Income Tax – Angel Investor Tax Credit for Investments in Emergent Technology

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb1128*

HOUSE BILL 1128
Q3 6lr2413
CF SB 826
By: Delegates Qi and Spiegel
Introduced and read first time: February 11, 2026
Assigned to: Ways and Means

A BILL ENTITLED

AN ACT concerning 1

Income Tax – Angel Investor Tax Credit for Investments in Emergent 2
Technology 3

FOR the purpose of allowing a credit against the State income tax for a certain percentage 4
of an investment made in qualified Maryland companies up to a certain amount; 5
providing that investments in companies engaging in certain emergent technology 6
may qualify for the tax credit, subject to certain requirements; providing that a 7
qualified investor shall make an investment in a qualified Maryland company within 8
a certain amount of time after the Department issues an initial tax credit certificate; 9
establishing the Angel Investor Tax Credit Reserve Fund; requiring interest 10
earnings of the Fund to be credited to the Fund; providing for the recapture of a 11
credit under certain circumstances; authorizing the Department to revoke a 12
certification if a representation made in connection with the application for the 13
certification is false; requiring the Department to conduct certain outreach about the 14
tax credit; and generally relating to the Angel Investor Tax Credit. 15

BY repealing and reenacting, with amendments, 16
Article – Economic Development 17
Section 2.5–109(a)(4)(vii) 18
Annotated Code of Maryland 19
(2024 Replacement Volume and 2025 Supplement) 20

BY repealing and reenacting, without amendments, 21
Article – State Finance and Procurement 22
Section 6–226(a)(2)(ii) 23
Annotated Code of Maryland 24
(2021 Replacement Volume and 2025 Supplement) 25

BY repealing and reenacting, with amendments, 26
Article – State Finance and Procurement 27
Section 6–226(a)(2)(iii)79. 28
2 HOUSE BILL 1128

Annotated Code of Maryland 1
(2021 Replacement Volume and 2025 Supplement) 2

BY adding to 3
Article – Tax – General 4
Section 10–733 5
Annotated Code of Maryland 6
(2022 Replacement Volume and 2025 Supplement) 7

BY repealing and reenacting, with amendments, 8
Chapter 717 of the Acts of the General Assembly of 2024 9
Section 8(54) 10

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 11
That the Laws of Maryland read as follows: 12

Article – Economic Development 13

2.5–109. 14

(a) In this section, “economic development program” means: 15

(4) each of the tax credit programs administered by the Department, 16
including: 17

(vii) the [Innovation Investment Incentive ] ANGEL INVESTOR Tax 18
Credit; 19

Article – State Finance and Procurement 20

6–226. 21

(a) (2) (ii) Notwithstanding any other provision of law, and unless 22
inconsistent with a federal law, grant agreement, or other federal requirement or with the 23
terms of a gift or settlement agreement, net interest on all State money al located by the 24
State Treasurer under this section to special funds or accounts, and otherwise entitled to 25
receive interest earnings, as accounted for by the Comptroller, shall accrue to the General 26
Fund of the State. 27

(iii) The provisions of subparagrap h (ii) of this paragraph do not 28
apply to the following funds: 29

79. the [Innovation Investment ] ANGEL INVESTOR TAX 30
CREDIT RESERVE Fund; 31

Article – Tax – General 32

HOUSE BILL 1128 3

10–733. 1

(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 2
INDICATED. 3

(2) (I) “COMPANY” MEANS ANY ENTITY OF ANY FORM DULY 4
ORGANIZED AND EXISTI NG UNDER THE LAWS OF ANY JURISDICTION FOR THE 5
PURPOSE OF CONDUCTING BUSINESS FOR PROFIT. 6

(II) “COMPANY” INCLUDES AN ENTITY T HAT BECOMES DULY 7
ORGANIZED AND EXISTI NG UNDER THE LAWS OF ANY JURISDICTION FOR T HE 8
PURPOSE OF CONDUCTING BUSINESS FOR PROFIT WITHIN 4 MONTHS OF RECEIVING 9
A QUALIFIED INVESTMENT. 10

(3) “DEPARTMENT” MEANS THE DEPARTMENT OF COMMERCE. 11

(4) “EMERGENT TECHNOLOGY ” MEANS ARTIFICIAL INT ELLIGENCE, 12
QUANTUM COMPUTING, OR CYBERSECURITY. 13

(5) (I) “INVESTMENT” MEANS THE CONTRIBUTI ON OF MONEY IN 14
CASH OR CASH EQUIVAL ENTS EXPRESSED IN UNITED STATES DOLLARS, AT A RISK 15
OF LOSS , TO A QUALIFIED MARYLAND COMPANY IN E XCHANGE FOR STOCK , A 16
PARTNERSHIP OR MEMBE RSHIP INTEREST, OR ANY OTH ER OWNERSHIP INTERES T 17
IN THE EQUITY OF THE QUALIFIED MARYLAND COMPANY , TITLE TO WHICH 18
OWNERSHIP INTEREST SHALL VEST IN THE QUALIFIED INVESTOR. 19

(II) “INVESTMENT” DOES NOT INCLUDE DEB T UNLESS IT IS 20
CONVERTIBLE DEBT. 21

(III) FOR PURPOSES OF THIS SECTION, AN INVESTMENT IS AT 22
RISK OF LOSS WHEN RE PAYMENT ENTIRELY DEP ENDS ON THE SUCCESS OF THE 23
BUSINESS OPERATIONS OF THE COMPANY. 24

(6) (I) “QUALIFIED INVESTOR” MEANS ANY INDIVIDUAL OR ENTITY 25
THAT, BEFORE JULY 1, 2029, INVESTS AT LEAST $25,000 IN A QUALIFIED MARYLAND 26
COMPANY AND THAT IS REQUIRED TO FILE AN INCOME TAX RETURN IN ANY 27
JURISDICTION. 28

(II) “QUALIFIED INVESTOR” DOES NOT INCLUDE: 29

1. A VENTURE CAPITAL BU SINESS, BANK, BANK AND 30
TRUST, INSURANCE, TRUST, OR SAVINGS ASSOCIATI ON OR BUILDING AND L OAN 31
ASSOCIATION; 32
4 HOUSE BILL 1128

2. A QUALIFIED PENSION PLAN, AN INDIVIDUAL 1
RETIREMENT ACCOUNT, OR ANY OTHER QUALIFIED RETIREMENT PLAN UNDER THE 2
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 OR FIDUCIARIES OR 3
CUSTODIANS UNDER SUCH PLANS, OR SIMILAR TAX–FAVORED PLANS OR ENTITIES 4
UNDER THE LAWS OF OTHER COUNTRIES; OR 5

3. A FOUNDER OR CURRENT EMPLOYEE OF THE 6
QUALIFIED MARYLAND COMPANY, IF THE COMPANY HAS BEEN IN ACTIVE BUSINESS 7
FOR MORE THAN 7 YEARS. 8

(7) “QUALIFIED MARYLAND COMPANY” MEANS A COMPANY THAT HAS 9
MET THE CRITERIA IN SUBSECTION (C) OF THIS SECTION. 10

(8) “RESERVE FUND” MEANS THE ANGEL INVESTOR TAX CREDIT 11
RESERVE FUND ESTABLISHED UNDER THIS SECTION. 12

(9) “SECRETARY” MEANS THE SECRETARY OF COMMERCE. 13

(B) (1) THERE IS AN ANGEL INVESTOR TAX CREDIT. 14

(2) THE ANGEL INVESTOR TAX CREDIT IS INTENDED TO FOSTER THE 15
GROWTH OF THE STATE’S EMERGENT TECHNOLOGY BY INCENTIVIZING INVESTMENT 16
IN EARLY–STAGE COMPANIES OR SMALL BUSINESSES THAT ARE EXPANDING. 17

(3) THE GOAL OF THE ANGEL INVESTOR TAX CREDIT IS TO 18
INCREASE: 19

(I) THE NUMBER OF COMPANIES DEVELOPING IN MARYLAND; 20

(II) THE OVERALL INVESTME NTS IN EMERGENT 21
TECHNOLOGIES; AND 22

(III) THE NUMBER OF INDIVI DUAL INVESTORS ACTIV ELY 23
INVESTING IN MARYLAND COMPANIES. 24

(4) SUBJECT TO SUBSECTION S (C), (D), AND (E) OF THIS SECTION , 25
FOR THE TAXABLE YEAR IN WHICH AN INVESTME NT IN A QUALIFIED MARYLAND 26
COMPANY IS MADE , A QUALIFIED INVESTOR MAY CLAIM A CREDIT A GAINST THE 27
STATE INCOME TAX IN A N AMOUNT EQUAL TO TH E AMOUNT STATED IN T HE FINAL 28
CREDIT CERTIFICATE A PPROVED BY TH E SECRETARY FOR THE INV ESTMENT AS 29
PROVIDED UNDER THIS SECTION. 30

HOUSE BILL 1128 5

(C) (1) TO BE ELIGIBLE FOR THE ANGEL INVESTOR TAX CREDIT UNDER 1
THIS SECTION, THE QUALIFIED INVESTOR: 2

(I) MAY NOT , AFTER MAKING THE PRO POSED INVESTMENT , 3
OWN OR CONTROL MORE THAN 50% OF THE EQUITY INTERESTS IN THE QUALIFIED 4
MARYLAND COMPANY IN WHICH THE INVESTMENT IS MADE; AND 5

(II) AT LEAST 30 DAYS PRIOR TO MAKING AN INVESTMENT IN A 6
QUALIFIED MARYLAND COMPANY , SHALL SUBMIT AN APPL ICATION TO THE 7
DEPARTMENT CONTAINING THE FOLLOWING: 8

1. EVIDENCE THAT THE INVESTOR IS: 9

A. IF A COMPANY , DULY ORGANIZED AND I N GOOD 10
STANDING IN THE JURISDICTION UNDER THE LAWS UNDER WHICH IT IS ORGANIZED; 11

B. CURRENT IN THE PAYMENT OF ALL TAX OBLIGATIONS 12
TO A STATE OR ANY UNIT OR SUBDIVISION OF A STATE; AND 13

C. NOT IN DEFAULT UNDER THE TERMS OF ANY 14
CONTRACT WITH, INDEBTEDNESS TO, OR GRANT FROM A STAT E OR ANY UNIT OR 15
SUBDIVISION OF A STATE; 16

2. EVIDENCE THAT THE COMPANY HAS BEEN APPROVED 17
BY THE DEPARTMENT AS A QUALI FIED MARYLAND COMPANY UNDE R PARAGRAPH 18
(2) OF THIS SUBSECTION; AND 19

3. ANY OTHER INFORMATIO N THE DEPARTMENT MAY 20
REQUIRE. 21

(2) (I) 1. TO BE ELIGIBLE TO REC EIVE QUALIFIED 22
INVESTMENTS UNDER THIS SECTION, A COMPANY MAY APPLY TO THE DEPARTMENT 23
TO BE APPROVED AS A QUALIFIED MARYLAND COMPANY. 24

2. THE APPLICATION SHALL INCLUDE: 25

A. A COPY OF THE COMPAN Y’S ORGANIZATIONAL 26
DOCUMENTS; 27

B. A BUSINESS PLAN, INCLUDING A DESCRIPTION OF THE 28
COMPANY AND THE MANAGEMENT, PRODUCT, MARKET, AND FINANCIAL PLAN; 29

6 HOUSE BILL 1128

C. A DESCRIPTION OF T HE COMPANY ’S TECHNOLOGY , 1
PRODUCT, OR SERVICE; 2

D. A STATEMENT OF THE POTENTIAL ECONOMIC IMPACT 3
OF THE COMPANY , INCLUDING THE NUMBER , LOCATION, AND TYPES OF JOBS 4
EXPECTED TO BE CREATED; 5

E. A DESCRIPTION OF THE TYPE OF OWNERSHIP TO BE 6
ISSUED FOR A QUALIFIED INVESTMENT; 7

F. A STATEMENT OF THE T IMING AND PROJECTED USE 8
OF A QUALIFIED INVESTMENT; AND 9

G. ANY OTHER INFORMATIO N REQUIRED BY THE 10
DEPARTMENT. 11

(II) EXCEPT AS PROVIDED UNDER SUBPARAGRAPH (III) OF THIS 12
PARAGRAPH, TO BE APPROVED AS A QUALIFIED MARYLAND COMPANY , THE 13
COMPANY SHALL PROVIDE EVIDENCE TO THE DEPARTMENT THAT THE COMPANY: 14

1. HAS ITS HEADQUARTERS AND BASE OF OPERATIO NS 15
IN THE STATE; 16

2. HAS OPERATED IN THE STATE FOR NOT MORE THAN 7 17
YEARS; 18

3. HAS RECEIVED LESS TH AN $2,000,000 IN 19
INVESTMENTS MADE BY A QUALIFIED INVESTOR; 20

4. HAD ANNUAL GROSS REV ENUES OF LESS THAN 21
$20,000,000 IN THE MOST RECENT YEAR OF OPERATION; 22

5. HAS FEWER THAN 25 FULL–TIME EMPLOYEES; 23

6. IS PRIMARILY OWNED B Y THE MANAGEMENT OF THE 24
COMPANY AND THEIR FAMILIES; 25

7. IS IN GOOD STANDING; 26

8. IS CURRENT IN THE PA YMENT OF ALL TAX 27
OBLIGATIONS TO THE STATE OR ANY UNIT OR SUBDIVISION OF THE STATE; 28

HOUSE BILL 1128 7

9. IS NOT IN DEFAULT UN DER THE TERMS OF ANY 1
CONTRACT WITH, INDEBTEDNESS TO, OR GRANT FROM THE STATE OR ANY UNIT OR 2
SUBDIVISION OF THE STATE; AND 3

10. ENGAGES IN ONE OR MORE EMERGENT TECHNOLOGY. 4

(III) THE DEPARTMENT MAY WAIVE THE REQUIREMENTS UNDER 5
SUBPARAGRAPH (II)2, 3, OR 4 OF THIS PARAGRAPH IN THE CASE OF A COMPAN Y 6
THAT HAS OP ERATED IN THE STATE FOR MORE THAN 7 YEARS BUT IS NEWLY 7
EXPANDING ITS OPERATIONS TO INCLUDE EMERGENT TECHNOLOGY. 8

(3) THE DEPARTMENT SHALL ESTABLISH A PROCESS FOR REVIEWING 9
AND APPROVING APPLICATIONS UNDER THIS SUBSECTION. 10

(D) (1) THE DEPARTMENT SHALL: 11

(I) SUBJECT TO PARAGRAPH (3) OF THIS SUBSECTION , 12
APPROVE ALL APPLICAT IONS THAT QUALIFY FO R TAX CREDITS UNDER THIS 13
SECTION ON A FIRST–COME, FIRST–SERVED BASIS; AND 14

(II) WITHIN 30 CALENDAR DAYS OF REC EIPT OF AN 15
APPLICATION: 16

1. CERTIFY THE AMOUNT OF ANY APPROVED TAX 17
CREDITS TO A QUALIFIED INVESTOR; AND 18

2. DETERMINE WHETHER A COMPANY QUALIFIES FO R 19
INVESTMENTS THAT ARE ELIGIBLE FOR THE TAX CREDIT UNDER THIS SECTION. 20

(2) THE DEPARTMENT SHALL AWAR D CREDITS IN THE FOL LOWING 21
PROPORTIONS: 22

(I) 50% OF THE AMOUNT IN THE RESERVE FUND TO QUALIFIED 23
INVESTORS THAT INVESTED IN A QUALIFIED MARYLAND COMPANY THAT HAS BEEN 24
IN BUSINESS FOR LESS THAN 7 YEARS; AND 25

(II) 50% OF THE AMOUNT IN THE RESERVE FUND TO QUALIFIED 26
INVESTORS THAT INVES TED IN A QUALIF IED MARYLAND COMPANY THAT IS 27
EXPANDING ITS OPERATIONS TO INCLUDE EMERGENT TECHNOLOGY. 28

(3) (I) AFTER THE DATE ON WHI CH THE DEPARTMENT ISSUES AN 29
INITIAL TAX CREDIT C ERTIFICATE UNDER THI S SECTION, A QUALIFIED INVESTOR 30
8 HOUSE BILL 1128

SHALL HAVE 30 CALENDAR DAYS TO MAK E AN INVESTMENT IN A QUAL IFIED 1
MARYLAND COMPANY. 2

(II) WITHIN 10 CALENDAR DAYS AFTER THE DATE ON WHICH A 3
QUALIFIED INVESTOR MAKES THE INVESTMENT, THE QUALIFIED INVESTOR SHALL 4
PROVIDE TO THE DEPARTMENT NOTICE AND PROOF OF THE MAKING OF THE 5
INVESTMENT, INCLUDING: 6

1. THE DATE OF THE INVESTMENT; 7

2. THE AMOUNT INVESTED; 8

3. PROOF OF THE RECEIPT OF THE INVESTED FUNDS BY 9
THE QUALIFIED MARYLAND COMPANY; 10

4. A COMPLETE DESCRIPTI ON OF THE NATURE OF THE 11
OWNERSHIP INTEREST I N THE EQUITY OF THE QUALIFIED MARYLAND COMPANY 12
ACQUIRED IN CONSIDERATION OF THE INVESTMENT; AND 13

5. ANY REASONABLE SUPPO RTING DOCUMENTATION 14
THE DEPARTMENT MAY REQUIRE. 15

(III) IF A QUALIFIED INVESTOR DOES NOT PROVIDE THE NOTICE 16
AND PROOF OF THE MAKING OF THE INVESTMENT REQUIRED IN SUBPARAGRAPH (II) 17
OF THIS PARAGRAPH WITHIN 40 CALENDAR DAYS AFTER THE DATE ON WHICH TH E 18
DEPARTMENT ISSUES AN INITIAL TAX CREDIT CERTIFICATE UNDER THIS SECTION: 19

1. THE DEPARTMENT SHALL RESCIND THE INITIAL TAX 20
CREDIT CERTIFICATE; AND 21

2. THE CREDIT AMOUNT ALLOCATED TO THE RESCINDED 22
CERTIFICATE SHALL REVERT TO THE RESERVE FUND AND SHALL BE AVAILABLE IN 23
THE APPLICABLE FISCAL YEAR FOR ALLOCATIO N BY THE DEPARTMENT TO OTHER 24
INITIAL TAX CREDIT CERTIFICATES IN ACCORDANCE WITH THE PROVISIONS OF THIS 25
SECTION. 26

(E) (1) THE TAX CREDIT ALLOWE D IN AN INITIAL TAX CREDIT 27
CERTIFICATE ISSUED U NDER THIS SECTION IS 25% OF THE INVESTMENT IN A 28
QUALIFIED MARYLAND COMPANY, NOT TO EXCEED $1,000,000. 29

(2) IF THE QUALIFIED INVE STOR THAT RECEIVES A TAX CREDIT 30
CERTIFICATE ISSUED UNDER THIS SECTION: 31

HOUSE BILL 1128 9

(I) IS AN S CORPORATION, THE TAX CREDIT MAY B E CLAIMED 1
BY THE SHAREHOLDERS OR PARTNERS OF THE QUALIFIED INVESTOR; OR 2

(II) IS A SINGLE MEMBER L IMITED LIABILITY COM PANY, THE 3
TAX CREDIT MAY BE CLAIMED BY THE OWNER. 4

(3) DURING ANY FISCAL YEA R, THE SECRETARY MAY NOT CER TIFY 5
TAX CREDITS FOR INVE STMENTS IN A SINGLE QUALIFIED MARYLAND COMPANY 6
THAT IN THE AGGREGAT E EXCEED 15% OF THE TOTAL APPROPR IATIONS TO THE 7
RESERVE FUND FOR THAT FISCAL YEAR. 8

(4) IF THE CREDIT ALLOWED UNDER THIS SECTION IN AN Y TAXABLE 9
YEAR EXCEEDS THE STATE INCOME TAX FOR THAT TAXABLE YEAR , ANY UNUSED 10
CREDIT MAY BE CARRIE D FORWARD AND APPLIE D FOR SUCCEEDING TAX ABLE 11
YEARS UNTIL THE EARLIER OF: 12

(I) THE FULL AMOUNT OF THE CREDIT IS USED; OR 13

(II) THE EX PIRATION OF THE 5TH YEAR AFTER THE TA XABLE 14
YEAR FOR WHICH THE CREDIT WAS ALLOWED. 15

(F) (1) (I) THERE IS AN ANGEL INVESTOR TAX CREDIT RESERVE 16
FUND THAT IS A SPECIA L CONTINUING, NONLAPSING FUND THAT IS NOT SUBJECT 17
TO § 7–302 OF THE STATE FINANCE AND PROCUREMENT ARTICLE. 18

(II) THE MONEY IN THE RESERVE FUND SHALL BE INVESTE D 19
AND REINVESTED BY TH E TREASURER, AND INTEREST AND EAR NINGS SHALL BE 20
CREDITED TO THE RESERVE FUND. 21

(III) THE MONEY IN THE RESERVE FUND MAY BE USED BY T HE 22
DEPARTMENT TO PAY THE COSTS OF ADMINISTERING THE TAX CREDIT PROGRAM 23
UNDER THIS SECTION. 24

(2) (I) SUBJECT TO THE PROVIS IONS OF THIS SUBSECT ION, THE 25
SECRETARY SHALL ISSUE AN INITIAL TAX CREDI T CERTIFICATE TO A Q UALIFIED 26
INVESTOR FOR EACH AP PROVED INVESTMENT IN A QUALIFIED MARYLAND 27
COMPANY. 28

(II) AN INITIAL TAX CREDIT CERTIFICATE ISSUED UNDER THIS 29
SUBSECTION SHALL STATE THE MAXIMUM AMOUNT OF TAX CREDIT FOR WHICH THE 30
QUALIFIED INVESTOR IS ELIGIBLE. 31

10 HOUSE BILL 1128

(III) 1. EXCEPT AS OTHERWISE P ROVIDED IN THIS 1
SUBPARAGRAPH, FOR ANY FISCAL YEAR , THE SECRETARY MAY NOT ISS UE INITIAL 2
TAX CREDIT CERTIFICA TES FOR CREDIT AMOUN TS IN THE AGGREGATE TOTALING 3
MORE THAN THE AMOUNT APPROPRIATED TO THE RESERVE FUND FOR THAT FISCAL 4
YEAR IN THE STATE BUDGET AS APPRO VED BY THE GENERAL ASSEMBLY, AS 5
REDUCED BY THE AMOUNT NEEDED TO PAY THE COSTS OF ADMINISTERING THE TAX 6
CREDIT PROGRAM UNDER THIS SECTION. 7

2. IF THE AGGREGATE CREDIT AMOUNTS UNDER INITIAL 8
TAX CREDIT CERTIFICA TES ISSUED IN A FISC AL YEAR TOTAL LESS T HAN THE 9
AMOUNT APPROPRIATED TO THE RESERVE FUND FOR T HAT FISCAL YEAR , ANY 10
EXCESS AMOUNT SHALL REMAIN IN THE RESERVE FUND AND MAY BE ISSUED UNDER 11
INITIAL TAX CREDIT CERTIFICATES FOR THE NEXT FISCAL YEAR. 12

3. FOR ANY FISCAL YEAR, IF FUNDS ARE TRANSFERRED 13
FROM THE RESERVE FUND UNDER THE AUTHOR ITY OF ANY PRO VISION OF LAW 14
OTHER THAN UNDER PARAGRAPH (3) OF THIS SUBSECTION, THE MAXIMUM CREDIT 15
AMOUNTS IN THE AGGREGATE FOR WHICH THE SECRETARY MAY ISSUE INITIAL TAX 16
CREDIT CERTIFICATES SHALL BE REDUCED BY THE AMOUNT TRANSFERRED. 17

(IV) FOR EACH FISCAL YEAR , THE GOVERNOR SHALL INCLUDE 18
IN THE BUDGET BILL A N APPROPRIATION OF A T LEAST $25,000,000 TO THE 19
RESERVE FUND. 20

(V) NOTWITHSTANDING THE P ROVISIONS OF § 7–213 OF THE 21
STATE FINANCE AND PROCUREMENT ARTICLE, THE GOVERNOR MAY NOT REDUCE 22
AN APPROPRIATION TO THE RESERVE FUND IN THE STATE BUDGET AS APPROVED 23
BY THE GENERAL ASSEMBLY. 24

(VI) BASED ON THE ACTUAL AMOUNT OF AN INVESTMENT MADE 25
BY A QUALIFIED INVES TOR, THE SECRETARY SHALL ISSUE A FINAL TAX CREDIT 26
CERTIFICATE TO THE QUALIFIED INVESTOR. 27

(3) (I) EXCEPT AS OTHE RWISE PROVIDED IN TH IS PARAGRAPH , 28
MONEY APPROPRIATED T O THE RESERVE FUND SHALL REMAIN IN THE RESERVE 29
FUND. 30

(II) 1. WITHIN 15 DAYS AFTER THE END OF EACH CALENDAR 31
QUARTER, THE DEPARTMENT SHALL NOTIFY THE COMPTROLLER AS TO EACH FINAL 32
CREDIT CERTIFICATE ISSUED DURING THE QUARTER: 33

HOUSE BILL 1128 11

A. THE MAXIMUM CREDIT A MOUNT STATED IN THE 1
INITIAL TAX CREDIT C ERTIFICATE FOR THE I NVESTMENT IN THE QUA LIFIED 2
MARYLAND COMPANY; AND 3

B. THE FINAL CERTIFIED CREDIT AMOUNT FOR TH E 4
INVESTMENT IN THE QUALIFIED MARYLAND COMPANY. 5

2. ON NOTIFICATION THAT AN INVESTMENT HAS BE EN 6
CERTIFIED, THE COMPTROLLER SHALL TRA NSFER AN AMOUNT EQUA L TO THE 7
CREDIT AMOUNT STATED IN THE INITIAL TAX C REDIT CERTIFICATE FO R THE 8
INVESTMENT FROM THE RESERVE FUND TO THE GENERAL FUND. 9

(III) 1. PERIODICALLY, BUT NOT MORE FREQUEN TLY THAN 10
QUARTERLY, THE DEPARTMENT MAY SUBMIT INVOICES FOR COSTS T HAT HAVE 11
BEEN INCURRED OR ARE ANTICIPATED TO BE IN CURRED IN ADMINISTER ING THE 12
TAX CREDIT PROGRAM UNDER THIS SECTION. 13

2. THE COMPTROLLER SHALL TRANSFER MONEY FROM 14
THE RESERVE FUND TO THE DEPARTMENT TO PAY FOR COSTS THAT HAVE BEEN 15
INCURRED OR ARE ANTI CIPATED TO BE INCURR ED IN ADMINISTERING THE TAX 16
CREDIT PROGRAM UNDER THIS SECTION. 17

(G) (1) THE CREDIT CLAIMED UN DER THIS SECTION SHA LL BE 18
RECAPTURED AS PROV IDED IN PARAGRAPH (3) OF THIS SUBSECTION I F WITHIN 2 19
YEARS FROM THE CLOSE OF THE TAXABLE YEAR FOR WHICH THE CREDIT IS 20
CLAIMED: 21

(I) THE QUALIFIED INVEST OR SELLS , TRANSFERS, OR 22
OTHERWISE DISPOSES OF THE OWNERSHIP INTEREST IN THE QUALIFIED MARYLAND 23
COMPANY THAT GAVE RISE TO THE CREDIT; OR 24

(II) THE QUALIFIED MARYLAND COMPANY THAT GAVE RISE TO 25
THE CREDIT: 26

1. CEASES OPERATING AS AN ACTIVE BUSINESS WITH ITS 27
HEADQUARTERS AND BASE OF OPERATIONS IN THE STATE; OR 28

2. PAYS OUT AS DIVIDEND S OR OTHERWISE 29
DISTRIBUTES THE EQUITY INVESTMENT. 30

(2) THE CREDIT CLAIMED UN DER THIS SECTION SHA LL BE 31
RECAPTURED AS PROVIDED IN PARAGRAPH (3) OF THIS SUBSECTION I F, WITHIN 4 32
MONTHS OF RECEIVING A QUALIFIED INVESTME NT, A QUALIFIED MARYLAND 33
12 HOUSE BILL 1128

COMPANY IS NOT DULY ORGANIZED AND EXISTING UNDER T HE LAWS OF ANY 1
JURISDICTION FOR THE PURPOSES OF CONDUCTING BUSINESS FOR PROFIT. 2

(3) THE AMOUNT REQUIRED T O BE RECAPTURED UNDE R THIS 3
SUBSECTION IS THE PRODUCT OF MULTIPLYING: 4

(I) THE TOTAL AMOUNT OF THE CREDIT CLAIMED O R, IN THE 5
CASE OF AN EVENT DES CRIBED IN PARAGRAPH (1)(I) OF THIS SUBSECTION , THE 6
PORTION OF THE CREDIT ATTRIBUTABLE TO THE OWNERSHIP INTEREST DISPOSED 7
OF; AND 8

(II) 1. 100%, IF THE EVENT REQUIRING RECAPTURE OF THE 9
CREDIT OCCURS DURING THE TAXABLE YEAR FOR WHICH T HE TAX CREDIT IS 10
CLAIMED; 11

2. 67%, IF THE EVENT REQUIRI NG RECAPTURE OF THE 12
CREDIT OCCURS DURING THE FIRST YEAR AFTER THE CLOSE OF THE TAXABLE YEAR 13
FOR WHICH THE TAX CREDIT IS CLAIMED; OR 14

3. 33%, IF THE EVENT REQUIRI NG RECAPTURE OF THE 15
CREDIT OCCURS MORE THAN 1 YEAR BUT NOT MORE TH AN 2 YEARS AFTER THE 16
CLOSE OF THE TAXABLE YEAR FOR WHICH THE TAX CREDIT IS CLAIMED. 17

(4) THE QUALIFIED INVESTO R THAT CLAIMED THE C REDIT SHALL 18
PAY THE AMOUNT TO BE RECAPTURED AS DETERMINED UNDER PARAGRAPH (3) OF 19
THIS SUBSECTION AS TAXES PAYABLE TO THE STATE FOR THE TAXABLE YEAR IN 20
WHICH THE EVENT REQUIRING RECAPTURE OF THE CREDIT OCCURS. 21

(H) (1) THE DEPARTMENT MAY REVOKE ITS INITIAL OR FINAL 22
CERTIFICATION OF AN APPROVED CREDIT UNDE R THIS SECTION IF AN Y 23
REPRESENTATION MADE IN CONNECTION WITH THE APPLICATION FOR THE 24
CERTIFICATION IS DETERMINED BY THE DEPARTMENT TO HAVE BEEN FALSE. 25

(2) THE REVOCATION MAY BE IN FULL OR IN PART A S THE 26
DEPARTMENT MAY DETERM INE AND , SUBJECT TO PARAGRAPH (3) OF THIS 27
SUBSECTION, SHALL BE C OMMUNICATED TO THE Q UALIFIED INVESTOR , THE 28
QUALIFIED MARYLAND COMPANY, AND THE COMPTROLLER. 29

(3) THE QUALIFIED INVESTO R SHALL HAVE AN OPPO RTUNITY TO 30
APPEAL ANY REVOCATION TO THE DEPARTMENT PRIOR TO N OTIFICATION OF THE 31
COMPTROLLER. 32

HOUSE BILL 1128 13

(4) THE COMPTROLLER MAY MAKE AN ASSESSME NT AGAINST THE 1
QUALIFIED INVESTOR T O RECAPTURE ANY AMOU NT OF TAX CREDIT THA T THE 2
QUALIFIED INVESTOR HAS ALREADY CLAIMED. 3

(I) THE DEPARTMENT SHALL COND UCT OUTREACH ABOUT T HE TAX 4
CREDIT ESTABLISHED U NDER THIS SECTION TO INCUBATORS, INSTITUTIONS OF 5
HIGHER EDUCATION, AND INVESTOR NETWORKS. 6

(J) IN ACCORDANCE WITH § 2.5–109 OF THE ECONOMIC DEVELOPMENT 7
ARTICLE, THE DEPARTMENT SHALL SUBMIT A REPORT ON THE INITIAL TAX CREDIT 8
CERTIFICATES AWARDED UNDER THIS SECTION FOR THE CALENDAR YEAR. 9

(K) THE DEPARTMENT AND THE COMPTROLLER JOINTLY S HALL ADOPT 10
REGULATIONS TO CARRY OUT THE PROVISIONS O F THIS SECTION AND T O SPECIFY 11
CRITERIA AND PROCEDU RES FOR APPLICATION FOR, APPROVAL OF , AND 12
MONITORING CONTINUING ELIGIBILITY FOR THE TAX CREDIT UNDER THIS SECTION. 13

Chapter 717 of the Acts of 2024 14

SECTION 8. AND BE IT FURTHER ENACTED, That, notwithstanding any other 15
provision of law, and unless inconsistent with a federal law, grant agreement, or other 16
federal requirement, or with the terms of a gift or sett lement agreement, for fiscal years 17
2024 through 2028, net interest on all State money allocated by the State Treasurer under 18
§ 6–226 of the State Finance and Procurement Article to special funds or accounts, and 19
otherwise entitled to receive interest earni ngs, as accounted for by the Comptroller, shall 20
accrue to the General Fund of the State, with the exception of the following funds: 21

(54) the [Innovation Investment Fund ] ANGEL INVESTOR TAX CREDIT 22
RESERVE FUND; 23

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 24
1, 2026, and shall be applicable to all taxable years beginning after December 31, 2025, but 25
before January 1, 2030. It shall remain effective for a period of 4 years and, at the end of 26
June 30, 2030, this Act, with no further action required by the General Assembly, shall be 27
abrogated and of no further force and effect. 28