EXPLANATION: CAPITALS INDICATE MATTER ADDE D TO EXISTING LAW .
[Brackets] indicate matter deleted from existing law.
*sb0427*
SENATE BILL 427
C8, Q3, F5 5lr0456
CF HB 498
By: The President (By Request – Administration) and Senators Brooks, Charles,
Ellis, Gile, Henson, Lam, Watson, and West
Introduced and read first time: January 20, 2025
Assigned to: Budget and Taxation and Finance
A BILL ENTITLED
AN ACT concerning 1
Economic Development – Delivering Economic Competitiveness and Advancing 2
Development Efforts (DECADE) Act 3
FOR the purpose of requiring the Department of Commerce to evaluate the potential 4
employment and economic growth of the State’s industry sectors and establish a 5
certain list of industry sectors and activities; repealing the Maryland Economic 6
Development Commission and Commerce Subcabinet; altering and staggering the 7
terms of certain appointed members of the Maryland Life Sciences Advisory Board 8
in a certain manner; altering the designation, administration, and purposes of and 9
eligibility for certain economic development programs; altering the definition of 10
“MEDCO obligation” under the Tax Increment Financing Act to include certain 11
projects under the Build Our Future Program; altering the purposes for which 12
certain bond proceeds may be used under the Tax Increment Financing Act; 13
requiring the State Department of Assessments and Taxation to waive certain filing 14
fees for certain businesses located within a Regional Institution Strategic Enterprise 15
zone; altering eligibility for, terms of, and types of financial assistance from the Child 16
Care Capital Support Revolving Loan Fund; altering the purposes of the Seed 17
Community Development Anchor Institution Fund to include prov iding certain 18
financial assistance for projects in certain RISE zone catchment areas and requiring 19
the Department of Housing and Community Development to prioritize certain 20
applications located in active RISE zones; redesignating the Economic Development 21
Opportunities Program Account to be the Strategic Closing Fund within the 22
Department of Commerce; altering the purposes for and methods by which the 23
Strategic Closing Fund may be utilized; altering the distribution of certain video 24
lottery terminal proceeds; altering the termination date of the Build Our Future 25
Grant Pilot Program and Job Creation Tax Credit, Research and Development Tax 26
Credit, and Innovation Investment Incentive Tax Credit programs; providing for the 27
termination of the One Maryland Economic Development Tax Credit Program on a 28
certain date; altering eligibility for and the calculation of certain tax credits; allowing 29 2 SENATE BILL 427
a qualified investor that is a pass–through entity that pays a certain income tax on 1
behalf of its members to receive and allocate in any manner a credit or refund of a 2
credit under the Biotechnology Investment Incentive Tax Credit and Innovation 3
Investment Incentive Tax Credit programs; altering the aggregate amount of film 4
production activity tax credit certificates that the Secretary of Commerce may issue 5
each fiscal year; repealing a certain limit on the aggregate amount of tax credit 6
certificates the Secretary may issue for a single film production activity; repealing a 7
credit against the State income tax for certain costs related to federal security 8
clearances; and generally relating to economic development and economic 9
development incentives. 10
BY renumbering 11
Article – Economic Development 12
Section 5–1401 through 5–1410 and the subtitle “Subtitle 14. Regional Institution 13
Strategic Enterprise Zone Program”; and 5–2301 through 5–2307 and the 14
subtitle “Subtitle 23. Build Our Future Grant Pilot Program” 15
to be Section 10–137 through 10–146 and the part “Part II. Regional Institution 16
Strategic Enterprise Zone Program”; and 10–149 through 10–155 and the part 17
“Part III. Build Our Future Grant Pilot Program”, respectively 18
Annotated Code of Maryland 19
(2024 Replacement Volume and 2024 Supplement) 20
BY repealing and reenacting, with amendments, 21
Article – Economic Development 22
Section 2–113, 2–116, 2.5–106, 3–203, 3–401, 3–402, 3–411, 5–102, and 5–205; 23
5–301 to be under the amended subtitle “Subtitle 3. Maryland Economic 24
Competitiveness Fund”; 5–310 to be under the amended part “Part III. 25
Maryland Economic Competitiveness Fund”; 5–319 through 5–321, 5–324, 26
5–325, 5–329, and 5–338(d); 5–501 to be under the amended subtitle “Subtitle 27
5. Maryland Economic Inclusion Fund”; 5–502; 5–505 to be under the 28
amended part “Part II. Maryland Economic Inclusion Fund”; 5–517 to be 29
under the amended part “Part III. Small Business Development Contract 30
Financing Program”; 5–518, 5–524 through 5–528, and 5–530; 5–533 to be 31
under the amended part “Part IV. Small Business Development Guaranty 32
Program”; 5–534, 5–539 through 5–543, 5–545, 5–546, 5–549 through 5–551, 33
5–553, 5–555 through 5–558, 5–561, 5–562, 5–566 through 5–575, 5–1001, 34
5–1002, 5–1006, and 5–1204(a)(1)(ii)4.; 5–1501(a) to be under the amended 35
subtitle “Subtitle 15. Reinvest for Success Account”; and 5–2402, 6–309, 36
6–601, 6–604, 6–614, 6–1007, 10–115, 10–133, 10–408(a), 10–415, 10–470, 37
10–528, 12–201(k) and (p), 12–207(b) and (e), and 16–102(d)(2) 38
Annotated Code of Maryland 39
(2024 Replacement Volume and 2024 Supplement) 40
BY repealing 41
Article – Economic Development 42
Section 2.5–201 through 2.5–207 and the subtitle “Subtitle 2. Maryland Economic 43
Development Commission”; 3–408 through 3–410; 5–305 through 5–307 and 44 SENATE BILL 427 3
the part “Part II. Maryland Economic Development Assistance Authority”; 1
and 5–506 through 5–514, 5–519 through 5–523, 5–529, 5–535 through 5–538, 2
5–544, 5–552, 5–554, 5–559, 5–563 through 5–565, 5–1003 through 5–1005, 3
and 5–1007 4
Annotated Code of Maryland 5
(2024 Replacement Volume and 2024 Supplement) 6
BY repealing and reenacting, without amendments, 7
Article – Economic Development 8
Section 3–201, 3–202, 3–403, 5–201, 5–203, 5–311 through 5–316, 5–322, 5–323, 9
5–401(a), (b), and (p), 5–2401, 10–101(a), (b), and (d), 10–401(a) and (c), 10
10–501(a) and (f), 12–201(a), and 12–207(a) 11
Annotated Code of Maryland 12
(2024 Replacement Volume and 2024 Supplement) 13
BY adding to 14
Article – Economic Development 15
Section 5–464, 5–506 through 5–508, and 6–407; and the new part designation “Part 16
I. Maryland Economic Development Corporation” to immediately precede 17
Section 10–101 18
Annotated Code of Maryland 19
(2024 Replacement Volume and 2024 Supplement) 20
BY repealing and reenacting, with amendments, 21
Article – Economic Development 22
Section 10–137, 10–139 through 10–146, 10–149(a), and 10–150 through 10–155 23
Annotated Code of Maryland 24
(2024 Replacement Volume and 2024 Supplement) 25
(As enacted by Section 1 of this Act) 26
BY repealing and reenacting, without amendments, 27
Article – Economic Development 28
Section 10–138 29
Annotated Code of Maryland 30
(2024 Replacement Volume and 2024 Supplement) 31
(As enacted by Section 1 of this Act) 32
BY adding to 33
Article – Corporations and Associations 34
Section 1–203(b)(14) 35
Annotated Code of Maryland 36
(2014 Replacement Volume and 2024 Supplement) 37
BY repealing and reenacting, with amendments, 38
Article – Corporations and Associations 39
Section 1–203(b)(14) 40
Annotated Code of Maryland 41 4 SENATE BILL 427
(2014 Replacement Volume and 2024 Supplement) 1
BY repealing and reenacting, with amendments, 2
Article – Education 3
Section 9.5–113.1 4
Annotated Code of Maryland 5
(2022 Replacement Volume and 2024 Supplement) 6
BY repealing and reenacting, with amendments, 7
Article – Housing and Community Development 8
Section 4–509, 6–404, and 6.5–107(e)(2) 9
Annotated Code of Maryland 10
(2019 Replacement Volume and 2024 Supplement) 11
BY repealing and reenacting, with amendments, 12
Article – State Finance and Procurement 13
Section 7–314 14
Annotated Code of Maryland 15
(2021 Replacement Volume and 2024 Supplement) 16
BY repealing and reenacting, with amendments, 17
Article – State Government 18
Section 9–1A–26(c)(2)(i) and 9–1A–27(a)(6) and (c)(1)(v)1. 19
Annotated Code of Maryland 20
(2021 Replacement Volume and 2024 Supplement) 21
BY repealing 22
Article – State Government 23
Section 9–3101 through 9–3104 and the subtitle “Subtitle 31. Commerce Subcabinet” 24
Annotated Code of Maryland 25
(2021 Replacement Volume and 2024 Supplement) 26
BY repealing and reenacting, without amendments, 27
Article – Tax – Property 28
Section 9–103.1(a)(1) 29
Annotated Code of Maryland 30
(2019 Replacement Volume and 2024 Supplement) 31
BY repealing and reenacting, with amendments, 32
Article – Tax – Property 33
Section 9–103.1(a)(7), (c)(6)(i), (e), and (f) and 9–229(c)(2) and (g) 34
Annotated Code of Maryland 35
(2019 Replacement Volume and 2024 Supplement) 36
BY repealing and reenacting, with amendments, 37
Chapter 430 of the Acts of the General Assembly of 2023 38
Section 3 39 SENATE BILL 427 5
BY repealing and reenacting, with amendments, 1
Chapter 431 of the Acts of the General Assembly of 2023 2
Section 3 3
BY repealing and reenacting, without amendments, 4
Article – Tax – General 5
Section 10–702(a)(1), 10–725(a) and (b)(2), 10–730(a)(1), (4), and (7) and (b), and 6
10–733(a) and (b)(2) and (3)(ii)2.J. 7
Annotated Code of Maryland 8
(2022 Replacement Volume and 2024 Supplement) 9
BY repealing and reenacting, with amendments, 10
Article – Tax – General 11
Section 10–702(a)(4)(ii), 10–721, 10–725(d), 10–730(f), 10–733(b)(4) and (d), and 12
10–733.1 13
Annotated Code of Maryland 14
(2022 Replacement Volume and 2024 Supplement) 15
BY adding to 16
Article – Tax – General 17
Section 10–725(b)(5) and 10–733(b)(5) and (j) 18
Annotated Code of Maryland 19
(2022 Replacement Volume and 2024 Supplement) 20
BY repealing 21
Article – Tax – General 22
Section 10–732 23
Annotated Code of Maryland 24
(2022 Replacement Volume and 2024 Supplement) 25
BY repealing and reenacting, with amendments, 26
Chapter 515 of the Acts of the General Assembly of 2000, as amended by Chapter 98 27
of the Acts of the General Assembly of 2005, Chapter 20 of the Acts of the 28
General Assembly of 2010, Chapter 85 of the Acts of the General Assembly of 29
2019, and Chapter 114 of the Acts of the General Assembly of 2021 30
Section 2 and 4 31
BY repealing and reenacting, with amendments, 32
Chapter 516 of the Acts of the General Assembly of 2000, as amended by Chapter 98 33
of the Acts of the General Assembly of 2005, Chapter 20 of the Acts of the 34
General Assembly of 2010, Chapter 85 of the Acts of the General Assembly of 35
2019, and Chapter 114 of the Acts of the General Assembly of 2021 36
Section 2 and 4 37
BY repealing and reenacting, with amendments, 38
Chapter 390 of the Acts of the General Assembly of 2013, as amended by Chapter 39 6 SENATE BILL 427
578 of the Acts of the General Assembly of 2018 and Chapter 113 of the Acts 1
of the General Assembly of 2021 2
Section 2 3
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBL Y OF MARYLAND, 4
That Section(s) 5–1401 through 5–1410 and the subtitle “Subtitle 14. Regional Institution 5
Strategic Enterprise Zone Program”; and 5–2301 through 5–2307 and the subtitle “Subtitle 6
23. Build Our Future Grant Pilot Program” of Article – Economic Development of the 7
Annotated Code of Maryland be renumbered to be Section(s) 10–137 through 10–146 and 8
the part “Part II. Regional Institution Strategic Enterprise Zone Program”; and 10–149 9
through 10–155 and the part “Part III. Build Our Future Grant Pi lot Program”, 10
respectively. 11
SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 12
as follows: 13
Article – Economic Development 14
2–113. 15
[(a) This section does not apply to a power, duty, responsibility, or function that is 16
granted to the Maryland Economic Development Commission under Subtitle 2 of this title. 17
(b)] The Secretary may exercise any power, duty, responsibility, or function of any 18
unit under the jurisdiction of the Department. 19
2–116. 20
(a) This section does not apply to a unit under the jurisdiction of the Department 21
to the extent that the unit is authorized by law to employ its own legal counsel. 22
(b) The Attorney General is the legal adviser to the Department. 23
(c) The Attorney General shall assign to the Department the number of assistant 24
Attorneys General that are authorized by law for the Department and its units. 25
(d) (1) The Attorney General shall designate one of the assistant Attorneys 26
General assigned to the Department as counsel to the Department and may not reassign 27
that individual without consulting with the Secretary. 28
(2) The counsel may only: 29
(i) advise the Secretary[, the Maryland Economic Development 30
Commission,] and any other official of the Department as they require; 31
(ii) supervise the other assistant Attorneys General assigned to the 32
Department; and 33 SENATE BILL 427 7
(iii) perform for the Department the other duties that the Attorney 1
General assigns. 2
(3) The other assistant Attorneys General shall perform for the 3
Department the other duties that the Attorney General assigns. 4
2.5–106. 5
The Department shall: 6
(1) investigate and assemble information about the economic development, 7
industrial opportunities, and economic resources of the State, including raw materials, 8
power and water resources, transportation facilities, markets, labor, banking and financing 9
facilities, industrial sites, and other fields of research; 10
(2) encourage location and development of new businesses in the State and 11
the retention and expansion of present enterprises in coordination with local governments 12
and local economic development units; 13
(3) encourage formation of local and sectional development committees and 14
cooperate with local civic groups and other local, State, and federal development units; 15
(4) disseminate information in the interest of industrial development in the 16
State, by publication, advertising, and other means; 17
(5) assist businesses in the areas of technology development and 18
commercialization, small business development, workforce development and productivity, 19
manufacturing modernization, and defense conversion; 20
(6) serve as an ombudsman for businesses affected by State policies and 21
programs; 22
(7) coordinate business assistance service delivery to individual companies; 23
(8) link groups of businesses to address regional and industry specific 24
needs; 25
(9) broker information exchange and entrepreneurial services that 26
enhance economic development through partnerships with businesses, nonprofit 27
organizations, professional groups, local economic development entities, and local 28
governments; 29
(10) assist in developing and conducting regional strategic planning and 30
coordinating State investments with regional economic development entities; 31
(11) collect and assemble information and data available from other State 32 8 SENATE BILL 427
units or instrumentalities; 1
(12) monitor economic conditions, release reports, and maintain 2
interindustry models of State regulations and local economies; 3
[(13) use community colleges in the State to help deliver services;] 4
[(14)] (13) administer the programs in the Department; 5
[(15)] (14) coordinate its efforts and activities with the Apprenticeship and 6
Training Council and Apprenticeship and Training Program in the Maryland Department 7
of Labor; 8
[(16)] (15) establish and monitor performance measures to determine the 9
success of outreach efforts to businesses; 10
[(17)] (16) facilitate regular meetings among its regional experts, financial 11
incentive team, and tourism development team to determine the success in meeting overall 12
economic development strategic goals and in addressing the economic development needs 13
of each region; 14
[(18)] (17) work with community colleges to enhance the role of community 15
colleges in providing workforce training services, including industry–specific education and 16
training in response to the needs of the State; [and] 17
[(19)] (18) (i) define, identify, and compile data on State and regional 18
workforce needs; and 19
(ii) work collaboratively with the Maryland Department of Labor 20
and the Maryland Higher Education Commission to produce uniform and consistent 21
baseline data, including common sources and measurements, about workforce needs to 22
inform State policies relating to postsecondary education; AND 23
(19) EVALUATE THE POTENTI AL EMPLOYMENT AND EC ONOMIC 24
GROWTH OF MARYLAND’S INDUSTRY SECTORS A ND, FROM THIS EVALUATION : 25
(I) ESTABLISH A LIST OF INDUSTRY SECTORS AND ACTIVITIES 26
TO BE CONSIDERED F OR ADDITIONAL INVEST MENT AND SUPPORT FRO M THE 27
DEPARTMENT ; 28
(II) RECOMMEND OTHER AGEN CIES CONSIDER PRIORI TIZING 29
THE SECTORS AND ACTI VITIES ON THE LIST D ESCRIBED UNDER ITEM (I) OF THIS 30
ITEM THROUGH THOSE A GENCIES’ POLICIES AND PROGRAM S; AND 31
(III) PUBLISH THE LIST DESCRIB ED UNDER ITEM (I) OF THIS 32 SENATE BILL 427 9
ITEM ON THE DEPARTMENT ’S WEBSITE. 1
[Subtitle 2. Maryland Economic Development Commission.] 2
[2.5–201. 3
In this subtitle, “Commission” means the Maryland Economic Development 4
Commission.] 5
[2.5–202. 6
(a) There is a Maryland Economic Development Commission staffed by the 7
Department. 8
(b) The purpose of the Commission is to: 9
(1) establish economic development policy in the State; 10
(2) advise the Secretary on economic development policy in the State; 11
(3) oversee the operations of the Department and its units, including the 12
Department’s efforts to support the creation of, attract, and retain businesses and jobs; and 13
(4) monitor the operations of the Maryland Technology Development 14
Corporation, the Maryland Economic Development Corporation, and the Maryland 15
Public–Private Partnership Marketing Corporation, including the efforts of those entities 16
to support the creation, attraction, and retention of businesses and jobs.] 17
[2.5–203. 18
(a) (1) (i) The Commission consists of: 19
1. not more than 21 voting members appointed by the 20
Governor with the advice and consent of the Senate; 21
2. two voting members appointed by the President of the 22
Senate of Maryland; 23
3. two voting members appointed by the Speaker of the 24
House of Delegates; 25
4. A. one member of the Senate of Maryland, designated 26
by the President of the Senate; and 27
B. one member of the House of Delegates, designated by the 28
Speaker of the House; and 29 10 SENATE BILL 427
5. the following representatives of State units and 1
instrumentalities of the State: 2
A. the Executive Director of the Maryland Economic 3
Development Corporation, or the Executive Director’s designee; 4
B. the Chief Executive Officer of the Maryland Technology 5
Development Corporation, or the Chief Executive Officer’s designee; 6
C. the Secretary or the Secretary’s designee; and 7
D. the Secretary of Labor, or the Secretary’s designee. 8
(ii) The Secretary and the Secretary of Labor or their designees, 9
State unit or instrumentality representatives, and members of the General Assembly are 10
nonvoting ex officio members of the Commission. 11
(iii) A designee under subparagraph (i)5 of this paragraph may be an 12
administrator or a senior official of the unit or instrumentality. 13
(2) The geographic representation of the Commission shall cover the entire 14
State and shall include at least one representative from: 15
(i) the upper Eastern Shore; 16
(ii) the lower Eastern Shore; 17
(iii) Calvert County, Charles County, or St. Mary’s County; 18
(iv) Allegany County or Garrett County; and 19
(v) Carroll County, Frederick County, or Washington County. 20
(3) The industries represented by the members of the Commission shall: 21
(i) be diverse; and 22
(ii) include at least one representative from: 23
1. the life sciences industry; and 24
2. the manufacturing industry. 25
(4) The members appointed shall reflect the racial and gender diversity of 26
the population of the State. 27
SENATE BILL 427 11
(b) The appointed members of the Commission shall have substantial interest or 1
experience in business or knowledge of business and economic development. 2
(c) The Commission and its members are subject to the Maryland Public Ethics 3
Law. 4
(d) (1) The term of an appointed member is 3 years. 5
(2) At the end of a term, an appointed member continues to serve until a 6
successor is appointed and qualifies. 7
(3) A member appointed after a term has begun serves only for the 8
remainder of the term and until a successor is appointed and qualifies. 9
(4) The terms of the appointed members are staggered as required by the 10
terms provided for members of the Commission on October 1, 2008. 11
(5) A member may be removed by the Governor with or without cause.] 12
[2.5–204. 13
(a) The Governor shall designate a chair or cochairs from the voting members of 14
the Commission. 15
(b) The Commission may elect an executive committee or form special 16
subcommittees from its members to exercise the powers and functions of the Commission 17
between meetings of the Commission.] 18
[2.5–205. 19
(a) (1) The Commission shall meet as often as its duties require, but not less 20
than quarterly. 21
(2) The chair or cochairs shall designate a time and place for meetings of 22
the Commission. 23
(b) A majority of the voting members of the Commission is a quorum. 24
(c) A voting member of the Commission: 25
(1) may not receive compensation as a member of the Commission; but 26
(2) is entitled to reimbursement in accordance with the Standard State 27
Travel Regulations as provided in the State budget. 28
(d) The Department shall provide staff support to the Commission.] 29 12 SENATE BILL 427
[2.5–206. 1
(a) The Commission may: 2
(1) adopt bylaws for the conduct of its business; 3
(2) hire consultants; and 4
(3) do anything necessary or convenient to carry out its powers and the 5
purposes of this subtitle. 6
(b) The Commission shall: 7
(1) develop and update an economic development strategic plan for the 8
State; 9
(2) seek ideas and advice from each region of the State to develop the 10
economic development strategic plan; 11
(3) recommend to the Governor and the Secretary the program and 12
spending priorities needed to implement the economic development strategic plan; 13
(4) review the allocation of financing incentives; 14
(5) participate in encouraging new businesses to locate in the State; 15
(6) conduct periodic reviews of the economic development activities of the 16
Department, the Maryland Economic Development Corporation, the Maryland Technology 17
Development Corporation, and the Maryland Public–Private Partnership Marketing 18
Corporation for compliance with the economic development strategic plan; 19
(7) make recommendations to the Governor and the Secretary to improve 20
economic development activities that fail to achieve economic development strategic goals 21
or are inconsistent with priorities under the economic development strategic plan; and 22
(8) carry out other economic development activities that the Governor or 23
the Secretary requests.] 24
[2.5–207. 25
(a) On or before January 15 of each year, the Commission shall report to the 26
General Assembly, in accordance with § 2–1257 of the State Government Article, on its 27
activities during the previous year. 28
(b) The report shall include a review of initiatives taken by the Commission and 29
the Department to implement the economic development strategic plan.] 30 SENATE BILL 427 13
3–201. 1
(a) In this subtitle the following words have the meanings indicated. 2
(b) “Advisory Board” means the Maryland Life Sciences Advisory Board. 3
(c) “Corporation” means the Maryland Technology Development Corporation. 4
(d) “Life sciences” includes the fields of biotechnology, pharmaceuticals, 5
biomedical technologies, life systems technologies, food sciences, environmental sciences, 6
and biomedical devices. 7
3–202. 8
(a) There is a Maryland Life Sciences Advisory Board in the Department. 9
(b) The purpose of the Advisory Board is to recommend State and federal policies, 10
priorities, practices, and legislation to expedite the creation of private sector jobs through 11
the commercialization of life sciences research. 12
3–203. 13
(a) The Advisory Board consists of the following 18 members: 14
(1) the Secretary or the Secretary’s designee; 15
(2) the Executive Director of the Corporation, or the Executive Director’s 16
designee; and 17
(3) the following members appointed by the Governor: 18
(i) three representing federal agencies located in the State with life 19
sciences missions; 20
(ii) seven with executive experience in life sciences businesses 21
located in the State, at least four of whom represent small businesses; 22
(iii) four representing institutions of higher education located in the 23
State, one of whom shall represent a community college; 24
(iv) one with general business marketing experience in a life sciences 25
business located in the State; and 26
(v) one member of the general public. 27
(b) The composition of the Advisory Board shall reflect the racial and gender 28 14 SENATE BILL 427
diversity of the population of the State. 1
(c) (1) Except for the Secretary or the Secretary’s designee and the Executive 2
Director of the Corporation or the Executive Director’s designee, the term of an Advisory 3
Board member is [2] 3 years. 4
(2) At the end of a term, a member continues to serve until a successor is 5
appointed and qualifies. 6
(3) A member who is appointed after a term has begun serves only for the 7
rest of the term and until a successor is appointed and qualifies. 8
(4) THE TERMS OF THE APPO INTED MEMBERS ARE ST AGGERED AS 9
REQUIRED BY THE TERM S PROVIDED FOR MEMBE RS OF THE ADVISORY BOARD ON 10
JULY 1, 2025. 11
(d) The Governor may remove a member of the Advisory Board for incompetence, 12
misconduct, or failure to perform the duties of the position. 13
(e) The Governor shall select a chair from among the members of the Advisory 14
Board. 15
(f) The Advisory Board may act with an affirmative vote of eight members. 16
(g) A member of the Advisory Board: 17
(1) may not receive compensation as a member of the Advisory Board; but 18
(2) is entitled to reimbursement for expenses under the Standard State 19
Travel Regulations, as provided in the State budget. 20
3–401. 21
(a) In this subtitle the following words have the meanings indicated. 22
[(b) “Board” means the Partnership for Workforce Quality Advisory Board.] 23
[(c)] (B) “Fund” means the [Partnership for Workforce Quality] TALENT 24
ACCELERATOR GRANT Fund. 25
[(d)] (C) “Program” means the [Partnership for Workforce Quality] TALENT 26
ACCELERATOR GRANT Program. 27
3–402. 28
There is a [Partnership for Workforce Quality] TALENT ACCELERATOR GRANT 29 SENATE BILL 427 15
Program in the Department. 1
3–403. 2
The purpose of the Program is to provide training services to: 3
(1) improve the competitiveness and productivity of the State’s workforce 4
and business community; 5
(2) upgrade employee skills, or train new employees, for new technologies 6
or production processes; and 7
(3) assist employers located in the State in promoting employment 8
stability. 9
[3–408. 10
(a) There is a Partnership for Workforce Quality Advisory Board in the 11
Department. 12
(b) The Board shall advise the Secretary.] 13
[3–409. 14
(a) The Board consists of the following 15 members: 15
(1) one member of the Senate of Maryland appointed by the President of 16
the Senate; 17
(2) one member of the House of Delegates appointed by the Speaker of the 18
House; and 19
(3) the following members appointed by the Governor with the advice of 20
the Secretary and the chair of the Governor’s Workforce Development Board: 21
(i) five representatives of business, of which three shall represent 22
employers with fewer than 100 employees; 23
(ii) three representatives of organized labor; 24
(iii) one representative from the Maryland Higher Education 25
Commission; 26
(iv) one representative from the State Department of Education; 27
(v) one representative from the Governor’s Workforce Development 28
Board; and 29 16 SENATE BILL 427
(vi) two representatives of the general public. 1
(b) (1) The term of a member appointed under subsection (a)(3) of this section 2
is 3 years. 3
(2) The terms of the members appointed under subsection (a)(3) of this 4
section are staggered as required by the terms provided for members of the Board on 5
October 1, 2008. 6
(3) At the end of a term, a member continues to serve until a successor is 7
appointed and qualifies. 8
(4) A member who is appointed after a term has begun serves only for the 9
rest of the term and until a successor is appointed and qualifies. 10
(c) A member of the Board: 11
(1) may not receive compensation as a member of the Board; but 12
(2) is entitled to reimbursement for expenses under the Standard State 13
Travel Regulations. 14
(d) The Governor shall designate the chair of the Board.] 15
[3–410. 16
(a) The Board shall: 17
(1) submit recommendations to the Secretary concerning overall policy for 18
the Program; 19
(2) recommend a system to evaluate requests for assistance under the 20
Program, including eligibility criteria and priorities for assistance; 21
(3) develop criteria to assess and evaluate Program performance and 22
advise the Secretary of the criteria; 23
(4) consult regularly with the Governor’s Workforce Development Board 24
and the Maryland Economic Development Commission concerning the activities of the 25
Program; 26
(5) submit a quarterly report on the Program to the Governor’s Workforce 27
Development Board; and 28
(6) advise the Secretary on coordination of cooperative activities at the 29
State and local level between the Department, employers, labor, and other public and 30 SENATE BILL 427 17
private entities involved with workforce quality. 1
(b) In recommending a system for evaluating requests for assistance, the Board 2
shall consider the equal distribution of assistance to all subdivisions of the State.] 3
3–411. 4
(a) There is a [Partnership for Workforce Quality] TALENT ACCELERATOR 5
GRANT Fund in the Department. 6
(b) The Secretary shall manage and supervise the Fund. 7
(c) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 8
under § 7–302 of the State Finance and Procurement Article. 9
(2) The Treasurer shall hold the Fund separately and the Comptroller shall 10
account for the Fund. 11
(d) The Fund consists of: 12
(1) money appropriated by the State to the Fund; 13
(2) money made available to the Fund through federal programs; 14
(3) private contributions to the Fund; 15
(4) an application or other fee paid to the Program in connection with 16
processing a request for financial assistance; and 17
(5) any other money made available to the Fund. 18
(e) The Department may use money in the Fund for: 19
(1) grants to defray the cost of workforce training; and 20
(2) administrative, actuarial, legal, and technical services for the Program. 21
(f) Any investment earnings shall be credited to the Fund. 22
(g) The Governor shall include in the State budget for each fiscal year an 23
appropriation of at least $1,000,000 for the [Partnership for Workforce Quality] TALENT 24
ACCELERATOR GRANT Program. 25
5–102. 26
The Department shall administer the State’s economic development and financial 27 18 SENATE BILL 427
assistance programs and funds including: 1
(1) the BRAC Revitalization and Incentive Zone Program, under Subtitle 2
13 of this title; 3
(2) [the Build Our Future Grant Pilot Program, under Subtitle 23 of this 4
title; 5
(3)] the Enterprise Fund, under Subtitle 6 of this title; 6
[(4)] (3) the Enterprise Zones Program, under Subtitle 7 of this title; 7
[(5)] (4) the Make Office Vacancies Extinct Program, under Subtitle 15 of 8
this title; 9
[(6)] (5) the Maryland Economic Adjustment Fund, under Subtitle 2 of 10
this title; 11
[(7)] (6) the Maryland Economic [Development Assistance Authority 12
and] COMPETITIVENESS Fund, under Subtitle 3 of this title; 13
[(8)] (7) the Maryland Industrial Development Financing Authority, 14
under Subtitle 4 of this title; 15
[(9)] (8) the Maryland [Small Business Development Financin g 16
Authority] ECONOMIC INCLUSION FUND, under Subtitle 5 of this title; 17
[(10)] (9) the Appalachian Regional Development Program, under Title 13, 18
Subtitle 1 of this article; 19
[(11)] (10) jointly with the Department of Housing and Community 20
Development, the Community Development Block Grant for Economic Development; AND 21
[(12) the Regional Institution Strategic Enterprise Zone Program under 22
Subtitle 14 of this title; and 23
(13)] (11) any other programs or funds designated by statute, the 24
Governor, or the Secretary. 25
5–201. 26
(a) In this subtitle the following words have the meanings indicated. 27
(b) “Fund” means the Maryland Economic Adjustment Fund. 28
(c) (1) “Working capital” means money for current operations of a business. 29 SENATE BILL 427 19
(2) “Working capital” includes money for supplies, materials, labor, 1
equipment, rent, software, marketing, insurance, and fees for professional services. 2
5–203. 3
(a) There is a Maryland Economic Adjustment Fund in the Department. 4
(b) (1) The Department shall administer the Fund. 5
(2) The Secretary may: 6
(i) delegate to any unit in the Department the underwriting, closing, 7
monitoring, and workout functions for Fund loans; or 8
(ii) contract with another entity to perform these functions. 9
(c) The Maryland Economic Adjustment Fund is a special, nonlapsing revolving 10
fund that is not subject to reversion under § 7–302 of the State Finance and Procurement 11
Article. 12
(d) (1) The Fund consists of: 13
(i) federal money allocated or granted to the Fund, including 14
adjustment implementation grant money designated for the Fund under the Defense 15
Conversion and Defense Economic Adjustment Program of the Economic Development 16
Administration of the United States Department of Commerce; 17
(ii) private money donated or granted to the Fund; 18
(iii) money appropriated by the State to the Fund; 19
(iv) premiums, fees, interest payments, and principal payments on 20
loans made under this subtitle, including a loan financed by the Economic Development 21
Opportunities Program Fund under § 7–314(f) of the State Finance and Procurement 22
Article; 23
(v) proceeds from the sale, disposition, lease, or rental of collateral 24
relating to loans under this subtitle; and 25
(vi) any other money made available to the Fund. 26
(2) This subtitle does not require an appropriation to the Fund from the 27
General Fund of the State, regardless of the availability of other funding sources for the 28
Fund. 29
(e) (1) The Fund shall be used to: 30 20 SENATE BILL 427
(i) make loans to new or existing companies with 50 or fewer 1
employees; 2
(ii) make grants to local or regional governmental or nonprofit 3
economic development revolving loan funds in the State; and 4
(iii) pay all expenses and disbursements authorized by the 5
Department for administering the Fund. 6
(2) A loan to an eligible company under this subtitle may include: 7
(i) advances of loan proceeds for loans; and 8
(ii) to the extent allowed by the regulations of the federal Economic 9
Development Administration of the United States Department of Commerce, money for 10
expenses for administrative, legal, actuarial, technical, and other services. 11
(3) Subject to the restrictions of this subtitle, the Department may make a 12
loan from the Fund to an applicant only if: 13
(i) the applicant meets the qualifications under this subtitle; and 14
(ii) the applicant meets any additional requirements imposed by the 15
source of the money to be loaned. 16
(f) (1) The Treasurer shall invest the money of the Fund in the same manner 17
as other State money may be invested. 18
(2) Any investment earnings of the Fund shall be credited to the Fund. 19
(3) The Treasurer shall submit a report each year to the Department on: 20
(i) the status of the money invested under this subtitle; 21
(ii) the market value of the assets in the Fund on the date of the 22
report; and 23
(iii) the interest received from investments for the Fund during the 24
reporting period. 25
5–205. 26
(a) An applicant for a loan under this subtitle shall submit to the Department an 27
application on the form that the Department requires. 28
(b) The application shall include: 29 SENATE BILL 427 21
(1) a detailed strategic business plan; 1
(2) the amount of money required for the activities described in the 2
strategic business plan; 3
(3) the money available to the applicant without financial assistance from 4
the Department; 5
(4) the amount of financial assistance requested from the Department; 6
(5) information relating to the financial status of the applicant, including, 7
if applicable: 8
(i) a current balance sheet; 9
(ii) a profit and loss statement; and 10
(iii) credit references; and 11
(6) any other relevant information that the Department requests. 12
(C) THE DEPARTMENT MAY NOT AP PROVE AN APPLICATION FOR FINANCIAL 13
ASSISTANCE UNDER THIS SUBTITLE AFTER JUNE 30, 2025. 14
Subtitle 3. Maryland Economic [Development Assistance Authority and] 15
COMPETITIVENESS Fund. 16
5–301. 17
(a) In this subtitle the following words have the meanings indicated. 18
(b) “Aquaculture project” means a project that encourages innovation, expansion, 19
and modernization of the seafood processing industry or aquaculture industry. 20
(c) “Arts and entertainment district” means an area designated by the Secretary 21
as an arts and entertainment district under Title 4, Subtitle 7 of this article. 22
(d) “Arts and entertainment enterprise” means a for–profit or nonprofit entity 23
that is: 24
(1) located in an arts and entertainment district; and 25
(2) dedicated to the visual or performing arts. 26
(e) “Arts and entertainment project” means a project that promotes or enhances 27 22 SENATE BILL 427
the development of an arts and entertainment district. 1
(f) (1) “Associated development and carrying costs” means costs that are 2
associated with the acquisition and maintenance of an asset. 3
(2) “Associated development and carrying costs” includes: 4
(i) settlement costs; 5
(ii) insurance; 6
(iii) interest; 7
(iv) taxes; 8
(v) government fees; 9
(vi) utilities; and 10
(vii) the costs of managing and securing the asset. 11
(g) [“Authority” means the Maryland Economic Development Assistance 12
Authority. 13
(h)] “Brownfields Revitalization Incentive Program” means the program in the 14
Department that provides financial assistance from the Fund for the redevelopment of 15
qualified brownfields sites, as provided in Part VI of this subtitle. 16
[(i)] (H) (1) “Brownfields site” means a property that: 17
(i) is located in a county or municipal corporation that elects to 18
participate in the Brownfields Revitalization Incentive Program in accordance with § 19
5–316 of this subtitle; and 20
(ii) is: 21
1. an eligible property, as defined in § 7–501 of the 22
Environment Article, that is owned or operated by an inculpable person, as defined in § 23
7–501 of the Environment Article; or 24
2. a property where there is a release, discharge, or 25
threatened release of oil, as defined in § 4–401 of the Environment Article, that is subject 26
to Title 4 of the Environment Article. 27
(2) “Brownfields site” does not include property that is owned or operated 28
by: 29
SENATE BILL 427 23
(i) a responsible person as defined in § 7–201 of the Environment 1
Article; or 2
(ii) a person responsible for the discharge, as defined in § 4–401 of 3
the Environment Article. 4
[(j)] (I) “Child care facility” means a facility that is required to be licensed as a 5
child care center under Title 9.5, Subtitle 4 of the Education Article. 6
[(k)] (J) “Child care special loan” means a direct loan to expand or improve child 7
care services at a child care facility, as provided in Part VII of this subtitle. 8
[(l)] (K) “Corporation” means the Maryland Economic Development 9
Corporation. 10
[(m)] (L) “Financial assistance” means a grant, loan, or investment provided 11
under this subtitle. 12
[(n)] (M) “Fund” means the Maryland Economic [Development Assistance] 13
COMPETITIVENESS Fund. 14
[(o)] (N) “Local government development fund” means a revolving, nonlapsing 15
fund that one or more local governments establish for economic development in the areas 16
under their jurisdiction. 17
[(p)] (O) “Local economic development opportunity” means a project that: 18
(1) is determined by the Department [or Authority] to provide a valuable 19
economic development opportunity to the jurisdiction in which the project is located; and 20
(2) is a priority for and endorsed by the governing body of that jurisdiction. 21
[(q)] (P) “Local government” means: 22
(1) a county; 23
(2) a municipal corporation; 24
(3) a designated agency or instrumentality of a county; or 25
(4) a designated agency or instrumentality of a municipal corporation. 26
[(r)] (Q) “Qualified brownfields site” means a brownfields site that is determined 27
by the Department to be eligible for financial assistance under this subtitle. 28
[(s)] (R) “Responsible person” has the meaning stated in § 7–201 of the 29 24 SENATE BILL 427
Environment Article. 1
[(t)] (S) “Significant strategic economic development opportunity” means a 2
project that is determined by the Department [or Authority] to provide a valuable economic 3
development opportunity of statewide, regional, or strategic industry impact. 4
[(u)] (T) “Specialized economic development opportunity” means: 5
(1) an aquaculture project; 6
(2) an arts and entertainment enterprise; 7
(3) an arts and entertainment project; 8
(4) the redevelopment of a qualified brownfields site; or 9
(5) a project to create or expand a child care facility. 10
[(v)] (U) “Tier I county project” means a project that a local government or the 11
Corporation carries out in a Tier I county. 12
[(w)] (V) “Working capital” means money to be used for current operations of a 13
business. 14
[Part II. Maryland Economic Development Assistance Authority.] 15
[5–305. 16
There is a Maryland Economic Development Assistance Authority in the 17
Department.] 18
[5–306. 19
(a) The Authority consists of the individuals serving as members of the Maryland 20
Industrial Development Financing Authority under § 5–406 of this title. 21
(b) The members of the Authority shall be appointed in accordance with § 5–407 22
of this title.] 23
[5–307. 24
(a) The members of the Authority may act concurrently in their capacities as 25
members of the Authority and of the Maryland Industrial Development Financing 26
Authority. 27
(b) The members of the Authority shall carry out the powers and duties of the 28 SENATE BILL 427 25
Authority under this subtitle whether acting: 1
(1) concurrently as members of the Authority and the Maryland Industrial 2
Development Financing Authority; or 3
(2) as members of either authority alone. 4
(c) The members of the Authority shall conduct the business of the Authority and 5
of the Maryland Industrial Development Financing Authority under Subtitle 4 of this title.] 6
Part III. Maryland Economic [Development Assistance] COMPETITIVENESS Fund. 7
5–310. 8
There is a Maryland Economic [Development Assistance] COMPETITIVENESS Fund 9
in the Department. 10
5–311. 11
The purposes of the Fund are to: 12
(1) expand employment opportunities in the State by providing financial 13
assistance to businesses that are engaged in eligible industry sectors, including financial 14
assistance for: 15
(i) aquaculture projects; 16
(ii) arts and entertainment enterprises; 17
(iii) arts and entertainment projects; and 18
(iv) creation and expansion of child care facilities; 19
(2) provide financial assistance for the redevelopment of qualified 20
brownfields sites; 21
(3) provide financial assistance to local governments and the Corporation 22
for economic development projects; and 23
(4) provide grants to local economic development funds. 24
5–312. 25
(a) The Secretary shall administer the Fund. 26
(b) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 27
under § 7–302 of the State Finance and Procurement Article. 28 26 SENATE BILL 427
(2) The Treasurer shall hold the Fund separately and the Comptroller shall 1
account for the Fund. 2
(c) Any investment earnings of the Fund shall be credited to the Fund. 3
5–313. 4
The Fund consists of: 5
(1) money appropriated in the State budget to the Fund; 6
(2) money made available to the Fund through federal programs or private 7
contributions; 8
(3) repayments of principal and interest from loans made from the Fund; 9
(4) proceeds from the sale, disposition, lease, or rental of collateral related 10
to financial assistance provided by the Department under this subtitle; 11
(5) application or other fees paid to the Fund to process requests for 12
financial assistance; 13
(6) recovery of an investment made by the Department in a business, 14
including an arrangement under which part of the investment is recovered through: 15
(i) a requirement that the Department receive a proportion of cash 16
flow, commissions, royalties, or license fees; 17
(ii) the repurchase from the Department of any of its investment 18
interest; or 19
(iii) the sale of an appreciated asset; 20
(7) repayments received from recipients of conditional grants from the 21
Department; 22
(8) money collected under § 9–229 of the Tax – Property Article; 23
(9) repayments on or recoveries from financial assistance provided from 24
the former: 25
(i) Brownfields Revitalization Incentive Fund; 26
(ii) Child Care Facilities Direct Loan Fund; 27
(iii) Child Care Special Loan Fund; 28 SENATE BILL 427 27
(iv) Maryland Industrial and Commercial Redevelopment Fund; 1
(v) Maryland Industrial Land Fund; 2
(vi) Maryland Seafood and Aquaculture Loan Fund; and 3
(vii) Smart Growth Economic Development Infrastructure Fund; and 4
(10) any other money made available to the Fund. 5
5–314. 6
(a) The Department may use money in the Fund to: 7
(1) provide financial assistance to eligible applicants; and 8
(2) pay expenses for administrative, actuarial, legal, and technical services 9
for the Fund. 10
(b) The Department periodically shall review its portfolio in an effort to ensure: 11
(1) the equitable distribution among the counties of money from the Fund; 12
(2) adequate funding for Tier I county projects; and 13
(3) that no particular Tier I county benefits disproportionately from 14
financial assistance to Tier I counties under this subtitle. 15
5–315. 16
In accordance with § 2.5–109 of this article, the Department shall report on the 17
number, amount, use, and economic benefits of financial assistance provided under this 18
subtitle. 19
5–316. 20
Financial assistance is deemed authorized under this subtitle if it was provided, or 21
approved to be provided, from the following programs that have been incorporated into the 22
Fund: 23
(1) the Brownfields Revitalization Incentive Fund; 24
(2) the Child Care Facilities Direct Loan Fund; 25
(3) the Child Care Special Loan Fund; 26
28 SENATE BILL 427
(4) the Maryland Industrial and Commercial Redevelopment Fund; 1
(5) the Maryland Industrial Land Act; 2
(6) the Maryland Seafood and Aquaculture Loan Fund; and 3
(7) the Smart Growth Economic Development Infrastructure Fund. 4
5–319. 5
(a) [(1) Financial assistance from the Fund not exceeding $2,500,000 may be 6
approved by the Secretary. 7
(2) Except as provided in paragraph (3) of this subsection, financial 8
assistance from the Fund exceeding $2,500,000 requires approval by the Authority. 9
(3) For a Tier I county project, the Secretary may approve financial 10
assistance exceeding $2,500,000. 11
(b) Except as provided in subsection (a)(3) of this section, with respect to requests 12
for financial assistance exceeding $2,500,000: 13
(1) The Department shall evaluate the requests; and 14
(2) The Authority shall: 15
(i) evaluate the requests that have first been evaluated by the 16
Department; 17
(ii) determine whether to approve the requests; and 18
(iii) set the terms and conditions of the financial assistance. 19
(c)] (1) Except as provided in paragraph (2) of this subsection, financial 20
assistance provided to a local government or the Corporation for a project shall be approved 21
by a formal resolution of: 22
(i) the governing body of the jurisdiction in which the project is 23
located; or 24
(ii) if the recipient of the financial assistance is the Corporation, its 25
board of directors. 26
(2) If the recipient of financial assistance is the Corporation for a Tier I 27
county project, the financial assistance shall be approved by formal resolutions of both the 28
board of directors of the Corporation and the governing body of the jurisdiction in which 29
the project is located. 30 SENATE BILL 427 29
(3) A project that is funded by a grant from the Fund to a local government 1
or the Corporation, and carried out by the local government or the Corporation, shall be 2
consistent with the strategy or plan for economic development of the county or municipal 3
corporation in which the project is located. 4
(4) If the Department provides financial assistance to a local government 5
for a project, an interest in that project is later transferred to a third party, and the transfer 6
of the interest is financed by the local government: 7
(i) the local government may assign the financing documents to the 8
Department as a repayment of or return on the Department’s financial assistance to the 9
local government; and 10
(ii) the assignment may not be considered a new financing under this 11
subtitle. 12
[(d)] (B) For a local economic development opportunity, the local government of 13
the jurisdiction in which the project is located shall provide[: 14
(1)] a formal resolution of the governing body of the jurisdiction in which 15
the project is located that endorses the financial assistance to be provided from the Fund[; 16
and 17
(2) as determined by the Department or Authority to evidence the support 18
of the local government for the project: 19
(i) a guarantee, secured by the full faith and credit of the county or 20
municipal corporation in which the project is located, of all or part of the financial 21
assistance to be provided by the Fund; 22
(ii) the financing of part of the costs of the project equal to at least 23
10% of the financial assistance to be provided from the Fund; or 24
(iii) both]. 25
5–320. 26
(a) To be eligible for financial assistance from the Fund, an applicant shall be: 27
(1) a local economic development fund that meets the criteria set forth in 28
Part V of this subtitle; or 29
(2) an individual, private business, nonprofit entity, or local government, 30
or the Corporation that intends to use the requested financial assistance for a project that: 31
(i) except as provided in subsection (b) of this section, is in an 32 30 SENATE BILL 427
eligible industry sector under § 5–321 of this subtitle; and 1
(ii) has a strong potential for expanding or retaining employment 2
opportunities in the State. 3
(b) A project need not be in an eligible industry sector if the applicant: 4
(1) is located in a Tier I county; or 5
(2) (i) is a local government or the Corporation; and 6
(ii) does not intend to use the financial assistance to carry out a 7
project that benefits a particular private sector entity. 8
(c) In form and content acceptable to the Department, an applicant for financial 9
assistance from the Fund shall submit to the Department an application that contains: 10
(1) the information that the Department [or Authority] considers 11
necessary to evaluate the request for financial assistance; and 12
(2) for a Tier I county project: 13
(i) a marketing plan designed to market the project to prospective 14
businesses; 15
(ii) a statement of planned marketing expenditures as a percent of 16
the total financial assistance amount requested; and 17
(iii) a plan for the project that is consistent with the county’s local 18
strategic economic development plan as to the location and type of project. 19
5–321. 20
(a) [(1) After consulting with the Department and the Maryland Department 21
of Labor, each year the Maryland Economic Development Commission shall: 22
(i) evaluate the potential employment and economic growth of 23
Maryland’s industry sectors; and 24
(ii) recommend eligible industry sectors to the Authority. 25
(2) Each year the Authority shall: 26
(i) consider the recommendation of the Maryland Economic 27
Development Commission; and 28
(ii) establish a list of industry sectors that will be eligible for 29 SENATE BILL 427 31
financial assistance from the Fund. 1
(3) In determining whether an applicant is engaged in an eligible industry 2
sector, the Department shall consider the definitions set forth in the North American 3
Industry Classification System.] EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS 4
SECTION, IN ORDER T O BE CONSIDERED ELIG IBLE FOR FINANCIAL A SSISTANCE 5
FROM THE FUND, A PROJECT SHALL BE ENGAGED IN AN ELI GIBLE INDUSTRY 6
SECTOR AS ESTABLISHE D THROUGH § 2.5–106 OF THIS ARTICLE. 7
(b) (1) For the purpose of providing financial assistance under this subtitle, 8
the following are ALSO deemed to be in eligible industry sectors: 9
(i) aquaculture projects; 10
(ii) arts and entertainment enterprises; 11
(iii) arts and entertainment projects; 12
(iv) redevelopment of qualified brownfields sites; 13
(v) creation or expansion of child care facilities; 14
(vi) projects in areas that are declared to be federal disaster areas 15
within 1 year before the Department receives an application for financial assistance under 16
this subtitle; and 17
(vii) feasibility studies. 18
(2) The requirements specifically imposed on significant strategic economic 19
development opportunities and local economic development opportunities under this 20
subtitle do not apply to the items listed in paragraph (1) of this subsection. 21
5–322. 22
(a) Financial assistance from the Fund may be used only to finance costs incurred 23
for: 24
(1) construction or acquisition of a building or real property, and associated 25
development and carrying costs; 26
(2) construction, acquisition, or installation of equipment, furnishings, 27
fixtures, leasehold improvements, site improvements, or infrastructure improvements, 28
including rail line enhancements on or to the site of an economic development project, and 29
associated development and carrying costs; 30
(3) working capital for significant strategic economic development 31
opportunities, arts and entertainment enterprises, or arts and entertainment projects; 32 32 SENATE BILL 427
(4) redevelopment of qualified brownfields sites; 1
(5) subject to § 5–325(b)(3) of this subtitle, construction, purchase, or 2
renovation of real property, fixtures, or equipment related to a child care facility; 3
(6) if supported by a resolution adopted by the governing body of the 4
jurisdiction in which a project may be located, feasibility studies; 5
(7) subject to § 5–325(b)(4) of this subtitle, preparation of a county’s or 6
municipal corporation’s strategy or plan for economic development; and 7
(8) a project intended to assist businesses in areas that are declared to be 8
federal disaster areas, but only if the Department receives an application for financial 9
assistance within 1 year after the declaration of the federal disaster area. 10
(b) Financial assistance from the Fund may not be used to refinance existing debt. 11
5–323. 12
Financial assistance from the Fund may not exceed the lesser of: 13
(1) $10,000,000; or 14
(2) 20% of the Fund balance. 15
5–324. 16
(a) Each subsection of this section is subject to § 5–323 of this subtitle. 17
(b) If the Department [or Authority] determines a project to be a significant 18
strategic economic development opportunity, the Department [or Authority] may provide 19
a loan from the Fund for the project to an individual, private business, nonprofit entity, or 20
the Corporation in an amount not exceeding $10,000,000. 21
(c) If the Department [or Authority] determines a project to be a local economic 22
development opportunity, the Department [or Authority] may provide financial assistance 23
from the Fund for the project to an individual, private business, nonprofit entity, or the 24
Corporation in an amount not exceeding: 25
(1) [$5,000,000] $7,500,000 for a loan or investment; and 26
(2) [$2,000,000] $5,000,000 for a grant. 27
(d) (1) Financial assistance provided to a local government or the Corporation 28
to finance a project may be: 29 SENATE BILL 427 33
(i) in the form of a grant, loan, or investment; and 1
(ii) except as provided in paragraph (2) of this subsection, in an 2
amount not exceeding [$3,000,000] $5,000,000. 3
(2) Financial assistance for a Tier I county project may be in an amount 4
determined by the Department. 5
(3) A grant to a local economic development fund is subject to the 6
requirements of Part V of this subtitle. 7
(e) Financial assistance for a specialized economic development opportunity may 8
be: 9
(1) provided to an individual, private business, nonprofit entity, or local 10
government, or the Corporation; 11
(2) in the form of a grant, loan, or investment; and 12
(3) in an amount determined by the Department [or Authority]. 13
5–325. 14
(a) Subject to the restrictions of this subtitle, the Department [or Authority] may 15
impose the terms and conditions on financial assistance from the Fund as either considers 16
appropriate. 17
(b) (1) Except as provided in paragraph (2), (3), or (4) of this subsection, 18
financial assistance from the Fund may not exceed 70% of the total costs of the project being 19
financed. 20
(2) Financial assistance from the Fund may constitute 100% of the total 21
costs of the project being financed if: 22
(i) the recipient is the Corporation; or 23
(ii) the financial assistance is for: 24
1. an arts and entertainment enterprise; 25
2. an arts and entertainment project; or 26
3. a Tier I county project. 27
(3) (i) Except as provided in subparagraph (ii) of this paragraph, 28
financial assistance from the Fund: 29 34 SENATE BILL 427
1. may be used to finance up to 50% of the costs of 1
construction, purchase, or renovation of real property, fixtures, or equipment related to a 2
child care facility; but 3
2. may not be used for working capital, supplies, or inventory 4
related to a child care facility. 5
(ii) Financial assistance from the Fund may be used to finance up to 6
20% of the costs described in subparagraph (i) of this paragraph incurred by a business that 7
has received or will receive a day care loan insured by the Maryland Industrial 8
Development Financing Authority. 9
(4) Financial assistance for preparation of a strategy or plan for economic 10
development of a county or municipal corporation may not exceed: 11
(i) 50% of the costs of preparation; or 12
(ii) $50,000 in a 3–year period. 13
(c) [(1) A loan from the Fund shall bear an interest rate below the market rate 14
of interest, as determined by the Department, if the loan is for: 15
(i) a significant strategic economic development opportunity; or 16
(ii) a specialized economic development opportunity. 17
(2) A loan from the Fund for a Tier I county project shall bear an interest 18
rate determined by the Department or the Authority. 19
(3) A loan from the Fund shall bear an interest rate not exceeding 20
one–eighth of 1% plus the net interest cost of the most recent State general obligation bond 21
issue preceding the approval of the loan if the loan is: 22
(i) for a local economic development opportunity; or 23
(ii) to a local government. 24
(4) A loan from the Fund may not bear an interest rate of less than 3% 25
unless: 26
(i) the project funded by the loan is located in an area of high 27
unemployment; or 28
(ii) the Department determines that the borrower is carrying out a 29
compelling economic development initiative. 30
SENATE BILL 427 35
(d) (1) The Department may waive interest during the first 2 years of the term 1
of a loan from the Fund. 2
(2) If a borrower defaults on a loan from the Fund, the Department may 3
impose an interest rate that exceeds the limits set forth in subsection (c)(1) or (3) of this 4
section. 5
(e) The term of a loan from the Fund may not exceed: 6
(1) for working capital, 3 years; 7
(2) for financing equipment, furnishings, or fixtures, the lesser of 15 years 8
or the useful life of the asset, as determined by the Department; 9
(3) for financing the construction or acquisition of buildings and real 10
property, 25 years; and 11
(4) for financing the redevelopment of a qualified brownfields site or a Tier 12
I county project, a term approved by the Department or Authority] THE DEPARTMENT 13
SHALL DETERMINE WHETHER A LOAN FROM THE FUND SHALL BEAR INTER EST AND, 14
IF SO, THE INTEREST RATE. 15
5–329. 16
(a) A local government may apply to the Department for a grant from the Fund 17
to a local economic development fund. 18
(b) In determining whether to approve a grant to a local economic development 19
fund, the Department [or Authority] shall consider and determine: 20
(1) the average rate of unemployment for the local jurisdiction in 21
comparison to the average rate of unemployment for the State; 22
(2) whether the local government currently administers a local economic 23
development fund; 24
(3) the ability of the local government to leverage private money; 25
(4) the level of financial commitment provided by the local government; 26
and 27
(5) any other factors that the Department [or Authority] considers 28
relevant. 29
5–338. 30
36 SENATE BILL 427
(d) (1) The Department shall notify the person whether the person qualifies 1
for financial assistance for the redevelopment of a brownfields site within 30 days after the 2
Department receives a request under subsection (c) of this section if: 3
(i) the Department of the Environment approves the participation 4
in the Voluntary Cleanup Plan or a corrective action plan; and 5
(ii) the Department [or Authority] approves the financial assistance. 6
(2) The notice shall specify which of the criteria in subsection (b) of this 7
section that the person meets. 8
5–401. 9
(a) In this subtitle the following words have the meanings indicated. 10
(b) “Authority” means the Maryland Industrial Development Financing 11
Authority. 12
(p) “Fund” means the Industrial Development Fund established under § 5–423 of 13
this subtitle. 14
5–464. 15
THE AUTHORITY AND THE SECRETARY MAY NOT APP ROVE FINANCIAL 16
ASSISTANCE FROM THE FUND OR THE ISSUANCE OF BONDS UNDER THIS SUBTITLE 17
AFTER JUNE 30, 2025. 18
Subtitle 5. Maryland [Small Business Development Financing Authority] ECONOMIC 19
INCLUSION FUND. 20
5–501. 21
(a) In this subtitle the following words have the meanings indicated. 22
(b) [“Authority” means the Maryland Small Business Development Financing 23
Authority. 24
(c)] “Financial institution” means: 25
(1) a financial institution, as defined in § 1–101 of the Financial 26
Institutions Article; and 27
(2) any other lender that the Authority approves. 28
(C) “FUND” MEANS THE MARYLAND ECONOMIC INCLUSION FUND. 29 SENATE BILL 427 37
(d) (1) “Loan document” means an instrument or agreement that evidences, 1
secures, or guarantees a loan. 2
(2) “Loan document” includes a note, financing statement, mortgage, 3
pledge, assignment, loan and security agreement, or guaranty. 4
(e) (1) “Working capital” means money used to meet the cash needs of an 5
operating business entity. 6
(2) “Working capital” does not include money used for a capital purchase. 7
5–502. 8
(a) The General Assembly finds that: 9
(1) the inability of socially or economically disadvantaged individuals to 10
obtain working capital is a major limitation on their opportunity to win and perform 11
government and other contracts; 12
(2) because socially or economically disadvantaged individuals frequently 13
have been awarded government or other contracts but have lacked the working capital to 14
post a bond, buy supplies needed to begin the work, or pay employees, these individuals 15
have been unable to accept the contracts; 16
(3) some individuals are unable to obtain government and other contracts 17
for reasons other than the cost to the owner or the ability to perform the contract work 18
competently; 19
(4) socially or economically disadvantaged individuals frequently lack 20
adequate capital to sustain and expand their businesses and to hire and train employees; 21
(5) because high risk, problem, or uncollectible loans are not in the interest 22
of financial institutions, financial institutions generally are reluctant to lend money to 23
socially or economically disadvantaged individuals with insufficient records of 24
performance; 25
(6) the inability of businesses owned by socially or economically 26
disadvantaged individuals to obtain long–term financing is a major limitation on their 27
opportunity to survive and expand; and 28
(7) the public welfare is served by promoting the viability and expansion of 29
businesses owned by economically or socially disadvantaged individuals, retaining or 30
increasing the employment of these individuals, and expanding the taxable base of the 31
economy of the State. 32
(b) The purposes of the [Authority] FUND are: 33 38 SENATE BILL 427
(1) to assist socially or economically disadvantaged individuals to obtain 1
adequate working capital to begin, continue, and complete projects[, the majority of funding 2
for which is provided by government entities or utilities]; 3
(2) to encourage socially or economically disadvantaged individuals to seek 4
government and other contracts; 5
(3) to encourage financial institutions to make loans to these individuals; 6
and 7
(4) to assist small businesses that are unable to obtain adequate business 8
financing on reasonable terms through normal financing channels because the businesses 9
do not meet the established credit criteria of financial institutions. 10
Part II. Maryland [Small Business Development Financing Authority] ECONOMIC 11
INCLUSION FUND. 12
5–505. 13
(A) There is a Maryland [Small Business Development Financing Authority] 14
ECONOMIC INCLUSION FUND in the Department. 15
(B) THE FUND IS A SPECIAL, NONLAPSING FUND THAT IS NOT SUBJECT TO 16
REVERSION UNDER § 7–302 OF THE STATE FINANCE AND PROCUREMENT ARTICLE. 17
(C) THE TREASURER SHALL : 18
(1) INVEST THE MONEY IN THE FUND IN THE SAME MANN ER AS OTHER 19
STATE MONEY MAY BE IN VESTED; 20
(2) CREDIT ANY INVESTMEN T EARNINGS TO THE FUND; AND 21
(3) REPORT EACH YEAR TO THE DEPARTMENT ON : 22
(I) THE STATUS OF THE MO NEY INVESTED UNDER T HIS 23
SUBTITLE; 24
(II) THE MARKET VALUE OF THE ASSETS IN THE FUND AS OF THE 25
DATE OF THE REPORT ; AND 26
(III) THE INTEREST RECEIVE D FROM INVESTMENTS D URING THE 27
PERIOD COVERED BY TH E REPORT. 28
(D) (1) THE FUND IS THE SUCCESSOR OF THE SMALL BUSINESS 29 SENATE BILL 427 39
DEVELOPMENT CONTRACT FINANCING FUND, THE SMALL BUSINESS 1
DEVELOPMENT GUARANTY FUND, THE EQUITY PARTICIPATION INVESTMENT 2
INCENTIVE PROGRAM FUND, AND THE SMALL BUSINESS SURETY BOND FUND 3
ESTABLISHED UNDER TH E MARYLAND SMALL BUSINESS DEVELOPMENT 4
FINANCING AUTHORITY. 5
(2) ALL FINANCIAL ASSISTANCE TRANSACTI ONS AND OBLIGATIONS 6
APPROVED BY THE MARYLAND SMALL BUSINESS DEVELOPMENT FINANCING 7
AUTHORITY SHALL CONTI NUE AS OBLIGATIONS O F THE FUND AND ARE 8
AUTHORIZED UNDER THI S SUBTITLE. 9
[5–506. 10
(a) The Authority consists of the following nine members: 11
(1) seven members appointed by the Governor; 12
(2) the Secretary or the Secretary’s designee; and 13
(3) (i) the Comptroller or the Treasurer as designated by the Governor; 14
or 15
(ii) the designee of the Governor’s designee. 16
(b) (1) The term of an appointed member is 5 years. 17
(2) The terms of appointed members are staggered as required for 18
appointments to the Authority on October 1, 2008. 19
(3) At the end of a term, an appointed member continues to serve until a 20
successor is appointed and qualifies. 21
(4) A member who is appointed after a term has begun serves only for the 22
rest of the term and until a successor is appointed and qualifies. 23
(c) The Governor may remove an appointed member for cause.] 24
5–506. 25
THE FUND CONSISTS OF : 26
(1) PREMIUMS FOR GUARANT EEING LOANS UNDER TH IS SUBTITLE; 27
(2) PREMIUMS FOR GUARANT EEING EQUITY INVESTM ENTS UNDER 28
THIS SUBTITLE; 29 40 SENATE BILL 427
(3) REPAYMENTS OF PRINCI PAL OF AND INTEREST ON DIRECT LOANS 1
AND EQUITY PARTICIPA TION FINANCING MADE UNDER THIS SUBTITLE ; 2
(4) PROCEEDS FROM THE SA LE, DISPOSITION, LEASE, OR RENTAL OF 3
COLLATERAL FOR DIREC T LOANS, LOAN GUARANTIES , OR EQUITY PARTICIPAT ION 4
FINANCING MADE UNDER THIS SUBTITLE; 5
(5) LOANS AND GRANTS FRO M THE FEDERAL GOVERN MENT OR A UNIT 6
OR INSTRUMENTALITY O F THE FEDERAL GOVERN MENT; 7
(6) GRANTS AND CONTRIBUT IONS OF FUNDS FROM T HE STATE, A 8
POLITICAL SUBDIVISIO N, OR ANY OTHER SOURCE ; 9
(7) PREMIUMS FOR GUARANT EEING LONG TERM LOAN S UNDER § 10
5–523 OF THIS SUBTITLE ; 11
(8) NOTWITHSTANDING § 10–469(E) AND (F) OF THIS ARTICLE OR A NY 12
OTHER LAW , ANY RECOVERY OF INVE STMENTS MADE UNDER § 10–469 OF THIS 13
ARTICLE THAT WERE FU NDED BY A TRANSFER O F MONEY FROM THE FUN DS UNDER 14
THIS SUBTITLE TO THE ENTERPRISE FUND, INCLUDING AN INVESTM ENT IN MMG 15
VENTURES LLP; 16
(9) NOTWITHSTANDING § 10–469(E) AND (F) OF THIS ARTICLE OR A NY 17
OTHER LAW, ANY REPAYMENT OF A G RANT MADE UNDER § 10–469 OF THIS ARTICLE 18
THAT WAS FUNDED BY A TRANSFER OF MONEY FR OM THE FUNDS UN DER THIS 19
SUBTITLE TO THE ENTERPRISE FUND; 20
(10) MONEY THAT THE STATE APPROPRIATES TO THE FUND; 21
(11) MONEY MADE AVAILABLE TO THE FUND THROUGH FEDERAL 22
PROGRAMS OR PRIVATE CONTRIBUTIONS ; 23
(12) PREMIUMS, FEES, ROYALTIES, AND REPAYMENTS OF 24
INVESTMENTS MADE UNDER THE TERMS OF BONDING ASSISTANC E AND EQUITY 25
PARTICIPATION FINANC ING; 26
(13) REPAYMENT OF FINANCI AL ASSISTANCE PROVID ED FROM THE 27
MARYLAND ECONOMIC ADJUSTMENT FUND ESTABLISHED UNDE R § 5–203 OF THIS 28
ARTICLE; AND 29
(14) ALL OTHER RECEIPTS O F THE DEPARTMENT UNDER THIS 30
SUBTITLE. 31 SENATE BILL 427 41
[5–507. 1
(a) The Authority shall elect a chair, vice chair, and treasurer from among its 2
members. 3
(b) The Authority shall determine the manner of election of officers and their 4
terms.] 5
5–507. 6
AT LEAST HALF OF THE ANNUAL APPROPRIATION TO THE FUND MUST BE 7
RESERVED FOR BUSINES S ACTIVITIES INCLUDE D ON THE LIST OF IND USTRIES AND 8
ACTIVITIES DEVELOPED BY THE DEPARTMENT IN ACCORDA NCE WITH § 2.5–106 OF 9
THIS ARTICLE. 10
[5–508. 11
(a) (1) Four members of the Authority are a quorum. 12
(2) The Authority may not act on any matter unless at least four members 13
in attendance concur. 14
(b) The Authority shall determine the times and places of its meetings. 15
(c) A member of the Authority is entitled to reimbursement for expenses under 16
the Standard State Travel Regulations, as provided in the State budget. 17
(d) The Authority may employ a staff in accordance with the State budget.] 18
5–508. 19
IN ORDER TO ADMINISTE R THE FUND, THE DEPARTMENT MAY : 20
(1) CONTRACT FOR AND ENGAGE THE S ERVICES OF A PRIVATE 21
MARYLAND CORPORATION TO ADMINISTER SOME O R ALL OF THE PROGRAM S OF THE 22
FUND; 23
(2) CONTRACT FOR AND ACC EPT, TO CARRY OUT THIS SU BTITLE, A 24
LOAN OR GRANT FROM T HE FEDERAL GOVERNMEN T, A POLITICAL SUBDIVIS ION OF 25
THE STATE, OR ANY OTHER SOURCE ; 26
(3) PURCHASE, RECEIVE, LEASE AS LESSEE, OR OTHERWISE ACQUIRE , 27
SELL, MORTGAGE , LEASE AS LESSOR , PLEDGE, ADMINISTER, DISPOSE OF, OR 28
OTHERWISE DEAL WITH PROPERTY GIVEN AS CO LLATERAL UNDER A LOA N 29 42 SENATE BILL 427
AGREEMENT ON THE TER MS AND CONDITIONS IT CONSIDERS ADVISABLE ; 1
(4) ADOPT REGULATIONS NE CESSARY TO CARRY OUT ITS POWERS; 2
(5) ACQUIRE OR TAKE ASSI GNMENTS OF LOAN DOCU MENTS; AND 3
(6) DO ANYTHING NECESSAR Y OR CONVENIENT TO C ARRY OUT ITS 4
POWERS. 5
[5–509. 6
(a) (1) The Executive Director is the chief administrative officer of the 7
Authority. 8
(2) With the approval of the Secretary, the Authority may: 9
(i) appoint the Executive Director; or 10
(ii) contract with a private entity to perform the duties of the 11
Executive Director. 12
(b) The Executive Director serves at the pleasure of the Authority, with the 13
concurrence of the Secretary. 14
(c) In addition to any other duties set forth in this subtitle, the Executive Director 15
shall: 16
(1) supervise the administrative affairs and technical activities of the 17
Authority in accordance with its regulations and policies; 18
(2) attend all meetings of the Authority; 19
(3) keep minutes of all proceedings of the Authority; 20
(4) approve all accounts for salaries, per diem payments, and allowable 21
expenses of the Authority, its employees, and its consultants; 22
(5) approve all expenses incidental to the operation of the Authority; and 23
(6) perform any other duty that the Authority or the Secretary requires to 24
carry out this subtitle.] 25
[5–510. 26
A member of the Authority may not participate in any decision related to the 27
approval of financial assistance if the member has any interest in: 28 SENATE BILL 427 43
(1) the applicant for the assistance; or 1
(2) the financial institution seeking a guaranty or an interest subsidy or 2
both.] 3
[5–511. 4
(a) In this section, “Authority staff” means any of the individuals who are 5
employed by the Department to operate the programs of the Authority immediately prior 6
to the execution by the Department of a contract under this section with the private 7
corporation organized by any of those individuals. 8
(b) (1) The Department may contract for and engage the services of some or 9
all of the Authority staff to administer the programs of the Authority, for a period of 3 years, 10
if the Authority staff has organized itself as a private Maryland corporation. 11
(2) The Department may: 12
(i) extend the termination date of the contract in effect as of 13
September 30, 2008, to June 30, 2012, and modify that extended contract as needed; and 14
(ii) renew the extended contract for up to two additional 5–year 15
terms, and modify that renewed and extended contract as needed. 16
(3) An extension or renewal contract shall include standards to evaluate 17
the performance of the private contractor in rendering services under the contract. 18
(c) In its name the corporation may use “Maryland Small Business Development 19
Financing Agency”, “MSBDFA, Inc.”, or any close approximation of those terms.] 20
[5–512. 21
(a) The Authority exercises its powers and performs its duties subject to the 22
authority of the Secretary. 23
(b) The Authority may: 24
(1) adopt bylaws for the conduct of its business; 25
(2) adopt a seal; 26
(3) maintain offices in the State; 27
(4) sue and be sued in its own name; 28
(5) retain consultants; 29 44 SENATE BILL 427
(6) use the services of governmental units; 1
(7) contract for and accept, to carry out this subtitle, a loan or grant from 2
the federal government, a political subdivision of the State, or any other source; 3
(8) purchase, receive, lease as lessee, or otherwise acquire, sell, mortgage, 4
lease as lessor, pledge, administer, dispose of, or otherwise deal with property given as 5
collateral under a loan agreement on the terms and conditions it considers advisable; 6
(9) adopt regulations necessary to carry out its powers; 7
(10) acquire or take assignments of loan documents; and 8
(11) do anything necessary or convenient to carry out its powers. 9
(c) The Authority shall: 10
(1) in its internal functions, follow the procedures of the State that govern 11
the purchase of office space, supplies, facilities, materials, equipment, and professional 12
services; 13
(2) keep proper records of its accounts; 14
(3) keep separate records for: 15
(i) the Small Business Development Contract Financing Fund 16
under Part III of this subtitle; 17
(ii) the Small Business Development Guaranty Fund under Part IV 18
of this subtitle; 19
(iii) the Equity Participation Investment Program Fund under Part 20
V of this subtitle; and 21
(iv) the Small Business Surety Bond Fund under Part VI of this 22
subtitle; and 23
(4) in accordance with § 2.5–109 of this article, submit a report on its 24
condition and operations.] 25
[5–513. 26
(a) In any action, service of process on the Authority shall be made by service on 27
the Executive Director of the Authority. 28
(b) Service may be made in person or by leaving a copy of the process at the office 29 SENATE BILL 427 45
of the Executive Director with the individual in charge of the office.] 1
[5–514. 2
(a) Notwithstanding § 10–469(e) and (f) of this article or any other law, the 3
following money shall be payable into the funds under this subtitle: 4
(1) any recovery of investments made under § 10–469 of this article that 5
were funded by a transfer of money from the funds under this subtitle to the Enterprise 6
Fund, including an investment in MMG Ventures LLP; and 7
(2) any repayment of a grant made under § 10–469 of this article that was 8
funded by a transfer of money from the funds under this subtitle to the Enterprise Fund. 9
(b) The Authority shall determine the proportion of the recovery or repayment 10
payable under subsection (a) of this section that shall be deposited into each of the funds 11
under this subtitle.] 12
5–509. RESERVED. 13
5–510. RESERVED. 14
Part III. Small Business Development Contract Financing [Fund] PROGRAM. 15
[5–517.] 5–511. 16
In this part, [“Fund”] “PROGRAM” means the Small Business Development 17
Contract Financing [Fund] PROGRAM. 18
[5–518.] 5–512. 19
There is a Small Business Development Contract Financing [Fund] PROGRAM 20
WITHIN THE FUND. 21
[5–519. 22
The Authority shall use the Fund to implement this part.] 23
[5–520. 24
The Authority shall administer the Fund.] 25
[5–521. 26
(a) The Fund is a special, nonlapsing fund that is not subject to reversion under 27 46 SENATE BILL 427
§ 7–302 of the State Finance and Procurement Article. 1
(b) The Treasurer shall: 2
(1) invest the money in the Fund in the same manner as other State money 3
may be invested; and 4
(2) credit any investment earnings to the Fund. 5
(c) If the Authority determines by resolution that any money in the Fund is no 6
longer needed to meet its obligations, the Authority may authorize the Comptroller to first 7
employ that money to pay the principal of and interest on outstanding bonds issued under 8
any Act authorizing the issue of State general obligation bonds issued to implement this 9
subtitle.] 10
[5–522. 11
The Fund consists of: 12
(1) premiums for guaranteeing loans under § 5–525(a) of this subtitle; 13
(2) premiums for guaranteeing equity investments under § 5–525(b) of this 14
subtitle; 15
(3) repayments of principal of and interest on direct loans made under § 16
5–525(c) of this subtitle; 17
(4) proceeds from the sale, disposition, lease, or rental of collateral for 18
direct loans or loan guaranties made under § 5–525 of this subtitle; and 19
(5) all other receipts of the Authority under this part.] 20
[5–523. 21
(a) If the Authority and the Secretary determine that more money is needed to 22
keep the Fund at an adequate level, the Authority shall send a written request for the 23
additional money to the Board of Public Works. 24
(b) The Board of Public Works may pay the amount requested from the General 25
Emergency Fund.] 26
[5–524.] 5–513. 27
The [Authority] DEPARTMENT may use the Fund for: 28
(1) loan guaranties made under [§ 5–525(a)] § 5–514(A) of this subtitle; 29 SENATE BILL 427 47
(2) equity investment guaranties made under [§ 5–525(b)] § 5–514(B) of 1
this subtitle; 2
(3) direct loans made under [§ 5–525(c)] § 5–514(C) of this subtitle; and 3
(4) expenses for administrative, legal, actuarial, and other services. 4
[5–525.] 5–514. 5
(a) (1) The [Authority] DEPARTMENT may use the Fund to guarantee a loan 6
made to an applicant only if: 7
(i) the applicant meets the requirements of this part; 8
(ii) [the loan is to be used to perform a contract for which the 9
majority of the funding is provided by the federal government, a state government, a local 10
government, or a utility regulated by the Public Service Commission; 11
(iii)] the maximum amount payable by the [Authority] 12
DEPARTMENT under the guaranty does not exceed [$2,000,000] $3,000,000; and 13
[(iv)] (III) the guaranteed loan is to be used for: 14
1. working capital; or 15
2. equipment needed to perform the contract, the cost of 16
which can be repaid from contract proceeds, if the [Authority] DEPARTMENT has entered 17
into an agreement with the applicant to secure the loan or guaranty. 18
(2) A guaranty made by the [Authority] DEPARTMENT may not exceed the 19
term of the contract, unless the [Authority] DEPARTMENT determines that a longer term 20
better serves the purposes of this subtitle. 21
(b) (1) The [Authority] DEPARTMENT may use the Fund to guarantee a 22
person’s proposed equity investment in the applicant only if: 23
(i) the applicant meets the requirements of this part; 24
(ii) the amount of the equity investment to be guaranteed does not 25
exceed the lesser of: 26
1. 10% of the person’s equity investment in the applicant; or 27
2. $250,000; AND 28
48 SENATE BILL 427
(iii) [the equity investment to be guaranteed is to be used to perform 1
a contract for which the majority of funding is provided by the federal government, a state 2
government, a local government, or a utility regulated by the Public Service Commission; 3
and 4
(iv)] the equity investment to be guaranteed is to be used for: 5
1. working capital; or 6
2. equipment needed to perform the contract, the cost of 7
which can be repaid from contract proceeds, if the [Authority] DEPARTMENT has entered 8
into an agreement with the applicant to secure the guaranty. 9
(2) The [Authority] DEPARTMENT may not guarantee the equity 10
investment of a person who: 11
(i) previously held an equity investment in the applicant; 12
(ii) previously participated in the management of the applicant; or 13
(iii) in any other manner is related to: 14
1. the applicant; or 15
2. any of the current stockholders, officers, or management 16
personnel of the applicant. 17
(c) (1) The [Authority] DEPARTMENT may use the Fund to lend money to an 18
applicant only if: 19
(i) the applicant meets the requirements of this part; 20
(ii) the applicant is unable to obtain money on reasonable terms 21
through normal lending channels from another source; 22
(iii) the loan does not exceed [$2,000,000] $3,000,000; AND 23
(iv) [the loan is to be used to perform a contract for which the 24
majority of funding is provided by the federal government, a state government, a local 25
government, or a utility regulated by the Public Service Commission; and 26
(v)] the loan is to be used for: 27
1. working capital; or 28
2. equipment needed to perform the contract, if the contract 29 SENATE BILL 427 49
proceeds can repay the cost of the equipment and if the [Authority] DEPARTMENT has 1
entered into an agreement with the applicant to secure the loan. 2
(2) A loan that the [Authority] DEPARTMENT makes shall mature not 3
later than the term of the contract, unless the [Authority] DEPARTMENT finds that a 4
longer term better serves the purposes of this part. 5
(d) In providing financial assistance under this section, the [Authority] 6
DEPARTMENT shall recognize the need to serve applicants from all political subdivisions 7
in the State. 8
[5–526.] 5–515. 9
(a) If the applicant is an individual, to qualify for financial assistance under this 10
part the applicant shall satisfy the [Authority] DEPARTMENT that: 11
(1) the applicant is of good moral character; 12
(2) the applicant has a reputation for financial responsibility, as 13
determined from creditors, employers, and other individuals who have personal knowledge 14
of the applicant; 15
(3) the applicant is a resident of the State or the principal place of business 16
of the applicant is in the State; and 17
(4) the applicant is unable to obtain adequate business financing on 18
reasonable terms through normal lending channels because the applicant: 19
(i) belongs to a group that historically has been deprived of access 20
to normal economic or financial resources [because of race, color, creed, sex, religion, or 21
national origin]; 22
(ii) has an identifiable physical handicap that severely limits the 23
ability of the applicant to obtain financial assistance, but that does not limit the ability of 24
the applicant to perform the contract or other activity for which the applicant would be 25
receiving financial assistance; 26
(iii) has any other social or economic impediment that is beyond the 27
control of the applicant but that does not limit the ability of the applicant to perform the 28
contract or other activity for which the applicant would be receiving financial assistance, 29
including: 30
1. the lack of formal education or financial capacity; or 31
2. geographical or regional economic distress; or 32
50 SENATE BILL 427
(iv) does not meet the established credit criteria of at least one 1
financial institution. 2
(b) If the applicant is a business enterprise that is not a sole proprietorship, to 3
qualify for financial assistance under this part at least 70% of the business enterprise shall 4
be owned by individuals who meet the qualifications for an individual applicant under 5
subsection (a) of this section. 6
(c) An applicant for a loan guaranty shall have applied for and been denied a loan 7
by a financial institution. 8
[5–527.] 5–516. 9
(a) To apply for financial assistance from the Fund under [§ 5–525] § 5–514 of 10
this subtitle, an applicant shall submit to the [Authority] DEPARTMENT an application on 11
the form that the [Authority] DEPARTMENT provides WITH THE INFORMATION THE 12
DEPARTMENT REQUIR ES. 13
[(b) The application shall: 14
(1) describe the project in detail; 15
(2) itemize known and estimated costs; 16
(3) specify the total amount of investment required to perform the contract; 17
(4) specify the amount of funds available to the applicant without financial 18
assistance from the Authority; 19
(5) specify the amount of financial assistance requested from the 20
Authority; 21
(6) provide information that demonstrates the inability of the applicant to 22
obtain adequate financing on reasonable terms through normal lending channels; 23
(7) provide information that demonstrates the financial status of the 24
applicant, including: 25
(i) a current balance sheet; 26
(ii) a profit and loss statement; and 27
(iii) credit references; and 28
(8) contain any other relevant information that the Authority requires.] 29
SENATE BILL 427 51
[(c)] (B) The [Authority] DEPARTMENT may require an applicant to provide an 1
audited balance sheet before the [Authority] DEPARTMENT approves or denies the 2
application. 3
[(d) The Authority may delegate the review and approval of the application 4
information required under subsection (b)(1), (2), and (3) of this section to the Executive 5
Director if an applicant meets all other requirements of this section.] 6
[5–528.] 5–517. 7
(a) The [Authority] DEPARTMENT may set the terms and conditions for a loan 8
guaranty made under [§ 5–525(a)] § 5–514(A) of this subtitle. 9
(b) (1) If the [Authority] DEPARTMENT decides to lend money from the Fund 10
to an applicant under [§ 5–525(c)] § 5–514(C) of this subtitle, the [Authority] 11
DEPARTMENT shall prepare loan documents that include: 12
(i) the interest rate on the loan that equals the market rate for a 13
conventional loan of comparable risk unless the [Authority] DEPARTMENT determines 14
that a lower rate better serves the purposes of this subtitle; 15
(ii) a disbursement schedule that provides enough money to the 16
applicant when the applicant needs it to perform the contract; 17
(iii) a requirement that the applicant and the [Authority] 18
DEPARTMENT co–sign each request for an advance of money before release of the money; 19
and 20
(iv) provisions for repayment of the loan. 21
(2) The loan documents may include any other provision that the 22
[Authority] DEPARTMENT determines is necessary to secure the loan, including an 23
assignment of or a lien on payment under the contract. 24
[5–529. 25
The Treasurer shall report each year to the Authority on: 26
(1) the status of the money invested under § 5–521 of this subtitle; 27
(2) the market value of the assets in the Fund as of the date of the report; 28
and 29
(3) the interest received from investments during the period covered by the 30
report.] 31
52 SENATE BILL 427
[5–530.] 5–518. 1
(a) A person may not knowingly make or cause to be made a false statement or 2
report in an application or document submitted to the [Authority] DEPARTMENT under 3
this part. 4
(b) A person may not knowingly make or cause to be made a false statement or 5
report to influence an action of the [Authority] DEPARTMENT under this part: 6
(1) on an application for financial assistance; or 7
(2) affecting financial assistance whether or not the assistance has already 8
been extended. 9
(c) A person who violates this section is guilty of a misdemeanor and on conviction 10
is subject to imprisonment not exceeding 5 years or a fine not exceeding $50,000 or both. 11
5–519. RESERVED. 12
5–520. RESERVED. 13
Part IV. Small Business Development Guaranty [Fund] PROGRAM. 14
[5–533.] 5–521. 15
In this part, [“Fund”] “PROGRAM” means the Small Business Development 16
Guaranty [Fund] PROGRAM. 17
[5–534.] 5–522. 18
There is a Small Business Development Guaranty PROGRAM WITHIN THE Fund. 19
[5–535. 20
The Authority shall use the Fund to implement this part.] 21
[5–536. 22
The Authority shall administer the Fund.] 23
[5–537. 24
(a) The Fund is a special, nonlapsing fund that is not subject to reversion under 25
§ 7–302 of the State Finance and Procurement Article. 26
(b) The Treasurer shall: 27 SENATE BILL 427 53
(1) invest the money in the Fund in the same manner as other State money 1
may be invested; and 2
(2) credit any investment earnings to the Fund. 3
(c) If the Authority determines by resolution that any money in the Fund is no 4
longer needed to meet its obligations, the Authority may authorize the Comptroller to first 5
apply that money to pay the principal of and interest on outstanding bonds issued under 6
any Act authorizing the issue of State general obligation bonds issued to implement this 7
subtitle.] 8
[5–538. 9
The Fund consists of: 10
(1) loans and grants from the federal government or a unit or 11
instrumentality of the federal government; 12
(2) grants and contributions of funds from the State, a political subdivision, 13
or any other source; 14
(3) premiums for guaranteeing long–term loans under § 5–540 of this 15
subtitle; 16
(4) proceeds from the sale, disposition, lease, or rental of collateral by the 17
Authority relating to loans guaranteed under § 5–540 of this subtitle; and 18
(5) all other receipts of the Authority under this part.] 19
[5–539.] 5–523. 20
The [Authority] DEPARTMENT may use the Fund for: 21
(1) guaranty payments made under [§ 5–540(a)] § 5–524(A) of this 22
subtitle; 23
(2) interest subsidy payments under [§ 5–540(b)] § 5–524(B) of this 24
subtitle; and 25
(3) expenses for administrative, legal, actuarial, and other services. 26
[5–540.] 5–524. 27
(a) (1) The [Authority] DEPARTMENT may use the Fund to guarantee up to 28
80% of the principal of and interest on a long–term loan made by a financial institution to 29 54 SENATE BILL 427
an applicant only if: 1
(i) the applicant meets the requirements under [§ 5–541] § 5–525 2
of this subtitle and has not violated [§ 5–545] § 5–528 of this subtitle; 3
(ii) the loan amount is $5,000 or more and the maximum amount 4
payable by the [Authority] DEPARTMENT under the guaranty does not exceed 5
[$2,000,000] $3,000,000; 6
(iii) the loan is used for: 7
1. working capital; 8
2. refinancing the applicant’s existing debt; 9
3. acquisition and installation of equipment; 10
4. making necessary improvements to real property that the 11
applicant leases or owns in fee simple; or 12
5. acquiring real property that the applicant will own in fee 13
simple if the property is to be used in the applicant’s trade or business for which the 14
guaranty is sought and the financial institution or the [Authority] DEPARTMENT places a 15
lien on the property; 16
(iv) the loan matures within 10 years after the closing date of the 17
loan; and 18
(v) the interest rate does not exceed the monthly weighted average 19
of the prime lending rate prevailing in Baltimore City on unsecured commercial loans, plus 20
2%, as determined by the [Authority] DEPARTMENT . 21
(2) (i) The [Authority] DEPARTMENT may only approve a guaranty 22
under this section if the [Authority] DEPARTMENT determines that the loan to be 23
guaranteed will have a substantial economic impact. 24
(ii) To determine the economic impact of a loan, the [Authority] 25
DEPARTMENT may consider: 26
1. the amount of the guaranty obligation; 27
2. the terms of the loan to be guaranteed; 28
3. the number of new jobs that the loan will create; and 29
4. any other factor that the [Authority] DEPARTMENT 30 SENATE BILL 427 55
considers relevant. 1
(b) (1) In addition to a loan guaranty, the [Authority] DEPARTMENT may 2
provide an interest subsidy for the benefit of the applicant. 3
(2) The subsidy: 4
(i) may be for the life of the loan; 5
(ii) may not exceed 4%; 6
(iii) shall be payable quarterly; and 7
(iv) shall be made to the financial institution that makes the loan 8
that the [Authority] DEPARTMENT guarantees. 9
(3) (i) The subsidy may not exceed the difference between: 10
1. the interest rate on the guaranteed loan; and 11
2. the discount interest rate that the Federal Reserve Bank 12
uses. 13
(ii) The interest rate may not exceed the monthly weighted average 14
of the prime lending rate that prevails in Baltimore City on unsecured commercial loans, 15
as the [Authority] DEPARTMENT determines as of the date of closing, plus 2%. 16
(4) The subsidy may not be paid during any period in which the loan is in 17
default. 18
(c) In providing financial assistance under this section, the [Authority] 19
DEPARTMENT shall recognize the need to serve applicants from all political subdivisions 20
in the State. 21
[5–541.] 5–525. 22
(a) If the applicant is a sole proprietor, to qualify for financial assistance under 23
this part the applicant shall satisfy the [Authority] DEPARTMENT that: 24
(1) the applicant is of good moral character; 25
(2) the applicant has a reputation for financial responsibility, as 26
determined from creditors, employers, and other individuals who have personal knowledge 27
of the applicant; 28
(3) the applicant is a resident of the State or the principal place of business 29 56 SENATE BILL 427
of the applicant is in the State; and 1
(4) the applicant is unable to obtain adequate business financing on 2
reasonable terms through normal lending channels because the applicant: 3
(i) belongs to a group that historically has been deprived of access 4
to normal economic or financial resources [because of race, color, creed, sex, religion, or 5
national origin]; 6
(ii) has an identifiable physical handicap that severely limits the 7
ability of the applicant to obtain financial assistance, but that does not limit the ability of 8
the applicant to perform the contract or other activity for which the applicant would be 9
receiving financial assistance; 10
(iii) has any other social or economic impediment that is beyond the 11
control of the applicant, but that does not limit the ability of the applicant to perform the 12
contract or other activity for which the applicant would be receiving financial assistance, 13
including: 14
1. the lack of formal education or financial capacity; or 15
2. geographical or regional economic distress; or 16
(iv) does not meet the established credit criteria of at least one 17
financial institution. 18
(b) If the applicant is not a sole proprietorship, to qualify for financial assistance 19
under this part at least 70% of the business enterprise shall be owned by individuals who 20
meet the qualifications for an individual applicant under subsection (a) of this section. 21
(c) An applicant for a loan guaranty shall have applied for and been denied a loan 22
by a financial institution. 23
[5–542.] 5–526. 24
(a) To apply for financial assistance from the Fund, a financial institution shall 25
submit to the [Authority] DEPARTMENT an application on the form that the [Authority] 26
DEPARTMENT provides WITH THE INFORMATION THE DEPARTMENT REQUIRES . 27
[(b) The application shall include: 28
(1) a detailed description of the proposed use of the loan proceeds, including 29
projected cash flow analyses, marketing plans, and appraisals; 30
(2) a detailed description of the funds available to the applicant; 31
SENATE BILL 427 57
(3) a detailed description of the proposed loan documents to be executed by 1
the financial institution and the applicant; 2
(4) a detailed description of the property proposed as collateral for the loan 3
and the financial institution’s certification of the property’s value; 4
(5) information that demonstrates the inability of the applicant to obtain 5
adequate financing on reasonable terms through normal lending channels; 6
(6) information that demonstrates the financial status of the applicant, 7
including: 8
(i) a current balance sheet; 9
(ii) a profit and loss statement; and 10
(iii) credit references; 11
(7) a proposed disbursement schedule; 12
(8) a proposed amortization schedule; 13
(9) a detailed description of the applicant’s experience in the trade or 14
business for which the loan and guarantee are requested; 15
(10) information that shows that the applicant satisfies the requirements of 16
§ 5–541 of this subtitle; and 17
(11) any other relevant information that the Authority requests.] 18
[(c)] (B) The [Authority] DEPARTMENT may require an applicant to provide an 19
audit report and balance sheet certified by an independent certified public accountant in 20
accordance with generally accepted accounting principles before the [Authority] 21
DEPARTMENT approves or denies the application. 22
[5–543.] 5–527. 23
A guaranty shall contain terms and conditions that the [Authority] DEPARTMENT 24
determines to be appropriate. 25
[5–544. 26
The Treasurer shall report each year to the Authority on: 27
(1) the status of the money invested under § 5–537 of this subtitle; 28
58 SENATE BILL 427
(2) the market value of the assets in the Fund as of the date of the report; 1
and 2
(3) the interest received from investments during the period covered by the 3
report.] 4
[5–545.] 5–528. 5
(a) A person may not knowingly make or cause to be made a false statement or 6
report in an application or document submitted to the [Authority] DEPARTMENT under 7
this part. 8
(b) A person may not knowingly make or cause to be made a false statement or 9
report to influence an action of the [Authority] DEPARTMENT under this part: 10
(1) on an application for financial assistance; or 11
(2) affecting financial assistance whether or not the assistance has already 12
been extended. 13
(c) A person who violates this section is guilty of a misdemeanor and on conviction 14
is subject to imprisonment not exceeding 5 years or a fine not exceeding $50,000 or both. 15
[5–546.] 5–529. 16
If an applicant or financial institution violates any provision of the loan documents 17
or ceases to meet the requirements of this part, on reasonable notice to the applicant or 18
financial institution, the [Authority] DEPARTMENT may: 19
(1) withhold from the applicant further loan payments until the applicant 20
complies with the documents or requirements; 21
(2) withhold from the financial institution further interest subsidy 22
payments until the financial institution complies with the loan documents or requirements; 23
and 24
(3) exercise any other remedy for which the loan documents provide. 25
5–530. RESERVED. 26
5–531. RESERVED. 27
Part V. Equity Participation Investment Program. 28
[5–549.] 5–532. 29
SENATE BILL 427 59
(a) In this part the following words have the meanings indicated. 1
(b) (1) “Enterprise” means a business entity proposing to carry on a business 2
in the State that meets the requirements of [§ 5–526] § 5–515 of this subtitle. 3
(2) “Enterprise” includes: 4
(i) a sole proprietorship; 5
(ii) a partnership; 6
(III) A LIMITED LIABILITY CORPORATION ; 7
[(iii)] (IV) a limited partnership; 8
[(iv)] (V) a corporation; or 9
[(v)] (VI) a joint venture. 10
(c) “Equity participation financing” includes investment or guaranty of 11
investment in an enterprise. 12
(d) “Existing business” means a business whose board of directors or owners 13
approve the sale of the business to an enterprise receiving equity participation financing. 14
(e) [“Fund” means the Equity Participation Investment Program Fund. 15
(f)] “Program” means the Equity Participation Investment Program. 16
[(g)] (F) “Qualified security” means: 17
(1) a note, bond, debenture, or other evidence of indebtedness; 18
(2) stock or other form of equity participation; 19
(3) a certificate of interest or participation in a profit–sharing agreement; 20
(4) an investment contract; 21
(5) a certificate of deposit for a security; 22
(6) a certificate of interest or participation in a patent or patent application 23
or in royalty or other payments under a patent or patent application; or 24
(7) an interest or instrument commonly known as a “security” or a 25
certificate for, receipt for, guaranty of, or option, warrant, or right to subscribe to or 26 60 SENATE BILL 427
purchase a qualified security. 1
[(h)] (G) “Small business” means a business that is classified as a small business 2
under the U.S. Small Business Administration size standards. 3
[5–550.] 5–533. 4
(a) The General Assembly finds that: 5
(1) small businesses have proven to be a fast growing and reliable form of 6
successful business expansion and successful new business creation; 7
(2) small businesses play a major role in the economy of the State and have 8
been a continuing source of increasing tax revenues and job opportunities; 9
(3) the growth of small businesses should be encouraged and should be an 10
integral part of the State’s economic development effort; 11
(4) socially or economically disadvantaged individuals often lack adequate 12
capital and are unable to obtain financing from financial institutions or venture capital 13
firms to begin and develop a small business, or to purchase an existing business; and 14
(5) promoting the creation and viability of small businesses and the 15
purchase of existing businesses by socially or economically disadvantaged individuals is in 16
the public interest. 17
(b) The purposes of the Equity Participation Investment Program are to: 18
(1) encourage and help socially or economically disadvantaged individuals 19
to create and develop small businesses and acquire existing businesses in the State; and 20
(2) assist small businesses that, because they do not meet the established 21
credit criteria of financial institutions, cannot obtain adequate business financing on 22
reasonable terms through normal financing channels. 23
[5–551.] 5–534. 24
There is an Equity Participation Investment Program in the [Department] FUND. 25
[5–552. 26
The Authority shall administer the Program.] 27
[5–553.] 5–535. 28
The [Authority] DEPARTMENT may: 29 SENATE BILL 427 61
(1) provide equity participation financing to help socially or economically 1
disadvantaged individuals in the State create and develop small businesses and acquire 2
existing businesses; 3
(2) buy, hold, and sell qualified securities; 4
(3) prepare, publish, and distribute technical studies, reports, and other 5
materials with or without charge; and 6
(4) provide and pay for advisory services and technical assistance that are 7
necessary or desirable to carry out the Program. 8
[5–554. 9
There is an Equity Participation Investment Program Fund.] 10
[5–555.] 5–536. 11
[(a) The Authority shall administer the Fund. 12
(b) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 13
under § 7–302 of the State Finance and Procurement Article. 14
(2) The Treasurer shall hold the Fund separately, and the Comptroller 15
shall account for the Fund. 16
(c) The Fund consists of: 17
(1) money drawn from the Small Business Development Guaranty Fund 18
established under Part IV of this subtitle; 19
(2) money the State appropriates to the Fund; 20
(3) money made available to the Fund through federal programs or private 21
contributions; 22
(4) proceeds from the sale, disposition, lease, or rental by the Authority of 23
collateral related to equity participation financing; 24
(5) premiums, fees, royalties, and repayments of principal, interest, and 25
investments paid by and on behalf of enterprises to the Authority under the terms of equity 26
participation financing; and 27
(6) any other money made available under the Program. 28
(d)] The [Authority] DEPARTMENT shall use the Fund to: 29 62 SENATE BILL 427
(1) purchase qualified securities that an enterprise issues to provide equity 1
participation financing as the Program allows; 2
(2) provide guaranties of investments to expand the capital resources of 3
enterprises; 4
(3) purchase advisory services and technical assistance consistent with the 5
Program; 6
(4) purchase securities in which a fiduciary of the State may lawfully 7
invest; 8
(5) provide equity participation financing as the Program allows; and 9
(6) pay for administrative, legal, and actuarial services that relate to the 10
Program. 11
[(e) The Fund shall be self–sustaining and shall achieve investment returns on its 12
portfolio in the form of: 13
(1) royalties from enterprises in amounts to be determined by the 14
Authority; and 15
(2) interest payments from any debt securities. 16
(f) As needed for the Program, the Authority may withdraw from time to time up 17
to a total of $2,000,000 from the Small Business Development Guaranty Fund and deposit 18
the withdrawal into the Fund. 19
(g) (1) The Treasurer shall invest the money of the Fund in the same manner 20
as other State money may be invested. 21
(2) Any investment earnings of the Fund shall be paid into the Fund. 22
(h) In accordance with § 2.5–109 of this article, the Authority shall submit a 23
report on the Program.] 24
[5–556.] 5–537. 25
[(a)] The [Authority] DEPARTMENT may provide equity participation financing 26
under the Program only after the enterprise submits an application [that contains a 27
business plan that meets the requirements of subsection (b) of this section] ON THE FORM 28
THAT THE DEPARTMENT PROVIDES W ITH THE INFORMATION THE DEPARTMENT 29
REQUIRES. 30
SENATE BILL 427 63
[(b) The business plan of an enterprise shall include: 1
(1) a description of the small business or existing business and its 2
management, product, and market; 3
(2) a statement of the amount, immediacy of need, and projected use of the 4
capital required; 5
(3) a statement of the potential economic impact of the purchase; 6
(4) information that relates to the satisfaction of the applicant’s 7
requirements of § 5–557(d) and (e) of this subtitle; and 8
(5) any other information the Authority requires.] 9
[5–557.] 5–538. 10
(a) (1) Under the Program the [Authority] DEPARTMENT may not: 11
(i) own securities representing more than 49% of the voting stock of 12
a small business or own an interest greater than 49% in a small business; or 13
(ii) own securities representing more than 49% of the voting stock of 14
an enterprise acquiring an existing business or own an interest greater than 49% in an 15
enterprise acquiring an existing business. 16
(2) The amount of the [Authority’s] DEPARTMENT ’S equity participation 17
financing in an enterprise may not exceed $2,000,000. 18
(3) Before providing equity participation financing, the [Authority] 19
DEPARTMENT shall find that there is a reasonable probability that the [Authority] 20
DEPARTMENT will recover its initial investment and an adequate return on investment 21
from the equity participation financing. 22
(4) The [Authority’s] DEPARTMENT ’S investment shall be recoverable 23
within 7 years after the equity participation financing. 24
(5) The [Authority’s] DEPARTMENT ’S recovery shall be the greater of: 25
(i) the current value of the percentage of the equity investment in 26
the enterprise; or 27
(ii) the amount of the initial investment in the enterprise. 28
(6) If there is a dispute between the borrower and the [Authority] 29
DEPARTMENT as to the value of the business entity at the time of recovery, the value shall 30 64 SENATE BILL 427
be determined after obtaining at least one independent appraisal of the value from an 1
appraiser selected from a list of at least three appraisers supplied by the [Authority] 2
DEPARTMENT . 3
(b) When an enterprise applies to the [Authority] DEPARTMENT for equity 4
participation financing to acquire an existing business, an enterprise or its principals shall 5
have: 6
(1) an equity investment equal to at least 5% of the total cost of acquisition; 7
and 8
(2) at least 3 years of successful experience with demonstrated 9
achievements and management responsibilities. 10
(c) The [Authority] DEPARTMENT may provide equity participation financing 11
for the acquisition of an existing business if the existing business: 12
(1) has been in existence for at least 5 years; 13
(2) has been profitable for at least 2 of the previous 3 years; 14
(3) has sufficient cash flow to service the debt and ensure adequate return 15
of the [Authority’s] DEPARTMENT ’S investment; 16
(4) has the capacity for growth and job creation; 17
(5) has its principal place of business in the State; and 18
(6) has a strong customer base. 19
(d) If the applicant enterprise is a sole proprietorship, to qualify for financial 20
assistance under this part, the applicant shall satisfy the [Authority] DEPARTMENT that: 21
(1) the applicant is of good moral character; 22
(2) the applicant has a reputation for financial responsibility, as 23
determined from creditors, employers, and other individuals who have personal knowledge 24
of the applicant; 25
(3) the applicant is a resident of the State or the principal place of business 26
of the applicant is in the State; and 27
(4) the applicant is unable to obtain adequate business financing on 28
reasonable terms through normal lending channels because the applicant: 29
(i) belongs to a group that historically has been deprived of access 30 SENATE BILL 427 65
to normal economic or financial resources [because of race, color, creed, sex, religion, or 1
national origin]; 2
(ii) has an identifiable physical handicap that severely limits the 3
ability of the applicant to obtain financial assistance, but that does not limit the ability of 4
the applicant to perform the contract or other activity for which the applicant would be 5
receiving financial assistance; 6
(iii) has any other social or economic impediment that is beyond the 7
control of the applicant, but that does not limit the ability of the applicant to perform the 8
contract or other activity for which the applicant would be receiving financial assistance, 9
including: 10
1. the lack of formal education or financial capacity; or 11
2. geographical or regional economic distress; or 12
(iv) does not meet the established credit or investment criteria of at 13
least one financial institution. 14
(e) If the applicant enterprise is not a sole proprietorship, to qualify for financial 15
assistance under this part, at least 51% of the enterprise shall be owned by individuals who 16
meet the qualifications for applicants under subsection (d) of this section. 17
[5–558.] 5–539. 18
The liability of the State and of the [Authority] DEPARTMENT in providing equity 19
participation financing is limited to investments under the Program. 20
[5–559. 21
(a) This section applies to financing provided under the Program during fiscal 22
years 2021 and 2022 for the purpose of relieving the adverse effects of the coronavirus 23
pandemic. 24
(b) The Authority may convert to a grant up to $50,000 of the financing described 25
under subsection (a) of this section that is provided to a small business.] 26
5–540. RESERVED. 27
5–541. RESERVED. 28
Part VI. Small Business Surety Bond Program. 29
[5–561.] 5–542. 30
66 SENATE BILL 427
(a) In this part the following words have the meanings indicated. 1
(b) [“Fund” means the Small Business Surety Bond Fund. 2
(c)] “Principal” means a small business entity that has assets, income, or 3
employees that do not exceed limits that the [Authority] DEPARTMENT sets by regulation. 4
[(d)] (C) “Program” means the Small Business Surety Bond Program. 5
[5–562.] 5–543. 6
There is a Small Business Surety Bond [Fund] PROGRAM WITHIN THE FUND. 7
[5–563. 8
(a) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 9
under § 7–302 of the State Finance and Procurement Article. 10
(2) The Treasurer shall hold the Fund separately, and the Comptroller 11
shall account for the Fund. 12
(b) (1) The Treasurer shall invest the money of the Fund in the same manner 13
as other State money may be invested. 14
(2) Any investment earnings of the Fund shall be credited to the Fund.] 15
[5–564. 16
The Fund consists of: 17
(1) money the State appropriates to the Fund; 18
(2) premiums, fees, and any other amounts the Authority receives with 19
respect to bonding assistance it provides; 20
(3) proceeds the Authority designates from the sale, lease, or other 21
disposition of property or contracts the Authority holds or acquires; and 22
(4) any other money available under the Program.] 23
[5–565. 24
The Fund shall be used: 25
(1) for the purposes described in the Program; and 26
SENATE BILL 427 67
(2) to pay expenses of the Authority in administering the Program.] 1
[5–566.] 5–544. 2
In administering the Program, the [Authority] DEPARTMENT may: 3
(1) use the services of other governmental units; 4
(2) contract for and accept loans and grants from the federal government, 5
the State government, or a local government and their units; and 6
(3) on the terms and conditions it considers advisable: 7
(i) acquire, manage, operate, dispose of, or otherwise deal with 8
property; 9
(ii) take assignments of rentals and leases; and 10
(iii) make contracts, leases, agreements, and arrangements that are 11
necessary or incidental to the performance of its duties. 12
[5–567.] 5–545. 13
The [Authority] DEPARTMENT may: 14
(1) prescribe or approve the form of and terms and conditions in 15
applications, guaranty agreements, or any other documents entered into by the [Authority] 16
DEPARTMENT , principals, or sureties under the Program; 17
(2) acquire or take assignments of documents executed, obtained, or 18
delivered in connection with any assistance the [Authority] DEPARTMENT provides under 19
the Program; 20
(3) set and collect premiums, fees, charges, costs, and expenses in 21
connection with any assistance the [Authority] DEPARTMENT provides under the 22
Program; 23
(4) adopt regulations to carry out the Program; and 24
(5) do anything necessary or convenient to carry out its powers and the 25
purposes of the Program. 26
[5–568.] 5–546. 27
(a) The [Authority] DEPARTMENT may guarantee a surety up to the lesser of 28
90% or [$2,250,000] $3,000,000 of its loss under a bid bond, payment bond, or performance 29 68 SENATE BILL 427
bond on a contract [financed by the federal government, a state government, a local 1
government, a private entity, or a utility that the Public Service Commission regulates]. 2
(b) The term of a guaranty under this part may not exceed the contract term, 3
including: 4
(1) the maintenance or warranty period required by the contract; and 5
(2) the period during which the surety may be liable for latent defects. 6
(c) The [Authority] DEPARTMENT may vary the terms and conditions of a 7
guaranty based on: 8
(1) the [Authority’s] DEPARTMENT ’S history of experience with a surety; 9
and 10
(2) any other factor the [Authority] DEPARTMENT considers relevant. 11
[5–569.] 5–547. 12
(a) The [Authority] DEPARTMENT may execute and perform a bid bond, 13
performance bond, and payment bond as a surety for the benefit of a principal in connection 14
with a contract [financed by the federal government or a state government, a local 15
government, a private entity, or a utility regulated by the Public Service Commission]. 16
(b) (1) This subsection does not apply if the sources of funding for the bonds 17
are grants. 18
(2) The bonds may not exceed [$2,500,000] $5,000,000 each. 19
(c) Bonds are subject to the approval of the [Authority] DEPARTMENT based on 20
the bond worthiness of the principal. 21
[5–570.] 5–548. 22
(a) The [Authority] DEPARTMENT may only approve a guaranty or a bond under 23
this part if the [Authority] DEPARTMENT determines that the contract, for which a bond 24
is sought to be guaranteed or issued, will have a substantial economic impact. 25
(b) To determine the economic impact of a contract, the [Authority] 26
DEPARTMENT may consider: 27
(1) the amount of the guaranty obligation; 28
(2) the terms of the bond to be guaranteed; 29
SENATE BILL 427 69
(3) the number of new jobs that the contract to be bonded will create; and 1
(4) any other factor that the [Authority] DEPARTMENT considers 2
relevant. 3
[5–571.] 5–549. 4
The [Authority] DEPARTMENT may establish a surety bonding line to issue or 5
guarantee multiple bonds to a principal within preapproved terms, conditions, and 6
limitations. 7
[5–572.] 5–550. 8
(a) To qualify for financial assistance under this part the principal shall satisfy 9
the [Authority] DEPARTMENT that the principal: 10
(1) is of good moral character or is owned by individuals of good moral 11
character; 12
(2) as determined from creditors, employers, and other individuals who 13
have personal knowledge, is an individual with a reputation for financial responsibility or 14
is owned by individuals, a majority of whom have a reputation for financial responsibility; 15
(3) is a resident of the State or the principal place of business of the 16
applicant is in the State; and 17
(4) is unable to obtain adequate bonding on reasonable terms through 18
normal channels. 19
(b) To qualify for financial assistance under this part the principal shall certify to 20
the [Authority] DEPARTMENT , and the [Authority] DEPARTMENT shall be satisfied, 21
that: 22
(1) a bond is required to bid on a contract or to serve as prime contractor 23
or subcontractor; 24
(2) a bond cannot be obtained on reasonable terms and conditions without 25
assistance from the Program; and 26
(3) the principal will not subcontract more than 75% of the monetary value 27
of the contract. 28
[5–573.] 5–551. 29
(a) To apply for financial assistance from the Program under this part, a principal 30
and, if applicable, a surety shall submit to the [Authority] DEPARTMENT an application 31 70 SENATE BILL 427
on the form that the [Authority] DEPARTMENT provides WITH THE INFORMATION THE 1
DEPARTMENT REQUIRES . 2
(b) [The application shall include: 3
(1) a detailed description of the project; 4
(2) an itemization of known and estimated costs; 5
(3) the total investment required to perform the contract; 6
(4) the working capital available to the principal; 7
(5) the bonding assistance sought; 8
(6) information that demonstrates the inability of the principal to obtain 9
adequate bonding on reasonable terms and conditions through normal channels without 10
assistance from the Program; 11
(7) a current balance sheet, a profit and loss statement, and credit 12
references about the financial status of the principal; 13
(8) a schedule of the status of existing and pending contracts; and 14
(9) any other relevant information the Authority requests. 15
(c)] The [Authority] DEPARTMENT may require an applicant to provide an 16
audited balance sheet before the [Authority] DEPARTMENT approves or denies the 17
application. 18
[(d)] (C) The [Authority] DEPARTMENT may not approve a guaranty or bond 19
under this part for a principal that has defaulted on a loan or guaranty from the [Authority] 20
DEPARTMENT unless: 21
(1) 2 years have passed since the time of the default; and 22
(2) the principal has cured any default in any financing program 23
administered by the Department. 24
[5–574.] 5–552. 25
(a) In its sole discretion, the [Authority] DEPARTMENT may set: 26
(1) the premiums and fees for providing bonding assistance under the 27
Program; and 28
SENATE BILL 427 71
(2) the terms and conditions when the premiums and fees are payable. 1
(b) The premiums and fees may vary in amount among transactions and at 2
different stages of a transaction. 3
(c) A determination by the Authority on premiums and fees remains effective for 4
as long as the bonding assistance provided by the [Authority] DEPARTMENT is in effect. 5
[5–575.] 5–553. 6
(a) A person may not knowingly make or cause to be made a false statement or 7
report in an application or document submitted to the [Authority] DEPARTMENT under 8
this part. 9
(b) A person may not knowingly make or cause to be made a false statement or 10
report to influence an action of the [Authority] DEPARTMENT under this part: 11
(1) on an application for assistance; or 12
(2) affecting bonding assistance whether or not the assistance has been 13
extended. 14
(c) A person who violates this section is guilty of a misdemeanor and on conviction 15
is subject to imprisonment not exceeding [6 months] 5 YEARS or a fine not exceeding 16
[$1,000] $50,000 or both. 17
5–1001. 18
(a) In this subtitle the following words have the meanings indicated. 19
(b) “Fund” means the Military Personnel and Veteran–Owned Small Business 20
No–Interest Loan Fund established under § 5–1006 of this subtitle. 21
[(c) “Service–disabled veteran” means a veteran with a disability that is 22
service–connected, as defined in 38 U.S.C. § 101(16). 23
(d) (1) “Small business employer” means an employer who employed an 24
average of 50 or fewer employees on business days during the calendar year preceding the 25
determination of eligibility for a loan under this subtitle. 26
(2) For purposes of paragraph (1) of this subsection, all persons treated as 27
a single employer under § 414(b), (c), (m), or (o) of the Internal Revenue Code shall be 28
treated as a single employer under this subtitle. 29
(e) “Veteran–owned small business” means a small business that is at least 51% 30
owned by a veteran as defined in 38 U.S.C. § 101(2).] 31 72 SENATE BILL 427
(C) “VETERAN–OWNED SMALL BUSINESS ENTERPRISE” HAS THE MEANING 1
STATED IN § 14–601 OF THE STATE FINANCE AND PROCUREMENT ARTICLE. 2
5–1002. 3
(a) Subject to the availability of funds, the Department, in consultation with the 4
Department of Veterans and Military Families, shall establish a program to provide 5
no–interest loans under this subtitle to[: 6
(1) small business employers of military reservists and National Guard 7
personnel who are called to active duty; 8
(2) businesses owned by military reservists and National Guard personnel 9
who are called to active duty; 10
(3) veteran–owned small businesses; and 11
(4) businesses employing a service–disabled veteran] VETERAN–OWNED 12
SMALL BUSINESS ENTER PRISES AS CERTIFIED BY THE GOVERNOR’S OFFICE OF 13
SMALL, MINORITY, AND WOMEN BUSINESS AFFAIRS. 14
(b) [If the availability of funds is limited, in making loans under this subtitle, the 15
Department, in consultation with the Department of Veterans and Military Families, shall 16
give priority to the businesses described in subsection (a)(2) and (3) of this section. 17
(c)] In making loans under this subtitle, the Department, in consultation with the 18
Department of Veterans and Military Families, shall take into consideration how to 19
maximize the number of [veterans, military reservists, and National Guard personnel] 20
VETERAN–OWNED SMALL BUSINESS ENTERPRISES who would benefit from loans made 21
under this subtitle. 22
[5–1003. 23
Loans shall be made under this subtitle for the purposes of: 24
(1) providing financial support to: 25
(i) a business owned by a military reservist or National Guard 26
member who is called to active duty; or 27
(ii) a small business employer of a military reservist or National 28
Guard member who is called to active duty; 29
(2) making the home, motor vehicle, or place of employment of a veteran 30
accessible to individuals with disabilities, including purchasing equipment necessary to 31 SENATE BILL 427 73
enable a business to employ a service–disabled veteran or to enable a service–disabled 1
veteran to operate a business; and 2
(3) defraying other necessary expenses, as determined by the Department 3
of Veterans and Military Families, incurred by: 4
(i) a business employing a service–disabled veteran; or 5
(ii) a veteran–owned small business.] 6
[5–1004. 7
(a) A loan made under this subtitle for the purpose of providing financial support 8
to a business owned by an individual who is called to active duty or to a small business 9
employer of an individual who is called to active duty: 10
(1) may be made at any time from the individual’s receipt of orders to 11
report to 6 months after the end of the individual’s active duty; and 12
(2) shall be subject to criteria for eligibility and priority established by the 13
Department of Veterans and Military Families, including the extent to which the individual 14
who is called to active duty is an essential employee of the business. 15
(b) A loan made under this subtitle for the purpose of making accessible to 16
individuals with disabilities the home, motor vehicle, or place of employment of a 17
service–disabled veteran may be made at any time.] 18
[5–1005. 19
(a) The Department shall administer the loan program authorized under this 20
subtitle. 21
(b) The Department of Veterans and Military Families shall establish eligibility 22
criteria for loans under this subtitle.] 23
[5–1006.] 5–1003. 24
(a) There is a Military Personnel and Veteran –Owned Small Business 25
No–Interest Loan Fund. 26
(b) The purpose of the Fund is to provide no–interest loans consistent with this 27
subtitle. 28
(c) The Secretary shall administer the Fund. 29
(d) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 30 74 SENATE BILL 427
under § 7–302 of the State Finance and Procurement Article. 1
(2) The State Treasurer shall hold the Fund separately, and the 2
Comptroller shall account for the Fund. 3
(3) Any investment earnings of the Fund shall be credited to the Fund. 4
(e) The Fund consists of: 5
(1) money the State appropriates to the Fund; 6
(2) money made available to the Fund through federal programs or private 7
contributions; 8
(3) repayments from loans provided by the Department under this subtitle; 9
(4) proceeds from the sale, disposition, lease, or rental of collateral related 10
to loans provided by the Department under this subtitle; and 11
(5) any other money made available to the Fund. 12
(f) The Department may use money in the Fund to provide loans to eligible 13
applicants under [§§ 5–1002 through 5–1004] § 5–1002 of this subtitle. 14
[5–1007. 15
(a) The Department shall adopt regulations to carry out this subtitle. 16
(b) The Department of Veterans and Military Families may adopt regulations 17
concerning eligibility criteria for loans under this subtitle.] 18
5–1204. 19
(a) (1) (ii) 4. If the money in the Account exceeds $1,000,000, any 20
money in excess of that amount shall be transferred to the [Small, Minority, and 21
Women–Owned Businesses] REINVEST FOR SUCCESS Account established under § 22
5–1501 of this title. 23
Subtitle 15. [Small, Minority, and Women–Owned Businesses] REINVEST FOR 24
SUCCESS Account. 25
5–1501. 26
(a) There is a [Small, Minority, and Women–Owned Businesses] REINVEST FOR 27
SUCCESS Account under the authority of the Department. 28
SENATE BILL 427 75
5–2401. 1
(a) In this subtitle the following words have the meanings indicated. 2
(b) “Fund” means the Industry 4.0 Technology Grant Fund. 3
(c) (1) “Industry 4.0 technology” means smart hardware and software 4
manufacturing technologies. 5
(2) “Industry 4.0 technology” includes: 6
(i) advanced sensor integration; 7
(ii) embedded software system applications; 8
(iii) robotics and autonomous equipment that collect data; 9
(iv) enterprise resource planning (ERP) and data analytics software; 10
(v) cloud computing and cybersecurity solutions; 11
(vi) artificial intelligence (AI) for continuous improvement of 12
efficiency and productivity; and 13
(vii) infrastructure required to implement a qualifying technology. 14
(d) “Program” means the Industry 4.0 Technology Grant Program. 15
(e) “Program administrator” means the entity that has authority to administer 16
the Program. 17
(f) “SME manufacturer” means a small or medi um–sized enterprise 18
manufacturer. 19
5–2402. 20
(a) There is an Industry 4.0 Technology Grant Program in the Department. 21
(b) The Department may enter into a memorandum of understanding with a 22
State–chartered corporation under Title 10 of this article to authorize the State–chartered 23
corporation to administer the Program in accordance with this subtitle. 24
(c) The purpose of the Program is to assist SME manufacturers in the purchase, 25
implementation, and related employee training of Industry 4.0 technology and related 26
infrastructure in order to increase productivity, efficiency, and competitiveness in the State 27
and national manufacturing environment. 28
76 SENATE BILL 427
(d) To qualify for a grant under the Program, an SME manufacturer shall submit 1
to the Program administrator an application that demonstrates that: 2
(1) the company is a qualifying SME manufacturer; 3
(2) the company has business operations in Maryland; and 4
(3) the company has been in existence for over 1 year. 5
(e) (1) [In] SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , IN 6
awarding grants under the Program, the Program administrator shall award grants on a 7
competitive basis based on: 8
(i) the proposed project’s alignment with adoption of Industry 4.0 9
technologies; 10
(ii) the applicant’s demonstrated overall commitment to, or strategy 11
for, Industry 4.0 technology adoption; 12
(iii) the demonstrated positive impact of the Industry 4.0 technology 13
on the applicant’s business operations and competitiveness; and 14
(iv) any other information requested by the Program administrator. 15
(2) THE DEPARTMENT SHALL PRIO RITIZE AWARDING GRAN TS TO 16
SME MANUFACTURERS ENGAGE D IN THE SECTORS AND ACTIVITY INCLUDED ON 17
THE LIST ESTABLISHED BY THE DEPARTMENT IN ACCORDA NCE WITH § 2.5–106 OF 18
THIS ARTICLE. 19
[(2)] (3) Subject to paragraph [(3)] (4) of this subsection, the Department 20
shall award to an eligible SME manufacturer a grant of at least $25,000, but not exceeding 21
$500,000. 22
[(3)] (4) (i) An SME manufacturer that receives a grant under this 23
subsection shall provide matching funds in the amounts specified under this paragraph. 24
(ii) The Department shall establish a sliding scale formula for the 25
matching funds required by an SME manufacturer to be provided a grant under this 26
section, with SME manufacturers with fewer employees requiring a lesser percentage and 27
SME manufacturers with more employees requiring a higher percentage. 28
[(4)] (5) (i) The Department shall reserve at least 20% of the funds 29
available during each fiscal year for awarding grants under this subsection to SME 30
manufacturers that employ 50 or fewer employees. 31
(ii) If the total amount of grants applied for by SME manufacturers 32 SENATE BILL 427 77
that employ 50 or fewer employees is less than the amount of funds reserved under 1
subparagraph (i) of this paragraph during a fiscal year, the Department may utilize the 2
balance of the reserved funds for awarding grants under this subsection to SME 3
manufacturers that employ more than 50 employees. 4
(f) (1) A grant awarded under the Program may be used for projects that 5
directly affect manufacturing processes and focus on investments in Industry 4.0 6
technology commercial–ready equipment through established vendors or related 7
infrastructure. 8
(2) Within 1 year after receiving a grant under the Program, an SME 9
manufacturer shall submit to the Department a letter that: 10
(i) describes how the grant funding was used; and 11
(ii) includes any invoices related to the implementation of the 12
Industry 4.0 technology or related infrastructure. 13
(3) The Department may require a grant recipient that fails to fulfill the 14
requirements of the grant to return all or part of the grant to the Program. 15
6–601. 16
(a) In this subtitle the following words have the meanings indicated. 17
(b) “Authority” means the Maryland E–Nnovation Initiative Fund Authority 18
established under § 6–605 of this subtitle. 19
(C) “ELIGIBLE FIELD OF STU DY” MEANS A FIELD OF STU DY FOCUSED ON 20
THE PRIORITY SECTORS AND ACTIVITY INCLUDE D ON THE LIST ESTABL ISHED IN 21
ACCORDANCE WITH § 2.5–106 OF THIS ARTICLE. 22
[(c)] (D) “Endowment proceeds” means those investment earnings accruing to a 23
research endowment of a nonprofit institution of higher education and available for 24
expenditure by the institution in accordance with § 6–612 of this subtitle. 25
[(d)] (E) “Fund” means the Maryland E–Nnovation Initiative Fund created 26
under § 6–604 of this subtitle. 27
[(e)] (F) “Governing board” has the meaning stated in § 10–101 of the Education 28
Article. 29
[(f)] (G) “Governing body” means: 30
(1) a governing board; 31
78 SENATE BILL 427
(2) the governing entity of a private nonprofit institution of higher 1
education; or 2
(3) the governing entity of a regional higher education center. 3
[(g)] (H) (1) “Nonprofit institution of higher education” means an institution 4
of postsecondary education located in the State, that receives State funds in the annual 5
operating budget and that generally limits enrollment to graduates of secondary schools 6
and awards degrees at either the associate, baccalaureate, or graduate level. 7
(2) “Nonprofit institution of higher education” includes public and private 8
nonprofit institutions of higher education located in the State. 9
[(h)] (I) “Private nonprofit institution of higher education” has the meaning 10
stated in § 10–101 of the Education Article. 11
[(i)] (J) “Program” means the Maryland E–Nnovation Initiative Program under 12
this subtitle. 13
[(j)] (K) “Qualified donation” means any private donation, gift, irrevocable 14
pledge, or bequest to a research endowment in accordance with § 6–613 of this subtitle. 15
[(k)] (L) “Regional higher education center” has the meaning stated in § 10–101 16
of the Education Article. 17
[(l)] (M) “Research endowment” means an account established at or 18
administered by a nonprofit institution of higher education in accordance with § 6–612 of 19
this subtitle. 20
6–604. 21
(a) There is a Maryland E–Nnovation Initiative Fund in the Department. 22
(b) The Secretary shall manage and supervise the Fund. 23
(c) (1) The Fund is a special, nonlapsing fund that is not subject to § 7–302 of 24
the State Finance and Procurement Article. 25
(2) The State Treasurer shall hold the Fund separately, and the 26
Comptroller shall account for the Fund. 27
(d) The Fund consists of: 28
(1) revenue distributed to the Fund under § 2–202(a)(1) of the Tax – 29
General Article; 30
SENATE BILL 427 79
(2) money appropriated in the State budget to the Fund; and 1
(3) any other money from any other source accepted for the benefit of the 2
Fund. 3
(e) For each of fiscal years 2016 through 2026, the Governor shall include in the 4
budget bill an appropriation to the Fund in an amount that when combined with the 5
amount estimated to be distributed to the Fund under subsection (d)(1) of this section 6
equals at least $8,500,000. 7
(f) The Department may use the Fund to: 8
(1) finance research endowments at nonprofit institutions of higher 9
education in [scientific and technical fields] AN ELIGIBLE FIELD of study; and 10
(2) pay the related administrative, legal, and actuarial expenses of the 11
Department. 12
(g) (1) The State Treasurer shall invest the money of the Fund in the same 13
manner as other State money may be invested. 14
(2) Any investment earnings of the Fund shall be credited to the Fund. 15
(h) Expenditures from the Fund may be made only in accordance with the State 16
budget. 17
6–614. 18
(a) Endowment proceeds shall be expended by a nonprofit institution of higher 19
education to further basic and applied research in [scientific and technical fields] AN 20
ELIGIBLE FIELD of study as designated by the Authority that offer promising and 21
significant economic impacts and the opportunity to develop clusters of technological 22
innovation in the State[, including: 23
(1) physical sciences; 24
(2) life and neuro sciences; 25
(3) engineering; 26
(4) mathematical and computational sciences; 27
(5) regulatory science; 28
(6) autonomous systems; 29
(7) aeronautical and space science; 30 80 SENATE BILL 427
(8) environmental sciences; 1
(9) behavioral and language science; 2
(10) health sciences; 3
(11) agriculture; or 4
(12) cybersecurity]. 5
(b) Endowment proceeds may be expended by a nonprofit institution of higher 6
education for: 7
(1) the payment of the base salaries of newly endowed department chairs, 8
new professorship positions, new research scientists, or new research staff positions, 9
including research technicians and support personnel, and to fund affiliated graduate or 10
undergraduate student research fellowships, if the positions or fellowships are engaged in 11
[the areas of research identified in subsection (a) of this section] AN ELIGIBLE FIELD OF 12
STUDY; or 13
(2) the purchase of basic infrastructure, including laboratory and scientific 14
equipment or other essential equipment and materials, related to an [area of research 15
identified in subsection (a) of this section] ELIGIBLE FIELD OF ST UDY. 16
(c) An individual in a position that is funded by endowment proceeds under 17
subsection (b)(1) of this section shall: 18
(1) work at least 20% of the year in support of a federal laboratory or 19
associated federal laboratory research support organization; 20
(2) hold a joint appointment or secondary position at another nonprofit 21
institution of higher education in the State; or 22
(3) work at least 20% of the year in support of entrepreneurial activities 23
with a company engaged in [one or more of the research areas identified in subsection (a) 24
of this section] AN ELIGIBLE FIELD OF STUDY. 25
(d) The Authority shall issue eligibility criteria regarding the expenditure of 26
endowment proceeds to pay the base salaries of personnel, fund student fellowships, and 27
purchase basic infrastructure. 28
PART I. MARYLAND ECONOMIC DEVELOPMENT CORPORATION . 29
10–101. 30
SENATE BILL 427 81
(a) In this subtitle the following words have the meanings indicated. 1
(b) “Board” means the Board of Directors of the Corporation. 2
(d) “Corporation” means the Maryland Economic Development Corporation. 3
10–115. 4
(A) The Corporation may: 5
(1) adopt bylaws for the conduct of its business; 6
(2) adopt a seal; 7
(3) maintain offices at a place it designates in the State; 8
(4) accept loans, grants, or assistance of any kind from the federal 9
government, a governmental unit, a college or university, or a private source; 10
(5) enter into contracts and other legal instruments; 11
(6) sue and be sued in its own name; 12
(7) acquire, purchase, hold, lease as lessee, and use any franchise, patent, 13
or license and real, personal, mixed, tangible, or intangible property, or any interest in 14
property, necessary or convenient to carry out its purposes; 15
(8) sell, lease as lessor, transfer, and dispose of its property or interest in 16
property; 17
(9) fix and collect rates, rentals, fees, royalties, and charges for services, 18
resources, and facilities it provides or makes available; 19
(10) with the owner’s permission, enter lands, waters, or premises to make 20
a survey, sounding, boring, or examination to accomplish a purpose authorized by this 21
subtitle; 22
(11) further define or limit the term “revenues” defined in § 10–101 of this 23
subtitle as the term applies to a particular project, financing, or other matter; 24
(12) create, own, control, or be a member of a corporation, limited liability 25
company, partnership, or other person, whether for–profit or nonprofit; 26
(13) exercise a power usually possessed by a private corporation in 27
performing similar functions unless to do so would conflict with State law; and 28
(14) do all things necessary or convenient to carry out the powers expressly 29 82 SENATE BILL 427
granted by this subtitle. 1
(B) THE CORPORATION MAY UTILIZE UP TO 5% OF THE ALLOCATED 2
APPROPRIATION FOR AD MINISTRATIVE COSTS F OR ANY PROJECT OR PR OGRAM 3
DIRECTED BY THE CORPORATION INCLUDED IN THE STATE’S ANNUAL OPERATING 4
OR CAPITAL BUDGETS . 5
10–133. 6
(a) On or before October 1 of each year, the Corporation shall submit a report to 7
the Governor[, the Maryland Economic Development Commission,] and, in accordance with 8
§ 2–1257 of the State Government Article, the General Assembly. 9
(b) The report shall include a complete operating and financial statement and 10
summarize the activities of the Corporation during the preceding fiscal year. 11
10–135. RESERVED. 12
10–136. RESERVED. 13
Part II. Regional Institution Strategic Enterprise Zone Program. 14
10–137. 15
(a) In this [subtitle] PART the following words have the meanings indicated. 16
(b) “Area” means a geographic area in one or more political subdivisions in the 17
State described by a closed perimeter boundary. 18
(c) “Fund” means the Regional Institution Strategic Enterprise Zone Fund 19
created under [§ 5–1408] § 10–144 of this subtitle. 20
(d) “Nonprofit organization” means an organization that is exempt or eligible for 21
exemption from taxation under § 501(c)(3) of the Internal Revenue Code. 22
(e) “Qualified institution” means an entity that is designated as a qualified 23
institution under [§ 5–1403] § 10–139 of this subtitle and may include: 24
(1) a regional higher education center as defined under § 10–101 of the 25
Education Article; 26
(2) an institution of higher education as defined under § 10–101 of the 27
Education Article; or 28
(3) a nonprofit organization that is affiliated with a federal agency. 29
SENATE BILL 427 83
(f) “RISE zone” means a geographic area in immediate proximity to a qualified 1
institution that is targeted for increased economic and community development that meets 2
the requirements of [§ 5–1404] § 10–140 of this subtitle and is designated as a Regional 3
Institution Strategic Enterprise zone by the [Secretary] CORPORATION under [§ 5–1404] 4
§ 10–140 of this subtitle. 5
10–138. 6
The purposes of the Regional Institution Strategic Enterprise Zone Program are to 7
access institutional assets that have a strong and demonstrated history of commitment to 8
economic development and revitalization in the communities in which they are located and 9
incentivize the location of innovative start–up businesses based on technology developed, 10
licensed, or poised for commercialization at or in collaboration with qualified Maryland 11
institutions. 12
10–139. 13
(a) An institution may apply to the [Secretary] CORPORATION to be designated 14
as a qualified institution. 15
(b) To be eligible for designation as a qualified institution, the applicant shall: 16
(1) evidence an intention: 17
(i) to make a significant financial investment or commitment in an 18
area of the State that the applicant intends to become a RISE zone; 19
(ii) to use the resources and expertise of the applicant to spur 20
economic development and community revitalization in an area of the State that the 21
applicant intends to become a RISE zone; and 22
(iii) to create a significant number of new jobs within an area of the 23
State that the applicant intends to become a RISE zone; 24
(2) have a demonstrated history of community involvement and economic 25
development within the communities that the applicant serves; and 26
(3) meet the minimum financial qualifications established by the 27
[Secretary] CORPORATION . 28
(c) If the applicant is a nonprofit organization that is not an institution of higher 29
education, the application shall demonstrate an affiliation with a federal agency. 30
(d) (1) In addition to the requirements under subsection (b) of this section, the 31
[Secretary] CORPORATION may establish by regulation any other requirements necessary 32
and appropriate in order for an applicant to be designated as a qualified institution. 33 84 SENATE BILL 427
(2) The [Secretary] CORPORATION shall adopt regulations that establish 1
factors for evaluating applications under subsection (b) of this section. 2
(e) In the form and content acceptable to the [Secretary] CORPORATION , an 3
applicant shall submit to the [Secretary] CORPORATION an application that contains the 4
information that the [Secretary] CORPORATION considers necessary to evaluate the 5
request for designation as a qualified institution. 6
(f) (1) Within 90 days after submission of an application under this section, 7
the [Secretary] CORPORATION shall approve or reject the application of an institution to 8
be designated as a qualified institution. 9
(2) At least 30 days before approval or rejection of an application under this 10
section, the [Secretary] CORPORATION shall notify the Legislative Policy Committee. 11
(3) The Legislative Policy Committee may provide advice to the [Secretary] 12
CORPORATION regarding the approval or rejection of an institution as a qualified 13
institution. 14
10–140. 15
(a) On or after July 1, [2015] 2025, a qualified institution shall apply jointly with 16
a county, a municipal corporation, or the economic development agency of a county or 17
municipal corporation to the [Secretary] CORPORATION to designate an area as a 18
Regional Institution Strategic Enterprise zone. 19
(b) The application shall: 20
(1) be in the form and contain the information that the [Secretary] 21
CORPORATION requires by regulation; 22
(2) state the boundaries of the area of the proposed RISE zone, not 23
exceeding 500 acres; 24
(3) describe the nexus of the RISE zone with the qualified institution; and 25
(4) contain a plan that identifies the target strategy and anticipated 26
economic impacts of the RISE zone. 27
(c) The [Secretary] CORPORATION may establish, by regulation, any other 28
requirements necessary and appropriate for an area to be designated as a RISE zone. 29
(d) (1) Unless a county in which a municipal corporation is located agrees to 30
designation of a RISE zone in the municipal corporation, qualified property in the 31
municipal corporation may not receive a tax credit against county property tax. 32 SENATE BILL 427 85
(2) Unless a municipal corporation located within a county agrees to 1
designation of a RISE zone within its boundaries, qualified property in the county may not 2
receive a tax credit against the municipal property tax. 3
(e) (1) Within 120 days after submission of an application under this section, 4
the [Secretary] CORPORATION shall: 5
(i) approve or reject an application for designation of a RISE zone, 6
including approval or modification of the proposed boundaries of the RISE zone; and 7
(ii) define the boundaries of the approved RISE zone. 8
(2) At least 45 days before approval or rejection of an application under this 9
section, the [Secretary] CORPORATION shall notify the Legislative Policy Committee. 10
(3) The Legislative Policy Committee may provide advice to the [Secretary] 11
CORPORATION regarding: 12
(i) the approval or rejection of the RISE zone; or 13
(ii) the boundaries of the RISE zone proposed by the [Secretary] 14
CORPORATION . 15
(f) (1) (i) Subject to subparagraph (ii) of this paragraph, the designation of 16
an area as a RISE zone is effective for 10 years. 17
(ii) Upon a joint application of a qualified institution, a county and, 18
if applicable, a municipal corporation, or the economic development agency of a county or 19
municipal corporation, the [Secretary] CORPORATION may renew a RISE zone for an 20
additional [5] 10 years. 21
(2) The [Secretary] CORPORATION may not: 22
(i) 1. except as provided in item 2 of this item, approve more 23
than three RISE zones in a single county or municipal corporation; or 24
2. approve more than four RISE zones in Baltimore City; or 25
(ii) approve a RISE zone the geographic area of which exceeds 500 26
acres. 27
(g) (1) A RISE zone may not be required to be in the immediate geographic 28
proximity of a qualified institution if an appropriate nexus for the increased economic and 29
community development is established with the qualified organization. 30
86 SENATE BILL 427
(2) If the proposed RISE zone is in a rural part of the State, a qualified 1
institution may not be required to be in the immediate area of the RISE zone. 2
(h) The [Secretary] CORPORATION may not designate a RISE zone in: 3
(1) a development district established under Title 12, Subtitle 2 of this 4
article; or 5
(2) a special taxing district established under Title 21 of the Local 6
Government Article or Section 62A of the Baltimore City Charter. 7
(i) The designation of an area as a RISE zone may not be construed 8
to limit or supersede a provision of a comprehensive plan, zoning ordinance, or other land 9
use policy adopted by a county, municipal corporation, or bicounty agency with land use 10
authority over the area designated as a RISE zone. 11
10–141. 12
(a) The [Secretary] CORPORATION shall assign to a RISE zone a business and 13
community development concierge who is an employee of the [Department] 14
CORPORATION . 15
(b) A business and community development concierge shall assist entities 16
locating in the RISE zone with: 17
(1) State, county, or municipal corporation permit and license applications; 18
(2) accessing existing programs at THE CORPORATION , the Department, 19
the Department of Housing and Community Development, the Maryland Department of 20
Labor, the Maryland Technology Development Corporation, or the Department of 21
Transportation; and 22
(3) any other activities the [Secretary] CORPORATION authorizes that 23
relate to the development of the RISE zone. 24
10–142. 25
(a) (1) To the extent provided for in this section, a business entity that locates 26
in a RISE zone is entitled to: 27
(i) for a business entity that locates in the RISE zone before January 28
1, 2023, the property tax credit under § 9–103.1 of the Tax – Property Article; 29
(ii) for a taxable year beginning before January 1, 2023, the income 30
tax credit under § 10–702 of the Tax – General Article; and 31
SENATE BILL 427 87
(iii) priority consideration for financial assistance from programs in 1
Subtitle 1 of this title. 2
(2) For purposes of the income tax credit authorized under paragraph (1)(ii) 3
of this subsection, the business entity is treated as being located in an enterprise zone. 4
(b) Subject to the limitations under subsection (a) of this section, a business entity 5
that moves into or locates in a RISE zone on or after the date that the zone is designated 6
under this [subtitle] PART may qualify for the incentives under this section. 7
(c) A business entity may not qualify for the incentives under subsection (a) of 8
this section unless the [Department] CORPORATION , in consultation with the county or 9
municipal corporation in which a RISE zone is located, certifies the business entity and its 10
location as consistent with the target strategy of the RISE zone. 11
(d) (1) Unless a business entity makes a significant capital investment or 12
expansion of its labor force after a RISE zone is designated, the incentives under this 13
section are not available to a business entity that was in a RISE zone before the date that 14
the zone is designated. 15
(2) The [Department] CORPORATION shall adopt regulations 16
establishing factors to determine if a business entity makes a significant capital investment 17
or expansion of its labor force under paragraph (1) of this subsection. 18
10–143. 19
(a) (1) (i) A qualified institution, THE CORPORATION , a county and, if 20
applicable, a municipal corporation, or the economic development agency of a county or 21
municipal corporation may establish a program to provide rental assistance to a business 22
entity that: 23
1. moves into or locates in a RISE zone on or after the date 24
that the zone is designated under this [subtitle] PART; AND 25
2. [has nexus with a qualified institution located in the RISE 26
zone; and 27
3. has been in active business not longer than 7 years] IS 28
ENCOMPASSED BY THE I NDUSTRY SECTORS AND ACTIVITIES INCLUDED ON THE LIST 29
DEVELOPED BY THE DEPARTMENT IN ACCORDA NCE WITH § 2.5–106 OF THIS 30
ARTICLE. 31
(ii) A business entity may not receive rental assistance under a 32
rental assistance program established in accordance with subparagraph (i) of this 33
paragraph for more than [3] 5 years. 34
88 SENATE BILL 427
(2) (i) A qualified institution, a county and, if applicable, a municipal 1
corporation, or the economic development agency of a county or municipal corporation that 2
establishes a rental assistance program in accordance with paragraph (1) of this subsection 3
may submit a request to receive a distribution [of matching funds] from the Fund. 4
(ii) The application shall include: 5
1. a description of the rental assistance program; 6
2. the amount of funding that the applicant has secured to 7
provide rental assistance under the rental assistance program; 8
3. the amount requested for distribution from the Fund in 9
accordance with this section; and 10
4. any other information requested by the [Department] 11
CORPORATION . 12
(iii) The applicant shall submit the application on or before the date 13
that the [Department] CORPORATION specifies. 14
(b) (1) The [Department] CORPORATION shall review each request for 15
distribution [of matching funds] from the Fund for compliance with the provisions of this 16
section and [Department] CORPORATION regulations. 17
(2) [Subject to the availability of funds in the Fund and paragraph (3) of 18
this subsection, if the Department approves a request for distribution of matching funds 19
from the Fund, the Department shall distribute to a fund dedicated to the applicant’s rental 20
assistance program an amount equal to three times the amount of funding specified under 21
subsection (a)(2)(ii)2 of this section. 22
(3) Except as provided in subsection (c) of this section, the Department] 23
THE CORPORATION shall make available not more than 25% of cumulative program funds 24
from the Fund for rental assistance programs in a single RISE zone. 25
(c) (1) Within 90 days after approval by the [Department] CORPORATION of 26
a request for [matching] funds under subsection (a) of this section, the applicant shall 27
deposit an amount equal to or greater than the amount specified under subsection (a)(2)(ii)2 28
of this section into a fund dedicated to the applicant’s rental assistance program. 29
(2) If an applicant fails to have deposited the amount required under 30
paragraph (1) of this subsection, any portion of funds allocated to the applicant that has 31
not been distributed shall be reallocated to another applicant in accordance with this 32
section. 33
(3) If the [Department] CORPORATION fails to allocate the funds in the 34 SENATE BILL 427 89
Fund under this [subtitle] PART and rental assistance programs in a single RISE zone 1
have previously received 25% of cumulative program funds from the Fund, the 2
[Department] CORPORATION may distribute additional funds to applicants for that RISE 3
zone in accordance with this [subtitle] PART. 4
(d) (1) On or before September 15 each year, a rental assistance program that 5
has received a distribution of funds from the Fund shall submit to the [Department] 6
CORPORATION an annual report in the form and containing the information required by 7
the [Secretary] CORPORATION . 8
(2) The report required under paragraph (1) of this subsection shall detail 9
the use of funds received under this section for the immediately preceding fiscal year and 10
provide an update on any funds that were not disbursed during that fiscal year. 11
(3) The [Department] CORPORATION may not distribute [matching] 12
funds from the Fund to a rental assistance program under this section if the rental 13
assistance program has failed to submit the report required under paragraph (1) of this 14
subsection. 15
(e) A rental assistance program that receives a distribution [of matching funds] 16
from the Fund shall be subject to an audit at least once every 3 years by an independent 17
certified public accountant that the applicant and the [Department] CORPORATION select. 18
(f) Based on the findings of an audit conducted under subsection (e) of this 19
section, the [Department] CORPORATION may make an assessment against a qualified 20
institution, a county, a municipal corporation, or an economic development agency to 21
recapture any misused or undistributed funds. 22
10–144. 23
(a) There is a Regional Institution Strategic Enterprise Fund in the 24
[Department] CORPORATION . 25
(b) The [Secretary] EXECUTIVE DIRECTOR OF THE CORPORATION shall 26
manage and supervise the Fund. 27
(c) (1) The Fund is a special, nonlapsing fund that is not subject to § 7–302 of 28
the State Finance and Procurement Article. 29
(2) The State Treasurer shall hold the Fund separately, and the 30
Comptroller shall account for the Fund. 31
(d) The Fund consists of: 32
(1) money appropriated in the State budget to the Fund; and 33
90 SENATE BILL 427
(2) any other money from any other source accepted for the benefit of the 1
Fund. 2
(e) The [Department] CORPORATION may use the Fund to: 3
(1) finance, in coordination with qualified institutions, counties, and 4
municipal corporations, the provision of rental assistance to business entities located in 5
RISE zones; and 6
(2) pay the related administrative, legal, and actuarial expenses of the 7
[Department] CORPORATION . 8
(f) (1) The State Treasurer shall invest the money of the Fund in the same 9
manner as other State money may be invested. 10
(2) Any investment earnings of the Fund shall be credited to the Fund. 11
(g) Expenditures from the Fund may be made only in accordance with the State 12
budget. 13
10–145. 14
[In accordance with § 2.5–109 of this article, the Department] THE CORPORATION 15
shall submit a report on the effectiveness of the tax incentives authorized under this 16
[subtitle] PART WITH THE ANNUAL REPORT SU BMITTED IN ACCORDANC E WITH § 17
10–133 OF THIS SUBTITLE. 18
10–146. 19
This [subtitle] PART and the tax credits and benefits authorized under it shall 20
terminate on January 1, 2030. 21
10–147. RESERVED. 22
10–148. RESERVED. 23
Part III. Build Our Future Grant Pilot Program. 24
10–149. 25
(a) In this [subtitle] PART the following words have the meanings indicated. 26
10–150. 27
(a) There is a Build Our Future Grant Pilot Program in the [Department] 28
CORPORATION . 29 SENATE BILL 427 91
(b) The purpose of the Program is to provide grant funding for infrastructure 1
projects intended to support innovation in an eligible technology sector. 2
(c) Grants may be awarded to private companies, nonprofit entities, local 3
governments, or colleges and universities in the State. 4
(d) The [Department] CORPORATION shall administer the Program. 5
10–151. 6
(a) To carry out the purpose of the Program, the [Department] CORPORATION 7
may award grants in accordance with this [subtitle] PART to approved recipients carrying 8
out infrastructure projects intended to support innovation in any of the [following eligible 9
technology sectors: 10
(1) advanced manufacturing; 11
(2) aerospace; 12
(3) agriculture; 13
(4) artificial intelligence; 14
(5) biotechnology; 15
(6) blue technology; 16
(7) cybersecurity; 17
(8) defense; 18
(9) energy and sustainability; 19
(10) life sciences; 20
(11) quantum; and 21
(12) sensors and robotics] INDUSTRY SECTORS AND ACTIVITIES 22
INCLUDED ON THE LIST DEVELOPED BY THE DEPARTMENT IN ACCORDA NCE WITH § 23
2.5–106 OF THIS ARTICLE . 24
(b) Examples of eligible projects include: 25
(1) sensitive compartmented information facilities; 26
92 SENATE BILL 427
(2) wet laboratories; 1
(3) cyber ranges; 2
(4) prototype manufacturing centers; and 3
(5) other specialized workforce training, skill certification, or 4
research–related spaces. 5
(c) Grant awards may be used to defray the cost a grantee incurs to acquire, 6
construct, rehabilitate, install, improve, or equip an eligible innovation infrastructure 7
project. 8
(d) (1) A single entity may be awarded not more than $2,000,000 in grant 9
funds in a fiscal year. 10
(2) (i) For a grant award up to $1,000,000, a grantee shall provide 11
matching funds that are at least 200% of the grant amount. 12
(ii) For a grant award exceeding $1,000,000, and up to $2,000,000, a 13
grantee shall provide matching funds that are at least 400% of the grant amount. 14
(iii) Funds received by a grantee through other State grant programs 15
are not counted toward the grantee’s matching funds requirement. 16
(3) A grantee must demonstrate an ability to cover the full estimated costs 17
of the project for which the grant is awarded. 18
(4) (i) Not more than 50% of the appropriation to the Fund in a fiscal 19
year may be awarded to colleges and universities in that fiscal year. 20
(ii) Grants to colleges and universities from the Fund must be 21
awarded to projects that: 22
1. are performed in collaboration with private industry; or 23
2. offer the prospect of significant economic impact and the 24
opportunity to develop entrepreneurship or clusters of technological innovation in the 25
State. 26
(E) WHEN PROVIDING FUNDIN G FROM THE FUND, THE CORPORATION 27
SHALL PRIORITIZE APP LICANTS LOCATED IN A REGIONAL INSTITUTION STRATEGIC 28
ENTERPRISE ZONE THAT IS DESIGNATED UNDER PART II OF THIS SUBTITLE. 29
10–152. 30
A grantee may be subject to repayment of the grant in an amount determined by the 31 SENATE BILL 427 93
[Department] CORPORATION if the grantee fails to: 1
(1) comply with reporting requirements established by the [Department] 2
CORPORATION ; or 3
(2) demonstrate appropriate use of grant funds. 4
10–153. 5
(a) There is a Build Our Future Grant Fund. 6
(b) The [Department] CORPORATION shall administer the Fund. 7
(c) The purpose of the Fund is to provide grants for infrastructure projects to 8
support innovation in eligible technology sectors under this [subtitle] PART. 9
(d) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 10
under § 7–302 of the State Finance and Procurement Article. 11
(2) The State Treasurer shall hold the Fund separately, and the 12
Comptroller shall account for the Fund. 13
(e) The Fund consists of: 14
(1) money appropriated in the State budget to the Fund; 15
(2) any interest earnings of the Fund; and 16
(3) any other money from any other source accepted for the benefit of the 17
Fund. 18
(f) (1) The Fund may be used to: 19
(i) provide grants in accordance with this [subtitle] PART; and 20
(ii) pay the administrative costs of the Program. 21
(2) During each fiscal year, the Department may use not more than 10% of 22
the money appropriated to the Fund to administer the Program. 23
(g) (1) The State Treasurer shall invest the money of the Fund in the same 24
manner as other State money may be invested. 25
(2) Any interest earnings of the Fund shall be credited to the Fund. 26
(h) Expenditures from the Fund may be made only in accordance with the State 27 94 SENATE BILL 427
budget. 1
10–154. 2
On or before July 1, [2026] 2029, the [Department] CORPORATION shall report to 3
the Governor and, in accordance with § 2–1257 of the State Government Article, the 4
General Assembly on the projects funded through and the economic impact of the Program. 5
10–155. 6
The [Secretary] CORPORATION may adopt regulations to carry out this [subtitle] 7
PART. 8
10–401. 9
(a) In this subtitle the following words have the meanings indicated. 10
(c) “Corporation” means the Maryland Technology Development Corporation. 11
10–408. 12
(a) The Corporation shall adopt regulations establishing: 13
(1) the investment committee; 14
(2) the responsibilities of the investment committee, INCLUDING A 15
PROCESS FOR CONSIDER ING REMEDIES , INCLUDING DIVESTMENT , FOR 16
INVESTMENTS IN A BUS INESS THAT NO LONGER MEETS THE DEFINITION OF A 17
QUALIFIED BUSINESS ; and 18
(3) the procedures for the appointment of investment committee members. 19
10–415. 20
(a) (1) On or before October 1 of each year, the Corporation shall report to the 21
Governor[, the Maryland Economic Development Commission,] and, in accordance with § 22
2–1257 of the State Government Article, the General Assembly. 23
(2) The report required under this subsection shall include: 24
(i) a complete operating and financial statement covering the 25
Corporation’s operations; 26
(ii) a summary of the Corporation’s activities during the preceding 27
fiscal year; 28
SENATE BILL 427 95
(iii) information on all salaries and any incentives approved by the 1
Board for Corporation employees; 2
(iv) information on outreach, training, mentorship, support, and 3
investment in minority and women–owned qualified businesses, including support for 4
marketing by the Maryland [Small Business Development Financing Authority ] 5
ECONOMIC INCLUSION FUND; 6
(v) information on entities that have current investments and 7
entities that received funding or investments in the current year on the: 8
1. principal business operations; 9
2. number of employees in the State and the number of 10
employees outside the State; 11
3. capital or other investments made in the State; and 12
4. proposed and actual job creation or capital investment in 13
the State as a result of the investment or support; 14
(vi) a list of businesses that have received funding that would no 15
longer qualify as a qualified business; and 16
(vii) information on the creation of and appointments made to an 17
advisory committee and the responsibilities of the advisory committee and members of the 18
committee. 19
(b) (1) On or before October 1 each year, beginning in 2023, and every 6 20
months thereafter, the Corporation shall report to the Governor[, the Maryland Economic 21
Development Commission,] and, in accordance with § 2–1257 of the State Government 22
Article, the Joint Audit and Evaluation Committee and the General Assembly. 23
(2) The report required under this subsection shall include a list of the 24
qualified businesses or other businesses receiving support through programs administered 25
by the Corporation, including those receiving investments made under § 21–123.2 of the 26
State Personnel and Pensions Article. 27
(3) The list of qualified businesses or other businesses receiving support 28
shall include for each business: 29
(i) the number of employees in the State; 30
(ii) the number of employees outside the State; 31
(iii) the capital or other investments made in the State; and 32
96 SENATE BILL 427
(iv) proposed job creation or capital investment in the State as a 1
result of the investment or support. 2
(c) (1) On or before October 1, 2024, and each October 1 thereafter, the 3
Corporation shall report to the Governor, the Maryland Economic Development 4
Commission, and, in accordance with § 2–1257 of the State Government Article, the 5
General Assembly on the following information from the immediately preceding fiscal year: 6
(i) the number of applications the Corporation received; 7
(ii) the amount of investment funding that was available at the 8
beginning of the fiscal year; 9
(iii) the amount of investment funding that was available at the end 10
of the fiscal year; 11
(iv) the amount of investment funding that was requested; 12
(v) the number of applicants the Corporation invested in; and 13
(vi) the amount of investment funding the Commission awarded. 14
(2) The information reported in accordance with paragraph (1) of this 15
subsection shall: 16
(i) specify which applications and investments were from social 17
impact funds, seed funds, and the Maryland Venture Fund; and 18
(ii) if available, provide information that has been de–identified and 19
disaggregated on applicants and qualified business founders by race, ethnicity, age, gender, 20
disability status, veteran status, and geographic location and the degree to which 21
applicants and founders identify with more than one demographic category. 22
10–470. 23
(a) The Corporation may require that all or part of a grant be repaid, with interest 24
at a rate the Corporation sets, when conditions specified by the Corporation occur. 25
(b) (1) Whenever the Corporation is authorized by law to make a grant, 26
including a grant from the Economic Development Opportunities Program Account 27
authorized under § 7–314 of the State Finance and Procurement Article, the Corporation 28
may use money appropriated for the grant to make an equity investment in a qualified 29
business. 30
(2) (i) Except as provided in subparagraph (ii) of this paragraph and 31
Subtitle 4A of this title, in making an equity investment under this subtitle or Subtitle 4A 32
of this title, the Corporation may not acquire an ownership interest in an enterprise that 33 SENATE BILL 427 97
exceeds 25%. 1
(ii) In making an equity investment under this subtitle or Subtitle 2
4A of this title in one or more venture or private equity firms, the Corporation may acquire 3
an ownership interest exceeding 25%. 4
(3) Within 15 years after making an equity investment under this subtitle 5
or Subtitle 4A of this title, the Corporation [shall], ON REVIEW AND APPROV AL OF THE 6
CORPORATION ’S INVESTMENT COMMITT EE, MAY divest itself of that investment OR 7
PURSUE ANOTHER REMEDY THAT IS IN THE CORPORATION ’S BEST INTEREST . 8
(4) The liability of the State and the Corporation in making an equity 9
investment under this subtitle or Subtitle 4A of this title is limited to the amount of that 10
investment. 11
10–501. 12
(a) In this subtitle the following words have the meanings indicated. 13
(f) “Corporation” means the Maryland Agricultural and Resource –Based 14
Industry Development Corporation. 15
10–528. 16
(a) On or before October 1 of each year, the Corporation shall report on its status 17
to the Governor, the Maryland Agricultural Commission[, the Maryland Economic 18
Development Commission,] and, in accordance with § 2–1257 of the State Government 19
Article, the General Assembly. 20
(b) The report shall include a complete operating and financial statement and a 21
summary of the Corporation’s activities during the preceding fiscal year. 22
12–201. 23
(a) In this subtitle the following words have the meanings indicated. 24
(k) “MEDCO obligation” means a bond, note, or other similar instrument that the 25
Maryland Economic Development Corporation issues under authority other than this 26
subtitle to finance the cost of infrastructure improvements located in or supporting a 27
transit–oriented development, a sustainable community, a RISE zone, [or] a State hospital 28
redevelopment, OR A PROJECT ALLOWABLE UN DER THE BUILD OUR FUTURE 29
PROGRAM ESTABLISHED B Y § 10–150 OF THIS ARTICLE . 30
(p) “RISE zone” means an area designated as a Regional Institution Strategic 31
Enterprise zone under [§ 5–1404] § 10–140 of this article. 32
98 SENATE BILL 427
12–207. 1
(a) Except as provided in subsections (b) and (e) of this section, bond proceeds 2
may be used only: 3
(1) to buy, lease, condemn, or otherwise acquire property, or an interest in 4
property: 5
(i) in the development district, a RISE zone, or a sustainable 6
community; or 7
(ii) needed for a right–of–way or other easement to or from the 8
development district, a RISE zone, or a sustainable community; 9
(2) for site removal; 10
(3) for surveys and studies; 11
(4) to relocate businesses or residents; 12
(5) to install utilities, construct parks and playgrounds, and for other 13
needed improvements including: 14
(i) roads to, from, or in the development district; 15
(ii) parking; and 16
(iii) lighting; 17
(6) to construct or rehabilitate buildings for a governmental purpose or use; 18
(7) for reserves or capitalized interest; 19
(8) for necessary costs to issue bonds; and 20
(9) to pay the principal of and interest on loans, advances, or indebtedness 21
that a political subdivision incurs for a purpose specified in this section. 22
(b) (1) This subsection applies to a sustainable community identified under § 23
12–203 of this subtitle. 24
(2) In addition to the purposes under subsection (a) of this section and 25
without limiting the purposes in subsection (a) of this section, bond proceeds may be used 26
in a sustainable community for: 27
(i) historic preservation or rehabilitation; 28
SENATE BILL 427 99
(ii) environmental remediation, demolition, and site preparation; 1
(iii) parking lots, facilities, or structures of any type whether for 2
public or private use; 3
(iv) highways as defined in § 8–101 of the Transportation Article or 4
transit service as defined in § 7–101 of the Transportation Article that support sustainable 5
communities; 6
(v) schools; 7
(vi) affordable or mixed income housing; [and] 8
(vii) stormwater management and storm drain facilities; AND 9
(VIII) INNOVATION CENTERS , SENSITIVE COMPARTMEN TED 10
INFORMATION FACILITI ES, AND STRUCTURES OF AN Y TYPE THAT SUPPORT THE 11
RETENTION, EXPANSION, OR ATTRACTION OF BUS INESS ACTIVITIES INC LUDED ON 12
THE LIST OF INDUSTRI ES AND ACTIVITIES DE VELOPED BY THE DEPARTMENT IN 13
ACCORDANCE WITH § 2.5–106 OF THIS ARTICLE . 14
(e) (1) This subsection applies to a RISE zone identified under § 12–203 of this 15
subtitle. 16
(2) In addition to the purposes under subsection (a) of this section and 17
without limiting the purposes in subsection (a) of this section, bond proceeds may be used 18
in a RISE zone for: 19
(i) historic preservation or rehabilitation; 20
(ii) environmental remediation, demolition, and site preparation; 21
(iii) parking lots, facilities, or structures of any type whether for 22
public or private use; 23
(iv) schools; 24
(v) affordable or mixed income housing; 25
(vi) stormwater management and storm drain facilities; 26
(vii) innovation centers, SENSITIVE COMPARTMENT ED 27
INFORMATION FACILITIES, and laboratory facilities, or structures of any type whether 28
for public or private use, including maintenance and installation of improvements in the 29
structures and services that support the purposes of the RISE zone program; and 30
100 SENATE BILL 427
(viii) any other facilities or structures of any type whether for public 1
or private use that support the purposes of the RISE zone program. 2
16–102. 3
(d) (2) Any money that has not been distributed or awarded on or before 4
December 31, 2024, shall revert to the Maryland Economic [Development Assistance] 5
COMPETITIVENESS Fund. 6
Article – Corporations and Associations 7
1–203. 8
(b) (14) BEGINNING IN FISCAL Y EAR 2026, THE DEPARTMENT SHALL 9
WAIVE THE FILING FEE FOR A BUSINESS ENTIT Y DESCRIBED UNDER PARA GRAPH 10
(3)(II) OF THIS SUBSECTION F OR EACH YEAR THAT TH E ENTITY PROVIDES EV IDENCE 11
TO THE DEPARTMENT THAT THE E NTITY: 12
(I) HAS LOCATED WITHIN A REGIONAL INSTITUTION 13
STRATEGIC ENTERPRISE ZONE THAT IS DESIGNATED UNDER TITLE 10, SUBTITLE 1 14
OF THE ECONOMIC DEVELOPMENT ARTICLE WITHIN 3 YEARS OF THE DATE BY 15
WHICH THE FILING FEE IS DUE; AND 16
(II) IS ENCOMPASSED BY THE INDUSTRY SECTORS AND 17
ACTIVITIES INCLUDED ON THE LIST DEVELOPE D BY THE DEPARTMENT OF 18
COMMERCE IN ACCORDANC E WITH § 2.5–106 OF THE ECONOMIC DEVELOPMENT 19
ARTICLE. 20
[(14)] (15) There is no processing fee for documents filed to dissolve, cancel, 21
or terminate an entity under this subsection. 22
Article – Education 23
9.5–113.1. 24
(a) (1) In this section the following words have the meanings indicated. 25
(2) “CHILD CARE SLOT ” MEANS SPACE AVAILABL E FOR A CHILD TO 26
ENROLL FOR A FULL 8–HOUR DAY OF CHILD CA RE. 27
(3) “ENOUGH ELIGIBLE NEIGHBORHOO D” MEANS AN AREA THAT 28
HAS BEEN DESIGNATED IN ACCORDANCE WITH § 9–2803 OF THE STATE 29
GOVERNMENT ARTICLE. 30
[(2)] (4) “Fund” means the Child Care Capital Support Revolving Loan 31 SENATE BILL 427 101
Fund. 1
[(3)] (5) “Rural community” has the meaning stated in § 2–207 of the 2
State Finance and Procurement Article. 3
(6) “SECRETARY” MEANS THE SECRETARY OF COMMERCE. 4
(b) There is a Child Care Capital Support Revolving Loan Fund. 5
(c) The purpose of the Fund is to provide no–interest loans for capital expenses 6
to child care providers who participate in the Child Care Scholarship Program under § 7
9.5–113 of this subtitle. 8
(d) The Department of Commerce shall administer the Fund with support from 9
the Department. 10
(e) (1) The Fund is a special, nonlapsing fund that is not subject to § 7–302 of 11
the State Finance and Procurement Article that shall be available in perpetuity for the 12
purpose of providing loans in accordance with the provisions of this section. 13
(2) The State Treasurer shall hold the Fund separately, and the 14
Comptroller shall account for the Fund. 15
(f) The Fund consists of: 16
(1) Money appropriated in the State budget to the Fund; 17
(2) Any interest earnings of the Fund; 18
(3) Repayments of principal and interest from loans made from the Fund; 19
and 20
(4) Any other money from any other source accepted for the benefit of the 21
Fund. 22
(g) (1) The Fund may be used only to provide no–interest loans to child care 23
providers for capital expenses related to a child care facility, including: 24
(i) Acquisition; 25
(ii) Expansion; 26
(iii) [Renovations; and 27
(iv)] New construction; AND 28
102 SENATE BILL 427
(IV) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION, 1
RENOVATIONS . 2
[(2) (i) Except as provided in subparagraph (ii) of this paragraph, child 3
care providers shall repay loans from the Fund not later than 5 years after receiving a loan 4
from the Fund. 5
(ii) The Department of Commerce may establish a financial 6
hardship exemption to allow a child care provider additional time to repay a loan from the 7
Fund. 8
(iii) If a hardship exemption is not granted, the Department of 9
Commerce shall apply its normal policy regarding assisting child care providers with past 10
due loan payments.] 11
(2) LOANS PROVIDED FOR RE NOVATIONS UNDER PAR AGRAPH (1)(IV) 12
OF THIS SUBSECTION M AY: 13
(I) BE PROVIDED ONLY TO A FAMILY CHILD CARE HO ME OR 14
LARGE FAMILY CHILD C ARE HOME; AND 15
(II) BE PROVIDED ONLY FOR RENOVATIONS NECESSAR Y TO 16
MAINTAIN LICENSURE B Y THE DEPARTMENT AS DEMONST RATED THROUGH 17
DOCUMENTS R EQUIRED BY THE DEPARTMENT OF COMMERCE AND VERIFIED BY 18
THE DEPARTMENT . 19
(3) (I) THE TERM OF A LOAN FR OM THE FUND SHALL BE 20
DETERMINED BY THE DEPARTMENT OF COMMERCE. 21
(II) THE TERM SET BY THE DEPARTMENT OF COMMERCE SHALL 22
BE FOR NOT LESS THAN 5 YEARS. 23
(4) UP TO $50,000 OF A LOAN PROVIDED T O A FAMILY CHILD CAR E 24
HOME OR LARGE FAMILY CHIL D CARE HOME MAY BE CONVERTED TO A GRANT ON 25
APPROVAL BY THE DEPARTMENT OF COMMERCE IN ACCORDANC E WITH 26
SUBSECTION (I)(2) OF THIS SECTION. 27
(h) (1) The State Treasurer shall invest the money of the Fund in the same 28
manner as other State money may be invested. 29
(2) Any interest earnings of the Fund shall be credited to the Fund. 30
(i) (1) The Department of Commerce, in consultation with the Department, 31
shall establish application procedures and eligibility criteria for loans from the Fund, in 32
addition to the requirement that a child care provider be a participant in the Child Care 33 SENATE BILL 427 103
Scholarship Program under § 9.5–113 of this subtitle. 1
(2) [The] IN ORDER TO HAVE A LO AN OR PART OF A LOAN CONVERT ED 2
TO A GRANT UNDER SUBSECTION (G)(4) OF THIS SECTION , A FAMILY CHILD CARE 3
HOME OR LARGE FAMILY CHIL D CARE HOME SHALL DEMONSTRATE AT TAINMENT OF 4
AT LEAST A QUALITY R ATING 3 ON THE MARYLAND EXCELS PROGRAM. 5
(3) EXCEPT AS PROVIDED IN PARAGRAPH (4) OF THIS SUBSECTION , 6
THE Department OF COMMERCE shall prioritize applicant criteria in the following order 7
when providing funding from the Fund: 8
[(i) Child care providers that are located in: 9
1. Underserved communities; or 10
2. Areas designated by the Department as areas lacking 11
child care slots; 12
(ii) Child care providers that are located in rural communities; 13
(iii) Child care providers that serve primarily low –income 14
populations in areas of high poverty;] 15
(I) CHILD CARE PROVIDERS THAT WILL INCREASE THE 16
NUMBER OF AVAILABLE CHILD CARE SLOTS THE CHILD CARE PROVIDER MAY OFFER; 17
(II) CHILD CARE PROVIDERS THAT ARE LOCATED IN AREAS 18
IDENTIFIED BY THE DEPARTMENT AS LACKING CHILD CARE SLOTS ; 19
(III) CHILD CARE PROVIDERS THAT SERVE PRIMARILY IN AN 20
ENOUGH ELIGIBLE NEIGHBORHOO D; 21
(iv) Child care providers that serve children with special needs; and 22
(v) Child care providers that serve children ages 2 and younger. 23
(4) (I) THE STATE SUPERINTENDENT AND TH E SECRETARY MAY 24
TEMPORARILY ALTER TH E PRIORITIZATION ORD ER OF APPLICATIONS T O BEST 25
MEET THE NEEDS OF TH E CHILD CARE INDUSTR Y AT A GIVEN TIME. 26
(II) SHOULD THE STATE SUPERINTENDENT AND TH E 27
SECRETARY CHOOSE TO A LTER THE PRIORITIZAT ION ORDER OF APPLICA TIONS, THE 28
NEW TEMP ORARY PRIORITIZATION ORDER SHALL BE COMMU NICATED ON THE 29
DEPARTMENT OF COMMERCE WEBSITE PRIO R TO ACCEPTING APPLI CATIONS. 30
104 SENATE BILL 427
(j) The Department of Commerce shall work with the Department to publicize 1
the availability of loans from the Fund and provide support to child care providers in 2
applying for loans from the Fund. 3
(k) (1) For fiscal year 2023, the Governor shall include in the annual budget 4
bill an appropriation to the Fund of $15,000,000. 5
(2) For fiscal year 2024, the Governor shall include in the annual budget 6
bill an appropriation to the Fund of $10,000,000. 7
Article – Housing and Community Development 8
4–509. 9
(a) (1) In this section the following words have the meanings indicated. 10
(2) “Anchor institution” means: 11
(i) an institution of higher education in the State, including 12
departments, foundations, and other entities of the institution; or 13
(ii) a hospital institution in the State, including departments, 14
foundations, and other entities of the institution, that: 15
1. has a group of at least five physicians who are organized 16
as a medical staff for the institution; 17
2. maintains facilities to provide, under the supervision of 18
the medical staff, diagnostic and treatment services for two or more unrelated individuals; 19
and 20
3. admits or retains the individuals for overnight care. 21
(3) “Blighted area” means an area in which a majority of buildings have 22
declined in productivity by reason of obsolescence, depreciation, or other causes to an extent 23
that they no longer justify fundamental repairs and adequate maintenance. 24
(4) “Fund” means the Seed Community Development Anchor Institution 25
Fund. 26
(5) “RISE ZONE CATCHMENT AREA” MEANS A GEOGRAPHIC A REA 27
LOCATED WITHIN A 5–MILE RADIUS OF THE CENTER POIN T OF A QUALIFIED 28
INSTITUTION THAT IS LOCATED IN AN ACTIVE REGIONAL INSTITUTION STRATEGIC 29
ENTERPRISE ZONE DESIGNATED UNDER TITLE 10, SUBTITLE 1 OF THE ECONOMIC 30
DEVELOPMENT ARTICLE. 31
SENATE BILL 427 105
(6) “Sustainable community” means an area designated as a sustainable 1
community under § 6–205 of this article. 2
(b) There is a Seed Community Development Anchor Institution Fund. 3
(c) The purpose of the Fund is to provide grants and loans to anchor institutions 4
for community development projects in RISE ZONE CATCHMENT AREAS, sustainable 5
communities, and blighted areas of the State. 6
(d) The Department shall administer the Fund. 7
(e) (1) The Fund is a special, nonlapsing fund that is not subject to § 7–302 of 8
the State Finance and Procurement Article. 9
(2) The State Treasurer shall hold the Fund s eparately, and the 10
Comptroller shall account for the Fund. 11
(f) The Fund consists of: 12
(1) money appropriated in the State budget to the Fund; 13
(2) interest earnings of the Fund; and 14
(3) any other money from any other source accepted for the benefit of the 15
Fund. 16
(g) (1) The Fund may be used only to provide grants and loans to anchor 17
institutions for community development projects in RISE ZONE CATCHMENT AREAS, 18
sustainable communities, and blighted areas of the State. 19
(2) To be eligible for a grant or loan, an anchor institution shall provide 20
evidence of matching funds. 21
(3) The Department shall award grants and loans from the Fund on a 22
competitive basis. 23
(4) WHEN PROVIDING GRANTS AND LOANS FROM THE FUND, THE 24
DEPARTMENT SHALL PRIO RITIZE APPLICANTS LOCATED IN A N ACTIVE REGIONAL 25
INSTITUTION STRATEGIC ENTERPRISE ZONE DESIGNATED UNDER TITLE 10, 26
SUBTITLE 1 OF THE ECONOMIC DEVELOPMENT ARTICLE. 27
(h) (1) The State Treasurer shall invest the money of the Fund in the same 28
manner as other State money may be invested. 29
(2) Any interest earnings of the Fund shall be credited to the Fund. 30
106 SENATE BILL 427
(i) Expenditures from the Fund may be made only in accordance with the State 1
budget. 2
(j) (1) For fiscal year 2019, the Governor shall include in the annual budget 3
bill or the capital budget bill an appropriation of $4,000,000 to the Fund. 4
(2) For fiscal year 2020, the Governor shall include in the annual budget 5
bill or the capital budget bill an appropriation of $5,000,000 for the Fund. 6
(3) (i) For fiscal year 2021, the Governor shall include in the annual 7
budget bill or the capital budget bill an appropriation of $5,000,000 for the Fund. 8
(ii) For fiscal year 2022 and each fiscal year thereafter, the Governor 9
shall include in the annual budget bill or the capital budget bill an appropriation of 10
$10,000,000 for the Fund. 11
6.5–107. 12
(e) The Fund consists of: 13
(2) money appropriated in the State budget to the Maryland Economic 14
[Development Assistance] COMPETITIVENESS Fund under Title 5, Subtitle 3 of the 15
Economic Development Article for the purpose of assisting in the establishment of 16
broadband communication services in rural and underserved areas of the State; 17
Article – State Finance and Procurement 18
7–314. 19
(a) (1) In this section the following words have the meanings indicated. 20
(2) [“Account” means the Economic Development Opportunities Program 21
Account.] “DEPARTMENT ” MEANS THE DEPARTMENT OF COMMERCE. 22
(3) [“Executive agency” means an executive department or agency in the 23
Executive Branch of State government, including all offices of the Executive Department 24
or agency directly responsible to the Governor. 25
(4)] “Extraordinary economic development opportunity” means the: 26
(i) attraction of a new private sector enterprise to the State or 27
retention or expansion of an existing private sector enterprise in the State that: 28
1. maintains a strong financial condition and minimal credit 29
risk profile; 30
SENATE BILL 427 107
2. is capable of accessing alternative sources of financing 1
through financial institutions or capital markets; 2
3. is consistent with the strategic plan of the State for 3
economic development; AND 4
4. creates or retains substantial employment, particularly in 5
areas of high unemployment; [and 6
5. invests in capital at a level equal to five times the value of 7
the incentive offered;] 8
(ii) retention or expansion of an existing public institution, private 9
institution, or federal research and development institute that: 10
1. is consistent with the strategic plan of the State for 11
economic development; and 12
2. creates or retains substantial employment, particularly in 13
areas of high unemployment; or 14
(iii) establishment or attraction of a public institution, a private 15
institution, or a federal research and development institute new to the State that: 16
1. is consistent with the strategic plan of the State for 17
economic development; and 18
2. creates or retains substantial employment, particularly in 19
areas of high unemployment. 20
(4) “FUND” MEANS THE STRATEGIC CLOSING FUND. 21
(5) (i) “Performance requirement” means a contractual agreement 22
between an executive agency and [an Account] A FUND recipient that requires the 23
[Account] FUND recipient to meet minimum economic development outcomes in exchange 24
for a grant or a loan under this section. 25
(ii) “Performance requirement” includes claw –back, penalty, 26
rescission, and recalibration clauses that utilize job creation, capital investment, and other 27
measures of economic development. 28
(6) “Private sector enterprise” means any commercia l, industrial, 29
educational, or research organization which is not a part of or controlled by a federal, State, 30
or local government agency. 31
(b) Subject to the provisions of this section, the [Economic Development 32 108 SENATE BILL 427
Opportunities Program Account] STRATEGIC CLOSING FUND is established WITHIN THE 1
DEPARTMENT to maximize extraordinary economic development opportunities. 2
(c) [Subject to subsection (r) of this section, the] THE Governor may provide an 3
appropriation in the budget bill to the [Account] FUND for a specific or general purpose or 4
purposes. 5
(d) After notice to and approval by the Legislative Policy Committee, the 6
Governor may transfer funds by budget amendment [from the Economic Development 7
Opportunities Program Account to the expenditure account of the appropriate executive 8
agency] TO THE FUND. 9
(e) (1) The [Account] FUND is a continuing, nonlapsing fund which is not 10
subject to § 7–302 of this subtitle. 11
(2) The Treasurer shall separately hold, and the Comptroller shall account 12
for, the [Account] FUND. 13
(3) The [Account] FUND shall be invested and reinvested in the same 14
manner as other State funds. 15
(4) [Except as provided in paragraph (5) of this subsection, any] ANY 16
investment earnings shall be subject to § 7–311(d) of this subtitle. 17
[(5) Any investment earnings on money transferred from the Account to a 18
second continuing, nonlapsing fund may be retained to the credit of the second fund.] 19
(f) (1) Money appropriated or credited to the [Account] FUND does not revert 20
to the Revenue Stabilization Account. 21
(2) [Except as provided in paragraph (3) of this subsection, repayments] 22
REPAYMENTS of principal or interest on any loan from the [Account] FUND shall be 23
retained to the credit of the [Account] FUND. 24
[(3) Repayments of principal or interest on any loan made from money 25
transferred from the Account to a second continuing, nonlapsing fund may be retained to 26
the credit of the second fund.] 27
(g) (1) The Department [of Commerce] shall include the following information 28
in the report that is required under § 2.5–109 of the Economic Development Article: 29
(i) the financial status of the program and a summary of its 30
operations for the preceding fiscal year; 31
(ii) for the previous 3 fiscal years, the status of [Account] FUND 32 SENATE BILL 427 109
disbursements for economic development projects reviewed by the Legislative Policy 1
Committee under this section; 2
(iii) for the previous 3 fiscal years, the status of job creation, capital 3
investment, and other measures of economic development for each economic development 4
project reviewed by the Legislative Policy Committee under this section; 5
(iv) a list of guidelines for the kinds of performance requirements 6
that may be negotiated with the loan or grant applicant; and 7
(v) an explanation of the job creation, capital investment, and other 8
measures of economic development described in items (i) through (iii) of this paragraph are 9
lower than negotiated according to subsection (h)(1) of this section. 10
(2) Upon receipt of the information that is required to be reported under 11
this subsection, the Legislative Policy Committee shall have 60 days to review and 12
comment on the information provided by the Department [of Commerce] under paragraph 13
(1) of this subsection, during which time the Department [of Commerce] shall provide any 14
additional information regarding the [Account] FUND as requested by the Legislative 15
Policy Committee. 16
(h) (1) Except as provided in paragraph (2) of this subsection and in subsection 17
(i) of this section, any funds transferred from the [Economic Development Opportunities 18
Program Account] FUND shall be used only for extraordinary economic development 19
opportunities that: 20
(i) meet the criteria provided in this section; 21
(ii) include performance requirements; and 22
(iii) in addition to the performance requirements under item (ii) of 23
this paragraph, include a performance requirement that utilizes a claw–back provision. 24
(2) The [Account] DEPARTMENT may UTILIZE THE FUND TO pay an 25
executive agency for administrative, legal, or actuarial expenses incurred by the [agency in 26
connection with transactions funded by transfers of money to the agency from the Account] 27
DEPARTMENT . 28
(i) (1) The Legislative Policy Committee may approve an economic 29
development opportunity that is not an extraordinary economic development opportunity 30
if the executive agency requesting the transfer of funds offers a detailed justification for the 31
exception. 32
(2) The Legislative Policy Committee shall give particular consideration to 33
an exception that would provide a significant economic development opportunity for an area 34
of the State that has a relatively high unemployment rate or relatively low per capita 35 110 SENATE BILL 427
income. 1
(j) [(1)] The Department of Commerce may modify the guidelines for the kinds 2
of performance requirements that may be negotiated with the loan or grant as needed, upon 3
approval of the Legislative Policy Committee. 4
[(2) An executive agency may depart from these guidelines as needed, upon 5
approval of the Legislative Policy Committee.] 6
(k) Subject to the provisions of this subtitle, funds [transferred] from the 7
[Economic Development Opportunities Program Account, to an executive agency,] FUND 8
may be loaned, granted, or invested for: 9
(1) assisting in the retention or expansion of existing private sector 10
enterprises, public or private institutions, or federal research and development institutes; 11
(2) assisting in the establishment or attraction of private sector 12
enterprises, public or private institutions, or federal research and development institutes 13
new to this State; or 14
(3) providing assistance where existing State or local programs lack 15
sufficient resources or are constrained by timing or program design from being utilized. 16
(l) [Upon submission to the Legislative Policy Committee of a proposed budget 17
amendment to transfer money from the Account, the Governor] BEFORE FUNDS FROM 18
THE FUND MAY BE LOANED , GRANTED, OR INVESTED IN ACCOR DANCE WITH 19
SUBSECTION (K) OF THIS SECTION , THE DEPARTMENT shall provide, subject to § 20
2–1257 of the State Government Article, to the Legislative Policy Committee: 21
(1) a detailed description of: 22
(i) the proposed use of the funds; 23
(ii) the manner in which the proposed use meets the criteria as set 24
forth in this section; 25
(iii) the degree to which the proposed use of funds will advance 26
statewide or local economic development strategies and objectives; and 27
(iv) the degree to which available sources of federal, State, local, and 28
private financial support have been sought and will be utilized; 29
(2) the terms, conditions, and performance requirements of any grant or 30
loan for which the funds are to be used; 31
(3) a comprehensive economic analysis of the proposed use of the funds 32 SENATE BILL 427 111
which estimates: 1
(i) the economic impact to the State and the local jurisdictions 2
affected; 3
(ii) a minimum level of net economic benefits to the public sector; 4
(iii) the number of jobs expected to be created as a result of the 5
proposed economic development project and the percentage of those jobs that are expected 6
to be held by Maryland residents; 7
(iv) the wage rates and benefit packages for the jobs expected to be 8
created as a result of the proposed economic development project; and 9
(v) any other appropriate financial or economic benefits; 10
(4) any other analysis or information that is requested by the Legislative 11
Policy Committee; and 12
(5) the date on which the executive agency expects to disburse the funds to 13
the proposed recipient. 14
(m) [If an executive agency fails to disburse transferred funds to a recipient within 15
1 year after the expected disbursement date presented to the Legislative Policy Committee 16
under subsection (l) of this section, the funds will revert back to the Account and the 17
Governor shall: 18
(1) resubmit the proposed budget amendment to transfer money from the 19
Account to the Legislative Policy Committee; and 20
(2) provide the Legislative Policy Committee with the information required 21
under subsection (l) of this section. 22
(n)] Funds appropriated to the [Economic Development Opportunities Program 23
Account] FUND may not be loaned, granted, or invested for: 24
(1) substituting for funds from other State or local programs for which a 25
project may be eligible and sufficient resources exist; 26
(2) projects which are not likely to attract or retain employment 27
opportunities; 28
(3) funding projects located outside the State; 29
(4) construction or land acquisition by the Maryland Stadium Authority; or 30
(5) funding for any sports activity or facility. 31 112 SENATE BILL 427
[(o) (1) This subsection does not apply to an economic development opportunity 1
located in an area designated as a qualified opportunity zone under § 1400Z–1 of the 2
Internal Revenue Code in Allegany County, Garrett County, Somerset County, or Wicomico 3
County. 4
(2) In the case of an economic development opportunity located outside a 5
priority funding area as established under Title 5, Subtitle 7B of this article, the 6
Department shall first comply with the provisions of that subtitle before making a request 7
for approval by the Legislative Policy Committee under this section.] 8
[(p)] (N) [An executive agency] THE DEPARTMENT may approve changes to a 9
transaction approved by the Legislative Policy Committee as long as the changes do not 10
materially and adversely affect the overall position of the [executive agency] 11
DEPARTMENT in the transaction or the economic development benefits to be derived by 12
the State in the transaction. 13
[(q)] (O) (1) (i) In this subsection the following words have the meanings 14
indicated. 15
(ii) “Financial assistance” means a grant, loan, or investment 16
provided under this subsection that exceeds $100,000. 17
(iii) “Political subdivision” includes an agency or other 18
instrumentality of the political subdivision. 19
(2) This subsection does not apply to financial assistance used solely for the 20
purpose of acquiring real property or structures on real property. 21
(3) With respect to financial assistance under this section to a political 22
subdivision: 23
(i) if the political subdivision has a program for promoting 24
procurement opportunities among minority businesses that is acceptable to the 25
Department [of Commerce], the political subdivision shall apply the requirements of that 26
program to the procurement of goods or services made with the proceeds from the financial 27
assistance; but 28
(ii) if the political subdivision does not have a program that is 29
acceptable to the Department [of Commerce] under item (i) of this paragraph, the political 30
subdivision is subject to paragraph (4) of this subsection. 31
(4) (i) In this paragraph, “minority business enterprise” has the 32
meaning stated in § 14–301 of this article. 33
(ii) With respect to financial assistance under this section to an 34 SENATE BILL 427 113
entity other than a political subdivision, the entity shall agree to include in the agreement 1
providing the financial assistance a provision acceptable to the Department of Commerce 2
that would encourage the procurement from minority business enterprises of goods or 3
services purchased with the proceeds from the financial assistance. 4
(iii) In negotiating the provision required under subparagraph (ii) of 5
this paragraph, the Department of Commerce shall take into account relevant factors, 6
including: 7
1. the intended use of the proceeds from the financial 8
assistance; and 9
2. the feasibility of obtaining the required goods or services 10
from minority business enterprises. 11
(5) The Department of Commerce may require that a recipient of financial 12
assistance under this section submit to the Department of Commerce a list, or an updated 13
list, of the minority business enterprises from which goods or services were procured and 14
the nature and dollar amount of the goods or services. 15
[(r) For fiscal years 2019 through 2021, the Governor shall include in the annual 16
budget bill an appropriation of $5,000,000 to the Account to be used by the Department of 17
Commerce to provide conditional loans or grants to companies that meet the following 18
criteria: 19
(1) construction of company headquarters in the State with capital 20
expenditures of at least $500,000,000; and 21
(2) retention of company headquarters in the State with at least 3,250 22
eligible employees, consistent with a letter of intent entered into with the Department of 23
Commerce in October 2016.] 24
Article – State Government 25
9–1A–26. 26
(c) A jackpot won at a video lottery terminal that is not claimed by the winner 27
within 182 days after the jackpot is won shall: 28
(2) be distributed as follows: 29
(i) 2.5% to the [Small, Minority, and Women–Owned Businesses] 30
REINVEST FOR SUCCESS Account established under § 5–1501 of the Economic 31
Development Article; 32
9–1A–27. 33 114 SENATE BILL 427
(a) Except as provided in subsections (b) and (c) of this section and § 1
9–1A–26(a)(3) of this subtitle, on a properly approved transmittal prepared by the 2
Commission, the Comptroller shall pay the following amounts from the proceeds of video 3
lottery terminals at each video lottery facility: 4
(6) [(i) except as provided in items (ii) and (iii) of this item,] 1.5% to BE 5
DISTRIBUTED EQUALLY BETWEEN THE MARYLAND ECONOMIC INCLUSION FUND 6
ESTABLISHED UNDER § 5–505 OF THE ECONOMIC DEVELOPMENT ARTICLE AND the 7
[Small, Minority, and Women–Owned Businesses] REINVEST FOR SUCCESS Account 8
established under § 5–1501 of the Economic Development Article; 9
[(ii) for fiscal year 2018, 1.5% to the General Fund to pay a portion of 10
the costs of the grants provided under Chapters 6 and 607 of the Acts of the General 11
Assembly of 2017; and 12
(iii) for fiscal years 2019 and 2020, 1.5% to the Education Trust Fund 13
established under § 9–1A–30 of this subtitle;] 14
(c) (1) For the first 10 years of operations at a video lottery facility in Allegany 15
County, on a properly approved transmittal prepared by the Commission, the Comptroller 16
shall pay the following amounts from the proceeds of video lottery terminals at a video 17
lottery facility in Allegany County: 18
(v) 1. except as provided in items 2 and 3 of this item, 0.75% to 19
the [Small, Minority, and Women–Owned Businesses] REINVEST FOR SUCCESS Account 20
established under § 5–1501 of the Economic Development Article; 21
[Subtitle 31. Commerce Subcabinet.] 22
[9–3101. 23
(a) In this subtitle the following words have the meanings indicated. 24
(b) “Secretary” means the Secretary of Commerce. 25
(c) “Subcabinet” means the Commerce Subcabinet.] 26
[9–3102. 27
(a) There is a Commerce Subcabinet. 28
(b) The Subcabinet is composed of the following members: 29
(1) the Secretary, or the Secretary’s designee; 30
SENATE BILL 427 115
(2) the Secretary of Transportation, or the Secretary’s designee; 1
(3) the Secretary of Labor, or the Secretary’s designee; 2
(4) the Secretary of the Environment, or the Secretary’s designee; 3
(5) the Secretary of Housing and Community Development, or the 4
Secretary’s designee; 5
(6) the Secretary of Planning, or the Secretary’s designee; and 6
(7) the Special Secretary of Minority Affairs, or the Special Secretary’s 7
designee.] 8
[9–3103. 9
The Subcabinet shall: 10
(1) advise the Governor on proposals to enhance the State’s business 11
climate; 12
(2) gather information the Subcabinet considers necessary to promote the 13
goals of the Subcabinet; 14
(3) collaborate to facilitate and expedite critical economic development 15
projects in the State; and 16
(4) provide other assistance that may be required to further the goals of 17
the Subcabinet and enhance the State’s business climate.] 18
[9–3104. 19
(a) The Secretary shall: 20
(1) chair the Subcabinet; 21
(2) convene the meetings of the Subcabinet; and 22
(3) be responsible for the oversight, direction, and accountability of the 23
work of the Subcabinet. 24
(b) The Office of the Secretary of Commerce shall provide the primary staff 25
support for the Subcabinet. 26
(c) The Subcabinet shall meet each month.] 27
116 SENATE BILL 427
Article – Tax – Property 1
9–103.1. 2
(a) (1) In this section the following words have the meanings indicated. 3
(7) “RISE zone” has the meaning stated in [§ 5–1401] § 10–137 of the 4
Economic Development Article. 5
(c) (6) (i) If a RISE zone is renewed as provided under [§ 5–1404] § 6
10–140 of the Economic Development Article, the governing body of a county or municipal 7
corporation shall calculate the amount of the tax credit under this section equal to at least 8
10% of the amount of property tax imposed on the eligible assessment of the qualified 9
property for the sixth through tenth taxable years. 10
(e) When a Regional Institution Strategic Enterprise zone is designated by the 11
[Secretary of Commerce] MARYLAND ECONOMIC DEVELOPMENT CORPORATION , the 12
[Secretary] CORPORATION shall certify to the State Department of Assessments and 13
Taxation: 14
(1) the real properties in the zone that are qualified properties for each 15
taxable year for which the property tax credit under this section is to be granted; and 16
(2) the date that the real properties became qualified properties. 17
(f) Before property tax bills are sent, the State Department of Assessments and 18
Taxation shall submit to the [Secretary of Commerce] MARYLAND ECONOMIC 19
DEVELOPMENT CORPORATION a list containing: 20
(1) the location of each qualified property; 21
(2) the amount of the base year value for each qualified property; and 22
(3) the amount of the eligible assessment for each qualified property. 23
9–229. 24
(c) For each of the 5 taxable years immediately following the first revaluation of 25
the property after completion of a voluntary cleanup or corrective action plan of a 26
brownfields site, each participating taxing jurisdiction where a qualified brownfields site is 27
located shall: 28
(2) contribute to the Maryland Economic [Development Assistance] 29
COMPETITIVENESS Fund under § 5–313(8) of the Economic Development Article, 30% of 30
the property tax attributable to the increase in the assessment of the brownfields site, 31
including improvements added to the site within the 5–year period as provided under this 32 SENATE BILL 427 117
subsection, over the assessment of the qualified brownfields site before the voluntary 1
cleanup. 2
(g) A taxing jurisdiction’s contribution for each qualified brownfields site to the 3
Maryland Economic [Development Assistance] COMPETITIVENESS Fund under 4
subsection (c)(2) of this section shall be used only for brownfields sites in the taxing 5
jurisdictions that have enacted a brownfields property tax credit ordinance. 6
Chapter 430 of the Acts of 2023 7
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 8
1, 2023. It shall remain effective for a period of [4] 7 years and, at the end of June 30, 9
[2027] 2030, this Act, with no further action required by the General Assembly, shall be 10
abrogated and of no further force and effect. 11
Chapter 431 of the Acts of 2023 12
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 13
1, 2023. It shall remain effective for a period of [4] 7 years and, at the end of June 30, 14
[2027] 2030, this Act, with no further action required by the General Assembly, shall be 15
abrogated and of no further force and effect. 16
SECTION 3. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 17
as follows: 18
Article – Economic Development 19
6–309. 20
(a) Subject to subsection (b) of this section, this subtitle and the tax credit 21
authorized under it shall terminate on January 1, [2027] 2026. 22
(b) After termination of this subtitle: 23
(1) a business entity may be considered for eligibility for the tax credit 24
authorized under this subtitle based on positions filled before termination of this subtitle, 25
provided that the other requirements of the subtitle are satisfied; and 26
(2) tax credits earned may be carried forward and are subject to recapture 27
in accordance with § 6–305 of this subtitle. 28
6–407. 29
(A) THIS SUBTITLE AND THE TAX CREDIT AUTHORIZE D UNDER IT SHALL 30
TERMINATE ON JANUARY 1, 2026. 31
118 SENATE BILL 427
(B) AFTER THE TERMINATION OF THIS SUBTITLE , TAX CREDITS EARNED 1
MAY BE CARRIED FORWA RD IN ACCORDANCE WIT H § 6–403 OF THIS SUBTITLE. 2
6–1007. 3
(a) In this section, “investment”, “qualified investor”, and “qualified Maryland 4
technology company” have the meanings stated in § 10–733 of the Tax – General Article. 5
(b) For a qualified opportunity fund that is a qualified investor in a qualified 6
Maryland technology company under § 10–733 of the Tax – General Article, if the qualified 7
Maryland technology company, on or after March 1, 2018, is newly established in or 8
expands into an opportunity zone [in a county other than Allegany County, Dorchester 9
County, Garrett County, or Somerset County]: 10
(1) the Level 1 opportunity zone enhancement is [33%] 65% of the 11
investment in a qualified Maryland technology company, not to exceed [$300,000] 12
$575,000; and 13
(2) the Level 2 opportunity zone enhancement is [50%] 75% of the 14
investment in the qualified Maryland technology company, not to exceed [$500,000] 15
$750,000. 16
(c) The enhanced tax credit percentages and maximums authorized under 17
subsection (b) of this section are in substitution for and not in addition to the percentages 18
and maximums under § 10–733(d) of the Tax – General Article. 19
Article – Housing and Community Development 20
6–404. 21
(a) (1) For a contribution worth $500 or more in goods, money, or real property 22
to an approved project, a business entity or an individual is entitled to a tax credit in the 23
amount determined under subsection (b) of this section. 24
(2) No part of a tax credit under this section may be taken more than once. 25
(b) (1) Except as provided in [paragraph (2)] PARAGRAPHS (2) AND (3) of 26
this subsection, the credit allowed to a business entity or an individual under this section 27
equals 50% of the amount of contributions: 28
(i) that the Department approves under subsection (c) of this 29
section; and 30
(ii) that were made during the taxable year for which the credit is 31
claimed. 32
SENATE BILL 427 119
(2) IF THE APPROVED PROJE CT OR BUSINESS ENTIT Y IS LOCATED 1
WITHIN A REGIONAL INSTITUTION STRATEGIC ENTERPRISE ZONE DESIG NATED 2
UNDER TITLE 10, SUBTITLE 1 OF THE ECONOMIC DEVELOPMENT ARTICLE OR A 3
RISE ZONE CATCHMENT AREA, AS DEFINED UNDER § 4–509 OF THIS ARTICLE, THE 4
TAX CREDIT ALLOWED TO A BUSINES S ENTITY OR AN INDIV IDUAL UNDER THIS 5
SECTION EQUALS 60% OF THE AMOUNT OF THE CONTRIBUTIONS DESCRIBED UNDER 6
PARAGRAPH (1) OF THIS SUBSECTION . 7
[(2)] (3) The credit allowed under this section for any taxable year may 8
not exceed the lesser of: 9
(i) $250,000; and 10
(ii) the total amount of tax otherwise payable by the business entity 11
or individual for the taxable year. 12
[(3)] (4) Any excess credit that would be allowed but for the limits of 13
paragraph [(2)] (3) of this subsection may be carried over and applied as a credit for up to 14
5 taxable years after the taxable year in which the contribution was made, until the full 15
amount of the excess is used. 16
(c) (1) To qualify for a credit for a contribution under this section, before 17
making a contribution, a business entity or an individual shall apply for and receive 18
approval of the contribution from the Department. 19
(2) Each application for approval of a contribution shall contain: 20
(i) the name of the approved project to which the contribution will 21
be made; 22
(ii) the amount of the contribution; and 23
(iii) a certification by an independent and unrelated third party as to 24
the value of any nonmonetary contribution included or, for new goods, an invoice or receipt 25
certifying the contribution’s net cost to the business entity or individual. 26
(3) The Department may not approve an application if it determines that: 27
(i) the maximum amount of contributions eligible for a tax credit for 28
the project for the fiscal year will be exceeded by the sum of: 29
1. the amount of the proposed contribution; and 30
2. the total amount of contributions previously approved for 31
that project for the fiscal year; or 32
120 SENATE BILL 427
(ii) the applicant has overstated the value of a nonmonetary 1
contribution. 2
(4) On or before January 31 of each year, the Department shall report to 3
the Department of Assessments and Taxation, the Comptroller, and the Maryland 4
Insurance Administration the contributions that the Department has approved under this 5
section in the preceding calendar year. 6
Article – Tax – General 7
10–702. 8
(a) (1) In this section the following words have the meanings indicated. 9
(4) (ii) “Enterprise zone” includes a Regional Institution Strategic 10
Enterprise zone established under [Title 5, Subtitle 14] TITLE 10, SUBTITLE 1 of the 11
Economic Development Article. 12
10–721. 13
(a) (1) In this section the following words have the meanings indicated. 14
(2) “Department” means the Department of Commerce. 15
(3) “Maryland base amount” means the base amount as defined in § 41(c) 16
of the Internal Revenue Code that is attributable to Maryland, determined by: 17
(i) substituting “Maryland qualified research and development 18
expense” for “qualified research expense”; 19
(ii) substituting “Maryland qualified research and development” for 20
“qualified research”; and 21
(iii) using, instead of the “fixed base percentage”: 22
1. the percentage that the Maryland qualified research and 23
development expense for the 4 taxable years immediately preceding the taxable year in 24
which the expense is incurred is of the gross receipts for those years; or 25
2. for a taxpayer who has fewer than 4 but at least 1 prior 26
taxable year, the percentage as determined under item 1 of this item, determined using the 27
number of immediately preceding taxable years that the taxpayer has. 28
(4) “Maryland gross receipts” means gross receipts that are reasonably 29
attributable to the conduct of a trade or business in this State, determined under methods 30
prescribed by the Comptroller based on standards similar to the standards under § 10–402 31
of this title. 32 SENATE BILL 427 121
(5) “Maryland qualified research and development” means qualified 1
research as defined in § 41(d) of the Internal Revenue Code that is conducted in this State 2
IN THE SECTORS INCLU DED ON THE LIST ESTA BLISHED BY THE DEPARTMENT IN 3
ACCORDANCE WITH § 2.5–106 OF THE ECONOMIC DEVELOPMENT ARTICLE. 4
(6) “Maryland qualified research and development expenses” means 5
qualified research expenses as defined in § 41(b) of the Internal Revenue Code incurred for 6
Maryland qualified research and development. 7
(7) “Net book value assets” means the total of a business’s net value of 8
assets, including intangibles but not including liabilities, minus depreciation and 9
amortization. 10
(8) “Small business” means a for–profit corporation, limited liability 11
company, partnership, or sole proprietorship with net book value assets totaling, at the 12
beginning or the end of the taxable year for which Maryland qualified research and 13
development expenses are incurred, as reported on the balance sheet, less than $5,000,000. 14
(b) (1) The purpose of the Research and Development Tax Credit Program is 15
to foster increased research activities and expenditures WITHIN TARGET INDUST RIES 16
AND SECTORS in Maryland. 17
(2) Subject to the limitations of this section, an individual or a corporation 18
may claim credits against the State income tax in an amount equal to 10% of the amount 19
by which the Maryland qualified research and development expenses paid or incurred by 20
the individual or corporation during the taxable year exceed the Maryland base amount for 21
the individual or corporation. 22
(c) (1) By November 15 of the calendar year following the end of the taxable 23
year in which the Maryland qualified research and development expenses were incurred, 24
an individual or corporation shall submit an application to the Department for the credits 25
allowed under subsection (b) of this section. 26
(2) For each calendar year, the total amount of credits approved by the 27
Department under subsection (b) of this section may not exceed $12,000,000. 28
(3) (i) Except as provided in paragraph (5) of this subsection, each 29
calendar year, the Department shall reserve $3,500,000 of the credits authorized under 30
subsection (b) of this section for applicants that are small businesses. 31
(ii) Subject to paragraph (5) of this subsection, if the total amount of 32
credits applied for by all small businesses under this section exceeds the amount specified 33
under subparagraph (i) of this paragraph, the Department shall approve a credit for each 34
applicant in an amount equal to the product of multiplying the credit applied for by the 35
applicant times a fraction: 36
122 SENATE BILL 427
1. the numerator of which is the amount specified under 1
subparagraph (i) of this paragraph; and 2
2. the denominator of which is the total of all credits applied 3
for by all small businesses under this section in the calendar year. 4
(4) (i) Except as provided in paragraph (5) of this subsection, for each 5
calendar year, the total amount of credits approved by the Department under this section 6
to applicants that are not small businesses may not exceed $8,500,000. 7
(ii) Subject to paragraph (5) of this subsection, if the total amount of 8
credits applied for by all applicants that are not small businesses exceeds the maximum 9
specified under subparagraph (i) of this paragraph, the Department shall approve a credit 10
under this section for each applicant in an amount equal to the product of multiplying the 11
credit applied for by the applicant times a fraction: 12
1. the numerator of which is the maximum specified under 13
subparagraph (i) of this paragraph; and 14
2. the denominator of which is the total of all credits applied 15
for by all applicants that are not small businesses in the calendar year. 16
(5) (i) For any calendar year, if the total amount of credits applied for 17
by all small businesses is less than $3,500,000, the amount specified under paragraph (4)(i) 18
of this subsection shall be increased for that calendar year by an amount equal to the 19
difference between $3,500,000 and the total amount of credits applied for by small 20
businesses. 21
(ii) For any calendar year, if the total amount of credits applied for 22
by all applicants that are not small businesses is less than $8,500,000, the amount specified 23
under paragraph (3)(i) of this subsection shall be increased for that calendar year by an 24
amount equal to the difference between $8,500,000 and the total amount of credits applied 25
for by applicants that are not small businesses. 26
(6) The Department may not approve a tax credit for any single applicant 27
in an amount exceeding $250,000. 28
(7) By February 15 of the calendar year following the end of the year in 29
which the individual or corporation submitted an application for the credit in accordance 30
with paragraph (1) of this subsection, the Department shall certify to the individual or 31
corporation the amount of the research and development tax credits approved by the 32
Department for the individual or corporation under this section. 33
(8) To claim the approved credits allowed under this section, an individual 34
or corporation shall: 35
(i) 1. file an amended income tax return for the taxable year in 36 SENATE BILL 427 123
which the Maryland qualified research and development expense was incurred; and 1
2. attach a copy of the Department’s certification of the 2
approved credit amount to the amended income tax return; or 3
(ii) subject to subsection (d) of this section, attach a copy of the 4
Department’s certification of the approved credit amount to an income tax return filed for 5
any of the 7 taxable years after the taxable year in which the Maryland qualified research 6
and development expenses were incurred. 7
(d) (1) Except as provided in paragraph (2) of this subsection, if the credit 8
allowed under this section in any taxable year exceeds the State income tax for that taxable 9
year, an individual or corporation may apply the excess as a credit against the State income 10
tax for succeeding taxable years until the earlier of: 11
(i) the full amount of the excess is used; or 12
(ii) the expiration of the 7th taxable year after the taxable year in 13
which the Maryland qualified research and development expense was incurred. 14
(2) If the credit allowed under this section in any taxable year exceeds the 15
State income tax for that taxable year, a small business may claim a refund in the amount 16
of the excess. 17
(e) (1) In determining the amount of the credit under this section: 18
(i) all members of the same controlled group of corporations, as 19
defined under § 41(f) of the Internal Revenue Code, shall be treated as a single taxpayer; 20
and 21
(ii) the credit allowable by this section to each member shall be its 22
proportionate shares of the qualified research expenses giving rise to the credit. 23
(2) The Comptroller shall adopt regulations providing for: 24
(i) determination of the amount of the credit under this section in 25
the case of trades or businesses, whether or not incorporated, that are under common 26
control; 27
(ii) pass–through and allocation of the credit in the case of estates 28
and trusts, partnerships, unincorporated trades or businesses, and S corporations; 29
(iii) adjustments in the case of acquisitions and dispositions 30
described in § 41(f)(3) of the Internal Revenue Code; and 31
(iv) determination of the credit in the case of short taxable years. 32
124 SENATE BILL 427
(3) The regulations adopted under paragraph (2) of this subsection shall be 1
based on principles similar to the principles applicable under § 41 of the Internal Revenue 2
Code and regulations adopted thereunder. 3
(f) (1) The Department of Commerce and the Comptroller jointly shall adopt 4
regulations to prescribe standards for determining when research or development is 5
considered conducted in the State for purposes of determining the credit under this section. 6
(2) In adopting regulations under this subsection, the Department and the 7
Comptroller may consider: 8
(i) the location where services are performed; 9
(ii) the residence or business location of the person or persons 10
performing services; 11
(iii) the location where supplies used in research and development 12
are consumed; and 13
(iv) any other factors that the Department determines are relevant 14
for the determination. 15
(g) In accordance with § 2.5–109 of the Economic Development Article, the 16
Department shall report on the credits approved under this section. 17
(h) If the provisions of § 41 of the Internal Revenue Code governing the federal 18
research and development tax credit are repealed or terminate, the provisions of this 19
section continue to operate as if the provisions of § 41 of the Internal Revenue Code remain 20
in effect, and the Maryland research and development tax credit under this section shall 21
continue to be available. 22
(I) (1) THE DEPARTMENT MAY NOT AP PROVE A CREDIT UNDER THIS 23
SECTION FOR A TAXABL E YEAR BEGINNING AFT ER DECEMBER 31, 2030. 24
(2) IF A TAXPAYER’S TAXABLE YEAR FOR I NCOME TAX PURPOSES I S 25
NOT THE CALENDAR YEA R, FOR THE TAXABLE YEAR THAT BEGINS IN CALEN DAR 26
YEAR 2030, THE TAXPAYER MAY APP LY FOR ONLY A PRORAT ED CREDIT FOR 27
RESEARCH AND DEVELOP MENT EXPENSES PAID O R INCURRED IN THE TA XABLE 28
YEAR FOR THAT PART OF THE TAXABLE YEAR THAT FA LLS IN CALENDAR YEAR 2030. 29
10–725. 30
(a) (1) In this section the following words have the meanings indicated. 31
(2) “Biotechnology company” means a company organized for profit that is 32
primarily engaged in, or within 2 months will be primarily engaged in, the research, 33 SENATE BILL 427 125
development, or commercialization of innovative and proprietary technology that 1
comprises, interacts with, or analyzes biological material including biomolecules (DNA, 2
RNA, or protein), cells, tissues, or organs. 3
(3) (i) “Company” means any entity of any form duly organized and 4
existing under the laws of any jurisdiction for the purpose of conducting business for profit. 5
(ii) “Company” does not include a sole proprietorship. 6
(4) “Department” means the Department of Commerce. 7
(5) (i) “Investment” means the contribution of money in cash or cash 8
equivalents expressed in United States dollars, at a risk of loss, to a qualified Maryland 9
biotechnology company in exchange for stock, a partnership or membership interest, or 10
other ownership interest in the equity of the qualified Maryland biotechnology company, 11
title to which ownership interest shall vest in the qualified investor. 12
(ii) “Investment” does not include debt. 13
(iii) For purposes of this section, an investment is at risk of loss when 14
its repayment entirely depends upon the success of the business operations of the qualified 15
company. 16
(6) (i) “Qualified investor” means any individual or entity that invests 17
at least $25,000 in a qualified Maryland biotechnology company and that is required to file 18
an income tax return in any jurisdiction. 19
(ii) “Qualified investor” does not include: 20
1. a qualified pension plan, individual retirement account, or 21
other qualified retirement plan under the Employee Retirement Income Security Act of 22
1974, as amended, or fiduciaries or custodians under such plans, or similar tax–favored 23
plans or entities under the laws of other countries; or 24
2. a founder or current employee of the qualified Maryland 25
biotechnology company, if the company has been in active business for more than 5 years. 26
(7) (i) “Qualified Maryland biotechnology company” means a 27
biotechnology company that: 28
1. has its headquarters and base of operations in this State; 29
2. has fewer than 50 full–time employees; 30
3. has been in active business no longer than 12 years; 31
4. does not have its securities publicly traded on any 32 126 SENATE BILL 427
exchange; 1
5. has been certified as a biotechnology company by the 2
Department; and 3
6. the qualified investors in the company have not received 4
more than $7,000,000 in tax credits in the aggregate under this section. 5
(ii) “Qualified Maryland biotechnology company” includes a 6
company that, within 2 months of the receipt of the investment, has met the requirements 7
of subparagraph (i) of this paragraph. 8
(8) “Secretary” means the Secretary of Commerce. 9
(b) (2) Subject to paragraphs (3) and (4) of this subsection and subsections (d) 10
and (e) of this section, for the taxable year in which an investment in a qualified Maryland 11
biotechnology company is made, a qualified investor may claim a credit against the State 12
income tax in an amount equal to the amount of tax credit stated in the final credit 13
certificate approved by the Secretary for the investment as provided under this section. 14
(5) IF THE QUALIFIED INVE STOR ALLOWED TO CLAI M A CREDIT 15
UNDER PARAGRAPH (2) OF THIS SUBSECTION I S A PASS–THROUGH ENTITY THAT 16
PAYS THE INCOME TAX IMPOSED UNDER § 10–102.1 OF THIS TITLE ON BEH ALF OF 17
ALL MEMBERS OF THE P ASS–THROUGH ENTITY , THE PASS–THROUGH ENTITY MAY 18
CLAIM AND ALLOCATE T HE CREDIT AMONG MEMB ERS OF THE PASS –THROUGH 19
ENTITY IN ANY MANNER . 20
(d) (1) The tax credit allowed in an initial tax credit certificate issued under 21
this section is: 22
(i) except as provided in item (ii) of this paragraph, 33% of the 23
investment in a qualified Maryland biotechnology company, not to exceed $250,000; or 24
(ii) [50%] 75% of the investment in the qualified Maryland 25
biotechnology company, not to exceed [$500,000] $750,000, if a qualified Maryland 26
biotechnology company[: 27
1. is located in Allegany County, Dorchester County, Garrett 28
County, or Somerset County; or 29
2.] is located in a Regional Institution Strategic Enterprise 30
zone that is designated under Title 5, Subtitle 14 of the Economic Development Article[, is 31
based on technology that was developed at a qualified institution within that zone, and has 32
been in active business not longer than 7 years]. 33
(2) During any fiscal year, the Secretary may not certify eligibility for tax 34 SENATE BILL 427 127
credits for investments in a single qualified Maryland biotechnology company that in the 1
aggregate exceed 10% of the total appropriations to the Maryland Biotechnology 2
Investment Tax Credit Reserve Fund for that fiscal year. 3
(3) (I) If the tax credit allowed under this section in any taxable year 4
exceeds the total tax otherwise payable by the qualified investor for that taxable year, the 5
qualified investor may claim a refund in the amount of the excess. 6
(II) IF THE QUALIFIED INVE STOR ALLOWED TO CLAI M A REFUND 7
UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH IS A PASS–THROUGH ENTITY THAT 8
PAYS THE INCOME TAX IMPOSED UNDER § 10–102.1 OF THIS TITLE ON BEHALF OF 9
ALL MEMBERS OF THE P ASS–THROUGH ENTITY , THE PASS–THROUGH ENTITY MAY 10
CLAIM AND ALLOCATE T HE CREDIT AMONG MEMB ERS OF THE 11
PASS–THROUGH ENTITY IN AN Y MANNER. 12
10–730. 13
(a) (1) In this section the following words have the meanings indicated. 14
(4) (i) “Film production activity” means: 15
1. the production of a film or video project that is intended 16
for nationwide commercial distribution; and 17
2. for a television series, each season of the television series. 18
(ii) “Film production activity” includes the production of: 19
1. a feature film; 20
2. a television project; 21
3. a commercial; 22
4. a corporate film; 23
5. a music video; 24
6. a digital animation project; 25
7. a documentary; or 26
8. a talk, reality, or game show. 27
(iii) “Film production activity” does not include the production of: 28
128 SENATE BILL 427
1. a student film; 1
2. a noncommercial personal video; 2
3. a sports broadcast; 3
4. a broadcast of a live event; 4
5. a video, computer, or social networking game; 5
6. pornography; 6
7. an infomercial; 7
8. a digital product or an animation project other than a 8
digital animation project; or 9
9. a multimedia project. 10
(7) “Qualified film production entity” means an entity that: 11
(i) is carrying out a film production activity; and 12
(ii) the Secretary determines to be eligible for the tax credit under 13
this section in accordance with subsection (c) of this section. 14
(b) (1) A qualified film production entity may claim a credit against the State 15
income tax for film production activities in the State in an amount equal to the amount 16
stated in the final tax credit certificate approved by the Secretary for film production 17
activities. 18
(2) If the tax credit allowed under this section in any taxable year exceeds 19
the total tax otherwise payable by the qualified film production entity for that taxable year, 20
the qualified film production entity may claim a refund in the amount of the excess. 21
(f) (1) Except as provided in paragraph (2) of this subsection, the Secretary 22
may not issue tax credit certificates for credit amounts in the aggregate totaling more than: 23
(i) for fiscal year 2014, $25,000,000; 24
(ii) for fiscal year 2015, $7,500,000; 25
(iii) for fiscal year 2016, $7,500,000; 26
(iv) for fiscal year 2019, $8,000,000; 27
(v) for fiscal year 2020, $11,000,000; 28 SENATE BILL 427 129
(vi) for fiscal year 2021 through 2023, $12,000,000; 1
(vii) for fiscal year 2024, $15,000,000; 2
(viii) for fiscal year 2025, $17,500,000; AND 3
(ix) for fiscal year 2026 AND EACH FISCAL YEAR THEREAFTER , 4
$20,000,000[; and 5
(x) for fiscal year 2027 and each fiscal year thereafter, $12,000,000]. 6
(2) If the aggregate credit amounts under the tax credit certificates issued 7
by the Secretary total less than the maximum provided under paragraph (1) of this 8
subsection in any fiscal year, any excess amount may be carried forward and issued under 9
tax credit certificates in a subsequent fiscal year. 10
(3) [The Secretary may not issue tax credit certificates for credit amounts 11
totaling more than $10,000,000 in the aggregate for a single film production activity. 12
(4)] (i) For fiscal year 2019 and each fiscal year thereafter, the Secretary 13
shall make 10% of the credit amount authorized under paragraph (1) of this subsection 14
available for Maryland small or independent film entities. 15
(ii) If the total amount of credits applied for by Maryland small or 16
independent film entities is less than the amount made available under subparagraph (i) 17
of this paragraph, the Secretary shall make available the unused amount of credits for use 18
by qualified film production entities. 19
[10–732. 20
(a) (1) In this section the following words have the meanings indicated. 21
(2) “Costs” means the costs to an individual or corporation for: 22
(i) security clearance administrative expenses incurred with regard 23
to an employee in the State including, but not limited to: 24
1. processing application requests for clearances for 25
employees in the State; 26
2. maintaining, upgrading, or installing computer systems in 27
the State required to obtain federal security clearances; and 28
3. training employees in the State to administer the 29
application process; and 30 130 SENATE BILL 427
(ii) construction and equipment costs incurred to construct or 1
renovate a sensitive compartmented information facility (“SCIF”) located in the State as 2
required by the federal government. 3
(3) “Department” means the Department of Commerce. 4
(4) “Secretary” means the Secretary of Commerce. 5
(5) “Small business” has the meaning stated in § 7–218 of this article. 6
(b) (1) Subject to the limitations of this section, for a taxable year beginning 7
after December 31, 2022, but before January 1, 2028, an individual or a corporation that 8
employs not more than 500 employees may claim credits against the State income tax for: 9
(i) security clearance administrative expenses, not to exceed 10
$200,000; 11
(ii) expenses incurred for rental payments owed during the first year 12
of a rental agreement for spaces leased in the State if the individual or corporation is a 13
small business that performs security–based contracting, not to exceed $200,000; and 14
(iii) subject to paragraph (2) of this subsection, construction and 15
equipment costs incurred to construct or renovate a single SCIF in an amount equal to the 16
lesser of 50% of the costs or $200,000. 17
(2) The total amount of construction and equipment costs incurred to 18
construct or renovate multiple SCIFs for which an individual or a corporation is eligible to 19
claim as a credit against the State income tax is $500,000. 20
(c) (1) By September 15 of the calendar year following the end of the taxable 21
year in which the costs were incurred, an individual or a corporation shall submit an 22
application to the Department for the credits allowed under subsection (b) of this section. 23
(2) (i) The total amount of credits approved by the Department under 24
subsection (b) of this section may not exceed $2,000,000 for any calendar year. 25
(ii) If the total amount of credits applied for by all individuals and 26
corporations under subsection (b) of this section exceeds the maximum specified under 27
subparagraph (i) of this paragraph, the Department shall approve a credit under subsection 28
(b) of this section for each applicant in an amount equal to the product of multiplying the 29
credit applied for by the applicant times a fraction: 30
1. the numerator of which is the maximum specified under 31
subparagraph (i) of this paragraph; and 32
2. the denominator of which is the total of all credits applied 33 SENATE BILL 427 131
for by all applicants under subsection (b) of this section in the calendar year. 1
(3) By December 15 of the calendar year following the end of the taxable 2
year in which the costs were incurred, the Department shall certify to the individual or 3
corporation the amount of tax credits approved by the Department for the individual or 4
corporation under this section. 5
(4) To claim the approved credits allowed under this section, an individual 6
or a corporation shall: 7
(i) 1. file an amended income tax return for the taxable year in 8
which the costs were incurred; and 9
2. attach a copy of the Department’s certification of the 10
approved credit amount to the amended income tax return; or 11
(ii) subject to subsection (d) of this section, attach a copy of the 12
Department’s certification of the approved credit amount to an income tax return filed for 13
any taxable year after the taxable year in which the costs were incurred. 14
(d) If the credit allowed for any taxable year under this section exceeds the total 15
tax otherwise due, an individual or corporation may apply the excess as a credit against 16
the State income tax for succeeding taxable years until the full amount of the excess is 17
used. 18
(e) The Department, in consultation with the Comptroller, shall adopt 19
regulations to carry out the provisions of this section. 20
(f) In accordance with § 2.5–109 of the Economic Development Article, the 21
Department shall submit a report on the number of credits certified in the previous 22
calendar year.] 23
10–733. 24
(a) (1) In this section the following words have the meanings indicated. 25
(2) (i) “Company” means any entity of any form duly organized and 26
existing under the laws of any jurisdiction for the purpose of conducting business for profit. 27
(ii) “Company” includes an entity that becomes duly organized and 28
existing under the laws of any jurisdiction for the purpose of conducting business for profit 29
within 4 months of receiving a qualified investment. 30
(iii) “Company” does not include a sole proprietorship. 31
(3) “Department” means the Department of Commerce. 32
132 SENATE BILL 427
(4) (i) “Investment” means the contribution of money in cash or cash 1
equivalents expressed in United States dollars, at a risk of loss, to a qualified Maryland 2
technology company in exchange for stock, a partnership or membership interest, or any 3
other ownership interest in the equity of the qualified Maryland technology company, title 4
to which ownership interest shall vest in the qualified investor. 5
(ii) “Investment” does not include debt unless it is convertible debt. 6
(iii) For purposes of this section, an investment is at risk of loss when 7
repayment entirely depends on the success of the business operations of the qualified 8
company. 9
(5) (i) “Qualified investor” means any individual or entity that invests 10
at least $25,000 in a qualified Maryland technology company and that is required to file an 11
income tax return in any jurisdiction. 12
(ii) “Qualified investor” does not include: 13
1. a qualified pension plan, an individual retirement 14
account, or any other qualified retirement plan under the Employee Retirement Income 15
Security Act of 1974, as amended, or fiduciaries or custodians under such plans, or similar 16
tax–favored plans or entities under the laws of other countries; or 17
2. a founder or current employee of the qualified Maryland 18
technology company, if the company has been in active business for more than 5 years. 19
(6) (i) “Qualified Maryland technology company” means a technology 20
company that has met the criteria set forth in subsection (b)(3) of this section. 21
(ii) “Qualified Maryland technology company” does not include a 22
technology company that is or has been certified as a qualified Maryland biotechnology 23
company under § 10–725 of this subtitle. 24
(7) “Secretary” means the Secretary of Commerce. 25
(8) “Technology company” means a company organized for profit that is 26
engaged in the research, development, or commercialization of innovative and proprietary 27
technology. 28
(b) (2) Subject to paragraph (3) of this subsection and subsections (d) and (e) 29
of this section, for the taxable year in which an investment in a qualified Maryland 30
technology company is made, a qualified investor may claim a credit against the State 31
income tax in an amount equal to the amount of tax credit stated in the final credit 32
certificate approved by the Secretary for the investment as provided under this section. 33
(3) To be eligible for the tax credit described in paragraph (2) of this 34
subsection, the qualified investor: 35 SENATE BILL 427 133
(ii) at least 30 days prior to making an investment in a qualified 1
Maryland technology company for which the qualified investor would be eligible for an 2
initial tax credit certificate under this subsection, shall submit an application to the 3
Department containing the following: 4
2. evidence that the qualified Maryland technology company 5
has satisfied the following minimum requirements for consideration as a qualified 6
Maryland technology company: 7
J. meets any other reasonable requirements of the 8
Department evidencing that the company is a going concern engaged in the research, 9
development, or commercialization of innovative and proprietary technology in an eligible 10
technology sector identified in accordance with paragraph (4) of this subsection; and 11
(4) (i) [After consulting with the Department and the Maryland 12
Department of Labor, each year the Maryland Economic Development Commission shall: 13
1. evaluate the potential employment and economic growth 14
of Maryland’s technology sectors; and 15
2. recommend eligible technology sectors to the Department. 16
(ii)] Each year the Department shall[: 17
1. consider the recommendation of the Maryland Economic 18
Development Commission; and 19
2.] establish a list of technology sectors that will be eligible 20
for the tax credit under this section. 21
[(iii)] (II) In determining whether a company is engaged in an 22
eligible technology sector, the Department shall consider the definitions set forth in the 23
North American Industry Classification System (NAICS). 24
(5) IF THE QUALIFIED INVE STOR ALLOWED TO CLAI M A CREDIT 25
UNDER PARAGRAPH (2) OF THIS SUBSECTION I S A PASS–THROUGH EN TITY THAT 26
PAYS THE INCOME TAX IMPOSED UNDER § 10–102.1 OF THIS TITLE ON BEH ALF OF 27
ALL MEMBERS OF THE P ASS–THROUGH ENTITY , THE PASS–THROUGH ENTITY MAY 28
CLAIM AND ALLOCATE T HE CREDIT AMONG MEMB ERS OF THE PASS –THROUGH 29
ENTITY IN ANY MANNER . 30
(d) (1) The tax credit allowed in an initial tax credit certificate issued under 31
this section is: 32
(i) except as provided in item (ii) of this paragraph, 33% of the 33 134 SENATE BILL 427
investment in a qualified Maryland technology company, not to exceed $250,000; or 1
(ii) [50%] 75% of the investment in the qualified Maryland 2
technology company, not to exceed [$500,000] $750,000, if a qualified Maryland 3
technology company[: 4
1. is located in Allegany County, Dorchester County, Garrett 5
County, or Somerset County; or 6
2.] is located in a Regional Institution Strategic Enterprise 7
zone that is designated under [Title 5, Subtitle 14] TITLE 10, SUBTITLE 1 of the Economic 8
Development Article[, is based on technology that was developed at a qualified institution 9
within that zone, and has been in active business not longer than 7 years]. 10
(2) During any fiscal year, the Secretary may not certify eligibility for tax 11
credits for investments in: 12
(i) a single qualified Maryland technology company that in the 13
aggregate exceed 15% of the total appropriations to the Maryland Innovation Investment 14
Tax Credit Reserve Fund for that fiscal year; or 15
(ii) a single technology sector that in the aggregate exceed 25% of the 16
total appropriations to the Maryland Innovation Investment Tax Credit Reserve Fund for 17
that fiscal year. 18
(3) (I) If the credit allowed under this section in any taxable year 19
exceeds the State income tax for that taxable year, an individual or a corporation may claim 20
a refund in the amount of the excess. 21
(II) IF THE QUALIFIED INVESTOR A LLOWED TO CLAIM A RE FUND 22
UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH IS A PASS–THROUGH ENTITY THAT 23
PAYS THE INCOME TAX IMPOSED UNDER § 10–102.1 OF THIS TITLE ON BEH ALF OF 24
ALL MEMBERS OF THE P ASS–THROUGH ENTITY , THE PASS–THROUGH ENTITY MAY 25
CLAIM AND ALLOCATE T HE CREDIT AMONG MEMB ERS OF THE PASS –THROUGH 26
ENTITY IN ANY MANNER . 27
(J) THE DEPARTMENT MAY NOT AP PROVE A CREDIT UNDER THIS SECTION 28
FOR A TAXABLE YEAR B EGINNING AFTER DECEMBER 31, 2029. 29
10–733.1. 30
(a) (1) In this section the following words have the meanings indicated. 31
(2) “Cybersecurity business” means an entity organized for profit that is 32
engaged primarily in the development of innovative and proprietary cybersecurity 33
technology or the provision of cybersecurity service. 34 SENATE BILL 427 135
(3) “Cybersecurity service” means an activity that is associated with a 1
category or subcategory identified under the Framework Core established by the National 2
Institute of Standards and Technology’s Cybersecurity Framework. 3
(4) “Cybersecurity technology” means products or goods intended to detect 4
or prevent activity intended to result in unauthorized access to, exfiltration of, 5
manipulation of, or impairment to the integrity, confidentiality, or availability of an 6
information system or information stored on or transiting an information system. 7
(5) “Department” means the Department of Commerce. 8
(6) [“Panel” means the panel that the Department may establish under 9
subsection (c) of this section composed of experts in the areas of cybersecurity technology 10
and cybersecurity service. 11
(7)] “Qualified buyer” means any entity [that has fewer than 50 employees 12
in the State and] that is required to file an income tax return in the State. 13
[(8)] (7) “Qualified seller” means a cybersecurity business that: 14
(i) has its headquarters and base of operations in the State; 15
(ii) 1. has less than [$5,000,000] $10,000,000 in annual 16
revenue; 17
2. is a minority–owned, woman–owned, veteran–owned, or 18
service–disabled–veteran–owned business; or 19
3. is located in a historically underutilized business zone 20
designated by the United States Small Business Administration; 21
(iii) 1. owns or has properly licensed any proprietary 22
cybersecurity technology; or 23
2. provides a cybersecurity service; 24
(iv) is in good standing; 25
(v) is current in the payment of all tax obligations to the State or any 26
unit or subdivision of the State; and 27
(vi) is not in default under the terms of any contract with, 28
indebtedness to, or grant from the State or any unit or subdivision of the State. 29
(b) (1) THERE IS A BUY MARYLAND CYBERSECURITY TAX CREDIT 30 136 SENATE BILL 427
AUTHORIZED UNDER THI S SECTION. 1
(2) THE BUY MARYLAND CYBERSECURITY TAX CREDIT IS INTENDED 2
TO PROMOTE THE CYBER SECURITY INDUSTRY IN MARYLAND BY HELPING 3
MARYLAND BUSINESSES AND NONPR OFITS PURCHASE CYBER SECURITY 4
TECHNOLOGIES AND SER VICES FROM MARYLAND CYBERSECURIT Y COMPANIES TO 5
PROTECT BUSINESS AND CUSTOMER INFORMATION . 6
[(1)] (3) Subject to paragraphs [(2) and (3)] (4) THROUGH (6) of this 7
subsection, a qualified buyer may claim a credit against the State income tax in an amount 8
equal to 50% of the cost incurred during the taxable year to purchase cybersecurity 9
technology or a cybersecurity service from one or more qualified sellers. 10
[(2)] (4) For any taxable year, the credit allowed under this section may 11
not exceed $50,000 for each qualified buyer. 12
(5) IF THE CREDIT ALLOWED UNDER THIS SECTION I N ANY TAXABLE 13
YEAR EXCEEDS THE STATE INCOME TAX FOR THAT TAXABLE YEAR , A QUALIFIED 14
BUYER MAY CLAIM A RE FUND IN THE AMOUNT OF THE EXCESS . 15
[(3)] (6) For any taxable year, the aggregate credits claimed for 16
cybersecurity technology or cybersecurity service purchased from a single qualified seller 17
may not exceed [$200,000] $1,000,000. 18
(c) [(1) The Department, in consultation with the Maryland Technology 19
Development Corporation, may establish a panel composed of experts in the areas of 20
cybersecurity technology and cybersecurity service. 21
(2) The Department may establish the panel under service contracts with 22
independent reviewers. 23
(3) The panel shall assist the Department in its determination as to 24
whether a company is a qualified seller. 25
(4) A member of the panel is not eligible to receive any benefit, direct or 26
indirect, from the tax credit under this section. 27
(5) (i) Except as provided in subparagraph (ii) of this paragraph, 28
Division II of the State Finance and Procurement Article does not apply to a service that 29
the Department obtains under this section. 30
(ii) The Department is subject to Title 12, Subtitle 4 of the State 31
Finance and Procurement Article for services the Department obtains under this section. 32
(d)] (1) (i) A qualified buyer eligible for the credit under this section may 33 SENATE BILL 427 137
apply to the Department for a credit certificate that states the amount of the credit the 1
qualified buyer may claim under subsection (b) of this section. 2
(ii) A qualified buyer shall attach the credit certificate to the income 3
tax return on which the qualified buyer claims the credit under subsection (b) of this 4
section. 5
(2) Subject to paragraph (3) of this subsection, the Secretary of Commerce 6
shall approve each application under paragraph (1) of this subsection that qualifies for a 7
credit certificate. 8
(3) [(i)] The total amount of the credit certificates approved by the 9
Secretary of Commerce under this subsection may not exceed: 10
1. for taxable year 2018, $2,000,000; and 11
2. for taxable year 2019 and each taxable year thereafter, 12
$4,000,000. 13
[(ii) For each taxable year, the Secretary of Commerce shall award 14
25% of the amount of tax credits authorized under subparagraph (i) of this paragraph to 15
qualified buyers that purchase cybersecurity services.] 16
[(e)] (D) (1) The Department may revoke its certification of a credit under 17
this section if any representation made in connection with the application for the 18
certification is determined by the Department to have been false. 19
(2) The revocation may be in full or in part as the Department may 20
determine and, subject to paragraph (3) of this subsection, shall be communicated to the 21
qualified buyer and the Comptroller. 22
(3) The qualified buyer shall have an opportunity to appeal any revocation 23
to the Department before notification of the Comptroller. 24
(4) The Comptroller may make an assessment against the qualified buyer 25
to recapture any amount of tax credit that the qualified buyer has already claimed. 26
[(f)] (E) In accordance with § 2.5–109 of the Economic Development Article, the 27
Department shall submit a report on the credit certificates awarded under this section for 28
the calendar year. 29
[(g)] (F) The Department and the Comptroller jointly shall adopt regulations to 30
carry out this section and to specify criteria and procedures for application for, approval of, 31
and monitoring continuing eligibility for the tax credit under this section. 32
(G) THE DEPARTMENT MAY NOT AP PROVE A CREDIT UNDER THIS SECTION 33 138 SENATE BILL 427
FOR A TAXABLE YEAR B EGINNING AFTER DECEMBER 31, 2029. 1
Chapter 515 of the Acts of 2000, as amended by Chapter 98 of the Acts of 2005, 2
Chapter 20 of the Acts of 2010, Chapter 85 of the Acts of 2019, and Chapter 114 of 3
the Acts of 2021 4
SECTION 2. AND BE IT FURTHER ENACTED, That: 5
(a) Except as otherwise provided in this section, this Act shall be applicable to all 6
taxable years beginning after December 31, 1999 [but before January 1, 2026]. 7
(b) If a taxpayer’s taxable year for income tax purposes is not the calendar year[: 8
(1)], for the taxable year that ends in calendar year 2000, the taxpayer may 9
apply for a prorated credit for research and development expenses paid or incurred in the 10
taxable year for that part of the taxable year that falls in calendar year 2000[; and 11
(2) for the taxable year that begins in calendar year 2025, the taxpayer 12
may apply for only a prorated credit for research and development expenses paid or 13
incurred in the taxable year for that part of the taxable year that falls in calendar year 14
2025]. 15
SECTION 4. AND BE IT FURTHER ENACTED, That this Act shall take effect July 16
1, 2000. [It shall remain effective for a period of 27 years and, at the end of June 30, 2027, 17
with no further action required by the General Assembly, this Act shall be abrogated and 18
of no further force and effect.] 19
Chapter 516 of the Acts of 2000, as amended by Chapter 98 of the Acts of 2005, 20
Chapter 20 of the Acts of 2010, Chapter 85 of the Acts of 2019, and Chapter 114 of 21
the Acts of 2021 22
SECTION 2. AND BE IT FURTHER ENACTED, That: 23
(a) Except as otherwise provided in this section, this Act shall be applicable to all 24
taxable years beginning after December 31, 1999 [but before January 1, 2026]. 25
(b) If a taxpayer’s taxable year for income tax purposes is not the calendar year[: 26
(1)], for the taxable year that ends in calendar year 2000, the taxpayer may 27
apply for a prorated credit for research and development expenses paid or incurred in the 28
taxable year for that part of the taxable year that falls in calendar year 2000[; and 29
(2) for the taxable year that begins in calendar year 2025, the taxpayer 30
may apply for only a prorated credit for research and development expenses paid or 31
incurred in the taxable year for that part of the taxable year that falls in calendar year 32
2025]. 33 SENATE BILL 427 139
SECTION 4. AND BE IT FURTHER ENACTED, That this Act shall take effect July 1
1, 2000. [It shall remain effective for a period of 27 years and, at the end of June 30, 2027, 2
with no further action required by the General Assembly, this Act shall be abrogated and 3
of no further force and effect.] 4
SECTION 4. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 5
as follows: 6
Chapter 390 of the Acts of 2013, as amended by Chapter 578 of the Acts of 2018 7
and Chapter 113 of the Acts of 2021 8
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 9
1, 2013, and shall be applicable to all taxable years beginning after December 31, 2013[, 10
but before January 1, 2025. This Act shall remain effective for a period of 12 years and, at 11
the end of June 30, 2025, with no further action required by the General Assembly, this Act 12
shall be abrogated and of no further force and effect]. 13
SECTION 5. AND BE IT FURTHER ENACTED, That the terms of the members of 14
the Maryland Life Sciences Advisory Board appointed by the Governor under § 3–203(a)(3) 15
of the Economic Development Article, as enacted by Section 2 of this Act, shall expire as 16
follows: 17
(1) five members in 2026; 18
(2) five members in 2027; and 19
(3) six members in 2028. 20
SECTION 6. AND BE IT FURTHER ENACTED, That the publisher of the 21
Annotated Code of Maryland, in consultation with and subject to the approval of the 22
Department of Legislative Services, shall correct, with no further action required by the 23
General Assembly, cross–references and terminology rendered incorrect by this Act. The 24
publisher shall adequately describe any correction that is made in an editor’s note following 25
the section affected. 26
SECTION 7. AND BE IT FURTHER ENACTED, That Section 3 of this Act shall be 27
applicable to all taxable years beginning after December 31, 2024. 28
SECTION 8. AND BE IT FURTHER ENACTED, That Section 4 of this Act shall take 29
effect June 1, 2025. 30
SECTION 9. AND BE IT FURTHER ENACTED, That, except as provided in Section 31
8 of this Act, this Act shall take effect July 1, 2025. 32