Biotechnology Investment Incentive Tax Credit - Conversion to Grant Program

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb0400*

HOUSE BILL 400
Q3, C8 6lr1293
CF SB 247
By: Delegate Chang
Introduced and read first time: January 22, 2026
Assigned to: Ways and Means

A BILL ENTITLED

AN ACT concerning 1

Biotechnology Investment Incentive Tax Credit – Conversion to Grant Program 2

FOR the purpose of converting the Biotechnology Investment Incentive Tax Credit to be 3
the Biotechnology Investment Incentive Grant Program in the De partment of 4
Commerce; requiring the Department to disburse a grant within a certain time 5
period; allowing a subtraction modification under the Maryland income tax for 6
certain grants received during the taxable year; and generally relating to the 7
Biotechnology Investment Incentive Grant Program. 8

BY transferring 9
Article – Tax – General 10
Section 10–725(a), (b), (c), (d) and (e), (f), (g), (h), and (i) 11
Annotated Code of Maryland 12
(2022 Replacement Volume and 2025 Supplement) 13
to be 14
Article – Economic Development 15
Section 5 –2701, 5 –2702, 5 –2703, 5 –2704, 5 –2706, 5 –2707, 5 –2708, and 5 –2709, 16
respectively, to be under the new subtitle “Subtitle 27. Biotechnology 17
Investment Incentive Grant Program” 18
Annotated Code of Maryland 19
(2024 Replacement Volume and 2025 Supplement) 20

BY repealing and reenacting, with amendments, 21
Article – Economic Development 22
Section 2.5–109(a), 6–1001(b), (c), and (e), and 6–1006 23
Annotated Code of Maryland 24
(2024 Replacement Volume and 2025 Supplement) 25

BY repealing and reenacting, with amendments, 26
Article – Economic Development 27
Section 5–2701 through 5–2704 and 5–2706 through 5–2709 28
2 HOUSE BILL 400

Annotated Code of Maryland 1
(2024 Replacement Volume and 2025 Supplement) 2
(As enacted by Section 1 of this Act) 3

BY adding to 4
Article – Economic Development 5
Section 5–2705 6
Annotated Code of Maryland 7
(2024 Replacement Volume and 2025 Supplement) 8

BY repealing and reenacting, without amendments, 9
Article – Economic Development 10
Section 6–1001(a) and (d) 11
Annotated Code of Maryland 12
(2024 Replacement Volume and 2025 Supplement) 13

BY repealing and reenacting, without amendments, 14
Article – Tax – General 15
Section 10–207(a) and 10–307(a) 16
Annotated Code of Maryland 17
(2022 Replacement Volume and 2025 Supplement) 18

BY adding to 19
Article – Tax – General 20
Section 10–207(rr) and 10–307(h) 21
Annotated Code of Maryland 22
(2022 Replacement Volume and 2025 Supplement) 23

BY repealing 24
Article – Tax – General 25
Section 10–725(j) 26
Annotated Code of Maryland 27
(2022 Replacement Volume and 2025 Supplement) 28

BY repealing and reenacting, with amendments, 29
Article – Tax – General 30
Section 10–804(j)(1) 31
Annotated Code of Maryland 32
(2022 Replacement Volume and 2025 Supplement) 33

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 34
That Section(s) 10–725(a), (b), (c), (d) and (e), (f), (g), (h), and (i) of Article – Tax – General 35
of the Annotated Code of Maryland be transferred to be Section(s) 5–2701, 5–2702, 5–2703, 36
5–2704, 5–2706, 5–2707, 5–2708, and 5 –2709, respectively, to be under the new subtitle 37
“Subtitle 27. Biotec hnology Investment Incentive Grant Program” of Article – Economic 38
Development of the Annotated Code of Maryland. 39

HOUSE BILL 400 3

SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 1
as follows: 2

Article – Economic Development 3

2.5–109. 4

(a) In this section, “economic development program” means: 5

(1) the Economic Development Opportunities Program Account 6
established under § 7–314 of the State Finance and Procurement Article; 7

(2) the Partnership for Workforce Quality Program established under Title 8
3, Subtitle 4 of this article; 9

(3) each of the economic development and financial assistance programs 10
established under Title 5 of this article; and 11

(4) each of the tax credit programs administered by the Department, 12
including: 13

(i) the Film Production Activity Tax Credit; 14

(ii) the Job Creation Tax Credit; 15

(iii) the One Maryland Economic Development Tax Credit; 16

(iv) [the Biotechnology Investment Incentive Tax Credit; 17

(v)] the Research and Development Tax Credit; 18

[(vi)] (V) the Security Clearance Administrative Expenses and 19
Construction and Equipment Costs Tax Credit; 20

[(vii)] (VI) the Innovation Investment Incentive Tax Credit; 21

[(viii)] (VII) the More Jobs for Marylanders Tax Credit; 22

[(ix)] (VIII) the Purchase of Cybersecurity Technology or Service Tax 23
Credit; 24

[(x)] (IX) the Opportunity Zone Enhancement Tax Credit; 25

[(xi)] (X) the Small Business Relief Tax Credit; 26

4 HOUSE BILL 400

[(xii)] (XI) any other tax credit program that is administered by the 1
Department under: 2

1. Title 6 of this article; or 3

2. Title 10, Subtitle 7 of the Tax – General Article; and 4

[(xiii)] (XII) the Theatrical Production Tax Credit. 5

Subtitle 27. Biotechnology Investment Incentive Grant Program. 6

5–2701. 7

(a) [(1)] In this [section] SUBTITLE the following words have the meanings 8
indicated. 9

[(2)] (B) “Biotechnology company” means a company organized for profit 10
that is primarily engaged in, or within 2 months will be primarily engaged in, the research, 11
development, or commercializat ion of innovative and proprietary technology that 12
comprises, interacts with, or analyzes biological material including biomolecules (DNA, 13
RNA, or protein), cells, tissues, or organs. 14

[(3)] (C) [(i)] (1) “Company” means any entity of any form duly 15
organized and existing under the laws of any jurisdiction for the purpose of conducting 16
business for profit. 17

[(ii)] (2) “Company” does not include a sole proprietorship. 18

[(4) “Department” means the Department of Commerce. 19

(5)] (D) “FUND” MEANS THE BIOTECHNOLOGY INVESTMENT 20
INCENTIVE GRANT PROGRAM FUND. 21

(E) [(i)] (1) “Investment” means the contribution of money in cash or cash 22
equivalents expressed in United States dollars, at a risk of loss, to a qualified Maryland 23
biotechnology company in exchange for stock, a partnership or membership interest, or 24
other ownership interest in the equity of the qualified Maryland biotechnology company, 25
title to which ownership interest shall vest in the qualified investor. 26

[(ii)] (2) “Investment” does not include debt. 27

[(iii)] (3) For purposes of this [section] SUBTITLE, an investment is 28
at risk of loss when its repayment entirely depends upon the success of the business 29
operations of the qualified company. 30

HOUSE BILL 400 5

(F) “PROGRAM” MEANS THE BIOTECHNOLOGY INVESTMENT INCENTIVE 1
GRANT PROGRAM. 2

[(6)] (G) [(i)] (1) “Qualified investor” means any individual or entity 3
that invests at least $25,000 in a qualified Maryland biotechnology company and that is 4
required to file an income tax return in any jurisdiction. 5

[(ii)] (2) “Qualified investor” does not include: 6

[1.] (I) a qualified pension plan, individual retirement 7
account, or other qualified retirement plan under the Employee Retirement Income 8
Security Act of 1974, as amended, or fiduciaries or custodians under such plans, or similar 9
tax–favored plans or entities under the laws of other countries; or 10

[2.] (II) a founder or current employee of the qualified 11
Maryland biotechnology company, if the company has been in active business for more than 12
5 years. 13

[(7)] (H) [(i)] (1) “Qualified Maryland biotechnology company” 14
means a biotechnology company that: 15

[1.] (I) has its headquarters and base of operations in this 16
State; 17

[2.] (II) has fewer than 50 full–time employees; 18

[3.] (III) has been in active business no longer than 12 years; 19

[4.] (IV) does not have its securities publicly traded on any 20
exchange; 21

[5.] (V) has been certified as a biotechnology company by 22
the Department; and 23

[6.] (VI) the qualified investors in the company have not 24
received more than $7,000,000 in tax credits UNDER THE BIOTECHNOLOGY 25
INVESTMENT INCENTIVE TAX CREDIT PROGRAM OR GRANTS in the aggregate under 26
this [section] SUBTITLE. 27

[(ii)] (2) “Qualified Maryland biotechnology company” includes a 28
company that, within 2 months of the receipt of the investment, has met the requirements 29
of [subparagraph (i) of this paragraph] PARAGRAPH (1) OF THIS SUBSECTION. 30

[(8) “Secretary” means the Secretary of Commerce.] 31

6 HOUSE BILL 400

5–2702. 1

[(b)] (A) (1) THERE IS A BIOTECHNOLOGY INVESTMENT INCENTIVE 2
GRANT PROGRAM IN THE DEPARTMENT. 3

(2) THE PROGRAM IS THE SUCCES SOR TO THE BIOTECHNOLOGY 4
INVESTMENT INCENTIVE TAX CREDIT PROGRAM. 5

[(1)] (B) The [Biotechnology Investm ent Incentive Tax Credit is 6
intended] PURPOSE OF THE PROGRAM IS to foster the growth of Maryland’s 7
biotechnology industry by incentivizing investment in early stage companies with the goal 8
of increasing the number of companies developing biotechnologies in Maryland, increasing 9
overall investments in the biotechnology sector, and increasing the number of individual 10
investors actively investing in Maryland’s life sciences companies. 11

[(2)] (C) Subject to [paragraphs (3) and (4) of this subsection and ] 12
subsections (d) and (e) of this section AND §§ 5–2704 AND 5–2705 OF THIS SUBTITLE, for 13
the [taxable] FISCAL year in which an investment in a qualified Maryland biotechnology 14
company is made, a qualified investor may [claim a credit against the State income tax in 15
an amount equal to the amount of tax credit stated in the final credit certificate approved 16
by the Secretary ] BE AWARDED A GRANT B Y THE SECRETARY for the investment as 17
provided under this [section] SUBTITLE. 18

[(3)] (D) To be eligible for [the tax credit described in paragraph (2) of this 19
subsection] A GRANT UNDER THIS SUBTITLE, the qualified investor shall be: 20

[(i)] (1) for a company, duly organized and in good standing in the 21
jurisdiction under the laws under which it is organized; 22

[(ii)] (2) for a company, in good standing and authorized or 23
registered to do business in the State; 24

[(iii)] (3) current in the payment of all tax obligations to the State 25
or any unit or subdivision of the State; and 26

[(iv)] (4) not in default under the terms of any contract with, 27
indebtedness to, or grant from the State or any unit or subdivision of the State. 28

[(4)] (E) To be eligible for [the tax credit described in paragraph (2) of this 29
subsection] A GRANT UNDER THIS S UBTITLE, the qualified investor may n ot, after 30
making the proposed investment, own or control more than 25% of the equity interests in 31
the qualified Maryland biotechnology company in which the investment is to be made. 32

5–2703. 33

HOUSE BILL 400 7

[(c)] (A) [(1)] At least 30 days prior to making an investment in a qualified 1
Maryland biotechnology company for which a qualified investor would be eligible for an 2
initial [tax credit] GRANT ELIGIBILITY certificate under [subsection (b) of this section ] 3
THIS SUBTITLE, the qualified investor shall submit an application to the Department. 4

[(2)] (B) The application shall evidence that the qualified Maryland 5
biotechnology company is: 6

[(i)] (1) in good standing; 7

[(ii)] (2) current in the payment of all tax obligatio ns to the State 8
or any unit or subdivision of the State; and 9

[(iii)] (3) not in default under the terms of any contract with, 10
indebtedness to, or grant from the State or any unit or subdivision of the State. 11

[(3)] (C) [(i)] (1) Subject to [subparagraph (ii) of this paragraph ] 12
PARAGRAPH (2) OF THIS SUBSECTION, the Department shall: 13

[1.] (I) approve all applications that qualify for [credits] A 14
GRANT under this [section] SUBTITLE on a first–come, first–served basis; and 15

[2.] (II) within 30 days of receipt of an application, [certify 16
the amount of any approved tax credits ] ISSUE AN INITIAL GRA NT ELIGIBILITY 17
CERTIFICATE to a qualified investor. 18

[(ii)] (2) The Department may not issue any [tax credit certificates] 19
GRANTS under this [section] SUBTITLE after June 30, 2028. 20

[(4)] (D) [(i)] (1) After the date on which the Department issues an 21
initial [tax credit ] GRANT ELIGIBILITY certificate under this [section] SUBTITLE, a 22
qualified investor shall have 30 calendar days to make an investment in a qualified 23
Maryland biotechnology company under this [section] SUBTITLE. 24

[(ii)] (2) Within 10 calendar days after the date on which a 25
qualified investor makes the investment, the qualified investor shall provide to the 26
Department notice and proof of the making of the investment, including: 27

[1.] (I) the date of the investment; 28

[2.] (II) the amount invested; 29

[3.] (III) proof of the receipt of the invested funds by the 30
qualified Maryland biotechnology company; 31

8 HOUSE BILL 400

[4.] (IV) a complete description of the nature of the 1
ownership interest in the equity of the qualified Maryland biotechnology company acquired 2
in consideration of the investment; and 3

[5.] (V) any reasonable supporting documentation the 4
Department may require. 5

[(iii)] (3) If a qualified investor does not provide the notice and proof 6
of the making of the investment required in [subparagraph (ii) of this paragraph ] 7
PARAGRAPH (2) OF THIS SUBSECTION within 40 calendar days after the date on which 8
the Department i ssues an initial [tax credit] GRANT ELIGIBILITY certificate under this 9
[section] SUBTITLE: 10

[1.] (I) the Department shall rescind the initial [tax credit] 11
GRANT ELIGIBILITY certificate; and 12

[2.] (II) the [credit] GRANT amount allocated to the 13
rescinded certificate shall [revert to the Maryland Biotechnology Investment Tax Credit 14
Reserve Fund and shall ] be available in the applicable fiscal year for allocation by the 15
Department to other initial [tax credit ] GRANT ELIGIBILITY certificates in accordan ce 16
with the provisions of this [section] SUBTITLE. 17

5–2704. 18

[(d)] (A) [(1) The tax credit ] SUBJECT TO SUBSECTION (B) OF THIS 19
SECTION, THE GRANT allowed in an initial [tax credit] GRANT ELIGIBILITY certificate 20
issued under this [section] SUBTITLE is: 21

[(i)] (1) except as provided in item [(ii) of this paragraph ] (2) OF 22
THIS SUBSECTION, 33% of the investment in a qualified Maryland biotechnology company, 23
not to exceed $250,000; or 24

[(ii)] (2) 50% of the investment in the qualified Maryland 25
biotechnology company, not to exceed $500,000, if a qualified Maryland biotechnology 26
company: 27

[1.] (I) is located in Allegany County, Dorchester County, 28
Garrett County, or Somerset County; or 29

[2.] (II) is located in a Regional Institution Strategic 30
Enterprise zone that is designated under [Title 5, ] Subtitle 14 of [the Economic 31
Development Article] THIS TITLE, is based on technology that was developed at a qualified 32
institution within that zone, and has been in active business not longer than 7 years. 33

HOUSE BILL 400 9

[(2)] (B) During any fiscal year, the Secretary may not certify eligibility 1
for [tax credits ] GRANTS for investments in a single qualified Maryland biotechnology 2
company that in the aggregate exceed 10% of the total appropriations to the [Maryland 3
Biotechnology Investment Tax Credit Reserve] Fund for that fiscal year. 4

[(3) If the tax credit allowed under this section in any taxable year exceeds 5
the total tax otherwise payable by the qualified investor for that taxable year, the qualified 6
investor may claim a refund in the amount of the excess. 7

(e) (1) In this subsection, “Reserve Fund” means the Maryland Biotechnology 8
Investment Tax Credit Reserve Fund established under paragraph (2) of this subsection. 9

(2) (i) There is a Biotechnology Investment Tax Credit Reserve Fund 10
which is a special continuing, nonlapsing fund that is not subject to § 7 –302 of the State 11
Finance and Procurement Article. 12

(ii) The money in the Fund shall be invested and reinvested by the 13
Treasurer, and interest and earnings shall be credited to the General Fund.] 14

[(3)] (C) [(i)] (1) Subject to the provisions of this [subsection] 15
SECTION, the Secretary shall issue an initial [tax credit] GRANT ELIGIBILITY certificate 16
for each approved investment in a qualified Maryland biotechnology company eligible for a 17
[tax credit] GRANT. 18

[(ii)] (2) An initial [tax credit ] GRANT ELIGIBILITY certificate 19
issued under this [subsection] SECTION shall state the maximum GRANT amount [of tax 20
credit] for which the qualified investor is eligible. 21

[(iii)] (3) [1.] (I) Except as otherwise provided in this 22
[subparagraph] PARAGRAPH, for any fiscal year, the Secretary may not issue initial [tax 23
credit] GRANT ELIGIBILITY certificates [for credit amounts ] in the aggregate totaling 24
more than the amount appropriated to the [Reserve] Fund for that fiscal year in the State 25
budget as approved by the General Assembly. 26

[2.] (II) If the aggregate [credit] GRANT amounts under 27
initial [tax credit] GRANT ELIGIBILITY certificates issued in a fiscal year tot al less than 28
the amount appropriated to the [Reserve] Fund for that fiscal year, any excess amount 29
shall remain in the [Reserve] Fund and may be issued under initial [tax credit] GRANT 30
ELIGIBILITY certificates for the next fiscal year. 31

[3.] (III) For any fiscal year, if funds are transferred from the 32
[Reserve] Fund under the authority of any provision of law [other than under paragraph 33
(4) of this subsection], the maximum [credit] GRANT amounts in the aggregate for which 34
the Secretary may issue ini tial [tax credit ] GRANT ELIGIBILITY certificates shall be 35
reduced by the amount transferred. 36
10 HOUSE BILL 400

[(iv) For each fiscal year, the Governor shall include in the budget bill 1
an appropriation to the Reserve Fund. 2

(v) Notwithstanding the provisions of § 7 –213 of the State Finance 3
and Procurement Article, the Governor may not reduce an appropriation to the Reserve 4
Fund in the State budget as approved by the General Assembly.] 5

[(vi)] (D) (1) Based on the actual amount of an investment made 6
by a qualified i nvestor AS DOCUMENTED IN ACCORDANCE WITH § 5–2703(D) OF THIS 7
SUBTITLE, the Secretary shall [issue a final tax credit certificate] AWARD A GRANT to the 8
qualified investor. 9

(2) THE DEPARTMENT SHALL DISB URSE THE GRANT TO TH E 10
QUALIFIED INVESTOR W ITHIN 90 DAYS OF DETERMINING TH AT THE INVESTMENT 11
HAS BEEN MADE. 12

[(4) (i) Except as provided in this paragraph, money appropriated to the 13
Reserve Fund shall remain in the Fund. 14

(ii) 1. Within 15 days after the end of each calendar quarter, the 15
Department shall notify the Comptroller as to each final credit certificate issued during the 16
quarter: 17

A. the maximum credit amount stated in the initial tax credit 18
certificate for the investment; and 19

B. the final certified credit amount for the investment. 20

2. On notification that an investment has been certified, the 21
Comptroller shall transfer an amount equal to the credit amount stated in the initial tax 22
credit certificate for the investment from the Reserve Fund to the General Fund.] 23

5–2705. 24

(A) THERE I S A BIOTECHNOLOGY INVESTMENT INCENTIVE GRANT 25
PROGRAM FUND. 26

(B) THE DEPARTMENT SHALL ADMINISTER THE FUND. 27

(C) (1) THE FUND IS A SPECIAL , NONLAPSING FUND THAT IS NOT 28
SUBJECT TO § 7–302 OF THE STATE FINANCE AND PROCUREMENT ARTICLE. 29

(2) THE STATE TREASURER SHALL HOLD THE FUND SEPARATELY , 30
AND THE COMPTROLLER SHALL ACCOUNT FOR THE FUND. 31
HOUSE BILL 400 11

(D) THE FUND CONSISTS OF: 1

(1) MONEY APPROPRIATED IN THE STATE BUDGET TO THE FUND; 2

(2) ANY GRANT AMOUNT THA T IS REVOKED UNDER T HIS SUBTITLE; 3
AND 4

(3) ANY OTHER MONEY FROM ANY OTHER SOURCE ACCEPTED FOR 5
THE BENEFIT OF THE FUND. 6

(E) THE FUND MAY BE USED ONLY FOR GRANTS PROVIDED UNDER THIS 7
SUBTITLE. 8

(F) (1) THE STATE TREASURER SHALL INVEST THE MONEY OF THE FUND 9
IN THE SAME MANNER AS OTHER STATE MONEY MAY BE INVESTED. 10

(2) ANY INTEREST EARNINGS OF THE FUND SHALL BE CREDITED TO 11
THE GENERAL FUND OF THE STATE. 12

(G) EXPENDITURES FROM THE FUND MAY BE MADE ONLY IN ACCORDANCE 13
WITH THE STATE BUDGET. 14

(H) (1) FOR EACH FISCAL YEAR, THE GOVERNOR SHALL INCLUDE IN THE 15
ANNUAL BUDGET BILL AN APPROPRIATION OF $10,000,000 TO THE FUND. 16

(2) NOTWITHSTANDING THE PROVISIONS OF § 7–213 OF THE STATE 17
FINANCE AND PROCUREMENT ARTICLE, THE GOVERNOR MAY NOT REDU CE AN 18
APPROPRIATION TO THE FUND IN THE STATE BUDGET AS APPRO VED BY THE 19
GENERAL ASSEMBLY. 20

5–2706. 21

[(f)] (A) [(1)] The [credit claimed under this section ] GRANT PROVIDED 22
UNDER THIS SUBTITLE shall be recaptured as provided in [paragraph (2) of this 23
subsection] SUBSECTION (B) OF THIS SECTION if, within 2 years [from the close o f the 24
taxable year for which the credit is claimed] AFTER THE GRANT WAS DISBURSED TO THE 25
QUALIFIED INVESTOR: 26

[(i)] (1) the qualified investor sells, transfers, or otherwise 27
disposes of the ownership interest in the qualified Maryland biotechnology comp any that 28
gave rise to the [credit] GRANT; or 29

12 HOUSE BILL 400

[(ii)] (2) the qualified Maryland biotechnology company that gave 1
rise to the [credit] GRANT ceases operating as an active business with its headquarters 2
and base of operations in the State. 3

[(2)] (B) The amount required to be recaptured under this [subsection] 4
SECTION is the product of multiplying: 5

[(i)] (1) the total amount of the [credit claimed ] DISBURSED 6
GRANT or, in the case of an event described in [paragraph (1)(i) of this subsection ] 7
SUBSECTION (A)(1) OF THIS SECTION , the portion of the [credit] DISBURSED GRANT 8
attributable to the ownership interest disposed of; and 9

[(ii)] (2) [1.] (I) 100%, if the event requiring recapture of the 10
[credit occurs during the taxable year for which the tax credit is claimed ] DISBURSED 11
GRANT OCCURS IN THE SAME FISCAL YEAR THAT THE GRANT WAS DISBURSED; 12

[2.] (II) 67%, if the event requiring recapture of the [credit 13
occurs during the first year after the close of the taxable year for which the tax credit is 14
claimed] DISBURSED GRANT OCCU RS IN THE FISCAL YEA R AFTER THE GRANT WA S 15
DISBURSED; or 16

[3.] (III) 33%, if the event requiring recapture of the [credit 17
occurs more than 1 year but not more than 2 years after the close of the taxable year for 18
which the t ax credit is claimed ] DISBURSED GRANT OCCURS IN THE SECOND FIS CAL 19
YEAR AFTER THE GRANT WAS DISBURSED. 20

(C) IF A COMPANY RECEIVES AN INVESTMENT AND FA ILS TO SATISFY THE 21
REQUIREMENTS FOR A QUALIFIED MARYLAND BIOTECHNOLOGY COMPANY WITHIN 22
2 MONTHS OF THE RECEIPT OF THE INVESTMENT, THE DEPARTMENT SHALL REVOKE 23
100% OF THE DISBURSED GRANT AMOUNT. 24

[(3)] (D) (1) The qualified investor that [claimed the credit ] HAS A 25
DISBURSED GRANT THAT IS RECAPTURED UNDER THIS SECTION shall pay the 26
RECAPTURED amount to [be recaptured as determined under paragraph (2) of this 27
subsection as taxes payable to the State for the taxable year in which the event requiring 28
recapture of the credit occurs ] THE DEPARTMENT BY THE DAT E SET BY THE 29
DEPARTMENT. 30

(2) THE DEPARTMENT SHALL DE POSIT THE RECAPTURED AMOUNT 31
INTO THE FUND. 32

5–2707. 33

HOUSE BILL 400 13

[(g)] (A) [(1)] The Department may revoke its initial [or final] ELIGIBILITY 1
certification OR AWARD of an approved [credit] GRANT under this [section] SUBTITLE if 2
any representation in connection with the application for the certification is determined by 3
the Department to have been false when made. 4

[(2)] (B) The revocation may be in full or in part as the Department may 5
determine and, subject to [paragraph (3) of this subsection ] SUBSECTION (C) OF THIS 6
SECTION, shall be communicated to the qualified investor [and the Comptroller]. 7

[(3)] (C) The qualified investor shall have an opportunity to appeal any 8
revocation to the Department [prior to notification of the Comptroller]. 9

[(4) The Comptroller may make an assessment against the qualified 10
investor to recapture any amount of tax credit that the qualified investor has already 11
claimed.] 12

5–2708. 13

[(h)] In accordance with § 2.5 –109 of [the Economic Development Article ] THIS 14
ARTICLE, the Department s hall report on the initial [tax credit ] ELIGIBILITY GRANT 15
certificates awarded for the calendar year and the qualified Maryland biotechnology 16
companies that received an investment for which an initial [tax credit ] ELIGIBILITY 17
GRANT certificate was awarded. 18

5–2709. 19

[(i)] The Department [and the Comptroller jointly] shall adopt regulations to carry 20
out the provisions of this section and to specify criteria and procedures for application for, 21
approval of, and monitoring continuing eligibility for the [tax credit under this section ] 22
PROGRAM. 23

6–1001. 24

(a) In this subtitle the following words have the meanings indicated. 25

(b) “Level 1 opportunity zone enhancement” means an enhanced tax credit OR 26
GRANT under the Program for which a qualified opportunity zone business or qualified 27
opportunity fund is eligible if: 28

(1) the following information is provided to the Department: 29

(i) the date of the qualified opportunity fund’s investment in the 30
qualified opportunity zone business and the amount of the investment; 31

(ii) the total project or business investment, including any leverage; 32
14 HOUSE BILL 400

(iii) the address and census tract of the qualified opportunity zone 1
business and the qualified opportunity fund; 2

(iv) the North American Industrial Classification Syst em Code for 3
the qualified opportunity zone business; 4

(v) an impact report, including both qualitative and quantitative 5
data on the investment and, as applicable, its progress toward: 6

1. creating and retaining jobs; 7

2. promoting entrepreneursh ip, including among 8
women– and minority–owned businesses; 9

3. providing affordable housing; 10

4. creating access to healthy food; 11

5. promoting environmental sustainability; and 12

6. benefiting the communities in the opportunity zone in a 13
manner not otherwise specified in this item; and 14

(vi) unless an applicant provides an affidavit to the Department 15
along with the application that the qualified opportunity zone business property is 16
unoccupied, will be demolished within 1 year of the date of the application, and will remain 17
unoccupied until the demolition is complete, with respect to qualified opportunity zone 18
business property that is an affected property required to be registered with the 19
Department of the Environment under § 6–811 of the Environment Article: 20

1. proof of registration with the Department of the 21
Environment; 22

2. if the property contains at least one residential rental unit, 23
proof of lead inspections conducted in accordance with §§ 6 –815 and 6 –819 of the 24
Environment Article; 25

3. if the property is an owner –occupied residential rental 26
property: 27

A. proof that visual exterior or interior painted surfaces are 28
free of chipping, flaking, or peeling lead–based paint; and 29

B. a copy of passing test results for lead–contaminated dust; 30
and 31

HOUSE BILL 400 15

4. verification that, for the substantial improvement of the 1
property performed in accordance with § 1400Z–2(d)(2)(D)(ii) of the Internal Revenue Code, 2
replacement doors and windows are free of lead–based paint; and 3

(vii) any other information requested by the Department that meets 4
the transparency goals of the Program; and 5

(2) for a qualified opportunity zone business located in an opportunity zone 6
in a county with a minimum wage that exceeds the State minimum wage, the qualified 7
opportunity zone business pays to each employee wages that exceed the greater of: 8

(i) 120% of the State minimum wage; or 9

(ii) 120% of the county minimum wage. 10

(c) “Level 2 opportunity zone enhancement” means an enhanced tax credit OR 11
GRANT under the Program for which a qualified opportunity zone business or qualified 12
opportunity fund is eligible if: 13

(1) the requirements for a Level 1 opportunity zone enhancement are met; 14

(2) (i) accountability to residents of the communities in the opportunity 15
zone is maintained through their representation on any governing board or advisory board 16
of the qualified opportunity zone business; or 17

(ii) a community benefits agreement is negotiated and agreed to by 18
community groups or strategic industry partnerships, as defined under § 11 –701 of the 19
Labor and Employment Article, in the opportunity zone and the qualified opportunity fund 20
that specifies a range of community benefits that the fund agrees to provide as part of the 21
development project, including workforce development or local hiring requirements; and 22

(3) (i) for a qualified opportunity zone business located entirely within 23
an opportunity zone in a municipal corporation, the municipal corporation, by resolution or 24
by letter, delivered to the Department by the municipal corporation’s authorized designee, 25
approves the provision of the enhanced tax credits OR GRANTS under the Program within 26
the municipal corporation; or 27

(ii) for a qualified opportunity zone business in an opportunity zone 28
that is not located entirely within a municipal corporation, the county, by resolution or by 29
letter, delivered to the Department by the county’s authorized designee, approves the 30
provision of the enhanced tax credits OR GRANTS under the Program within the county. 31

(d) “Opportunity zone” means an area that has been designated as a qualified 32
opportunity zone in the State under § 1400Z–1 of the Internal Revenue Code. 33

16 HOUSE BILL 400

(e) “Program” means the Opportunity Zone Enhancement Program in the 1
Department established under § 6 –1002 of this subtitle that allows enhanced tax credits 2
OR GRANTS under: 3

(1) § 6–304 of this title (Job Creation); 4

(2) § 6–403 of this title (One Maryland economic development); 5

(3) § 10 –702 of the Tax – General Article (wages paid in an enterprise 6
zone); 7

(4) [§ 10 –725 of the Tax – General Article ] TITLE 5, SUBTITLE 27 OF 8
THIS ARTICLE (biotechnology investment incentive); 9

(5) § 10 –733 of the Tax – General Article (cybersecurity investment 10
incentive); and 11

(6) § 10–741 of the Tax – General Article (More Jobs for Marylanders). 12

6–1006. 13

(a) In this section, “investment”, “qualified investor”, and “qualified Maryland 14
biotechnology company” have the meanings stated in [§ 10 –725 of the Tax – General 15
Article] § 5–2701 OF THIS ARTICLE. 16

(b) For a qualified opportunity fund that is a qualified investor in a qualified 17
Maryland biotechnology company under [§ 10–725 of the Tax – General Article] TITLE 5, 18
SUBTITLE 27 OF THIS ARTICLE, if the qualified Maryland biotechnology company, on or 19
after March 1, 2018, is newly established in or expands into an opportunity zone: 20

(1) the Level 1 opportunity zone enhancement is 65% of the investment in 21
a qualified Maryland biotechnology company in any county, not to exceed $575,000; and 22

(2) the Level 2 opportunity zone enhancement is 75% of the investment in 23
the qualified Maryland biotechnology company in any county, not to exceed $750,000. 24

(c) The enhanced [tax credit ] GRANT percentages and maximums authorized 25
under subs ection (b) of this section are in substitution for and not in addition to the 26
percentages and maximums under [§ 10–725(d) of the Tax – General Article] TITLE 5, 27
SUBTITLE 27 OF THIS ARTICLE. 28

Article – Tax – General 29

10–207. 30

HOUSE BILL 400 17

(a) To the extent included in federal adjusted gross income, the amounts under 1
this section are subtracted from the federal adjusted gross income of a resident to determine 2
Maryland adjusted gross income. 3

(RR) THE SUBTRACTION UNDER SUBSECTION (A) OF THIS SECTION INCLUDES 4
THE AMOUNT O F A GRANT RECEIVED F ROM THE BIOTECHNOLOGY INVESTMENT 5
INCENTIVE GRANT PROGRAM UNDER TITLE 5, SUBTITLE 27 OF THE ECONOMIC 6
DEVELOPMENT ARTICLE. 7

10–307. 8

(a) To the extent included in federal taxable income, the amounts under this 9
section are subtracted from the federal taxable income of a corporation to determine 10
Maryland modified income. 11

(H) THE SUBTRACTION UNDER SUBSECTION (A) OF THIS SECTION INCLUDES 12
THE AMOUNT OF A GRAN T RECEIVED FROM THE BIOTECHNOLOGY INVESTMENT 13
INCENTIVE GRANT PROGRAM UNDER TITLE 5, SUBTITLE 27 OF THE ECONOMIC 14
DEVELOPMENT ARTICLE. 15

10–725. 16

[(j) If a company receives an investment under subsection (a)(7)(ii) of this section 17
and fails to satisfy the requirements for a qualified Maryland biotechnology company 18
within 2 months, the Department shall revoke any final tax credit certificates that have 19
been issued and recapture any tax credits already claimed by the qualified investor.] 20

10–804. 21

(j) (1) Except as otherwise provided in this subsection, a taxpayer claiming 22
any of the fol lowing tax credits shall submit a claim for the credit by electronic means as 23
required by the Comptroller by regulation: 24

(i) the Job Creation Tax Credit, as provided under Title 6, Subtitle 25
2 of the Economic Development Article; 26

(ii) the One Maryland Tax Credit, as provided under Title 6, Subtitle 27
4 of the Economic Development Article; 28

(iii) [the Biotechnology Investment Incentive Tax Credit, as provided 29
under § 10–725 of this title; 30

(iv)] the Enterprise Zone Income Tax Credit, as provided u nder § 31
10–702 of this title; and 32

18 HOUSE BILL 400

[(v)] (IV) any other tax credit specified by the Comptroller through 1
regulation. 2

SECTION 3. AND BE IT FURTHER ENACTED, That: 3

(a) The provisions of § 10–725 of the Tax – General Article, as that section was in 4
effect before the effective date of this Act, shall continue to apply to tax credit certificates 5
issued under that section before the effective date of this Act. 6

(b) Title 5, Subtitle 27 of the Economic Development Article, as enacted by 7
Sections 1 and 2 of t his Act, shall apply to certificates issued on or after the effective date 8
of this Act. 9

SECTION 4. AND BE IT FURTHER ENACTED, That this Act shall take effect July 10
1, 2026. 11