EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXIS TING LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*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
Committee Report: Favorable with amendments
Senate action: Adopted with floor amendments
Read second time: March 17, 2025
CHAPTER ______
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 modifying the membership of the board of the Maryland Economic Development 16
Commission; redesignating the Maryland Economic Development Assistance 17
Authority to be the Maryland Economic Competitiveness Fund; repealing certain 18
limits on assistance offered by the Competitiveness Fund; repealing the Maryland 19
Small Business Development Financing Authority and certain related funds ; 20
altering eligibility for, terms of, and types of financial assistance from the Child Care 21
Capital Support Revolving Loan Fund; altering the purposes of the Seed Community 22
Development Anchor Institution Fund to include providing certain financial 23
assistance for projects in certain RISE zone catchment areas and requiring the 24 2 SENATE BILL 427
Department of Housing and Community Development to prioritize certain 1
applications located in active RISE zones; redesignating the Economic Development 2
Opportunities Program Account to be the Strategic Closing Fund within the 3
Department of Commerce; altering the purposes for and methods by which the 4
Strategic Closing Fund may be utilized; altering the distribution of certain video 5
lottery terminal proceeds; altering the termination date of the Build Our Future 6
Grant Pilot Program and Job Creation Tax Credit, Research and Development Tax 7
Credit, and Innovation Investment Incentive Tax Credit programs; providing for the 8
termination of the One Maryland Economic Development Tax Credit Program on a 9
certain date; altering eligibility for and the calculation of certain tax credits; allowing 10
a qualified investor that is a pass–through entity that pays a certain income tax on 11
behalf of its members to receive and allocate in any manner a credit or refund of a 12
credit under the Biotechnology Investment Incentive Tax Credit and Innovation 13
Investment Incentive Tax Credit programs; making the film production activity tax 14
credit transferable; authorizing a qualified film production entity to amend its 15
application for the film production activity tax credit under certain circumstances; 16
altering the aggregate amount of film production activity tax credit certificates that 17
the Secretary of Commerce may issue each fiscal year; repealing a certain limit on 18
the aggregate amount of tax credit certificates the Secretary may issue for a single 19
film production activity; repealing a credit against the State income tax for certain 20
costs related to federal security clearances; and generally relating to economic 21
development and economic development incentives. 22
BY renumbering 23
Article – Economic Development 24
Section 5–1401 through 5–1410 and the subtitle “Subtitle 14. Regional Institution 25
Strategic Enterprise Zone Program”; and 5–2301 through 5–2307 and the 26
subtitle “Subtitle 23. Build Our Future Grant Pilot Program” 27
to be Section 10–137 through 10–146 and the part “Part II. Regional Institution 28
Strategic Enterprise Zone Program”; and 10–149 through 10–155 and the part 29
“Part III. Build Our Future Grant Pilot Program”, respectively 30
Annotated Code of Maryland 31
(2024 Replacement Volume and 2024 Supplement) 32
BY repealing and reenacting, with amendments, 33
Article – Economic Development 34
Section 2–113, 2–116, 2.5–106, 3–203, 3–401, 3–402, 3–411, 5–102, and 5–205; 35
5–301 to be under the amended subtitle “Subtitle 3. Maryland Economic 36
Competitiveness Fund”; 5–310 to be under the amended part “Part III. 37
Maryland Economic Competitiveness Fund”; 5–319 through 5–321, 5–320, 38
5–321, 5–324, 5–325, 5–329, and 5–338(d); 5–501 to be under the amended 39
subtitle “Subtitle 5. Maryland Economic Inclusion Fund”; 5–502; 5–505 to be 40
under the amended part “Part II. Maryland Economic Inclusion Fund”; 5–517 41
to be under the amended part “Part III. Small Business Development Contract 42
Financing Program”; 5–518, 5–524 through 5–528, and 5–530; 5–533 to be 43
under the amended part “Part IV. Small Business Development Guaranty 44
Program”; 5–534, 5–539 through 5–543, 5–545, 5–546, 5–549 through 5–551, 45 SENATE BILL 427 3
5–553, 5–555 through 5–558, 5–561, 5–562, 5–566 through 5–575, 6–1007, 1
5–1001, 5–1002, 5–1006, and 5–1204(a)(1)(ii)4.; 5–1501(a) to be under the 2
amended subtitle “Subtitle 15. Reinvest for Success Account”; and 5–2402, 3
6–309, 6–601, 6–604, 6–614, 6–1007 10–106, 10–115, 10–133, 10–408(a), 4
10–415, 10–470, and 10–528, 12–201(k) and (p), 12–207(b) and (e), and 5
16–102(d)(2) 6
Annotated Code of Maryland 7
(2024 Replacement Volume and 2024 Supplement) 8
BY repealing 9
Article – Economic Development 10
Section 2.5–201 through 2.5–207 and the subtitle “Subtitle 2. Maryland Economic 11
Development Commission”; 3–408 through 3–410; 5–305 through 5–307 and 12
the part “Part II. Maryland Economic Development Assistance Authority”; 13
and 5–506 through 5–514, 5–519 through 5–523, 5–529, 5–535 through 5–538, 14
5–544, 5–552, 5–554, 5–559, and 5–563 through 5–565, 5–1003 through 15
5–1005, and 5–1007 16
Annotated Code of Maryland 17
(2024 Replacement Volume and 2024 Supplement) 18
BY repealing and reenacting, without amendments, 19
Article – Economic Development 20
Section 3–201, 3–202, 3–403, 5–201, 5–203, 5–311 through 5–316, 5–322, 5–323, 21
5–323, 5–401(a), (b), and (p), 5–2401, 10–101(a), (b), and (d), 10–401(a) and 22
(c), 10–501(a) and (f), 12–201(a), and 12–207(a) 10–401(a) and (c), and 23
10–501(a) and (f) 24
Annotated Code of Maryland 25
(2024 Replacement Volume and 2024 Supplement) 26
BY adding to 27
Article – Economic Development 28
Section 5–464, 5–506 through 5–508 and 5–507, and 6–407; and the new part 29
designation “Part I. Maryland Economic Development Corporation” to 30
immediately precede Section 10–101 31
Annotated Code of Maryland 32
(2024 Replacement Volume and 2024 Supplement) 33
BY repealing and reenacting, with amendments, 34
Article – Economic Development 35
Section 10–137, 10–139 through 10–146, 10–149(a), and 10–150 through 10–155 36
Annotated Code of Maryland 37
(2024 Replacement Volume and 2024 Supplement) 38
(As enacted by Section 1 of this Act) 39
BY repealing and reenacting, without amendments, 40
Article – Economic Development 41
Section 10–138 42 4 SENATE BILL 427
Annotated Code of Maryland 1
(2024 Replacement Volume and 2024 Supplement) 2
(As enacted by Section 1 of this Act) 3
BY adding to 4
Article – Corporations and Associations 5
Section 1–203(b)(14) 6
Annotated Code of Maryland 7
(2014 Replacement Volume and 2024 Supplement) 8
BY repealing and reenacting, with amendments, 9
Article – Corporations and Associations 10
Section 1–203(b)(14) 11
Annotated Code of Maryland 12
(2014 Replacement Volume and 2024 Supplement) 13
BY repealing and reenacting, with amendments, 14
Article – Education 15
Section 9.5–113.1 16
Annotated Code of Maryland 17
(2022 Replacement Volume and 2024 Supplement) 18
BY repealing and reenacting, with amendments, 19
Article – Housing and Community Development 20
Section 4–509, 6–404, 6–404 and 6.5–107(e)(2) 21
Annotated Code of Maryland 22
(2019 Replacement Volume and 2024 Supplement) 23
BY repealing and reenacting, with amendments, 24
Article – State Finance and Procurement 25
Section 7–314 26
Annotated Code of Maryland 27
(2021 Replacement Volume and 2024 Supplement) 28
BY repealing and reenacting, with amendments, 29
Article – State Government 30
Section 9–1A–26(c)(2)(i) and 9–1A–27(a)(6) and (c)(1)(v)1. 31
Annotated Code of Maryland 32
(2021 Replacement Volume and 2024 Supplement) 33
BY repealing and reenacting, without amendments, 34
Article – State Government 35
Section 9–1A–27(c)(1)(v)1. 36
Annotated Code of Maryland 37
(2021 Replacement Volume and 2024 Supplement) 38
BY repealing 39 SENATE BILL 427 5
Article – State Government 1
Section 9–3101 through 9–3104 and the subtitle “Subtitle 31. Commerce Subcabinet” 2
Annotated Code of Maryland 3
(2021 Replacement Volume and 2024 Supplement) 4
BY repealing and reenacting, without amendments, 5
Article – Tax – Property 6
Section 9–103.1(a)(1) 7
Annotated Code of Maryland 8
(2019 Replacement Volume and 2024 Supplement) 9
BY repealing and reenacting, with amendments, 10
Article – Tax – Property 11
Section 9–103.1(a)(7), (c)(6)(i), (e), and (f) and 9–229(c)(2) and (g) 12
Annotated Code of Maryland 13
(2019 Replacement Volume and 2024 Supplement) 14
BY repealing and reenacting, with amendments, 15
Chapter 430 of the Acts of the General Assembly of 2023 16
Section 3 17
BY repealing and reenacting, with amendments, 18
Chapter 431 of the Acts of the General Assembly of 2023 19
Section 3 20
BY repealing and reenacting, without amendments, 21
Article – Tax – General 22
Section 10–702(a)(1), 10–725(a) and (b)(2), 10–730(a)(1), (4), and (7) and (b), and 23
10–733(a) and (b)(2) and (3)(ii)2.J. 24
Annotated Code of Maryland 25
(2022 Replacement Volume and 2024 Supplement) 26
BY repealing and reenacting, with amendments, 27
Article – Tax – General 28
Section 10–702(a)(4)(ii), 10–721, 10–725(d), 10–730(b), (c), and (i), 10–730(f), 29
10–733(b)(4) and (d), and 10–733.1 30
Annotated Code of Maryland 31
(2022 Replacement Volume and 2024 Supplement) 32
BY adding to 33
Article – Tax – General 34
Section 10–725(b)(5) and (k) and 10–733(b)(5) and, (j), and (k) 35
Annotated Code of Maryland 36
(2022 Replacement Volume and 2024 Supplement) 37
BY repealing and reenacting, without amendments, 38
Article – Tax – Property 39 6 SENATE BILL 427
Section 9–103(a)(1) and (6) and (b)(1) and 9–103.1(a)(1) and (6), (b), (c)(5), (e), and (f) 1
Annotated Code of Maryland 2
(2019 Replacement Volume and 2024 Supplement) 3
BY repealing and reenacting, with amendments, 4
Article – Tax – Property 5
Section 9–103(d)(2) and (5) and (e)(1), 9–103.1(a)(7), (c)(3), (4), and (6), (d), (e), and 6
(f), and 9–229(c)(2) and (g) 7
Annotated Code of Maryland 8
(2019 Replacement Volume and 2024 Supplement) 9
BY repealing 10
Article – Tax – General 11
Section 10–732 12
Annotated Code of Maryland 13
(2022 Replacement Volume and 2024 Supplement) 14
BY repealing and reenacting, with amendments, 15
Chapter 515 of the Acts of the General Assembly of 2000, as amended by Chapter 98 16
of the Acts of the General Assembly of 2005, Chapter 20 of the Acts of the 17
General Assembly of 2010, Chapter 85 of the Acts of the General Assembly of 18
2019, and Chapter 114 of the Acts of the General Assembly of 2021 19
Section 2 and 4 20
BY repealing and reenacting, with amendments, 21
Chapter 516 of the Acts of the General Assembly of 2000, as amended by Chapter 98 22
of the Acts of the General Assembly of 2005, Chapter 20 of the Acts of the 23
General Assembly of 2010, Chapter 85 of the Acts of the General Assembly of 24
2019, and Chapter 114 of the Acts of the General Assembly of 2021 25
Section 2 and 4 26
BY repealing and reenacting, with amendments, 27
Chapter 390 of the Acts of the General Assembly of 2013, as amended by Chapter 28
578 of the Acts of the General Assembly of 2018 and Chapter 113 of the Acts 29
of the General Assembly of 2021 30
Section 2 31
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 32
That Section(s) 5–1401 through 5–1410 and the subtitle “Subtitle 14. Regional Institution 33
Strategic Enterprise Zone Program”; and 5–2301 through 5–2307 and the subtitle “Subtitle 34
23. Build Our Future Grant Pilot Program” of Article – Economic Development of the 35
Annotated Code of Maryland be renumbered to be Section(s) 10–137 through 10–146 and 36
the part “Part II. Regional Institution Strategic Enterprise Zone Program”; and 10–149 37
through 10–155 and the part “Part III. Build Our Future Grant Pilot Program”, 38
respectively. 39
SENATE BILL 427 7
SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 1
as follows: 2
Article – Economic Development 3
2–113. 4
[(a) This section does not apply to a power, duty, responsibility, or function that is 5
granted to the Maryland Economic Development Commission under Subtitle 2 of this title. 6
(b)] The Secretary may exercise any power, duty, responsibility, or function of any 7
unit under the jurisdiction of the Department. 8
2–116. 9
(a) This section does not apply to a unit under the jurisdiction of the Department 10
to the extent that the unit is authorized by law to employ its own legal counsel. 11
(b) The Attorney General is the legal adviser to the Department. 12
(c) The Attorney General shall assign to the Department the number of assistant 13
Attorneys General that are authorized by law for the Department and its units. 14
(d) (1) The Attorney General shall designate one of the assistant Attorneys 15
General assigned to the Department as counsel to the Department and may not reassign 16
that individual without consulting with the Secretary. 17
(2) The counsel may only: 18
(i) advise the Secretary[, the Maryland Economic Development 19
Commission,] and any other official of the Department as they require; 20
(ii) supervise the other assistant Attorneys General assigned to the 21
Department; and 22
(iii) perform for the Department the other duties that the Attorney 23
General assigns. 24
(3) The other assistant Attorneys General shall perform for the 25
Department the other duties that the Attorney General assigns. 26
2.5–106. 27
The Department shall: 28
(1) investigate and assemble information about the economic development, 29
industrial opportunities, and economic resources of the State, including raw materials, 30 8 SENATE BILL 427
power and water resources, transportation facilities, markets, labor, banking and financing 1
facilities, industrial sites, and other fields of research; 2
(2) encourage location and development of new businesses in the State and 3
the retention and expansion of present enterprises in coordination with local governments 4
and local economic development units; 5
(3) encourage formation of local and sectional development committees and 6
cooperate with local civic groups and other local, State, and federal development units; 7
(4) disseminate information in the interest of industrial development in the 8
State, by publication, advertising, and other means; 9
(5) assist businesses in the areas of technology development and 10
commercialization, small business development, workforce development and productivity, 11
manufacturing modernization, and defense conversion; 12
(6) serve as an ombudsman for businesses affected by State policies and 13
programs; 14
(7) coordinate business assistance service delivery to individual companies; 15
(8) link groups of businesses to address regional and industry specific 16
needs; 17
(9) broker information exchange and entrepreneurial services that 18
enhance economic development through partnerships with businesses, nonprofit 19
organizations, professional groups, local economic development entities, and local 20
governments; 21
(10) assist in developing and conducting regional strategic planning and 22
coordinating State investments with regional economic development entities; 23
(11) collect and assemble information and data available from other State 24
units or instrumentalities; 25
(12) monitor economic conditions, release reports, and maintain 26
interindustry models of State regulations and local economies; 27
[(13) use community colleges in the State to help deliver services;] 28
[(14)] (13) administer the programs in the Department; 29
[(15)] (14) coordinate its efforts and activities with the Apprenticeship and 30
Training Council and Apprenticeship and Training Program in the Maryland Department 31
of Labor; 32
SENATE BILL 427 9
[(16)] (15) establish and monitor performance measures to determine the 1
success of outreach efforts to businesses; 2
[(17)] (16) facilitate regular meetings among its regional experts, financial 3
incentive team, and tourism development team to determine the success in meeting overall 4
economic development strategic goals and in addressing the economic development needs 5
of each region; 6
[(18)] (17) work with community colleges to enhance the role of community 7
colleges in providing workforce training services, including industry–specific education and 8
training in response to the needs of the State; [and] 9
[(19)] (18) (i) define, identify, and compile data on State and regional 10
workforce needs; and 11
(ii) work collaboratively with the Maryland Department of Labor 12
and the Maryland Higher Education Commission to produce uniform and consistent 13
baseline data, including common sources and measurements, about workforce needs to 14
inform State policies relating to postsecondary education; AND 15
(19) EVALUATE THE POTENTI AL EMPLOYMENT AND EC ONOMIC 16
GROWTH OF MARYLAND’S INDUSTRY SECTORS A ND, FROM THIS EVALUATION : 17
(I) ESTABLISH A LIST OF INDUSTRY SECTORS AND ACTIV ITIES 18
TO BE CONSIDERED FOR ADDITIONAL INVESTMEN T AND SUPPORT FROM T HE 19
DEPARTMENT ; 20
(II) RECOMMEND OTHER AGEN CIES CONSIDER PRIORI TIZING 21
THE SECTORS AND ACTI VITIES ON THE LIST D ESCRIBED UNDER ITEM (I) OF THIS 22
ITEM THROUGH THOSE A GENCIES’ POLICIES AND PROGRAM S; AND 23
(III) PUBLISH THE LIST DES CRIBED UNDER ITEM (I) OF THIS 24
ITEM ON THE DEPARTMENT ’S WEBSITE. 25
[Subtitle 2. Maryland Economic Development Commission.] 26
[2.5–201. 27
In this subtitle, “Commission” means the Maryland Economic Development 28
Commission.] 29
[2.5–202. 30
(a) There is a Maryland Economic Development Commission staffed by the 31
Department. 32 10 SENATE BILL 427
(b) The purpose of the Commission is to: 1
(1) establish economic development policy in the State; 2
(2) advise the Secretary on economic development policy in the State; 3
(3) oversee the operations of the Department and its units, including the 4
Department’s efforts to support the creation of, attract, and retain businesses and jobs; and 5
(4) monitor the operations of the Maryland Technology Development 6
Corporation, the Maryland Economic Development Corporation, and the Maryland 7
Public–Private Partnership Marketing Corporation, including the efforts of those entities 8
to support the creation, attraction, and retention of businesses and jobs.] 9
[2.5–203. 10
(a) (1) (i) The Commission consists of: 11
1. not more than 21 voting members appointed by the 12
Governor with the advice and consent of the Senate; 13
2. two voting members appointed by the President of the 14
Senate of Maryland; 15
3. two voting members appointed by the Speaker of the 16
House of Delegates; 17
4. A. one member of the Senate of Maryland, designated 18
by the President of the Senate; and 19
B. one member of the House of Delegates, designated by the 20
Speaker of the House; and 21
5. the following representatives of State units and 22
instrumentalities of the State: 23
A. the Executive Director of the Maryland Economic 24
Development Corporation, or the Executive Director’s designee; 25
B. the Chief Executive Officer of the Maryland Technology 26
Development Corporation, or the Chief Executive Officer’s designee; 27
C. the Secretary or the Secretary’s designee; and 28
D. the Secretary of Labor, or the Secretary’s designee. 29
SENATE BILL 427 11
(ii) The Secretary and the Secretary of Labor or their designees, 1
State unit or instrumentality representatives, and members of the General Assembly are 2
nonvoting ex officio members of the Commission. 3
(iii) A designee under subparagraph (i)5 of this paragraph may be an 4
administrator or a senior official of the unit or instrumentality. 5
(2) The geographic representation of the Commission shall cover the entire 6
State and shall include at least one representative from: 7
(i) the upper Eastern Shore; 8
(ii) the lower Eastern Shore; 9
(iii) Calvert County, Charles County, or St. Mary’s County; 10
(iv) Allegany County or Garrett County; and 11
(v) Carroll County, Frederick County, or Washington County. 12
(3) The industries represented by the members of the Commission shall: 13
(i) be diverse; and 14
(ii) include at least one representative from: 15
1. the life sciences industry; and 16
2. the manufacturing industry. 17
(4) The members appointed shall reflect the racial and gender diversity of 18
the population of the State. 19
(b) The appointed members of the Commission shall have substantial interest or 20
experience in business or knowledge of business and economic development. 21
(c) The Commission and its members are subject to the Maryland Public Ethics 22
Law. 23
(d) (1) The term of an appointed member is 3 years. 24
(2) At the end of a term, an appointed member continues to serve until a 25
successor is appointed and qualifies. 26
(3) A member appointed after a term has begun serves only for the 27
remainder of the term and until a successor is appointed and qualifies. 28
12 SENATE BILL 427
(4) The terms of the appointed members are staggered as required by the 1
terms provided for members of the Commission on October 1, 2008. 2
(5) A member may be removed by the Governor with or without cause.] 3
[2.5–204. 4
(a) The Governor shall designate a chair or cochairs from the voting members of 5
the Commission. 6
(b) The Commission may elect an executive committee or f orm special 7
subcommittees from its members to exercise the powers and functions of the Commission 8
between meetings of the Commission.] 9
[2.5–205. 10
(a) (1) The Commission shall meet as often as its duties require, but not less 11
than quarterly. 12
(2) The chair or cochairs shall designate a time and place for meetings of 13
the Commission. 14
(b) A majority of the voting members of the Commission is a quorum. 15
(c) A voting member of the Commission: 16
(1) may not receive compensation as a member of the Commission; but 17
(2) is entitled to reimbursement in accordance with the Standard State 18
Travel Regulations as provided in the State budget. 19
(d) The Department shall provide staff support to the Commission.] 20
[2.5–206. 21
(a) The Commission may: 22
(1) adopt bylaws for the conduct of its business; 23
(2) hire consultants; and 24
(3) do anything necessary or convenient to carry out its powers and the 25
purposes of this subtitle. 26
(b) The Commission shall: 27
SENATE BILL 427 13
(1) develop and update an economic development strategic plan for the 1
State; 2
(2) seek ideas and advice from each region of the State to develop the 3
economic development strategic plan; 4
(3) recommend to the Governor and the Secretary the program and 5
spending priorities needed to implement the economic development strategic plan; 6
(4) review the allocation of financing incentives; 7
(5) participate in encouraging new businesses to locate in the State; 8
(6) conduct periodic reviews of the economic development activities of the 9
Department, the Maryland Economic Development Corporation, the Maryland Technology 10
Development Corporation, and the Maryland Public–Private Partnership Marketing 11
Corporation for compliance with the economic development strategic plan; 12
(7) make recommendations to the Governor and the Secretary to improve 13
economic development activities that fail to achieve economic development strategic goals 14
or are inconsistent with priorities under the economic development strategic plan; and 15
(8) carry out other economic development activities that the Governor or 16
the Secretary requests.] 17
[2.5–207. 18
(a) On or before January 15 of each year, the Commission shall report to the 19
General Assembly, in accordance with § 2–1257 of the State Government Article, on its 20
activities during the previous year. 21
(b) The report shall include a review of initiatives taken by the Commission and 22
the Department to implement the economic development strategic plan.] 23
3–201. 24
(a) In this subtitle the following words have the meanings indicated. 25
(b) “Advisory Board” means the Maryland Life Sciences Advisory Board. 26
(c) “Corporation” means the Maryland Technology Development Corporation. 27
(d) “Life sciences” includes the fields of biotechnology, pharmaceuticals, 28
biomedical technologies, life systems technologies, food sciences, environmental sciences, 29
and biomedical devices. 30
3–202. 31 14 SENATE BILL 427
(a) There is a Maryland Life Sciences Advisory Board in the Department. 1
(b) The purpose of the Advisory Board is to recommend State and federal policies, 2
priorities, practices, and legislation to expedite the creation of private sector jobs through 3
the commercialization of life sciences research. 4
3–203. 5
(a) The Advisory Board consists of the following 18 members: 6
(1) the Secretary or the Secretary’s designee; 7
(2) the Executive Director of the Corporation, or the Executive Director’s 8
designee; and 9
(3) the following members appointed by the Governor: 10
(i) three representing federal agencies located in the State with life 11
sciences missions; 12
(ii) seven with executive experience in life sciences businesses 13
located in the State, at least four of whom represent small businesses; 14
(iii) four representing institutions of higher education located in the 15
State, one of whom shall represent a community college; 16
(iv) one with general business marketing experience in a life sciences 17
business located in the State; and 18
(v) one member of the general public. 19
(b) The composition of the Advisory Board shall reflect the racial and gender 20
diversity of the population of the State. 21
(c) (1) Except for the Secretary or the Secretary’s designee and the Executive 22
Director of the Corporation or the Executive Director’s designee, the term of an Advisory 23
Board member is [2] 3 years. 24
(2) At the end of a term, a member continues to serve until a successor is 25
appointed and qualifies. 26
(3) A member who is appointed after a term has begun serves only for the 27
rest of the term and until a successor is appointed and qualifies. 28
SENATE BILL 427 15
(4) THE TERMS OF THE APPO INTED MEMBERS ARE STAGGERED AS 1
REQUIRED BY THE TERM S PROVIDED FOR MEMBE RS OF THE ADVISORY BOARD ON 2
JULY 1, 2025. 3
(d) The Governor may remove a member of the Advisory Board for incompetence, 4
misconduct, or failure to perform the duties of the position. 5
(e) The Governor shall select a chair from among the members of the Advisory 6
Board. 7
(f) The Advisory Board may act with an affirmative vote of eight members. 8
(g) A member of the Advisory Board: 9
(1) may not receive compensation as a member of the Advisory Board; but 10
(2) is entitled to reimbursement for expenses under the Standard State 11
Travel Regulations, as provided in the State budget. 12
3–401. 13
(a) In this subtitle the following words have the meanings indicated. 14
[(b) “Board” means the Partnership for Workforce Quality Advisory Board.] 15
[(c)] (B) “Fund” means the [Partnership for Workforce Quality] TALENT 16
ACCELERATOR GRANT Fund. 17
[(d)] (C) “Program” means the [Partnership for Workforce Quality] TALENT 18
ACCELERATOR GRANT Program. 19
3–402. 20
There is a [Partnership for Workforce Quality] TALENT ACCELERATOR GRANT 21
Program in the Department. 22
3–403. 23
The purpose of the Program is to provide training services to: 24
(1) improve the competitiveness and productivity of the State’s workforce 25
and business community; 26
(2) upgrade employee skills, or train new employees, for new technologies 27
or production processes; and 28
16 SENATE BILL 427
(3) assist employers located in the State in promoting employment 1
stability. 2
[3–408. 3
(a) There is a Partnership for Workforce Quality Advisory Board in the 4
Department. 5
(b) The Board shall advise the Secretary.] 6
[3–409. 7
(a) The Board consists of the following 15 members: 8
(1) one member of the Senate of Maryland appointed by the President of 9
the Senate; 10
(2) one member of the House of Delegates appointed by the Speaker of the 11
House; and 12
(3) the following members appointed by the Governor with the advice of 13
the Secretary and the chair of the Governor’s Workforce Development Board: 14
(i) five representatives of business, of which three shall represent 15
employers with fewer than 100 employees; 16
(ii) three representatives of organized labor; 17
(iii) one representative from the Maryland Higher Education 18
Commission; 19
(iv) one representative from the State Department of Education; 20
(v) one representative from the Governor’s Workforce Development 21
Board; and 22
(vi) two representatives of the general public. 23
(b) (1) The term of a member appointed under subsection (a)(3) of this section 24
is 3 years. 25
(2) The terms of the members appointed under subsection (a)(3) of this 26
section are staggered as required by the terms provided for members of the Board on 27
October 1, 2008. 28
(3) At the end of a term, a member continues to serve until a successor is 29
appointed and qualifies. 30 SENATE BILL 427 17
(4) A member who is appointed after a term has begun serves only for the 1
rest of the term and until a successor is appointed and qualifies. 2
(c) A member of the Board: 3
(1) may not receive compensation as a member of the Board; but 4
(2) is entitled to reimbursement for expenses under the Standard State 5
Travel Regulations. 6
(d) The Governor shall designate the chair of the Board.] 7
[3–410. 8
(a) The Board shall: 9
(1) submit recommendations to the Secretary concerning overall policy for 10
the Program; 11
(2) recommend a system to evaluate requests for assistance under the 12
Program, including eligibility criteria and priorities for assistance; 13
(3) develop criteria to assess and evaluate Program performance and 14
advise the Secretary of the criteria; 15
(4) consult regularly with the Governor’s Workforce Development Board 16
and the Maryland Economic Development Commission concerning the activities of the 17
Program; 18
(5) submit a quarterly report on the Program to the Governor’s Workforce 19
Development Board; and 20
(6) advise the Secretary on coordination of cooperative activities at the 21
State and local level between the Department, employers, labor, and other public and 22
private entities involved with workforce quality. 23
(b) In recommending a system for evaluating requests for assistance, the Board 24
shall consider the equal distribution of assistance to all subdivisions of the State.] 25
3–411. 26
(a) There is a [Partnership for Workforce Quality] TALENT ACCELERATOR 27
GRANT Fund in the Department. 28
(b) The Secretary shall manage and supervise the Fund. 29
18 SENATE BILL 427
(c) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 1
under § 7–302 of the State Finance and Procurement Article. 2
(2) The Treasurer shall hold the Fund separately and the Comptroller shall 3
account for the Fund. 4
(d) The Fund consists of: 5
(1) money appropriated by the State to the Fund; 6
(2) money made available to the Fund through federal programs; 7
(3) private contributions to the Fund; 8
(4) an application or other fee paid to the Program in connection with 9
processing a request for financial assistance; and 10
(5) any other money made available to the Fund. 11
(e) The Department may use money in the Fund for: 12
(1) grants to defray the cost of workforce training; and 13
(2) administrative, actuarial, legal, and technical services for the Program. 14
(f) Any investment earnings shall be credited to the Fund. 15
(g) The Governor shall include in the State budget for each fiscal year an 16
appropriation of at least $1,000,000 for the [Partnership for Workforce Quality] TALENT 17
ACCELERATOR GRANT Program. 18
5–102. 19
The Department shall administer the State’s economic development and financial 20
assistance programs and funds including: 21
(1) the BRAC Revitalization and Incentive Zone Program, under Subtitle 22
13 of this title; 23
(2) [the Build Our Future Grant Pilot Program, under Subtitle 23 of this 24
title; 25
(3)] the Enterprise Fund, under Subtitle 6 of this title; 26
[(4)] (3) the Enterprise Zones Program, under Subtitle 7 of this title; 27
SENATE BILL 427 19
[(5)] (4) the Make Office Vacancies Extinct Program, under Subtitle 15 of 1
this title; 2
[(6)] (5) the Maryland Economic Adjustment Fund, under Subtitle 2 of 3
this title; 4
[(7)] (6) the Maryland Economic [Development Assistance Authority 5
and] COMPETITIVENESS Fund, under Subtitle 3 of this title; 6
[(8)] (7) the Maryland Industrial Development Financing Authority, 7
under Subtitle 4 of this title; 8
[(9)] (8) the Maryland [Small Business Development Financing 9
Authority] ECONOMIC INCLUSION FUND, under Subtitle 5 of this title; 10
[(10)] (9) the Appalachian Regional Development Program, under Title 13, 11
Subtitle 1 of this article; 12
[(11)] (10) jointly with the Department of Housing and Community 13
Development, the Community Development Block Grant for Economic Development; AND 14
[(12) the Regional Institution Strategic Enterprise Zone Program under 15
Subtitle 14 of this title; and 16
(13)] (11) any other programs or funds designated by statute, the 17
Governor, or the Secretary. 18
5–201. 19
(a) In this subtitle the following words have the meanings indicated. 20
(b) “Fund” means the Maryland Economic Adjustment Fund. 21
(c) (1) “Working capital” means money for current operations of a business. 22
(2) “Working capital” includes money for supplies, materials, labor, 23
equipment, rent, software, marketing, insurance, and fees for professional services. 24
5–203. 25
(a) There is a Maryland Economic Adjustment Fund in the Department. 26
(b) (1) The Department shall administer the Fund. 27
(2) The Secretary may: 28
20 SENATE BILL 427
(i) delegate to any unit in the Department the underwriting, closing, 1
monitoring, and workout functions for Fund loans; or 2
(ii) contract with another entity to perform these functions. 3
(c) The Maryland Economic Adjustment Fund is a special, nonlapsing revolving 4
fund that is not subject to reversion under § 7–302 of the State Finance and Procurement 5
Article. 6
(d) (1) The Fund consists of: 7
(i) federal money allocated or granted to the Fund, including 8
adjustment implementation grant money designated for the Fund under the Defense 9
Conversion and Defense Economic Adjustment Program of the Economic Development 10
Administration of the United States Department of Commerce; 11
(ii) private money donated or granted to the Fund; 12
(iii) money appropriated by the State to the Fund; 13
(iv) premiums, fees, interest payments, and principal payments on 14
loans made under this subtitle, including a loan financed by the Economic Development 15
Opportunities Program Fund under § 7–314(f) of the State Finance and Procurement 16
Article; 17
(v) proceeds from the sale, disposition, lease, or rental of collateral 18
relating to loans under this subtitle; and 19
(vi) any other money made available to the Fund. 20
(2) This subtitle does not require an appropriation to the Fund from the 21
General Fund of the State, regardless of the availability of other funding sources for the 22
Fund. 23
(e) (1) The Fund shall be used to: 24
(i) make loans to new or existing companies with 50 or fewer 25
employees; 26
(ii) make grants to local or regional governmental or nonprofit 27
economic development revolving loan funds in the State; and 28
(iii) pay all expenses and disbursements authorized by the 29
Department for administering the Fund. 30
(2) A loan to an eligible company under this subtitle may include: 31
SENATE BILL 427 21
(i) advances of loan proceeds for loans; and 1
(ii) to the extent allowed by the regulations of the federal Economic 2
Development Administration of the United States Department of Commerce, money for 3
expenses for administrative, legal, actuarial, technical, and other services. 4
(3) Subject to the restrictions of this subtitle, the Department may make a 5
loan from the Fund to an applicant only if: 6
(i) the applicant meets the qualifications under this subtitle; and 7
(ii) the applicant meets any additional requirements imposed by the 8
source of the money to be loaned. 9
(f) (1) The Treasurer shall invest the money of the Fund in the same manner 10
as other State money may be invested. 11
(2) Any investment earnings of the Fund shall be credited to the Fund. 12
(3) The Treasurer shall submit a report each year to the Department on: 13
(i) the status of the money invested under this subtitle; 14
(ii) the market value of the assets in the Fund on the date of the 15
report; and 16
(iii) the interest received from investments for the Fund during the 17
reporting period. 18
5–205. 19
(a) An applicant for a loan under this subtitle shall submit to the Department an 20
application on the form that the Department requires. 21
(b) The application shall include: 22
(1) a detailed strategic business plan; 23
(2) the amount of money required for the activities described in the 24
strategic business plan; 25
(3) the money available to the applicant without financial assistance from 26
the Department; 27
(4) the amount of financial assistance requested from the Department; 28
22 SENATE BILL 427
(5) information relating to the financial status of the applicant, including, 1
if applicable: 2
(i) a current balance sheet; 3
(ii) a profit and loss statement; and 4
(iii) credit references; and 5
(6) any other relevant information that the Department requests. 6
(C) THE DEPARTMENT MAY NOT AP PROVE AN APPLICATION FOR FINANCIAL 7
ASSISTANCE UNDER THI S SUBTITLE AFTER JUNE 30, 2025. 8
Subtitle 3. Maryland Economic [Development Assistance Authority and] 9
COMPETITIVENESS Fund. 10
5–301. 11
(a) In this subtitle the following words have the meanings indicated. 12
(b) “Aquaculture project” means a project that encourages innovation, expansion, 13
and modernization of the seafood processing industry or aquaculture industry. 14
(c) “Arts and entertainment district” means an area designated by the Secretary 15
as an arts and entertainment district under Title 4, Subtitle 7 of this article. 16
(d) “Arts and entertainment enterprise” means a for–profit or nonprofit entity 17
that is: 18
(1) located in an arts and entertainment district; and 19
(2) dedicated to the visual or performing arts. 20
(e) “Arts and entertainment project” means a project that promotes or enhances 21
the development of an arts and entertainment district. 22
(f) (1) “Associated development and carrying costs” means costs that are 23
associated with the acquisition and maintenance of an asset. 24
(2) “Associated development and carrying costs” includes: 25
(i) settlement costs; 26
(ii) insurance; 27
(iii) interest; 28 SENATE BILL 427 23
(iv) taxes; 1
(v) government fees; 2
(vi) utilities; and 3
(vii) the costs of managing and securing the asset. 4
(g) [“Authority” means the Maryland Economic Development Assistance 5
Authority. 6
(h)] “Brownfields Revitalization Incentive Program” means the program in the 7
Department that provides financial assistance from the Fund for the redevelopment of 8
qualified brownfields sites, as provided in Part VI of this subtitle. 9
[(i)] (H) (1) “Brownfields site” means a property that: 10
(i) is located in a county or municipal corporation that elects to 11
participate in the Brownfields Revitalization Incentive Program in accordance with § 12
5–316 of this subtitle; and 13
(ii) is: 14
1. an eligible property, as defined in § 7–501 of the 15
Environment Article, that is owned or operated by an inculpable person, as defined in § 16
7–501 of the Environment Article; or 17
2. a property where there is a release, discharge, or 18
threatened release of oil, as defined in § 4–401 of the Environment Article, that is subject 19
to Title 4 of the Environment Article. 20
(2) “Brownfields site” does not include property that is owned or operated 21
by: 22
(i) a responsible person as defined in § 7–201 of the Environment 23
Article; or 24
(ii) a person responsible for the discharge, as defined in § 4–401 of 25
the Environment Article. 26
[(j)] (I) “Child care facility” means a facility that is required to be licensed as a 27
child care center under Title 9.5, Subtitle 4 of the Education Article. 28
[(k)] (J) “Child care special loan” means a direct loan to expand or improve child 29
care services at a child care facility, as provided in Part VII of this subtitle. 30
24 SENATE BILL 427
[(l)] (K) “Corporation” means the Maryland Economic Development 1
Corporation. 2
[(m)] (L) “Financial assistance” means a grant, loan, or investment provided 3
under this subtitle. 4
[(n)] (M) “Fund” means the Maryland Economic [Development Assistance] 5
COMPETITIVENESS Fund. 6
[(o)] (N) “Local government development fund” means a revolving, nonlapsing 7
fund that one or more local governments establish for economic development in the areas 8
under their jurisdiction. 9
[(p)] (O) “Local economic development opportunity” means a project that: 10
(1) is determined by the Department [or Authority] to provide a valuable 11
economic development opportunity to the jurisdiction in which the project is located; and 12
(2) is a priority for and endorsed by the governing body of that jurisdiction. 13
[(q)] (P) “Local government” means: 14
(1) a county; 15
(2) a municipal corporation; 16
(3) a designated agency or instrumentality of a county; or 17
(4) a designated agency or instrumentality of a municipal corporation. 18
[(r)] (Q) “Qualified brownfields site” means a brownfields site that is determined 19
by the Department to be eligible for financial assistance under this subtitle. 20
[(s)] (R) “Responsible person” has the meaning stated in § 7–201 of the 21
Environment Article. 22
[(t)] (S) “Significant strategic economic development opportunity” means a 23
project that is determined by the Department [or Authority] to provide a valuable economic 24
development opportunity of statewide, regional, or strategic industry impact. 25
[(u)] (T) “Specialized economic development opportunity” means: 26
(1) an aquaculture project; 27
(2) an arts and entertainment enterprise; 28
SENATE BILL 427 25
(3) an arts and entertainment project; 1
(4) the redevelopment of a qualified brownfields site; or 2
(5) a project to create or expand a child care facility. 3
[(v)] (U) “Tier I county project” means a project that a local government or the 4
Corporation carries out in a Tier I county. 5
[(w)] (V) “Working capital” means money to be used for current operations of a 6
business. 7
[Part II. Maryland Economic Development Assistance Authority.] 8
[5–305. 9
There is a Maryland Economic Development Assistance Authority in the 10
Department.] 11
[5–306. 12
(a) The Authority consists of the individuals serving as members of the Maryland 13
Industrial Development Financing Authority under § 5–406 of this title. 14
(b) The members of the Authority shall be appointed in accordance with § 5–407 15
of this title.] 16
[5–307. 17
(a) The members of the Authority may act concurrently in their capacities as 18
members of the Authority and of the Maryland Industrial Development Financing 19
Authority. 20
(b) The members of the Authority shall carry out the powers and duties of the 21
Authority under this subtitle whether acting: 22
(1) concurrently as members of the Authority and the Maryland Industrial 23
Development Financing Authority; or 24
(2) as members of either authority alone. 25
(c) The members of the Authority shall conduct the business of the Authority and 26
of the Maryland Industrial Development Financing Authority under Subtitle 4 of this title.] 27
Part III. Maryland Economic [Development Assistance] COMPETITIVENESS Fund. 28
26 SENATE BILL 427
5–310. 1
There is a Maryland Economic [Development Assistance] COMPETITIVENESS Fund 2
in the Department. 3
5–311. 4
The purposes of the Fund are to: 5
(1) expand employment opportunities in the State by providing financial 6
assistance to businesses that are engaged in eligible industry sectors, including financial 7
assistance for: 8
(i) aquaculture projects; 9
(ii) arts and entertainment enterprises; 10
(iii) arts and entertainment projects; and 11
(iv) creation and expansion of child care facilities; 12
(2) provide financial assistance for the redevelopment of qualified 13
brownfields sites; 14
(3) provide financial assistance to local governments and the Corporation 15
for economic development projects; and 16
(4) provide grants to local economic development funds. 17
5–312. 18
(a) The Secretary shall administer the Fund. 19
(b) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 20
under § 7–302 of the State Finance and Procurement Article. 21
(2) The Treasurer shall hold the Fund separately and the Comptroller shall 22
account for the Fund. 23
(c) Any investment earnings of the Fund shall be credited to the Fund. 24
5–313. 25
The Fund consists of: 26
(1) money appropriated in the State budget to the Fund; 27
SENATE BILL 427 27
(2) money made available to the Fund through federal programs or private 1
contributions; 2
(3) repayments of principal and interest from loans made from the Fund; 3
(4) proceeds from the sale, disposition, lease, or rental of collateral related 4
to financial assistance provided by the Department under this subtitle; 5
(5) application or other fees paid to the Fund to process requests for 6
financial assistance; 7
(6) recovery of an investment made by the Department in a business, 8
including an arrangement under which part of the investment is recovered through: 9
(i) a requirement that the Department receive a proportion of cash 10
flow, commissions, royalties, or license fees; 11
(ii) the repurchase from the Department of any of its investment 12
interest; or 13
(iii) the sale of an appreciated asset; 14
(7) repayments received from recipients of conditional grants from the 15
Department; 16
(8) money collected under § 9–229 of the Tax – Property Article; 17
(9) repayments on or recoveries from financial assistance provided from 18
the former: 19
(i) Brownfields Revitalization Incentive Fund; 20
(ii) Child Care Facilities Direct Loan Fund; 21
(iii) Child Care Special Loan Fund; 22
(iv) Maryland Industrial and Commercial Redevelopment Fund; 23
(v) Maryland Industrial Land Fund; 24
(vi) Maryland Seafood and Aquaculture Loan Fund; and 25
(vii) Smart Growth Economic Development Infrastructure Fund; and 26
(10) any other money made available to the Fund. 27
5–314. 28 28 SENATE BILL 427
(a) The Department may use money in the Fund to: 1
(1) provide financial assistance to eligible applicants; and 2
(2) pay expenses for administrative, actuarial, legal, and technical services 3
for the Fund. 4
(b) The Department periodically shall review its portfolio in an effort to ensure: 5
(1) the equitable distribution among the counties of money from the Fund; 6
(2) adequate funding for Tier I county projects; and 7
(3) that no particular Tier I county benefits disproportionately from 8
financial assistance to Tier I counties under this subtitle. 9
5–315. 10
In accordance with § 2.5–109 of this article, the Department shall report on the 11
number, amount, use, and economic benefits of financial assistance provided under this 12
subtitle. 13
5–316. 14
Financial assistance is deemed authorized under this subtitle if it was provided, or 15
approved to be provided, from the following programs that have been incorporated into the 16
Fund: 17
(1) the Brownfields Revitalization Incentive Fund; 18
(2) the Child Care Facilities Direct Loan Fund; 19
(3) the Child Care Special Loan Fund; 20
(4) the Maryland Industrial and Commercial Redevelopment Fund; 21
(5) the Maryland Industrial Land Act; 22
(6) the Maryland Seafood and Aquaculture Loan Fund; and 23
(7) the Smart Growth Economic Development Infrastructure Fund. 24
5–319. 25
(a) [(1) Financial assistance from the Fund not exceeding $2,500,000 may be 26
approved by the Secretary. 27 SENATE BILL 427 29
(2) Except as provided in paragraph (3) of this subsection, financial 1
assistance from the Fund exceeding $2,500,000 requires approval by the Authority. 2
(3) For a Tier I county project, the Secretary may approve financial 3
assistance exceeding $2,500,000. 4
(b) Except as provided in subsection (a)(3) of this section, with respect to requests 5
for financial assistance exceeding $2,500,000: 6
(1) The Department shall evaluate the requests; and 7
(2) The Authority shall: 8
(i) evaluate the requests that have first been evaluated by the 9
Department; 10
(ii) determine whether to approve the requests; and 11
(iii) set the terms and conditions of the financial assistance. 12
(c)] (1) Except as provided in paragraph (2) of this subsection, financial 13
assistance provided to a local government or the Corporation for a project shall be approved 14
by a formal resolution of: 15
(i) the governing body of the jurisdiction in which the project is 16
located; or 17
(ii) if the recipient of the financial assistance is the Corporation, its 18
board of directors. 19
(2) If the recipient of financial assistance is the Corporation for a Tier I 20
county project, the financial assistance shall be approved by formal resolutions of both the 21
board of directors of the Corporation and the governing body of the jurisdiction in which 22
the project is located. 23
(3) A project that is funded by a grant from the Fund to a local government 24
or the Corporation, and carried out by the local government or the Corporation, shall be 25
consistent with the strategy or plan for economic development of the county or municipal 26
corporation in which the project is located. 27
(4) If the Department provides financial assistance to a local government 28
for a project, an interest in that project is later transferred to a third party, and the transfer 29
of the interest is financed by the local government: 30
30 SENATE BILL 427
(i) the local government may assign the financing documents to the 1
Department as a repayment of or return on the Department’s financial assistance to the 2
local government; and 3
(ii) the assignment may not be considered a new financing under this 4
subtitle. 5
[(d)] (B) For a local economic development opportunity, the local government of 6
the jurisdiction in which the project is located shall provide[: 7
(1)] a formal resolution of the governing body of the jurisdiction in which 8
the project is located that endorses the financial assistance to be provided from the Fund[; 9
and 10
(2) as determined by the Department or Authority to evidence the support 11
of the local government for the project: 12
(i) a guarantee, secured by the full faith and credit of the county or 13
municipal corporation in which the project is located, of all or part of the financial 14
assistance to be provided by the Fund; 15
(ii) the financing of part of the costs of the project equal to at least 16
10% of the financial assistance to be provided from the Fund; or 17
(iii) both]. 18
5–320. 19
(a) To be eligible for financial assistance from the Fund, an applicant shall be: 20
(1) a local economic development fund that meets the criteria set forth in 21
Part V of this subtitle; or 22
(2) an individual, private business, nonprofit entity, or local government, 23
or the Corporation that intends to use the requested financial assistance for a project that: 24
(i) except as provided in subsection (b) of this section, is in an 25
eligible industry sector under § 5–321 of this subtitle; and 26
(ii) has a strong potential for expanding or retaining employment 27
opportunities in the State. 28
(b) A project need not be in an eligible industry sector if the applicant: 29
(1) is located in a Tier I county; or 30
(2) (i) is a local government or the Corporation; and 31 SENATE BILL 427 31
(ii) does not intend to use the financial assistance to carry out a 1
project that benefits a particular private sector entity. 2
(c) In form and content acceptable to the Department, an applicant for financial 3
assistance from the Fund shall submit to the Department an application that contains: 4
(1) the information that the Department [or Authority] considers 5
necessary to evaluate the request for financial assistance; and 6
(2) for a Tier I county project: 7
(i) a marketing plan designed to market the project to prospective 8
businesses; 9
(ii) a statement of planned marketing expenditures as a percent of 10
the total financial assistance amount requested; and 11
(iii) a plan for the project that is consistent with the county’s local 12
strategic economic development plan as to the location and type of project. 13
5–321. 14
(a) [(1) After consulting with the Department and the Maryland Department 15
of Labor, each year the Maryland Economic Development Commission shall: 16
(i) evaluate the potential employment and economic growth of 17
Maryland’s industry sectors; and 18
(ii) recommend eligible industry sectors to the Authority. 19
(2) (1) Each year the Authority DEPARTMENT shall: 20
(i) consider the recommendation of the Maryland Economic 21
Development Commission; and 22
(ii) establish a list of industry sectors that will be eligible for 23
financial assistance from the Fund. 24
(3) (2) In determining whether an applicant is engaged in an eligible 25
industry sector, the Department shall consider the definitions set forth in the North 26
American Industry Classification System.] EXCEPT AS PROVIDED IN SUBSECTION (B) 27
OF THIS SECTION, IN ORDER TO BE CONSI DERED ELIGIBLE FOR F INANCIAL 28
ASSISTANCE FROM THE FUND, A PROJECT SHALL BE E NGAGED IN AN ELIGIBL E 29
INDUSTRY SECTOR AS ESTABLISHE D THROUGH § 2.5–106 OF THIS ARTICLE. 30
32 SENATE BILL 427
(b) (1) For the purpose of providing financial assistance under this subtitle, 1
the following are ALSO deemed to be in eligible industry sectors: 2
(i) aquaculture projects; 3
(ii) arts and entertainment enterprises; 4
(iii) arts and entertainment projects; 5
(iv) redevelopment of qualified brownfields sites; 6
(v) creation or expansion of child care facilities; 7
(vi) projects in areas that are declared to be federal disaster areas 8
within 1 year before the Department receives an application for financial assistance under 9
this subtitle; and 10
(vii) feasibility studies. 11
(2) The requirements specifically imposed on significant strategic economic 12
development opportunities and local economic development opportunities under this 13
subtitle do not apply to the items listed in paragraph (1) of this subsection. 14
5–322. 15
(a) Financial assistance from the Fund may be used only to finance costs incurred 16
for: 17
(1) construction or acquisition of a building or real property, and associated 18
development and carrying costs; 19
(2) construction, acquisition, or installation of equipment, furnishings, 20
fixtures, leasehold improvements, site improvements, or infrastructure improvements, 21
including rail line enhancements on or to the site of an economic development project, and 22
associated development and carrying costs; 23
(3) working capital for significant strategic economic development 24
opportunities, arts and entertainment enterprises, or arts and entertainment projects; 25
(4) redevelopment of qualified brownfields sites; 26
(5) subject to § 5–325(b)(3) of this subtitle, construction, purchase, or 27
renovation of real property, fixtures, or equipment related to a child care facility; 28
(6) if supported by a resolution adopted by the governing body of the 29
jurisdiction in which a project may be located, feasibility studies; 30
SENATE BILL 427 33
(7) subject to § 5–325(b)(4) of this subtitle, preparation of a county’s or 1
municipal corporation’s strategy or plan for economic development; and 2
(8) a project intended to assist businesses in areas that are declared to be 3
federal disaster areas, but only if the Department receives an application for financial 4
assistance within 1 year after the declaration of the federal disaster area. 5
(b) Financial assistance from the Fund may not be used to refinance existing debt. 6
5–323. 7
Financial assistance from the Fund may not exceed the lesser of: 8
(1) $10,000,000; or 9
(2) 20% of the Fund balance. 10
5–324. 11
(a) Each subsection of this section is subject to § 5–323 of this subtitle. 12
(b) If the Department [or Authority] determines a project to be a significant 13
strategic economic development opportunity, the Department [or Authority] may provide 14
a loan from the Fund for the project to an individual, private business, nonprofit entity, or 15
the Corporation in an amount not exceeding $10,000,000. 16
(c) If the Department [or Authority] determines a project to be a local economic 17
development opportunity, the Department [or Authority] may provide financial assistance 18
from the Fund for the project to an individual, private business, nonprofit entity, or the 19
Corporation in an amount not exceeding: 20
(1) [$5,000,000] $7,500,000 for a loan or investment; and 21
(2) [$2,000,000] $5,000,000 for a grant. 22
(d) (1) Financial assistance provided to a local government or the Corporation 23
to finance a project may be: 24
(i) in the form of a grant, loan, or investment; and 25
(ii) except as provided in paragraph (2) of this subsection, in an 26
amount not exceeding [$3,000,000] $5,000,000. 27
(2) Financial assistance for a Tier I county project may be in an amount 28
determined by the Department. 29
34 SENATE BILL 427
(3) A grant to a local economic development fund is subject to the 1
requirements of Part V of this subtitle. 2
(e) Financial assistance for a specialized economic development opportunity may 3
be: 4
(1) provided to an individual, private business, nonprofit entity, or local 5
government, or the Corporation; 6
(2) in the form of a grant, loan, or investment; and 7
(3) in an amount determined by the Department [or Authority]. 8
5–325. 9
(a) Subject to the restrictions of this subtitle, the Department [or Authority] may 10
impose the terms and conditions on financial assistance from the Fund as either considers 11
appropriate. 12
(b) (1) Except as provided in paragraph (2), (3), or (4) of this subsection, 13
financial assistance from the Fund may not exceed 70% of the total costs of the project being 14
financed. 15
(2) Financial assistance from the Fund may constitute 100% of the total 16
costs of the project being financed if: 17
(i) the recipient is the Corporation; or 18
(ii) the financial assistance is for: 19
1. an arts and entertainment enterprise; 20
2. an arts and entertainment project; or 21
3. a Tier I county project. 22
(3) (i) Except as provided in subparagraph (ii) of this paragraph, 23
financial assistance from the Fund: 24
1. may be used to finance up to 50% of the costs of 25
construction, purchase, or renovation of real property, fixtures, or equipment related to a 26
child care facility; but 27
2. may not be used for working capital, supplies, or inventory 28
related to a child care facility. 29
SENATE BILL 427 35
(ii) Financial assistance from the Fund may be used to finance up to 1
20% of the costs described in subparagraph (i) of this paragraph incurred by a business that 2
has received or will receive a day care loan insured by the Maryland Industrial 3
Development Financing Authority. 4
(4) Financial assistance for preparation of a strategy or plan for economic 5
development of a county or municipal corporation may not exceed: 6
(i) 50% of the costs of preparation; or 7
(ii) $50,000 in a 3–year period. 8
(c) [(1) A loan from the Fund shall bear an interest rate below the market rate 9
of interest, as determined by the Department, if the loan is for: 10
(i) a significant strategic economic development opportunity; or 11
(ii) a specialized economic development opportunity. 12
(2) A loan from the Fund for a Tier I county project shall bear an interest 13
rate determined by the Department or the Authority. 14
(3) A loan from the Fund shall bear an interest rate not exceeding 15
one–eighth of 1% plus the net interest cost of the most recent State general obligation bond 16
issue preceding the approval of the loan if the loan is: 17
(i) for a local economic development opportunity; or 18
(ii) to a local government. 19
(4) A loan from the Fund may not bear an interest rate of less than 3% 20
unless: 21
(i) the project funded by the loan is located in an area of high 22
unemployment; or 23
(ii) the Department determines that the borrower is carrying out a 24
compelling economic development initiative. 25
(d) (1) The Department may waive interest during the first 2 years of the term 26
of a loan from the Fund. 27
(2) If a borrower defaults on a loan from the Fund, the Department may 28
impose an interest rate that exceeds the limits set forth in subsection (c)(1) or (3) of this 29
section. 30
(e) The term of a loan from the Fund may not exceed: 31 36 SENATE BILL 427
(1) for working capital, 3 years; 1
(2) for financing equipment, furnishings, or fixtures, the lesser of 15 years 2
or the useful life of the asset, as determined by the Department; 3
(3) for financing the construction or acquisition of buildings and real 4
property, 25 years; and 5
(4) for financing the redevelopment of a qualified brownfields site or a Tier 6
I county project, a term approved by the Department or Authority] THE DEPARTMENT 7
SHALL DETERMINE WHET HER A LOAN FROM THE FUND SHALL BEAR INTER EST AND, 8
IF SO, THE INTEREST RATE . 9
5–329. 10
(a) A local government may apply to the Department for a grant from the Fund 11
to a local economic development fund. 12
(b) In determining whether to approve a grant to a local economic development 13
fund, the Department [or Authority] shall consider and determine: 14
(1) the average rate of unemployment for the local jurisdiction in 15
comparison to the average rate of unemployment for the State; 16
(2) whether the local government currently administers a local economic 17
development fund; 18
(3) the ability of the local government to leverage private money; 19
(4) the level of financial commitment provided by the local government; 20
and 21
(5) any other factors that the Department [or Authority] considers 22
relevant. 23
5–338. 24
(d) (1) The Department shall notify the person whether the person qualifies 25
for financial assistance for the redevelopment of a brownfields site within 30 days after the 26
Department receives a request under subsection (c) of this section if: 27
(i) the Department of the Environment approves the participation 28
in the Voluntary Cleanup Plan or a corrective action plan; and 29
(ii) the Department [or Authority] approves the financial assistance. 30 SENATE BILL 427 37
(2) The notice shall specify which of the criteria in subsection (b) of this 1
section that the person meets. 2
5–401. 3
(a) In this subtitle the following words have the meanings indicated. 4
(b) “Authority” means the Maryland Industrial Development Financing 5
Authority. 6
(p) “Fund” means the Industrial Development Fund established under § 5–423 of 7
this subtitle. 8
5–464. 9
THE AUTHORITY AND THE SECRETARY MAY NOT APP ROVE FINANCIAL 10
ASSISTANCE FROM THE FUND OR THE ISSUANCE OF BONDS UNDER THIS SUBTITLE 11
AFTER JUNE 30, 2025. 12
Subtitle 5. Maryland [Small Business Development Financing Authority] ECONOMIC 13
INCLUSION FUND. 14
5–501. 15
(a) In this subtitle the following words have the meanings indicated. 16
(b) [“Authority” means the Maryland Small Business Development Financing 17
Authority. 18
(c)] “Financial institution” means: 19
(1) a financial institution, as defined in § 1–101 of the Financial 20
Institutions Article; and 21
(2) any other lender that the Authority DEPARTMENT approves. 22
(C) “FUND” MEANS THE MARYLAND ECONOMIC INCLUSION FUND. 23
(d) (1) “Loan document” means an instrument or agreement that evidences, 24
secures, or guarantees a loan. 25
(2) “Loan document” includes a note, financing statement, mortgage, 26
pledge, assignment, loan and security agreement, or guaranty. 27
38 SENATE BILL 427
(e) (1) “Working capital” means money used to meet the cash needs of an 1
operating business entity. 2
(2) “Working capital” does not include money used for a capital purchase. 3
5–502. 4
(a) The General Assembly finds that: 5
(1) the inability of socially or economically disadvantaged individuals to 6
obtain working capital is a major limitation on their opportunity to win and perform 7
government and other contracts; 8
(2) because socially or economically disadvantaged individuals frequently 9
have been awarded government or other contracts but have lacked the working capital to 10
post a bond, buy supplies needed to begin the work, or pay employees, these individuals 11
have been unable to accept the contracts; 12
(3) some individuals are unable to obtain government and other contracts 13
for reasons other than the cost to the owner or the ability to perform the contract work 14
competently; 15
(4) socially or economically disadvantaged individuals frequently lack 16
adequate capital to sustain and expand their businesses and to hire and train employees; 17
(5) because high risk, problem, or uncollectible loans are not in the interest 18
of financial institutions, financial institutions generally are reluctant to lend money to 19
socially or economically disadvantaged individuals with insufficient records of 20
performance; 21
(6) the inability of businesses owned by socially or economically 22
disadvantaged individuals to obtain long–term financing is a major limitation on their 23
opportunity to survive and expand; and 24
(7) the public welfare is served by promoting the viability and expansion of 25
businesses owned by economically or socially disadvantaged individuals, retaining or 26
increasing the employment of these individuals, and expanding the taxable base of the 27
economy of the State. 28
(b) The purposes of the [Authority] FUND are: 29
(1) to assist socially or economically disadvantaged individuals to obtain 30
adequate working capital to begin, continue, and complete projects[, the majority of funding 31
for which is provided by government entities or utilities]; 32
(2) to encourage socially or economically disadvantaged individuals to seek 33
government and other contracts; 34 SENATE BILL 427 39
(3) to encourage financial institutions to make loans to these individuals; 1
and 2
(4) to assist small businesses that are unable to obtain adequate business 3
financing on reasonable terms through normal financing channels because the businesses 4
do not meet the established credit criteria of financial institutions. 5
Part II. Maryland [Small Business Development Financing Authority] ECONOMIC 6
INCLUSION FUND. 7
5–505. 8
(A) There is a Maryland [Small Business Development Financing Authority] 9
ECONOMIC INCLUSION FUND in the Department. 10
(B) THE FUND IS A SPECIAL, NONLAPSING FUND THAT IS NOT SUBJECT TO 11
REVERSION UNDER § 7–302 OF THE STATE FINANCE AND PROCUREMENT ARTICLE. 12
(C) THE TREASURER SHALL : 13
(1) INVEST THE MONEY IN THE FUND IN THE SAM E MANNER AS OTHER 14
STATE MONEY MAY BE IN VESTED; 15
(2) CREDIT ANY INVESTMEN T EARNINGS TO THE FUND; AND 16
(3) REPORT EACH YEAR TO THE DEPARTMENT ON : 17
(I) THE STATUS OF THE MO NEY INVESTED UNDER T HIS 18
SUBTITLE; 19
(II) THE MARKET VALUE OF THE ASSETS IN THE FUND AS OF THE 20
DATE OF THE REPORT ; AND 21
(III) THE INTEREST RECEIVE D FROM INVESTMENTS D URING THE 22
PERIOD COVERED BY TH E REPORT. 23
(D) (1) THE FUND IS THE SUCCESSOR OF THE SMALL BUSINESS 24
DEVELOPMENT CONTRACT FINANCING FUND, THE SMALL BUSINESS 25
DEVELOPMENT GUARANTY FUND, THE EQUITY PARTICIPATION INVESTMENT 26
INCENTIVE PROGRAM FUND, AND THE SMALL BUSINESS SURETY BOND FUND 27
ESTABLISHED UNDER TH E MARYLAND SMALL BUSINESS DEVELOPMENT 28
FINANCING AUTHORITY. 29
40 SENATE BILL 427
(2) ALL FINANCIAL ASSISTA NCE TRANSACTIONS AND OBLIGATIONS 1
APPROVED BY THE MARYLAND SMALL BUSINESS DEVELOPMENT FINANCING 2
AUTHORITY SHALL CONTI NUE AS OBLIGATIONS O F THE FUND AND ARE 3
AUTHORIZED UNDER THI S SUBTITLE. 4
[5–506. 5
(a) The Authority consists of the following nine members: 6
(1) seven members appointed by the Governor; 7
(2) the Secretary or the Secretary’s designee; and 8
(3) (i) the Comptroller or the Treasurer as designated by the Governor; 9
or 10
(ii) the designee of the Governor’s designee. 11
(b) (1) The term of an appointed member is 5 years. 12
(2) The terms of appointed members are staggered as required for 13
appointments to the Authority on October 1, 2008. 14
(3) At the end of a term, an appointed member continues to serve until a 15
successor is appointed and qualifies. 16
(4) A member who is appointed after a term has begun serves only for the 17
rest of the term and until a successor is appointed and qualifies. 18
(c) The Governor may remove an appointed member for cause.] 19
5–506. 20
THE FUND CONSISTS OF : 21
(1) PREMIUMS FOR GUARANT EEING LOANS UNDER THIS SUB TITLE; 22
(2) PREMIUMS FOR GUARANT EEING EQUITY INVESTM ENTS UNDER 23
THIS SUBTITLE; 24
(3) REPAYMENTS OF PRINCI PAL OF AND INTEREST ON DIRECT LOANS 25
AND EQUITY PARTICIPA TION FINANCING MADE UNDER THIS SUBTITLE ; 26
(4) PROCEEDS FROM THE SA LE, DISPOSITION, LEASE, OR RENTAL OF 27
COLLATERAL FOR DIREC T LOANS, LOAN GUARANTIES , OR EQUITY PARTICIPAT ION 28
FINANCING MADE UNDER THIS SUBTITLE; 29 SENATE BILL 427 41
(5) LOANS AND GRANTS FRO M THE FEDERAL GOVERN MENT OR A UNIT 1
OR INSTRUMENTALITY O F THE FEDERAL GOVERNMENT ; 2
(6) GRANTS AND CONTRIBUT IONS OF FUNDS FROM T HE STATE, A 3
POLITICAL SUBDIVISIO N, OR ANY OTHER SOURCE ; 4
(7) PREMIUMS FOR GUARANT EEING LONG TERM LOAN S UNDER § 5
5–523 OF THIS SUBTITLE ; 6
(8) NOTWITHSTANDING § 10–469(E) AND (F) OF THIS ARTICLE OR ANY 7
OTHER LAW , ANY RECOVERY OF INVE STMENTS MADE UNDER § 10–469 OF THIS 8
ARTICLE THAT WERE FU NDED BY A TRANSFER O F MONEY FROM THE FUN DS UNDER 9
THIS SUBTITLE TO THE ENTERPRISE FUND, INCLUDING AN INVESTM ENT IN MMG 10
VENTURES LLP; 11
(9) NOTWITHSTANDING § 10–469(E) AND (F) OF THIS ARTICLE OR A NY 12
OTHER LAW, ANY REPAYMENT OF A G RANT MADE UNDER § 10–469 OF THIS ARTICLE 13
THAT WAS FUNDED BY A TRANSFER OF MONEY FR OM THE FUNDS UNDER T HIS 14
SUBTITLE TO THE ENTERPRISE FUND; 15
(10) MONEY THAT THE STATE APPROPRIATES T O THE FUND; 16
(11) MONEY MADE AVAILABLE TO THE FUND THROUGH FEDERAL 17
PROGRAMS OR PRIVATE CONTRIBUTIONS ; 18
(12) PREMIUMS, FEES, ROYALTIES, AND REPAYMENTS OF 19
INVESTMENTS MADE UND ER THE TERMS OF BOND ING ASSISTANCE AND E QUITY 20
PARTICIPATION FINANC ING; AND 21
(13) REPAYMENT OF FINANCI AL ASSISTANCE PROVID ED FROM THE 22
MARYLAND ECONOMIC ADJUSTMENT FUND ESTABLISHED UNDE R § 5–203 OF THIS 23
ARTICLE; AND 24
(14) (13) ALL OTHER RECEIPTS O F THE DEPARTMENT UNDER THIS 25
SUBTITLE. 26
[5–507. 27
(a) The Authority shall elect a chair, vice chair, and treasurer from among its 28
members. 29
(b) The Authority shall determine the manner of election of officers and their 30
terms.] 31
42 SENATE BILL 427
5–507. 1
AT LEAST HALF OF THE ANNUAL APPROPRIATION TO THE FUND MUST BE 2
RESERVED FOR BUSINES S ACTIVITIES INCLUDE D ON THE LIST OF INDUS TRIES AND 3
ACTIVITIES DEVELOPED BY THE DEPARTMENT IN ACCORDA NCE WITH § 2.5–106 OF 4
THIS ARTICLE. 5
[5–508. 6
(a) (1) Four members of the Authority are a quorum. 7
(2) The Authority may not act on any matter unless at least four members 8
in attendance concur. 9
(b) The Authority shall determine the times and places of its meetings. 10
(c) A member of the Authority is entitled to reimbursement for expenses under 11
the Standard State Travel Regulations, as provided in the State budget. 12
(d) The Authority may employ a staff in accordance with the State budget.] 13
5–508. 5–507. 14
IN ORDER TO ADMINISTE R THE FUND, THE DEPARTMENT MAY : 15
(1) CONTRACT FOR AND ENG AGE THE SERVICES OF A PRIVATE 16
MARYLAND CORPORATION TO ADMINISTER SOME O R ALL OF THE PROGRAMS OF THE 17
FUND; 18
(2) CONTRACT FOR AND ACC EPT, TO CARRY OUT THIS SU BTITLE, A 19
LOAN OR GRANT FROM T HE FEDERAL GOVERNMEN T, A POLITICAL SUBDIVIS ION OF 20
THE STATE, OR ANY OTHER SOURCE ; 21
(3) PURCHASE, RECEIVE, LEASE AS LESSEE, OR OTHERWISE ACQUIRE , 22
SELL, MORTGAGE , LEASE AS LESSOR , PLEDGE, ADMINISTER, DISPOSE OF, OR 23
OTHERWISE DEAL WITH PROPERTY GIVEN AS CO LLATERAL UNDER A LOA N 24
AGREEMENT ON THE TER MS AND CONDITIONS IT CONSIDERS ADVISABLE ; 25
(4) ADOPT REGULATIONS NE CESSARY TO CARRY OUT ITS POWERS; 26
(5) ACQUIRE OR TAKE ASSIGN MENTS OF LOAN DOCUME NTS; AND 27
(6) DO ANYTHING NECESSAR Y OR CONVENIENT TO C ARRY OUT ITS 28
POWERS. 29
SENATE BILL 427 43
[5–509. 1
(a) (1) The Executive Director is the chief administrative officer of the 2
Authority. 3
(2) With the approval of the Secretary, the Authority may: 4
(i) appoint the Executive Director; or 5
(ii) contract with a private entity to perform the duties of the 6
Executive Director. 7
(b) The Executive Director serves at the pleasure of the Authority, with the 8
concurrence of the Secretary. 9
(c) In addition to any other duties set forth in this subtitle, the Executive Director 10
shall: 11
(1) supervise the administrative affairs and technical activities of the 12
Authority in accordance with its regulations and policies; 13
(2) attend all meetings of the Authority; 14
(3) keep minutes of all proceedings of the Authority; 15
(4) approve all accounts for salaries, per diem payments, and allowable 16
expenses of the Authority, its employees, and its consultants; 17
(5) approve all expenses incidental to the operation of the Authority; and 18
(6) perform any other duty that the Authority or the Secretary requires to 19
carry out this subtitle.] 20
[5–510. 21
A member of the Authority may not participate in any decision related to the 22
approval of financial assistance if the member has any interest in: 23
(1) the applicant for the assistance; or 24
(2) the financial institution seeking a guaranty or an interest subsidy or 25
both.] 26
[5–511. 27
(a) In this section, “Authority staff” means any of the individuals who are 28
employed by the Department to operate the programs of the Authority immediately prior 29 44 SENATE BILL 427
to the execution by the Department of a contract under this section with the private 1
corporation organized by any of those individuals. 2
(b) (1) The Department may contract for and engage the services of some or 3
all of the Authority staff to administer the programs of the Authority, for a period of 3 years, 4
if the Authority staff has organized itself as a private Maryland corporation. 5
(2) The Department may: 6
(i) extend the termination date of the contract in effect as of 7
September 30, 2008, to June 30, 2012, and modify that extended contract as needed; and 8
(ii) renew the extended contract for up to two additional 5–year 9
terms, and modify that renewed and extended contract as needed. 10
(3) An extension or renewal contract shall include standards to evaluate 11
the performance of the private contractor in rendering services under the contract. 12
(c) In its name the corporation may use “Maryland Small Business Development 13
Financing Agency”, “MSBDFA, Inc.”, or any close approximation of those terms.] 14
[5–512. 15
(a) The Authority exercises its powers and performs its duties subject to the 16
authority of the Secretary. 17
(b) The Authority may: 18
(1) adopt bylaws for the conduct of its business; 19
(2) adopt a seal; 20
(3) maintain offices in the State; 21
(4) sue and be sued in its own name; 22
(5) retain consultants; 23
(6) use the services of governmental units; 24
(7) contract for and accept, to carry out this subtitle, a loan or grant from 25
the federal government, a political subdivision of the State, or any other source; 26
(8) purchase, receive, lease as lessee, or otherwise acquire, sell, mortgage, 27
lease as lessor, pledge, administer, dispose of, or otherwise deal with property given as 28
collateral under a loan agreement on the terms and conditions it considers advisable; 29
SENATE BILL 427 45
(9) adopt regulations necessary to carry out its powers; 1
(10) acquire or take assignments of loan documents; and 2
(11) do anything necessary or convenient to carry out its powers. 3
(c) The Authority shall: 4
(1) in its internal functions, follow the procedures of the State that govern 5
the purchase of office space, supplies, facilities, materials, equipment, and professional 6
services; 7
(2) keep proper records of its accounts; 8
(3) keep separate records for: 9
(i) the Small Business Development Contract Financing Fund 10
under Part III of this subtitle; 11
(ii) the Small Business Development Guaranty Fund under Part IV 12
of this subtitle; 13
(iii) the Equity Participation Investment Program Fund under Part 14
V of this subtitle; and 15
(iv) the Small Business Surety Bond Fund under Part VI of this 16
subtitle; and 17
(4) in accordance with § 2.5–109 of this article, submit a report on its 18
condition and operations.] 19
[5–513. 20
(a) In any action, service of process on the Authority shall be made by service on 21
the Executive Director of the Authority. 22
(b) Service may be made in person or by leaving a copy of the process at the office 23
of the Executive Director with the individual in charge of the office.] 24
[5–514. 25
(a) Notwithstanding § 10–469(e) and (f) of this article or any other law, the 26
following money shall be payable into the funds under this subtitle: 27
(1) any recovery of investments made under § 10–469 of this article that 28
were funded by a transfer of money from the funds under this subtitle to the Enterprise 29
Fund, including an investment in MMG Ventures LLP; and 30 46 SENATE BILL 427
(2) any repayment of a grant made under § 10–469 of this article that was 1
funded by a transfer of money from the funds under this subtitle to the Enterprise Fund. 2
(b) The Authority shall determine the proportion of the recovery or repayment 3
payable under subsection (a) of this section that shall be deposited into each of the funds 4
under this subtitle.] 5
5–508. RESERVED. 6
5–509. RESERVED. 7
5–510. RESERVED. 8
Part III. Small Business Development Contract Financing [Fund] PROGRAM. 9
[5–517.] 5–511. 5–510. 10
In this part, [“Fund”] “PROGRAM” means the Small Business Development 11
Contract Financing [Fund] PROGRAM. 12
[5–518.] 5–512. 5–511. 13
There is a Small Business Development Contract Financing [Fund] PROGRAM 14
WITHIN THE FUND. 15
[5–519. 16
The Authority shall use the Fund to implement this part.] 17
[5–520. 18
The Authority shall administer the Fund.] 19
[5–521. 20
(a) The Fund is a special, nonlapsing fund that is not subject to reversion under 21
§ 7–302 of the State Finance and Procurement Article. 22
(b) The Treasurer shall: 23
(1) invest the money in the Fund in the same manner as other State money 24
may be invested; and 25
(2) credit any investment earnings to the Fund. 26
SENATE BILL 427 47
(c) If the Authority determines by resolution that any money in the Fund is no 1
longer needed to meet its obligations, the Authority may authorize the Comptroller to first 2
employ that money to pay the principal of and interest on outstanding bonds issued under 3
any Act authorizing the issue of State general obligation bonds issued to implement this 4
subtitle.] 5
[5–522. 6
The Fund consists of: 7
(1) premiums for guaranteeing loans under § 5–525(a) of this subtitle; 8
(2) premiums for guaranteeing equity investments under § 5–525(b) of this 9
subtitle; 10
(3) repayments of principal of and interest on direct loans made under § 11
5–525(c) of this subtitle; 12
(4) proceeds from the sale, disposition, lease, or rental of collateral for 13
direct loans or loan guaranties made under § 5–525 of this subtitle; and 14
(5) all other receipts of the Authority under this part.] 15
[5–523. 16
(a) If the Authority and the Secretary determine that more money is needed to 17
keep the Fund at an adequate level, the Authority shall send a written request for the 18
additional money to the Board of Public Works. 19
(b) The Board of Public Works may pay the amount requested from the General 20
Emergency Fund.] 21
[5–524.] 5–513. 5–512. 22
The [Authority] DEPARTMENT may use the Fund for: 23
(1) loan guaranties made under [§ 5–525(a)] § 5–514(A) § 5–513(A) of this 24
subtitle; 25
(2) equity investment guaranties made under [§ 5–525(b)] § 5–514(B) § 26
5–513(B) of this subtitle; 27
(3) direct loans made under [§ 5–525(c)] § 5–514(C) § 5–513(C) of this 28
subtitle; and 29
(4) expenses for administrative, legal, actuarial, and other services. 30 48 SENATE BILL 427
[5–525.] 5–514. 5–513. 1
(a) (1) The [Authority] DEPARTMENT may use the Fund to guarantee a loan 2
made to an applicant only if: 3
(i) the applicant meets the requirements of this part; 4
(ii) [the loan is to be used to perform a contract for which the 5
majority of the funding is provided by the federal government, a state government, a local 6
government, or a utility regulated by the Public Service Commission; 7
(iii)] the maximum amount payable by the [Authority] 8
DEPARTMENT under the guaranty does not exceed [$2,000,000] $3,000,000; and 9
[(iv)] (III) the guaranteed loan is to be used for: 10
1. working capital; or 11
2. equipment needed to perform the contract, the cost of 12
which can be repaid from contract proceeds, if the [Authority] DEPARTMENT has entered 13
into an agreement with the applicant to secure the loan or guaranty. 14
(2) A guaranty made by the [Authority] DEPARTMENT may not exceed the 15
term of the contract, unless the [Authority] DEPARTMENT determines that a longer term 16
better serves the purposes of this subtitle. 17
(b) (1) The [Authority] DEPARTMENT may use the Fund to guarantee a 18
person’s proposed equity investment in the applicant only if: 19
(i) the applicant meets the requirements of this part; 20
(ii) the amount of the equity investment to be guaranteed does not 21
exceed the lesser of: 22
1. 10% of the person’s equity investment in the applicant; or 23
2. $250,000; AND 24
(iii) [the equity investment to be guaranteed is to be used to perform 25
a contract for which the majority of funding is provided by the federal government, a state 26
government, a local government, or a utility regulated by the Public Service Commission; 27
and 28
(iv)] the equity investment to be guaranteed is to be used for: 29
SENATE BILL 427 49
1. working capital; or 1
2. equipment needed to perform the contract, the cost of 2
which can be repaid from contract proceeds, if the [Authority] DEPARTMENT has entered 3
into an agreement with the applicant to secure the guaranty. 4
(2) The [Authority] DEPARTMENT may not guarantee the equity 5
investment of a person who: 6
(i) previously held an equity investment in the applicant; 7
(ii) previously participated in the management of the applicant; or 8
(iii) in any other manner is related to: 9
1. the applicant; or 10
2. any of the current stockholders, officers, or management 11
personnel of the applicant. 12
(c) (1) The [Authority] DEPARTMENT may use the Fund to lend money to an 13
applicant only if: 14
(i) the applicant meets the requirements of this part; 15
(ii) the applicant is unable to obtain money on reasonable terms 16
through normal lending channels from another source; 17
(iii) the loan does not exceed [$2,000,000] $3,000,000; AND 18
(iv) [the loan is to be used to perform a contract for which the 19
majority of funding is provided by the federal government, a state government, a local 20
government, or a utility regulated by the Public Service Commission; and 21
(v)] the loan is to be used for: 22
1. working capital; or 23
2. equipment needed to perform the contract, if the contract 24
proceeds can repay the cost of the equipment and if the [Authority] DEPARTMENT has 25
entered into an agreement with the applicant to secure the loan. 26
(2) A loan that the [Authority] DEPARTMENT makes shall mature not 27
later than the term of the contract, unless the [Authority] DEPARTMENT finds that a 28
longer term better serves the purposes of this part. 29
50 SENATE BILL 427
(d) In providing financial assistance under this section, the [Authority] 1
DEPARTMENT shall recognize the need to serve applicants from all political subdivisions 2
in the State. 3
[5–526.] 5–515. 5–514. 4
(a) If the applicant is an individual, to qualify for financial assistance under this 5
part the applicant shall satisfy the [Authority] DEPARTMENT that: 6
(1) the applicant is of good moral character; 7
(2) the applicant has a reputation for financial responsibility, as 8
determined from creditors, employers, and other individuals who have personal knowledge 9
of the applicant; 10
(3) the applicant is a resident of the State or the principal place of business 11
of the applicant is in the State; and 12
(4) the applicant is unable to obtain adequate business financing on 13
reasonable terms through normal lending channels because the applicant: 14
(i) belongs to a group that historically has been deprived of access 15
to normal economic or financial resources [because of race, color, creed, sex, religion, or 16
national origin]; 17
(ii) has an identifiable physical handicap that severely limits the 18
ability of the applicant to obtain financial assistance, but that does not limit the ability of 19
the applicant to perform the contract or other activity for which the applicant would be 20
receiving financial assistance; 21
(iii) has any other social or economic impediment that is beyond the 22
control of the applicant but that does not limit the ability of the applicant to perform the 23
contract or other activity for which the applicant would be receiving financial assistance, 24
including: 25
1. the lack of formal education or financial capacity; or 26
2. geographical or regional economic distress; or 27
(iv) does not meet the established credit criteria of at least one 28
financial institution. 29
(b) If the applicant is a business enterprise that is not a sole proprietorship, to 30
qualify for financial assistance under this part at least 70% of the business enterprise shall 31
be owned by individuals who meet the qualifications for an individual applicant under 32
subsection (a) of this section. 33 SENATE BILL 427 51
(c) An applicant for a loan guaranty shall have applied for and been denied a loan 1
by a financial institution. 2
[5–527.] 5–516. 5–515. 3
(a) To apply for financial assistance from the Fund under [§ 5–525] § 5–514 § 4
5–513 of this subtitle, an applicant shall submit to the [Authority] DEPARTMENT an 5
application on the form that the [Authority] DEPARTMENT provides WITH THE 6
INFORMATION THE DEPARTMENT REQU IRES. 7
[(b) The application shall: 8
(1) describe the project in detail; 9
(2) itemize known and estimated costs; 10
(3) specify the total amount of investment required to perform the contract; 11
(4) specify the amount of funds available to the applicant without financial 12
assistance from the Authority; 13
(5) specify the amount of financial assistance requested from the 14
Authority; 15
(6) provide information that demonstrates the inability of the applicant to 16
obtain adequate financing on reasonable terms through normal lending channels; 17
(7) provide information that demonstrates the financial status of the 18
applicant, including: 19
(i) a current balance sheet; 20
(ii) a profit and loss statement; and 21
(iii) credit references; and 22
(8) contain any other relevant information that the Authority requires.] 23
[(c)] (B) The [Authority] DEPARTMENT may require an applicant to provide an 24
audited balance sheet before the [Authority] DEPARTMENT approves or denies the 25
application. 26
[(d) The Authority may delegate the review and approval of the application 27
information required under subsection (b)(1), (2), and (3) of this section to the Executive 28
Director if an applicant meets all other requirements of this section.] 29 52 SENATE BILL 427
[5–528.] 5–517. 5–516. 1
(a) The [Authority] DEPARTMENT may set the terms and conditions for a loan 2
guaranty made under [§ 5–525(a)] § 5–514(A) § 5–513(A) of this subtitle. 3
(b) (1) If the [Authority] DEPARTMENT decides to lend money from the Fund 4
to an applicant under [§ 5–525(c)] § 5–514(C) § 5–513(C) of this subtitle, the [Authority] 5
DEPARTMENT shall prepare loan documents that include: 6
(i) the interest rate on the loan that equals the market rate for a 7
conventional loan of comparable risk unless the [Authority] DEPARTMENT determines 8
that a lower rate better serves the purposes of this subtitle; 9
(ii) a disbursement schedule that provides enough money to the 10
applicant when the applicant needs it to perform the contract; 11
(iii) a requirement that the applicant and the [Authority] 12
DEPARTMENT co–sign each request for an advance of money before release of the money; 13
and 14
(iv) provisions for repayment of the loan. 15
(2) The loan documents may include any other provision that the 16
[Authority] DEPARTMENT determines is necessary to secure the loan, including an 17
assignment of or a lien on payment under the contract. 18
[5–529. 19
The Treasurer shall report each year to the Authority on: 20
(1) the status of the money invested under § 5–521 of this subtitle; 21
(2) the market value of the assets in the Fund as of the date of the report; 22
and 23
(3) the interest received from investments during the period covered by the 24
report.] 25
[5–530.] 5–518. 5–517. 26
(a) A person may not knowingly make or cause to be made a false statement or 27
report in an application or document submitted to the [Authority] DEPARTMENT under 28
this part. 29
SENATE BILL 427 53
(b) A person may not knowingly make or cause to be made a false statement or 1
report to influence an action of the [Authority] DEPARTMENT under this part: 2
(1) on an application for financial assistance; or 3
(2) affecting financial assistance whether or not the assistance has already 4
been extended. 5
(c) A person who violates this section is guilty of a misdemeanor and on conviction 6
is subject to imprisonment not exceeding 5 years or a fine not exceeding $50,000 or both. 7
5–519. 5–518. RESERVED. 8
5–520. 5–519. RESERVED. 9
Part IV. Small Business Development Guaranty [Fund] PROGRAM. 10
[5–533.] 5–521. 5–520. 11
In this part, [“Fund”] “PROGRAM” means the Small Business Development 12
Guaranty [Fund] PROGRAM. 13
[5–534.] 5–522. 5–521. 14
There is a Small Business Development Guaranty PROGRAM WITHIN THE Fund. 15
[5–535. 16
The Authority shall use the Fund to implement this part.] 17
[5–536. 18
The Authority shall administer the Fund.] 19
[5–537. 20
(a) The Fund is a special, nonlapsing fund that is not subject to reversion under 21
§ 7–302 of the State Finance and Procurement Article. 22
(b) The Treasurer shall: 23
(1) invest the money in the Fund in the same manner as other State money 24
may be invested; and 25
(2) credit any investment earnings to the Fund. 26
54 SENATE BILL 427
(c) If the Authority determines by resolution that any money in the Fund is no 1
longer needed to meet its obligations, the Authority may authorize the Comptroller to first 2
apply that money to pay the principal of and interest on outstanding bonds issued under 3
any Act authorizing the issue of State general obligation bonds issued to implement this 4
subtitle.] 5
[5–538. 6
The Fund consists of: 7
(1) loans and grants from the federal government or a unit or 8
instrumentality of the federal government; 9
(2) grants and contributions of funds from the State, a political subdivision, 10
or any other source; 11
(3) premiums for guaranteeing long–term loans under § 5–540 of this 12
subtitle; 13
(4) proceeds from the sale, disposition, lease, or rental of collateral by the 14
Authority relating to loans guaranteed under § 5–540 of this subtitle; and 15
(5) all other receipts of the Authority under this part.] 16
[5–539.] 5–523. 5–522. 17
The [Authority] DEPARTMENT may use the Fund for: 18
(1) guaranty payments made under [§ 5–540(a)] § 5–524(A) § 5–523(A) of 19
this subtitle; 20
(2) interest subsidy payments under [§ 5–540(b)] § 5–524(B) § 5–523(B) 21
of this subtitle; and 22
(3) expenses for administrative, legal, actuarial, and other services. 23
[5–540.] 5–524. 5–523. 24
(a) (1) The [Authority] DEPARTMENT may use the Fund to guarantee up to 25
80% of the principal of and interest on a long–term loan made by a financial institution to 26
an applicant only if: 27
(i) the applicant meets the requirements under [§ 5–541] § 5–525 28
§ 5–524 of this subtitle and has not violated [§ 5–545] § 5–528 § 5–527 of this subtitle; 29
SENATE BILL 427 55
(ii) the loan amount is $5,000 or more and the maximum amount 1
payable by the [Authority] DEPARTMENT under the guaranty does not exceed 2
[$2,000,000] $3,000,000; 3
(iii) the loan is used for: 4
1. working capital; 5
2. refinancing the applicant’s existing debt; 6
3. acquisition and installation of equipment; 7
4. making necessary improvements to real property that the 8
applicant leases or owns in fee simple; or 9
5. acquiring real property that the applicant will own in fee 10
simple if the property is to be used in the applicant’s trade or business for which the 11
guaranty is sought and the financial institution or the [Authority] DEPARTMENT places a 12
lien on the property; 13
(iv) the loan matures within 10 years after the closing date of the 14
loan; and 15
(v) the interest rate does not exceed the monthly weighted average 16
of the prime lending rate prevailing in Baltimore City on unsecured commercial loans, plus 17
2%, as determined by the [Authority] DEPARTMENT . 18
(2) (i) The [Authority] DEPARTMENT may only approve a guaranty 19
under this section if the [Authority] DEPARTMENT determines that the loan to be 20
guaranteed will have a substantial economic impact. 21
(ii) To determine the economic impact of a loan, the [Authority] 22
DEPARTMENT may consider: 23
1. the amount of the guaranty obligation; 24
2. the terms of the loan to be guaranteed; 25
3. the number of new jobs that the loan will create; and 26
4. any other factor that the [Authority] DEPARTMENT 27
considers relevant. 28
(b) (1) In addition to a loan guaranty, the [Authority] DEPARTMENT may 29
provide an interest subsidy for the benefit of the applicant. 30
56 SENATE BILL 427
(2) The subsidy: 1
(i) may be for the life of the loan; 2
(ii) may not exceed 4%; 3
(iii) shall be payable quarterly; and 4
(iv) shall be made to the financial institution that makes the loan 5
that the [Authority] DEPARTMENT guarantees. 6
(3) (i) The subsidy may not exceed the difference between: 7
1. the interest rate on the guaranteed loan; and 8
2. the discount interest rate that the Federal Reserve Bank 9
uses. 10
(ii) The interest rate may not exceed the monthly weighted average 11
of the prime lending rate that prevails in Baltimore City on unsecured commercial loans, 12
as the [Authority] DEPARTMENT determines as of the date of closing, plus 2%. 13
(4) The subsidy may not be paid during any period in which the loan is in 14
default. 15
(c) In providing financial assistance under this section, the [Authority] 16
DEPARTMENT shall recognize the need to serve applicants from all political subdivisions 17
in the State. 18
[5–541.] 5–525. 5–524. 19
(a) If the applicant is a sole proprietor, to qualify for financial assistance under 20
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
SENATE BILL 427 57
(i) belongs to a group that historically has been deprived of access 1
to normal economic or financial resources [because of race, color, creed, sex, religion, or 2
national origin]; 3
(ii) has an identifiable physical handicap that severely limits the 4
ability of the applicant to obtain financial assistance, but that does not limit the ability of 5
the applicant to perform the contract or other activity for which the applicant would be 6
receiving financial assistance; 7
(iii) has any other social or economic impediment that is beyond the 8
control of the applicant, but that does not limit the ability of the applicant to perform the 9
contract or other activity for which the applicant would be receiving financial assistance, 10
including: 11
1. the lack of formal education or financial capacity; or 12
2. geographical or regional economic distress; or 13
(iv) does not meet the established credit criteria of at least one 14
financial institution. 15
(b) If the applicant is not a sole proprietorship, to qualify for financial assistance 16
under this part at least 70% of the business enterprise shall be owned by individuals who 17
meet the qualifications for an individual applicant under subsection (a) of this section. 18
(c) An applicant for a loan guaranty shall have applied for and been denied a loan 19
by a financial institution. 20
[5–542.] 5–526. 5–525. 21
(a) To apply for financial assistance from the Fund, a financial institution shall 22
submit to the [Authority] DEPARTMENT an application on the form that the [Authority] 23
DEPARTMENT provides WITH THE INFORMATION THE DEPARTMENT REQUIRES . 24
[(b) The application shall include: 25
(1) a detailed description of the proposed use of the loan proceeds, including 26
projected cash flow analyses, marketing plans, and appraisals; 27
(2) a detailed description of the funds available to the applicant; 28
(3) a detailed description of the proposed loan documents to be executed by 29
the financial institution and the applicant; 30
(4) a detailed description of the property proposed as collateral for the loan 31
and the financial institution’s certification of the property’s value; 32 58 SENATE BILL 427
(5) information that demonstrates the inability of the applicant to obtain 1
adequate financing on reasonable terms through normal lending channels; 2
(6) information that demonstrates the financial status of the applicant, 3
including: 4
(i) a current balance sheet; 5
(ii) a profit and loss statement; and 6
(iii) credit references; 7
(7) a proposed disbursement schedule; 8
(8) a proposed amortization schedule; 9
(9) a detailed description of the applicant’s experience in the trade or 10
business for which the loan and guarantee are requested; 11
(10) information that shows that the applicant satisfies the requirements of 12
§ 5–541 of this subtitle; and 13
(11) any other relevant information that the Authority requests.] 14
[(c)] (B) The [Authority] DEPARTMENT may require an applicant to provide an 15
audit report and balance sheet certified by an independent certified public accountant in 16
accordance with generally accepted accounting principles before the [Authority] 17
DEPARTMENT approves or denies the application. 18
[5–543.] 5–527. 5–526. 19
A guaranty shall contain terms and conditions that the [Authority] DEPARTMENT 20
determines to be appropriate. 21
[5–544. 22
The Treasurer shall report each year to the Authority on: 23
(1) the status of the money invested under § 5–537 of this subtitle; 24
(2) the market value of the assets in the Fund as of the date of the report; 25
and 26
(3) the interest received from investments during the period covered by the 27
report.] 28 SENATE BILL 427 59
[5–545.] 5–528. 5–527. 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
[5–546.] 5–529. 5–528. 12
If an applicant or financial institution violates any provision of the loan documents 13
or ceases to meet the requirements of this part, on reasonable notice to the applicant or 14
financial institution, the [Authority] DEPARTMENT may: 15
(1) withhold from the applicant further loan payments until the applicant 16
complies with the documents or requirements; 17
(2) withhold from the financial institution further interest subsidy 18
payments until the financial institution complies with the loan documents or requirements; 19
and 20
(3) exercise any other remedy for which the loan documents provide. 21
5–530. 5–529. RESERVED. 22
5–531. 5–530. RESERVED. 23
Part V. Equity Participation Investment Program. 24
[5–549.] 5–532. 5–531. 25
(a) In this part the following words have the meanings indicated. 26
(b) (1) “Enterprise” means a business entity proposing to carry on a business 27
in the State that meets the requirements of [§ 5–526] § 5–515 § 5–514 of this subtitle. 28
60 SENATE BILL 427
(2) “Enterprise” includes: 1
(i) a sole proprietorship; 2
(ii) a partnership; 3
(III) A LIMITED LIABILITY CORPORATION ; 4
[(iii)] (IV) a limited partnership; 5
[(iv)] (V) a corporation; or 6
[(v)] (VI) a joint venture. 7
(c) “Equity participation financing” includes investment or guaranty of 8
investment in an enterprise. 9
(d) “Existing business” means a business whose board of directors or owners 10
approve the sale of the business to an enterprise receiving equity participation financing. 11
(e) [“Fund” means the Equity Participation Investment Program Fund. 12
(f)] “Program” means the Equity Participation Investment Program. 13
[(g)] (F) “Qualified security” means: 14
(1) a note, bond, debenture, or other evidence of indebtedness; 15
(2) stock or other form of equity participation; 16
(3) a certificate of interest or participation in a profit–sharing agreement; 17
(4) an investment contract; 18
(5) a certificate of deposit for a security; 19
(6) a certificate of interest or participation in a patent or patent application 20
or in royalty or other payments under a patent or patent application; or 21
(7) an interest or instrument commonly known as a “security” or a 22
certificate for, receipt for, guaranty of, or option, warrant, or right to subscribe to or 23
purchase a qualified security. 24
[(h)] (G) “Small business” means a business that is classified as a small business 25
under the U.S. Small Business Administration size standards. 26
SENATE BILL 427 61
[5–550.] 5–533. 5–532. 1
(a) The General Assembly finds that: 2
(1) small businesses have proven to be a fast growing and reliable form of 3
successful business expansion and successful new business creation; 4
(2) small businesses play a major role in the economy of the State and have 5
been a continuing source of increasing tax revenues and job opportunities; 6
(3) the growth of small businesses should be encouraged and should be an 7
integral part of the State’s economic development effort; 8
(4) socially or economically disadvantaged individuals often lack adequate 9
capital and are unable to obtain financing from financial institutions or venture capital 10
firms to begin and develop a small business, or to purchase an existing business; and 11
(5) promoting the creation and viability of small businesses and the 12
purchase of existing businesses by socially or economically disadvantaged individuals is in 13
the public interest. 14
(b) The purposes of the Equity Participation Investment Program are to: 15
(1) encourage and help socially or economically disadvantaged individuals 16
to create and develop small businesses and acquire existing businesses in the State; and 17
(2) assist small businesses that, because they do not meet the established 18
credit criteria of financial institutions, cannot obtain adequate business financing on 19
reasonable terms through normal financing channels. 20
[5–551.] 5–534. 5–533. 21
There is an Equity Participation Investment Program in the [Department] FUND. 22
[5–552. 23
The Authority shall administer the Program.] 24
[5–553.] 5–535. 5–534. 25
The [Authority] DEPARTMENT may: 26
(1) provide equity participation financing to help socially or economically 27
disadvantaged individuals in the State create and develop small businesses and acquire 28
existing businesses; 29
62 SENATE BILL 427
(2) buy, hold, and sell qualified securities; 1
(3) prepare, publish, and distribute technical studies, reports, and other 2
materials with or without charge; and 3
(4) provide and pay for advisory services and technical assistance that are 4
necessary or desirable to carry out the Program. 5
[5–554. 6
There is an Equity Participation Investment Program Fund.] 7
[5–555.] 5–536. 5–535. 8
[(a) The Authority shall administer the Fund. 9
(b) (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 Treasurer shall hold the Fund separately, and the Comptroller 12
shall account for the Fund. 13
(c) The Fund consists of: 14
(1) money drawn from the Small Business Development Guaranty Fund 15
established under Part IV of this subtitle; 16
(2) money the State appropriates to the Fund; 17
(3) money made available to the Fund through federal programs or private 18
contributions; 19
(4) proceeds from the sale, disposition, lease, or rental by the Authority of 20
collateral related to equity participation financing; 21
(5) premiums, fees, royalties, and repayments of principal, interest, and 22
investments paid by and on behalf of enterprises to the Authority under the terms of equity 23
participation financing; and 24
(6) any other money made available under the Program. 25
(d)] The [Authority] DEPARTMENT shall use the Fund to: 26
(1) purchase qualified securities that an enterprise issues to provide equity 27
participation financing as the Program allows; 28
SENATE BILL 427 63
(2) provide guaranties of investments to expand the capital resources of 1
enterprises; 2
(3) purchase advisory services and technical assistance consistent with the 3
Program; 4
(4) purchase securities in which a fiduciary of the State may lawfully 5
invest; 6
(5) provide equity participation financing as the Program allows; and 7
(6) pay for administrative, legal, and actuarial services that relate to the 8
Program. 9
[(e) The Fund shall be self–sustaining and shall achieve investment returns on its 10
portfolio in the form of: 11
(1) royalties from enterprises in amounts to be determined by the 12
Authority; and 13
(2) interest payments from any debt securities. 14
(f) As needed for the Program, the Authority may withdraw from time to time up 15
to a total of $2,000,000 from the Small Business Development Guaranty Fund and deposit 16
the withdrawal into the Fund. 17
(g) (1) The Treasurer shall invest the money of the Fund in the same manner 18
as other State money may be invested. 19
(2) Any investment earnings of the Fund shall be paid into the Fund. 20
(h) In accordance with § 2.5–109 of this article, the Authority shall submit a 21
report on the Program.] 22
[5–556.] 5–537. 5–536. 23
[(a)] The [Authority] DEPARTMENT may provide equity participation financing 24
under the Program only after the enterprise submits an application [that contains a 25
business plan that meets the requirements of subsection (b) of this section] ON THE FORM 26
THAT THE DEPARTMENT PROVIDES W ITH THE INFORMATION THE DEPARTMENT 27
REQUIRES. 28
[(b) The business plan of an enterprise shall include: 29
(1) a description of the small business or existing business and its 30
management, product, and market; 31 64 SENATE BILL 427
(2) a statement of the amount, immediacy of need, and projected use of the 1
capital required; 2
(3) a statement of the potential economic impact of the purchase; 3
(4) information that relates to the satisfaction of the applicant’s 4
requirements of § 5–557(d) and (e) of this subtitle; and 5
(5) any other information the Authority requires.] 6
[5–557.] 5–538. 5–537. 7
(a) (1) Under the Program the [Authority] DEPARTMENT may not: 8
(i) own securities representing more than 49% of the voting stock of 9
a small business or own an interest greater than 49% in a small business; or 10
(ii) own securities representing more than 49% of the voting stock of 11
an enterprise acquiring an existing business or own an interest greater than 49% in an 12
enterprise acquiring an existing business. 13
(2) The amount of the [Authority’s] DEPARTMENT ’S equity participation 14
financing in an enterprise may not exceed $2,000,000. 15
(3) Before providing equity participation financing, the [Authority] 16
DEPARTMENT shall find that there is a reasonable probability that the [Authority] 17
DEPARTMENT will recover its initial investment and an adequate return on investment 18
from the equity participation financing. 19
(4) The [Authority’s] DEPARTMENT ’S investment shall be recoverable 20
within 7 years after the equity participation financing. 21
(5) The [Authority’s] DEPARTMENT ’S recovery shall be the greater of: 22
(i) the current value of the percentage of the equity investment in 23
the enterprise; or 24
(ii) the amount of the initial investment in the enterprise. 25
(6) If there is a dispute between the borrower and the [Authority] 26
DEPARTMENT as to the value of the business entity at the time of recovery, the value shall 27
be determined after obtaining at least one independent appraisal of the value from an 28
appraiser selected from a list of at least three appraisers supplied by the [Authority] 29
DEPARTMENT . 30
SENATE BILL 427 65
(b) When an enterprise applies to the [Authority] DEPARTMENT for equity 1
participation financing to acquire an existing business, an enterprise or its principals shall 2
have: 3
(1) an equity investment equal to at least 5% of the total cost of acquisition; 4
and 5
(2) at least 3 years of successful experience with demonstrated 6
achievements and management responsibilities. 7
(c) The [Authority] DEPARTMENT may provide equity participation financing 8
for the acquisition of an existing business if the existing business: 9
(1) has been in existence for at least 5 years; 10
(2) has been profitable for at least 2 of the previous 3 years; 11
(3) has sufficient cash flow to service the debt and ensure adequate return 12
of the [Authority’s] DEPARTMENT ’S investment; 13
(4) has the capacity for growth and job creation; 14
(5) has its principal place of business in the State; and 15
(6) has a strong customer base. 16
(d) If the applicant enterprise is a sole proprietorship, to qualify for financial 17
assistance under this part, the applicant shall satisfy the [Authority] DEPARTMENT that: 18
(1) the applicant is of good moral character; 19
(2) the applicant has a reputation for financial responsibility, as 20
determined from creditors, employers, and other individuals who have personal knowledge 21
of the applicant; 22
(3) the applicant is a resident of the State or the principal place of business 23
of the applicant is in the State; and 24
(4) the applicant is unable to obtain adequate business financing on 25
reasonable terms through normal lending channels because the applicant: 26
(i) belongs to a group that historically has been deprived of access 27
to normal economic or financial resources [because of race, color, creed, sex, religion, or 28
national origin]; 29
66 SENATE BILL 427
(ii) has an identifiable physical handicap that severely limits the 1
ability of the applicant to obtain financial assistance, but that does not limit the ability of 2
the applicant to perform the contract or other activity for which the applicant would be 3
receiving financial assistance; 4
(iii) has any other social or economic impediment that is beyond the 5
control of the applicant, but that does not limit the ability of the applicant to perform the 6
contract or other activity for which the applicant would be receiving financial assistance, 7
including: 8
1. the lack of formal education or financial capacity; or 9
2. geographical or regional economic distress; or 10
(iv) does not meet the established credit or investment criteria of at 11
least one financial institution. 12
(e) If the applicant enterprise is not a sole proprietorship, to qualify for financial 13
assistance under this part, at least 51% of the enterprise shall be owned by individuals who 14
meet the qualifications for applicants under subsection (d) of this section. 15
[5–558.] 5–539. 5–538. 16
The liability of the State and of the [Authority] DEPARTMENT in providing equity 17
participation financing is limited to investments under the Program. 18
[5–559. 19
(a) This section applies to financing provided under the Program during fiscal 20
years 2021 and 2022 for the purpose of relieving the adverse effects of the coronavirus 21
pandemic. 22
(b) The Authority may convert to a grant up to $50,000 of the financing described 23
under subsection (a) of this section that is provided to a small business.] 24
5–540. 5–539. RESERVED. 25
5–541. 5–540. RESERVED. 26
Part VI. Small Business Surety Bond Program. 27
[5–561.] 5–542. 5–541. 28
(a) In this part the following words have the meanings indicated. 29
(b) [“Fund” means the Small Business Surety Bond Fund. 30 SENATE BILL 427 67
(c)] “Principal” means a small business entity that has assets, income, or 1
employees that do not exceed limits that the [Authority] DEPARTMENT sets by regulation. 2
[(d)] (C) “Program” means the Small Business Surety Bond Program. 3
[5–562.] 5–543. 5–542. 4
There is a Small Business Surety Bond [Fund] PROGRAM WITHIN THE FUND. 5
[5–563. 6
(a) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 7
under § 7–302 of the State Finance and Procurement Article. 8
(2) The Treasurer shall hold the Fund separately, and the Comptroller 9
shall account for the Fund. 10
(b) (1) The Treasurer shall invest the money of the Fund in the same manner 11
as other State money may be invested. 12
(2) Any investment earnings of the Fund shall be credited to the Fund.] 13
[5–564. 14
The Fund consists of: 15
(1) money the State appropriates to the Fund; 16
(2) premiums, fees, and any other amounts the Authority receives with 17
respect to bonding assistance it provides; 18
(3) proceeds the Authority designates from the sale, lease, or other 19
disposition of property or contracts the Authority holds or acquires; and 20
(4) any other money available under the Program.] 21
[5–565. 22
The Fund shall be used: 23
(1) for the purposes described in the Program; and 24
(2) to pay expenses of the Authority in administering the Program.] 25
[5–566.] 5–544. 5–543. 26 68 SENATE BILL 427
In administering the Program, the [Authority] DEPARTMENT may: 1
(1) use the services of other governmental units; 2
(2) contract for and accept loans and grants from the federal government, 3
the State government, or a local government and their units; and 4
(3) on the terms and conditions it considers advisable: 5
(i) acquire, manage, operate, dispose of, or otherwise deal with 6
property; 7
(ii) take assignments of rentals and leases; and 8
(iii) make contracts, leases, agreements, and arrangements that are 9
necessary or incidental to the performance of its duties. 10
[5–567.] 5–545. 5–544. 11
The [Authority] DEPARTMENT may: 12
(1) prescribe or approve the form of and terms and conditions in 13
applications, guaranty agreements, or any other documents entered into by the [Authority] 14
DEPARTMENT , principals, or sureties under the Program; 15
(2) acquire or take assignments of documents executed, obtained, or 16
delivered in connection with any assistance the [Authority] DEPARTMENT provides under 17
the Program; 18
(3) set and collect premiums, fees, charges, costs, and expenses in 19
connection with any assistance the [Authority] DEPARTMENT provides under the 20
Program; 21
(4) adopt regulations to carry out the Program; and 22
(5) do anything necessary or convenient to carry out its powers and the 23
purposes of the Program. 24
[5–568.] 5–546. 5–545. 25
(a) The [Authority] DEPARTMENT may guarantee a surety up to the lesser of 26
90% or [$2,250,000] $3,000,000 of its loss under a bid bond, payment bond, or performance 27
bond on a contract [financed by the federal government, a state government, a local 28
government, a private entity, or a utility that the Public Service Commission regulates]. 29
SENATE BILL 427 69
(b) The term of a guaranty under this part may not exceed the contract term, 1
including: 2
(1) the maintenance or warranty period required by the contract; and 3
(2) the period during which the surety may be liable for latent defects. 4
(c) The [Authority] DEPARTMENT may vary the terms and conditions of a 5
guaranty based on: 6
(1) the [Authority’s] DEPARTMENT ’S history of experience with a surety; 7
and 8
(2) any other factor the [Authority] DEPARTMENT considers relevant. 9
[5–569.] 5–547. 5–546. 10
(a) The [Authority] DEPARTMENT may execute and perform a bid bond, 11
performance bond, and payment bond as a surety for the benefit of a principal in connection 12
with a contract [financed by the federal government or a state government, a local 13
government, a private entity, or a utility regulated by the Public Service Commission]. 14
(b) (1) This subsection does not apply if the sources of funding for the bonds 15
are grants. 16
(2) The bonds may not exceed [$2,500,000] $5,000,000 each. 17
(c) Bonds are subject to the approval of the [Authority] DEPARTMENT based on 18
the bond worthiness of the principal. 19
[5–570.] 5–548. 5–547. 20
(a) The [Authority] DEPARTMENT may only approve a guaranty or a bond under 21
this part if the [Authority] DEPARTMENT determines that the contract, for which a bond 22
is sought to be guaranteed or issued, will have a substantial economic impact. 23
(b) To determine the economic impact of a contract, the [Authority] 24
DEPARTMENT may consider: 25
(1) the amount of the guaranty obligation; 26
(2) the terms of the bond to be guaranteed; 27
(3) the number of new jobs that the contract to be bonded will create; and 28
70 SENATE BILL 427
(4) any other factor that the [Authority] DEPARTMENT considers 1
relevant. 2
[5–571.] 5–549. 5–548. 3
The [Authority] DEPARTMENT may establish a surety bonding line to issue or 4
guarantee multiple bonds to a principal within preapproved terms, conditions, and 5
limitations. 6
[5–572.] 5–550. 5–549. 7
(a) To qualify for financial assistance under this part the principal shall satisfy 8
the [Authority] DEPARTMENT that the principal: 9
(1) is of good moral character or is owned by individuals of good moral 10
character; 11
(2) as determined from creditors, employers, and other individuals who 12
have personal knowledge, is an individual with a reputation for financial responsibility or 13
is owned by individuals, a majority of whom have a reputation for financial responsibility; 14
(3) is a resident of the State or the principal place of business of the 15
applicant is in the State; and 16
(4) is unable to obtain adequate bonding on reasonable terms through 17
normal channels. 18
(b) To qualify for financial assistance under this part the principal shall certify to 19
the [Authority] DEPARTMENT , and the [Authority] DEPARTMENT shall be satisfied, 20
that: 21
(1) a bond is required to bid on a contract or to serve as prime contractor 22
or subcontractor; 23
(2) a bond cannot be obtained on reasonable terms and conditions without 24
assistance from the Program; and 25
(3) the principal will not subcontract more than 75% of the monetary value 26
of the contract. 27
[5–573.] 5–551. 5–550. 28
(a) To apply for financial assistance from the Program under this part, a principal 29
and, if applicable, a surety shall submit to the [Authority] DEPARTMENT an application 30
on the form that the [Authority] DEPARTMENT provides WITH THE INFORMATION THE 31
DEPARTMENT REQUIRES. 32 SENATE BILL 427 71
(b) [The application shall include: 1
(1) a detailed description of the project; 2
(2) an itemization of known and estimated costs; 3
(3) the total investment required to perform the contract; 4
(4) the working capital available to the principal; 5
(5) the bonding assistance sought; 6
(6) information that demonstrates the inability of the principal to obtain 7
adequate bonding on reasonable terms and conditions through normal channels without 8
assistance from the Program; 9
(7) a current balance sheet, a profit and loss statement, and credit 10
references about the financial status of the principal; 11
(8) a schedule of the status of existing and pending contracts; and 12
(9) any other relevant information the Authority requests. 13
(c)] The [Authority] DEPARTMENT may require an applicant to provide an 14
audited balance sheet before the [Authority] DEPARTMENT approves or denies the 15
application. 16
[(d)] (C) The [Authority] DEPARTMENT may not approve a guaranty or bond 17
under this part for a principal that has defaulted on a loan or guaranty from the [Authority] 18
DEPARTMENT unless: 19
(1) 2 years have passed since the time of the default; and 20
(2) the principal has cured any default in any financing program 21
administered by the Department. 22
[5–574.] 5–552. 5–551. 23
(a) In its sole discretion, the [Authority] DEPARTMENT may set: 24
(1) the premiums and fees for providing bonding assistance under the 25
Program; and 26
(2) the terms and conditions when the premiums and fees are payable. 27
72 SENATE BILL 427
(b) The premiums and fees may vary in amount among transactions and at 1
different stages of a transaction. 2
(c) A determination by the Authority on premiums and fees remains effective for 3
as long as the bonding assistance provided by the [Authority] DEPARTMENT is in effect. 4
[5–575.] 5–553. 5–552. 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 assistance; or 11
(2) affecting bonding assistance whether or not the assistance has been 12
extended. 13
(c) A person who violates this section is guilty of a misdemeanor and on conviction 14
is subject to imprisonment not exceeding [6 months] 5 YEARS or a fine not exceeding 15
[$1,000] $50,000 or both. 16
5–1001. 17
(a) In this subtitle the following words have the meanings indicated. 18
(b) “Fund” means the Military Personnel and Veteran–Owned Small Business 19
No–Interest Loan Fund established under § 5–1006 of this subtitle. 20
[(c) “Service–disabled veteran” means a veteran with a disability that is 21
service–connected, as defined in 38 U.S.C. § 101(16). 22
(d) (1) “Small business employer” means an employer who employed an 23
average of 50 or fewer employees on business days during the calendar year preceding the 24
determination of eligibility for a loan under this subtitle. 25
(2) For purposes of paragraph (1) of this subsection, all persons treated as 26
a single employer under § 414(b), (c), (m), or (o) of the Internal Revenue Code shall be 27
treated as a single employer under this subtitle. 28
(e) “Veteran–owned small business” means a small business that is at least 51% 29
owned by a veteran as defined in 38 U.S.C. § 101(2).] 30
SENATE BILL 427 73
(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 74 SENATE BILL 427
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
SENATE BILL 427 75
(d) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 1
under § 7–302 of the State Finance and Procurement Article. 2
(2) The State Treasurer shall hold the Fund separately, and the 3
Comptroller shall account for the Fund. 4
(3) Any investment earnings of the Fund shall be credited to the Fund. 5
(e) The Fund consists of: 6
(1) money the State appropriates to the Fund; 7
(2) money made available to the Fund through federal programs or private 8
contributions; 9
(3) repayments from loans provided by the Department under this subtitle; 10
(4) proceeds from the sale, disposition, lease, or rental of collateral related 11
to loans provided by the Department under this subtitle; and 12
(5) any other money made available to the Fund. 13
(f) The Department may use money in the Fund to provide loans to eligible 14
applicants under [§§ 5–1002 through 5–1004] § 5–1002 of this subtitle. 15
[5–1007. 16
(a) The Department shall adopt regulations to carry out this subtitle. 17
(b) The Department of Veterans and Military Families may adopt regulations 18
concerning eligibility criteria for loans under this subtitle.] 19
5–1204. 20
(a) (1) (ii) 4. If the money in the Account exceeds $1,000,000, any 21
money in excess of that amount shall be transferred to the [Small, Minority, and 22
Women–Owned Businesses] REINVEST FOR SUCCESS Account established under § 23
5–1501 of this title. 24
Subtitle 15. [Small, Minority, and Women–Owned Businesses] REINVEST FOR 25
SUCCESS Account. 26
5–1501. 27
(a) There is a [Small, Minority, and Women–Owned Businesses] REINVEST FOR 28
SUCCESS Account under the authority of the Department. 29 76 SENATE BILL 427
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 medium –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 SENATE BILL 427 77
(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
78 SENATE BILL 427
(ii) If the total amount of grants applied for by SME manufacturers 1
that employ 50 or fewer employees is less than the amount of funds reserved under 2
subparagraph (i) of this paragraph during a fiscal year, the Department may utilize the 3
balance of the reserved funds for awarding grants under this subsection to SME 4
manufacturers that employ more than 50 employees. 5
(f) (1) A grant awarded under the Program may be used for projects that 6
directly affect manufacturing processes and focus on investments in Industry 4.0 7
technology commercial–ready equipment through established vendors or related 8
infrastructure. 9
(2) Within 1 year after receiving a grant under the Program, an SME 10
manufacturer shall submit to the Department a letter that: 11
(i) describes how the grant funding was used; and 12
(ii) includes any invoices related to the implementation of the 13
Industry 4.0 technology or related infrastructure. 14
(3) The Department may require a grant recipient that fails to fulfill the 15
requirements of the grant to return all or part of the grant to the Program. 16
6–601. 17
(a) In this subtitle the following words have the meanings indicated. 18
(b) “Authority” means the Maryland E–Nnovation Initiative Fund Authority 19
established under § 6–605 of this subtitle. 20
(C) “ELIGIBLE FIELD OF STU DY” MEANS A FIELD OF STU DY FOCUSED ON 21
THE PRIORITY SECTORS AND ACTIVITY INCLUDE D ON THE LIST ESTABL ISHED IN 22
ACCORDANCE WITH § 2.5–106 OF THIS ARTICLE. 23
[(c)] (D) “Endowment proceeds” means those investment earnings accruing to a 24
research endowment of a nonprofit institution of higher education and available for 25
expenditure by the institution in accordance with § 6–612 of this subtitle. 26
[(d)] (E) “Fund” means the Maryland E–Nnovation Initiative Fund created 27
under § 6–604 of this subtitle. 28
[(e)] (F) “Governing board” has the meaning stated in § 10–101 of the Education 29
Article. 30
[(f)] (G) “Governing body” means: 31
(1) a governing board; 32 SENATE BILL 427 79
(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 80 SENATE BILL 427
(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
SENATE BILL 427 81
(7) aeronautical and space science; 1
(8) environmental sciences; 2
(9) behavioral and language science; 3
(10) health sciences; 4
(11) agriculture; or 5
(12) cybersecurity]. 6
(b) Endowment proceeds may be expended by a nonprofit institution of higher 7
education for: 8
(1) the payment of the base salaries of newly endowed department chairs, 9
new professorship positions, new research scientists, or new research staff positions, 10
including research technicians and support personnel, and to fund affiliated graduate or 11
undergraduate student research fellowships, if the positions or fellowships are engaged in 12
[the areas of research identified in subsection (a) of this section] AN ELIGIBLE FIELD OF 13
STUDY; or 14
(2) the purchase of basic infrastructure, including laboratory and scientific 15
equipment or other essential equipment and materials, related to an [area of research 16
identified in subsection (a) of this section] ELIGIBLE FIELD OF ST UDY. 17
(c) An individual in a position that is funded by endowment proceeds under 18
subsection (b)(1) of this section shall: 19
(1) work at least 20% of the year in support of a federal laboratory or 20
associated federal laboratory research support organization; 21
(2) hold a joint appointment or secondary position at another nonprofit 22
institution of higher education in the State; or 23
(3) work at least 20% of the year in support of entrepreneurial activities 24
with a company engaged in [one or more of the research areas identified in subsection (a) 25
of this section] AN ELIGIBLE FIELD OF STUDY. 26
(d) The Authority shall issue eligibility criteria regarding the expenditure of 27
endowment proceeds to pay the base salaries of personnel, fund student fellowships, and 28
purchase basic infrastructure. 29
PART I. MARYLAND ECONOMIC DEVELOPMENT CORPORATION . 30
10–101. 31 82 SENATE BILL 427
(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
10–106. 4
(a) A Board of Directors shall manage the Corporation and exercise its powers. 5
(b) The Board consists of the following [12] members: 6
(1) as ex officio voting members: 7
(i) the Secretary; and 8
(ii) the Secretary of Transportation; [and] 9
(2) the following members, appointed by the Governor with the advice and 10
consent of the Senate: 11
(i) two representatives of local government; 12
(ii) three members who are knowledgeable in real estate or 13
commercial financing; 14
(iii) three members who are knowledgeable in industrial 15
development or industrial relations; and 16
(iv) two members of the general public; 17
(3) ONE MEMBER OF THE GE NERAL PUBLIC APPOINT ED BY THE 18
PRESIDENT OF THE SENATE; AND 19
(4) ONE MEMBER OF THE GE NERAL PUBLIC APPOINT ED BY THE 20
SPEAKER OF THE HOUSE. 21
(c) Each member of the Board shall be a resident of the State. 22
(d) In appointing Board members, the Governor shall consider geographic 23
diversity and minority representation. 24
(e) (1) The term of an appointed member is 4 years. 25
SENATE BILL 427 83
(2) The terms of the appointed members are staggered as required by the 1
terms provided for members of the Board on October 1, 2008. 2
(3) At the end of a term, a member continues to serve until a successor is 3
appointed and qualifies. 4
(4) A member who is appointed after a term has begun serves only for the 5
rest of the term and until a successor is appointed and qualifies. 6
(f) Before taking office, each member appointed to the Board shall take the oath 7
required by Article 1, § 9 of the Maryland Constitution. 8
10–115. 9
(A) The Corporation may: 10
(1) adopt bylaws for the conduct of its business; 11
(2) adopt a seal; 12
(3) maintain offices at a place it designates in the State; 13
(4) accept loans, grants, or assistance of any kind from the federal 14
government, a governmental unit, a college or university, or a private source; 15
(5) enter into contracts and other legal instruments; 16
(6) sue and be sued in its own name; 17
(7) acquire, purchase, hold, lease as lessee, and use any franchise, patent, 18
or license and real, personal, mixed, tangible, or intangible property, or any interest in 19
property, necessary or convenient to carry out its purposes; 20
(8) sell, lease as lessor, transfer, and dispose of its property or interest in 21
property; 22
(9) fix and collect rates, rentals, fees, royalties, and charges for services, 23
resources, and facilities it provides or makes available; 24
(10) with the owner’s permission, enter lands, waters, or premises to make 25
a survey, sounding, boring, or examination to accomplish a purpose authorized by this 26
subtitle; 27
(11) further define or limit the term “revenues” defined in § 10–101 of this 28
subtitle as the term applies to a particular project, financing, or other matter; 29
84 SENATE BILL 427
(12) create, own, control, or be a member of a corporation, limited liability 1
company, partnership, or other person, whether for–profit or nonprofit; 2
(13) exercise a power usually possessed by a private corporation in 3
performing similar functions unless to do so would conflict with State law; and 4
(14) do all things necessary or convenient to carry out the powers expressly 5
granted by this subtitle. 6
(B) THE CORPORATION MAY UTILI ZE UP TO 5% OF THE ALLOCATED 7
APPROPRIATION FOR AD MINISTRATIVE COSTS FOR ANY PROJEC T OR PROGRAM 8
DIRECTED BY THE CORPORATION INCLUDED IN THE STATE’S ANNUAL OPERATING 9
OR CAPITAL BUDGETS . 10
10–133. 11
(a) On or before October 1 of each year, the Corporation shall submit a report to 12
the Governor[, the Maryland Economic Development Commission,] and, in accordance with 13
§ 2–1257 of the State Government Article, the General Assembly. 14
(b) The report shall include a complete operating and financial statement and 15
summarize the activities of the Corporation during the preceding fiscal year. 16
10–135. RESERVED. 17
10–136. RESERVED. 18
Part II. Regional Institution Strategic Enterprise Zone Program. 19
10–137. 20
(a) In this [subtitle] PART the following words have the meanings indicated. 21
(b) “Area” means a geographic area in one or more political subdivisions in the 22
State described by a closed perimeter boundary. 23
(c) “Fund” means the Regional Institution Strategic Enterprise Zone Fund 24
created under [§ 5–1408] § 10–144 of this subtitle. 25
(d) “Nonprofit organization” means an organization that is exempt or eligible for 26
exemption from taxation under § 501(c)(3) of the Internal Revenue Code. 27
(e) “Qualified institution” means an entity that is designated as a qualified 28
institution under [§ 5–1403] § 10–139 of this subtitle and may include: 29
SENATE BILL 427 85
(1) a regional higher education center as defined under § 10–101 of the 1
Education Article; 2
(2) an institution of higher education as defined under § 10–101 of the 3
Education Article; or 4
(3) a nonprofit organization that is affiliated with a federal agency. 5
(f) “RISE zone” means a geographic area in immediate proximity to a qualified 6
institution that is targeted for increased economic and community development that meets 7
the requirements of [§ 5–1404] § 10–140 of this subtitle and is designated as a Regional 8
Institution Strategic Enterprise zone by the [Secretary] CORPORATION under [§ 5–1404] 9
§ 10–140 of this subtitle. 10
10–138. 11
The purposes of the Regional Institution Strategic Enterprise Zone Program are to 12
access institutional assets that have a strong and demonstrated history of commitment to 13
economic development and revitalization in the communities in which they are located and 14
incentivize the location of innovative start–up businesses based on technology developed, 15
licensed, or poised for commercialization at or in collaboration with qualified Maryland 16
institutions. 17
10–139. 18
(a) An institution may apply to the [Secretary] CORPORATION to be designated 19
as a qualified institution. 20
(b) To be eligible for designation as a qualified institution, the applicant shall: 21
(1) evidence an intention: 22
(i) to make a significant financial investment or commitment in an 23
area of the State that the applicant intends to become a RISE zone; 24
(ii) to use the resources and expertise of the applicant to spur 25
economic development and community revitalization in an area of the State that the 26
applicant intends to become a RISE zone; and 27
(iii) to create a significant number of new jobs within an area of the 28
State that the applicant intends to become a RISE zone; 29
(2) have a demonstrated history of community involvement and economic 30
development within the communities that the applicant serves; and 31
(3) meet the minimum financial qualifications established by the 32
[Secretary] CORPORATION . 33 86 SENATE BILL 427
(c) If the applicant is a nonprofit organization that is not an institution of higher 1
education, the application shall demonstrate an affiliation with a federal agency. 2
(d) (1) In addition to the requirements under subsection (b) of this section, the 3
[Secretary] CORPORATION may establish by regulation any other requirements necessary 4
and appropriate in order for an applicant to be designated as a qualified institution. 5
(2) The [Secretary] CORPORATION shall adopt regulations that establish 6
factors for evaluating applications under subsection (b) of this section. 7
(e) In the form and content acceptable to the [Secretary] CORPORATION , an 8
applicant shall submit to the [Secretary] CORPORATION an application that contains the 9
information that the [Secretary] CORPORATION considers necessary to evaluate the 10
request for designation as a qualified institution. 11
(f) (1) Within 90 days after submission of an application under this section, 12
the [Secretary] CORPORATION shall approve or reject the application of an institution to 13
be designated as a qualified institution. 14
(2) At least 30 days before approval or rejection of an application under this 15
section, the [Secretary] CORPORATION shall notify the Legislative Policy Committee. 16
(3) The Legislative Policy Committee may provide advice to the [Secretary] 17
CORPORATION regarding the approval or rejection of an institution as a qualified 18
institution. 19
10–140. 20
(a) On or after July 1, [2015] 2025, a qualified institution shall apply jointly with 21
a county, a municipal corporation, or the economic development agency of a county or 22
municipal corporation to the [Secretary] CORPORATION to designate an area as a 23
Regional Institution Strategic Enterprise zone. 24
(b) The application shall: 25
(1) be in the form and contain the information that the [Secretary] 26
CORPORATION requires by regulation; 27
(2) state the boundaries of the area of the proposed RISE zone, not 28
exceeding 500 acres; 29
(3) describe the nexus of the RISE zone with the qualified institution; and 30
(4) contain a plan that identifies the target strategy and anticipated 31
economic impacts of the RISE zone. 32 SENATE BILL 427 87
(c) The [Secretary] CORPORATION may establish, by regulation, any other 1
requirements necessary and appropriate for an area to be designated as a RISE zone. 2
(d) (1) Unless a county in which a municipal corporation is located agrees to 3
designation of a RISE zone in the municipal corporation, qualified property in the 4
municipal corporation may not receive a tax credit against county property tax. 5
(2) Unless a municipal corporation located within a county agrees to 6
designation of a RISE zone within its boundaries, qualified property in the county may not 7
receive a tax credit against the municipal property tax. 8
(e) (1) Within 120 days after submission of an application under this section, 9
the [Secretary] CORPORATION shall: 10
(i) approve or reject an application for designation of a RISE zone, 11
including approval or modification of the proposed boundaries of the RISE zone; and 12
(ii) define the boundaries of the approved RISE zone. 13
(2) At least 45 days before approval or rejection of an application under this 14
section, the [Secretary] CORPORATION shall notify the Legislative Policy Committee. 15
(3) The Legislative Policy Committee may provide advice to the [Secretary] 16
CORPORATION regarding: 17
(i) the approval or rejection of the RISE zone; or 18
(ii) the boundaries of the RISE zone proposed by the [Secretary] 19
CORPORATION . 20
(f) (1) (i) Subject to subparagraph (ii) of this paragraph, the designation of 21
an area as a RISE zone is effective for 10 years. 22
(ii) Upon a joint application of a qualified institution, a county and, 23
if applicable, a municipal corporation, or the economic development agency of a county or 24
municipal corporation, the [Secretary] CORPORATION may renew a RISE zone for an 25
additional [5] 10 years. 26
(2) The [Secretary] CORPORATION may not: 27
(i) 1. except as provided in item 2 of this item, approve more 28
than three RISE zones in a single county or municipal corporation; or 29
2. approve more than four RISE zones in Baltimore City; or 30
88 SENATE BILL 427
(ii) approve a RISE zone the geographic area of which exceeds 500 1
acres. 2
(g) (1) A RISE zone may not be required to be in the immediate geographic 3
proximity of a qualified institution if an appropriate nexus for the increased economic and 4
community development is established with the qualified organization. 5
(2) If the proposed RISE zone is in a rural part of the State, a qualified 6
institution may not be required to be in the immediate area of the RISE zone. 7
(h) The [Secretary] CORPORATION may not designate a RISE zone in: 8
(1) a development district established under Title 12, Subtitle 2 of this 9
article; or 10
(2) a special taxing district established under Title 21 of the Local 11
Government Article or Section 62A of the Baltimore City Charter. 12
(i) (H) The designation of an area as a RISE zone may not be construed to limit 13
or supersede a provision of a comprehensive plan, zoning ordinance, or other land use policy 14
adopted by a county, municipal corporation, or bicounty agency with land use authority 15
over the area designated as a RISE zone. 16
10–141. 17
(a) The [Secretary] CORPORATION shall assign to a RISE zone a business and 18
community development concierge who is an employee of the [Department] 19
CORPORATION . 20
(b) A business and community development concierge shall assist entities 21
locating in the RISE zone with: 22
(1) State, county, or municipal corporation permit and license applications; 23
(2) accessing existing programs at THE CORPORATION , the Department, 24
the Department of Housing and Community Development, the Maryland Department of 25
Labor, the Maryland Technology Development Corporation, or the Department of 26
Transportation; and 27
(3) any other activities the [Secretary] CORPORATION authorizes that 28
relate to the development of the RISE zone. 29
10–142. 30
(a) (1) To the extent provided for in this section, a business entity that locates 31
in a RISE zone is entitled to: 32 SENATE BILL 427 89
(i) for a business entity that locates in the RISE zone before January 1
1, 2023, the property tax credit under § 9–103.1 of the Tax – Property Article; 2
(ii) for a taxable year beginning before January 1, 2023, the income 3
tax credit under § 10–702 of the Tax – General Article; and 4
(iii) priority consideration for financial assistance from programs in 5
Subtitle 1 of this title. 6
(2) For purposes of the income tax credit authorized under paragraph (1)(ii) 7
of this subsection, the business entity is treated as being located in an enterprise zone. 8
(b) Subject to the limitations under subsection (a) of this section, a business entity 9
that moves into or locates in a RISE zone on or after the date that the zone is designated 10
under this [subtitle] PART may qualify for the incentives under this section. 11
(c) A business entity may not qualify for the incentives under subsection (a) of 12
this section unless the [Department] CORPORATION , in consultation with the county or 13
municipal corporation in which a RISE zone is located, certifies the business entity and its 14
location as consistent with the target strategy of the RISE zone. 15
(d) (1) Unless a business entity makes a significant capital investment or 16
expansion of its labor force after a RISE zone is designated, the incentives under this 17
section are not available to a business entity that was in a RISE zone before the date that 18
the zone is designated. 19
(2) The [Department] CORPORATION shall adopt regulations 20
establishing factors to determine if a business entity makes a significant capital investment 21
or expansion of its labor force under paragraph (1) of this subsection. 22
10–143. 23
(a) (1) (i) A qualified institution, THE CORPORATION , a county and, if 24
applicable, a municipal corporation, or the economic development agency of a county or 25
municipal corporation may establish a program to provide rental assistance to a business 26
entity that: 27
1. moves into or locates in a RISE zone on or after the date 28
that the zone is designated under this [subtitle] PART; AND 29
2. [has nexus with a qualified institution located in the RISE 30
zone; and 31
3. has been in active business not longer than 7 years] IS 32
ENCOMPASSED BY THE I NDUSTRY SECTORS AND ACTIVITIES INCLUDED ON THE LIST 33 90 SENATE BILL 427
DEVELOPED BY THE DEPARTMENT IN ACCORDA NCE WITH § 2.5–106 OF THIS 1
ARTICLE. 2
(ii) A business entity may not receive rental assistance under a 3
rental assistance program established in accordance with subparagraph (i) of this 4
paragraph for more than [3] 5 years. 5
(2) (i) A qualified institution, a county and, if applicable, a municipal 6
corporation, or the economic development agency of a county or municipal corporation that 7
establishes a rental assistance program in accordance with paragraph (1) of this subsection 8
may submit a request to receive a distribution [of matching funds] from the Fund. 9
(ii) The application shall include: 10
1. a description of the rental assistance program; 11
2. the amount of funding that the applicant has secured to 12
provide rental assistance under the rental assistance program; 13
3. the amount requested for distribution from the Fund in 14
accordance with this section; and 15
4. any other information requested by the [Department] 16
CORPORATION . 17
(iii) The applicant shall submit the application on or before the date 18
that the [Department] CORPORATION specifies. 19
(b) (1) The [Department] CORPORATION shall review each request for 20
distribution [of matching funds] from the Fund for compliance with the provisions of this 21
section and [Department] CORPORATION regulations. 22
(2) [Subject to the availability of funds in the Fund and paragraph (3) of 23
this subsection, if the Department approves a request for distribution of matching funds 24
from the Fund, the Department shall distribute to a fund dedicated to the applicant’s rental 25
assistance program an amount equal to three times the amount of funding specified under 26
subsection (a)(2)(ii)2 of this section. 27
(3) Except as provided in subsection (c) of this section, the Department] 28
THE CORPORATION shall make available not more than 25% of cumulative program funds 29
from the Fund for rental assistance programs in a single RISE zone. 30
(c) (1) Within 90 days after approval by the [Department] CORPORATION of 31
a request for [matching] funds under subsection (a) of this section, the applicant shall 32
deposit an amount equal to or greater than the amount specified under subsection (a)(2)(ii)2 33
of this section into a fund dedicated to the applicant’s rental assistance program. 34 SENATE BILL 427 91
(2) If an applicant fails to have deposited the amount required under 1
paragraph (1) of this subsection, any portion of funds allocated to the applicant that has 2
not been distributed shall be reallocated to another applicant in accordance with this 3
section. 4
(3) If the [Department] CORPORATION fails to allocate the funds in the 5
Fund under this [subtitle] PART and rental assistance programs in a single RISE zone 6
have previously received 25% of cumulative program funds from the Fund, the 7
[Department] CORPORATION may distribute additional funds to applicants for that RISE 8
zone in accordance with this [subtitle] PART. 9
(d) (1) On or before September 15 each year, a rental assistance program that 10
has received a distribution of funds from the Fund shall submit to the [Department] 11
CORPORATION an annual report in the form and containing the information required by 12
the [Secretary] CORPORATION . 13
(2) The report required under paragraph (1) of this subsection shall detail 14
the use of funds received under this section for the immediately preceding fiscal year and 15
provide an update on any funds that were not disbursed during that fiscal year. 16
(3) The [Department] CORPORATION may not distribute [matching] 17
funds from the Fund to a rental assistance program under this section if the rental 18
assistance program has failed to submit the report required under paragraph (1) of this 19
subsection. 20
(e) A rental assistance program that receives a distribution [of matching funds] 21
from the Fund shall be subject to an audit at least once every 3 years by an independent 22
certified public accountant that the applicant and the [Department] CORPORATION select. 23
(f) Based on the findings of an audit conducted under subsection (e) of this 24
section, the [Department] CORPORATION may make an assessment against a qualified 25
institution, a county, a municipal corporation, or an economic development agency to 26
recapture any misused or undistributed funds. 27
10–144. 28
(a) There is a Regional Institution Strategic Enterprise Fund in the 29
[Department] CORPORATION . 30
(b) The [Secretary] EXECUTIVE DIRECTOR OF THE CORPORATION shall 31
manage and supervise the Fund. 32
(c) (1) The Fund is a special, nonlapsing fund that is not subject to § 7–302 of 33
the State Finance and Procurement Article. 34
92 SENATE BILL 427
(2) The State Treasurer shall hold the Fund separately, and the 1
Comptroller shall account for the Fund. 2
(d) The Fund consists of: 3
(1) money appropriated in the State budget to the Fund; and 4
(2) any other money from any other source accepted for the benefit of the 5
Fund. 6
(e) The [Department] CORPORATION may use the Fund to: 7
(1) finance, in coordination with qualified institutions, counties, and 8
municipal corporations, the provision of rental assistance to business entities located in 9
RISE zones; and 10
(2) pay the related administrative, legal, and actuarial expenses of the 11
[Department] CORPORATION . 12
(f) (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
(g) Expenditures from the Fund may be made only in accordance with the State 16
budget. 17
10–145. 18
[In accordance with § 2.5–109 of this article, the Department] THE CORPORATION 19
shall submit a report on the effectiveness of the tax incentives authorized under this 20
[subtitle] PART WITH THE ANNUAL REPO RT SUBMITTED IN ACCO RDANCE WITH § 21
10–133 OF THIS SUBTITLE . 22
10–146. 23
This [subtitle] PART and the tax credits and benefits authorized under it shall 24
terminate on January 1, 2030. 25
10–147. RESERVED. 26
10–148. RESERVED. 27
Part III. Build Our Future Grant Pilot Program. 28
10–149. 29 SENATE BILL 427 93
(a) In this [subtitle] PART the following words have the meanings indicated. 1
10–150. 2
(a) There is a Build Our Future Grant Pilot Program in the [Department] 3
CORPORATION . 4
(b) The purpose of the Program is to provide grant funding for infrastructure 5
projects intended to support innovation in an eligible technology sector. 6
(c) Grants may be awarded to private companies, nonprofit entities, local 7
governments, or colleges and universities in the State. 8
(d) The [Department] CORPORATION shall administer the Program. 9
10–151. 10
(a) To carry out the purpose of the Program, the [Department] CORPORATION 11
may award grants in accordance with this [subtitle] PART to approved recipients carrying 12
out infrastructure projects intended to support innovation in any of the [following eligible 13
technology sectors: 14
(1) advanced manufacturing; 15
(2) aerospace; 16
(3) agriculture; 17
(4) artificial intelligence; 18
(5) biotechnology; 19
(6) blue technology; 20
(7) cybersecurity; 21
(8) defense; 22
(9) energy and sustainability; 23
(10) life sciences; 24
(11) quantum; and 25
94 SENATE BILL 427
(12) sensors and robotics] INDUSTRY SECTORS AND ACTIVITIES 1
INCLUDED ON THE LIST DEVELOPED BY THE DEPARTMENT IN ACCORDA NCE WITH § 2
2.5–106 OF THIS ARTICLE . 3
(b) Examples of eligible projects include: 4
(1) sensitive compartmented information facilities; 5
(2) wet laboratories; 6
(3) cyber ranges; 7
(4) prototype manufacturing centers; and 8
(5) other specialized workforce training, skill certification, or 9
research–related spaces. 10
(c) Grant awards may be used to defray the cost a grantee incurs to acquire, 11
construct, rehabilitate, install, improve, or equip an eligible innovation infrastructure 12
project. 13
(d) (1) A single entity may be awarded not more than $2,000,000 in grant 14
funds in a fiscal year. 15
(2) (i) For a grant award up to $1,000,000, a grantee shall provide 16
matching funds that are at least 200% of the grant amount. 17
(ii) For a grant award exceeding $1,000,000, and up to $2,000,000, a 18
grantee shall provide matching funds that are at least 400% of the grant amount. 19
(iii) Funds received by a grantee through other State grant programs 20
are not counted toward the grantee’s matching funds requirement. 21
(3) A grantee must demonstrate an ability to cover the full estimated costs 22
of the project for which the grant is awarded. 23
(4) (i) Not more than 50% of the appropriation to the Fund in a fiscal 24
year may be awarded to colleges and universities in that fiscal year. 25
(ii) Grants to colleges and universities from the Fund must be 26
awarded to projects that: 27
1. are performed in collaboration with private industry; or 28
2. offer the prospect of significant economic impact and the 29
opportunity to develop entrepreneurship or clusters of technological innovation in the 30
State. 31 SENATE BILL 427 95
(E) WHEN PROVIDING FUNDIN G FROM THE FUND, THE CORPORATION 1
SHALL PRIORITIZE APP LICANTS LOCATED IN A REGIONAL INSTITUTION STRATEGIC 2
ENTERPRISE ZONE THAT IS DESIGNATED UNDER PART II OF THIS SUBTITLE. 3
10–152. 4
A grantee may be subject to repayment of the grant in an amount determined by the 5
[Department] CORPORATION if the grantee fails to: 6
(1) comply with reporting requirements established by the [Department] 7
CORPORATION ; or 8
(2) demonstrate appropriate use of grant funds. 9
10–153. 10
(a) There is a Build Our Future Grant Fund. 11
(b) The [Department] CORPORATION shall administer the Fund. 12
(c) The purpose of the Fund is to provide grants for infrastructure projects to 13
support innovation in eligible technology sectors under this [subtitle] PART. 14
(d) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 15
under § 7–302 of the State Finance and Procurement Article. 16
(2) The State Treasurer shall hold the Fund separately, and the 17
Comptroller shall account for the Fund. 18
(e) The Fund consists of: 19
(1) money appropriated in the State budget to the Fund; 20
(2) any interest earnings of the Fund; and 21
(3) any other money from any other source accepted for the benefit of the 22
Fund. 23
(f) (1) The Fund may be used to: 24
(i) provide grants in accordance with this [subtitle] PART; and 25
(ii) pay the administrative costs of the Program. 26
96 SENATE BILL 427
(2) During each fiscal year, the Department may use not more than 10% of 1
the money appropriated to the Fund to administer the Program. 2
(g) (1) The State Treasurer shall invest the money of the Fund in the same 3
manner as other State money may be invested. 4
(2) Any interest earnings of the Fund shall be credited to the Fund. 5
(h) Expenditures from the Fund may be made only in accordance with the State 6
budget. 7
10–154. 8
On or before July 1, [2026] 2029, the [Department] CORPORATION shall report to 9
the Governor and, in accordance with § 2–1257 of the State Government Article, the 10
General Assembly on the projects funded through and the economic impact of the Program. 11
10–155. 12
The [Secretary] CORPORATION may adopt regulations to carry out this [subtitle] 13
PART. 14
10–401. 15
(a) In this subtitle the following words have the meanings indicated. 16
(c) “Corporation” means the Maryland Technology Development Corporation. 17
10–408. 18
(a) The Corporation shall adopt regulations establishing: 19
(1) the investment committee; 20
(2) the responsibilities of the investment committee, INCLUDING A 21
PROCESS FOR CONSIDER ING REMEDIES , INCLUDING DIVESTMENT , FOR 22
INVESTMENTS IN A BUS INESS THAT NO LONGER MEETS THE DEFINITION OF A 23
QUALIFIED BUSINESS ; and 24
(3) the procedures for the appointment of investment committee members. 25
10–415. 26
(a) (1) On or before October 1 of each year, the Corporation shall report to the 27
Governor[, the Maryland Economic Development Commission,] and, in accordance with § 28
2–1257 of the State Government Article, the General Assembly. 29 SENATE BILL 427 97
(2) The report required under this subsection shall include: 1
(i) a complete operating and financial statement covering the 2
Corporation’s operations; 3
(ii) a summary of the Corporation’s activities during the preceding 4
fiscal year; 5
(iii) information on all salaries and any incentives approved by the 6
Board for Corporation employees; 7
(iv) information on outreach, training, mentorship, support, and 8
investment in minority and women–owned qualified businesses, including support for 9
marketing by the Maryland [Small Business Development Financing Authority ] 10
ECONOMIC INCLUSION FUND; 11
(v) information on entities that have current investments and 12
entities that received funding or investments in the current year on the: 13
1. principal business operations; 14
2. number of employees in the State and the number of 15
employees outside the State; 16
3. capital or other investments made in the State; and 17
4. proposed and actual job creation or capital investment in 18
the State as a result of the investment or support; 19
(vi) a list of businesses that have received funding that would no 20
longer qualify as a qualified business; and 21
(vii) information on the creation of and appointments made to an 22
advisory committee and the responsibilities of the advisory committee and members of the 23
committee. 24
(b) (1) On or before October 1 each year, beginning in 2023, and every 6 25
months thereafter, the Corporation shall report to the Governor[, the Maryland Economic 26
Development Commission,] and, in accordance with § 2–1257 of the State Government 27
Article, the Joint Audit and Evaluation Committee and the General Assembly. 28
(2) The report required under this subsection shall include a list of the 29
qualified businesses or other businesses receiving support through programs administered 30
by the Corporation, including those receiving investments made under § 21–123.2 of the 31
State Personnel and Pensions Article. 32
98 SENATE BILL 427
(3) The list of qualified businesses or other businesses receiving support 1
shall include for each business: 2
(i) the number of employees in the State; 3
(ii) the number of employees outside the State; 4
(iii) the capital or other investments made in the State; and 5
(iv) proposed job creation or capital investment in the State as a 6
result of the investment or support. 7
(c) (1) On or before October 1, 2024, and each October 1 thereafter, the 8
Corporation shall report to the Governor, the Maryland Economic Development 9
Commission, and, in accordance with § 2–1257 of the State Government Article, the 10
General Assembly on the following information from the immediately preceding fiscal year: 11
(i) the number of applications the Corporation received; 12
(ii) the amount of investment funding that was available at the 13
beginning of the fiscal year; 14
(iii) the amount of investment funding that was available at the end 15
of the fiscal year; 16
(iv) the amount of investment funding that was requested; 17
(v) the number of applicants the Corporation invested in; and 18
(vi) the amount of investment funding the Commission awarded. 19
(2) The information reported in accordance with paragraph (1) of this 20
subsection shall: 21
(i) specify which applications and investments were from social 22
impact funds, seed funds, and the Maryland Venture Fund; and 23
(ii) if available, provide information that has been de–identified and 24
disaggregated on applicants and qualified business founders by race, ethnicity, age, gender, 25
disability status, veteran status, and geographic location and the degree to which 26
applicants and founders identify with more than one demographic category. 27
10–470. 28
(a) The Corporation may require that all or part of a grant be repaid, with interest 29
at a rate the Corporation sets, when conditions specified by the Corporation occur. 30
SENATE BILL 427 99
(b) (1) Whenever the Corporation is authorized by law to make a grant, 1
including a grant from the Economic Development Opportunities Program Account 2
authorized under § 7–314 of the State Finance and Procurement Article, the Corporation 3
may use money appropriated for the grant to make an equity investment in a qualified 4
business. 5
(2) (i) Except as provided in subparagraph (ii) of this paragraph and 6
Subtitle 4A of this title, in making an equity investment under this subtitle or Subtitle 4A 7
of this title, the Corporation may not acquire an ownership interest in an enterprise that 8
exceeds 25%. 9
(ii) In making an equity investment under this subtitle or Subtitle 10
4A of this title in one or more venture or private equity firms, the Corporation may acquire 11
an ownership interest exceeding 25%. 12
(3) Within 15 years after making an equity investment under this subtitle 13
or Subtitle 4A of this title, the Corporation [shall], ON REVIEW AND APPROV AL OF THE 14
CORPORATION ’S INVESTMENT COMMITT EE, MAY divest itself of that investment OR 15
PURSUE ANOTHER REMED Y THAT IS IN THE CORPORATION ’S BEST INTEREST . 16
(4) The liability of the State and the Corporation in making an equity 17
investment under this subtitle or Subtitle 4A of this title is limited to the amount of that 18
investment. 19
10–501. 20
(a) In this subtitle the following words have the meanings indicated. 21
(f) “Corporation” means the Maryland Agricultural and Resource –Based 22
Industry Development Corporation. 23
10–528. 24
(a) On or before October 1 of each year, the Corporation shall report on its status 25
to the Governor, the Maryland Agricultural Commission[, the Maryland Economic 26
Development Commission,] and, in accordance with § 2–1257 of the State Government 27
Article, the General Assembly. 28
(b) The report shall include a complete operating and financial statement and a 29
summary of the Corporation’s activities during the preceding fiscal year. 30
12–201. 31
(a) In this subtitle the following words have the meanings indicated. 32
(k) “MEDCO obligation” means a bond, note, or other similar instrument that the 33
Maryland Economic Development Corporation issues under authority other than this 34 100 SENATE BILL 427
subtitle to finance the cost of infrastructure improvements located in or supporting a 1
transit–oriented development, a sustainable community, a RISE zone, [or] a State hospital 2
redevelopment, OR A PROJECT ALLOWAB LE UNDER THE BUILD OUR FUTURE 3
PROGRAM ESTABLISHED B Y § 10–150 OF THIS ARTICLE . 4
(p) “RISE zone” means an area designated as a Regional Institution Strategic 5
Enterprise zone under [§ 5–1404] § 10–140 of this article. 6
12–207. 7
(a) Except as provided in subsections (b) and (e) of this section, bond proceeds 8
may be used only: 9
(1) to buy, lease, condemn, or otherwise acquire property, or an interest in 10
property: 11
(i) in the development district, a RISE zone, or a sustainable 12
community; or 13
(ii) needed for a right–of–way or other easement to or from the 14
development district, a RISE zone, or a sustainable community; 15
(2) for site removal; 16
(3) for surveys and studies; 17
(4) to relocate businesses or residents; 18
(5) to install utilities, construct parks and playgrounds, and for other 19
needed improvements including: 20
(i) roads to, from, or in the development district; 21
(ii) parking; and 22
(iii) lighting; 23
(6) to construct or rehabilitate buildings for a governmental purpose or use; 24
(7) for reserves or capitalized interest; 25
(8) for necessary costs to issue bonds; and 26
(9) to pay the principal of and interest on loans, advances, or indebtedness 27
that a political subdivision incurs for a purpose specified in this section. 28
SENATE BILL 427 101
(b) (1) This subsection applies to a sustainable community identified under § 1
12–203 of this subtitle. 2
(2) In addition to the purposes under subsection (a) of this section and 3
without limiting the purposes in subsection (a) of this section, bond proceeds may be used 4
in a sustainable community for: 5
(i) historic preservation or rehabilitation; 6
(ii) environmental remediation, demolition, and site preparation; 7
(iii) parking lots, facilities, or structures of any type whether for 8
public or private use; 9
(iv) highways as defined in § 8–101 of the Transportation Article or 10
transit service as defined in § 7–101 of the Transportation Article that support sustainable 11
communities; 12
(v) schools; 13
(vi) affordable or mixed income housing; [and] 14
(vii) stormwater management and storm drain facilities; AND 15
(VIII) INNOVATION CENTERS , SENSITIVE COMPARTMEN TED 16
INFORMATION FACILITI ES, AND STRUCTURES OF ANY TY PE THAT SUPPORT THE 17
RETENTION, EXPANSION, OR ATTRACTION OF BUS INESS ACTIVITIES INC LUDED ON 18
THE LIST OF INDUSTRI ES AND ACTIVITIES DE VELOPED BY THE DEPARTMENT IN 19
ACCORDANCE WITH § 2.5–106 OF THIS ARTICLE . 20
(e) (1) This subsection applies to a RISE zone identified under § 12–203 of this 21
subtitle. 22
(2) In addition to the purposes under subsection (a) of this section and 23
without limiting the purposes in subsection (a) of this section, bond proceeds may be used 24
in a RISE zone for: 25
(i) historic preservation or rehabilitation; 26
(ii) environmental remediation, demolition, and site preparation; 27
(iii) parking lots, facilities, or structures of any type whether for 28
public or private use; 29
(iv) schools; 30
102 SENATE BILL 427
(v) affordable or mixed income housing; 1
(vi) stormwater management and storm drain facilities; 2
(vii) innovation centers, SENSITIVE COMPARTMEN TED 3
INFORMATION FACILITI ES, and laboratory facilities, or structures of any type whether 4
for public or private use, including maintenance and installation of improvements in the 5
structures and services that support the purposes of the RISE zone program; and 6
(viii) any other facilities or structures of any type whether for public 7
or private use that support the purposes of the RISE zone program. 8
16–102. 9
(d) (2) Any money that has not been distributed or awarded on or before 10
December 31, 2024, shall revert to the Maryland Economic [Development Assistance] 11
COMPETITIVENESS Fund. 12
Article – Corporations and Associations 13
1–203. 14
(b) (14) BEGINNING IN FISCAL Y EAR 2026, THE DEPARTMENT SHALL 15
WAIVE THE FILING FEE FOR A BUSINESS ENTIT Y DESCRIBED UNDER PA RAGRAPH 16
(3)(II) OF THIS SUBSECTION F OR EACH YEAR THAT TH E ENTITY PROVIDES EV IDENCE 17
TO THE DEPARTMENT THAT THE E NTITY: 18
(I) HAS LOCATED WITHIN A REGIONAL INSTITUTION 19
STRATEGIC ENTERPRISE ZONE THAT IS DESIGNATED UNDER TITLE 10, SUBTITLE 1 20
OF THE ECONOMIC DEVELOPMENT ARTICLE WITHIN 3 YEARS OF THE DATE BY 21
WHICH THE FILING FEE IS DUE; AND 22
(II) IS ENCOMPASSED BY THE INDUSTRY SECTORS AND 23
ACTIVITIES INCLUDED ON THE LIST DEVELOPE D BY THE DEPARTMENT OF 24
COMMERCE IN ACCORDANC E WITH § 2.5–106 OF THE ECONOMIC DEVELOPMENT 25
ARTICLE. 26
[(14)] (15) There is no processing fee for documents filed to dissolve, cancel, 27
or terminate an entity under this subsection. 28
Article – Education 29
9.5–113.1. 30
(a) (1) In this section the following words have the meanings indicated. 31
SENATE BILL 427 103
(2) “CHILD CARE SLOT ” MEANS SPACE AVAILABL E FOR A CHILD TO 1
ENROLL FOR A FULL 8–HOUR DAY OF CHILD CA RE. 2
(3) “ENOUGH ELIGIBLE NEIGHB ORHOOD” MEANS AN AREA THAT 3
HAS BEEN DESIGNATED IN ACCORDANCE WITH § 9–2803 OF THE STATE 4
GOVERNMENT ARTICLE. 5
[(2)] (4) “Fund” means the Child Care Capital Support Revolving Loan 6
Fund. 7
[(3)] (5) “Rural community” has the meaning stated in § 2–207 of the 8
State Finance and Procurement Article. 9
(6) “SECRETARY” MEANS THE SECRETARY OF COMMERCE. 10
(b) There is a Child Care Capital Support Revolving Loan Fund. 11
(c) The purpose of the Fund is to provide no–interest loans for capital expenses 12
to child care providers who participate in the Child Care Scholarship Program under § 13
9.5–113 of this subtitle. 14
(d) The Department of Commerce shall administer the Fund with support from 15
the Department. 16
(e) (1) The Fund is a special, nonlapsing fund that is not subject to § 7–302 of 17
the State Finance and Procurement Article that shall be available in perpetuity for the 18
purpose of providing loans in accordance with the provisions of this section. 19
(2) The State Treasurer shall hold the Fund separately, and the 20
Comptroller shall account for the Fund. 21
(f) The Fund consists of: 22
(1) Money appropriated in the State budget to the Fund; 23
(2) Any interest earnings of the Fund; 24
(3) Repayments of principal and interest from loans made from the Fund; 25
and 26
(4) Any other money from any other source accepted for the benefit of the 27
Fund. 28
(g) (1) The Fund may be used only to provide no–interest loans to child care 29
providers for capital expenses related to a child care facility, including: 30
104 SENATE BILL 427
(i) Acquisition; 1
(ii) Expansion; 2
(iii) [Renovations; and 3
(iv)] New construction; AND 4
(IV) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , 5
RENOVATIONS . 6
[(2) (i) Except as provided in subparagraph (ii) of this paragraph, child 7
care providers shall repay loans from the Fund not later than 5 years after receiving a loan 8
from the Fund. 9
(ii) The Department of Commerce may establish a financial 10
hardship exemption to allow a child care provider additional time to repay a loan from the 11
Fund. 12
(iii) If a hardship exemption is not granted, the Department of 13
Commerce shall apply its normal policy regarding assisting child care providers with past 14
due loan payments.] 15
(2) LOANS PROVIDED FOR RENOVAT IONS UNDER PARAGRAPH (1)(IV) 16
OF THIS SUBSECTION M AY: 17
(I) BE PROVIDED ONLY TO A FAMILY CHILD CARE HO ME OR 18
LARGE FAMILY CHILD C ARE HOME; AND 19
(II) BE PROVIDED ONLY FOR RENOVATIONS NECESSAR Y TO 20
MAINTAIN LICENSURE B Y THE DEPARTMENT AS DEMONSTRATED THRO UGH 21
DOCUMENTS REQUIRED B Y THE DEPARTMENT OF COMMERCE AND VERIFIED BY 22
THE DEPARTMENT . 23
(3) (I) THE TERM OF A LOAN FR OM THE FUND SHALL BE 24
DETERMINED BY THE DEPARTMENT OF COMMERCE. 25
(II) THE TERM SET BY THE DEPARTMENT OF COMMERCE SHALL 26
BE FOR NOT LESS THAN 5 YEARS. 27
(4) UP TO $50,000 OF A LOAN PROVIDED T O A FAMILY CHILD CAR E 28
HOME OR LARGE FAMILY CHILD CARE HOME MAY BE CONVERTED TO A GR ANT ON 29
APPROVAL BY THE DEPARTMENT OF COMMERCE IN ACCORDANC E WITH 30
SUBSECTION (I)(2) OF THIS SECTION. 31
SENATE BILL 427 105
(h) (1) The State Treasurer shall invest the money of the Fund in the same 1
manner as other State money may be invested. 2
(2) Any interest earnings of the Fund shall be credited to the Fund. 3
(i) (1) The Department of Commerce, in consultation with the Department, 4
shall establish application procedures and eligibility criteria for loans from the Fund, in 5
addition to the requirement that a child care provider be a participant in the Child Care 6
Scholarship Program under § 9.5–113 of this subtitle. 7
(2) [The] IN ORDER TO HAVE A LO AN OR PART OF A LOAN CONVERTED 8
TO A GRANT UNDER SUB SECTION (G)(4) OF THIS SECTION , A FAMILY CHILD CARE 9
HOME OR LARGE FAMILY CHILD CARE HOME SHAL L DEMONSTRATE ATTAIN MENT OF 10
AT LEAST A QUALITY R ATING 3 ON THE MARYLAND EXCELS PROGRAM. 11
(3) EXCEPT AS PROVIDED IN PARAGRAPH (4) OF THIS SUBSECTION , 12
THE Department OF COMMERCE shall prioritize applicant criteria in the following order 13
when providing funding from the Fund: 14
[(i) Child care providers that are located in: 15
1. Underserved communities; or 16
2. Areas designated by the Department as areas lacking 17
child care slots; 18
(ii) Child care providers that are located in rural communities; 19
(iii) Child care providers that serve primarily low –income 20
populations in areas of high poverty;] 21
(I) CHILD CARE PROVIDERS THAT WILL INCREASE T HE 22
NUMBER OF AVAILABLE CHILD CARE SLOTS THE CHILD CARE PROVIDER MAY OFFER; 23
(II) CHILD CARE PROVIDERS THAT ARE LOCATED IN AREAS 24
IDENTIFIED BY THE DEPARTMENT AS LACKING CHILD CARE SLOTS ; 25
(III) CHILD CARE PROVIDERS THAT SERVE PRIMARILY IN AN 26
ENOUGH ELIGIBLE NEIGHBORHOO D; 27
(iv) Child care providers that serve children with special needs; and 28
(v) Child care providers that serve children ages 2 and younger. 29
106 SENATE BILL 427
(4) (I) THE STATE SUPERINTENDENT AND TH E SECRETARY MAY 1
TEMPORARILY ALTER TH E PRIORITIZATION ORD ER OF APPLICATIONS T O BEST 2
MEET THE NEEDS OF TH E CHILD CARE INDUSTR Y AT A GIVEN TIME. 3
(II) SHOULD THE STATE SUPERINTENDENT AND TH E 4
SECRETARY CHOOSE TO A LTER THE PRIORITIZAT ION ORDER OF APPLICATION S, THE 5
NEW TEMPORARY PRIORI TIZATION ORDER SHALL BE COMMUNICATED ON T HE 6
DEPARTMENT OF COMMERCE WEBSITE PRIO R TO ACCEPTING APPLI CATIONS. 7
(j) The Department of Commerce shall work with the Department to publicize 8
the availability of loans from the Fund and provide support to child care providers in 9
applying for loans from the Fund. 10
(k) (1) For fiscal year 2023, the Governor shall include in the annual budget 11
bill an appropriation to the Fund of $15,000,000. 12
(2) For fiscal year 2024, the Governor shall include in the annual budget 13
bill an appropriation to the Fund of $10,000,000. 14
Article – Housing and Community Development 15
4–509. 16
(a) (1) In this section the following words have the meanings indicated. 17
(2) “Anchor institution” means: 18
(i) an institution of higher education in the State, including 19
departments, foundations, and other entities of the institution; or 20
(ii) a hospital institution in the State, including departments, 21
foundations, and other entities of the institution, that: 22
1. has a group of at least five physicians who are organized 23
as a medical staff for the institution; 24
2. maintains facilities to provide, under the supervision of 25
the medical staff, diagnostic and treatment services for two or more unrelated individuals; 26
and 27
3. admits or retains the individuals for overnight care. 28
(3) “Blighted area” means an area in which a majority of buildings have 29
declined in productivity by reason of obsolescence, depreciation, or other causes to an extent 30
that they no longer justify fundamental repairs and adequate maintenance. 31
SENATE BILL 427 107
(4) “Fund” means the Seed Community Development Anchor Institution 1
Fund. 2
(5) “RISE ZONE CATCHMENT AREA ” MEANS A GEOGRAPHIC A REA 3
LOCATED WITHIN A 5–MILE RADIUS OF THE C ENTER POINT OF A QUALIFIED 4
INSTITUTION THAT IS LOCATED IN AN ACTIVE REGIONAL INSTITUTION STRATEGIC 5
ENTERPRISE ZONE DESIGNATED UNDER TITLE 10, SUBTITLE 1 OF THE ECONOMIC 6
DEVELOPMENT ARTICLE. 7
(6) “Sustainable community” means an area designated as a sustainable 8
community under § 6–205 of this article. 9
(b) There is a Seed Community Development Anchor Institution Fund. 10
(c) The purpose of the Fund is to provide grants and loans to anchor institutions 11
for community development projects in RISE ZONE CATCHMENT ARE AS, sustainable 12
communities, and blighted areas of the State. 13
(d) The Department shall administer the Fund. 14
(e) (1) The Fund is a special, nonlapsing fund that is not subject to § 7–302 of 15
the State Finance and Procurement Article. 16
(2) The State Treasurer shall hold the Fund separately, and the 17
Comptroller shall account for the Fund. 18
(f) The Fund consists of: 19
(1) money appropriated in the State budget to the Fund; 20
(2) interest earnings of the Fund; and 21
(3) any other money from any other source accepted for the benefit of the 22
Fund. 23
(g) (1) The Fund may be used only to provide grants and loans to anchor 24
institutions for community development projects in RISE ZONE CATCHMENT AREAS , 25
sustainable communities, and blighted areas of the State. 26
(2) To be eligible for a grant or loan, an anchor institution shall provide 27
evidence of matching funds. 28
(3) The Department shall award grants and loans from the Fund on a 29
competitive basis. 30
108 SENATE BILL 427
(4) WHEN PROVIDING GRANTS AND LOANS FROM THE FUND, THE 1
DEPARTMENT SHALL PRIORI TIZE APPLICANTS LOCA TED IN AN ACTIVE REGIONAL 2
INSTITUTION STRATEGIC ENTERPRISE ZONE DESIGNATED UNDER TITLE 10, 3
SUBTITLE 1 OF THE ECONOMIC DEVELOPMENT ARTICLE. 4
(h) (1) The State Treasurer shall invest the money of the Fund in the same 5
manner as other State money may be invested. 6
(2) Any interest earnings of the Fund shall be credited to the Fund. 7
(i) Expenditures from the Fund may be made only in accordance with the State 8
budget. 9
(j) (1) For fiscal year 2019, the Governor shall include in the annual budget 10
bill or the capital budget bill an appropriation of $4,000,000 to the Fund. 11
(2) For fiscal year 2020, the Governor shall include in the annual budget 12
bill or the capital budget bill an appropriation of $5,000,000 for the Fund. 13
(3) (i) For fiscal year 2021, the Governor shall include in the annual 14
budget bill or the capital budget bill an appropriation of $5,000,000 for the Fund. 15
(ii) For fiscal year 2022 and each fiscal year thereafter, the Governor 16
shall include in the annual budget bill or the capital budget bill an appropriation of 17
$10,000,000 for the Fund. 18
6.5–107. 19
(e) The Fund consists of: 20
(2) money appropriated in the State budget to the Maryland Economic 21
[Development Assistance] COMPETITIVENESS Fund under Title 5, Subtitle 3 of the 22
Economic Development Article for the purpose of assisting in the establishment of 23
broadband communication services in rural and underserved areas of the State; 24
Article – State Finance and Procurement 25
7–314. 26
(a) (1) In this section the following words have the meanings indicated. 27
(2) [“Account” means the Economic Development Opportunities Program 28
Account.] “DEPARTMENT ” MEANS THE DEPARTMENT OF COMMERCE. 29
SENATE BILL 427 109
(3) [“Executive agency” means an executive department or agency in the 1
Executive Branch of State government, including all offices of the Executive Department 2
or agency directly responsible to the Governor. 3
(4)] “Extraordinary economic development opportunity” means the: 4
(i) attraction of a new private sector enterprise to the State or 5
retention or expansion of an existing private sector enterprise in the State that: 6
1. maintains a strong financial condition and minimal credit 7
risk profile; 8
2. is capable of accessing alternative sources of financing 9
through financial institutions or capital markets; 10
3. is consistent with the strategic plan of the State for 11
economic development; AND 12
4. creates or retains substantial employment, particularly in 13
areas of high unemployment; [and 14
5. invests in capital at a level equal to five times the value of 15
the incentive offered;] 16
(ii) retention or expansion of an existing public institution, private 17
institution, or federal research and development institute that: 18
1. is consistent with the strategic plan of the State for 19
economic development; and 20
2. creates or retains substantial employment, particularly in 21
areas of high unemployment; or 22
(iii) establishment or attraction of a public institution, a private 23
institution, or a federal research and development institute new to the State that: 24
1. is consistent with the strategic plan of the State for 25
economic development; and 26
2. creates or retains substantial employment, particularly in 27
areas of high unemployment. 28
(4) “FUND” MEANS THE STRATEGIC CLOSING FUND. 29
(5) (i) “Performance requirement” means a contractual agreement 30
between an executive agency and [an Account] A FUND recipient that requires the 31 110 SENATE BILL 427
[Account] FUND recipient to meet minimum economic development outcomes in exchange 1
for a grant or a loan under this section. 2
(ii) “Performance requirement” includes claw –back, penalty, 3
rescission, and recalibration clauses that utilize job creation, capital investment, and other 4
measures of economic development. 5
(6) “Private sector enterprise” means any commercial, industrial, 6
educational, or research organization which is not a part of or controlled by a federal, State, 7
or local government agency. 8
(b) Subject to the provisions of this section, the [Economic Development 9
Opportunities Program Account] STRATEGIC CLOSING FUND is established WITHIN THE 10
DEPARTMENT to maximize extraordinary economic development opportunities. 11
(c) [Subject to subsection (r) of this section, the] THE Governor may provide an 12
appropriation in the budget bill to the [Account] FUND for a specific or general purpose or 13
purposes. 14
(d) After notice to and approval by the Legislative Policy Committee, the 15
Governor may transfer funds by budget amendment [from the Economic Development 16
Opportunities Program Account to the expenditure account of the appropriate executive 17
agency] TO THE FUND. 18
(e) (1) The [Account] FUND is a continuing, nonlapsing fund which is not 19
subject to § 7–302 of this subtitle. 20
(2) The Treasurer shall separately hold, and the Comptroller shall account 21
for, the [Account] FUND. 22
(3) The [Account] FUND shall be invested and reinvested in the same 23
manner as other State funds. 24
(4) [Except as provided in paragraph (5) of this subsection, any] ANY 25
investment earnings shall be subject to § 7–311(d) of this subtitle. 26
[(5) Any investment earnings on money transferred from the Account to a 27
second continuing, nonlapsing fund may be retained to the credit of the second fund.] 28
(f) (1) Money appropriated or credited to the [Account] FUND does not revert 29
to the Revenue Stabilization Account. 30
(2) [Except as provided in paragraph (3) of this subsection, repayments] 31
REPAYMENTS of principal or interest on any loan from the [Account] FUND shall be 32
retained to the credit of the [Account] FUND. 33 SENATE BILL 427 111
[(3) Repayments of principal or interest on any loan made from money 1
transferred from the Account to a second continuing, nonlapsing fund may be retained to 2
the credit of the second fund.] 3
(g) (1) The Department [of Commerce] shall include the following information 4
in the report that is required under § 2.5–109 of the Economic Development Article: 5
(i) the financial status of the program and a summary of its 6
operations for the preceding fiscal year; 7
(ii) for the previous 3 fiscal years, the status of [Account] FUND 8
disbursements for economic development projects reviewed by the Legislative Policy 9
Committee under this section; 10
(iii) for the previous 3 fiscal years, the status of job creation, capital 11
investment, and other measures of economic development for each economic development 12
project reviewed by the Legislative Policy Committee under this section; 13
(iv) a list of guidelines for the kinds of performance requirements 14
that may be negotiated with the loan or grant applicant; and 15
(v) an explanation of the job creation, capital investment, and other 16
measures of economic development described in items (i) through (iii) of this paragraph are 17
lower than negotiated according to subsection (h)(1) of this section. 18
(2) Upon receipt of the information that is required to be reported under 19
this subsection, the Legislative Policy Committee shall have 60 days to review and 20
comment on the information provided by the Department [of Commerce] under paragraph 21
(1) of this subsection, during which time the Department [of Commerce] shall provide any 22
additional information regarding the [Account] FUND as requested by the Legislative 23
Policy Committee. 24
(h) (1) Except as provided in paragraph (2) of this subsection and in subsection 25
(i) of this section, any funds transferred from the [Economic Development Opportunities 26
Program Account] FUND shall be used only for extraordinary economic development 27
opportunities that: 28
(i) meet the criteria provided in this section; 29
(ii) include performance requirements; and 30
(iii) in addition to the performance requirements under item (ii) of 31
this paragraph, include a performance requirement that utilizes a claw–back provision. 32
112 SENATE BILL 427
(2) The [Account] DEPARTMENT may UTILIZE THE FUND TO pay an 1
executive agency for administrative, legal, or actuarial expenses incurred by the [agency in 2
connection with transactions funded by transfers of money to the agency from the Account] 3
DEPARTMENT . 4
(i) (1) The Legislative Policy Committee may approve a n economic 5
development opportunity that is not an extraordinary economic development opportunity 6
if the executive agency requesting the transfer of funds offers a detailed justification for the 7
exception. 8
(2) The Legislative Policy Committee shall give particular consideration to 9
an exception that would provide a significant economic development opportunity for an area 10
of the State that has a relatively high unemployment rate or relatively low per capita 11
income. 12
(j) [(1)] The Department of Commerce may modify the guidelines for the kinds 13
of performance requirements that may be negotiated with the loan or grant as needed, upon 14
approval of the Legislative Policy Committee. 15
[(2) An executive agency may depart from these guidelines as needed, upon 16
approval of the Legislative Policy Committee.] 17
(k) Subject to the provisions of this subtitle, funds [transferred] from the 18
[Economic Development Opportunities Program Account, to an executive agency,] FUND 19
may be loaned, granted, or invested for: 20
(1) assisting in the retention or expansion of existing private sector 21
enterprises, public or private institutions, or federal research and development institutes; 22
(2) assisting in the establishment or attraction of private sector 23
enterprises, public or private institutions, or federal research and development institutes 24
new to this State; or 25
(3) providing assistance where existing State or local programs lack 26
sufficient resources or are constrained by timing or program design from being utilized. 27
(l) [Upon submission to the Legislative Policy Committee of a proposed budget 28
amendment to transfer money from the Account, the Governor] BEFORE FUNDS FROM 29
THE FUND MAY BE LOANED , GRANTED, OR INVESTED IN ACCOR DANCE WITH 30
SUBSECTION (K) OF THIS SECTION , THE DEPARTMEN T shall provide, subject to § 31
2–1257 of the State Government Article, to the Legislative Policy Committee: 32
(1) a detailed description of: 33
(i) the proposed use of the funds; 34
SENATE BILL 427 113
(ii) the manner in which the proposed use meets the criteria as set 1
forth in this section; 2
(iii) the degree to which the proposed use of funds will advance 3
statewide or local economic development strategies and objectives; and 4
(iv) the degree to which available sources of federal, State, local, and 5
private financial support have been sought and will be utilized; 6
(2) the terms, conditions, and performance requirements of any grant or 7
loan for which the funds are to be used; 8
(3) a comprehensive economic analysis of the proposed use of the funds 9
which estimates: 10
(i) the economic impact to the State and the local jurisdictions 11
affected; 12
(ii) a minimum level of net economic benefits to the public sector; 13
(iii) the number of jobs expected to be created as a result of the 14
proposed economic development project and the percentage of those jobs that are expected 15
to be held by Maryland residents; 16
(iv) the wage rates and benefit packages for the jobs expected to be 17
created as a result of the proposed economic development project; and 18
(v) any other appropriate financial or economic benefits; 19
(4) any other analysis or information that is requested by the Legislative 20
Policy Committee; and 21
(5) the date on which the executive agency expects to disburse the funds to 22
the proposed recipient. 23
(m) [If an executive agency fails to disburse transferred funds to a recipient within 24
1 year after the expected disbursement date presented to the Legislative Policy Committee 25
under subsection (l) of this section, the funds will revert back to the Account and the 26
Governor shall: 27
(1) resubmit the proposed budget amendment to transfer money from the 28
Account to the Legislative Policy Committee; and 29
(2) provide the Legislative Policy Committee with the information required 30
under subsection (l) of this section. 31
114 SENATE BILL 427
(n)] Funds appropriated to the [Economic Development Opportunities Program 1
Account] FUND may not be loaned, granted, or invested for: 2
(1) substituting for funds from other State or local programs for which a 3
project may be eligible and sufficient resources exist; 4
(2) projects which are not likely to attract or retain employment 5
opportunities; 6
(3) funding projects located outside the State; 7
(4) construction or land acquisition by the Maryland Stadium Authority; or 8
(5) funding for any sports activity or facility. 9
[(o) (1) This subsection does not apply to an economic development opportunity 10
located in an area designated as a qualified opportunity zone under § 1400Z–1 of the 11
Internal Revenue Code in Allegany County, Garrett County, Somerset County, or Wicomico 12
County. 13
(2) In the case of an economic development opportunity located outside a 14
priority funding area as established under Title 5, Subtitle 7B of this article, the 15
Department shall first comply with the provisions of that subtitle before making a request 16
for approval by the Legislative Policy Committee under this section.] 17
[(p)] (N) [An executive agency] THE DEPARTMENT may approve changes to a 18
transaction approved by the Legislative Policy Committee as long as the changes do not 19
materially and adversely affect the overall position of the [executive agency] 20
DEPARTMENT in the transaction or the economic development benefits to be derived by 21
the State in the transaction. 22
[(q)] (O) (1) (i) In this subsection the following words have the meanings 23
indicated. 24
(ii) “Financial assistance” means a grant, loan, or investment 25
provided under this subsection that exceeds $100,000. 26
(iii) “Political subdivision” includes an agency or other 27
instrumentality of the political subdivision. 28
(2) This subsection does not apply to financial assistance used solely for the 29
purpose of acquiring real property or structures on real property. 30
(3) With respect to financial assistance under this section to a political 31
subdivision: 32
SENATE BILL 427 115
(i) if the political subdivision has a program for promoting 1
procurement opportunities among minority businesses that is acceptable to the 2
Department [of Commerce], the political subdivision shall apply the requirements of that 3
program to the procurement of goods or services made with the proceeds from the financial 4
assistance; but 5
(ii) if the political subdivision does not have a program that is 6
acceptable to the Department [of Commerce] under item (i) of this paragraph, the political 7
subdivision is subject to paragraph (4) of this subsection. 8
(4) (i) In this paragraph, “minority business enterprise” has the 9
meaning stated in § 14–301 of this article. 10
(ii) With respect to financial assistance under this section to an 11
entity other than a political subdivision, the entity shall agree to include in the agreement 12
providing the financial assistance a provision acceptable to the Department of Commerce 13
that would encourage the procurement from minority business enterprises of goods or 14
services purchased with the proceeds from the financial assistance. 15
(iii) In negotiating the provision required under subparagraph (ii) of 16
this paragraph, the Department of Commerce shall take into account relevant factors, 17
including: 18
1. the intended use of the proceeds from the financial 19
assistance; and 20
2. the feasibility of obtaining the required goods or services 21
from minority business enterprises. 22
(5) The Department of Commerce may require that a recipient of financial 23
assistance under this section submit to the Department of Commerce a list, or an updated 24
list, of the minority business enterprises from which goods or services were procured and 25
the nature and dollar amount of the goods or services. 26
[(r) For fiscal years 2019 through 2021, the Governor shall include in the annual 27
budget bill an appropriation of $5,000,000 to the Account to be used by the Department of 28
Commerce to provide conditional loans or grants to companies that meet the following 29
criteria: 30
(1) construction of company headquarters in the State with capital 31
expenditures of at least $500,000,000; and 32
(2) retention of company headquarters in the State with at least 3,250 33
eligible employees, consistent with a letter of intent entered into with the Department of 34
Commerce in October 2016.] 35
Article – State Government 36 116 SENATE BILL 427
9–1A–26. 1
(c) A jackpot won at a video lottery terminal that is not claimed by the winner 2
within 182 days after the jackpot is won shall: 3
(2) be distributed as follows: 4
(i) 2.5% to the [Small, Minority, and Women–Owned Businesses] 5
REINVEST FOR SUCCESS Account established under § 5–1501 of the Economic 6
Development Article; 7
9–1A–27. 8
(a) Except as provided in subsections (b) and (c) of this section and § 9
9–1A–26(a)(3) of this subtitle, on a properly approved transmittal prepared by the 10
Commission, the Comptroller shall pay the following amounts from the proceeds of video 11
lottery terminals at each video lottery facility: 12
(6) [(i) except as provided in items (ii) and (iii) of this item,] 1.5% to BE 13
DISTRIBUTED EQUALLY BETWEEN 40% TO THE MARYLAND ECONOMIC INCLUSION 14
FUND ESTABLISHED UNDE R § 5–505 OF THE ECONOMIC DEVELOPMENT ARTICLE 15
AND 60% TO the [Small, Minority, and Women–Owned Businesses] REINVEST FOR 16
SUCCESS Account established under § 5–1501 of the Economic Development Article; 17
[(ii) for fiscal year 2018, 1.5% to the General Fund to pay a portion of 18
the costs of the grants provided under Chapters 6 and 607 of the Acts of the General 19
Assembly of 2017; and 20
(iii) for fiscal years 2019 and 2020, 1.5% to the Education Trust Fund 21
established under § 9–1A–30 of this subtitle;] 22
(c) (1) For the first 10 years of operations at a video lottery facility in Allegany 23
County, on a properly approved transmittal prepared by the Commission, the Comptroller 24
shall pay the following amounts from the proceeds of video lottery terminals at a video 25
lottery facility in Allegany County: 26
(v) 1. except as provided in items 2 and 3 of this item, 0.75% to 27
the [Small, Minority, and Women–Owned Businesses] REINVEST FOR SUCCESS Account 28
established under § 5–1501 of the Economic Development Article; 29
[Subtitle 31. Commerce Subcabinet.] 30
[9–3101. 31
(a) In this subtitle the following words have the meanings indicated. 32 SENATE BILL 427 117
(b) “Secretary” means the Secretary of Commerce. 1
(c) “Subcabinet” means the Commerce Subcabinet.] 2
[9–3102. 3
(a) There is a Commerce Subcabinet. 4
(b) The Subcabinet is composed of the following members: 5
(1) the Secretary, or the Secretary’s designee; 6
(2) the Secretary of Transportation, or the Secretary’s designee; 7
(3) the Secretary of Labor, or the Secretary’s designee; 8
(4) the Secretary of the Environment, or the Secretary’s designee; 9
(5) the Secretary of Housing and Community Development, or the 10
Secretary’s designee; 11
(6) the Secretary of Planning, or the Secretary’s designee; and 12
(7) the Special Secretary of Minority Affairs, or the Special Secretary’s 13
designee.] 14
[9–3103. 15
The Subcabinet shall: 16
(1) advise the Governor on proposals to enhance the State’s business 17
climate; 18
(2) gather information the Subcabinet considers necessary to promote the 19
goals of the Subcabinet; 20
(3) collaborate to facilitate and expedite critical economic development 21
projects in the State; and 22
(4) provide other assistance that may be required to further the goals of 23
the Subcabinet and enhance the State’s business climate.] 24
[9–3104. 25
(a) The Secretary shall: 26 118 SENATE BILL 427
(1) chair the Subcabinet; 1
(2) convene the meetings of the Subcabinet; and 2
(3) be responsible for the oversight, direction, and accountability of the 3
work of the Subcabinet. 4
(b) The Office of the Secretary of Commerce shall provide the primary staff 5
support for the Subcabinet. 6
(c) The Subcabinet shall meet each month.] 7
Article – Tax – Property 8
9–103.1. 9
(a) (1) In this section the following words have the meanings indicated. 10
(7) “RISE zone” has the meaning stated in [§ 5–1401] § 10–137 of the 11
Economic Development Article. 12
(c) (6) (i) If a RISE zone is renewed as provided under [§ 5–1404] § 13
10–140 of the Economic Development Article, the governing body of a county or municipal 14
corporation shall calculate the amount of the tax credit under this section equal to at least 15
10% of the amount of property tax imposed on the eligible assessment of the qualified 16
property for the sixth through tenth taxable years. 17
(e) When a Regional Institution Strategic Enterprise zone is designated by the 18
[Secretary of Commerce] MARYLAND ECONOMIC DEVELOPMENT CORPORATION , the 19
[Secretary] CORPORATION shall certify to the State Department of Assessments and 20
Taxation: 21
(1) the real properties in the zone that are qualified properties for each 22
taxable year for which the property tax credit under this section is to be granted; and 23
(2) the date that the real properties became qualified properties. 24
(f) Before property tax bills are sent, the State Department of Assessments and 25
Taxation shall submit to the [Secretary of Commerce] MARYLAND ECONOMIC 26
DEVELOPMENT CORPORATION a list containing: 27
(1) the location of each qualified property; 28
(2) the amount of the base year value for each qualified property; and 29
SENATE BILL 427 119
(3) the amount of the eligible assessment for each qualified property. 1
9–229. 2
(c) For each of the 5 taxable years immediately following the first revaluation of 3
the property after completion of a voluntary cleanup or corrective action plan of a 4
brownfields site, each participating taxing jurisdiction where a qualified brownfields site is 5
located shall: 6
(2) contribute to the Maryland Economic [Development Assistance] 7
COMPETITIVENESS Fund under § 5–313(8) of the Economic Development Article, 30% of 8
the property tax attributable to the increase in the assessment of the brownfields site, 9
including improvements added to the site within the 5–year period as provided under this 10
subsection, over the assessment of the qualified brownfields site before the voluntary 11
cleanup. 12
(g) A taxing jurisdiction’s contribution for each qualified brownfields site to the 13
Maryland Economic [Development Assistance] COMPETITIVENESS Fund under 14
subsection (c)(2) of this section shall be used only for brownfields sites in the taxing 15
jurisdictions that have enacted a brownfields property tax credit ordinance. 16
Chapter 430 of the Acts of 2023 17
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 18
1, 2023. It shall remain effective for a period of [4] 7 years and, at the end of June 30, 19
[2027] 2030, this Act, with no further action required by the General Assembly, shall be 20
abrogated and of no further force and effect. 21
Chapter 431 of the Acts of 2023 22
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 23
1, 2023. It shall remain effective for a period of [4] 7 years and, at the end of June 30, 24
[2027] 2030, this Act, with no further action required by the General Assembly, shall be 25
abrogated and of no further force and effect. 26
SECTION 3. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 27
as follows: 28
Article – Economic Development 29
6–1007. 30
(a) In this section, “investment”, “qualified investor”, and “qualified Maryland 31
technology company” have the meanings stated in § 10–733 of the Tax – General Article. 32
120 SENATE BILL 427
(b) For a qualified opportunity fund that is a qualified investor in a qualified 1
Maryland technology company under § 10–733 of the Tax – General Article, if the qualified 2
Maryland technology company, on or after March 1, 2018, is newly established in or 3
expands into an opportunity zone [in a county other than Allegany County, Dorchester 4
County, Garrett County, or Somerset County]: 5
(1) the Level 1 opportunity zone enhancement is [33%] 65% of the 6
investment in a qualified Maryland technology company, not to exceed [$300,000] 7
$575,000; and 8
(2) the Level 2 opportunity zone enhancement is [50%] 75% of the 9
investment in the qualified Maryland technology company, not to exceed [$500,000] 10
$750,000. 11
(c) The enhanced tax credit percentages and maximums authorized under 12
subsection (b) of this section are in substitution for and not in addition to the percentages 13
and maximums under § 10–733(d) of the Tax – General Article. 14
Article – Economic Development 15
6–309. 16
(a) Subject to subsection (b) of this section, this subtitle and the tax credit 17
authorized under it shall terminate on January 1, [2027] 2026. 18
(b) After termination of this subtitle: 19
(1) a business entity may be considered for eligibility for the tax credit 20
authorized under this subtitle based on positions filled before termination of this subtitle, 21
provided that the other requirements of the subtitle are satisfied; and 22
(2) tax credits earned may be carried forward and are subject to recapture 23
in accordance with § 6–305 of this subtitle. 24
6–407. 25
(A) THIS SUBTITLE AND THE TAX CREDIT AUTHORIZE D UNDER IT SHALL 26
TERMINATE ON JANUARY 1, 2026. 27
(B) AFTER THE TERMINATION OF THIS SUBTITLE , TAX CREDITS EARNED 28
MAY BE CARRIED FORWA RD IN ACCORDANCE WIT H § 6–403 OF THIS SUBTITLE. 29
6–1007. 30
(a) In this section, “investment”, “qualified investor”, and “qualified Maryland 31
technology company” have the meanings stated in § 10–733 of the Tax – General Article. 32 SENATE BILL 427 121
(b) For a qualified opportunity fund that is a qualified investor in a qualified 1
Maryland technology company under § 10–733 of the Tax – General Article, if the qualified 2
Maryland technology company, on or after March 1, 2018, is newly established in or 3
expands into an opportunity zone [in a county other than Allegany County, Dorchester 4
County, Garrett County, or Somerset County]: 5
(1) the Level 1 opportunity zone enhancement is [33%] 65% of the 6
investment in a qualified Maryland technology company, not to exceed [$300,000] 7
$575,000; and 8
(2) the Level 2 opportunity zone enhancement is [50%] 75% of the 9
investment in the qualified Maryland technology company, not to exceed [$500,000] 10
$750,000. 11
(c) The enhanced tax credit percentages and maximums authorized under 12
subsection (b) of this section are in substitution for and not in addition to the percentages 13
and maximums under § 10–733(d) of the Tax – General Article. 14
Article – Housing and Community Development 15
6–404. 16
(a) (1) For a contribution worth $500 or more in goods, money, or real property 17
to an approved project, a business entity or an individual is entitled to a tax credit in the 18
amount determined under subsection (b) of this section. 19
(2) No part of a tax credit under this section may be taken more than once. 20
(b) (1) Except as provided in [paragraph (2)] PARAGRAPHS (2) AND (3) of 21
this subsection, the credit allowed to a business entity or an individual under this section 22
equals 50% of the amount of contributions: 23
(i) that the Department approves under subsection (c) of this 24
section; and 25
(ii) that were made during the taxable year for which the credit is 26
claimed. 27
(2) IF THE APPROVED PROJE CT OR BUSINESS ENTIT Y IS LOCATED 28
WITHIN A REGIONAL INSTITUTION STRATEGIC ENTERPRISE ZONE DESIG NATED 29
UNDER TITLE 10, SUBTITLE 1 OF THE ECONOMIC DEVELOPMENT ARTICLE OR A 30
RISE ZONE CATCHMENT AREA , AS DEFINED UNDER § 4–509 OF THIS ARTICLE, THE 31
TAX CREDIT ALLOWED T O A BUSINESS ENTITY OR AN INDIVIDUAL UND ER THIS 32
SECTION EQUALS 60% OF THE AMOUNT OF THE CONTRIBUTIONS DESCRIBED UNDER 33
PARAGRAPH (1) OF THIS SUBSECTION . 34 122 SENATE BILL 427
[(2)] (3) The credit allowed under this section for any taxable year may 1
not exceed the lesser of: 2
(i) $250,000; and 3
(ii) the total amount of tax otherwise payable by the business entity 4
or individual for the taxable year. 5
[(3)] (4) Any excess credit that would be allowed but for the limits of 6
paragraph [(2)] (3) of this subsection may be carried over and applied as a credit for up to 7
5 taxable years after the taxable year in which the contribution was made, until the full 8
amount of the excess is used. 9
(c) (1) To qualify for a credit for a contribution under this section, before 10
making a contribution, a business entity or an individual shall apply for and receive 11
approval of the contribution from the Department. 12
(2) Each application for approval of a contribution shall contain: 13
(i) the name of the approved project to which the contribution will 14
be made; 15
(ii) the amount of the contribution; and 16
(iii) a certification by an independent and unrelated third party as to 17
the value of any nonmonetary contribution included or, for new goods, an invoice or receipt 18
certifying the contribution’s net cost to the business entity or individual. 19
(3) The Department may not approve an application if it determines that: 20
(i) the maximum amount of contributions eligible for a tax credit for 21
the project for the fiscal year will be exceeded by the sum of: 22
1. the amount of the proposed contribution; and 23
2. the total amount of contributions previously approved for 24
that project for the fiscal year; or 25
(ii) the applicant has overstated the value of a nonmonetary 26
contribution. 27
(4) On or before January 31 of each year, the Department shall report to 28
the Department of Assessments and Taxation, the Comptroller, and the Maryland 29
Insurance Administration the contributions that the Department has approved under this 30
section in the preceding calendar year. 31
SENATE BILL 427 123
Article – Tax – General 1
10–702. 2
(a) (1) In this section the following words have the meanings indicated. 3
(4) (ii) “Enterprise zone” includes a Regional Institution Strategic 4
Enterprise zone established under [Title 5, Subtitle 14] TITLE 10, SUBTITLE 1 of the 5
Economic Development Article. 6
10–721. 7
(a) (1) In this section the following words have the meanings indicated. 8
(2) “Department” means the Department of Commerce. 9
(3) “Maryland base amount” means the base amount as defined in § 41(c) 10
of the Internal Revenue Code that is attributable to Maryland, determined by: 11
(i) substituting “Maryland qualified research and development 12
expense” for “qualified research expense”; 13
(ii) substituting “Maryland qualified research and development” for 14
“qualified research”; and 15
(iii) using, instead of the “fixed base percentage”: 16
1. the percentage that the Maryland qualified research and 17
development expense for the 4 taxable years immediately preceding the taxable year in 18
which the expense is incurred is of the gross receipts for those years; or 19
2. for a taxpayer who has fewer than 4 but at least 1 prior 20
taxable year, the percentage as determined under item 1 of this item, determined using the 21
number of immediately preceding taxable years that the taxpayer has. 22
(4) “Maryland gross receipts” means gross receipts that are reasonably 23
attributable to the conduct of a trade or business in this State, determined under methods 24
prescribed by the Comptroller based on standards similar to the standards under § 10–402 25
of this title. 26
(5) “Maryland qualified research and development” means qualified 27
research as defined in § 41(d) of the Internal Revenue Code that is conducted in this State 28
IN THE SECTORS INCLU DED ON THE LIST ESTA BLISHED BY THE DEPARTMENT IN 29
ACCORDANCE WITH § 2.5–106 OF THE ECONOMIC DEVELOPMENT ARTICLE. 30
124 SENATE BILL 427
(6) “Maryland qualified research and development expenses” means 1
qualified research expenses as defined in § 41(b) of the Internal Revenue Code incurred for 2
Maryland qualified research and development. 3
(7) “Net book value assets” means the total of a business’s net value of 4
assets, including intangibles but not including liabilities, minus depreciation and 5
amortization. 6
(8) “Small business” means a for–profit corporation, limited liability 7
company, partnership, or sole proprietorship with net book value assets totaling, at the 8
beginning or the end of the taxable year for which Maryland qualified research and 9
development expenses are incurred, as reported on the balance sheet, less than $5,000,000. 10
(b) (1) The purpose of the Research and Development Tax Credit Program is 11
to foster increased research activities and expenditures WITHIN TARGET INDUST RIES 12
AND SECTORS in Maryland. 13
(2) Subject to the limitations of this section, an individual or a corporation 14
may claim credits against the State income tax in an amount equal to 10% of the amount 15
by which the Maryland qualified research and development expenses paid or incurred by 16
the individual or corporation during the taxable year exceed the Maryland base amount for 17
the individual or corporation. 18
(c) (1) By November 15 of the calendar year following the end of the taxable 19
year in which the Maryland qualified research and development expenses were incurred, 20
an individual or corporation shall submit an application to the Department for the credits 21
allowed under subsection (b) of this section. 22
(2) For each calendar year, the total amount of credits approved by the 23
Department under subsection (b) of this section may not exceed $12,000,000. 24
(3) (i) Except as provided in paragraph (5) of this subsection, each 25
calendar year, the Department shall reserve $3,500,000 of the credits authorized under 26
subsection (b) of this section for applicants that are small businesses. 27
(ii) Subject to paragraph (5) of this subsection, if the total amount of 28
credits applied for by all small businesses under this section exceeds the amount specified 29
under subparagraph (i) of this paragraph, the Department shall approve a credit for each 30
applicant in an amount equal to the product of multiplying the credit applied for by the 31
applicant times a fraction: 32
1. the numerator of which is the amount specified under 33
subparagraph (i) of this paragraph; and 34
2. the denominator of which is the total of all credits applied 35
for by all small businesses under this section in the calendar year. 36
SENATE BILL 427 125
(4) (i) Except as provided in paragraph (5) of this subsection, for each 1
calendar year, the total amount of credits approved by the Department under this section 2
to applicants that are not small businesses may not exceed $8,500,000. 3
(ii) Subject to paragraph (5) of this subsection, if the total amount of 4
credits applied for by all applicants that are not small businesses exceeds the maximum 5
specified under subparagraph (i) of this paragraph, the Department shall approve a credit 6
under this section for each applicant in an amount equal to the product of multiplying the 7
credit applied for by the applicant times a fraction: 8
1. the numerator of which is the maximum specified under 9
subparagraph (i) of this paragraph; and 10
2. the denominator of which is the total of all credits applied 11
for by all applicants that are not small businesses in the calendar year. 12
(5) (i) For any calendar year, if the total amount of credits applied for 13
by all small businesses is less than $3,500,000, the amount specified under paragraph (4)(i) 14
of this subsection shall be increased for that calendar year by an amount equal to the 15
difference between $3,500,000 and the total amount of credits applied for by small 16
businesses. 17
(ii) For any calendar year, if the total amount of credits applied for 18
by all applicants that are not small businesses is less than $8,500,000, the amount specified 19
under paragraph (3)(i) of this subsection shall be increased for that calendar year by an 20
amount equal to the difference between $8,500,000 and the total amount of credits applied 21
for by applicants that are not small businesses. 22
(6) The Department may not approve a tax credit for any single applicant 23
in an amount exceeding $250,000. 24
(7) By February 15 of the calendar year following the end of the year in 25
which the individual or corporation submitted an application for the credit in accordance 26
with paragraph (1) of this subsection, the Department shall certify to the individual or 27
corporation the amount of the research and development tax credits approved by the 28
Department for the individual or corporation under this section. 29
(8) To claim the approved credits allowed under this section, an individual 30
or corporation shall: 31
(i) 1. file an amended income tax return for the taxable year in 32
which the Maryland qualified research and development expense was incurred; and 33
2. attach a copy of the Department’s certification of the 34
approved credit amount to the amended income tax return; or 35
126 SENATE BILL 427
(ii) subject to subsection (d) of this section, attach a copy of the 1
Department’s certification of the approved credit amount to an income tax return filed for 2
any of the 7 taxable years after the taxable year in which the Maryland qualified research 3
and development expenses were incurred. 4
(d) (1) Except as provided in paragraph (2) of this subsection, if the credit 5
allowed under this section in any taxable year exceeds the State income tax for that taxable 6
year, an individual or corporation may apply the excess as a credit against the State income 7
tax for succeeding taxable years until the earlier of: 8
(i) the full amount of the excess is used; or 9
(ii) the expiration of the 7th taxable year after the taxable year in 10
which the Maryland qualified research and development expense was incurred. 11
(2) If the credit allowed under this section in any taxable year exceeds the 12
State income tax for that taxable year, a small business may claim a refund in the amount 13
of the excess. 14
(e) (1) In determining the amount of the credit under this section: 15
(i) all members of the same controlled group of corporations, as 16
defined under § 41(f) of the Internal Revenue Code, shall be treated as a single taxpayer; 17
and 18
(ii) the credit allowable by this section to each member shall be its 19
proportionate shares of the qualified research expenses giving rise to the credit. 20
(2) The Comptroller shall adopt regulations providing for: 21
(i) determination of the amount of the credit under this section in 22
the case of trades or businesses, whether or not incorporated, that are under common 23
control; 24
(ii) pass–through and allocation of the credit in the case of estates 25
and trusts, partnerships, unincorporated trades or businesses, and S corporations; 26
(iii) adjustments in the case of acquisitions and dispositions 27
described in § 41(f)(3) of the Internal Revenue Code; and 28
(iv) determination of the credit in the case of short taxable years. 29
(3) The regulations adopted under paragraph (2) of this subsection shall be 30
based on principles similar to the principles applicable under § 41 of the Internal Revenue 31
Code and regulations adopted thereunder. 32
SENATE BILL 427 127
(f) (1) The Department of Commerce and the Comptroller jointly shall adopt 1
regulations to prescribe standards for determining when research or development is 2
considered conducted in the State for purposes of determining the credit under this section. 3
(2) In adopting regulations under this subsection, the Department and the 4
Comptroller may consider: 5
(i) the location where services are performed; 6
(ii) the residence or business location of the person or persons 7
performing services; 8
(iii) the location where supplies used in research and development 9
are consumed; and 10
(iv) any other factors that the Department determines are relevant 11
for the determination. 12
(g) In accordance with § 2.5–109 of the Economic Development Article, the 13
Department shall report on the credits approved under this section. 14
(h) If the provisions of § 41 of the Internal Revenue Code governing the federal 15
research and development tax credit are repealed or terminate, the provisions of this 16
section continue to operate as if the provisions of § 41 of the Internal Revenue Code remain 17
in effect, and the Maryland research and development tax credit under this section shall 18
continue to be available. 19
(I) (1) THE DEPARTMENT MAY NOT AP PROVE A CREDIT UNDER THIS 20
SECTION FOR A TAXABL E YEAR BEGINNING AFT ER DECEMBER 31, 2030. 21
(2) IF A TAXPAYER’S TAXABLE YEAR FOR I NCOME TAX PURPOSES I S 22
NOT THE CALENDAR YEA R, FOR THE TAXABLE YEAR THAT BEGINS IN CALEN DAR 23
YEAR 2030, THE TAXPAYER MAY APP LY FOR ONLY A PRORAT ED CREDIT FOR 24
RESEARCH AND DEVELOP MENT EXPENSES PAID O R INCURRED IN THE TA XABLE 25
YEAR FOR THAT PART O F THE TAXABLE YEAR T HAT FALLS IN CALENDA R YEAR 2030. 26
10–725. 27
(a) (1) In this section the following words have the meanings indicated. 28
(2) “Biotechnology company” means a company organized for profit that is 29
primarily engaged in, or within 2 months will be primarily engaged in, the research, 30
development, or commercialization of innovative and proprietary technology that 31
comprises, interacts with, or analyzes biological material including biomolecules (DNA, 32
RNA, or protein), cells, tissues, or organs. 33
128 SENATE BILL 427
(3) (i) “Company” means any entity of any form duly organized and 1
existing under the laws of any jurisdiction for the purpose of conducting business for profit. 2
(ii) “Company” does not include a sole proprietorship. 3
(4) “Department” means the Department of Commerce. 4
(5) (i) “Investment” means the contribution of money in cash or cash 5
equivalents expressed in United States dollars, at a risk of loss, to a qualified Maryland 6
biotechnology company in exchange for stock, a partnership or membership interest, or 7
other ownership interest in the equity of the qualified Maryland biotechnology company, 8
title to which ownership interest shall vest in the qualified investor. 9
(ii) “Investment” does not include debt. 10
(iii) For purposes of this section, an investment is at risk of loss when 11
its repayment entirely depends upon the success of the business operations of the qualified 12
company. 13
(6) (i) “Qualified investor” means any individual or entity that invests 14
at least $25,000 in a qualified Maryland biotechnology company and that is required to file 15
an income tax return in any jurisdiction. 16
(ii) “Qualified investor” does not include: 17
1. a qualified pension plan, individual retirement account, or 18
other qualified retirement plan under the Employee Retirement Income Security Act of 19
1974, as amended, or fiduciaries or custodians under such plans, or similar tax–favored 20
plans or entities under the laws of other countries; or 21
2. a founder or current employee of the qualified Maryland 22
biotechnology company, if the company has been in active business for more than 5 years. 23
(7) (i) “Qualified Maryland biotechnology company” means a 24
biotechnology company that: 25
1. has its headquarters and base of operations in this State; 26
2. has fewer than 50 full–time employees; 27
3. has been in active business no longer than 12 years; 28
4. does not have its securities publicly traded on any 29
exchange; 30
5. has been certified as a biotechnology company by the 31
Department; and 32 SENATE BILL 427 129
6. the qualified investors in the company have not received 1
more than $7,000,000 in tax credits in the aggregate under this section. 2
(ii) “Qualified Maryland biotechnology company” includes a 3
company that, within 2 months of the receipt of the investment, has met the requirements 4
of subparagraph (i) of this paragraph. 5
(8) “Secretary” means the Secretary of Commerce. 6
(b) (2) Subject to paragraphs (3) and (4) of this subsection and subsections (d) 7
and (e) of this section, for the taxable year in which an investment in a qualified Maryland 8
biotechnology company is made, a qualified investor may claim a credit against the State 9
income tax in an amount equal to the amount of tax credit stated in the final credit 10
certificate approved by the Secretary for the investment as provided under this section. 11
(5) IF FOR A TAXABLE YEAR BE GINNING AFTER DECEMBER 31, 2025, 12
IF THE QUALIFIED INVEST OR ALLOWED TO CLAIM A CREDIT UNDER PARAG RAPH (2) 13
OF THIS SUBSECTION I S A PASS–THROUGH ENTITY THAT PAYS THE INCOME TAX 14
IMPOSED UNDER § 10–102.1 OF THIS TITLE ON BEH ALF OF ALL MEMBERS O F THE 15
PASS–THROUGH ENTITY , THE PASS–THROUGH ENTITY MAY C LAIM AND ALLOCATE 16
THE CREDIT AMONG MEM BERS OF THE PASS –THROUGH ENTITY IN AN Y MANNER. 17
(d) (1) The tax credit allowed in an initial tax credit certificate issued under 18
this section is: 19
(i) except as provided in item (ii) of this paragraph, 33% of the 20
investment in a qualified Maryland biotechnology company, not to exceed $250,000; or 21
(ii) [50%] 75% of the investment in the qualified Maryland 22
biotechnology company, not to exceed [$500,000] $750,000, if a qualified Maryland 23
biotechnology company[: 24
1. is located in Allegany County, Dorchester County, Garrett 25
County, or Somerset County; or 26
2.] is located in a Regional Institution Strategic Enterprise 27
zone that is designated under Title 5, Subtitle 14 of the Economic Development Article[, is 28
based on technology that was developed at a qualified institution within that zone, and has 29
been in active business not longer than 7 years]. 30
(2) During any fiscal year, the Secretary may not certify eligibility for tax 31
credits for investments in a single qualified Maryland biotechnology company that in the 32
aggregate exceed 10% of the total appropriations to the Maryl and Biotechnology 33
Investment Tax Credit Reserve Fund for that fiscal year. 34
130 SENATE BILL 427
(3) (I) If the tax credit allowed under this section in any taxable year 1
exceeds the total tax otherwise payable by the qualified investor for that taxable year, the 2
qualified investor may claim a refund in the amount of the excess. 3
(II) IF FOR A TAXABLE YEAR BE GINNING AFTER DECEMBER 31, 4
2025, IF THE QUALIFIED INVEST OR ALLOWED TO CLAIM A REFUND UNDER 5
SUBPARAGRAPH (I) OF THIS PARAGRAPH IS A PASS–THROUGH ENTITY THAT PAYS 6
THE INCOME TAX IMPOSED UNDE R § 10–102.1 OF THIS TITLE ON BEH ALF OF ALL 7
MEMBERS OF THE PASS –THROUGH ENTITY , THE PASS–THROUGH ENTITY MAY C LAIM 8
AND ALLOCATE THE CRE DIT AMONG MEMBERS OF THE PASS–THROUGH ENTITY IN 9
ANY MANNER . 10
(K) FOR A TAXABLE YEAR BE GINNING AFTER DECEMBER 31, 2025, THE 11
COMPTROLLER SHALL PRO VIDE THE MEANS FOR A QUALIFIED INVESTOR T O FILE 12
THE INVESTOR’S RETURN ELECTRONICA LLY. 13
10–730. 14
(a) (1) In this section the following words have the meanings indicated. 15
(4) (i) “Film production activity” means: 16
1. the production of a film or video project that is intended 17
for nationwide commercial distribution; and 18
2. for a television series, each season of the television series. 19
(ii) “Film production activity” includes the production of: 20
1. a feature film; 21
2. a television project; 22
3. a commercial; 23
4. a corporate film; 24
5. a music video; 25
6. a digital animation project; 26
7. a documentary; or 27
8. a talk, reality, or game show. 28
(iii) “Film production activity” does not include production of: 29 SENATE BILL 427 131
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 project 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
(3) (I) IN ACCORDANCE WITH RE GULATIONS ADOPTED BY THE 22
DEPARTMENT AND THE COMPTROLLER UNDER SUB SECTION (I) OF THIS SECTION , 23
THE AMOUNT OF THE TA X CREDIT ALLOWED BUT NOT USED FOR FILM PR ODUCTION 24
ACTIVITIES IN THE STATE MAY BE TRANSFER RED IN WHOLE OR IN P ART TO ANY 25
INDIVIDUAL OR BUSINE SS ENTITY. 26
(II) 1. FOR THE TAXABLE YEAR OF ANY TRANSFER UNDE R 27
THIS PARAGRAPH , THE TRANSFEREE UNDER SUBPARAGRAPH (I) OF THIS 28
PARAGRAPH MAY APPLY THE TAX CREDIT AGAIN ST THE TOTAL TAX OTH ERWISE 29
PAYABLE BY THE TRANS FEREE IN ANY TAXABLE YEAR. 30 132 SENATE BILL 427
2. IF THE TAX CREDIT EXC EEDS THE STATE INCOME TAX 1
OF THE TRANSFEREE IN ANY TAXABLE YEAR, THE TRANSFEREE : 2
A. MAY CLAIM A REFUND I N THE AMOUNT OF THE 3
EXCESS; OR 4
B. MAY TRANSFER THE REM AINDER OF THE TAX CR EDIT 5
TO ANY INDIVIDUAL OR BUSINESS ENTITY . 6
(c) (1) Before beginning a film production activity, a film production entity 7
shall submit to the Department an application to qualify as a film production entity. 8
(2) The application shall describe the anticipated film production activity, 9
including: 10
(i) the projected total budget; 11
(ii) the estimated number of Maryland resident and out–of–state 12
employees and total wages to be paid; and 13
(iii) the anticipated dates for carrying out the major elements of the 14
film production activity. 15
(3) Except as provided in subsection (h) of this section, to qualify as a film 16
production entity, the estimated total direct costs incurred in the State must exceed 17
$250,000. 18
(4) The application shall include any other information required by the 19
Secretary. 20
(5) For a film production entity with total direct costs that exceed $250,000, 21
the Secretary may require the information provided in an application to be verified by an 22
independent auditor selected and paid for by the film production entity seeking 23
certification. 24
(6) The Secretary shall: 25
(i) determine if the film production entity qualifies for the credit 26
under this section; and 27
(ii) notify the Comptroller of the estimated amount of total direct 28
costs and the taxable year the credit will be claimed. 29
(7) (I) A QUALIFIED FILM PRODU CTION ENTITY MAY AME ND ITS 30
INITIAL APPLICATION SUBMIT TED UNDER PARAGRAPH (1) OF THIS SUBSECTION I F 31 SENATE BILL 427 133
AN INDEPENDENT AUDIT OR SELECTED AND PAID FOR BY THE QUALIFIED FILM 1
PRODUCTION ENTITY HA S VERIFIED THAT THE PROJECTED TOTAL BUDG ET IN ITS 2
INITIAL APPLICATION HAS INCREASED OR DEC REASED BY AT LEAST 50%. 3
(II) THE SECRETARY SHALL : 4
1. EVALUATE AN AMENDED APPLICATION SUBMITTE D 5
UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH ; 6
2. DETERMINE IF THE FIL M PRODUCTION ENTITY 7
CONTINUES TO QUALIFY FOR THE CREDIT UNDER THIS SECTION; AND 8
3. IF THE SECRETARY APPROVES TH E AMENDED 9
APPLICATION, NOTIFY THE COMPTROLLER OF THE AM ENDED ESTIMATED AMOU NT 10
OF TOTAL DIRECT COST S AND THE TAXABLE YE AR THE CREDIT WILL B E CLAIMED. 11
(i) The Department and the Comptroller jointly shall adopt regulations to carry 12
out the provisions of this section and to specify criteria and procedures for the application 13
for, approval of, TRANSFER OF, and monitoring of continuing eligibility for the tax credit 14
under this section. 15
10–730. 16
(a) (1) In this section the following words have the meanings indicated. 17
(4) (i) “Film production activity” means: 18
1. the production of a film or video project that is intended 19
for nationwide commercial distribution; and 20
2. for a television series, each season of the television series. 21
(ii) “Film production activity” includes the production of: 22
1. a feature film; 23
2. a television project; 24
3. a commercial; 25
4. a corporate film; 26
5. a music video; 27
6. a digital animation project; 28
134 SENATE BILL 427
7. a documentary; or 1
8. a talk, reality, or game show. 2
(iii) “Film production activity” does not include the production of: 3
1. a student film; 4
2. a noncommercial personal video; 5
3. a sports broadcast; 6
4. a broadcast of a live event; 7
5. a video, computer, or social networking game; 8
6. pornography; 9
7. an infomercial; 10
8. a digital product or an animation project other than a 11
digital animation project; or 12
9. a multimedia project. 13
(7) “Qualified film production entity” means an entity that: 14
(i) is carrying out a film production activity; and 15
(ii) the Secretary determines to be eligible for the tax credit under 16
this section in accordance with subsection (c) of this section. 17
(b) (1) A qualified film production entity may claim a credit against the State 18
income tax for film production activities in the State in an amount equal to the amount 19
stated in the final tax credit certificate approved by the Secretary for film production 20
activities. 21
(2) If the tax credit allowed under this section in any taxable year exceeds 22
the total tax otherwise payable by the qualified film production entity for that taxable year, 23
the qualified film production entity may claim a refund in the amount of the excess. 24
(f) (1) Except as provided in paragraph (2) of this subsection, the Secretary 25
may not issue tax credit certificates for credit amounts in the aggregate totaling more than: 26
(i) for fiscal year 2014, $25,000,000; 27
(ii) for fiscal year 2015, $7,500,000; 28 SENATE BILL 427 135
(iii) for fiscal year 2016, $7,500,000; 1
(iv) for fiscal year 2019, $8,000,000; 2
(v) for fiscal year 2020, $11,000,000; 3
(vi) for fiscal year 2021 through 2023, $12,000,000; 4
(vii) for fiscal year 2024, $15,000,000; 5
(viii) for fiscal year 2025, $17,500,000; AND 6
(ix) for fiscal year 2026 AND EACH FISCAL YEAR THEREAFTER , 7
$20,000,000[; and 8
(x) for fiscal year 2027 and each fiscal year thereafter, $12,000,000]. 9
(2) If the aggregate credit amounts under the tax credit certificates issued 10
by the Secretary total less than the maximum provided under paragraph (1) of this 11
subsection in any fiscal year, any excess amount may be carried forward and issued under 12
tax credit certificates in a subsequent fiscal year. 13
(3) [The Secretary may not issue tax credit certificates for credit amounts 14
totaling more than $10,000,000 in the aggregate for a single film production activity. 15
(4)] (i) For fiscal year 2019 and each fiscal year thereafter, the Secretary 16
shall make 10% of the credit amount authorized under paragraph (1) of this subsection 17
available for Maryland small or independent film entities. 18
(ii) If the total amount of credits applied for by Maryland small or 19
independent film entities is less than the amount made available under subparagraph (i) 20
of this paragraph, the Secretary shall make available the unused amount of credits for use 21
by qualified film production entities. 22
[10–732. 23
(a) (1) In this section the following words have the meanings indicated. 24
(2) “Costs” means the costs to an individual or corporation for: 25
(i) security clearance administrative expenses incurred with regard 26
to an employee in the State including, but not limited to: 27
1. processing application requests for clearances for 28
employees in the State; 29 136 SENATE BILL 427
2. maintaining, upgrading, or installing computer systems in 1
the State required to obtain federal security clearances; and 2
3. training employees in the State to administer the 3
application process; and 4
(ii) construction and equipment costs incurred to construct or 5
renovate a sensitive compartmented information facility (“SCIF”) located in the State as 6
required by the federal government. 7
(3) “Department” means the Department of Commerce. 8
(4) “Secretary” means the Secretary of Commerce. 9
(5) “Small business” has the meaning stated in § 7–218 of this article. 10
(b) (1) Subject to the limitations of this section, for a taxable year beginning 11
after December 31, 2022, but before January 1, 2028, an individual or a corporation that 12
employs not more than 500 employees may claim credits against the State income tax for: 13
(i) security clearance administrative expenses, not to exceed 14
$200,000; 15
(ii) expenses incurred for rental payments owed during the first year 16
of a rental agreement for spaces leased in the State if the individual or corporation is a 17
small business that performs security–based contracting, not to exceed $200,000; and 18
(iii) subject to paragraph (2) of this subsection, construction and 19
equipment costs incurred to construct or renovate a single SCIF in an amount equal to the 20
lesser of 50% of the costs or $200,000. 21
(2) The total amount of construction and equipment costs incurred to 22
construct or renovate multiple SCIFs for which an individual or a corporation is eligible to 23
claim as a credit against the State income tax is $500,000. 24
(c) (1) By September 15 of the calendar year following the end of the taxable 25
year in which the costs were incurred, an individual or a corporation shall submit an 26
application to the Department for the credits allowed under subsection (b) of this section. 27
(2) (i) The total amount of credits approved by the Department under 28
subsection (b) of this section may not exceed $2,000,000 for any calendar year. 29
(ii) If the total amount of credits applied for by all individuals and 30
corporations under subsection (b) of this section exceeds the maximum specified under 31
subparagraph (i) of this paragraph, the Department shall approve a credit under subsection 32 SENATE BILL 427 137
(b) of this section for each applicant in an amount equal to the product of multiplying the 1
credit applied for by the applicant times a fraction: 2
1. the numerator of which is the maximum specified under 3
subparagraph (i) of this paragraph; and 4
2. the denominator of which is the total of all credits applied 5
for by all applicants under subsection (b) of this section in the calendar year. 6
(3) By December 15 of the calendar year following the end of the taxable 7
year in which the costs were incurred, the Department shall certify to the individual or 8
corporation the amount of tax credits approved by the Department for the individual or 9
corporation under this section. 10
(4) To claim the approved credits allowed under this section, an individual 11
or a corporation shall: 12
(i) 1. file an amended income tax return for the taxable year in 13
which the costs were incurred; and 14
2. attach a copy of the Department’s certification of the 15
approved credit amount to the amended income tax return; or 16
(ii) subject to subsection (d) of this section, attach a copy of the 17
Department’s certification of the approved credit amount to an income tax return filed for 18
any taxable year after the taxable year in which the costs were incurred. 19
(d) If the credit allowed for any taxable year under this section exceeds the total 20
tax otherwise due, an individual or corporation may apply the excess as a credit against 21
the State income tax for succeeding taxable years until the full amount of the excess is 22
used. 23
(e) The Department, in consultation with the Comptroller, shall adopt 24
regulations to carry out the provisions of this section. 25
(f) In accordance with § 2.5–109 of the Economic Development Article, the 26
Department shall submit a report on the number of credits certified in the previous 27
calendar year.] 28
10–733. 29
(a) (1) In this section the following words have the meanings indicated. 30
(2) (i) “Company” means any entity of any form duly organized and 31
existing under the laws of any jurisdiction for the purpose of conducting business for profit. 32
138 SENATE BILL 427
(ii) “Company” includes an entity that becomes duly organized and 1
existing under the laws of any jurisdiction for the purpose of conducting business for profit 2
within 4 months of receiving a qualified investment. 3
(iii) “Company” does not include a sole proprietorship. 4
(3) “Department” means the Department of Commerce. 5
(4) (i) “Investment” means the contribution of money in cash or cash 6
equivalents expressed in United States dollars, at a risk of loss, to a qualified Maryland 7
technology company in exchange for stock, a partnership or membership interest, or any 8
other ownership interest in the equity of the qualified Maryland technology company, title 9
to which ownership interest shall vest in the qualified investor. 10
(ii) “Investment” does not include debt unless it is convertible debt. 11
(iii) For purposes of this section, an investment is at risk of loss when 12
repayment entirely depends on the success of the business operations of the qualified 13
company. 14
(5) (i) “Qualified investor” means any individual or entity that invests 15
at least $25,000 in a qualified Maryland technology company and that is required to file an 16
income tax return in any jurisdiction. 17
(ii) “Qualified investor” does not include: 18
1. a qualified pension plan, an individual retirement 19
account, or any other qualified retirement plan under the Employee Retirement Income 20
Security Act of 1974, as amended, or fiduciaries or custodians under such plans, or similar 21
tax–favored plans or entities under the laws of other countries; or 22
2. a founder or current employee of the qualified Maryland 23
technology company, if the company has been in active business for more than 5 years. 24
(6) (i) “Qualified Maryland technology company” means a technology 25
company that has met the criteria set forth in subsection (b)(3) of this section. 26
(ii) “Qualified Maryland technology company” does not include a 27
technology company that is or has been certified as a qualified Maryland biotechnology 28
company under § 10–725 of this subtitle. 29
(7) “Secretary” means the Secretary of Commerce. 30
(8) “Technology company” means a company organized for profit that is 31
engaged in the research, development, or commercialization of innovative and proprietary 32
technology. 33
SENATE BILL 427 139
(b) (2) Subject to paragraph (3) of this subsection and subsections (d) and (e) 1
of this section, for the taxable year in which an investment in a qualified Maryland 2
technology company is made, a qualified investor may claim a credit against the State 3
income tax in an amount equal to the amount of tax credit stated in the final credit 4
certificate approved by the Secretary for the investment as provided under this section. 5
(3) To be eligible for the tax credit described in paragraph (2) of this 6
subsection, the qualified investor: 7
(ii) at least 30 days prior to making an investment in a qualified 8
Maryland technology company for which the qualified investor would be eligible for an 9
initial tax credit certificate under this subsection, shall submit an application to the 10
Department containing the following: 11
2. evidence that the qualified Maryland technology company 12
has satisfied the following minimum requirements for consideration as a qualified 13
Maryland technology company: 14
J. meets any other reasonable requirements of the 15
Department evidencing that the company is a going concern engaged in the research, 16
development, or commercialization of innovative and proprietary technology in an eligible 17
technology sector identified in accordance with paragraph (4) of this subsection; and 18
(4) (i) [After consulting with the Department and the Maryland 19
Department of Labor, each year the Maryland Economic Development Commission shall: 20
1. evaluate the potential employment and economic growth 21
of Maryland’s technology sectors; and 22
2. recommend eligible technology sectors to the Department. 23
(ii)] Each year the Department shall[: 24
1. consider the recommendation of the Maryland Economic 25
Development Commission; and 26
2.] establish a list of technology sectors that will be eligible 27
for the tax credit under this section. 28
[(iii)] (II) In determining whether a company is engaged in an 29
eligible technology sector, the Department shall consider the definitions set forth in the 30
North American Industry Classification System (NAICS). 31
(5) IF FOR A TAXABLE YEAR BE GINNING AFTER DECEMBER 31, 2025, 32
IF THE QUALIFIED INVEST OR ALLOWED TO CLAIM A CREDIT UNDER PARAG RAPH (2) 33
OF THIS SUBSECTION I S A PASS–THROUGH ENTITY THAT PAYS THE INCOME TAX 34 140 SENATE BILL 427
IMPOSED UNDER § 10–102.1 OF THIS TITLE ON B EHALF OF ALL MEMBERS OF THE 1
PASS–THROUGH ENTITY , THE PASS–THROUGH ENTITY MAY C LAIM AND ALLOCATE 2
THE CREDIT AMONG MEM BERS OF THE PASS –THROUGH ENTITY IN AN Y MANNER. 3
(d) (1) The tax credit allowed in an initial tax credit certificate issued under 4
this section is: 5
(i) except as provided in item (ii) of this paragraph, 33% of the 6
investment in a qualified Maryland technology company, not to exceed $250,000; or 7
(ii) [50%] 75% of the investment in the qualified Maryland 8
technology company, not to exceed [$500,000] $750,000, if a qualified Maryland 9
technology company[: 10
1. is located in Allegany County, Dorchester County, Garrett 11
County, or Somerset County; or 12
2.] is located in a Regional Institution Strategic Enterprise 13
zone that is designated under [Title 5, Subtitle 14] TITLE 10, SUBTITLE 1 of the Economic 14
Development Article[, is based on technology that was developed at a qualified institution 15
within that zone, and has been in active business not longer than 7 years]. 16
(2) During any fiscal year, the Secretary may not certify eligibility for tax 17
credits for investments in: 18
(i) a single qualified Maryland technology company that in the 19
aggregate exceed 15% of the total appropriations to the Maryland Innovation Investment 20
Tax Credit Reserve Fund for that fiscal year; or 21
(ii) a single technology sector that in the aggregate exceed 25% of the 22
total appropriations to the Maryland Innovation Investment Tax Credit Reserve Fund for 23
that fiscal year. 24
(3) (I) If the credit allowed under this section in any taxable year 25
exceeds the State income tax for that taxable year, an individual or a corporation may claim 26
a refund in the amount of the excess. 27
(II) IF FOR A TAXABLE YEAR BE GINNING AFTER DECEMBER 31, 28
2025, IF THE QUALIFIED INVEST OR ALLOWED TO CLAIM A REFUND UNDER 29
SUBPARAGRAPH (I) OF THIS PARAGRAPH IS A PASS–THROUGH ENTITY THAT PAYS 30
THE INCOME TAX IMPOS ED UNDER § 10–102.1 OF THIS TITLE ON BEH ALF OF ALL 31
MEMBERS OF THE PASS –THROUGH ENTITY , THE PASS–THROUGH ENTITY MAY C LAIM 32
AND ALLOCATE THE CRE DIT AMONG MEMBERS OF THE PASS–THROUGH ENTITY IN 33
ANY MANNER . 34
SENATE BILL 427 141
(J) THE DEPARTMENT MAY NOT AP PROVE A CREDIT UNDER THIS SECTION 1
FOR A TAXABLE YEAR B EGINNING AFTER DECEMBER 31, 2029. 2
(K) FOR A TAXABLE YEAR BE GINNING AFTER DECEMBER 31, 2025, THE 3
COMPTROLLER SHALL PRO VIDE THE MEANS FOR A QUALIFIED INVESTOR T O FILE 4
THE INVESTOR’S RETURN ELECTRONICA LLY. 5
10–733.1. 6
(a) (1) In this section the following words have the meanings indicated. 7
(2) “Cybersecurity business” means an entity organized for profit that is 8
engaged primarily in the development of innovative and proprietary cybersecurity 9
technology or the provision of cybersecurity service. 10
(3) “Cybersecurity service” means an activity that is associated with a 11
category or subcategory identified under the Framework Core established by the National 12
Institute of Standards and Technology’s Cybersecurity Framework. 13
(4) “Cybersecurity technology” means products or goods intended to detect 14
or prevent activity intended to result in unauthorized access to, exfiltration of, 15
manipulation of, or impairment to the integrity, confidentiality, or availability of an 16
information system or information stored on or transiting an information system. 17
(5) “Department” means the Department of Commerce. 18
(6) [“Panel” means the panel that the Department may establish under 19
subsection (c) of this section composed of experts in the areas of cybersecurity technology 20
and cybersecurity service. 21
(7)] “Qualified buyer” means any entity [that has fewer than 50 employees 22
in the State and] that is required to file an income tax return in the State. 23
[(8)] (7) “Qualified seller” means a cybersecurity business that: 24
(i) has its headquarters and base of operations in the State; 25
(ii) 1. has less than [$5,000,000] $10,000,000 in annual 26
revenue; 27
2. is a minority–owned, woman–owned, veteran–owned, or 28
service–disabled–veteran–owned business; or 29
3. is located in a historically underutilized business zone 30
designated by the United States Small Business Administration; 31
142 SENATE BILL 427
(iii) 1. owns or has properly licensed any proprietary 1
cybersecurity technology; or 2
2. provides a cybersecurity service; 3
(iv) is in good standing; 4
(v) is current in the payment of all tax obligations to the State or any 5
unit or subdivision of the State; and 6
(vi) is not in default under the terms of any contract with, 7
indebtedness to, or grant from the State or any unit or subdivision of the State. 8
(b) (1) THERE IS A BUY MARYLAND CYBERSECURITY TAX CREDIT 9
AUTHORIZED UNDER THI S SECTION. 10
(2) THE BUY MARYLAND CYBERSECURITY TAX CREDIT IS INTENDED 11
TO PROMOTE THE CYBER SECURITY INDUSTRY IN MARYLAND BY HELPING 12
MARYLAND BUSINESSES A ND NONPROFITS PURCHA SE CYBERSECURITY 13
TECHNOLOGIES AND SER VICES FROM MARYLAND CYBERSECURIT Y COMPANIES TO 14
PROTECT BUSINESS AND CUSTOMER INFORMATION . 15
[(1)] (3) Subject to paragraphs [(2) and (3)] (4) THROUGH (6) of this 16
subsection, a qualified buyer may claim a credit against the State income tax in an amount 17
equal to 50% of the cost incurred during the taxable year to purchase cybersecurity 18
technology or a cybersecurity service from one or more qualified sellers. 19
[(2)] (4) For any taxable year, the credit allowed under this section may 20
not exceed $50,000 for each qualified buyer. 21
(5) IF THE CREDIT ALLOWED UNDER THIS SECTION I N ANY TAXABLE 22
YEAR EXCEEDS THE STATE INCOME TAX FOR THAT TAXABLE YEAR , A QUALIFIED 23
BUYER MAY CLAIM A RE FUND IN THE AMOUNT O F THE EXCESS. 24
[(3)] (6) For any taxable year, the aggregate credits claimed for 25
cybersecurity technology or cybersecurity service purchased from a single qualified seller 26
may not exceed [$200,000] $1,000,000. 27
(c) [(1) The Department, in consultation with the Maryland Technology 28
Development Corporation, may establish a panel composed of experts in the areas of 29
cybersecurity technology and cybersecurity service. 30
(2) The Department may establish the panel under service contracts with 31
independent reviewers. 32
SENATE BILL 427 143
(3) The panel shall assist the Department in its determination as to 1
whether a company is a qualified seller. 2
(4) A member of the panel is not eligible to receive any benefit, direct or 3
indirect, from the tax credit under this section. 4
(5) (i) Except as provided in subparagraph (ii) of this paragraph, 5
Division II of the State Finance and Procurement Article does not apply to a service that 6
the Department obtains under this section. 7
(ii) The Department is subject to Title 12, Subtitle 4 of the State 8
Finance and Procurement Article for services the Department obtains under this section. 9
(d)] (1) (i) A qualified buyer eligible for the credit under this section may 10
apply to the Department for a credit certificate that states the amount of the credit the 11
qualified buyer may claim under subsection (b) of this section. 12
(ii) A qualified buyer shall attach the credit certificate to the income 13
tax return on which the qualified buyer claims the credit under subsection (b) of this 14
section. 15
(2) Subject to paragraph (3) of this subsection, the Secretary of Commerce 16
shall approve each application under paragraph (1) of this subsection that qualifies for a 17
credit certificate. 18
(3) [(i)] The total amount of the credit certificates approved by the 19
Secretary of Commerce under this subsection may not exceed: 20
1. for taxable year 2018, $2,000,000; and 21
2. for taxable year 2019 and each taxable year thereafter, 22
$4,000,000. 23
[(ii) For each taxable year, the Secretary of Commerce shall award 24
25% of the amount of tax credits authorized under subparagraph (i) of this paragraph to 25
qualified buyers that purchase cybersecurity services.] 26
[(e)] (D) (1) The Department may revoke its certification of a credit under 27
this section if any representation made in connection with the application for the 28
certification is determined by the Department to have been false. 29
(2) The revocation may be in full or in part as the Department may 30
determine and, subject to paragraph (3) of this subsection, shall be communicated to the 31
qualified buyer and the Comptroller. 32
(3) The qualified buyer shall have an opportunity to appeal any revocation 33
to the Department before notification of the Comptroller. 34 144 SENATE BILL 427
(4) The Comptroller may make an assessment against the qualified buyer 1
to recapture any amount of tax credit that the qualified buyer has already claimed. 2
[(f)] (E) In accordance with § 2.5–109 of the Economic Development Article, the 3
Department shall submit a report on the credit certificates awarded under this section for 4
the calendar year. 5
[(g)] (F) The Department and the Comptroller jointly shall adopt regulations to 6
carry out this section and to specify criteria and procedures for application for, approval of, 7
and monitoring continuing eligibility for the tax credit under this section. 8
(G) THE DEPARTMENT MAY NOT AP PROVE A CREDIT UNDER THIS SECTION 9
FOR A TAXABLE YEAR B EGINNING AFTER DECEMBER 31, 2029. 10
SECTION 4. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 11
as follows: 12
Article – Tax – Property 13
9–103. 14
(a) (1) In this section the following words have the meanings indicated. 15
(6) (i) “Qualified property” means real property that is: 16
1. not used for residential purposes; 17
2. used in a trade or business by a business entity that meets 18
the requirements of § 5–707 of the Economic Development Article; and 19
3. located in an enterprise zone that is designated under 20
Title 5, Subtitle 7 of the Economic Development Article. 21
(ii) “Qualified property” includes personal property on real property 22
that is located in a focus area as defined in § 5–701 of the Economic Development Article. 23
(b) (1) The governing body of a county or of a municipal corporation shall grant 24
a tax credit under this section against the property tax imposed on the eligible assessment 25
of qualified property. 26
(d) (2) For newly constructed qualified property that provides both office and 27
retail space and became eligible for the credit under this section on or after [January 1, 28
2019] JULY 1, 2018, but before January 1, 2022, the appropriate governing body shall 29
calculate the amount of the tax credit under this section equal to a percentage of the amount 30
of property tax imposed on the eligible assessment of the qualified property as follows: 31 SENATE BILL 427 145
(i) 80% in each of the 1st 8 taxable years following the calendar year 1
in which the property initially becomes a qualified property; 2
(ii) 70% in the 9th taxable year; 3
(iii) 60% in the 10th taxable year; 4
(iv) 50% in the 11th taxable year; 5
(v) 40% in the 12th taxable year; and 6
(vi) 30% in the 13th taxable year. 7
(5) For qualified property located in a focus area, the appropriate governing 8
body shall calculate the amount of the tax credit under this section equal to 80% of the 9
amount of property tax imposed on the eligible assessment of the qualified property: 10
(i) for newly constructed qualified property that provides both office 11
and retail space and became eligible for the credit under this section on or after [January 12
1, 2019] JULY 1, 2018, but before January 1, 2022, for each of the 13 taxable years 13
following the calendar year in which the property initially becomes a qualified property; or 14
(ii) for any other qualified property, for each of the 10 taxable years 15
following the calendar year in which the property initially becomes a qualified property. 16
(e) (1) A tax credit under this section is available to a qualified property for no 17
more than 10 consecutive years or, in the case of newly constructed qualified property that 18
provides both office and retail space and became eligible for the credit under this section 19
on or after [January 1, 2019] JULY 1, 2018, but before January 1, 2022, no more than 13 20
consecutive years, beginning with: 21
(i) the taxable year following the calendar year in which the real 22
property initially becomes a qualified property; or 23
(ii) the taxable year in which the real property initially becomes a 24
qualified property, subject to the approval of the appropriate local governing body and the 25
Secretary of Commerce. 26
9–103.1. 27
(a) (1) In this section the following words have the meanings indicated. 28
(6) “Qualified property” means real property that is: 29
(i) located in a RISE zone; 30
146 SENATE BILL 427
(ii) not used for residential purposes; and 1
(iii) used in a trade or business by a business entity that locates in 2
the RISE zone before January 1, 2023. 3
(7) “RISE zone” has the meaning stated in [§ 5–1401] § 10–137 of the 4
Economic Development Article. 5
(b) The governing body of a county or of a municipal corporation shall grant a tax 6
credit under this section against the property tax imposed on the eligible assessment of 7
qualified property. 8
(c) (3) [For] EXCEPT AS PROVIDED IN PARAGRAPH (4) OF THIS 9
SUBSECTION, FOR purposes of calculating the amount of the credit allowed under this 10
section, the amount of property tax imposed on the eligible assessment shall be calculated 11
without reduction for any credits allowed under this title. 12
(4) (i) For qualified property located in an enterprise zone designated 13
under Title 5, Subtitle 7 of the Economic Development Article, the appropriate governing 14
body shall calculate the amount of the tax credit under this section equal to 80% of the 15
amount of property tax imposed on the eligible assessment of the qualified property, AFTER 16
FIRST APPLYING ANY C REDITS REQUIRED UNDE R § 9–103 OF THIS SUBTITLE, for each 17
of the 5 taxable years following the calendar year in which the property initially becomes a 18
qualified property. 19
(ii) For qualified property located in a focus area designated under § 20
5–706 of the Economic Development Article, the appropriate governing body shall calculate 21
the amount of the tax credit under this section equal to 100% of the amount of property tax 22
imposed on the eligible assessment of the qualified property, AFTER FIRST APPLYING ANY 23
CREDITS REQUIRED UND ER § 9–103 OF THIS SUBTITLE, for each of the 5 taxable years 24
following the calendar year in which the property initially becomes a qualified property. 25
(iii) 1. If a business entity is certified as consistent with the 26
target strategy of the RISE zone and the qualified property is located in an enterprise zone 27
or focus area, the amount of the required reimbursement under § 9–103(h) of this subtitle 28
may only be for the amount required for the required property tax credits under § 9–103 of 29
this subtitle. 30
2. The property tax credits required under subparagraphs (i) 31
and (ii) of this paragraph do not alter the amount of funds required to be reimbursed under 32
§ 9–103(h) of this subtitle. 33
3. IF A BUSINESS ENTITY IS CERTIFIED AS CONS ISTENT 34
WITH THE TARGET STRA TEGY OF THE RISE ZONE AND THE QUALIFI ED PROPERTY 35
IS LOCATED IN AN ENT ERPRISE ZONE OR FOCU S AREA, THE BUSINESS ENTITY MAY 36
CONCURRENTLY CLAIM T HE PROPERTY TAX CRED ITS UNDER THIS SECTI ON AND § 37 SENATE BILL 427 147
9–103 OF THIS SUBTITLE , PROVIDED THAT THE TO TAL PROPERTY TAX CRE DITS IN 1
ANY TAXABLE YEAR MAY NOT EXCEED 100% OF THE PROPERTY TAX THAT WOULD 2
OTHERWISE BE DUE TO THE STATE AND LOCAL JURIS DICTION. 3
4. THE CONCURRENT APPLIC ATION OF PROPERTY TA X 4
CREDITS UNDER THIS S ECTION MAY NOT ALTER THE TIME LIMITATION ON THE 5
AVAILABILITY OF ANY PROPERTY TA X CREDIT. 6
(5) The governing body of a county or municipal corporation may increase, 7
by local law, the percentage under paragraph (1) of this subsection. 8
(6) (i) If a RISE zone is renewed as provided under [§ 5–1404] § 9
10–140 of the Economic Development Article, the governing body of a county or municipal 10
corporation shall calculate the amount of the tax credit under this section equal to at least 11
10% of the amount of property tax imposed on the eligible assessment of the qualified 12
property, AFTER FIRST APPLYING ANY CREDITS REQUIRED UNDER § 9–103 OF THIS 13
SUBTITLE, for the sixth through tenth taxable years. 14
(ii) The governing body of a county or municipal corporation may 15
increase, by local law, the percentage under subparagraph (i) of this paragraph. 16
(d) (1) Except as provided in subsection (c)(6) of this section, a tax credit under 17
this section is available to a qualified property for no more than 5 consecutive years 18
beginning with: 19
(I) the taxable year following the calendar year in which the real 20
property initially becomes a qualified property; OR 21
(II) THE TAXABLE YEAR IN WHICH THE REAL PROPE RTY 22
INITIALLY BECOMES A QUALIFIED PROPERTY , SUBJECT TO THE APPRO VAL OF THE 23
APPROPRIATE LOCAL GO VERNING BODY AND THE DEPARTMENT OF COMMERCE . 24
(2) If the designation of a RISE zone expires, the tax credit under this 25
section continues to be available to a qualified property. 26
(3) State property tax imposed on real property is not affected by this 27
section. 28
(e) When a Regional Institution Strategic Enterprise zone is designated by the 29
Secretary of Commerce, the Secretary shall certify to the State Department of Assessments 30
and Taxation: 31
(1) the real properties in the zone that are qualified properties for each 32
taxable year for which the property tax credit under this section is to be granted; and 33
(2) the date that the real properties became qualified properties. 34 148 SENATE BILL 427
(f) Before property tax bills are sent, the State Department of Assessments and 1
Taxation shall submit to the Secretary of Commerce a list containing: 2
(1) the location of each qualified property; 3
(2) the amount of the base year value for each qualified property; and 4
(3) the amount of the eligible assessment for each qualified property. 5
SECTION 5. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 6
as follows: 7
Chapter 515 of the Acts of 2000, as amended by Chapter 98 of the Acts of 2005, 8
Chapter 20 of the Acts of 2010, Chapter 85 of the Acts of 2019, and Chapter 114 of 9
the Acts of 2021 10
SECTION 2. AND BE IT FURTHER ENACTED, That: 11
(a) Except as otherwise provided in this section, this Act shall be applicable to all 12
taxable years beginning after December 31, 1999 [but before January 1, 2026]. 13
(b) If a taxpayer’s taxable year for income tax purposes is not the calendar year[: 14
(1)], for the taxable year that ends in calendar year 2000, the taxpayer may 15
apply for a prorated credit for research and development expenses paid or incurred in the 16
taxable year for that part of the taxable year that falls in calendar year 2000[; and 17
(2) for the taxable year that begins in calendar year 2025, the taxpayer 18
may apply for only a prorated credit for research and development expenses paid or 19
incurred in the taxable year for that part of the taxable year that falls in calendar year 20
2025]. 21
SECTION 4. AND BE IT FURTHER ENACTED, That this Act shall take effect July 22
1, 2000. [It shall remain effective for a period of 27 years and, at the end of June 30, 2027, 23
with no further action required by the General Assembly, this Act shall be abrogated and 24
of no further force and effect.] 25
Chapter 516 of the Acts of 2000, as amended by Chapter 98 of the Acts of 2005, 26
Chapter 20 of the Acts of 2010, Chapter 85 of the Acts of 2019, and Chapter 114 of 27
the Acts of 2021 28
SECTION 2. AND BE IT FURTHER ENACTED, That: 29
(a) Except as otherwise provided in this section, this Act shall be applicable to all 30
taxable years beginning after December 31, 1999 [but before January 1, 2026]. 31 SENATE BILL 427 149
(b) If a taxpayer’s taxable year for income tax purposes is not the calendar year[: 1
(1)], for the taxable year that ends in calendar year 2000, the taxpayer may 2
apply for a prorated credit for research and development expenses paid or incurred in the 3
taxable year for that part of the taxable year that falls in calendar year 2000[; and 4
(2) for the taxable year that begins in calendar year 2025, the taxpayer 5
may apply for only a prorated credit for research and development expenses paid or 6
incurred in the taxable year for that part of the taxable year that falls in calendar year 7
2025]. 8
SECTION 4. AND BE IT FURTHER ENACTED, That this Act shall take effect July 9
1, 2000. [It shall remain effective for a period of 27 years and, at the end of June 30, 2027, 10
with no further action required by the General Assembly, this Act shall be abrogated and 11
of no further force and effect.] 12
SECTION 4. 6. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 13
as follows: 14
Chapter 390 of the Acts of 2013, as amended by Chapter 578 of the Acts of 2018 15
and Chapter 113 of the Acts of 2021 16
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 17
1, 2013, and shall be applicable to all taxable years beginning after December 31, 2013[, 18
but before January 1, 2025. This Act shall remain effective for a period of 12 years and, at 19
the end of June 30, 2025, with no further action required by the General Assembly, this Act 20
shall be abrogated and of no further force and effect]. 21
SECTION 5. AND BE IT FURTHER ENACTED, That the terms of t he members of 22
the Maryland Life Sciences Advisory Board appointed by the Governor under § 3–203(a)(3) 23
of the Economic Development Article, as enacted by Section 2 of this Act, shall expire as 24
follows: 25
(1) five members in 2026; 26
(2) five members in 2027; and 27
(3) six members in 2028. 28
SECTION 6. 7. AND BE IT FURTHER ENACTED, That the publisher of the 29
Annotated Code of Maryland, in consultation with and subject to the approval of the 30
Department of Legislative Services, shall correct, with no further action required by the 31
General Assembly, cross–references and terminology rendered incorrect by this Act. The 32
publisher shall adequately describe any correction that is made in an editor’s note following 33
the section affected. 34 150 SENATE BILL 427
SECTION 7. 8. AND BE IT FURTHER ENACTED, That Section 3 of this Act shall 1
be applicable to all taxable years beginning after December 31, 2024. 2
SECTION 8. 9. AND BE IT FURTHER ENACTED, That Section 4 of this Act shall 3
take effect June 1, 2025. be applicable to all taxable years beginning after June 30, 2025. 4
SECTION 9. 10. AND BE IT FURTHER ENACTED, That , except as provided in 5
Section 8 of this Act, Sections 1, 2, 3, and 5 of this Act shall take effect July 1, 2025. 6
SECTION 11. AND BE IT FURTHER ENACTED, That, except as provided in 7
Section 10 of this Act, this Act shall take effect June 1, 2025. 8
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.