Economic Development - Delivering Economic Competitiveness and Advancing Development Efforts (DECADE) Act

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING 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.
Italics indicate opposite chamber/conference committee amendments.
*hb0898*

HOUSE BILL 898
C8, Q3, Q1 (6lr0324)
ENROLLED BILL
— Ways and Means and Economic Matters/Budget and Taxation and Finance —
Introduced by The Speaker (By Request – Administration) and Delegates Allen,
Amprey, Behler, Bhandari, Boafo, Boyce, Coley, Edelson, Fennell, Griffith,
Guyton, Harrison, Hill, Holmes, Hornberger, Ivey, D. Jones, Kaufman,
Lewis, Moreno, Odom, Pasteur, Patterson, Phillips, Pruski, Qi, Roberts,
Rogers, Ross, Ruff, Simmons, Solomon, Spiegel, Taveras, Taylor,
Tomlinson, Turner, Watson, White Holland, Wims, Wu, and Ziegler

Read and Examined by Proofreaders:

_______________________________________________
Proofreader.
_______________________________________________
Proofreader.

Sealed with the Great Seal and presented to the Governor, for his approval this

_______ day of _______________ at ________________________ o’clock, ________M.

______________________________________________
Speaker.

CHAPTER ______

AN ACT concerning 1

Economic Development – Delivering Economic Competitiveness and Advancing 2
Development Efforts (DECADE) Act 3

FOR the purpose of altering the designation, administration, and purposes of and eligibility 4
for certain economi c development programs; redesignating the Economic 5
Development Opportunities Program Account to be the Strategic Closing Fund 6
within the Department of Commerce; altering the purposes for and methods by 7
which the Strategic Closing Fund may be utilized; altering the distribution of certain 8
video lottery terminal proceeds; altering the distribution of certain video lottery 9
terminal proceeds; providing for certain requirements relating to the administration 10
2 HOUSE BILL 898

of the Small, Minority, and Women –Owned Businesses Account; providing that the 1
sales and use tax does not apply to the sale of certain information technology services 2
and certain digital codes and digital products under certain circumstances; altering 3
the termination date of the Build Our Future Grant Pilot Program, Job Creation Tax 4
Credit, Research and Development Tax Credit, and Employer Security Clearance 5
Costs Tax Credit; altering eligibility for and the calculation of certain tax credits; 6
allowing a qualified investor that is a pass–through entity that pays a certain income 7
tax on behalf of its members to receive and allocate in any manner a credit or refund 8
of a credit under the Biotechnology Investment Incentive Tax Credit; establishing 9
the purpose of the film production activity tax credit; authorizing a qualified film 10
production entity to amend its application for the film production activity tax credit 11
under certain circumstances; repealing altering, for certain fiscal years, a certain 12
limit on the aggregate amount of tax credit certificates that the Secretary may issue 13
for a single film production activity; altering certain reporting requirements 14
concerning certain economic development programs and tax credits; requiring the 15
Office of the Comptroller and the Department of Commerce to evaluate the fi lm 16
production activity tax credit and submit a certain report on or before a certain date; 17
and generally relating to economic development and economic development 18
initiatives. 19

BY transferring 20
Article – State Finance and Procurement 21
Section 7–314 22
Annotated Code of Maryland 23
(2021 Replacement Volume and 2025 Supplement) 24
to be 25
Article – Economic Development 26
Section 5–108 27
Annotated Code of Maryland 28
(2024 Replacement Volume and 2025 Supplement) 29

BY renumbering 30
Article – Economic Development 31
Section 5–1401 through 5 –1410 and the subtitle “Subtitle 14. Regional Institution 32
Strategic Enterprise Zone Program”; and 5 –2301 through 5 –2307 and the 33
subtitle “Subtitle 23. Build Our Future Grant Pilot Program” 34
to be Section 10 –137 through 10 –146 and th e part “Part II. Regional Institution 35
Strategic Enterprise Zone Program”; and 10–149 through 10–155 and the part 36
“Part III. Build Our Future Grant Pilot Program”, respectively 37
Annotated Code of Maryland 38
(2024 Replacement Volume and 2025 Supplement) 39

BY repealing and reenacting, without amendments, 40
Article – Economic Development 41
Section 1–101(a), (c), and (e), 2.5 –109(b), 5–301(a), (g), and (l) through (n), 5 –310, 42
5–311, 5 –320, 5 –323, 5 –505, 5 –509, 5–1501(a), 10–101(a) and (d), and 43
12–201(a) 44
HOUSE BILL 898 3

Annotated Code of Maryland 1
(2024 Replacement Volume and 2025 Supplement) 2

BY repealing and reenacting, with amendments, 3
Article – Economic Development 4
Section 2.5 –109(a)(1), (d)(1), and (e), 5–102, 5 –319, 5–324, and 5 –325; 5 –501 and 5
5–502 to be under the amended subtitle “Subtitle 5. Maryland Small Business 6
Development Financing Authority and Fund”; 5–511 to be under the amended 7
part “Part II. Maryland Small Business Development Financing Authority 8
and Fund”; 5 –517, 5–518, 5–524 through 5 –528, and 5 –530 to be unde r the 9
amended part “Part III. Small Business Development Contract Financing 10
Program”; 5–533, 5–534, 5–539 through 5–543, 5–545, and 5–546 to be under 11
the amended part “Part IV. Small Business Development Guaranty Program”; 12
and 5–549 through 5–551, 5–553, 5–555 through 5–558, 5–561, 5–562, 5–566 13
through 5–575, 5–1501(d) and (g)(1), 6–309, 10–470(b)(1), and 12–201(p) 14
Annotated Code of Maryland 15
(2024 Replacement Volume and 2025 Supplement) 16

BY adding to 17
Article – Economic Development 18
Section 2.5 –109(g); and 5–515; and 5 –1501(m); the new part designation “Part I. 19
Maryland Economic Development Corporation” to immediately precede 20
Section 10–101; and 10–156 21
Annotated Code of Maryland 22
(2024 Replacement Volume and 2025 Supplement) 23

BY repealing and reenacting, with amendments, 24
Article – Economic Development 25
Section 5–108 26
Annotated Code of Maryland 27
(2024 Replacement Volume and 2025 Supplement) 28
(As enacted by Section 1 of this Act) 29

BY adding to 30
Article – Economic Development 31
Section 5–515; the new part designation “Part I. Maryland Economic Development 32
Corporation” to immediately precede Section 10–101; and 10–156 33
Annotated Code of Maryland 34
(2024 Replacement Volume and 2025 Supplement) 35

BY repealing 36
Article – Economic Development 37
Section 5–519 through 5–523, 5–529, 5–535 through 5 –538, 5–544, 5–552, 5–554, 38
5–559, and 5–563 through 5–565 39
Annotated Code of Maryland 40
(2024 Replacement Volume and 2025 Supplement) 41

4 HOUSE BILL 898

BY repealing and reenacting, with amendments, 1
Article – Economic Development 2
Section 10–137 and 10–139 through 10–146; and 10–149 through 10–155 to be under 3
the amended part “Part III. Build Our Future Grant Program” 4
Annotated Code of Maryland 5
(2024 Replacement Volume and 2025 Supplement) 6
(As enacted by Section 2 of this Act) 7

BY repealing and reenacting, without amendments, 8
Article – Economic Development 9
Section 10–138 10
Annotated Code of Maryland 11
(2024 Replacement Volume and 2025 Supplement) 12
(As enacted by Section 2 of this Act) 13

BY adding to 14
Article – Corporations and Associations 15
Section 1–203(b)(14) 16
Annotated Code of Maryland 17
(2025 Replacement Volume) 18

BY repealing and reenacting, with amendments, 19
Article – Corporations and Associations 20
Section 1–203(b)(14) 21
Annotated Code of Maryland 22
(2025 Replacement Volume) 23

BY repealing and reenacting, with amendments, 24
Article – State Finance and Procurement 25
Section 7–309 26
Annotated Code of Maryland 27
(2021 Replacement Volume and 2025 Supplement) 28

BY repealing and reenacting, with amendments, 29
Article – State Government 30
Section 9–1A–27(a)(6) 31
Annotated Code of Maryland 32
(2021 Replacement Volume and 2025 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 2025 Supplement) 38

BY repealing and reenacting, without amendments, 39
Article – Tax – General 40
HOUSE BILL 898 5

Section 10–702(a)(1), 10–721(a) and (b), 10–725(a) and (b)(2), 10–730(a)(1), (4), and 1
(7) and (b), and 10–732(a) 2
Annotated Code of Maryland 3
(2022 Replacement Volume and 2025 Supplement) 4

BY repealing and reenacting, with amendments, 5
Article – Tax – General 6
Section 10–702(a)(4)(ii), (c), and (e)(1), 10–725(b)(3) and (d), 10–730(c) and (f), and 7
10–732(b) 8
Annotated Code of Maryland 9
(2022 Replacement Volume and 2025 Supplement) 10

BY adding to 11
Article – Tax – General 12
Section 10–721(i) and 10–725(b)(5) and (k) 10–721(i), 10–725(b)(5), and 10–730(a–1) 13
10–730(a–1), and 11–247 14
Annotated Code of Maryland 15
(2022 Replacement Volume and 2025 Supplement) 16

BY repealing and reenacting, without amendments, 17
Article – Tax – Property 18
Section 9–103(a)(1) and (6) and (b)(1) and 9–103.1(a)(1) and (6), (b), and (c)(5) 19
Annotated Code of Maryland 20
(2019 Replacement Volume and 2025 Supplement) 21

BY repealing and reenacting, with amendments, 22
Article – Tax – Property 23
Section 9–103(d)(2) and (5) and (e)(1) and 9–103.1(a)(7), (c)(3), (4), and (6), (d), (e), 24
and (f) and 9–230(m) 25
Annotated Code of Maryland 26
(2019 Replacement Volume and 2025 Supplement) 27

BY repealing and reenacting, with amendments, 28
Chapter 430 of the Acts of the General Assembly of 2023 29
Section 3 30

BY repealing and reenacting, with amendments, 31
Chapter 431 of the Acts of the General Assembly of 2023 32
Section 3 33

BY repealing and reenacting, with amendments, 34
Chapter 515 of the Acts of the General Assembly of 2000, as amended by Chapter 98 35
of the Acts of the General Assembly of 2005, Chapter 20 of the Acts of the 36
General Assembly of 2010, Chapter 85 of the Acts of the General Assembly of 37
2019, and Chapter 114 of the Acts of the General Assembly of 2021 38
Section 2 and 4 39

6 HOUSE BILL 898

BY repealing and reenacting, with amendments, 1
Chapter 516 of the Acts of the General Assembly of 2000, as amended by Chapter 98 2
of the Acts of the General Assembly of 2005, Chapter 20 of the Acts of the 3
General Assembly of 2010, Chapter 85 of the Acts of the General Assembly of 4
2019, and Chapter 114 of the Acts of the General Assembly of 2021 5
Section 2 and 4 6

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 7
That Section(s) 7–314 of Article – State Finance and Procurement of the Annotated Code 8
of Maryland be transferred to be Section(s) 5–108 of Article – Economic Development of the 9
Annotated Code of Maryland. 10

SECTION 2. AND BE IT FURTHER ENACTED, That Section(s) 5 –1401 through 11
5–1410 and the sub title “Subtitle 14. Regional Institution Strategic Enterprise Zone 12
Program”; and 5 –2301 through 5 –2307 and the subtitle “Subtitle 23. Build Our Future 13
Grant Pilot Program” of Article – Economic Development of the Annotated Code of 14
Maryland be renumbered to be Section(s) 10 –137 through 10 –146 and the part “Part II. 15
Regional Institution Strategic Enterprise Zone Program”; and 10–149 through 10–155 and 16
the part “Part III. Build Our Future Grant Pilot Program”, respectively. 17

SECTION 3. AND BE IT FURTHER ENACT ED, That the Laws of Maryland read 18
as follows: 19

Article – Economic Development 20

1–101. 21

(a) In this division the following words have the meanings indicated. 22

(c) “Department” means the Department of Commerce. 23

(e) “Secretary” means the Secretary of Commerce. 24

2.5–109. 25

(a) In this section, “economic development program” means: 26

(1) the [Economic Development Opportunities Program Account ] 27
STRATEGIC CLOSING FUND established under [§ 7 –314 of the State Finance and 28
Procurement Article] § 5–108 OF THIS ARTICLE; 29

(b) The Department shall compile data in accordance with this section on the 30
economic development programs administered by the Department. 31

HOUSE BILL 898 7

(d) (1) The report required under SUBSECTION (C) OF this section shall 1
include the following data, if applicable, on the economic development programs 2
administered by the Department: 3

(i) the number of jobs created; 4

(ii) the number of jobs retained; 5

(III) THE MINIMUM , MAXIMUM, AND AVERAGE SALARY O F THE 6
JOBS CREATED OR RETAINED; 7

(IV) FOR EACH OF THE FOLL OWING CATEGORIES, THE NUMBER 8
OF JOBS CREATED OR RETAINED THAT: 9

1. PROVIDE CAREER ADVANCEMENT TRAINING; 10

2. PROVIDE PAID LEAVE; 11

3. OFFER EMPLOYER –PROVIDED HEALTH INSU RANCE 12
BENEFITS THAT DO NOT EXCEED 8.5% OF THE EMPLOYEE’S NET MONTHLY 13
EARNINGS; AND 14

4. OFFER RETIREMENT BENEFITS; 15

[(iii)] (V) the estimated amount of State revenue generated; 16

[(iv)] (VI) the status of any special fund; 17

[(v)] (VII) for minority business enterprises, as defined in § 14–301 18
of the State Finance and Procurement Article: 19

1. the number of enterprises that received assistance from 20
each economic development program; and 21

2. the percentage of assistance distributed to each minority 22
business enterprise from each econ omic development program compared to the total 23
assistance distributed from each economic development program; 24

[(vi)] (VIII) a statement indicating whether, during the current 25
reporting year, the Department reduced, revoked, or recaptured a tax credit or any amount 26
of financial assistance from a recipient and, if applicable: 27

1. the total amount recovered as a result of the reduction, 28
revocation, or recapture, and any penalty assessed; and 29

8 HOUSE BILL 898

2. a justification for the reduction, revocation, or recapture; 1
and 2

[(vii)] (IX) any additional information required by the Department 3
through regulations. 4

(e) The Department shall establish, maintain, and update annually a publicly 5
available database on the Department’s website that: 6

(1) provides information that is downloadable by the public in a common 7
machine–readable format; and 8

(2) includes, as applicable: 9

(i) the name of each business entity that is a recipient of an 10
economic development program; 11

(ii) the total amount of tax credits certified, financial assistance 12
paid, and loans forgiven or uncollectible by the Department for each recipient of the tax 13
credit or financial assistance; 14

(iii) the number of jobs actually created or retained by each recipient; 15

(iv) the MINIMUM, MAXIMUM, AND average salary of the jobs 16
created or retained by each recipient; 17

(v) the amount of capital investment made or project costs incurred 18
by each recipient; and 19

(vi) a statement indicating whether, during the current reporting 20
year, the Department reduced, revoked, or recaptured a tax credit or any amount of 21
financial assistance from a recipient and, if applicable: 22

1. the total amount recovered as a result of the reduction, 23
revocation, or recapture, and any penalty assessed; and 24

2. a justification for the reduction, revocation, or recapture. 25

(G) (1) ON OR BEFORE DECEMBER 1, 2029, THE DEPARTMENT SHALL 26
SUBMIT A REPORT ON THE ECONOMIC DEVELOPMENT PROGRAMS ADMINISTERED BY 27
THE DEPARTMENT THAT WERE ALTERED BY CHAPTER ____ (S.B. 388) (H.B. 898) OF 28
THE ACTS OF THE GENERAL ASSEMBLY OF 2026 TO THE GOVERNOR AND , IN 29
ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE, THE GENERAL 30
ASSEMBLY. 31

HOUSE BILL 898 9

(2) THE REPORT REQUIRED U NDER THIS SUBSECTION SHALL 1
INCLUDE ANALYSIS OF: 2

(I) WHETHER THE ALTERATIONS INCREASED OR DECREAS ED 3
UTILIZATION OF EACH PROGRAM; 4

(II) WHETHER THE ALTERATI ONS INCREASED OR DEC REASED 5
THE EFFECTIVENESS OF EACH PROGRAM; AND 6

(III) WHETHER THE ALTERATI ONS ACCOMPLISHED THE 7
DEPARTMENT’S GOALS FOR EACH PROGRAM. 8

5–102. 9

The Department shall administer the State’s economic development and financial 10
assistance programs and funds including: 11

(1) the BRAC Revitalization and Incentive Zone Program, under Subtitle 12
13 of this title; 13

(2) [the Build Our Future Grant Pilot Program, under Subtitle 23 of this 14
title; 15

(3)] the Enterprise Fund, under Subtitle 6 of this title; 16

[(4)] (3) the Enterprise Zones Program, under Subtitle 7 of this title; 17

[(5)] (4) the Make Office Vacancies Extinct Program, under Subtitle 15 of 18
this title; 19

[(6)] (5) the Maryland Economic Adjustment Fund, under Subtitle 2 of 20
this title; 21

[(7)] (6) the Maryland Economic Development Assistance Authority and 22
Fund, under Subtitle 3 of this title; 23

[(8)] (7) the Maryland Industrial Develop ment Financing Authority, 24
under Subtitle 4 of this title; 25

[(9)] (8) the Maryland Small Business Development Financing Authority, 26
under Subtitle 5 of this title; 27

[(10)] (9) the Appalachian Regional Development Program, under Title 13, 28
Subtitle 1 of this article; 29

10 HOUSE BILL 898

[(11)] (10) jointly with the Department of Housing and Community 1
Development, the Community Development Block Grant for Economic Development; AND 2

[(12) the Regional Institution Strategic Enterprise Zone Program under 3
Subtitle 14 of this title; and 4

(13)] (11) any other programs or funds designated by statute, the 5
Governor, or the Secretary. 6

5–108. 7

(a) (1) In this section the following words have the meanings indicated. 8

(2) [“Account” means the Economic Development Opportunities Program 9
Account. 10

(3) “Executive agency” means an executive department or agency in the 11
Executive Branch of State government, including all offices of the Executive Department 12
or agency directly responsible to the Governor. 13

(4)] “Extraordinary economic development opportunity” means the: 14

(i) attraction of a new private sector enterprise to the State or 15
retention or expansion of an existing private sector enterprise in the State that: 16

1. maintains a strong financial condition and minimal credit 17
risk profile; 18

2. is capable of accessing alternative sources of financing 19
through financial institutions or capital markets; 20

3. is consistent with the strategic plan of the State for 21
economic development; AND 22

4. creates or retains substanti al employment[, particularly 23
in areas of high unemployment; and 24

5. invests in capital at a level equal to five times the value of 25
the incentive offered]; 26

(ii) retention or expansion of an existing public institution, private 27
institution, or federal research and development institute that: 28

1. is consistent with the strategic plan of the State for 29
economic development; and 30

HOUSE BILL 898 11

2. creates or retains substantial employment [, particularly 1
in areas of high unemployment]; or 2

(iii) establishment or attraction of a public institution, a private 3
institution, or a federal research and development institute new to the State that: 4

1. is consistent with the strategic plan of the State for 5
economic development; and 6

2. creates or r etains substantial employment [, particularly 7
in areas of high unemployment]. 8

(3) “FUND” MEANS THE STRATEGIC CLOSING FUND. 9

[(5)] (4) (i) “Performance requirement” means a contractual 10
agreement between an executive agency and [an Account] A FUND recipient that requires 11
the [Account] FUND recipient to meet minimum economic development outcomes in 12
exchange for a grant or a loan under this section. 13

(ii) “Performance requirement” includes claw –back, penalty, 14
rescission, and recalibration clauses that utilize job creation, capital investment, and other 15
measures of economic development. 16

[(6)] (5) “Private sector enterprise” means any commercial, industrial, 17
educational, or research organization which is not a part of or controlled by a federal, State, 18
or local government agency. 19

(b) Subject to the provisions of this section, the [Economic Development 20
Opportunities Program Account] STRATEGIC CLOSING FUND is established WITHIN THE 21
DEPARTMENT to maximize extraordinary economic development opportunities. 22

(c) [Subject to subsection (r) of this section, the ] THE Governor may provide an 23
appropriation in the budget bill to the [Account] FUND for a specific or general purpose or 24
purposes. 25

(d) After notice to and approval by the Legislative Policy Committee , the 26
Governor may transfer funds by budget amendment [from the Economic Development 27
Opportunities Program Account to the expenditure account of the appropriate executive 28
agency] TO THE FUND. 29

(e) (1) The [Account] FUND is a continuing, nonlapsing fund which is not 30
subject to § 7–302 of [this subtitle] THE STATE FINANCE AND PROCUREMENT ARTICLE. 31

(2) The Treasurer shall separately hold, and the Comptroller shall account 32
for, the [Account] FUND. 33
12 HOUSE BILL 898

(3) The [Account] FUND shall be invested and reinvested in the same 1
manner as other State funds. 2

(4) [Except as provided in paragraph (5) of this subsection, any ] ANY 3
investment earnings shall be [subject to § 7 –311(d) of this subtitle ] CREDITED TO THE 4
GENERAL FUND OF THE STATE. 5

[(5) Any investment earnings on money transferred from the Account to a 6
second continuing, nonlapsing fund may be retained to the credit of the second fund.] 7

(f) (1) Money appropriated or credited to the [Account] FUND does not revert 8
to the [Revenue Stabilization Account] GENERAL FUND OF THE STATE. 9

(2) [Except as provided in paragraph (3) of this subsection, repayments ] 10
REPAYMENTS of principal or interest on any loan from the [Account] FUND shall be 11
retained to the credit of the [Account] FUND. 12

[(3) Repayments of principal or interest on any loan made from money 13
transferred from the Account to a second continuing, nonlapsing fund may be retained to 14
the credit of the second fund.] 15

(g) (1) The Department [of Commerce] shall include the following information 16
in the report that is required under § 2.5–109 of [the Economic Development Article] THIS 17
ARTICLE: 18

(i) the financial status of the program and a summary of its 19
operations for the preceding fiscal year; 20

(ii) for the previous 3 f iscal years, the status of [Account] FUND 21
disbursements for economic development projects reviewed by the Legislative Policy 22
Committee under this section; 23

(iii) for the previous 3 fiscal years, the status of job creation, capital 24
investment, and other measures of economic development for each economic development 25
project reviewed by the Legislative Policy Committee under this section; AND 26

(iv) [a list of guide lines for the kinds of performance requirements 27
that may be negotiated with the loan or grant applicant; and 28

(v)] an explanation if the job creation, capital investment, and other 29
measures of economic development described in items (i) through (iii) of this paragraph are 30
lower than negotiated according to subsection (h)(1) of this section. 31

HOUSE BILL 898 13

(2) [Upon] ON receipt of the information that is required to be reported 1
under this subsection, the Legislative Policy Committee shall have [60] 21 30 days to 2
review and comment on the information provided by the Department [of Commerce] under 3
paragraph (1) of this subsection, during which time the Department [of Commerce] shall 4
provide any additional information regarding the [Account] FUND as requested by the 5
Legislative Policy Committee. 6

(h) (1) Except as provided in paragraph (2) of this subsection and in subsection 7
(i) of this section, any funds transferred from the [Economic Development Opportunities 8
Program Account ] FUND shall be used only for ex traordinary economic development 9
opportunities that: 10

(i) meet the criteria provided in this section; 11

(ii) include performance requirements; and 12

(iii) in addition to the performance requirements under item (ii) of 13
this paragraph, include a performance requirement that utilizes a claw–back provision. 14

(2) The [Account] DEPARTMENT may UTILIZE THE FUND TO pay [an 15
executive agency] for administrative, legal, or actuarial expenses incurred by the [agency 16
in connection with transactions funded b y transfers of money to the agency from the 17
Account] DEPARTMENT. 18

(i) (1) The Legislative Policy Committee may approve an economic 19
development opportunity that is not an extraordinary economic development opportunity 20
if the executive agency requesting the transfer of funds offers a detailed justification for the 21
exception. 22

(2) The Legislative Policy Committee shall give particular consideration to 23
an exception that would provide a significant economic development opportunity for an area 24
of the State tha t has a relatively high unemployment rate or relatively low per capita 25
income. 26

(j) (1) The Department [of Commerce ] may modify the guidelines for the 27
kinds of performance requirements that may be negotiated with the loan or grant as 28
needed, upon approval of the Legislative Policy Committee. 29

(2) [An executive agency ] THE DEPARTMENT may depart from these 30
guidelines as needed, upon approval of the Legislative Policy Committee. 31

(k) [Subject to the provisions of this subtitle, funds transferred] MONEY from the 32
[Economic Development Opportunities Program Account, to an executive agency, ] FUND 33
may be loaned, granted, or invested for: 34

14 HOUSE BILL 898

(1) assisting in the retention or expansion of existing private sector 1
enterprises, public or private institutions, or federal research and development institutes; 2

(2) assisting in the establishment or attraction of private sector 3
enterprises, public or private institutions, or federal research and development institutes 4
new to this State; or 5

(3) providing assistance where existing State or local programs lack 6
sufficient resources or are constrained by timing or program design from being utilized. 7

(l) (1) [Upon submission to the Legislative Policy Committee of a proposed 8
budget amendment to transfer money from the Account, the Governor ] BEFORE FUNDS 9
FROM THE FUND MAY BE LOANED , GRANTED, OR INVESTED IN ACCOR DANCE WITH 10
SUBSECTION (K) OF THIS SECTION , THE DEPARTMENT shall provide, subject to § 11
2–1257 of the State Government Article, to the Legislative Policy Committee: 12

(1) (I) a detailed description of: 13

(i) 1. the proposed use of the funds; 14

(ii) 2. the manner in which the proposed use meets the criteria 15
as set forth in this section; 16

(iii) 3. the degree to which the proposed use of funds will advance 17
statewide or local economic development strategies and objectives; and 18

(iv) 4. the degree to which available sources o f federal, State, 19
local, and private financial support have been sought and will be utilized; 20

(2) (II) the terms, conditions, and performance requirements of any 21
grant or loan for which the funds are to be used; 22

(3) (III) a comprehensive economic ana lysis of the proposed use of the 23
funds which estimates: 24

(i) 1. the economic impact to the State and the local 25
jurisdictions affected; 26

(ii) 2. a minimum level of net economic benefits to the public 27
sector; 28

(iii) 3. the number of jobs expected to be created as a result of the 29
proposed economic development project and the percentage of those jobs that are expected 30
to be held by Maryland residents; 31

HOUSE BILL 898 15

(iv) 4. the wage rates and benefit packages for the jobs expected 1
to be created as a result of the proposed economic development project; and 2

(v) 5. any other appropriate financial or economic benefits; 3

(4) (IV) any other analysis or information that is requested by the 4
Legislative Policy Committee; and 5

(5) (V) the date on which the executive agency expects to disburse the 6
funds to the proposed recipient. 7

(2) THE LEGISLATIVE POLICY COMMITTEE SHALL HAVE 60 DAYS TO 8
REVIEW THE INFORMATION PROVIDED UNDER PARAGRAPH (1) OF THIS SUBSECTION 9
AND APPROVE THE PROPOSED USE OF FUNDS BEFORE FUNDS FROM THE FUND MAY 10
BE LOANED, GRANTED, OR INVESTED IN ACCORDANCE WITH SUBSECTION (K) OF THIS 11
SECTION. 12

(m) [If an executive agency fails to disburse transferred funds to a recipient within 13
1 year after the expected disbursement date presented to the Legislative Policy Committee 14
under subsection (l) of this section, the funds will revert back to the Account and the 15
Governor shall: 16

(1) resubmit the proposed budget amendment to transfer money from the 17
Account to the Legislative Policy Committee; and 18

(2) provide the Legislative Policy Committee with the information required 19
under subsection (l) of this section. 20

(n)] Funds appropriated to the [Economic Development Opportunities Program 21
Account] FUND may not be loaned, granted, or invested for: 22

(1) substituting for funds from other State or local programs for which a 23
project may be eligible and sufficient resources exist; 24

(2) projects which are not likely to attract or retain employment 25
opportunities; 26

(3) funding projects located outside the State; 27

(4) construction or land acquisition by the Maryland Stadium Authority; or 28

(5) funding for any sports activity or facility. 29

[(o) (1) This subsection does not apply to an economic development opportunity 30
located in an area designated as a qualified oppor tunity zone under § 1400Z –1 of the 31
16 HOUSE BILL 898

Internal Revenue Code in Allegany County, Garrett County, Somerset County, or Wicomico 1
County. 2

(2) In the case of an economic development opportunity located outside a 3
priority funding area as established under Title 5 , Subtitle 7B of this article, the 4
Department shall first comply with the provisions of that subtitle before making a request 5
for approval by the Legislative Policy Committee under this section.] 6

[(p)] (N) [An executive agency] THE DEPARTMENT may approve changes to a 7
transaction approved by the Legislative Policy Committee as long as the changes do not 8
materially and adversely affect the overall position of the [executive agency ] 9
DEPARTMENT in the transaction or the economic development benefits to be der ived by 10
the State in the transaction. 11

[(q)] (O) (1) (i) In this subsection the following words have the meanings 12
indicated. 13

(ii) “Financial assistance” means a grant, loan, or investment 14
provided under this subsection that exceeds $100,000. 15

(iii) “Political subdivision” includes an agency or other 16
instrumentality of the political subdivision. 17

(2) This subsection does not apply to financial assistance used solely for the 18
purpose of acquiring real property or structures on real property. 19

(3) With respect to financial assistance under this section to a political 20
subdivision: 21

(i) if the political subdivision has a program for promoting 22
procurement opportunities among minority businesses that is acceptable to the 23
Department [of Commerce], the political subdivision shall apply the requirements of that 24
program to the procurement of goods or services made with the proceeds from the financial 25
assistance; but 26

(ii) if the political subdivision does not have a program that is 27
acceptable to the Department [of Commerce] under item (i) of this paragraph, the political 28
subdivision is subject to paragraph (4) of this subsection. 29

(4) (i) In this paragraph, “minority business enterprise” has the 30
meaning stated in § 14–301 of [this article] THE STATE FINANCE AND PROCUREMENT 31
ARTICLE. 32

(ii) With respect to financial assistance under this section to an 33
entity other than a political subdivision, the entity shall agree to include in the agreement 34
providing the financial assistance a provision acceptable to the Department [of Commerce] 35
HOUSE BILL 898 17

that would encourage the procurement from minority business enterprises of goods or 1
services purchased with the proceeds from the financial assistance. 2

(iii) In negotiating the provision required under subparagraph (ii) o f 3
this paragraph, the Department [of Commerce] shall take into account relevant factors, 4
including: 5

1. the intended use of the proceeds from the financial 6
assistance; and 7

2. the feasibility of obtaining the required goods or services 8
from minority business enterprises. 9

(5) The Department [of Commerce ] may require that a recipient of 10
financial assistance under this section submit to the Department [of Commerce] a list, or 11
an updated list, of the minority business enterprises from which goods or services were 12
procured and the nature and dollar amount of the goods or services. 13

[(r) For fiscal years 2019 through 2021, the Governor shall include in the annual 14
budget bill an appropriation of $5,000,000 to the Account to be used by the Department of 15
Commerce to provide conditional loans or grants to companies that meet the following 16
criteria: 17

(1) construction of company headquarters in the State with capital 18
expenditures of at least $500,000,000; and 19

(2) retention of company headquarters in the State with at least 3,250 20
eligible employees, consistent with a letter of intent entered into with the Department of 21
Commerce in October 2016.] 22

5–301. 23

(a) In this subtitle the following words have the meanings indicated. 24

(g) “Authority” means the Maryland Economic Development Assistance 25
Authority. 26

(l) “Corporation” means the Maryland Economic Development Corporation. 27

(m) “Financial assistance” means a grant, loan, or investment provided under this 28
subtitle. 29

(n) “Fund” means the Maryland Economic Development Assistance Fund. 30

5–310. 31

18 HOUSE BILL 898

There is a Maryland Economic Development Assistance Fund in the Department. 1

5–311. 2

The purposes of the Fund are to: 3

(1) expand employment opportunities in the State by providing financial 4
assistance to businesses that are engaged in eligible industry sectors, including financial 5
assistance for: 6

(i) aquaculture projects; 7

(ii) arts and entertainment enterprises; 8

(iii) arts and entertainment projects; and 9

(iv) creation and expansion of child care facilities; 10

(2) provide financial assistance for the redevelopment of qualified 11
brownfields sites; 12

(3) provide financial assistance to local governments and the Corporation 13
for economic development projects; and 14

(4) provide grants to local economic development funds. 15

5–319. 16

(a) (1) Financial assistance from the Fund not exceeding [$2,500,000] 17
$5,000,000 may be approved by the Secretary. 18

(2) Except as provided in paragraph (3) of this subsection, financial 19
assistance from the Fund exceeding [$2,500,000] $5,000,000 requires approval by the 20
Authority. 21

(3) For a Tier I county project, the Secretary may approve financial 22
assistance exceeding [$2,500,000] $5,000,000. 23

(b) Except as provided in subsection (a)(3) of this section, with respect to requests 24
for financial assistance exceeding [$2,500,000] $5,000,000: 25

(1) the Department shall evaluate the requests; and 26

(2) the Authority shall: 27

HOUSE BILL 898 19

(i) evaluate the requests t hat have first been evaluated by the 1
Department; 2

(ii) determine whether to approve the requests; and 3

(iii) set the terms and conditions of the financial assistance. 4

(c) (1) Except as provided in paragraph (2) of this subsection, financial 5
assistance provided to a local government or the Corporation for a project shall be approved 6
by a LETTER FROM OR formal resolution of: 7

(i) the governing body of the jurisdiction in which the project is 8
located; or 9

(ii) if the recipient of the financial assistance is the Corporation, its 10
board of directors. 11

(2) If the recipient of financial assistance is the Corporation for a Tier I 12
county project, the financial assistance shall be approved by LETTERS FROM OR formal 13
resolutions of both the board of directors of the Corporation and the governing body of the 14
jurisdiction in which the project is located. 15

(3) A project that is funded by a grant from the Fund to a local government 16
or the Corporation, and carried out by the local government or the Corporation, shall be 17
consistent with the strategy or plan for economic development of the county or municipal 18
corporation in which the project is located. 19

(4) If the Department provides fin ancial assistance to a local government 20
for a project, an interest in that project is later transferred to a third party, and the transfer 21
of the interest is financed by the local government: 22

(i) the local government may assign the financing documents to the 23
Department as a repayment of or return on the Department’s financial assistance to the 24
local government, and 25

(ii) the assignment may not be considered a new financing under this 26
subtitle. 27

(d) For a local economic development opportunity, the l ocal government of the 28
jurisdiction in which the project is located shall provide[: 29

(1)] a LETTER FROM OR formal resolution of the governing body of the 30
jurisdiction in which the project is located that endorses the financial assistance to be 31
provided from the Fund[; and 32

20 HOUSE BILL 898

(2) as determined by the Department or Authority to evidence the support 1
of the local government for the project: 2

(i) a guarantee, secured by the full faith and credit of the county or 3
municipal corporation in which the project i s located, of all or part of the financial 4
assistance to be provided by the Fund; 5

(ii) the financing of part of the costs of the project equal to at least 6
10% of the financial assistance to be provided from the Fund; or 7

(iii) both]. 8

(E) A LETTER SUBMITTED UNDER THIS SECTION SHALL INCLUD E THE 9
SIGNATURES OF A MAJORITY OF THE MEMBERS OF THE GOVERNING BODY. 10

5–320. 11

(a) To be eligible for financial assistance from the Fund, an applicant shall be: 12

(1) a local economic development fund that meets the criteria set forth in 13
Part V of this subtitle; or 14

(2) an individual, private business, nonprofit entity, or local government, 15
or the Corporation that intends to use the requested financial assistance for a project that: 16

(i) except as provided in subsection (b) of this section, is in an 17
eligible industry sector under § 5–321 of this subtitle; and 18

(ii) has a strong potential for expanding or retaining employment 19
opportunities in the State. 20

(b) A project need not be in an eligible industry sector if the applicant: 21

(1) is located in a Tier I county; or 22

(2) (i) is a local government or the Corporation; and 23

(ii) does not intend to use the financial assistance to carry out a 24
project that benefits a particular private sector entity. 25

(c) In form and content acceptable to the Department, an applicant for financial 26
assistance from the Fund shall submit to the Department an application that contains: 27

(1) the information that the Department or Authority considers necessary 28
to evaluate the request for financial assistance; and 29

HOUSE BILL 898 21

(2) for a Tier I county project: 1

(i) a marketing plan designed to market the project to prospective 2
businesses; 3

(ii) a statement of planned marketing expenditures as a percent of 4
the total financial assistance amount requested; and 5

(iii) a plan for the project that is consistent with the county’s local 6
strategic economic development plan as to the location and type of project. 7

5–323. 8

Financial assistance from the Fund may not exceed the lesser of: 9

(1) $10,000,000; or 10

(2) 20% of the Fund balance. 11

5–324. 12

(a) Each subsection of this section is subject to § 5–323 of this subtitle. 13

(b) If the Department or Authority determines a project to be a significant 14
strategic economic development opportunity , the Department or Authority may provide a 15
loan from the Fund for the project to an individual, private business, nonprofit entity, or 16
the Corporation in an amount not exceeding $10,000,000. 17

(c) If the Department or Authority determines a project to be a local economic 18
development opportunity, the Department or Authority may provide financial assistance 19
from the Fund for the project to an individual, private business, nonprofit entity, or the 20
Corporation in an amount not exceeding: 21

(1) [$5,000,000] $7,500,000 for a loan or investment; and 22

(2) [$2,000,000] $5,000,000 for a grant. 23

(d) (1) Financial assistance provided to a local government or the Corporation 24
to finance a project may be: 25

(i) in the form of a grant, loan, or investment; and 26

(ii) except as provided in paragraph (2) of this subsection, in an 27
amount not exceeding [$3,000,000] $5,000,000. 28

22 HOUSE BILL 898

(2) Financial assistance for a Tier I county project may be in an amount 1
determined by the Department. 2

(3) A grant to a local economic de velopment fund is subject to the 3
requirements of Part V of this subtitle. 4

(e) Financial assistance for a specialized economic development opportunity may 5
be: 6

(1) provided to an individual, private business, nonprofit entity, or local 7
government, or the Corporation; 8

(2) in the form of a grant, loan, or investment; and 9

(3) in an amount determined by the Department or Authority. 10

5–325. 11

(a) Subject to the restrictions of this subtitle, the Department or Authority may 12
impose the terms and conditions on financial assistance from the Fund as either considers 13
appropriate. 14

(b) (1) Except as provided in paragraph (2), (3), or (4) of this subsection, 15
financial assistance from the Fund may not exceed 70% of the total costs of the project being 16
financed. 17

(2) Financial assistance from the Fund may constitute 100% of the total 18
costs of the project being financed if: 19

(i) the recipient is the Corporation; or 20

(ii) the financial assistance is for: 21

1. an arts and entertainment enterprise; 22

2. an arts and entertainment project; or 23

3. a Tier I county project. 24

(3) (i) Except as provided in subparagraph (ii) of this paragraph, 25
financial assistance from the Fund: 26

1. may be used to finance up to 50% of the costs of 27
construction, purchase, or renovation of real property, fixtures, or equipment related to a 28
child care facility; but 29

HOUSE BILL 898 23

2. may not be used for working capital, supplies, or inventory 1
related to a child care facility. 2

(ii) Financial assistance from the Fund may be used to finance up to 3
20% of the costs described in subparagraph (i) of this paragraph incurred by a business that 4
has received or will receive a day care loan insured by the Maryland Industrial 5
Development Financing Authority. 6

(4) Financial assistance for preparation of a strategy or plan for economic 7
development of a county or municipal corporation may not exceed: 8

(i) 50% of the costs of preparation; or 9

(ii) $50,000 in a 3–year period. 10

[(c) (1) A loan from the Fund shall bear an interest rate below the market rate 11
of interest, as determined by the Department, if the loan is for: 12

(i) a significant strategic economic development opportunity; or 13

(ii) a specialized economic development opportunity. 14

(2) A loan from the Fund for a Tier I county project shall bear an interest 15
rate determined by the Department or the Authority. 16

(3) A loan from the Fund shall bear an interest rate not exceeding 17
one–eighth of 1% plus the net interest cost of the most recent State general obligation bond 18
issue preceding the approval of the loan if the loan is: 19

(i) for a local economic development opportunity; or 20

(ii) to a local government. 21

(4) A loan from the Fund may not bear an interest rate of less than 3% 22
unless: 23

(i) the project funded by the loa n is located in an area of high 24
unemployment; or 25

(ii) the Department determines that the borrower is carrying out a 26
compelling economic development initiative. 27

(d) (1) The Department may waive interest during the first 2 years of the term 28
of a loan from the Fund. 29

24 HOUSE BILL 898

(2) If a borrower defaults on a loan from the Fund, the Department may 1
impose an interest rate that exceeds the limits set forth in subsection (c)(1) or (3) of this 2
section. 3

(e) The term of a loan from the Fund may not exceed: 4

(1) for working capital, 3 years; 5

(2) for financing equipment, furnishings, or fixtures, the lesser of 15 years 6
or the useful life of the asset, as determined by the Department; 7

(3) for financing the construction or acquisition of buildings and real 8
property, 25 years; and 9

(4) for financing the redevelopment of a qualified brownfields site or a Tier 10
I county project, a term approved by the Department or Authority.] 11

(C) THE DEPARTMENT OR THE AUTHORITY SHALL DETERMINE WHETHER A 12
LOAN FROM THE FUND SHALL BEAR INTEREST AND, IF SO, THE INTEREST RATE. 13

Subtitle 5. Maryland Small Business Development Financing Authority AND FUND. 14

5–501. 15

(a) In this subtitle the following words have the meanings indicated. 16

(b) “Authority” means the Maryland Small Business De velopment 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 approves. 22

(D) “FUND” MEANS THE MARYLAND SMALL BUSINESS DEVELOPMENT 23
FINANCING FUND. 24

[(d)] (E) (1) “Loan document” means an instrument or agreement that 25
evidences, secures, or guarantees a loan. 26

(2) “Loan document” includes a note, financing statement, mortgage, 27
pledge, assignment, loan and security agreement, or guaranty. 28

HOUSE BILL 898 25

[(e)] (F) (1) “Working capital” means money used to meet the cash needs of 1
an 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 o r 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 tax able 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

26 HOUSE BILL 898

(2) to encourage socially or economically disadvantaged individuals to seek 1
government and other contracts; 2

(3) to encourage financial institutions to make loans to these individuals ; 3
and 4

(4) to assist small businesses that are unable to obtain adequate business 5
financing on reasonable terms through normal financing channels because the businesses 6
do not meet the established credit criteria of financial institutions. 7

Part II. Maryland Small Business Development Financing Authority AND FUND. 8

5–505. 9

There is a Maryland Small Business Development Financing Authority in the 10
Department. 11

5–509. 12

(a) (1) The Executive Director is the chief administrative officer of the 13
Authority. 14

(2) With the approval of the Secretary, the Authority may: 15

(i) appoint the Executive Director; or 16

(ii) contract with a private entity to perform the duties of the 17
Executive Director. 18

(b) The Executive Director serves at the pleasure of the Author ity, with the 19
concurrence of the Secretary. 20

(c) In addition to any other duties set forth in this subtitle, the Executive Director 21
shall: 22

(1) supervise the administrative affairs and technical activities of the 23
Authority in accordance with its regulations and policies; 24

(2) attend all meetings of the Authority; 25

(3) keep minutes of all proceedings of the Authority; 26

(4) approve all accounts for salaries, per diem payments, and allowable 27
expenses of the Authority, its employees, and its consultants; 28

(5) approve all expenses incidental to the operation of the Authority; and 29

HOUSE BILL 898 27

(6) perform any other duty that the Authority or the Secretary requires to 1
carry out this subtitle. 2

5–511. 3

[(a) In this section, “Authority staff” means any of the individuals who are 4
employed by the Department to operate the programs of the Authority immediately prior 5
to the execution by the Department of a contract under this section with the private 6
corporation organized by any of those individuals. 7

(b) (1)] (A) The Department may contract for and engage the services of 8
[some or all of the Authority staff] A PRIVATE MARYLAND CORPORATION to administer 9
SOME OR ALL OF the programs of the Authority[, for a period of 3 years, if the Authority 10
staff has organized itself as a private Maryland corporation]. 11

[(2) (B) The Department may: 12

(i) (1) extend the termination date of the A contract in effect as of 13
September 30, 2008, to June 30, 2012, and modify that extended contract as needed; and 14

(ii) (2) renew the extended contract for up to two additional 15
5–year terms ONE ADDITIONAL 3–YEAR TERM, and modify that renewed and extended 16
contract as needed. 17

(3) (C) An extension or renewal contract shall include standards to 18
evaluate the performance of the private contractor in rendering services under the contract. 19

(c) In its name the corporation may use “Maryland Small Business Development 20
Financing Agency”, “MSBDFA, Inc.”, or any close approximation of those terms.] 21

5–515. 22

(A) THERE IS A MARYLAND SMALL BUSINESS DEVELOPMENT FINANCING 23
FUND IN THE DEPARTMENT. 24

(B) THE FUND IS A SPECIAL, NONLAPSING FUND THAT IS NOT SUBJECT TO 25
REVERSION UNDER § 7–302 OF THE STATE FINANCE AND PROCUREMENT ARTICLE. 26

(C) THE STATE TREASURER SHALL: 27

(1) INVEST THE MONEY IN THE FUND IN THE SAME MANNER AS OTHER 28
STATE MONEY MAY BE INVESTED; 29

(2) CREDIT ANY INVESTMENT EARNINGS TO THE FUND; AND 30

28 HOUSE BILL 898

(3) REPORT EACH YEAR TO THE DEPARTMENT ON: 1

(I) THE STATUS OF THE MO NEY INVESTED UNDER T HIS 2
SUBTITLE; 3

(II) THE MARKET VALUE OF THE ASSETS IN THE FUND AS OF THE 4
DATE OF THE REPORT; AND 5

(III) THE INTEREST RECEIVED FROM INVESTMENTS DURING THE 6
PERIOD COVERED BY THE REPORT. 7

(D) (1) THE FUND IS THE SUCCESSOR OF THE SMALL BUSINESS 8
DEVELOPMENT CONTRACT FINANCING FUND, THE SMALL BUSINESS 9
DEVELOPMENT GUARANTY FUND, THE EQUITY PARTICIPATION INVESTMENT 10
INCENTIVE PROGRAM FUND, AND THE SMALL BUSINESS SURETY BOND FUND 11
ESTABLISHED UNDER TH E MARYLAND SMALL BUSINESS DEVELOPMENT 12
FINANCING AUTHORITY. 13

(2) ALL FINANCIAL ASSISTA NCE TRANSACT IONS AND OBLIGATIONS 14
APPROVED BY THE MARYLAND SMALL BUSINESS DEVELOPMENT FINANCING 15
AUTHORITY SHALL CONTI NUE AS OBLIGATIONS O F THE FUND AND ARE 16
AUTHORIZED UNDER THIS SUBTITLE. 17

(E) THE FUND CONSISTS OF: 18

(1) PREMIUMS FOR GUARANTEEING LOANS UNDER THIS SUBTITLE; 19

(2) PREMIUMS FOR GUARANT EEING EQUITY INVESTM ENTS UNDER 20
THIS SUBTITLE; 21

(3) REPAYMENTS OF PRINCIPAL OF AND INTEREST ON DIRECT LOANS 22
AND EQUITY PARTICIPATION FINANCING MADE UNDER THIS SUBTITLE; 23

(4) PROCEEDS FROM THE SALE, DISPOSITION, LEASE, OR RENTAL OF 24
COLLATERAL FOR DIREC T LOANS, LOAN GUARANTIES, OR EQUITY PARTICIPAT ION 25
FINANCING MADE UNDER THIS SUBTITLE; 26

(5) LOANS AND GRANTS FROM THE FEDERAL GOVERNMENT OR A UNIT 27
OR INSTRUMENTALITY OF THE FEDERAL GOVERNMENT; 28

(6) GRANTS AND CONTRIBUT IONS OF FUNDS FROM T HE STATE, A 29
POLITICAL SUBDIVISION, OR ANY OTHER SOURCE; 30

HOUSE BILL 898 29

(7) PREMIUMS FOR GUARANTEEING LONG–TERM LOANS UNDER THIS 1
SUBTITLE; 2

(8) NOTWITHSTANDING § 10–469(E) AND (F) OF THIS ARTICLE OR ANY 3
OTHER LAW , ANY RECOVERY OF INVE STMENTS MADE UNDER § 10–469 OF THIS 4
ARTICLE THAT WERE FUNDED BY A TRANSFER OF MONEY FROM THE FUNDS UNDER 5
THIS SUBTITLE TO THE ENTERPRISE FUND, INCLUDING AN INVESTMENT IN MMG 6
VENTURES LLP; 7

(9) NOTWITHSTANDING § 10–469(E) AND (F) OF THIS ARTICLE OR ANY 8
OTHER LAW, ANY REPAYMENT OF A GRANT MADE UNDER § 10–469 OF THIS ARTICLE 9
THAT WAS FUNDED BY A TRANSFER OF MONEY FR OM THE FUNDS UNDER T HIS 10
SUBTITLE TO THE ENTERPRISE FUND; 11

(10) MONEY THE STATE APPROPRIATES TO THE FUND; 12

(11) MONEY MADE AVAILABLE TO THE FUND THROUGH FE DERAL 13
PROGRAMS OR PRIVATE CONTRIBUTIONS; 14

(12) PREMIUMS, FEES, ROYALTIES, AND REPAYMENTS OF 15
INVESTMENTS MADE UND ER THE TERMS OF BOND ING ASSISTANCE AND E QUITY 16
PARTICIPATION FINANCING; AND 17

(13) ALL OTHER RECEIPTS O F THE DEPARTMENT UNDER THIS 18
SUBTITLE. 19

Part III. Small Business Development Contract Financing [Fund] PROGRAM. 20

5–517. 21

In this part, [“Fund”] “PROGRAM” means the Small Business Development 22
Contract Financing [Fund] PROGRAM. 23

5–518. 24

There is a Small Business Development Contract Financing [Fund] PROGRAM 25
WITHIN THE FUND. 26

[5–519. 27

The Authority shall use the Fund to implement this part.] 28

[5–520. 29

30 HOUSE BILL 898

The Authority shall administer the Fund.] 1

[5–521. 2

(a) The Fund is a special, nonlapsing fund that is not subject to reversion under 3
§ 7–302 of the State Finance and Procurement Article. 4

(b) The Treasurer shall: 5

(1) invest the money in the Fund in the same manner as other State money 6
may be invested; and 7

(2) credit any investment earnings to the Fund. 8

(c) If the Authority determines by resolution that any money in the Fund is no 9
longer needed to meet its obligations, the Authority may authorize the Comptroller to first 10
employ that money to pay the principal of and interest on outstanding bonds issued under 11
any Act authorizing the issue o f State general obligation bonds issued to implement this 12
subtitle.] 13

[5–522. 14

The Fund consists of: 15

(1) premiums for guaranteeing loans under § 5–525(a) of this subtitle; 16

(2) premiums for guaranteeing equity investments under § 5–525(b) of this 17
subtitle; 18

(3) repayments of principal of and interest on direct loans made under § 19
5–525(c) of this subtitle; 20

(4) proceeds from the sale, disposition, lease, or rental of collateral for 21
direct loans or loan guaranties made under § 5–525 of this subtitle; and 22

(5) all other receipts of the Authority under this part.] 23

[5–523. 24

(a) If the Authority and the Secretary determine that more money is needed to 25
keep the Fund at an adequate level, the Authority shall send a written request for the 26
additional money to the Board of Public Works. 27

(b) The Board of Public Works may pay the amount requested from the General 28
Emergency Fund.] 29

HOUSE BILL 898 31

[5–524.] 5–519. 1

The Authority may use the Fund for: 2

(1) loan guaranties made under [§ 5–525(a)] § 5–520(A) of this subtitle; 3

(2) equity investment guaranties made under [§ 5–525(b)] § 5–520(B) of 4
this subtitle; 5

(3) direct loans made under [§ 5–525(c)] § 5–520(C) of this subtitle; and 6

(4) expenses for administrative, legal, actuarial, and other services. 7

[5–525.] 5–520. 8

(a) (1) The Authority may use the Fund to guarantee a loan made to an 9
applicant only if: 10

(i) the applicant meets the requirements of this part; 11

(ii) [the loan is to be used to perform a contract for which the 12
majority of the funding is provided by the federal government, a state government, a local 13
government, or a utility regulated by the Public Service Commission; 14

(iii)] the maximum amount payable by the Authority under the 15
guaranty does not exceed [$2,000,000] $3,000,000; and 16

[(iv)] (III) the guaranteed loan is to be used for: 17

1. working capital; or 18

2. equipment needed to perform the contract, the cost of 19
which can be repaid from contract proceeds, if the Authority has entered into an agreement 20
with the applicant to secure the loan or guaranty. 21

(2) A guaranty made by the Authority may not exceed the term of the 22
contract, unless the Authority determines that a longer term better serves the purposes of 23
this subtitle. 24

(b) (1) The Authority may use the Fund to guarantee a person’s proposed 25
equity investment in the applicant only if: 26

(i) the applicant meets the requirements of this part; 27

(ii) the amount of the equity investment to be guaranteed does not 28
exceed the lesser of: 29
32 HOUSE BILL 898

1. 10% of the person’s equity investment in the applicant; or 1

2. $250,000; AND 2

(iii) [the equity investment to be guaranteed is to be used to perform 3
a contract for which the majority of funding is provided by the federal government, a state 4
government, a local government, or a utility regulated by the Public Service Commission; 5
and 6

(iv)] the equity investment to be guaranteed is to be used for: 7

1. working capital; or 8

2. equipment needed to perform the contract, the cost of 9
which can be repaid from contract proceeds, if the Authority has entered into an agreement 10
with the applicant to secure the guaranty. 11

(2) The Authority may not guarantee the equity investment of a person 12
who: 13

(i) previously held an equity investment in the applicant; 14

(ii) previously participated in the management of the applicant; or 15

(iii) in any other manner is related to: 16

1. the applicant; or 17

2. any of the current stockholders, officers, or management 18
personnel of the applicant. 19

(c) (1) The Authority may use the Fund to lend money to an applicant only if: 20

(i) the applicant meets the requirements of this part; 21

(ii) the applicant is unable to obtain money on reasonable terms 22
through normal lending channels from another source; 23

(iii) the loan does not exceed [$2,000,000] $3,000,000; AND 24

(iv) [the loan is to be used to perform a contract for which the 25
majority of funding is provided by the federal government, a state government, a local 26
government, or a utility regulated by the Public Service Commission; and 27

(v)] the loan is to be used for: 28
HOUSE BILL 898 33

1. working capital; or 1

2. equipment needed to perform the contract, if the contract 2
proceeds can repay the cost of the equipment and if the Authority has entered into an 3
agreement with the applicant to secure the loan. 4

(2) A loan that the Authority makes shall mature not later than the term 5
of the contract, unless the Authority finds that a longer term better serves the purposes of 6
this part. 7

(d) In providing financial assistance under this section, the Authority shall 8
recognize the need to serve applicants from all political subdivisions in the State. 9

[5–526.] 5–521. 10

(a) If the applicant is an individual, to qualify for financial assistance under this 11
part the applicant shall satisfy the Authority that: 12

(1) the applicant is of good moral character; 13

(2) the applicant has a reputation for financial responsibility, as 14
determined from creditors, employers, and other individuals who have personal knowledge 15
of the applicant; 16

(3) the applicant is a resident of the State or the principal place of business 17
of the applicant is in the State; and 18

(4) the applicant is unable to obtain adequate business financing on 19
reasonable terms through normal lending channels because the applicant: 20

(i) belongs to a group that historically has been deprived of access 21
to normal economic or financial resources [because of race, color, creed, sex, religion, or 22
national origin]; 23

(ii) has [an identifiable physical handicap that severely limits the 24
ability of the applicant to obtain financial assistance, but that does not limit the ability of 25
the applicant to perform the contract or other activity for which the applicant would be 26
receiving financial assistance] A DOCUMENTED DISABILITY; 27

(iii) has any other social or economic impediment that is beyond the 28
control of the applicant but that does not limit the ability of the applicant to perform the 29
contract or other activity for which the applicant would be receiving financial assistance, 30
including: 31

1. the lack of formal education or financial capacity; or 32
34 HOUSE BILL 898

2. geographical or regional economic distress; or 1

(iv) does not meet the established credit criteria of at least one 2
financial institution. 3

(b) If the applicant is a business enterprise that is not a sole proprietorship, to 4
qualify for financial assistance under this part at least 70% of the business enterprise shall 5
be owned by individuals who meet the qualifications for an individual applicant under 6
subsection (a) of this section. 7

(c) An applicant for a loan guaranty shall have applied for and been denied a loan 8
by a financial institution. 9

[5–527.] 5–522. 10

(a) To apply for financial assistance from the Fund under [§ 5–525] § 5–520 of 11
this subtitle, an applicant shall submit to the Authority an application on the form that the 12
Authority provides WITH THE INFORMATION THE AUTHORITY REQUIRES. 13

[(b) The application shall: 14

(1) describe the project in detail; 15

(2) itemize known and estimated costs; 16

(3) specify the total amount of investment required to perform the contract; 17

(4) specify the amount of funds available to the applicant without financial 18
assistance from the Authority; 19

(5) specify the amount of financial assistanc e requested from the 20
Authority; 21

(6) provide information that demonstrates the inability of the applicant to 22
obtain adequate financing on reasonable terms through normal lending channels; 23

(7) provide information that demonstrates the financial status of the 24
applicant, including: 25

(i) a current balance sheet; 26

(ii) a profit and loss statement; and 27

(iii) credit references; and 28

HOUSE BILL 898 35

(8) contain any other relevant information that the Authority requires.] 1

[(c)] (B) The Authority may require an applicant to provide an audited balance 2
sheet before the Authority approves or denies the application. 3

[(d) The Authority may delegate the review and approval of the application 4
information required under subsection (b)(1), (2), and (3) of this section t o the Executive 5
Director if an applicant meets all other requirements of this section.] 6

[5–528.] 5–523. 7

(a) The Authority may set the terms and conditions for a loan guaranty made 8
under [§ 5–525(a)] § 5–520(A) of this subtitle. 9

(b) (1) If the Authorit y decides to lend money from the Fund to an applicant 10
under [§ 5–525(c)] § 5–520(C) of this subtitle, the Authority shall prepare loan documents 11
that include: 12

(i) the interest rate on the loan that equals the market rate for a 13
conventional loan of comp arable risk unless the Authority determines that a lower rate 14
better serves the purposes of this subtitle; 15

(ii) a disbursement schedule that provides enough money to the 16
applicant when the applicant needs it to perform the contract; 17

(iii) a requirement that the applicant and the Authority co–sign each 18
request for an advance of money before release of the money; and 19

(iv) provisions for repayment of the loan. 20

(2) The loan documents may include any other provision that the Authority 21
determines is necessary to secure the loan, including an assignment of or a lien on payment 22
under the contract. 23

[5–529. 24

The Treasurer shall report each year to the Authority on: 25

(1) the status of the money invested under § 5–521 of this subtitle; 26

(2) the market value of the assets in the Fund as of the date of the report; 27
and 28

(3) the interest received from investments during the period covered by the 29
report.] 30

36 HOUSE BILL 898

[5–530.] 5–524. 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 under this part. 3

(b) A person may not knowingly make or cause to be made a false statement or 4
report to influence an action of the Authority under this part: 5

(1) on an application for financial assistance; or 6

(2) affecting financial assistance whether or not the assistance has already 7
been extended. 8

(c) A person who violates this section is guilty of a misdemeanor and on conviction 9
is subject to imprisonment not exceeding 5 years or a fine not exceeding $50,000 or both. 10

5–525. RESERVED. 11

5–526. RESERVED. 12

Part IV. Small Business Development Guaranty [Fund] PROGRAM. 13

[5–533.] 5–527. 14

In this part, [“Fund”] “PROGRAM” means the Small Business Development 15
Guaranty [Fund] PROGRAM. 16

[5–534.] 5–528. 17

There is a Small Business Development Guaranty PROGRAM WITHIN THE Fund. 18

[5–535. 19

The Authority shall use the Fund to implement this part.] 20

[5–536. 21

The Authority shall administer the Fund.] 22

[5–537. 23

(a) The Fund is a special, nonlapsing fund that is not subject to reversion under 24
§ 7–302 of the State Finance and Procurement Article. 25

(b) The Treasurer shall: 26
HOUSE BILL 898 37

(1) invest the money in the Fund in the same manner as other State money 1
may be invested; and 2

(2) credit any investment earnings to the Fund. 3

(c) If the Authority determines by resolution that any money in the Fund is no 4
longer needed to meet its obligations, the Authority may authorize the Comptroller to first 5
apply that money to pay the principal of and interest o n outstanding bonds issued under 6
any Act authorizing the issue of State general obligation bonds issued to implement this 7
subtitle.] 8

[5–538. 9

The Fund consists of: 10

(1) loans and grants from the federal government or a unit or 11
instrumentality of the federal government; 12

(2) grants and contributions of funds from the State, a political subdivision, 13
or any other source; 14

(3) premiums for guaranteeing long –term loans under § 5 –540 of this 15
subtitle; 16

(4) proceeds from the sale, disposition, lease, o r rental of collateral by the 17
Authority relating to loans guaranteed under § 5–540 of this subtitle; and 18

(5) all other receipts of the Authority under this part.] 19

[5–539.] 5–529. 20

The Authority may use the Fund for: 21

(1) guaranty payments made under [§ 5 –540(a)] § 5–530(A) of this 22
subtitle; 23

(2) interest subsidy payments under [§ 5 –540(b)] § 5–530(B) of this 24
subtitle; and 25

(3) expenses for administrative, legal, actuarial, and other services. 26

[5–540.] 5–530. 27

(a) (1) The Authority may use the Fund to guarantee up to 80% of the principal 28
of and interest on a long–term loan made by a financial institution to an applicant only if: 29
38 HOUSE BILL 898

(i) the applicant meets the requirements under [§ 5–541] § 5–531 1
of this subtitle and has not violated [§ 5–545] § 5–534 of this subtitle; 2

(ii) the loan amount is $5,000 or more and the maximum amount 3
payable by the Authority under the guaranty does not exceed [$2,000,000] $3,000,000; 4

(iii) the loan is used for: 5

1. working capital; 6

2. refinancing the applicant’s existing debt; 7

3. acquisition and installation of equipment; 8

4. making necessary improvements to real property that the 9
applicant leases or owns in fee simple; or 10

5. acquiring real property that t he applicant will own in fee 11
simple if the property is to be used in the applicant’s trade or business for which the 12
guaranty is sought and the financial institution or the Authority places a lien on the 13
property; 14

(iv) the loan matures within 10 years after the closing date of the 15
loan; and 16

(v) the interest rate does not exceed the monthly weighted average 17
of the prime lending rate prevailing in Baltimore City on unsecured commercial loans, plus 18
2%, as determined by the Authority. 19

(2) The Authority may authorize the provision of a guaranty under this 20
section in the following forms: 21

(i) an irrevocable letter of credit; 22

(ii) an official treasurer’s check; 23

(iii) funds on deposit in an escrow or other depository account; or 24

(iv) any ot her legal instrument promising a financial institution 25
restitution or reimbursement for its loan losses, within the limits of the guaranty. 26

(3) Any terms and conditions governing the instruments described under 27
paragraph (2) of this subsection may not be so onerous as to discourage the financial 28
institution from offering the loan. 29

HOUSE BILL 898 39

(4) (i) The Authority may only approve a guaranty under this section if 1
the Authority determines that the loan to be guaranteed will have a substantial economic 2
impact. 3

(ii) To determine the economic impact of a loan, the Authority may 4
consider: 5

1. the amount of the guaranty obligation; 6

2. the terms of the loan to be guaranteed; 7

3. the number of new jobs that the loan will create; and 8

4. any other factor that the Authority considers relevant. 9

(b) (1) In addition to a loan guaranty, the Authority may provide an interest 10
subsidy for the benefit of the applicant. 11

(2) The subsidy: 12

(i) may be for the life of the loan; 13

(ii) may not exceed 4%; 14

(iii) shall be payable quarterly; and 15

(iv) shall be made to the financial institution that makes the loan 16
that the Authority guarantees. 17

(3) (i) The subsidy may not exceed the difference between: 18

1. the interest rate on the guaranteed loan; and 19

2. the discount interest rate that the Federal Reserve Bank 20
uses. 21

(ii) The interest rate may not exceed the monthly weighted average 22
of the prime lending rate that prevails in Baltimore City on unsecured commercial loans, 23
as the Authority determines as of the date of closing, plus 2%. 24

(4) The subsidy may not be paid during any period in which the loan is in 25
default. 26

(c) In providing financial assistance under this section, the Authority shall 27
recognize the need to serve applicants from all political subdivisions in the State. 28

[5–541.] 5–531. 29
40 HOUSE BILL 898

(a) If the applicant is a sole proprietor, to qualify for financial assistance under 1
this part the applicant shall satisfy the Authority that: 2

(1) the applicant is of good moral character; 3

(2) the applicant has a reputation for financial responsibility, as 4
determined from creditors, employers, and other individuals who have personal knowledge 5
of the applicant; 6

(3) the applicant is a resident of the State or the principal place of business 7
of the applicant is in the State; and 8

(4) the applicant is unable to obtain adequate business financing on 9
reasonable terms through normal lending channels because the applicant: 10

(i) belongs to a group that historically has been deprived of access 11
to normal economic or financial resources [because of race, color, creed, sex, religion, or 12
national origin]; 13

(ii) has [an identifiable physical handicap that severely limits the 14
ability of the applicant to obtain financial assistance, but that does no t limit the ability of 15
the applicant to perform the contract or other activity for which the applicant would be 16
receiving financial assistance] A DOCUMENTED DISABILITY; 17

(iii) has any other social or economic impediment that is beyond the 18
control of the applicant, but that does not limit the ability of the applicant to perform the 19
contract or other activity for which the applicant would be receiving financial assistance, 20
including: 21

1. the lack of formal education or financial capacity; or 22

2. geographical or regional economic distress; or 23

(iv) does not meet the established credit criteria of at least one 24
financial institution. 25

(b) If the applicant is not a sole proprietorship, to qualify for financial assistance 26
under this part at least 70% of the business enterprise shall be owned by individuals who 27
meet the qualifications for an individual applicant under subsection (a) of this section. 28

(c) An applicant for a loan guaranty shall have applied for and been denied a loan 29
by a financial institution. 30

[5–542.] 5–532. 31

HOUSE BILL 898 41

(a) To apply for financial assistance from the Fund, a financial institution shall 1
submit to the Authority an application on the form that the Authority provides WITH THE 2
INFORMATION THE AUTHORITY REQUIRES. 3

[(b) The application shall include: 4

(1) a detailed description of the proposed use of the loan proceeds, including 5
projected cash flow analyses, marketing plans, and appraisals; 6

(2) a detailed description of the funds available to the applicant; 7

(3) a detailed description of the proposed loan documents to be executed by 8
the financial institution and the applicant; 9

(4) a detailed description of the property proposed as collateral for the loan 10
and the financial institution’s certification of the property’s value; 11

(5) information that demonstrates the inability of the applicant to obtain 12
adequate financing on reasonable terms through normal lending channels; 13

(6) information that demonstrates the financial status of the applicant, 14
including: 15

(i) a current balance sheet; 16

(ii) a profit and loss statement; and 17

(iii) credit references; 18

(7) a proposed disbursement schedule; 19

(8) a proposed amortization schedule; 20

(9) a detailed description of the applicant’s experience in the trade or 21
business for which the loan and guarantee are requested; 22

(10) information that shows that the applicant satisfies the requirements of 23
§ 5–541 of this subtitle; and 24

(11) any other relevant information that the Authority requests.] 25

[(c)] (B) The Authority may require an applicant to provide an audit report and 26
balance sheet certified by an independent certified public accountant in accordance with 27
generally accepted accounting principles before the Authority approves or denies the 28
application. 29

42 HOUSE BILL 898

[5–543.] 5–533. 1

A guaranty shall contain terms and conditions that the Authority determines to be 2
appropriate. 3

[5–544. 4

The Treasurer shall report each year to the Authority on: 5

(1) the status of the money invested under § 5–537 of this subtitle; 6

(2) the market value of the assets in the Fund as of the date of the report; 7
and 8

(3) the interest received from investments during the period covered by the 9
report.] 10

[5–545.] 5–534. 11

(a) A person may not knowingly make or cause to be made a false statement or 12
report in an application or document submitted to the Authority under this part. 13

(b) A person may not knowingly make or cause to be made a false statement or 14
report to influence an action of the Authority under this part: 15

(1) on an application for financial assistance; or 16

(2) affecting financial assistance whether or not the assistance has already 17
been extended. 18

(c) A person who violates this section is guilty of a misdemeanor and on conviction 19
is subject to imprisonment not exceeding 5 years or a fine not exceeding $50,000 or both. 20

[5–546.] 5–535. 21

If an applicant or financial institution violates any provision of the loan documents 22
or ceases to meet the requirements of this part, on reasonable notice to the applicant or 23
financial institution, the Authority may: 24

(1) withhold from the applicant further loan payments until the applicant 25
complies with the documents or requirements; 26

(2) withhold from the financial institution further interest subsidy 27
payments until the financial institution complies with the loan documents or requirements; 28
and 29

HOUSE BILL 898 43

(3) exercise any other remedy for which the loan documents provide. 1

5–536. RESERVED. 2

5–537. RESERVED. 3

Part V. Equity Participation Investment Program. 4

[5–549.] 5–538. 5

(a) In this part the following words have the meanings indicated. 6

(b) (1) “Enterprise” means a business entity proposing to carry on a business 7
in the State that meets the requirements of [§ 5–526] § 5–521 of this subtitle. 8

(2) “Enterprise” includes: 9

(i) a sole proprietorship; 10

(ii) a partnership; 11

(iii) A LIMITED LIABILITY CORPORATION; 12

(IV) a limited partnership; 13

[(iv)] (V) a corporation; or 14

[(v)] (VI) a joint venture. 15

(c) “Equity participation financing” includes investment or guaranty of 16
investment in an enterprise. 17

(d) “Existing business” means a business whose board of directors or owners 18
approve the sale of the business to an enterprise receiving equity participation financing. 19

(e) [“Fund” means the Equity Participation Investment Program Fund. 20

(f)] “Program” means the Equity Participation Investment Program. 21

[(g)] (F) “Qualified security” means: 22

(1) a note, bond, debenture, or other evidence of indebtedness; 23

(2) stock or other form of equity participation; 24

(3) a certificate of interest or participation in a profit–sharing agreement; 25
44 HOUSE BILL 898

(4) an investment contract; 1

(5) a certificate of deposit for a security; 2

(6) a certificate of interest or participation in a patent or patent application 3
or in royalty or other payments under a patent or patent application; or 4

(7) an interest or instrument commonly known as a “security” or a 5
certificate for, receipt for, guaranty of, or option, warrant, or right to subscribe to or 6
purchase a qualified security. 7

[(h)] (G) “Small business” means a business that is classified as a small business 8
under the U.S. Small Business Administration size standards. 9

[5–550.] 5–539. 10

(a) The General Assembly finds that: 11

(1) small businesses have proven to be a fast growing and relia ble form of 12
successful business expansion and successful new business creation; 13

(2) small businesses play a major role in the economy of the State and have 14
been a continuing source of increasing tax revenues and job opportunities; 15

(3) the growth of small businesses should be encouraged and should be an 16
integral part of the State’s economic development effort; 17

(4) socially or economically disadvantaged individuals often lack adequate 18
capital and are unable to obtain financing from financial institut ions or venture capital 19
firms to begin and develop a small business, or to purchase an existing business; and 20

(5) promoting the creation and viability of small businesses and the 21
purchase of existing businesses by socially or economically disadvantaged individuals is in 22
the public interest. 23

(b) The purposes of the Equity Participation Investment Program are to: 24

(1) encourage and help socially or economically disadvantaged individuals 25
to create and develop small businesses and acquire existing businesses in the State; and 26

(2) assist small businesses that, because they do not meet the established 27
credit criteria of financial institutions, cannot obtain adequate business financing on 28
reasonable terms through normal financing channels. 29

[5–551.] 5–540. 30
HOUSE BILL 898 45

There is an Equity Participation Investment Program in the [Department] FUND. 1

[5–552. 2

The Authority shall administer the Program.] 3

[5–553.] 5–541. 4

The Authority may: 5

(1) provide equity participation financing to help socially or economically 6
disadvantaged individuals in the State create and develop small businesses and acquire 7
existing businesses; 8

(2) buy, hold, and sell qualified securities; 9

(3) prepare, publish, and distribute technical studies, reports, and other 10
materials with or without charge; and 11

(4) provide and pay for advisory services and technical assistance that are 12
necessary or desirable to carry out the Program. 13

[5–554. 14

There is an Equity Participation Investment Program Fund.] 15

[5–555.] 5–542. 16

[(a) The Authority shall administer the Fund. 17

(b) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 18
under § 7–302 of the State Finance and Procurement Article. 19

(2) The Treasurer shall hold the Fund separately, and the Comptroller 20
shall account for the Fund. 21

(c) The Fund consists of: 22

(1) money drawn from the Small Business Development Guaranty Fund 23
established under Part IV of this subtitle; 24

(2) money the State appropriates to the Fund; 25

(3) money made available to the Fund through federal programs or private 26
contributions; 27
46 HOUSE BILL 898

(4) proceeds from the sale, disposition, lease, or rental by the Authority of 1
collateral related to equity participation financing; 2

(5) premiums, fees, royalties, and repayments of principal, interest, and 3
investments paid by and on behalf of enterprises to the Authority under the terms of equity 4
participation financing; and 5

(6) any other money made available under the Program. 6

(d)] The Authority shall use the Fund to: 7

(1) purchase qualified securities that an enterprise issues to provide equity 8
participation financing as the Program allows; 9

(2) provide guaranties of investments to expand the capital resources of 10
enterprises; 11

(3) purchase advisory services and technical assistance consistent with the 12
Program; 13

(4) purchase securities in which a fiduciary of the State may lawfully 14
invest; 15

(5) provide equity participation financing as the Program allows; and 16

(6) pay for administrative, legal, and actuarial services that relate to the 17
Program. 18

[(e) The Fund shall be self–sustaining and shall achieve investment returns on its 19
portfolio in the form of: 20

(1) royalties from enterprises in amounts to be determined by the 21
Authority; and 22

(2) interest payments from any debt securities. 23

(f) As needed for the Program, the Authority may withdraw from time to time up 24
to a total of $2,000,000 from the Small Business Development Guaranty Fund and deposit 25
the withdrawal into the Fund. 26

(g) (1) The Treasurer shall invest the money of the Fund in the same manner 27
as other State money may be invested. 28

(2) Any investment earnings of the Fund shall be paid into the Fund. 29

HOUSE BILL 898 47

(h) In accordance with § 2.5 –109 of this article, the Authority shall submit a 1
report on the Program.] 2

[5–556.] 5–543. 3

[(a)] The Authority may provide equity participation financing under the Program 4
only after the enterprise submits an application [that contains a business plan that meets 5
the requirements of subsection (b) of this section] ON THE FORM THAT THE AUTHORITY 6
PROVIDES WITH THE INFORMATION THE AUTHORITY REQUIRES. 7

[(b) The business plan of an enterprise shall include: 8

(1) a description of the small business or existing business and its 9
management, product, and market; 10

(2) a statement of the amount, immediacy of need, and projected use of the 11
capital required; 12

(3) a statement of the potential economic impact of the purchase; 13

(4) information that relates to the satisfaction of the applicant’s 14
requirements of § 5–557(d) and (e) of this subtitle; and 15

(5) any other information the Authority requires.] 16

[5–557.] 5–544. 17

(a) (1) Under the Program the Authority may not: 18

(i) own securities representing more than 49% of the voting stock of 19
a small business or own an interest greater than 49% in a small business; or 20

(ii) own securities representing more than 49% of the voting stock of 21
an enterprise acquiring an existing business or own an interest greater than 49% in an 22
enterprise acquiring an existing business. 23

(2) The amount of the Authority’s eq uity participation financing in an 24
enterprise may not exceed $2,000,000 $3,000,000. 25

(3) Before providing equity participation financing, the Authority shall find 26
that there is a reasonable probability that the Authority will recover its initial investment 27
and an adequate return on investment from the equity participation financing. 28

(4) The Authority’s investment shall be recoverable within 7 years after 29
the equity participation financing. 30

48 HOUSE BILL 898

(5) The Authority’s recovery shall be the greater of: 1

(i) the current value of the percentage of the equity investment in 2
the enterprise; or 3

(ii) the amount of the initial investment in the enterprise. 4

(6) If there is a dispute between the borrower and the Authority as to the 5
value of the business entity at the time of recovery, the value shall be determined after 6
obtaining at least one independent appraisal of the value from an appraiser selected from 7
a list of at least three appraisers supplied by the Authority. 8

(b) When an enterprise applies to the Authority for equity participation financing 9
to acquire an existing business, an enterprise or its principals shall have: 10

(1) an equity investment equal to at least 5% of the total cost of acquisition; 11
and 12

(2) at least 3 years of successful experience with demonstrated 13
achievements and management responsibilities. 14

(c) The Authority may provide equity participation financing for the acquisition 15
of an existing business if the existing business: 16

(1) has been in existence for at least 5 years; 17

(2) has been profitable for at least 2 of the previous 3 years; 18

(3) has sufficient cash flow to service the debt and ensure adequate return 19
of the Authority’s investment; 20

(4) has the capacity for growth and job creation; 21

(5) has its principal place of business in the State; and 22

(6) has a strong customer base. 23

(d) If the applicant enterprise is a sole proprietorship, to qualify for financial 24
assistance under this part, the applicant shall satisfy the Authority that: 25

(1) the applicant is of good moral character; 26

(2) the applicant has a reputation for financial responsibility, as 27
determined from creditors, employers, and other individuals who have personal knowledge 28
of the applicant; 29

HOUSE BILL 898 49

(3) the applicant is a resident of the State or the principal place of business 1
of the applicant is in the State; and 2

(4) the applicant is unable to obtain adequate business financing on 3
reasonable terms through normal lending channels because the applicant: 4

(i) belongs to a group that historically has been deprived of access 5
to normal economic or financial resources [because of race, color, creed, sex, religion, or 6
national origin]; 7

(ii) has [an identifiable physical handicap that severely limits the 8
ability of the applicant to obtain financial assistance, but that does not limit the ability of 9
the applicant to perform the contract or other activity for which the applicant would be 10
receiving financial assistance] A DOCUMENTED DISABILITY; 11

(iii) has any other social or economic impediment that is beyond the 12
control of the applicant, but that does not limit the ability of the applicant to perform the 13
contract or other activity for which the applicant would be receiving financial assistance, 14
including: 15

1. the lack of formal education or financial capacity; or 16

2. geographical or regional economic distress; or 17

(iv) does not meet the established credit or investment criteria of at 18
least one financial institution. 19

(e) If the applicant enterprise is not a sole proprietorship, to qualify for financial 20
assistance under this part, at least 51% of the enterprise shall be owned by individuals who 21
meet the qualifications for applicants under subsection (d) of this section. 22

[5–558.] 5–545. 23

The liabilit y of the State and of the Authority in providing equity participation 24
financing is limited to investments under the Program. 25

[5–559. 26

(a) This section applies to financing provided under the Program during fiscal 27
years 2021 and 2022 for the purpose of re lieving the adverse effects of the coronavirus 28
pandemic. 29

(b) The Authority may convert to a grant up to $50,000 of the financing described 30
under subsection (a) of this section that is provided to a small business.] 31

5–546. RESERVED. 32
50 HOUSE BILL 898

5–547. RESERVED. 1

Part VI. Small Business Surety Bond Program. 2

[5–561.] 5–548. 3

(a) In this part the following words have the meanings indicated. 4

(b) [“Fund” means the Small Business Surety Bond Fund. 5

(c)] “Principal” means a small business entity that has assets, income, or 6
employees that do not exceed limits that the Authority sets by regulation. 7

[(d)] (C) “Program” means the Small Business Surety Bond Program. 8

[5–562.] 5–549. 9

There is a Small Business Surety Bond PROGRAM WITHIN THE Fund. 10

[5–563. 11

(a) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 12
under § 7–302 of the State Finance and Procurement Article. 13

(2) The Treasurer shall hold the Fund separately, and the Comptroller 14
shall account for the Fund. 15

(b) (1) The Treasurer shall invest the money of the Fund in the same manner 16
as other State money may be invested. 17

(2) Any investment earnings of the Fund shall be credited to the Fund.] 18

[5–564. 19

The Fund consists of: 20

(1) money the State appropriates to the Fund; 21

(2) premiums, fees, and any other amounts the Authority receives with 22
respect to bonding assistance it provides; 23

(3) proceeds the Authority designates from the sale, lease, or other 24
disposition of property or contracts the Authority holds or acquires; and 25

(4) any other money available under the Program.] 26
HOUSE BILL 898 51

[5–565. 1

The Fund shall be used: 2

(1) for the purposes described in the Program; and 3

(2) to pay expenses of the Authority in administering the Program.] 4

[5–566.] 5–550. 5

In administering the Program, the Authority may: 6

(1) use the services of other governmental units; 7

(2) contract for and accept loans and grants from the federal government, 8
the State government, or a local government and their units; and 9

(3) on the terms and conditions it considers advisable: 10

(i) acquire, manage, operate, dispose of, or otherwise deal with 11
property; 12

(ii) take assignments of rentals and leases; and 13

(iii) make contracts, leases, agreements, and arrangements that are 14
necessary or incidental to the performance of its duties. 15

[5–567.] 5–551. 16

The Authority may: 17

(1) prescribe or approve the form of and terms and conditions in 18
applications, guaranty agreements, or any other documents entered into by the Authority, 19
principals, or sureties under the Program; 20

(2) acquire or take assignments of documents executed, obtained, or 21
delivered in connection with any assistance the Authority provides under the Program; 22

(3) set and collect premiums, fees, charges, costs, and expenses in 23
connection with any assistance the Authority provides under the Program; 24

(4) adopt regulations to carry out the Program; and 25

(5) do anything necessary or convenient to carry out its powers and the 26
purposes of the Program. 27
52 HOUSE BILL 898

[5–568.] 5–552. 1

(a) The Authority may guarantee a surety up to the lesser of 90% or [$2,250,000] 2
$3,000,000 of its loss under a bid bond, payment bond, or performance bond on a contract 3
[financed by the federal government, a state government, a local government, a private 4
entity, or a utility that the Public Service Commission regulates]. 5

(b) The term of a guaranty under this part may not exceed the contract term, 6
including: 7

(1) the maintenance or warranty period required by the contract; and 8

(2) the period during which the surety may be liable for latent defects. 9

(c) The Authority may vary the terms and conditions of a guaranty based on: 10

(1) the Authority’s history of experience with a surety; and 11

(2) any other factor the Authority considers relevant. 12

[5–569.] 5–553. 13

(a) The Authority may execute and perform a bid bond, performance bond, and 14
payment bond as a surety for the benefit of a principal in connection with a contract 15
[financed by the federal government or a state government, a local government, a pri vate 16
entity, or a utility regulated by the Public Service Commission]. 17

(b) (1) This subsection does not apply if the sources of funding for the bonds 18
are grants. 19

(2) The bonds may not exceed [$2,500,000] $5,000,000 each. 20

(c) Bonds are subject to the approval of the Authority based on the bond 21
worthiness of the principal. 22

[5–570.] 5–554. 23

(a) The Authority may only approve a guaranty or a bond under this part if the 24
Authority determines that the contract, for which a bond is sought to be guaranteed or 25
issued, will have a substantial economic impact. 26

(b) To determine the economic impact of a contract, the Authority may consider: 27

(1) the amount of the guaranty obligation; 28

HOUSE BILL 898 53

(2) the terms of the bond to be guaranteed; 1

(3) the number of new jobs that the contract to be bonded will create; and 2

(4) any other factor that the Authority considers relevant. 3

[5–571.] 5–555. 4

The Authority may establish a surety bonding line to issue or guarantee multiple 5
bonds to a principal within preapproved terms, conditions, and limitations. 6

[5–572.] 5–556. 7

(a) To qualify for financial assistance under this part the principal shall satisfy 8
the Authority 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, and the Authority shall be satisfied, that: 20

(1) a bond is required to bid on a contract or to serve as prime contractor 21
or subcontractor; 22

(2) a bond cannot be obtained on reasonable terms and conditions without 23
assistance from the Program; and 24

(3) the principal will not subcontract more than 75% of the monetary value 25
of the contract. 26

[5–573.] 5–557. 27

(a) To apply for financial assistance from the Program under this part, a principal 28
and, if applicable, a surety shall submit to the Authority an application on the form that 29
the Authority provides WITH THE INFORMATION THE AUTHORITY REQUIRES. 30
54 HOUSE BILL 898

(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 may require an applicant to provide an audited balance sheet 14
before the Authority approves or denies the application. 15

[(d)] (C) The Authority may not approve a guaranty or bond under this part for 16
a principal that has defaulted on a loan or guaranty from the Authority unless: 17

(1) 2 years have passed since the time of the default; and 18

(2) the principal has cured any default in any financing program 19
administered by the Department. 20

[5–574.] 5–558. 21

(a) In its sole discretion, the Authority may set: 22

(1) the premiums and fees for providing bonding assistance under the 23
Program; and 24

(2) the terms and conditions when the premiums and fees are payable. 25

(b) The premiums and fees may vary in amount among transactions and at 26
different stages of a transaction. 27
HOUSE BILL 898 55

(c) A determination by the Authority on premiums and fees remains effective for 1
as long as the bonding assistance provided by the Authority is in effect. 2

[5–575.] 5–559. 3

(a) A person may not knowingly make or cause to be made a false statement or 4
report in an application or document submitted to the Authority under this part. 5

(b) A person may not knowingly make or cause to be made a false statement or 6
report to influence an action of the Authority under this part: 7

(1) on an application for assistance; or 8

(2) affecting bonding assistance whether or not the assistance has been 9
extended. 10

(c) A person who violates this section is guilty of a misdemeanor and on conviction 11
is subject to imprisonment not exceeding [6 months ] 5 YEARS or a fine not exceeding 12
[$1,000] $50,000 or both. 13

5–1501. 14

(a) In this section, “eligible fund manager” means: 15

(1) an entity that has significant financial or investment experience, under 16
criteria developed by the Department; and 17

(2) includes an entity that the Department designates to manage funds 18
received under subsection (c)(1) of this section. 19

(d) (1) (i) Subject to the provisions of paragraph (2) of this subsection, the 20
Department shall make grants to eligible fund managers to provide investment capital and 21
financial assistance to small, minority, and women–owned businesses in the State. 22

(ii) 1. Financial assistance provided by eligible fund managers 23
shall be in the form of: 24

A. a loan; or 25

B. subject to subsubparagraph 2 of this subparagraph, a 26
grant. 27

2. Financial assistance in the form of a grant: 28

56 HOUSE BILL 898

A. may not exceed $10,000 and shall be issued in conjunction 1
with a loan of any amount; or 2

B. shall be made pursuant to subsection (i) of this section. 3

(III) THE DEPARTMENT SHALL APPROVE A LOAN DISBURSEMENT 4
REQUEST FROM AN ELIG IBLE FUND MANAGER WI THIN 30 DAYS OF RECEIVING TH E 5
REQUEST. 6

(2) Except for money received from the Strategic Energy Investment Fund, 7
the Department shall ensure that eligible fund managers allocate at least 50% of the funds 8
from this Account to small, minority, and women–owned businesses in the jurisdictions and 9
communities surrounding a video lottery facility. 10

(3) WHEN DETERMINING THE GRANT AMOUNT TO AWAR D TO AN 11
ELIGIBLE FUND MANAGE R, THE DEPARTMENT SHALL CONS IDER PERFORMANCE 12
METRICS, INCLUDING FUND MANAGER ACTIVITY. 13

(4) THE DEPARTMENT SHALL CONDUCT AN ANNUAL REVIEW OF THE 14
GRANT AMOUNT AWARDED TO EACH ELIGIBLE FUN D MANAGER TO DETERMI NE 15
WHETHER THE AMOUNT IS SUFFICIENT. 16

(5) AT LEAST ONCE EVERY 3 YEARS, THE DEPARTMENT SHALL ISSUE 17
A REQUEST FOR PROPOSALS TO ADD NEW ELIGIBLE FUND MANAGERS. 18

(g) (1) Subject to paragraph (2) of this subsection, an eligible fund manager 19
may use money from grants received under this section to pay expenses for administrative, 20
actuarial, legal, MARKETING, and technical services. 21

(M) (1) ON OR BEFORE JUNE 30, 2027, AND EACH JUNE 30 THEREAFTER, 22
THE DEPARTMENT SHALL PUBLISH AN ANNUAL FINANCIAL STATUS REPORT ON THE 23
DEPARTMENT’S WEBSITE. 24

(2) THE REPORT UNDER THIS SUBSECTION SHALL INCLUDE: 25

(I) FUND MANAGER ACTIVITY; 26

(II) A FUND MANAGER SATISFACTION SURVEY; 27

(III) FUND MANAGER DESCRIPTIONS; AND 28

(IV) FUND MANAGER DISBURSEMENTS. 29

6–309. 30

HOUSE BILL 898 57

(a) Subject to subsection (b) of this section, this subtitle and the tax credit 1
authorized under it shall terminate on January 1, [2027] 2032. 2

(b) After termination of this subtitle: 3

(1) a business entity may be considered for eligibility for the tax credit 4
authorized under this subtitle based on positions filled before termination of this subtitle, 5
provided that the other requirements of the subtitle are satisfied; and 6

(2) tax credits earned may be carried forward and are subject to recapture 7
in accordance with § 6–305 of this subtitle. 8

PART I. MARYLAND ECONOMIC DEVELOPMENT CORPORATION. 9

10–101. 10

(a) In this subtitle the following words have the meanings indicated. 11

(d) “Corporation” means the Maryland Economic Development Corporation. 12

10–135. RESERVED. 13

10–136. RESERVED. 14

Part II. Regional Institution Strategic Enterprise Zone Program. 15

10–137. 16

(a) In this [subtitle] PART the following words have the meanings indicated. 17

(b) “Area” means a geographic area in one or more political subdivisions in the 18
State described by a closed perimeter boundary. 19

(c) “Fund” means the Regional Institution Strategic Enterprise Zone Fund 20
created under [§ 5–1408] § 10–144 of this subtitle. 21

(d) “Nonprofit organization” means an organization that is exempt or eligible for 22
exemption from taxation under § 501(c)(3) of the Internal Revenue Code. 23

(e) “Qualified institution” means an entity that is designated as a qualified 24
institution under [§ 5–1403] § 10–139 of this subtitle and may include: 25

(1) a regional higher education center as defined under § 10 –101 of the 26
Education Article; 27

58 HOUSE BILL 898

(2) an institution of higher education as defined under § 10 –101 of the 1
Education Article; or 2

(3) a nonprofit organization that is affiliated with a federal agency. 3

(f) “RISE zone” means a geographic area in immediate proximity to a qualified 4
institution that is targeted for increased economic and community development that meets 5
the requirements of [§ 5–1404] § 10–140 of this subtitle and is designated as a Regional 6
Institution Strategic Enterprise zone by the [Secretary] CORPORATION under [§ 5–1404] 7
§ 10–140 of this subtitle. 8

10–138. 9

The purposes of the Regional Institution Strategic Enter prise Zone Program are to 10
access institutional assets that have a strong and demonstrated history of commitment to 11
economic development and revitalization in the communities in which they are located and 12
incentivize the location of innovative start –up businesses based on technology developed, 13
licensed, or poised for commercialization at or in collaboration with qualified Maryland 14
institutions. 15

10–139. 16

(a) An institution may apply to the [Secretary] CORPORATION to be designated 17
as a qualified institution. 18

(b) To be eligible for designation as a qualified institution, the applicant shall: 19

(1) evidence an intention: 20

(i) to make a significant financial investment or commitment in an 21
area of the State that the applicant intends to become a RISE zone; 22

(ii) to use the resources and expertise of the applicant to spur 23
economic development and community revitalization in an area of the State that the 24
applicant intends to become a RISE zone; and 25

(iii) to create a significant number of new jobs within an area of the 26
State that the applicant intends to become a RISE zone; 27

(2) have a demonstrated history of community involvement and economic 28
development within the communities that the applicant serves; and 29

(3) meet the minimum financial qualifications established by the 30
[Secretary] CORPORATION. 31

HOUSE BILL 898 59

(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 considers necessary to evaluate the request for designation 10
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] 2026, 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

60 HOUSE BILL 898

(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 mu nicipal 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 OR PARAGRAPH 28
(3) OF THIS SUBSECTION , approve more than three RISE zones in a single county or 29
municipal corporation; or 30

2. EXCEPT AS PROVIDED I N PARAGRAPH (3) OF THIS 31
SUBSECTION, approve more than four RISE zones in Baltimore City; or 32
HOUSE BILL 898 61

(ii) approve a RISE zone the geographic area of which exceeds 500 1
acres. 2

(3) THE CORPORATION MAY APPRO VE ONE EXTRAORDINARY RISE 3
ZONE IN A SINGLE COUNTY OR MUNICIPAL CORPORATION FOR AN AREA THAT, IN THE 4
DETERMINATION OF THE SECRETARY, PROMOTES QUANTUM COMPUTING. 5

(g) (1) A RISE zone may not be required to be in the immediate geographic 6
proximity of a qualified institution if an appropriate nexus for the increased economic and 7
community development is established with the qualified organization. 8

(2) If the proposed RISE zone is in a rural part of the State, a qualified 9
institution may not be required to be in the immediate area of the RISE zone. 10

(h) [The Secretary may not designate a RISE zone in: 11

(1) a development district established under Title 12, Subtitle 2 of this 12
article; or 13

(2) a special taxing district established under Title 21 of the Local 14
Government Article or Section 62A of the Baltimore City Charter. 15

(i)] The designation of an area as a RISE zone m ay not be construed to limit or 16
supersede a provision of a comprehensive plan, zoning ordinance, or other land use policy 17
adopted by a county, municipal corporation, or bicounty agency with land use authority 18
over the area designated as a RISE zone. 19

10–141. 20

(a) The [Secretary] CORPORATION shall assign to a RISE zone a business and 21
community development concierge who is an employee of the [Department] 22
CORPORATION. 23

(b) A business and community development concierge shall assist entities 24
locating in the RISE zone with: 25

(1) State, county, or municipal corporation permit and license applications; 26

(2) accessing existing programs at the CORPORATION, THE Department, 27
the Department of Housing and Community Development, the Maryland Department of 28
Labor, the Maryland Technology Development Corporation, or the Department of 29
Transportation; and 30

(3) any other activities the [Secretary] CORPORATION authorizes that 31
relate to the development of the RISE zone. 32
62 HOUSE BILL 898

10–142. 1

(a) (1) To the extent provided for in this section, a business entity that locates 2
in a RISE zone is entitled to: 3

(i) for a business entity that locates in the RISE zone before January 4
1, 2023, the property tax credit under § 9–103.1 of the Tax – Property Article; 5

(ii) for a taxable year beginning before January 1, 2023, the income 6
tax credit under § 10–702 of the Tax – General Article; and 7

(iii) priority consideration for financial assistance from programs in 8
TITLE 5, Subtitle 1 of this [title] ARTICLE. 9

(2) For purposes of the income tax credit authorized under paragraph (1)(ii) 10
of this subsection, the business entity is treated as being located in an enterprise zone. 11

(b) Subject to the limitations under subsection (a) of this section, a business entity 12
that moves into or locates in a RISE zone on or after the date that the zone is designated 13
under this [subtitle] PART may qualify for the incentives under this section. 14

(c) A business entity may not qualify for the incentives under subsection (a) of 15
this section unless the [Department] CORPORATION, in consultation with the county or 16
municipal corporation in which a RISE zone is located, certifies the business entity and its 17
location as consistent with the target strategy of the RISE zone. 18

(d) (1) Unless a business entity makes a significant capital investment or 19
expansion of its labor force after a RISE zone is designated, the incentives under this 20
section are not available to a business entity that was in a RISE zone before the date that 21
the zone is designated. 22

(2) The [Department] CORPORATION shall adopt regulations 23
establishing factors to determine if a business entity makes a significant capital investment 24
or expansion of its labor force under paragraph (1) of this subsection. 25

10–143. 26

(a) (1) (i) A qualified institution, THE CORPORATION, a county and, if 27
applicable, a municipal corporation, or the economic development agency of a county or 28
municipal corporation may establish a program to provide rental assistance to a business 29
entity that[: 30

1.] moves into or locates in a RISE zone on or after the date 31
that the zone is designated under this [subtitle; PART; AND 32

HOUSE BILL 898 63

2. has nexus with a qualified institution located in the RISE 1
zone; 2

3. 2. has been in active business not longer than 7 years] PART 3
AT THE TIME THAT THE BUSINESS ENTITY APPLIES TO RECEIVE RENTAL ASSISTANCE 4
FROM THE PROGRAM. 5

(ii) A business entity may not receive rental assistance under a 6
rental assistance program established in accordance with subparagraph (i) of this 7
paragraph for more than [3] 5 years. 8

(2) (i) A qualified institution, a county and, if applicable, a municipal 9
corporation, or the economic development agency of a county or municipal corporation that 10
establishes a rental assistance program in accordance with paragraph (1) of this subsection 11
may submit a request to receive a distribution [of matching funds] from the Fund. 12

(ii) The application shall include: 13

1. a description of the rental assistance program; 14

2. [the amount of funding that the applicant has secured to 15
provide rental assistance under the rental assistance program; 16

3.] the amount requested for distribution from the Fund in 17
accordance with this section; and 18

[4.] 3. any other information requested by the [Department] 19
CORPORATION. 20

(iii) The applicant shall submit the application on or before the date 21
that the [Department] CORPORATION specifies. 22

(b) (1) The [Department] CORPORATION shall review each request for 23
distribution of [matching] funds from the Fund for compliance with the provisions of this 24
section and [Department] CORPORATION regulations. 25

(2) [Subject to the availability of funds in the Fund and paragraph (3) of 26
this subsection, if the Department approves a request for distri bution of matching funds 27
from the Fund, the Department shall distribute to a fund dedicated to the applicant’s rental 28
assistance program an amount equal to three times the amount of funding specified under 29
subsection (a)(2)(ii)2 of this section. 30

(3) Except as provided in subsection (c) of this section, the Department ] 31
THE CORPORATION shall make available not more than 25% of cumulative program funds 32
from the Fund for rental assistance programs in a single RISE zone. 33
64 HOUSE BILL 898

(c) [(1) Within 90 days after approv al by the Department of a request for 1
matching funds under subsection (a) of this section, the applicant shall deposit an amount 2
equal to or greater than the amount specified under subsection (a)(2)(ii)2 of this section into 3
a fund dedicated to the applicant’s rental assistance program. 4

(2) If an applicant fails to have deposited the amount required under 5
paragraph (1) of this subsection, any portion of funds allocated to the applicant that has 6
not been distributed shall be reallocated to another applica nt in accordance with this 7
section. 8

(3)] If the [Department] CORPORATION fails to allocate the funds in the 9
Fund under this [subtitle] PART and rental assistance programs in a single RISE zone 10
have previously received 25% of cumulative program funds from the Fund, the Department 11
may distribute additional funds to applicants for that RISE zone in accordance with this 12
[subtitle] PART. 13

(d) (1) On or before September 15 each year, a rental assistance program that 14
has received a distribution of funds from the Fund shall submit to the [Department] 15
CORPORATION an annual report in the form and containing the information required by 16
the [Secretary] CORPORATION. 17

(2) The report required under paragraph (1) of this subsection shall detail 18
the use of funds received under this section for the immediately preceding fiscal year and 19
provide an update on any funds that were not disbursed during that fiscal year. 20

(3) The [Department] CORPORATION may not distribute [matching] 21
funds from the Fund to a rental assistance program under this section if the rental 22
assistance program has failed to submit the report required under paragraph (1) of this 23
subsection. 24

(e) A rental assistance program that receives a distribution of [matching] funds 25
from the Fund shall be subject to an audit at least once every 3 years by an independent 26
certified public accountant that the applicant and the [Department] CORPORATION 27
select. 28

(f) Based on the findings of an audit conducted under subsection (e) of this 29
section, the [Department] CORPORATION may make an assessment against a qualified 30
institution, a county, a municipal corporation, or an economic development agency to 31
recapture any misused or undistributed funds. 32

10–144. 33

(a) There is a Regional Institution Strategic Enterprise Fund in the 34
[Department] CORPORATION. 35

HOUSE BILL 898 65

(b) The [Secretary] EXECUTIVE DIRECTOR OF THE CORPORATION shall 1
manage and supervise the Fund. 2

(c) (1) The Fund is a special, nonlapsing fund that is not subject to § 7–302 of 3
the State Finance and Procurement Article. 4

(2) The State Treasurer shall hold the Fund separately, and the 5
Comptroller shall account for the Fund. 6

(d) The Fund consists of: 7

(1) money appropriated in the State budget to the Fund; and 8

(2) any other money from any other source accepted for the bene fit of the 9
Fund. 10

(e) The [Department] CORPORATION may use the Fund to: 11

(1) finance, in coordination with qualified institutions, counties, and 12
municipal corporations, the provision of rental assistance to business entities located in 13
RISE zones; and 14

(2) pay the related administrative, legal, and actuarial expenses of the 15
[Department] CORPORATION. 16

(f) (1) The State Treasurer shall invest the money of the Fund in the same 17
manner as other State money may be invested. 18

(2) Any investment earnings of the Fund shall be credited to the Fund. 19

(g) Expenditures from the Fund may be made only in accordance with the State 20
budget. 21

10–145. 22

(A) [In accordance with § 2.5 –109 of this article, the Department ] THE 23
CORPORATION shall submit a report on the effectiveness of the tax incentives authorized 24
under this [subtitle] PART WITH THE ANNUAL REPORT SUBMITTED IN ACCORDANCE 25
WITH § 10–133 OF THIS SUBTITLE. 26

(B) THE REPORT REQUIRED U NDER THIS SECTION SH ALL INCLUDE THE 27
FOLLOWING INFORMATION FOR THE PRECEDING FISCAL YEAR: 28

(1) THE NUMBER OF BUSINE SS ENTITIES THAT REC EIVED 29
ASSISTANCE FROM THE CORPORATION UNDER § 10–141 OF THIS SUBTITLE AND THE 30
TYPE OF ASSISTANCE PROVIDED; 31
66 HOUSE BILL 898

(2) THE NUMBER OF BUSINE SS ENTITIES CERTIFIE D BY THE 1
CORPORATION UNDER § 10–142 OF THIS SUBTITLE; 2

(3) THE NUMBER OF BUSINE SS ENTITIES THAT REC EIVED RENTAL 3
ASSISTANCE FROM A PR OGRAM ESTABLISHED IN ACCORDANCE WITH § 10–143 OF 4
THIS SUBTITLE THAT RECEIVED A DISTRIBUTION FROM THE FUND; AND 5

(4) THE NUMBER OF SM ALL, MINORITY–OWNED, OR WOMEN–OWNED 6
BUSINESSES DESCRIBED UNDER EACH OF ITEMS (1) THROUGH (3) OF THIS 7
SUBSECTION. 8

10–146. 9

(A) This SUBJECT TO SUBSECTION (B) OF THIS SECTION , THIS [subtitle] 10
PART and the tax credits and benefits authorized under it shall terminate on January 1, 11
2030. 12

(B) AFTER THE TERMINATION OF THIS PART , A BUSINESS ENTITY MA Y 13
CONTINUE TO RECEIVE A BENEFIT AUTHORIZED UNDER THIS PART UNTIL THE DATE 14
THAT THE RISE ZONE IN WHICH THE BU SINESS ENTITY IS LOC ATED WOULD 15
OTHERWISE HAVE EXPIRED BUT FOR SUBSECTION (A) OF THIS SECTION. 16

10–147. RESERVED. 17

10–148. RESERVED. 18

Part III. Build Our Future Grant [Pilot] Program. 19

10–149. 20

(a) In this [subtitle] PART the following words have the meanings indicated. 21

(b) “Fund” means the Build Our Future Grant Fund. 22

(c) “Program” means the Build Our Future Grant [Pilot] Program. 23

10–150. 24

(a) There is a Build Our Future Grant [Pilot] Program in the [Department] 25
CORPORATION. 26

(b) The purpose of the Program is to provide grant funding for infrastructure 27
projects intended to support innovation in an eligible technology sector. 28

HOUSE BILL 898 67

(c) Grants may be awarded to private companies, nonprofit entities, local 1
governments, or colleges and universities in the State. 2

(d) The [Department] CORPORATION shall administer the Program. 3

10–151. 4

(a) To carry out the purpose of the Program, the [Department] CORPORATION 5
may award grants in accordance with this [subtitle] PART to approved recipients carrying 6
out infrastructure projects intended to support innovation in any of the following eligible 7
technology sectors: 8

(1) advanced manufacturing; 9

(2) aerospace; 10

(3) agriculture; 11

(4) artificial intelligence; 12

(5) biotechnology; 13

(6) blue technology; 14

(7) cybersecurity; 15

(8) defense; 16

(9) energy and sustainability; 17

(10) life sciences; 18

(11) quantum; and 19

(12) sensor and robotics. 20

(b) Examples of eligible projects include: 21

(1) sensitive compartmented information facilities; 22

(2) wet laboratories; 23

(3) cyber ranges; 24

(4) prototype manufacturing centers; and 25

68 HOUSE BILL 898

(5) other specialized workforce training, skill certification, or 1
research–related spaces. 2

(c) Grant awards may be used to defray the cost a grantee incurs to acquire, 3
construct, rehabilitate, install, improve, or equip an eligible innovation infrastructure 4
project. 5

(d) (1) A single entity may be awarded not more than $2,000,000 in grant 6
funds in a fiscal year. 7

(2) (i) For a grant award up to $1,000,000, a grantee shall provide 8
matching funds that are at least 200% of the grant amount. 9

(ii) For a grant award exceeding $1,000,000, and up to $2,000,000, a 10
grantee shall provide matching funds that are at least 400% of the grant amount. 11

(iii) Funds received by a grantee through other State grant programs 12
are not counted toward the grantee’s matching funds requirement. 13

(3) A grantee must demonstrate an ability to cover the full estimated costs 14
of the project for which the grant is awarded. 15

(4) (i) Not more than 50% of the appropriation to the Fund in a fiscal 16
year may be awarded to colleges and universities in that fiscal year. 17

(ii) Grants to colleges and universities from the Fund must be 18
awarded to projects that: 19

1. are performed in collaboration with private industry; or 20

2. offer the prospect of significant economic impact and the 21
opportunity to develop entrepreneurship or clusters of technological innovation in the 22
State. 23

(E) WHEN PROVIDING FUNDIN G FROM THE FUND, THE CORPORATION 24
SHALL PRIORITIZE APPLICANTS LOCATED IN A REGIONAL INSTITUTION STRATEGIC 25
ENTERPRISE ZONE THAT IS DESIGNATED UNDER PART II OF THIS SUBTITLE. 26

10–152. 27

A grantee may be subject to repayment of the grant in an amount determined by the 28
[Department] CORPORATION if the grantee fails to: 29

(1) comply with reporting requirements established by the [Department] 30
CORPORATION; or 31

HOUSE BILL 898 69

(2) demonstrate appropriate use of grant funds. 1

10–153. 2

(a) There is a Build Our Future Grant Fund. 3

(b) The [Department] CORPORATION shall administer the Fund. 4

(c) The purpose of the Fund is to provide grants for infrastructure projects to 5
support innovation in eligible technology sectors under this [subtitle] PART. 6

(d) (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 State Treasurer shall hold the Fund separately, and the 9
Comptroller shall account for the Fund. 10

(e) The Fund consists of: 11

(1) money appropriated in the State budget to the Fund; 12

(2) any interest earnings of the Fund; and 13

(3) any other money from any other source accepted for the benefit of the 14
Fund. 15

(f) (1) The Fund may be used to: 16

(i) provide grants in accordance with this [subtitle] PART; and 17

(ii) pay the administrative costs of the Program. 18

(2) During each fiscal year, the [Department] CORPORATION may use not 19
more than 10% of the money appropriated to the Fund to administer the Program. 20

(g) (1) The State Treasurer shall invest the money of the Fund in the same 21
manner as other State money may be invested. 22

(2) Any interest earnings of the Fund shall be credited to the Fund. 23

(h) Expenditures from the Fund may be made only in accordance with the State 24
budget. 25

10–154. 26

70 HOUSE BILL 898

On or before July 1, 2026, AND EACH JULY 1 THEREAFTER, the [Department] 1
CORPORATION shall report to the Governor and, in accordance with § 2–1257 of the State 2
Government Article, the General Assembly on the projects funded through and the 3
economic impact of the Program. 4

10–155. 5

The [Secretary] CORPORATION may adopt regulations to carry out this [subtitle] 6
PART. 7

10–156. 8

THIS PART AND THE GRANT PROGRAM UNDER IT SHALL TERMINATE ON JUNE 9
30, 2030. 10

10–470. 11

(b) (1) Whenever the Corporation is authorized by law to make a grant, 12
[including a grant from the Economic Development Opportunities Program Account 13
authorized under § 7–314 of the State Finance and Procurement Article, ] the Corporation 14
may use money appropriated for the grant to make an equity investment in a qualified 15
business. 16

12–201. 17

(a) In this subtitle the following words have the meanings indicated. 18

(p) “RISE zone” means an area designated as a Regional Institution Strategic 19
Enterprise zone under [§ 5–1404] § 10–140 of this article. 20

Article – Corporations and Associations 21

1–203. 22

(b) (14) BEGINNING IN FISCAL Y EAR 2027, THE DEPARTMENT SHALL 23
WAIVE THE FILING FEE FOR A BUSINESS ENTIT Y DESCRIBED UNDER PA RAGRAPH 24
(3)(II) OF THIS SUBSECTION FOR EACH YEAR THAT THE ENTITY PROVIDES EVIDENCE 25
TO THE DEPARTMENT THAT THE ENTITY: 26

(I) HAS LOCATED WITH IN A REGIONAL INSTITUTION 27
STRATEGIC ENTERPRISE ZONE THAT IS DESIGNATED UNDER TITLE 10, SUBTITLE 1 28
OF THE ECONOMIC DEVELOPMENT ARTICLE WITHIN 3 YEARS OF THE DATE BY 29
WHICH THE FILING FEE IS DUE; AND 30

HOUSE BILL 898 71

(II) IS IN AN ELIGIBLE TEC HNOLOGY SECTOR DESCR IBED 1
UNDER § 10–151 OF THE ECONOMIC DEVELOPMENT ARTICLE. 2

[(14)] (15) There is no processing fee for documents filed to dissolve, cancel, 3
or terminate an entity under this subsection. 4

Article – State Finance and Procurement 5

7–309. 6

(a) There is a State Reserve Fund. 7

(b) The State Reserve Fund comprises: 8

(1) the Dedicated Purpose Account; 9

(2) the Revenue Stabilization Account; AND 10

(3) the [Economic Development Opportunities Program Account ] 11
STRATEGIC CLOSING FUND; and 12

(4) the Catastrophic Event Account. 13

Article – State Government 14

9–1A–27. 15

(a) Except as provided in subsections (b) and (c) of this section and § 16
9–1A–26(a)(3) of this subtitle, on a properly approved transmittal prepared by the 17
Commission, the Comptroller shall pay the fol lowing amounts from the proceeds of video 18
lottery terminals at each video lottery facility: 19

(6) [(i) except as provided in items (ii) and (iii) of this item,] 1.5% to BE 20
DISTRIBUTED EQUALLY BETWEEN THE MARYLAND SMALL BUSINESS 21
DEVELOPMENT FINANCING FUND ESTABLISHED UNDER § 5–515 OF THE ECONOMIC 22
DEVELOPMENT ARTICLE AND BE DISTRIBUTED: 23

(I) $5,000,000 TO THE MARYLAND SMALL BUSINESS 24
DEVELOPMENT FINANCING FUND ESTABLISHED UNDER § 5–515 OF THE ECONOMIC 25
DEVELOPMENT ARTICLE; AND 26

(II) THE REMAINDER TO the Small, Minority, and Women –Owned 27
Businesses Account established under § 5–1501 of the Economic Development Article; 28

72 HOUSE BILL 898

[(ii) for fiscal year 2018, 1.5% to the General Fund to pay a portion of 1
the costs of the grants provided under Chapters 6 and 607 of th e Acts of the General 2
Assembly of 2017; and 3

(iii) for fiscal years 2019 and 2020, 1.5% to the Education Trust Fund 4
established under § 9–1A–30 of this subtitle;] 5

(c) (1) For the first 10 years of operations at a video lottery facility in Allegany 6
County, on a properly approved transmittal prepared by the Commission, the Comptroller 7
shall pay the following amounts from the proceeds of video lottery terminals at a video 8
lottery facility in Allegany County: 9

(v) 1. except as provided in items 2 and 3 of this item, 0.75% to 10
the Small, Minority, and Women –Owned Businesses Account established under § 5 –1501 11
of the Economic Development Article; 12

Article – Tax – General 13

11–247. 14

(A) (1) IN THIS SECTION , “AFFILIATED GROUP ” HAS THE MEANING 15
STATED UNDER § 1504 OF THE INTERNAL REVENUE CODE AND INCLUDES RELATED 16
PARTIES DESCRIBED UNDER § 267(B)(10), (11), OR (12) OF THE INTERNAL REVENUE 17
CODE. 18

(2) FOR THE PURPOSES OF THIS SUBSECTION: 19

(I) ALL REFERENCES TO A CORPORATION OR PARTN ERSHIP 20
UNDER § 267(B)(10) OF THE INTERNAL REVENUE CODE INCLUDE AN S 21
CORPORATION; AND 22

(II) ALL REFERENCES TO AN S CORPORATION UNDER § 23
267(B)(10), (11), AND (12) INCLUDE A QUALIFIED SUBCHAPTER S CORPORATION 24
SUBSIDIARY. 25

(B) THE SALES AND USE TAX IMPOSED ON A TAXABLE SERVICE DESCRIBED 26
UNDER § 11–101(M)(14) OR (15) OF THIS TITLE OR A D IGITAL CODE OR DIGIT AL 27
PRODUCT DOES NOT APP LY TO A SALE IF BOTH THE VENDOR AND THE B UYER ARE 28
MEMBERS OF THE SAME AFFILIATED GROUP. 29

SECTION 4. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 30
as follows: 31

Article – Tax – General 32

HOUSE BILL 898 73

10–702. 1

(a) (1) In this section the following words have the meanings indicated. 2

(4) (ii) “Enterprise zone” includes a Regional Institution Strategic 3
Enterprise zone established under [Title 5, Subtitle 14 ] TITLE 10, SUBTITLE 1 of the 4
Economic Development Article. 5

(c) If a business entity does not claim an enhanced tax credit under subsection (e) 6
of this section for a focus area employee, for the taxable year in which a business entity 7
satisfies the requirements of § 5–707 or [§ 5–1406] § 10–142 of the Economic Development 8
Article, a credit is allowed that equals: 9

(1) up to $3,000 of the wages paid to each qualified employee who: 10

(i) is an economically disadvantaged individual; and 11

(ii) is not hi red to replace an individual whom the business entity 12
employed in that or any of the 3 preceding taxable years; and 13

(2) up to $1,000 of the wages paid to each qualified employee who: 14

(i) is not an economically disadvantaged individual; and 15

(ii) is not hired to replace an individual whom the business entity 16
employed in that or any of the 3 preceding taxable years. 17

(e) (1) For the taxable year in which a business entity satisfies the 18
requirements of §§ 5–706 and 5–707 or [§ 5–1406] § 10–142 of the Economic Development 19
Article, a credit is allowed that equals: 20

(i) up to $4,500 of the wages paid to each focus area employee who: 21

1. is an economically disadvantaged individual; and 22

2. is not hired to replace an individual whom the b usiness 23
entity employed in that year or any of the 3 preceding taxable years; and 24

(ii) up to $1,500 of the wages paid to each focus area employee who: 25

1. is not an economically disadvantaged individual; and 26

2. is not hired to replace an indiv idual whom the business 27
entity employed in that year or any of the 3 preceding taxable years. 28

10–721. 29
74 HOUSE BILL 898

(a) (1) In this section the following words have the meanings indicated. 1

(2) “Department” means the Department of Commerce. 2

(3) “Maryland base amount” means the base amount as defined in § 41(c) 3
of the Internal Revenue Code that is attributable to Maryland, determined by: 4

(i) substituting “Maryland qualified research and development 5
expense” for “qualified research expense”; 6

(ii) substituting “Maryland qualified research and development” for 7
“qualified research”; and 8

(iii) using, instead of the “fixed base percentage”: 9

1. the percentage that the Maryland qualified research and 10
development expense for the 4 taxable years immediately preceding the taxable year in 11
which the expense is incurred is of the gross receipts for those years; or 12

2. for a taxpayer who has fewer than 4 but at least 1 prior 13
taxable year, the percentage as determined under item 1 of this item, determined using the 14
number of immediately preceding taxable years that the taxpayer has. 15

(4) “Maryland gross receipts” means gross receipts that are reasonably 16
attributable to the conduct of a trade or business in this State, determined under methods 17
prescribed by the Comptroller based on standards similar to the standards under § 10–402 18
of this title. 19

(5) “Maryland qualified research and development” means qualified 20
research as defined in § 41(d) of the Internal Revenue Code that is conducted in this State. 21

(6) “Maryland qualified research and development expenses” means 22
qualified research expenses as defined in § 41(b) of the Internal Revenue Code incurred for 23
Maryland qualified research and development. 24

(7) “Net book value assets” means the total of a business’s net value of 25
assets, including intangibles but not including liabilities, minus depreciation and 26
amortization. 27

(8) “Small business” means a for –profit corporation, limited liability 28
company, partnership, or sole proprietorship with net book value assets totaling, at the 29
beginning or the end of the taxable year for which Maryland qualified research and 30
development expenses are incurred, as reported on the balance sheet, less than $5,000,000. 31

(b) (1) The purpose of the Research and Devel opment Tax Credit Program is 32
to foster increased research activities and expenditures in Maryland. 33
HOUSE BILL 898 75

(2) Subject to the limitations of this section, an individual or a corporation 1
may claim credits against the State income tax in an amount equal to 10% of the amount 2
by which the Maryland qualified research and development expenses paid or incurred by 3
the individual or corporation during the taxable year exceed the Maryland base amount for 4
the individual or corporation. 5

(I) (1) THE DEPARTMENT MAY NOT AP PROVE A CREDIT UNDER T HIS 6
SECTION FOR A TAXABLE YEAR BEGINNING AFTER DECEMBER 31, 2030. 7

(2) IF A TAXPAYER ’S TAXABLE YEAR FOR I NCOME TAX PURPOSES I S 8
NOT THE CALENDAR YEA R, FOR THE TAXABLE YEAR THAT BEGINS IN CALEN DAR 9
YEAR 2030, THE TAXPAYER MAY APP LY FOR O NLY A PRORATED CREDI T FOR 10
RESEARCH AND DEVELOP MENT EXPENSES PAID O R INCURRED IN THE TA XABLE 11
YEAR FOR THAT PART OF THE TAXABLE YEAR THAT FALLS IN CALENDAR YEAR 2030. 12

10–725. 13

(a) (1) In this section the following words have the meanings indicated. 14

(2) “Biotechnology company” means a company organized for profit that is 15
primarily engaged in, or within 2 months will be primarily engaged in, the research, 16
development, or commercialization of innovative and proprietary technology that 17
comprises, interacts w ith, or analyzes biological material including biomolecules (DNA, 18
RNA, or protein), cells, tissues, or organs. 19

(3) (i) “Company” means any entity of any form duly organized and 20
existing under the laws of any jurisdiction for the purpose of conducting business for profit. 21

(ii) “Company” does not include a sole proprietorship. 22

(4) “Department” means the Department of Commerce. 23

(5) (i) “Investment” means the contribution of money in cash or cash 24
equivalents expressed in United States dollars, at a risk of loss, to a qualified Maryland 25
biotechnology company in exchange for stock, a partnership or membership interest, or 26
other ownership interest in the equity of the qualified Maryland biotechnology company, 27
title to which ownership interest shall vest in the qualified investor. 28

(ii) “Investment” does not include debt. 29

(iii) For purposes of this section, an investment is at risk of loss when 30
its repayment entirely depends upon the success of the business operations of the qualified 31
company. 32

76 HOUSE BILL 898

(6) (i) “Qualified investor” means any individual or entity that invests 1
at least $25,000 in a qualified Maryland biotechnology company and that is required to file 2
an income tax return in any jurisdiction. 3

(ii) “Qualified investor” does not include: 4

1. a qualified pension plan, individual retirement account, or 5
other qualified retirement plan under the Employee Retirement Income Security Act of 6
1974, as amended, or fiduciaries or custodians under such plans, or similar tax –favored 7
plans or entities under the laws of other countries; or 8

2. a founder or current employee of the qualified Maryland 9
biotechnology company, if the company has been in active business for more than 5 years. 10

(7) (i) “Qualified Maryland biotechnology company” means a 11
biotechnology company that: 12

1. has its headquarters and base of operations in this State; 13

2. has fewer than 50 full–time employees; 14

3. has been in active business no longer than 12 years; 15

4. does not have its securities publicly traded on any 16
exchange; 17

5. has been certified as a biotechnology company by the 18
Department; and 19

6. the qualified investors in the company have not received 20
more than $7,000,000 in tax credits in the aggregate under this section. 21

(ii) “Qualified Mary land biotechnology company” includes a 22
company that, within 2 months of the receipt of the investment, has met the requirements 23
of subparagraph (i) of this paragraph. 24

(8) “Secretary” means the Secretary of Commerce. 25

(b) (2) Subject to paragraphs (3) and (4) of this subsection and subsections (d) 26
and (e) of this section, for the taxable year in which an investment in a qualified Maryland 27
biotechnology company is made, a qualified investor may claim a credit against the State 28
income tax in an amount equa l to the amount of tax credit stated in the final credit 29
certificate approved by the Secretary for the investment as provided under this section. 30

(3) To be eligible for the tax credit described in paragraph (2) of this 31
subsection, the qualified investor shall be: 32

HOUSE BILL 898 77

(i) for a company WITH ITS BASE OF OPERATIONS OUTSIDE THE 1
STATE, duly organized and in good standing in the jurisdiction under the laws under which 2
it is organized; 3

(ii) for a company WITH ITS BASE OF OPERATIONS IN THE STATE, 4
in good standing and authorized or registered to do business in the State; 5

(iii) current in the payment of all tax obligations to the State or any 6
unit or subdivision of the State; and 7

(iv) not in default under the terms of any contract with, indebtedness 8
to, or grant from the State or any unit or subdivision of the State. 9

(5) IF FOR A TAXABLE YEAR BEGINNING AFTER DECEMBER 31, 2026, 10
IF THE QUALIFIED INVESTOR ALLOWED TO CLAIM A CREDIT UNDER PARAGRAPH (2) 11
OF THIS SUBSECTION I S A PASS –THROUGH ENTITY THAT PAYS THE INCOME TAX 12
IMPOSED UNDER § 10–102.1 OF THIS TITLE ON BEH ALF OF ALL MEMBERS O F THE 13
PASS–THROUGH ENTITY, THE PASS–THROUGH ENTITY M AY CLAIM AND ALLOCAT E 14
THE CREDIT AMONG MEMBERS OF THE PASS–THROUGH ENTITY IN ANY MANNER. 15

(d) (1) The tax credit allowed in an initial tax credit certificate issued under 16
this section is: 17

(i) except as provided in item (ii) of this paragraph, 33% of the 18
investment in a qualified Maryland biotechnology company, not to exceed $250,000; or 19

(ii) [50%] 75% of the investment in the qualified Maryland 20
biotechnology company, not to exceed [$500,000] $750,000, if a qualified Maryland 21
biotechnology company: 22

1. is located in Allegany County, Dorchester County, Garrett 23
County, or Somerset County; or 24

2. is located in a Regional Institution Strategic Enterprise 25
zone that is designated under [Title 5, Subtitle 14] TITLE 10, SUBTITLE 1 of the Economic 26
Development Article[, is based on technology that was developed at a qualified institution 27
within that zone, and has been in active business not longer than 7 years]. 28

(2) During any fiscal year, the Secretary may not certify eligibility for tax 29
credits for investments in a single qualified Maryland biotechnology company that in the 30
aggregate exceed 10% of the total appropriations to the Maryland Biotechnology 31
Investment Tax Credit Reserve Fund for that fiscal year. 32

78 HOUSE BILL 898

(3) (I) If the tax credit allowed unde r 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) FOR A TAXABLE YEAR BE GINNING AFTER DECEMBER 31, 4
2026, IF THE QUALIFIED INV ESTOR ALLOWED TO CLA IM A CREDIT UNDER 5
SUBPARAGRAPH (I) OF THIS PARAGRAPH IS A PASS–THROUGH ENTITY THAT PAYS 6
THE INCOME TAX IMPOS ED UNDER § 10–102.1 OF THIS TITLE ON BEH ALF OF ALL 7
MEMBERS OF THE PASS–THROUGH ENTITY, THE PASS–THROUGH ENTITY MAY CLAIM 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 PROVIDE THE MEANS FOR A QUALIFIED INVESTOR TO FILE 12
THE INVESTOR’S RETURN ELECTRONICALLY. 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 the production of: 29
HOUSE BILL 898 79

1. a student film; 1

2. a noncommercial personal video; 2

3. a sports broadcast; 3

4. a broadcast of a live event; 4

5. a video, computer, or social networking game; 5

6. pornography; 6

7. an infomercial; 7

8. a digital product or an animation project other than a 8
digital animation project; or 9

9. a multimedia project. 10

(7) “Qualified film production entity” means an entity that: 11

(i) is carrying out a film production activity; and 12

(ii) the Secretary determines to be eligible for the tax credit under 13
this section in accordance with subsection (c) of this section. 14

(A–1) THE PURPOSE OF THE TA X CREDIT ALLOWED UND ER THIS SECTION IS 15
TO INCENTIVIZE AND P ROMOTE FILM PRODUCTI ON ACTIVITY IN THE STATE TO 16
STIMULATE THE LOCAL ECONOMY BY CREATING JOBS, FOSTERING INVESTMENT IN 17
INDUSTRY INFRASTRUCTURE, AND BOOSTING TOURISM. 18

(b) (1) A qualified film production entity may claim a credit against the State 19
income tax for film production activities in the State in an amount equal to the amount 20
stated in the final tax credit certificate approved by the Secreta ry for film production 21
activities. 22

(2) If the tax credit allowed under this section in any taxable year exceeds 23
the total tax otherwise payable by the qualified film production entity for that taxable year, 24
the qualified film production entity may claim a refund in the amount of the excess. 25

(c) (1) Before beginning a film production activity, a film production entity 26
shall submit to the Department an application to qualify as a film production entity. 27

(2) The application shall describe the anticipated film production activity, 28
including: 29
80 HOUSE BILL 898

(i) the projected total budget; 1

(ii) the estimated number of Maryland resident and out –of–state 2
employees and total wages to be paid; and 3

(iii) the anticipated dates for carrying out the major elements of the 4
film production activity. 5

(3) Except as provided in subsection (h) of this section, to qualify as a film 6
production entity, the estimated total direct costs incurred in the State must exceed 7
$250,000. 8

(4) The application shall include any other information required by the 9
Secretary. 10

(5) For a film production entity with total direct costs that exceed $250,000, 11
the Secretary may require the information provided in an application to be verified by an 12
independent auditor selected and paid for by the film production entity seeking 13
certification. 14

(6) The Secretary shall: 15

(i) determine if the film production entity qualifies for the credit 16
under this section; and 17

(ii) notify the Comptroller of the estimated amount of total direct 18
costs and the taxable year the credit will be claimed. 19

(7) (I) A QUALIFIED FILM PRODU CTION ENTITY MAY AME ND ITS 20
INITIAL APPLICATION SUBMITTED UNDER PARAGRAPH (1) OF THIS SUBSECTION IF 21
AN INDEPENDENT AUDIT OR SELECTED AND PAID FOR BY THE QUALIFIED FILM 22
PRODUCTION ENTITY HAS VERIFIED THAT THE PROJECTED T OTAL BUDGET IN ITS 23
INITIAL APPLICATION HAS INCREASED OR DECREASED BY AT LEAST 50%. 24

(II) THE SECRETARY SHALL: 25

1. EVALUATE AN AMENDED APPLICATION SUBMITTE D 26
UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH; 27

2. DETERMINE IF THE FILM P RODUCTION ENTITY 28
CONTINUES TO QUALIFY FOR THE CREDIT UNDER THIS SECTION; AND 29

3. SUBJECT TO THE AVAIL ABILITY OF CREDIT AM OUNT 30
IN THE FISCAL YEAR , IF THE SECRETARY APPROVES THE AMENDED APPLICATION, 31
HOUSE BILL 898 81

NOTIFY THE COMPTROLLER OF THE AMENDED ESTIMATED AM OUNT OF TOTAL 1
DIRECT COSTS AND THE TAXABLE YEAR THE CREDIT WILL BE CLAIMED. 2

(f) (1) Except as provided in paragraph (2) of this subsection, the Secretary 3
may not issue tax credit certificates for credit amounts in the aggregate totaling more than: 4

(i) for fiscal year 2014, $25,000,000; 5

(ii) for fiscal year 2015, $7,500,000; 6

(iii) for fiscal year 2016, $7,500,000; 7

(iv) for fiscal year 2019, $8,000,000; 8

(v) for fiscal year 2020, $11,000,000; 9

(vi) for fiscal years 2021 through 2023, $12,000,000; 10

(vii) for fiscal year 2024, $15,000,000; 11

(viii) for fiscal year 2025, $17,500,000; and 12

(ix) for fiscal year 2026 and each fiscal year thereafter, $12,000,000. 13

(2) If the aggregate credit amounts under the tax credit certificates issued 14
by the Secretary total less than the maximum provided under paragraph (1) of this 15
subsection in any fiscal year, any excess amount may be carried forward and issued under 16
tax credit certificates in a subsequent fiscal year. 17

(3) (I) [The EXCEPT AS PROVIDED IN SUBPARAGRAPH (II) OF THIS 18
PARAGRAPH, THE Secretary may not issue tax credit certificates for credit amounts 19
totaling more than $10,000,000 in the aggregate for a single film production activity. 20

(II) FOR FISCAL YEARS 2027 THROUGH 2030, THE SECRETARY 21
MAY NOT ISSUE TAX CREDIT CERTIFICATES FOR CREDIT AMOUNTS TOTALING MORE 22
THAN $30,000,000 IN THE AGGREGATE FOR A SINGLE FILM PRODUCTION ACTIVITY. 23

(4)] (i) For fiscal year 2019 and each fiscal year thereafter, the Secretary 24
shall make 10% of the credit amount authorized under paragraph (1) of this subsection 25
available for Maryland small or independent film entities. 26

(ii) If the total amount of credits applied for by Maryland small or 27
independent film entities is less than the amount made available under subparagraph (i) 28
of this paragraph, the Secretary shall make available the unused amount of credits for use 29
by qualified film production entities. 30

82 HOUSE BILL 898

10–732. 1

(a) (1) In this section the following words have the meanings indicated. 2

(2) “Costs” means the costs to an individual or corporation for: 3

(i) security clearance administrative expenses incurred with regard 4
to an employee in the State including, but not limited to: 5

1. processing application requests for clear ances for 6
employees in the State; 7

2. maintaining, upgrading, or installing computer systems in 8
the State required to obtain federal security clearances; and 9

3. training employees in the State to administer the 10
application process; and 11

(ii) construction and equipment costs incurred to construct or 12
renovate a sensitive compartmented information facility (“SCIF”) located in the State as 13
required by the federal government. 14

(3) “Department” means the Department of Commerce. 15

(4) “Secretary” means the Secretary of Commerce. 16

(5) “Small business” has the meaning stated in § 7–218 of this article. 17

(b) (1) Subject to the limitations of this section, for a taxable year beginning 18
after December 31, 2022, but before January 1, [2028] 2033, an individual or a corporation 19
that employs not more than 500 employees may claim credits against the State income tax 20
for: 21

(i) security clearance administrative expenses, not to exceed 22
$200,000; 23

(ii) expenses incurred for rental payments owed during the first year 24
of a rental agreement for spaces leased in the State if the individual or corporation is a 25
small business that performs security–based contracting, not to exceed $200,000; and 26

(iii) Subject to paragraph (2) of this subsection, constructi on and 27
equipment costs incurred to construct or renovate a single SCIF in an amount equal to the 28
lesser of 50% of the costs or $200,000. 29

(2) The total amount of construction and equipment costs incurred to 30
construct or renovate multiple SCIFs for which an individual or a corporation is eligible to 31
claim as a credit against the State income tax is $500,000. 32
HOUSE BILL 898 83

SECTION 5. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 1
as follows: 2

Article – Tax – Property 3

9–103. 4

(a) (1) In this section the following words have the meanings indicated. 5

(6) (i) “Qualified property” means real property that is: 6

1. not used for residential purposes; 7

2. used in a trade or business by a business entity that meets 8
the requirements of § 5–707 of the Economic Development Article; and 9

3. located in an enterprise zone that is designated under 10
Title 5, Subtitle 7 of the Economic Development Article. 11

(ii) “Qualified property” includes personal property on real property 12
that is located in a focus area as defined in § 5–701 of the Economic Development Article. 13

(b) (1) The governing body of a county or of a municipal corporation shall grant 14
a tax credit under this section against the property tax imposed on the eligible assessment 15
of qualified property. 16

(d) (2) For newly constructed qualified property that provides both office and 17
retail space and became eligible for the credit under this section on or after [January 1, 18
2019] JULY 1, 2018, but before January 1, 2022, the appropriate governing body shall 19
calculate the amount of the tax credit under this section equal to a percentage of the amount 20
of property tax imposed on the eligible assessment of the qualified property as follows: 21

(i) 80% in each of the 1st 8 taxable years following the calendar year 22
in which the property initially becomes a qualified property; 23

(ii) 70% in the 9th taxable year; 24

(iii) 60% in the 10th taxable year; 25

(iv) 50% in the 11th taxable year; 26

(v) 40% in the 12th taxable year; and 27

(vi) 30% in the 13th taxable year. 28

84 HOUSE BILL 898

(5) For qualified property located in a focus area, the appropriate governing 1
body shall calculate the amount of the tax credit under this section equal to 80% of the 2
amount of property tax imposed on the eligible assessment of the qualified property: 3

(i) for newly constructed qualified property that provides both office 4
and retail space and became eligible for the credit under this section on or after [January 5
1, 2019 ] JULY 1, 2018, but before January 1, 2022, for each of the 13 taxable years 6
following the calendar year in which the property initially becomes a qualified property; or 7

(ii) for any other qualified property, for each of the 10 taxable years 8
following the calendar year in which the property initially becomes a qualified property. 9

(e) (1) A tax credit under this section is available to a qualified property for no 10
more than 10 consecutive years or, in the case of newly constructed qualified property that 11
provides both office and retail space and became eligible for the credit un der this section 12
on or after [January 1, 2019] JULY 1, 2018, but before January 1, 2022, no more than 13 13
consecutive years, beginning with: 14

(i) the taxable year following the calendar year in which the real 15
property initially becomes a qualified property; or 16

(ii) the taxable year in which the real property initially becomes a 17
qualified property, subject to the approval of the appropriate local governing body and the 18
Secretary of Commerce. 19

9–103.1. 20

(a) (1) In this section the following words have the meanings indicated. 21

(6) “Qualified property” means real property that is: 22

(i) located in a RISE zone; 23

(ii) not used for residential purposes; and 24

(iii) used in a trade or business by a business entity that locates in 25
the RISE zone before January 1, 2023. 26

(7) “RISE zone” has the meaning stated in [§ 5 –1401] § 10–137 of the 27
Economic Development Article. 28

(b) The governing body of a county or of a municipal corporation shall grant a tax 29
credit under this section against the property tax imposed on the eligible assessment of 30
qualified property. 31

HOUSE BILL 898 85

(c) (3) [For] EXCEPT AS PROVIDED IN PARAGRAPH (4) OF THIS 1
SUBSECTION, FOR purposes of calculating the amount of the credit allowed under this 2
section, the amount of property tax imposed on the eligible assessment shall be calculated 3
without reduction for any credits allowed under this title. 4

(4) (i) For qualified property located in an enterprise zone designated 5
under Title 5, Subtitle 7 of the Economic Development Article, the appropriate gover ning 6
body shall calculate the amount of the tax credit under this section equal to 80% of the 7
amount of property tax imposed on the eligible assessment of the qualified property, AFTER 8
FIRST APPLYING ANY CREDITS REQUIRED UNDER § 9–103 OF THIS SUBTITLE, for each 9
of the 5 taxable years following the calendar year in which the property initially becomes a 10
qualified property. 11

(ii) For qualified property located in a focus area designated under § 12
5–706 of the Economic Development Article, the appropriate governing body shall calculate 13
the amount of the tax credit under this section equal to 100% of the amount of property tax 14
imposed on the eligible assessment of the qualified property, AFTER FIRST APPLYING ANY 15
CREDITS REQUIRED UNDER § 9–103 OF THIS SUBTITLE, for each of the 5 taxable years 16
following the calendar year in which the property initially becomes a qualified property. 17

(iii) 1. If a business entity is certified as consistent with the 18
target strategy of the RISE zone and the qualified property is located in an enterprise zone 19
or focus area, the amount of the required reimbursement under § 9 –103(h) of this subtitle 20
may only be for the amount required for the required property tax credits under § 9–103 of 21
this subtitle. 22

2. The property tax credits required under subparagraphs (i) 23
and (ii) of this paragraph do not alter the amount of funds required to be reimbursed under 24
§ 9–103(h) of this subtitle. 25

3. IF A BUSINESS ENTITY IS CERTIFIED AS CONS ISTENT 26
WITH THE TARGET STRA TEGY OF THE RISE ZONE AND THE QUALIFI ED PROPERTY 27
IS LOCATED IN AN ENT ERPRISE ZONE OR FOCUS AREA, THE BUSINESS ENTITY MAY 28
CONCURRENTLY CLAIM THE PROPERTY TAX CRED ITS UNDER THIS SECTI ON AND § 29
9–103 OF THIS SUBTITLE, PROVIDED THAT THE TO TAL PROPERTY TAX CRE DITS IN 30
ANY TAXABLE YEAR MAY NOT EXCEED 100% OF THE PROPERTY TAX THAT WOULD 31
OTHERWISE BE DUE TO THE STATE AND LOCAL JURISDICTION. 32

4. THE CONCURRENT APPLIC ATION OF PROPERTY TA X 33
CREDITS UNDER THIS S ECTION MAY NOT ALTER THE TIME LIMITATION ON THE 34
AVAILABILITY OF ANY PROPERTY TAX CREDIT. 35

(5) The governing body of a county or municipal corporation may increase, 36
by local law, the percentage under paragraph (1) of this subsection. 37

86 HOUSE BILL 898

(6) (i) If a RISE zone is renewed as provided under [§ 5 –1404] § 1
10–140 of the Economic Development Article, the governing body of a county or municipal 2
corporation shall calculate the amount of the tax credit under this section equal to at least 3
10% of the amount of property tax imposed on the eligible assessment of the qualified 4
property, AFTER FIRST APPLYING ANY CREDITS REQUIRED UNDER § 9–103 OF THIS 5
SUBTITLE, for the sixth through tenth taxable years. 6

(ii) The governing body of a county or municipal corporation may 7
increase, by local law, the percentage under subparagraph (i) of this paragraph. 8

(d) (1) Except as provided in subsection (c)(6) of this section, a tax credit under 9
this section is available to a qualified property for no more than 5 consecutive years 10
beginning with: 11

(I) the taxable year following the calendar year in whic h the real 12
property initially becomes a qualified property; OR 13

(II) THE TAXABLE YEAR IN WHICH THE REAL PROPE RTY 14
INITIALLY BECOMES A QUALIFIED PROPERTY, SUBJECT TO THE APPROVAL OF THE 15
APPROPRIATE LOCAL GOVERNING BODY AND THE DEPARTMENT OF COMMERCE. 16

(2) If the designation of a RISE zone expires, the tax credit under this 17
section continues to be available to a qualified property. 18

(3) State property tax imposed on real property is not affected by this 19
section. 20

(e) When a Regional Institution Strate gic Enterprise zone is designated by the 21
[Secretary of Commerce] MARYLAND ECONOMIC DEVELOPMENT CORPORATION, the 22
[Secretary] CORPORATION shall certify to the State Department of Assessments and 23
Taxation: 24

(1) the real properties in the zone that are quali fied properties for each 25
taxable year for which the property tax credit under this section is to be granted; and 26

(2) the date that the real properties became qualified properties. 27

(f) Before property tax bills are sent, the State Department of Assessments and 28
Taxation shall submit to the [Secretary of Commerce ] MARYLAND ECONOMIC 29
DEVELOPMENT CORPORATION a list containing: 30

(1) the location of each qualified property; 31

(2) the amount of the base year value for each qualified property; and 32

HOUSE BILL 898 87

(3) the amount of the eligible assessment for each qualified property. 1

9–230. 2

(m) (1) On October 1 [of each year ], 2026, AND EACH OCTOBER 1 3
THEREAFTER, each county and municipal corporation that has granted tax credits under 4
this section shall report to the Department [, the Department of Commerce, and the 5
Comptroller]: 6

[(1)] (I) [the amount of ] FOR each credit granted for that year , THE 7
FOLLOWING INFORMATION: 8

1. THE AMOUNT OF THE CREDIT; 9

2. THE NAME AND ADDRESS OF THE BUSINESS ENTITY; 10

3. THE INVESTMENT ASSOCIATED WITH THE CREDIT; 11

4. WHETHER THE CREDIT R ESULTED FROM AN 12
EXPANSION, A RELOCATION, OR A NEW BUSINESS; 13

5. THE NUMBER OF JOBS A SSOCIATED WITH THE 14
CREDIT; 15

6. WHETHER THE BUSINESS ENTITY HAD A PRESENCE IN 16
THE STATE PRIOR TO RECEIVING THE CREDIT AND T HE BUSINESS ENTITY’S YEARS 17
OF OPERATION; AND 18

7. THE TOTAL NUMBER OF INDIVIDUALS EMPLOYED BY 19
THE BUSINESS ENTITY; and 20

[(2)] (II) whether the business entity is in compliance with the 21
requirements for the tax credit. 22

(2) ON OR BEFORE DECEMBER 31, 2026, AND EACH DECEMBER 31 23
THEREAFTER, THE DEPARTMENT SHALL AGGR EGATE THE REPORTS RE CEIVED 24
UNDER PARAGRAPH (1) OF THIS SUBSECTION AND SUBMIT A COMBINED REPORT TO 25
THE GENERAL ASSEMBLY, IN ACCORDANCE WITH § 2–1257 OF THE STATE 26
GOVERNMENT ARTICLE, INCLUDING ANY FINDINGS OR RECOMMENDATIONS. 27

SECTION 6. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 28
as follows: 29

Chapter 430 of the Acts of 2023 30

88 HOUSE BILL 898

SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 1
1, 2023. [It shall remain effective for a period of 4 years and, at the end of June 30, 2027, 2
this Act, with no further action required by the General Assembly, shall be abrogated a nd 3
of no further force and effect.] 4

Chapter 431 of the Acts of 2023 5

SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 6
1, 2023. [It shall remain effective for a period of 4 years and, at the end of June 30, 2027, 7
this Act, with no further action required by the General Assembly, shall be abrogated and 8
of no further force and effect.] 9

Chapter 515 of the Acts of 2000, as amended by Chapter 98 of the Acts of 2005, 10
Chapter 20 of the Acts of 2010, Chapter 85 of the Acts of 2019, and Chapter 114 of 11
the Acts of 2021 12

SECTION 2. AND BE IT FURTHER ENACTED, That: 13

(a) Except as otherwise provided in this section, this Act shall be applicable to all 14
taxable years beginning after December 31, 1999 [but before January 1, 2026]. 15

(b) If a taxpayer’s taxable year for income tax purposes is not the calendar year[: 16

(1)], for the taxable year that ends in calendar year 2000, the taxpayer may 17
apply for a prorated credit for research and development expenses paid or incurred in the 18
taxable year for that part of the taxable year that falls in calendar year 2000[; and 19

(2) for the taxable year that begins in calendar year 2025, the taxpayer 20
may apply for only a prorated credit for research and development expenses paid or 21
incurred in the taxable year for that part of the taxable year that falls in calendar year 22
2025]. 23

SECTION 4. AND BE IT FURTHER ENACTED, That this Act shall take effect July 24
1, 2000. [It shall remain effective for a period of 27 years and, at the end of June 30, 2027, 25
with no further action required by the General Assembly, this Act shall be abrogated and 26
of no further force and effect.] 27

Chapter 516 of the Acts of 2000, as amended by Chapter 98 of the Acts of 2005, 28
Chapter 20 of the Acts of 2010, Chapter 85 of the Acts of 2019, and Chapter 114 of 29
the Acts of 2021 30

SECTION 2. AND BE IT FURTHER ENACTED, That: 31

(a) Except as otherwise provided in this section, this Act shall be applicable to all 32
taxable years beginning after December 31, 1999 [but before January 1, 2026]. 33

HOUSE BILL 898 89

(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 t axable 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 7. AND BE IT FURTHER ENACTED, That the publisher of the 13
Annotated Code of Maryland, in consultation with and subject to the app roval of the 14
Department of Legislative Services, shall correct, with no further action required by the 15
General Assembly, cross –references and terminology rendered incorrect by this Act. The 16
publisher shall adequately describe any correction that is made in an editor’s note following 17
the section affected. 18

SECTION 8. AND BE IT FURTHER ENACTED, That: 19

(a) On or before December 1, 2026, the Office of the Comptroller shall report to 20
the General Assembly, in accordance with § 2–1257 of the State Government Article, on its 21
current ability to track credits carried forward under § 10–721 of the Tax – General Article 22
and potential methods to improve that tracking. 23

(b) On or before December 1, 2026, the Department of Commerce shall report to 24
the General Assembl y, in accordance with § 2 –1257 of the State Government Article, on 25
whether the refundable credit allowed under § 10–721(d)(2) of the Tax – General Article for 26
small businesses is underutilized and, if so, potential reasons for and methods to address 27
that underutilization. 28

SECTION 9. AND BE IT FURTHER ENACTED, That: 29

(a) On or before December 1, 2026, the Department of Commerce shall evaluate 30
the tax credit allowed under § 10–730 of the Tax – General Article, as enacted under Section 31
5 of this Act, and report to the General Assembly, in accordance with § 2–1257 of the State 32
Government Article, on the tax credit. 33

(b) The report under subsection (a) of this section shall include recommendations 34
on how the tax credit could be improved or streamlined, including potential reforms to: 35

90 HOUSE BILL 898

(1) the list of eligible production activities; 1

(2) the small or independent film entity eligibility requirements, including 2
hiring requirements, and designated funding levels; 3

(3) the minimum in –State spending requirem ents for larger film 4
production entities; and 5

(4) the qualifying costs, including whether qualifying costs would be better 6
defined by administrative regulation. 7

SECTION 8. 10. AND BE IT FURTHER ENACTED, That Section 4 of this Act shall 8
be applicable to all taxable years beginning after December 31, 2025. 9

SECTION 9. 11. AND BE IT FURTHER ENACTED, That Section 5 of this Act shall 10
be applicable to all taxable years beginning after June 30, 2026. 11

SECTION 10. 12. AND BE IT FURTHER ENACTED, That Sections 1, 2, 3, 4, and 6 12
of this Act shall take effect July 1, 2026. 13

SECTION 11. 13. AND BE IT FURTHER ENACTED, That, except as provided in 14
Section 10 12 of this Act, this Act shall take effect June 1, 2026. 15

Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.