN 25% OF THE 7
OPERATING EXPENSES O F A QUALIFIED INCUB ATOR. 8
(3) (I) SUBJECT TO SUBPARAGRA PH (II) OF THIS PARAGRAPH , 9
GRANTS AWARDED UNDER THE PROGRAM SHALL RENEW AND BE AWARDED TO A 10
QUALIFIED INCUBATOR EACH FISCAL YEAR OF THE PROGRAM WITHOUT FURTHER 11
APPLICATION. 12
(II) THE RENEWAL OF A GRANT I S SUBJECT TO THE QUALIFIED 13
INCUBATOR’S COMPLIANCE WITH TH E TERMS OF THE GRANT INCLUDING ECONOMIC 14
IMPACT METRICS PROPO SED IN THE APPLICATI ON FOR THE GRANT AND ON A 15
COMPETITIVE BASIS WI TH OTHER QUALIFIED I NCUBATORS APPLYING F OR 16
FUNDING. 17
(4) FOR ANY FISCAL YEAR , AN ORGANIZATION MAY NOT RECEIVE A 18
GRANT UNDER THE PROGRAM THAT IS LESS THAN $100,000 OR EXCEEDS $400,000. 19
(C) (1) THE DEPARTMENT SHALL ESTABLISH A CO MPETITIVE 20
APPLICATION PROCESS FOR GRANTS MADE UNDE R THE PROGRAM. 21
(2) THE DEPARTMENT SHALL AWARD AT LEAST HALF OF THE MONEY 22
APPROPRIATED TO THE PROGRAM TO ORGANIZATI ONS THAT PARTICIPATE IN § 23
14–302 OF THE STATE FINANCE AND PROCUREMENT ARTICLE AND GIVE 24
PREFERENCE TO QUALIF IED INCUBATORS THAT : 25
(I) HAVE A PROGRAM MANAG ED BY SOCIALLY OR 26
ECONOMICALLY DISADVANTAGED INDIVI DUALS; 27
(II) ARE LOCATED IN A FED ERALLY RECOGNIZED HU B ZONE, A 28
STATE QUALIFIED OPPOR TUNITY ZONE, OR AN UNDERSERVED CO MMUNITY; 29
(III) HAVE EXPERIENCE SUPP ORTING COMPANIES IN THE 30
START–UP STAGE; 31
SENATE BILL 765 5
(IV) SERVE COMPANIES LED BY SOCIALLY OR ECONOMIC ALLY 1
DISADVANTAGED INDIVI DUALS AND HAVE AN EC ONOMIC IMPACT ON UND ERSERVED 2
COMMUNITIES ; OR 3
(V) HAVE ESTABLISHED A P RESENCE IN AN UNDERS ERVED 4
COMMUNITY . 5
5–2504. 6
(A) (1) THE DEPARTMENT AND A GRANT RECIPIEN T SHALL EXECUTE A 7
PROGRAM AGREEMENT . 8
(2) THE GRANT RECIPIENT S HALL COMPLY WITH THE TERMS OF THE 9
PROGRAM AGREEMENT . 10
(3) THE DEPARTMENT MAY EXERCISE ANY REM EDY AUTHORIZED BY 11
LAW IF THE GRANT REC IPIENT: 12
(I) VIOLATES ANY PROVISI ON OF THE PROGRAM AGREEMENT ; 13
OR 14
(II) DOES NOT MEET ANY RE QUIREMENT UNDER THIS SECTION. 15
(B) (1) ON OR BEFORE SEPTEMBER 1, 2025, AND EACH SEPTEMBER 1 16
THEREAFTER , AN ORGANIZATION THAT RECEIVES A GRANT UND ER THE PROGRAM 17
SHALL REPORT TO THE DEPARTMENT DOCUMENTING HOW THE ORGA NIZATION 18
USED THE GRANT MONEY RECEIVED IN THE IMME DIATELY PRECEDING FISCAL YEAR. 19
(2) THE REPORT REQUIRED U NDER PARAGRAPH (1) OF THIS 20
SUBSECTION SHALL INC LUDE: 21
(I) INFORMATION ABOUT THE USE OF THE GRANT ; 22
(II) THE ECONOMIC IMPACT OF THE GRANT; AND 23
(III) ANY OTHER INFORMATIO N THE DEPARTMENT CONSIDERS 24
NECESSARY TO DETERMI NE THE EFFECTIVENESS AND IMPACT OF THE PROGRAM. 25
(3) ON OR BEFORE DECEMBER 31, 2025, AND EVERY YEAR 26
THEREAFTER , THE DEPARTMENT SHALL REPO RT TO THE GENERAL ASSEMBLY, IN 27
ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE, ON THE 28
FOLLOWING INFORMATIO N FOR THE PRECEDING FISCAL YEAR: 29
(I) THE NUMBER OF GRANTS AWARDED UNDER THE PROGRAM; 30 6 SENATE BILL 765
(II) THE AMOUNT OF EACH G RANT AWARDED UNDER THIS 1
SECTION; AND 2
(III) THE NAME AND LOCATIO N OF EACH ORGANIZATI ON 3
AWARDED A GRANT UNDE R THE PROGRAM. 4
5–2505. 5
(A) THERE IS A BUSINESS DIVERSITY INCUBATOR FUND. 6
(B) THE PURPOSE OF THE FUND IS TO FUND GRANT S AWARDED UNDER THE 7
PROGRAM IN ACCORDANCE WITH THIS SECTION. 8
(C) THE DEPARTMENT SHALL ADMINISTER THE FUND. 9
(D) THE FUND IS A SPECIAL, NONLAPSING FUND THAT IS NOT SUBJECT TO 10
REVERSION UNDER § 7–302 OF THE STATE FINANCE AND PROCUREMENT ARTICLE. 11
(E) THE STATE TREASURER SHALL HOLD THE FUND SEPARATELY, AND THE 12
COMPTROLLER SHALL ACC OUNT FOR THE FUND. 13
(F) THE FUND CONSISTS OF : 14
(1) MONEY APPROPRIATED I N THE STATE BUDGET TO THE FUND; AND 15
(2) ANY OTHER MONEY FROM ANY OTHER SOURCE ACC EPTED FOR 16
THE BENEFIT OF THE FUND. 17
(G) (1) EXCEPT AS PROVIDED IN PARAGRAP H (2) OF THIS SUBSECTION , 18
THE FUND MAY BE USED ONLY TO PROVIDE GRANTS UN DER THE PROGRAM. 19
(2) UP TO 15% OF THE ANNUAL APPROP RIATION TO THE FUND MAY 20
BE USED FOR THE ADMI NISTRATION OF THE FUND AND THE PROGRAM. 21
(H) FOR EACH OF FISCAL Y EARS 2026 THROUGH 2031, THE GOVERNOR MAY 22
INCLUDE IN THE ANNUA L BUDGET BILL AN APP ROPRIATION OF $5,000,000 TO THE 23
FUND. 24
(I) THE STATE TREASURER SHALL INVES T THE MONEY OF THE FUND IN 25
THE SAME MANNER AS O THER STATE MONEY MAY BE IN VESTED. 26
5–2506. 27
SENATE BILL 765 7
NOTHING IN THIS SUBTITLE MAY BE CONSTRUED TO PROHIBIT AN 1
ORGANIZATION FROM RE CEIVING FUNDS FROM A GOVERNMENT SOURCE OT HER 2
THAN THE PROGRAM. 3
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 4
1, 2024. It shall remain effective for a period of 7 years and, at the end of June 30, 2031, 5
this Act, with no further action required by the General Assembly, shall be abrogated and 6
of no further force and effect. 7
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.