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.
*sb0388*

SENATE BILL 388
C8, Q3, Q1 (6lr0323)
ENROLLED BILL
— Budget and Taxation and Finance/Ways and Means and Economic Matters —
Introduced by The President (By Request – Administration) and Senators
Augustine, Beidle, Brooks, Charles, Harris, Hettleman, King, Lam, and Love

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.

______________________________________________
President.

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 economic development progr ams; 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
of the Small, Minority, and Women –Owned Businesses Account; providing that the 11
sales and use tax does not apply to the sale of certain information technology services 12
and certain digital codes and digital products under certain circumstances; altering 13
the termination date of the Build Our Future Grant Pilot Program, Job Creation Tax 14
2 SENATE BILL 388

Credit, Research and Development Tax Credit, and Employer Security Clearance 1
Costs Tax Credit; altering eligibility for and the calculation of certain tax credits; 2
establishing the purpose of the film production activity tax credit; allowing a qualified 3
investor that is a pass–through entity that pays a certain income tax on behalf of its 4
members to receive and allocate in any manner a credit or refund of a credit under 5
the Biotechnology Investment Incentive Tax Credit; authorizing a qualified film 6
production entity to amend its application for the film production activity tax credit 7
under certain circumstances; repealing a certain limit on the aggregate amount of 8
tax credit certificates that the Secretary may issue for a single film production 9
activity; altering certain reporting requirements concerning certain economic 10
development programs and tax credits; requiring the Office of the Comptroller and 11
the Department of Commerce to evaluate the film production activity tax credit and 12
submit a certain report on or before a certain date; and generally relating to economic 13
development and economic development initiatives. 14

BY transferring 15
Article – State Finance and Procurement 16
Section 7–314 17
Annotated Code of Maryland 18
(2021 Replacement Volume and 2025 Supplement) 19
to be 20
Article – Economic Development 21
Section 5–108 22
Annotated Code of Maryland 23
(2024 Replacement Volume and 2025 Supplement) 24

BY renumbering 25
Article – Economic Development 26
Section 5–1401 through 5 –1410 and the subtitle “Subtitle 14. Regional Institution 27
Strategic Enterprise Zone Program”; and 5 –2301 through 5 –2307 and the 28
subtitle “Subtitle 23. Build Our Future Grant Pilot Program” 29
to be Section 10 –137 through 10 –146 and the part “Part II. Regional Institution 30
Strategic Enterprise Zone Program”; and 10–149 through 10–155 and the part 31
“Part III. Build Our Future Grant Pilot Program”, respectively 32
Annotated Code of Maryland 33
(2024 Replacement Volume and 2025 Supplement) 34

BY repealing and reenacting, without amendments, 35
Article – Economic Development 36
Section 1–101(a), (c), and (e), 2.5 –109(b), 5–301(a), (g), and (l) through (n), 5 –310, 37
5–311, 5 –320, 5 –323, 5 –505, 5 –509, 5–1501(a), 10–101(a) and (d), and 38
12–201(a) 39
Annotated Code of Maryland 40
(2024 Replacement Volume and 2025 Supplement) 41

BY repealing and reenacting, with amendments, 42
Article – Economic Development 43
SENATE BILL 388 3

Section 2.5 –109(a)(1), (d)(1), and (e), 5–102, 5 –319, 5 –324, and 5 –325; 5–501 and 1
5–502 to be under the amended subtitle “Subtitle 5. Maryland Small Business 2
Development Financing Authority and Fund”; 5–511 to be under the amended 3
part “Part II. Maryland Small Business Development Financing Authority 4
and Fund”; 5 –517, 5–518, 5–524 through 5 –528, and 5 –530 to be under the 5
amended part “Part III. Small Business Develop ment Contract Financing 6
Program”; 5–533, 5–534, 5–539 through 5–543, 5–545, and 5–546 to be under 7
the amended part “Part IV. Small Business Development Guaranty Program”; 8
and 5–549 through 5–551, 5–553, 5–555 through 5–558, 5–561, 5–562, 5–566 9
through 5–575, 5–1501(d) and (g)(1), 6–309, 10–470(b)(1), and 12–201(p) 10
Annotated Code of Maryland 11
(2024 Replacement Volume and 2025 Supplement) 12

BY adding to 13
Article – Economic Development 14
Section 2.5 –109(g), 5 –515, and 5 –1501(m); the new part designation “Part I. 15
Maryland Economic Development Corporation” to immediately precede Section 16
10–101; and 10–156 17
Annotated Code of Maryland 18
(2024 Replacement Volume and 2025 Supplement) 19

BY repealing and reenacting, with amendments, 20
Article – Economic Development 21
Section 5–108 22
Annotated Code of Maryland 23
(2024 Replacement Volume and 2025 Supplement) 24
(As enacted by Section 1 of this Act) 25

BY adding to 26
Article – Economic Development 27
Section 5 –515; 5–1501(m); the new part designation “Part I. Maryland Economic 28
Development Corporation” to immediately precede Section 10 –101; and 29
10–156 30
Annotated Code of Maryland 31
(2024 Replacement Volume and 2025 Supplement) 32

BY repealing 33
Article – Economic Development 34
Section 5–519 through 5 –523, 5–529, 5–535 through 5 –538, 5–544, 5–552, 5–554, 35
5–559, and 5–563 through 5–565 36
Annotated Code of Maryland 37
(2024 Replacement Volume and 2025 Supplement) 38

BY repealing and reenacting, with amendments, 39
Article – Economic Development 40
Section 10–137 and 10–139 through 10–146; and 10–149 through 10–155 to be under 41
the amended part “Part III. Build Our Future Grant Program” 42
4 SENATE BILL 388

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

BY repealing and reenacting, without amendments, 4
Article – Economic Development 5
Section 10–138 6
Annotated Code of Maryland 7
(2024 Replacement Volume and 2025 Supplement) 8
(As enacted by Section 2 of this Act) 9

BY adding to 10
Article – Corporations and Associations 11
Section 1–203(b)(14) 12
Annotated Code of Maryland 13
(2025 Replacement Volume) 14

BY repealing and reenacting, with amendments, 15
Article – Corporations and Associations 16
Section 1–203(b)(14) 17
Annotated Code of Maryland 18
(2025 Replacement Volume) 19

BY repealing and reenacting, with amendments, 20
Article – State Finance and Procurement 21
Section 7–309 22
Annotated Code of Maryland 23
(2021 Replacement Volume and 2025 Supplement) 24

BY repealing and reenacting, with amendments, 25
Article – State Government 26
Section 9–1A–27(a)(6) 27
Annotated Code of Maryland 28
(2021 Replacement Volume and 2025 Supplement) 29

BY repealing and reenacting, without amendments, 30
Article – State Government 31
Section 9–1A–27(c)(1)(v)1. 32
Annotated Code of Maryland 33
(2021 Replacement Volume and 2025 Supplement) 34

BY repealing and reenacting, without amendments, 35
Article – Tax – General 36
Section 10–702(a)(1), 10–721(a) and (b), 10–725(a) and (b)(2), 10–730(a)(1), (4), and 37
(7) and (b), and 10–732(a) 38
Annotated Code of Maryland 39
(2022 Replacement Volume and 2025 Supplement) 40
SENATE BILL 388 5

BY repealing and reenacting, with amendments, 1
Article – Tax – General 2
Section 10–702(a)(4)(ii), (c), and (e)(1) 10–725(b)(3) and (d) , 10–730(c) and (f), and 3
10–732(b) 4
Annotated Code of Maryland 5
(2022 Replacement Volume and 2025 Supplement) 6

BY adding to 7
Article – Tax – General 8
Section 10–721(i), 10–730(a–1), and 10–725(b)(5) and (k) 11–247 9
Annotated Code of Maryland 10
(2022 Replacement Volume and 2025 Supplement) 11

BY repealing and reenacting, without amendments, 12
Article – Tax – Property 13
Section 9–103(a)(1) and (6) and (b)(1) and 9–103.1(a)(1) and (6), (b), and (c)(5) 14
Annotated Code of Maryland 15
(2019 Replacement Volume and 2025 Supplement) 16

BY repealing and reenacting, with amendments, 17
Article – Tax – Property 18
Section 9–103(d)(2) and (5) and (e)(1) and 9–103.1(a)(7), (c)(3), (4), and (6), (d), (e), 19
and (f) and 9–230(m) 20
Annotated Code of Maryland 21
(2019 Replacement Volume and 2025 Supplement) 22

BY repealing and reenacting, with amendments, 23
Chapter 430 of the Acts of the General Assembly of 2023 24
Section 3 25

BY repealing and reenacting, with amendments, 26
Chapter 431 of the Acts of the General Assembly of 2023 27
Section 3 28

BY repealing and reenacting, with amendments, 29
Chapter 515 of the Acts of the General Assembly of 2000, as amended by Chapter 98 30
of the Acts of the General Assembly of 2005, Chapter 20 of the Acts of the 31
General Assembly of 2010, Chapter 85 of the Acts of the General Assembly of 32
2019, and Chapter 114 of the Acts of the General Assembly of 2021 33
Section 2 and 4 34

BY repealing and reenacting, with amendments, 35
Chapter 516 of the Acts of the General Assembly of 2000, as amended by Chapter 98 36
of the Acts of the General Assembly of 2005, Chapter 20 of the Acts of the 37
General Assembly of 2010, Chapter 85 of the Acts of the General Assembly of 38
2019, and Chapter 114 of the Acts of the General Assembly of 2021 39
6 SENATE BILL 388

Section 2 and 4 1

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 2
That Section(s) 7–314 of Article – State Finance and Procurement of the Annotated Co de 3
of Maryland be transferred to be Section(s) 5–108 of Article – Economic Development of the 4
Annotated Code of Maryland. 5

SECTION 2. AND BE IT FURTHER ENACTED, That Section(s) 5 –1401 through 6
5–1410 and the subtitle “Subtitle 14. Regional Institution Str ategic Enterprise Zone 7
Program”; and 5 –2301 through 5 –2307 and the subtitle “Subtitle 23. Build Our Future 8
Grant Pilot Program” of Article – Economic Development of the Annotated Code of 9
Maryland be renumbered to be Section(s) 10 –137 through 10 –146 and the part “Part II. 10
Regional Institution Strategic Enterprise Zone Program”; and 10–149 through 10–155 and 11
the part “Part III. Build Our Future Grant Pilot Program”, respectively. 12

SECTION 3. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 13
as follows: 14

Article – Economic Development 15

1–101. 16

(a) In this division the following words have the meanings indicated. 17

(c) “Department” means the Department of Commerce. 18

(e) “Secretary” means the Secretary of Commerce. 19

2.5–109. 20

(a) In this section, “economic development program” means: 21

(1) the [Economic Development Opportunities Program Account ] 22
STRATEGIC CLOSING FUND established under [§ 7 –314 of the State Finance and 23
Procurement Article] § 5–108 OF THIS ARTICLE; 24

(b) The Department shall compil e data in accordance with this section on the 25
economic development programs administered by the Department. 26

(d) (1) The report required under SUBSECTION (C) OF this section shall 27
include the following data, if applicable, on the economic development programs 28
administered by the Department: 29

(i) the number of jobs created; 30

(ii) the number of jobs retained; 31
SENATE BILL 388 7

(III) THE MINIMUM , MAXIMUM, AND AVERAGE SALARY O F THE 1
JOBS CREATED OR RETAINED; 2

(IV) FOR EACH OF THE FOLL OWING CATEGORIES, THE NUMBER 3
OF JOBS CREATED OR RETAINED THAT: 4

1. PROVIDE CAREER ADVANCEMENT TRAINING; 5

2. PROVIDE PAID LEAVE; 6

3. OFFER EMPLOYER –PROVIDED HEALTH INSU RANCE 7
BENEFITS THAT DO NOT EXCEED 8.5% OF THE EMPLOYEE ’S NET MONTHLY 8
EARNINGS; AND 9

4. OFFER RETIREMENT BENEFITS; 10

[(iii)] (V) the estimated amount of State revenue generated; 11

[(iv)] (VI) the status of any special fund; 12

[(v)] (VII) for minority business enterprises, as defined in § 14–301 of 13
the State Finance and Procurement Article: 14

1. the number of enterprises that received assistance from 15
each economic development program; and 16

2. the percentage of assistance distributed to each minority 17
business enterprise from each economic development program compared to the total 18
assistance distributed from each economic development program; 19

[(vi)] (VIII) a statement indicating whether, during the current 20
reporting year, the Department reduced, revoked, or recaptured a tax credit or any amount 21
of 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
and 26

[(vii)] (IX) any additional information requi red by the Department 27
through regulations. 28

8 SENATE BILL 388

(e) The Department shall establish, maintain, and update annually a publicly 1
available database on the Department’s website that: 2

(1) provides information that is downloadable by the public in a common 3
machine–readable format; and 4

(2) includes, as applicable: 5

(i) the name of each business entity that is a recipient of an economic 6
development program; 7

(ii) the total amount of tax credits certified, financial assistance paid, 8
and loans forgiven or uncollectible by the Department for each recipient of the tax credit or 9
financial assistance; 10

(iii) the number of jobs actually created or retained by each recipient; 11

(iv) the MINIMUM, MAXIMUM, AND average salary of the jobs created 12
or retained by each recipient; 13

(v) the amount of capital investment made or project costs incurred 14
by each recipient; and 15

(vi) a statement indicating whether, during the current reporting 16
year, the Department reduced, revoked, or recaptured a tax credit or any amount of financial 17
assistance from a recipient and, if applicable: 18

1. the total amount recovered as a result of the reduction, 19
revocation, or recapture, and any penalty assessed; and 20

2. a justification for the reduction, revocation, or recapture. 21

(G) (1) ON OR BEFORE DECEMBER 1, 2029, THE DEPARTMENT SHALL 22
SUBMIT A REPORT ON THE ECONOMIC DEVELOPMENT PROGRAMS ADMINISTERED BY 23
THE DEPARTMENT THAT WERE ALTERED BY CHAPTER ____ (S.B. 388) (H.B. 898) OF 24
THE ACTS OF THE GENERAL ASSEMBLY OF 2026 TO THE GOVERNOR AND , IN 25
ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE, THE GENERAL 26
ASSEMBLY. 27

(2) THE REPORT REQUIRED U NDER THIS SUBSECTION SHALL 28
INCLUDE ANALYSIS OF: 29

(I) WHETHER THE ALTERATI ONS INCREASED OR DEC REASED 30
UTILIZATION OF EACH PROGRAM; 31

SENATE BILL 388 9

(II) WHETHER THE ALTERATI ONS INCREASED OR DEC REASED 1
THE EFFECTIVENESS OF EACH PROGRAM; AND 2

(III) WHETHER THE ALTERATI ONS ACCOMPLISHED THE 3
DEPARTMENT’S GOALS FOR EACH PROGRAM. 4

5–102. 5

The Department shall administer the State’s economic development and financial 6
assistance programs and funds including: 7

(1) the BRAC Revitalization and Incentive Zone Program, under Subtitle 8
13 of this title; 9

(2) [the Build Our Future Grant Pilot Program, under Subtitle 23 of this 10
title; 11

(3)] the Enterprise Fund, under Subtitle 6 of this title; 12

[(4)] (3) the Enterprise Zones Program, under Subtitle 7 of this title; 13

[(5)] (4) the Make Office Vacancies Extinct Program, under Subtitle 15 of 14
this title; 15

[(6)] (5) the Maryland Economic Adjustme nt Fund, under Subtitle 2 of 16
this title; 17

[(7)] (6) the Maryland Economic Development Assistance Authority and 18
Fund, under Subtitle 3 of this title; 19

[(8)] (7) the Maryland Industrial Development Financing Authority, 20
under Subtitle 4 of this title; 21

[(9)] (8) the Maryland Small Business Development Financing Authority, 22
under Subtitle 5 of this title; 23

[(10)] (9) the Appalachian Regional Development Program, under Title 13, 24
Subtitle 1 of this article; 25

[(11)] (10) jointly with the Department of Housing and Community 26
Development, the Community Development Block Grant for Economic Development; AND 27

[(12) the Regional Institution Strategic Enterprise Zone Program under 28
Subtitle 14 of this title; and 29

10 SENATE BILL 388

(13)] (11) any other programs or funds designated by statute, the 1
Governor, or the Secretary. 2

5–108. 3

(a) (1) In this section the following words have the meanings indicated. 4

(2) [“Account” means the Economic Development Opportunities Program 5
Account. 6

(3) “Executive agency” means an executive department or agency in the 7
Executive Branch of State government, including all offices of the Executive Department 8
or agency directly responsible to the Governor. 9

(4)] “Extraordinary economic development opportunity” means the: 10

(i) attraction of a new private sector enterprise to the State or 11
retention or expansion of an existing private sector enterprise in the State that: 12

1. maintains a strong financial condition and minimal credit 13
risk profile; 14

2. is capable of accessing alternative sources of financing 15
through financial institutions or capital markets; 16

3. is consistent with the strategic plan of the State for 17
economic development; AND 18

4. creates or retains substantial employment [, particularly 19
in areas of high unemployment; and 20

5. invests in capital at a level equal to five times the value of 21
the incentive offered]; 22

(ii) retention or expansion of an existing public institution, private 23
institution, or federal research and development institute that: 24

1. is consistent with the strategic plan of the State for 25
economic development; and 26

2. creates or retains substantial employment [, particularly 27
in areas of high unemployment]; or 28

(iii) establishment or attraction of a public institution, a private 29
institution, or a federal research and development institute new to the State that: 30

SENATE BILL 388 11

1. is consistent with the strategic plan of the State for 1
economic development; and 2

2. creates or retains substantial employment [, particularly 3
in areas of high unemployment]. 4

(3) “FUND” MEANS THE STRATEGIC CLOSING FUND. 5

[(5)] (4) (i) “Performance requirement” means a contractual 6
agreement between an executive agency and [an Account] A FUND recipient that requires 7
the [Account] FUND recipient to meet minimum economic development outcomes in 8
exchange for a grant or a loan under this section. 9

(ii) “Performance requirement” includes claw –back, penalty, 10
rescission, and recalibration clauses that utilize job creation, capital investment, and other 11
measures of economic development. 12

[(6)] (5) “Private sector enterprise” means any commercial, industrial, 13
educational, or research organization which is not a part of or controlled by a federal, State, 14
or local government agency. 15

(b) Subject to the provisions of this section, the [Economic Development 16
Opportunities Program Account] STRATEGIC CLOSING FUND is established WITHIN THE 17
DEPARTMENT to maximize extraordinary economic development opportunities. 18

(c) [Subject to subsection (r ) of this section, the ] THE Governor may provide an 19
appropriation in the budget bill to the [Account] FUND for a specific or general purpose or 20
purposes. 21

(d) After notice to and approval by the Legislative Policy Committee, the 22
Governor may transfer fund s by budget amendment [from the Economic Development 23
Opportunities Program Account to the expenditure account of the appropriate executive 24
agency] TO THE FUND. 25

(e) (1) The [Account] FUND is a continuing, nonlapsing fund which is not 26
subject to § 7–302 of [this subtitle] THE STATE FINANCE AND PROCUREMENT ARTICLE. 27

(2) The Treasurer shall separately hold, and the Comptroller shall account 28
for, the [Account] FUND. 29

(3) The [Account] FUND shall be invested and reinvested in the same 30
manner as other State funds. 31

12 SENATE BILL 388

(4) [Except as provided in paragraph (5) of this subsection, any ] ANY 1
investment earnings shall be [subject to § 7 –311(d) of this subtitle ] CREDITED TO THE 2
GENERAL FUND OF THE STATE. 3

[(5) Any investment earnings on money transferred from the Account to a 4
second continuing, nonlapsing fund may be retained to the credit of the second fund.] 5

(f) (1) Money appropriated or credited to the [Account] FUND does not revert 6
to the [Revenue Stabilization Account] GENERAL FUND OF THE STATE. 7

(2) [Except as provided in paragraph (3) of this subsection, repayments ] 8
REPAYMENTS of principal or interest on any loan from the [Account] FUND shall be 9
retained to the credit of the [Account] FUND. 10

[(3) Repayments of principal or interest on any loan made from money 11
transferred from the Account to a second continuing, nonlapsing fund may be retained to 12
the credit of the second fund.] 13

(g) (1) The Department [of Commerce] shall include the following information 14
in the report that is required under § 2.5–109 of [the Economic Development Article] THIS 15
ARTICLE: 16

(i) the financial status of the program and a summary of its 17
operations for the preceding fiscal year; 18

(ii) for the previous 3 fiscal years, the status of [Account] FUND 19
disbursements for economic development projects reviewed by the Legislative Policy 20
Committee under this section; 21

(iii) for the previous 3 fiscal years, the status of job creation, capital 22
investment, and other measures of economic development for each economic development 23
project reviewed by the Legislative Policy Committee under this section; AND 24

(iv) [a list of guide lines for the kinds of performance requirements 25
that may be negotiated with the loan or grant applicant; and 26

(v)] an explanation if the job creation, capital investment, and other 27
measures of economic development described in items (i) through (iii) of this paragraph are 28
lower than negotiated according to subsection (h)(1) of this section. 29

(2) [Upon] ON receipt of the information that is required to be reported 30
under this subsection, the Legislative Policy Committee shall have [60] 21 days to review 31
and comment on the information provided by the Department [of Commerce ] under 32
paragraph (1) of this subsection, during which time the Department [of Commerce] shall 33
SENATE BILL 388 13

provide any additional information regarding the [Account] FUND as requested by the 1
Legislative Policy Committee. 2

(h) (1) Except as provided in paragraph (2) of this subsection and in subsection 3
(i) of this section, any funds transferred from the [Economic Development Opportunities 4
Program Account ] FUND shall be used only for extraordin ary economic development 5
opportunities that: 6

(i) meet the criteria provided in this section; 7

(ii) include performance requirements; and 8

(iii) in addition to the performance requirements under item (ii) of 9
this paragraph, include a performance requirement that utilizes a claw–back provision. 10

(2) The [Account] DEPARTMENT may UTILIZE THE FUND TO pay [an 11
executive agency] for administrative, legal, or actuarial expenses incurred by the [agency 12
in connection with transactions funded by transfers of money to the agency from the 13
Account] DEPARTMENT. 14

(i) (1) The Legislative Policy Committee may approve an economic 15
development opportunity that is not an extraordinary economic development opportunity 16
if the executive agency requesting the transfer of funds offers a detailed justification for the 17
exception. 18

(2) The Legislative Policy Committee shall give particular consideration to 19
an exception that would provide a significant economic development opportunity for an area 20
of the State that has a rela tively high unemployment rate or relatively low per capita 21
income. 22

(j) (1) The Department [of Commerce ] may modify the guidelines for the 23
kinds of performance requirements that may be negotiated with the loan or grant as 24
needed, upon approval of the Legislative Policy Committee. 25

(2) [An executive agency ] THE DEPARTMENT may depart from these 26
guidelines as needed, upon approval of the Legislative Policy Committee. 27

(k) [Subject to the provisions of this subtitle, funds transferred] MONEY from the 28
[Economic Development Opportunities Program Account, to an executive agency, ] FUND 29
may be loaned, granted, or invested for: 30

(1) assisting in the retention or expansion of existing private sector 31
enterprises, public or private institutions, or federal research and development institutes; 32

14 SENATE BILL 388

(2) assisting in the establishment or attraction of private sector 1
enterprises, public or private institutions, or federal research and development institutes 2
new to this State; or 3

(3) providing assistance where exis ting State or local programs lack 4
sufficient resources or are constrained by timing or program design from being utilized. 5

(l) (1) [Upon submission to the Legislative Policy Committee of a proposed 6
budget amendment to transfer money from the Account, the Governor] BEFORE FUNDS 7
FROM THE FUND MAY BE LOANED , GRANTED, OR INVESTED IN ACCOR DANCE WITH 8
SUBSECTION (K) OF THIS SECTION , THE DEPARTMENT shall provide, subject to § 9
2–1257 of the State Government Article, to the Legislative Policy Committee: 10

(1) (I) a detailed description of: 11

(i) 1. the proposed use of the funds; 12

(ii) 2. the manner in which the proposed use meets the criteria 13
as set forth in this section; 14

(iii) 3. the degree to which the proposed use of funds will advance 15
statewide or local economic development strategies and objectives; and 16

(iv) 4. the degree to which available sources of federal, State, 17
local, and private financial support have been sought and will be utilized; 18

(2) (II) the terms, conditions, and performance re quirements of any 19
grant or loan for which the funds are to be used; 20

(3) (III) a comprehensive economic analysis of the proposed use of the 21
funds which estimates: 22

(i) 1. the economic impact to the State and the local 23
jurisdictions affected; 24

(ii) 2. a minimum level of net economic benefits to the public 25
sector; 26

(iii) 3. the number of jobs expected to be created as a result of the 27
proposed economic development project and the percentage of those jobs that are expected 28
to be held by Maryland residents; 29

(iv) 4. the wage rates and benefit packages for the jobs expected 30
to be created as a result of the proposed economic development project; and 31

SENATE BILL 388 15

(v) 5. any other appropriate financial or economic benefits; 1

(4) (IV) any other analysis or info rmation that is requested by the 2
Legislative Policy Committee; and 3

(5) (V) the date on which the executive agency expects to disburse the 4
funds to the proposed recipient. 5

(2) THE LEGISLATIVE POLICY COMMITTEE SHALL HAVE 60 DAYS TO 6
REVIEW THE INFORMATION PROVIDED UNDER PARAGRAPH (1) OF THIS SUBSECTION 7
AND APPROVE THE PROPOSED USE OF FUNDS BEFORE FUNDS FROM THE FUND MAY 8
BE LOANED , GRANTED, OR INVESTED IN ACCOR DANCE WITH SUBSECTIO N (K) OF 9
THIS SECTION. 10

(m) [If an executive agency fails to disburse transferred funds to a recipient within 11
1 year after the expected disbursement date presented to the Legislative Policy Committee 12
under subsection (l) of this section, the funds will revert back to the Account and the 13
Governor shall: 14

(1) resubmit the proposed budget amendment to transfer money from the 15
Account to the Legislative Policy Committee; and 16

(2) provide the Legislative Policy Committee with the information required 17
under subsection (l) of this section. 18

(n)] Funds appropriated to the [Economic Development Opportunities Program 19
Account] FUND may not be loaned, granted, or invested for: 20

(1) substituting for funds from other State or local programs for which a 21
project may be eligible and sufficient resources exist; 22

(2) projects which are not likely to attract or retain employment 23
opportunities; 24

(3) funding projects located outside the State; 25

(4) construction or land acquisition by the Maryland Stadium Authority; or 26

(5) funding for any sports activity or facility. 27

[(o) (1) This subsection does not apply to an economic development opportunity 28
located in an area designated as a qualified opportunity zone under § 1400Z –1 of the 29
Internal Revenue Code in Allegany County, Garrett County, Somerset County, or Wicomico 30
County. 31

16 SENATE BILL 388

(2) In the case of an economic development opportunity located outside a 1
priority funding area as established under Title 5, Subtitle 7B of this article, the 2
Department shall first comply with the provisions of that subtitle before making a request 3
for approval by the Legislative Policy Committee under this section.] 4

[(p)] (N) [An executive agency] THE DEPARTMENT may approve changes to a 5
transaction approved by the Legislative Policy Committee as long as the changes do not 6
materially and adversely affect the overall position of the [executive agency ] 7
DEPARTMENT in the transaction or the economic development benefits to be derived by 8
the State in the transaction. 9

[(q)] (O) (1) (i) In this subsection the following words have the meanings 10
indicated. 11

(ii) “Financial assistance” means a grant, loan, or investment 12
provided under this subsection that exceeds $100,000. 13

(iii) “Political subdivision” includes an agency or other 14
instrumentality of the political subdivision. 15

(2) This subsection does not apply to financial assistance used solely for the 16
purpose of acquiring real property or structures on real property. 17

(3) With respect to financial assistance under this section to a political 18
subdivision: 19

(i) if the political subdivision has a program for promoting 20
procurement opportunities among minority businesses that is acceptable to the 21
Department [of Commerce], the political subdivision shall apply the requirements of that 22
program to the procurement of goods or services made with the proceeds from the financial 23
assistance; but 24

(ii) if the political subdivision does not have a program that is 25
acceptable to the Department [of Commerce] under item (i) of this paragraph, the political 26
subdivision is subject to paragraph (4) of this subsection. 27

(4) (i) In this paragraph, “minority business enterprise” has the 28
meaning stated in § 14–301 of [this article] THE STATE FINANCE AND PROCUREMENT 29
ARTICLE. 30

(ii) With respect to financial assistance under this sec tion to an 31
entity other than a political subdivision, the entity shall agree to include in the agreement 32
providing the financial assistance a provision acceptable to the Department [of Commerce] 33
that would encourage the procurement from minority business e nterprises of goods or 34
services purchased with the proceeds from the financial assistance. 35

SENATE BILL 388 17

(iii) In negotiating the provision required under subparagraph (ii) of 1
this paragraph, the Department [of Commerce] shall take into account relevant factors, 2
including: 3

1. the intended use of the proceeds from the financial 4
assistance; and 5

2. the feasibility of obtaining the required goods or services 6
from minority business enterprises. 7

(5) The Department [of Commerce ] may require that a recipient of 8
financial assistance under this section submit to the Department [of Commerce] a list, or 9
an updated list, of the minority business enterprises from which goods or services were 10
procured and the nature and dollar amount of the goods or services. 11

[(r) For fiscal years 2019 through 2021, the Governor shall include in the annual 12
budget bill an appropriation of $5,000,000 to the Account to be used by the Department of 13
Commerce to provide conditional loans or grants to companies that meet the following 14
criteria: 15

(1) construction of company headquarters in the State with capital 16
expenditures of at least $500,000,000; and 17

(2) retention of company headquarters in the State with at least 3,250 18
eligible employees, consistent with a letter of intent entered into with the Department of 19
Commerce in October 2016.] 20

5–301. 21

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

(g) “Authority” means the Maryland Economic Development Assistance 23
Authority. 24

(l) “Corporation” means the Maryland Economic Development Corporation. 25

(m) “Financial assistance” means a grant, loan, or investment provided under this 26
subtitle. 27

(n) “Fund” means the Maryland Economic Development Assistance Fund. 28

5–310. 29

There is a Maryland Economic Development Assistance Fund in the Department. 30

5–311. 31
18 SENATE BILL 388

The purposes of the Fund are to: 1

(1) expand employment opportunities in the State by providing financial 2
assistance to businesses that are engaged in eligible industry sectors, including financial 3
assistance for: 4

(i) aquaculture projects; 5

(ii) arts and entertainment enterprises; 6

(iii) arts and entertainment projects; and 7

(iv) creation and expansion of child care facilities; 8

(2) provide financial assistance for the redevelopment of qualified 9
brownfields sites; 10

(3) provide financial assistance to local governments and the Corporation 11
for economic development projects; and 12

(4) provide grants to local economic development funds. 13

5–319. 14

(a) (1) Financial assistance from the Fund not excee ding [$2,500,000] 15
$5,000,000 may be approved by the Secretary. 16

(2) Except as provided in paragraph (3) of this subsection, financial 17
assistance from the Fund exceeding [$2,500,000] $5,000,000 requires approval by the 18
Authority. 19

(3) For a Tier I count y project, the Secretary may approve financial 20
assistance exceeding [$2,500,000] $5,000,000. 21

(b) Except as provided in subsection (a)(3) of this section, with respect to requests 22
for financial assistance exceeding [$2,500,000] $5,000,000: 23

(1) the Department shall evaluate the requests; and 24

(2) the Authority shall: 25

(i) evaluate the requests that have first been evaluated by the 26
Department; 27

(ii) determine whether to approve the requests; and 28
SENATE BILL 388 19

(iii) set the terms and conditions of the financial assistance. 1

(c) (1) Except as provided in paragraph (2) of this subsection, financial 2
assistance provided to a local government or the Corporation for a project shall be approved 3
by a LETTER FROM OR formal resolution of: 4

(i) the governing b ody of the jurisdiction in which the project is 5
located; or 6

(ii) if the recipient of the financial assistance is the Corporation, its 7
board of directors. 8

(2) If the recipient of financial assistance is the Corporation for a Tier I 9
county project, th e financial assistance shall be approved by LETTERS FROM OR formal 10
resolutions of both the board of directors of the Corporation and the governing body of the 11
jurisdiction in which the project is located. 12

(3) A project that is funded by a grant from the Fund to a local government 13
or the Corporation, and carried out by the local government or the Corporation, shall be 14
consistent with the strategy or plan for economic development of the county or municipal 15
corporation in which the project is located. 16

(4) If the Department provides financial assistance to a local government 17
for a project, an interest in that project is later transferred to a third party, and the transfer 18
of the interest is financed by the local government: 19

(i) the local government may assign the financing documents to the 20
Department as a repayment of or return on the Department’s financial assistance to the 21
local government, and 22

(ii) the assignment may not be considered a new financing under this 23
subtitle. 24

(d) For a local economi c development opportunity, the local government of the 25
jurisdiction in which the project is located shall provide[: 26

(1)] a LETTER FROM OR formal resolution of the governing body of the 27
jurisdiction in which the project is located that endorses the financial assistance to be 28
provided from the Fund[; and 29

(2) as determined by the Department or Authority to evidence the support 30
of the local government for the project: 31

20 SENATE BILL 388

(i) a guarantee, secured by the full faith and credit of the county or 1
municipal corporation in which the project is located, of all or part of the financial 2
assistance to be provided by the Fund; 3

(ii) the financing of part of the costs of the project equal to at least 4
10% of the financial assistance to be provided from the Fund; or 5

(iii) both]. 6

(E) A LETTER SUBMITTED UND ER THIS SECTION SHAL L INCLUDE THE 7
SIGNATURES OF A MAJORITY OF THE MEMBERS OF THE GOVERNING BODY. 8

5–320. 9

(a) To be eligible for financial assistance from the Fund, an applicant shall be: 10

(1) a local economic development fund that meets the criteria set forth in 11
Part V of this subtitle; or 12

(2) an individual, private business, nonprofit entity, or local government, 13
or the Corporation that intends to use the requested financial assistance for a project that: 14

(i) except as provided in subsection (b) of this section, is in an 15
eligible industry sector under § 5–321 of this subtitle; and 16

(ii) has a strong potential for expanding or retaining employment 17
opportunities in the State. 18

(b) A project need not be in an eligible industry sector if the applicant: 19

(1) is located in a Tier I county; or 20

(2) (i) is a local government or the Corporation; and 21

(ii) does not intend to use the financial assistance to carry out a 22
project that benefits a particular private sector entity. 23

(c) In form and content acceptable to the Department, an applicant for financial 24
assistance from the Fund shall submit to the Department an application that contains: 25

(1) the information that the Department or Authority considers necessary 26
to evaluate the request for financial assistance; and 27

(2) for a Tier I county project: 28

SENATE BILL 388 21

(i) a marketing plan designed to market the project to prospective 1
businesses; 2

(ii) a statement of planned marketing expenditure s as a percent of 3
the total financial assistance amount requested; and 4

(iii) a plan for the project that is consistent with the county’s local 5
strategic economic development plan as to the location and type of project. 6

5–323. 7

Financial assistance from the Fund may not exceed the lesser of: 8

(1) $10,000,000; or 9

(2) 20% of the Fund balance. 10

5–324. 11

(a) Each subsection of this section is subject to § 5–323 of this subtitle. 12

(b) If the Department or Authority determines a project to be a signifi cant 13
strategic economic development opportunity, the Department or Authority may provide a 14
loan from the Fund for the project to an individual, private business, nonprofit entity, or 15
the Corporation in an amount not exceeding $10,000,000. 16

(c) If the Department or Authority determines a project to be a local economic 17
development opportunity, the Department or Authority may provide financial assistance 18
from the Fund for the project to an individual, private business, nonprofit entity, or the 19
Corporation in an amount not exceeding: 20

(1) [$5,000,000] $7,500,000 for a loan or investment; and 21

(2) [$2,000,000] $5,000,000 for a grant. 22

(d) (1) Financial assistance provided to a local government or the Corporation 23
to finance a project may be: 24

(i) in the form of a grant, loan, or investment; and 25

(ii) except as provided in paragraph (2) of this subsection, in an 26
amount not exceeding [$3,000,000] $5,000,000. 27

(2) Financial assistance for a Tier I county project may be in an amount 28
determined by the Department. 29

22 SENATE BILL 388

(3) A grant to a local economic development fund is subject to the 1
requirements of Part V of this subtitle. 2

(e) Financial assistance for a specialized economic development opportunity may 3
be: 4

(1) provided to an individual, private busi ness, nonprofit entity, or local 5
government, or the Corporation; 6

(2) in the form of a grant, loan, or investment; and 7

(3) in an amount determined by the Department or Authority. 8

5–325. 9

(a) Subject to the restrictions of this subtitle, the Departme nt or Authority may 10
impose the terms and conditions on financial assistance from the Fund as either considers 11
appropriate. 12

(b) (1) Except as provided in paragraph (2), (3), or (4) of this subsection, 13
financial assistance from the Fund may not exceed 70% of the total costs of the project being 14
financed. 15

(2) Financial assistance from the Fund may constitute 100% of the total 16
costs of the project being financed if: 17

(i) the recipient is the Corporation; or 18

(ii) the financial assistance is for: 19

1. an arts and entertainment enterprise; 20

2. an arts and entertainment project; or 21

3. a Tier I county project. 22

(3) (i) Except as provided in subparagraph (ii) of this paragraph, 23
financial assistance from the Fund: 24

1. may be used to financ e up to 50% of the costs of 25
construction, purchase, or renovation of real property, fixtures, or equipment related to a 26
child care facility; but 27

2. may not be used for working capital, supplies, or inventory 28
related to a child care facility. 29

SENATE BILL 388 23

(ii) Financial assistance from the Fund may be used to finance up to 1
20% of the costs described in subparagraph (i) of this paragraph incurred by a business that 2
has received or will receive a day care loan insured by the Maryland Industrial 3
Development Financing Authority. 4

(4) Financial assistance for preparation of a strategy or plan for economic 5
development of a county or municipal corporation may not exceed: 6

(i) 50% of the costs of preparation; or 7

(ii) $50,000 in a 3–year period. 8

[(c) (1) A loan from the Fund shall bear an interest rate below the market rate 9
of interest, as determined by the Department, if the loan is for: 10

(i) a significant strategic economic development opportunity; or 11

(ii) a specialized economic development opportunity. 12

(2) A loan from the Fund for a Tier I county project shall bear an interest 13
rate determined by the Department or the Authority. 14

(3) A loan from the Fund shall bear an interest rate not exceeding 15
one–eighth of 1% plus the net interest cost of the most recent State general obligation bond 16
issue preceding the approval of the loan if the loan is: 17

(i) for a local economic development opportunity; or 18

(ii) to a local government. 19

(4) A loan from the Fund may not bear an interest rate of less than 3% 20
unless: 21

(i) the project funded by the loan is located in an area of high 22
unemployment; or 23

(ii) the Department determines that the borrower is carrying out a 24
compelling economic development initiative. 25

(d) (1) The Department may waive interest during the first 2 years of the term 26
of a loan from the Fund. 27

(2) If a borrower defaults on a loan from the Fund, the Department may 28
impose an interest rate that exceeds the limits set forth in subsection (c)(1) or (3) of this 29
section. 30

(e) The term of a loan from the Fund may not exceed: 31
24 SENATE BILL 388

(1) for working capital, 3 years; 1

(2) for financing equipment, furnishings, or fixtures, the lesser of 15 years 2
or the useful life of the asset, as determined by the Department; 3

(3) for financing the construction or acquisition of buildings and real 4
property, 25 years; and 5

(4) for financing the redevelopment of a qualified brownfields site or a Tier 6
I county project, a term approved by the Department or Authority.] 7

(C) THE DEPARTMENT OR THE AUTHORITY SHALL DETERMINE WHETHER A 8
LOAN FROM THE FUND SHALL BEAR INTEREST AND, IF SO, THE INTEREST RATE. 9

Subtitle 5. Maryland Small Business Development Financing Authority AND FUND. 10

5–501. 11

(a) In this subtitle the following words have the meanings indicated. 12

(b) “Authority” means the Maryland Small Business Development Financing 13
Authority. 14

(c) “Financial institution” means: 15

(1) a financial institution, as defined in § 1 –101 of the Financial 16
Institutions Article; and 17

(2) any other lender that the Authority approves. 18

(D) “FUND” MEANS THE MARYLAND SMALL BUSINESS DEVELOPMENT 19
FINANCING FUND. 20

[(d)] (E) (1) “Loan document” means an instrument or agreement that 21
evidences, secures, or guarantees a loan. 22

(2) “Loan document” includes a note, financing statement, mortgage, 23
pledge, assignment, loan and security agreement, or guaranty. 24

[(e)] (F) (1) “Working capital” means money used to meet the cash needs of 25
an operating business entity. 26

(2) “Working capital” does not include money used for a capital purchase. 27

5–502. 28
SENATE BILL 388 25

(a) The General Assembly finds that: 1

(1) the inability of socially or economically disadvantaged individuals to 2
obtain working capital is a major limitation on their opportunity to win and perform 3
government and other contracts; 4

(2) because socially or economically disadvantaged individuals frequently 5
have been awarded government or other contracts but have lacked the working capital to 6
post a bond, buy supplies needed to begin the work, or pay employees, these individuals 7
have been unable to accept the contracts; 8

(3) some individuals are unable to obtain government and other contracts 9
for reasons other than the cost to the owner or the ability to perform the contract work 10
competently; 11

(4) socially or economically disadvantaged individuals frequently lack 12
adequate capital to sustain and expand their businesses and to hire and train employees; 13

(5) because high risk, problem, or uncollectible loans are not in the interest 14
of financial institutions, financial instit utions generally are reluctant to lend money to 15
socially or economically disadvantaged individuals with insufficient records of 16
performance; 17

(6) the inability of businesses owned by socially or economically 18
disadvantaged individuals to obtain long –term financing is a major limitation on their 19
opportunity to survive and expand; and 20

(7) the public welfare is served by promoting the viability and expansion of 21
businesses owned by economically or socially disadvantaged individuals, retaining or 22
increasing the employment of these individuals, and expanding the taxable base of the 23
economy of the State. 24

(b) The purposes of the [Authority] FUND are: 25

(1) to assist socially or economically disadvantaged individuals to obtain 26
adequate working capital to begin, continue, and complete projects[, the majority of funding 27
for which is provided by government entities or utilities]; 28

(2) to encourage socially or economically disadvantaged individuals to seek 29
government and other contracts; 30

(3) to encourage financial institutions to make loans to these individuals; 31
and 32

26 SENATE BILL 388

(4) to assist small businesses that are unable to obtain adequate business 1
financing on reasonable terms through normal financing channels because the businesses 2
do not meet the established credit criteria of financial institutions. 3

Part II. Maryland Small Business Development Financing Authority AND FUND. 4

5–505. 5

There is a Maryland Small Business Development Financing Authority in the 6
Department. 7

5–509. 8

(a) (1) The Executive Director is the chief administrative officer of the 9
Authority. 10

(2) With the approval of the Secretary, the Authority may: 11

(i) appoint the Executive Director; or 12

(ii) contract with a private entity to perform the duties of the 13
Executive Director. 14

(b) The Executive Director serves at the pleasure of the Authority, with the 15
concurrence of the Secretary. 16

(c) In addition to any other duties set forth in this subtitle, the Executive Director 17
shall: 18

(1) supervise the administrative affairs and technical activities of the 19
Authority in accordance with its regulations and policies; 20

(2) attend all meetings of the Authority; 21

(3) keep minutes of all proceedings of the Authority; 22

(4) approve all accounts for salaries, per diem payments, and allowable 23
expenses of the Authority, its employees, and its consultants; 24

(5) approve all expenses incidental to the operation of the Authority; and 25

(6) perform any other duty that the Authority or the Secretary requires to 26
carry out this subtitle. 27

5–511. 28

SENATE BILL 388 27

[(a) In this section, “Authority staff” means any of the individuals who are 1
employed by the Department to operate the programs of the Authority immediately prior 2
to the execution by the Department of a contract under this section with the private 3
corporation organized by any of those individuals. 4

(b) (1)] (A) The Department may contract for and engage the services of 5
[some or all of the Authority staff] A PRIVATE MARYLAND CORPORATION to administer 6
SOME OR ALL OF the programs of the Authority[, for a period of 3 years, if the Authority 7
staff has organized itself as a private Maryland corporation]. 8

[(2) (B) The Department may: 9

(i) (1) extend the termination date of the A contract in effect as of 10
September 30, 2008, to June 30, 2012, and modify that extended contract as needed; and 11

(ii) (2) renew the extended contract for up to two additional 12
5–year terms ONE ADDITIONAL 3–YEAR TERM, and modify that renewed and extended 13
contract as needed. 14

(3) (C) An extension or renewal contract shall include standards to 15
evaluate the performance of the private contractor in rendering services under the contract. 16

(c) In its name the corporation may use “Maryland Small Business Development 17
Financing Agency”, “MSBDFA, Inc.”, or any close approximation of those terms.] 18

5–515. 19

(A) THERE IS A MARYLAND SMALL BUSINESS DEVELOPMENT FINANCING 20
FUND IN THE DEPARTMENT. 21

(B) THE FUND IS A SPECIAL, NONLAPSING FUND THAT IS NOT SUBJECT TO 22
REVERSION UNDER § 7–302 OF THE STATE FINANCE AND PROCUREMENT ARTICLE. 23

(C) THE STATE TREASURER SHALL: 24

(1) INVEST THE MONEY IN THE FUND IN THE SAME MANNER AS OTHER 25
STATE MONEY MAY BE INVESTED; 26

(2) CREDIT ANY INVESTMENT EARNINGS TO THE FUND; AND 27

(3) REPORT EACH YEAR TO THE DEPARTMENT ON: 28

(I) THE STATUS O F THE MONEY INVESTED UNDER THIS 29
SUBTITLE; 30
28 SENATE BILL 388

(II) THE MARKET VALUE OF THE ASSETS IN THE FUND AS OF THE 1
DATE OF THE REPORT; AND 2

(III) THE INTEREST RECEIVED FROM INVESTMENTS DURING THE 3
PERIOD COVERED BY THE REPORT. 4

(D) (1) THE FUND IS THE SUCCESSOR OF THE SMALL BUSINESS 5
DEVELOPMENT CONTRACT FINANCING FUND, THE SMALL BUSINESS 6
DEVELOPMENT GUARANTY FUND, THE EQUITY PARTICIPATION INVESTMENT 7
INCENTIVE PROGRAM FUND, AND THE SMALL BUSINESS SURETY BOND FUND 8
ESTABLISHED UNDER TH E MARYLAND SMALL BUSINESS DEVELOPMENT 9
FINANCING AUTHORITY. 10

(2) ALL FINANCIAL ASSISTA NCE TRANSACTIONS AND OBLIGATIONS 11
APPROVED BY THE MARYLAND SMALL BUSINESS DEVELOPMENT FINANCING 12
AUTHORITY SHALL CONTI NUE AS OBLIGATIONS O F THE FUND AND ARE 13
AUTHORIZED UNDER THIS SUBTITLE. 14

(E) THE FUND CONSISTS OF: 15

(1) PREMIUMS FOR GUARANTEEING LOANS UNDER THIS SUBTITLE; 16

(2) PREMIUMS FOR GUARANT EEING EQUITY INVESTM ENTS UNDER 17
THIS SUBTITLE; 18

(3) REPAYMENTS OF PRINCIPAL OF AND INTEREST ON DIRECT LOANS 19
AND EQUITY PARTICIPATION FINANCING MADE UNDER THIS SUBTITLE; 20

(4) PROCEEDS FROM THE SALE, DISPOSITION, LEASE, OR RENTAL OF 21
COLLATERAL FOR DIREC T LOANS, LOAN GUARANTIES, OR EQUITY PARTICIPAT ION 22
FINANCING MADE UNDER THIS SUBTITLE; 23

(5) LOANS AND GRANTS FROM THE FEDERAL GOVERNMENT OR A UNIT 24
OR INSTRUMENTALITY OF THE FEDERAL GOVERNMENT; 25

(6) GRANTS AND CONTRIBUT IONS OF FUNDS FROM T HE STATE, A 26
POLITICAL SUBDIVISION, OR ANY OTHER SOURCE; 27

(7) PREMIUMS FOR GUARANTEEING LONG–TERM LOANS UNDER THIS 28
SUBTITLE; 29

SENATE BILL 388 29

(8) NOTWITHSTANDING § 10–469(E) AND (F) OF THIS ARTICLE OR ANY 1
OTHER LAW , ANY RECOVERY OF INVE STMENTS MADE UNDER § 10–469 OF THIS 2
ARTICLE THAT WERE FUNDED BY A TRANSFER OF MONEY FROM THE FUNDS UNDER 3
THIS SUBTITLE TO THE ENTERPRISE FUND, INCLUDING AN INVESTMENT IN MMG 4
VENTURES LLP; 5

(9) NOTWITHSTANDING § 10–469(E) AND (F) OF THIS ARTICLE OR ANY 6
OTHER LAW, ANY REPAYMENT OF A GRANT MADE UNDER § 10–469 OF THIS ARTICLE 7
THAT WAS FUNDED BY A TRANSFER OF MONEY FR OM THE FUNDS UNDER T HIS 8
SUBTITLE TO THE ENTERPRISE FUND; 9

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

(11) MONEY MADE AVAILABLE TO THE FUND THROUGH FEDERAL 11
PROGRAMS OR PRIVATE CONTRIBUTIONS; 12

(12) PREMIUMS, FEES, ROYALTIES, AND REPAYMENTS OF 13
INVESTMENTS MADE UND ER THE TERMS OF BOND ING ASSISTANCE AND E QUITY 14
PARTICIPATION FINANCING; AND 15

(13) ALL OTHER RECEIPTS O F THE DEPARTMENT UNDER THIS 16
SUBTITLE. 17

Part III. Small Business Development Contract Financing [Fund] PROGRAM. 18

5–517. 19

In this part, [“Fund”] “PROGRAM” means the Small Business Development 20
Contract Financing [Fund] PROGRAM. 21

5–518. 22

There is a Small Business Development Contract Financing [Fund] PROGRAM 23
WITHIN THE FUND. 24

[5–519. 25

The Authority shall use the Fund to implement this part.] 26

[5–520. 27

The Authority shall administer the Fund.] 28

[5–521. 29
30 SENATE BILL 388

(a) The Fund is a special, nonlapsing fund that is not subject to reversion under 1
§ 7–302 of the State Finance and Procurement Article. 2

(b) The Treasurer shall: 3

(1) invest the money in the Fund in the same manner as other State money 4
may be invested; and 5

(2) credit any investment earnings to the Fund. 6

(c) If the Authority determines by resolution that any money in the Fund is no 7
longer needed to meet its obligations, the Authority may authorize the Comptroller to first 8
employ that money to pay the principal of and interest on outstanding bonds issued under 9
any Act authorizing the issue of State general obligation bonds issued to implement this 10
subtitle.] 11

[5–522. 12

The Fund consists of: 13

(1) premiums for guaranteeing loans under § 5–525(a) of this subtitle; 14

(2) premiums for guaranteeing equity investments under § 5–525(b) of this 15
subtitle; 16

(3) repayments of principal of and interest on direct loans made under § 17
5–525(c) of this subtitle; 18

(4) proceeds from the sale, disposition, lease, or rental of collate ral for 19
direct loans or loan guaranties made under § 5–525 of this subtitle; and 20

(5) all other receipts of the Authority under this part.] 21

[5–523. 22

(a) If the Authority and the Secretary determine that more money is needed to 23
keep the Fund at an adequ ate level, the Authority shall send a written request for the 24
additional money to the Board of Public Works. 25

(b) The Board of Public Works may pay the amount requested from the General 26
Emergency Fund.] 27

[5–524.] 5–519. 28

The Authority may use the Fund for: 29
SENATE BILL 388 31

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

(2) equity investment guaranties made under [§ 5–525(b)] § 5–520(B) of 2
this subtitle; 3

(3) direct loans made under [§ 5–525(c)] § 5–520(C) of this subtitle; and 4

(4) expenses for administrative, legal, actuarial, and other services. 5

[5–525.] 5–520. 6

(a) (1) The Authority may use the Fund to guarantee a loan made to an 7
applicant only if: 8

(i) the applicant meets the requirements of this part; 9

(ii) [the loan is to be used to perform a contract for which the 10
majority of the funding is provided by the federal government, a state government, a local 11
government, or a utility regulated by the Public Service Commission; 12

(iii)] the maximum amount payable by the Auth ority under the 13
guaranty does not exceed [$2,000,000] $3,000,000; and 14

[(iv)] (III) the guaranteed loan is to be used for: 15

1. working capital; or 16

2. equipment needed to perform the contract, the cost of 17
which can be repaid from contract proceeds, if the Authority has entered into an agreement 18
with the applicant to secure the loan or guaranty. 19

(2) A guaranty made by the Authority may not exceed the term of the 20
contract, unless the Authority determines that a longer term better serves the purposes of 21
this subtitle. 22

(b) (1) The Authority may use the Fund to guarantee a person’s proposed 23
equity investment in the applicant only if: 24

(i) the applicant meets the requirements of this part; 25

(ii) the amount of the equity investment to be guaranteed does not 26
exceed the lesser of: 27

1. 10% of the person’s equity investment in the applicant; or 28

32 SENATE BILL 388

2. $250,000; AND 1

(iii) [the equity investment to be guaranteed is to be used to perform 2
a contract for which the majority of funding is provided by the federal government, a state 3
government, a local government, or a utility regulated by the Public Service Commission; 4
and 5

(iv)] the equity investment to be guaranteed is to be used for: 6

1. working capital; or 7

2. equipment need ed to perform the contract, the cost of 8
which can be repaid from contract proceeds, if the Authority has entered into an agreement 9
with the applicant to secure the guaranty. 10

(2) The Authority may not guarantee the equity investment of a person 11
who: 12

(i) previously held an equity investment in the applicant; 13

(ii) previously participated in the management of the applicant; or 14

(iii) in any other manner is related to: 15

1. the applicant; or 16

2. any of the current stockholders, officers, or management 17
personnel of the applicant. 18

(c) (1) The Authority may use the Fund to lend money to an applicant only if: 19

(i) the applicant meets the requirements of this part; 20

(ii) the applicant is unable to obtain money on reasonable terms 21
through normal lending channels from another source; 22

(iii) the loan does not exceed [$2,000,000] $3,000,000; AND 23

(iv) [the loan is to be used to perform a contract for which the 24
majority of funding is provided by the federal government, a state government, a local 25
government, or a utility regulated by the Public Service Commission; and 26

(v)] the loan is to be used for: 27

1. working capital; or 28

SENATE BILL 388 33

2. equipment needed to perform the contract, if the contract 1
proceeds can repay the cost of the equipmen t and if the Authority has entered into an 2
agreement with the applicant to secure the loan. 3

(2) A loan that the Authority makes shall mature not later than the term 4
of the contract, unless the Authority finds that a longer term better serves the purposes of 5
this part. 6

(d) In providing financial assistance under this section, the Authority shall 7
recognize the need to serve applicants from all political subdivisions in the State. 8

[5–526.] 5–521. 9

(a) If the applicant is an individual, to qualify for financial assistance under this 10
part the applicant shall satisfy the Authority that: 11

(1) the applicant is of good moral character; 12

(2) the applicant has a reputation for financial responsibility, as 13
determined from creditors, employers, and other individuals who have personal knowledge 14
of the applicant; 15

(3) the applicant is a resident of the State or the principal place of business 16
of the applicant is in the State; and 17

(4) the applicant is unable to obtain adequate business financing on 18
reasonable terms through normal lending channels because the applicant: 19

(i) belongs to a group that historically has been deprived of access 20
to normal economic or financial resources [because of race, color, creed, sex, religion, or 21
national origin]; 22

(ii) has [an identifiable physical handicap that severely limits the 23
ability of the applicant to obtain financial assistance, but that does not limit the ability of 24
the applicant to perform the contract or other activity for which the applicant would be 25
receiving financial assistance] A DOCUMENTED DISABILITY; 26

(iii) has any other social or economic impediment that is beyond the 27
control of the applicant but that does not limit the ability of the applicant to perform the 28
contract or other activity for which the applicant would be receiving financial assistance, 29
including: 30

1. the lack of formal education or financial capacity; or 31

2. geographical or regional economic distress; or 32

34 SENATE BILL 388

(iv) does not meet the established credit criteria of at least one 1
financial institution. 2

(b) If the applicant is a business enterprise that is not a sole proprietorship, to 3
qualify for financial assistance under this part at least 70% of the business enterprise shall 4
be owned by individuals who meet the qualifications for an individual applicant under 5
subsection (a) of this section. 6

(c) An applicant for a loan guaranty shall have applied for and been denied a loan 7
by a financial institution. 8

[5–527.] 5–522. 9

(a) To apply for financial assistance from the Fund under [§ 5–525] § 5–520 of 10
this subtitle, an applicant shall submit to the Authority an application on the form that the 11
Authority provides WITH THE INFORMATION THE AUTHORITY REQUIRES. 12

[(b) The application shall: 13

(1) describe the project in detail; 14

(2) itemize known and estimated costs; 15

(3) specify the total amount of investment required to perform the contract; 16

(4) specify the amount of funds available to the applicant without financial 17
assistance from the Authority; 18

(5) specify the amount of finan cial assistance requested from the 19
Authority; 20

(6) provide information that demonstrates the inability of the applicant to 21
obtain adequate financing on reasonable terms through normal lending channels; 22

(7) provide information that demonstrates the fin ancial status of the 23
applicant, including: 24

(i) a current balance sheet; 25

(ii) a profit and loss statement; and 26

(iii) credit references; and 27

(8) contain any other relevant information that the Authority requires.] 28

SENATE BILL 388 35

[(c)] (B) The Authority may require an applicant to provide an audited balance 1
sheet before the Authority approves or denies the application. 2

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

[5–528.] 5–523. 6

(a) The Authority may set the terms and conditions for a loan guaranty made 7
under [§ 5–525(a)] § 5–520(A) of this subtitle. 8

(b) (1) If the Authority decides to lend money from the Fund to an applicant 9
under [§ 5–525(c)] § 5–520(C) of this subtitle, the Authority shall prepare loan documents 10
that include: 11

(i) the interest rate on the loan that equals the market rate for a 12
conventional loan of comparable risk unless the Authority determines that a lower rate 13
better serves the purposes of this subtitle; 14

(ii) a disbursement schedule that provides enough money to the 15
applicant when the applicant needs it to perform the contract; 16

(iii) a requirement that the applicant and the Authority co–sign each 17
request for an advance of money before release of the money; and 18

(iv) provisions for repayment of the loan. 19

(2) The loan documents may include any other provision that the Authority 20
determines is necessary to secure the loan, including an assignment of or a lien on payment 21
under the contract. 22

[5–529. 23

The Treasurer shall report each year to the Authority on: 24

(1) the status of the money invested under § 5–521 of this subtitle; 25

(2) the market value of the assets in the Fund as of the date of the report; 26
and 27

(3) the interest received from investments during the period covered by the 28
report.] 29

[5–530.] 5–524. 30

36 SENATE BILL 388

(a) A person may not knowingly make or cause to be made a false stat ement or 1
report in an application or document submitted to the Authority under this part. 2

(b) A person may not knowingly make or cause to be made a false statement or 3
report to influence an action of the Authority under this part: 4

(1) on an application for financial assistance; or 5

(2) affecting financial assistance whether or not the assistance has already 6
been extended. 7

(c) A person who violates this section is guilty of a misdemeanor and on conviction 8
is subject to imprisonment not exceeding 5 years or a fine not exceeding $50,000 or both. 9

5–525. RESERVED. 10

5–526. RESERVED. 11

Part IV. Small Business Development Guaranty [Fund] PROGRAM. 12

[5–533.] 5–527. 13

In this part, [“Fund”] “PROGRAM” means the Small Business Development 14
Guaranty [Fund] PROGRAM. 15

[5–534.] 5–528. 16

There is a Small Business Development Guaranty PROGRAM WITHIN THE Fund. 17

[5–535. 18

The Authority shall use the Fund to implement this part.] 19

[5–536. 20

The Authority shall administer the Fund.] 21

[5–537. 22

(a) The Fund is a special, nonlapsing fund that is not subject to reversion under 23
§ 7–302 of the State Finance and Procurement Article. 24

(b) The Treasurer shall: 25

(1) invest the money in the Fund in the same manner as other State money 26
may be invested; and 27
SENATE BILL 388 37

(2) credit any investment earnings to the Fund. 1

(c) If the Authority determines by resolution that any money in the Fund is no 2
longer needed to meet its obligations, the Authority may authorize the Comptroller to first 3
apply that money to pay the principal of and interest o n outstanding bonds issued under 4
any Act authorizing the issue of State general obligation bonds issued to implement this 5
subtitle.] 6

[5–538. 7

The Fund consists of: 8

(1) loans and grants from the federal government or a unit or 9
instrumentality of the federal government; 10

(2) grants and contributions of funds from the State, a political subdivision, 11
or any other source; 12

(3) premiums for guaranteeing long –term loans under § 5 –540 of this 13
subtitle; 14

(4) proceeds from the sale, disposition, lease, o r rental of collateral by the 15
Authority relating to loans guaranteed under § 5–540 of this subtitle; and 16

(5) all other receipts of the Authority under this part.] 17

[5–539.] 5–529. 18

The Authority may use the Fund for: 19

(1) guaranty payments made under [§ 5 –540(a)] § 5–530(A) of this 20
subtitle; 21

(2) interest subsidy payments under [§ 5 –540(b)] § 5–530(B) of this 22
subtitle; and 23

(3) expenses for administrative, legal, actuarial, and other services. 24

[5–540.] 5–530. 25

(a) (1) The Authority may use the Fund to guarantee up to 80% of the principal 26
of and interest on a long–term loan made by a financial institution to an applicant only if: 27

(i) the applicant meets the requirements under [§ 5–541] § 5–531 28
of this subtitle and has not violated [§ 5–545] § 5–534 of this subtitle; 29
38 SENATE BILL 388

(ii) the loan amount is $5,000 or more and the maximum amount 1
payable by the Authority under the guaranty does not exceed [$2,000,000] $3,000,000; 2

(iii) the loan is used for: 3

1. working capital; 4

2. refinancing the applicant’s existing debt; 5

3. acquisition and installation of equipment; 6

4. making necessary improvements to real property that the 7
applicant leases or owns in fee simple; or 8

5. acquiring real property that the applicant will own in fee 9
simple if the property is to be used in the applicant’s trade or business for which the 10
guaranty is sought and the financial institution or the Authority places a lien on the 11
property; 12

(iv) the loan matures within 10 years after the closing date of the 13
loan; and 14

(v) the interest rate does not exceed the monthly weighted average 15
of the prime lending rate prevailing in Baltimore City on unsecured commercial loans, plus 16
2%, as determined by the Authority. 17

(2) The Authority may authorize the provisio n of a guaranty under this 18
section in the following forms: 19

(i) an irrevocable letter of credit; 20

(ii) an official treasurer’s check; 21

(iii) funds on deposit in an escrow or other depository account; or 22

(iv) any other legal instrument promisin g a financial institution 23
restitution or reimbursement for its loan losses, within the limits of the guaranty. 24

(3) Any terms and conditions governing the instruments described under 25
paragraph (2) of this subsection may not be so onerous as to discourage the financial 26
institution from offering the loan. 27

(4) (i) The Authority may only approve a guaranty under this section if 28
the Authority determines that the loan to be guaranteed will have a substantial economic 29
impact. 30

SENATE BILL 388 39

(ii) To determine the economi c impact of a loan, the Authority may 1
consider: 2

1. the amount of the guaranty obligation; 3

2. the terms of the loan to be guaranteed; 4

3. the number of new jobs that the loan will create; and 5

4. any other factor that the Authority considers relevant. 6

(b) (1) In addition to a loan guaranty, the Authority may provide an interest 7
subsidy for the benefit of the applicant. 8

(2) The subsidy: 9

(i) may be for the life of the loan; 10

(ii) may not exceed 4%; 11

(iii) shall be payable quarterly; and 12

(iv) shall be made to the financial institution that makes the loan 13
that the Authority guarantees. 14

(3) (i) The subsidy may not exceed the difference between: 15

1. the interest rate on the guaranteed loan; and 16

2. the discount interest rate that the Federal Reserve Bank 17
uses. 18

(ii) The interest rate may not exceed the monthly weighted average 19
of the prime lending rate that prevails in Baltimore City on unsecured commercial loans, 20
as the Authority determines as of the date of closing, plus 2%. 21

(4) The subsidy may not be paid during any period in which the loan is in 22
default. 23

(c) In providing financial assistance under this section, the Authority shall 24
recognize the need to serve applicants from all political subdivisions in the State. 25

[5–541.] 5–531. 26

(a) If the applicant is a sole proprietor, to qualify for financial assistance under 27
this part the applicant shall satisfy the Authority that: 28

40 SENATE BILL 388

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

(2) the applicant has a reputation for financial responsibility, as 2
determined from creditors, employers, and other individuals who have personal knowledge 3
of the applicant; 4

(3) the applicant is a resident of the State or the principal place of business 5
of the applicant is in the State; and 6

(4) the applicant is unable to obtain adequate business financing on 7
reasonable terms through normal lending channels because the applicant: 8

(i) belongs to a group that historically has been deprived of access 9
to normal economic or fi nancial resources [because of race, color, creed, sex, religion, or 10
national origin]; 11

(ii) has [an identifiable physical handicap that severely limits the 12
ability of the applicant to obtain financial assistance, but that does not limit the ability of 13
the applicant to perform the contract or other activity for which the applicant would be 14
receiving financial assistance] A DOCUMENTED DISABILITY; 15

(iii) has any other social or economic impediment that is beyond the 16
control of the applicant, but that does not limit the ability of the applicant to perform the 17
contract or other activity for which the applicant would be receiving financial assistance, 18
including: 19

1. the lack of formal education or financial capacity; or 20

2. geographical or regional economic distress; or 21

(iv) does not meet the established credit criteria of at least one 22
financial institution. 23

(b) If the applicant is not a sole proprietorship, to qualify for financial assistance 24
under this part at least 70% of the business ente rprise shall be owned by individuals who 25
meet the qualifications for an individual applicant under subsection (a) of this section. 26

(c) An applicant for a loan guaranty shall have applied for and been denied a loan 27
by a financial institution. 28

[5–542.] 5–532. 29

(a) To apply for financial assistance from the Fund, a financial institution shall 30
submit to the Authority an application on the form that the Authority provides WITH THE 31
INFORMATION THE AUTHORITY REQUIRES. 32

SENATE BILL 388 41

[(b) The application shall include: 1

(1) a detailed description of the proposed use of the loan proceeds, including 2
projected cash flow analyses, marketing plans, and appraisals; 3

(2) a detailed description of the funds available to the applicant; 4

(3) a detailed description of the proposed loan documents to be executed by 5
the financial institution and the applicant; 6

(4) a detailed description of the property proposed as collateral for the loan 7
and the financial institution’s certification of the property’s value; 8

(5) information that demonstrates the inability of the applicant to obtain 9
adequate financing on reasonable terms through normal lending channels; 10

(6) information that demonstrates the financial status of the applicant, 11
including: 12

(i) a current balance sheet; 13

(ii) a profit and loss statement; and 14

(iii) credit references; 15

(7) a proposed disbursement schedule; 16

(8) a proposed amortization schedule; 17

(9) a detailed description of the applicant’s experience in the trade or 18
business for which the loan and guarantee are requested; 19

(10) information that shows that the applicant satisfies the requirements of 20
§ 5–541 of this subtitle; and 21

(11) any other relevant information that the Authority requests.] 22

[(c)] (B) The Authority may require an applicant to provide an audit report and 23
balance sheet certified by an independent certified public accountant in accordance with 24
generally accepted accounting principles before the Authority approves or denies the 25
application. 26

[5–543.] 5–533. 27

A guaranty shall contain terms and conditions that the Authority determines to be 28
appropriate. 29
42 SENATE BILL 388

[5–544. 1

The Treasurer shall report each year to the Authority on: 2

(1) the status of the money invested under § 5–537 of this subtitle; 3

(2) the market value of the assets in the Fund as of the date of the report; 4
and 5

(3) the interest received from investments during the period covered by the 6
report.] 7

[5–545.] 5–534. 8

(a) A person may not knowingly make or cause to be made a false statement or 9
report in an application or document submitted to the Authority under this part. 10

(b) A person may not knowingly make or cause to be made a false statement or 11
report to influence an action of the Authority under this part: 12

(1) on an application for financial assistance; or 13

(2) affecting financial assistance whether or not the assistance has already 14
been extended. 15

(c) A person who violates this section is guilty of a misdemeanor and on conviction 16
is subject to imprisonment not exceeding 5 years or a fine not exceeding $50,000 or both. 17

[5–546.] 5–535. 18

If an applicant or financial institution violates any provision of the loan documents 19
or ceases to meet the requirements of this part, on reasonable notice to the applicant or 20
financial institution, the Authority may: 21

(1) withhold from the applicant further loan payments until the applicant 22
complies with the documents or requirements; 23

(2) withhold from the financial institution further interest subsidy 24
payments until the financial institution complies with the loan documents or requirements; 25
and 26

(3) exercise any other remedy for which the loan documents provide. 27

5–536. RESERVED. 28

SENATE BILL 388 43

5–537. RESERVED. 1

Part V. Equity Participation Investment Program. 2

[5–549.] 5–538. 3

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

(b) (1) “Enterprise” means a business entity proposing to carry on a business 5
in the State that meets the requirements of [§ 5–526] § 5–521 of this subtitle. 6

(2) “Enterprise” includes: 7

(i) a sole proprietorship; 8

(ii) a partnership; 9

(iii) A LIMITED LIABILITY CORPORATION; 10

(IV) a limited partnership; 11

[(iv)] (V) a corporation; or 12

[(v)] (VI) a joint venture. 13

(c) “Equity participation financing” includes investment or guaranty of 14
investment in an enterprise. 15

(d) “Existing business” means a business whose board of directors or owners 16
approve the sale of the business to an enterprise receiving equity participation financing. 17

(e) [“Fund” means the Equity Participation Investment Program Fund. 18

(f)] “Program” means the Equity Participation Investment Program. 19

[(g)] (F) “Qualified security” means: 20

(1) a note, bond, debenture, or other evidence of indebtedness; 21

(2) stock or other form of equity participation; 22

(3) a certificate of interest or participation in a profit–sharing agreement; 23

(4) an investment contract; 24

(5) a certificate of deposit for a security; 25
44 SENATE BILL 388

(6) a certificate of interest or participation in a patent or patent application 1
or in royalty or other payments under a patent or patent application; or 2

(7) an interest or instrument commonly known as a “security” or a 3
certificate for, receipt for, guaranty of, or option, warrant, or right to subscribe to or 4
purchase a qualified security. 5

[(h)] (G) “Small business” means a business that is classified as a small business 6
under the U.S. Small Business Administration size standards. 7

[5–550.] 5–539. 8

(a) The General Assembly finds that: 9

(1) small businesses have proven to be a fast growing and reliable form of 10
successful business expansion and successful new business creation; 11

(2) small businesses play a major role in the economy of the State and have 12
been a continuing source of increasing tax revenues and job opportunities; 13

(3) the growth of small businesses should be encouraged and should be an 14
integral part of the State’s economic development effort; 15

(4) socially or economically disadvantaged individuals often lack adequate 16
capital and are unable to obtain financing from financial institutions or venture capital 17
firms to begin and develop a small business, or to purchase an existing business; and 18

(5) promoting the creation and viability of small businesses and the 19
purchase of existing businesses by socially or economically disadvantaged individuals is in 20
the public interest. 21

(b) The purposes of the Equity Participation Investment Program are to: 22

(1) encourage and help socially or economically disadvantaged individuals 23
to create and develop small businesses and acquire existing businesses in the State; and 24

(2) assist small businesses that, because they do not meet the established 25
credit criteria of financial institutions, cannot obtain adequate business financing on 26
reasonable terms through normal financing channels. 27

[5–551.] 5–540. 28

There is an Equity Participation Investment Program in the [Department] FUND. 29

[5–552. 30
SENATE BILL 388 45

The Authority shall administer the Program.] 1

[5–553.] 5–541. 2

The Authority may: 3

(1) provide equity participation financing to help socially or economically 4
disadvantaged individuals in the State create and develop small businesses and acquire 5
existing businesses; 6

(2) buy, hold, and sell qualified securities; 7

(3) prepare, publish, and distribute technical studies, reports, and other 8
materials with or without charge; and 9

(4) provide and pay for advisory services and technical assistance that are 10
necessary or desirable to carry out the Program. 11

[5–554. 12

There is an Equity Participation Investment Program Fund.] 13

[5–555.] 5–542. 14

[(a) The Authority shall administer the Fund. 15

(b) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 16
under § 7–302 of the State Finance and Procurement Article. 17

(2) The Treasurer shall hold the Fund separately, and the Comptroller 18
shall account for the Fund. 19

(c) The Fund consists of: 20

(1) money drawn from the Small Business Development Guaranty Fund 21
established under Part IV of this subtitle; 22

(2) money the State appropriates to the Fund; 23

(3) money made available to the Fund through federal programs or private 24
contributions; 25

(4) proceeds from the sale, disposition, lease, or rental by the Authority of 26
collateral related to equity participation financing; 27

46 SENATE BILL 388

(5) premiums, fees, royalties, and repayments of principal, interest, and 1
investments paid by and on behalf of enterprises to the Authority under the terms of equity 2
participation financing; and 3

(6) any other money made available under the Program. 4

(d)] The Authority shall use the Fund to: 5

(1) purchase qualified securities that an enterprise issues to provide equity 6
participation financing as the Program allows; 7

(2) provide guaranties of investments to expand the capital resources of 8
enterprises; 9

(3) purchase advisory services and technical assistance consistent with the 10
Program; 11

(4) purchase securities in which a fiduciary of the State may lawfully 12
invest; 13

(5) provide equity participation financing as the Program allows; and 14

(6) pay for administrative, legal, and actuarial services that relate to the 15
Program. 16

[(e) The Fund shall be self–sustaining and shall achieve investment returns on its 17
portfolio in the form of: 18

(1) royalties from enterprises in amounts to be determined by the 19
Authority; and 20

(2) interest payments from any debt securities. 21

(f) As needed for the Program, the Authority may withdraw from time to time up 22
to a total of $2,000,000 from the Small Business Development Guaranty Fund and deposit 23
the withdrawal into the Fund. 24

(g) (1) The Treasurer shall invest the money of the Fund in the same manner 25
as other State money may be invested. 26

(2) Any investment earnings of the Fund shall be paid into the Fund. 27

(h) In accordance with § 2.5 –109 of this article, the Authority shall submit a 28
report on the Program.] 29

[5–556.] 5–543. 30
SENATE BILL 388 47

[(a)] The Authority may provide equity participation financing under the Program 1
only after the enterprise submits an application [that contains a business plan that meets 2
the requirements of subsection (b) of this section] ON THE FORM THAT THE AUTHORITY 3
PROVIDES WITH THE INFORMATION THE AUTHORITY REQUIRES. 4

[(b) The business plan of an enterprise shall include: 5

(1) a description of the small business or existing business and its 6
management, product, and market; 7

(2) a statement of the amount, immediacy of need, and projected use of the 8
capital required; 9

(3) a statement of the potential economic impact of the purchase; 10

(4) information that relates to the satisfaction of the applicant’s 11
requirements of § 5–557(d) and (e) of this subtitle; and 12

(5) any other information the Authority requires.] 13

[5–557.] 5–544. 14

(a) (1) Under the Program the Authority may not: 15

(i) own securities representing more than 49% of the voting stock of 16
a small business or own an interest greater than 49% in a small business; or 17

(ii) own securities representing more than 49% of the voting stock of 18
an enterprise acquiring an existing business or own an interest greater than 49% in an 19
enterprise acquiring an existing business. 20

(2) The amount of the Authority’s equity participation financing i n an 21
enterprise may not exceed $2,000,000 $3,000,000. 22

(3) Before providing equity participation financing, the Authority shall find 23
that there is a reasonable probability that the Authority will recover its initial investment 24
and an adequate return on investment from the equity participation financing. 25

(4) The Authority’s investment shall be recoverable within 7 years after 26
the equity participation financing. 27

(5) The Authority’s recovery shall be the greater of: 28

(i) the current value of the pe rcentage of the equity investment in 29
the enterprise; or 30
48 SENATE BILL 388

(ii) the amount of the initial investment in the enterprise. 1

(6) If there is a dispute between the borrower and the Authority as to the 2
value of the business entity at the time of recovery, the value shall be determined after 3
obtaining at least one independent appraisal of the value from an appraiser selected from 4
a list of at least three appraisers supplied by the Authority. 5

(b) When an enterprise applies to the Authority for equity participation financing 6
to acquire an existing business, an enterprise or its principals shall have: 7

(1) an equity investment equal to at least 5% of the total cost of acquisition; 8
and 9

(2) at least 3 years of successful experience with demonstrated 10
achievements and management responsibilities. 11

(c) The Authority may provide equity participation financing for the acquisition 12
of an existing business if the existing business: 13

(1) has been in existence for at least 5 years; 14

(2) has been profitable for at least 2 of the previous 3 years; 15

(3) has sufficient cash flow to service the debt and ensure adequate return 16
of the Authority’s investment; 17

(4) has the capacity for growth and job creation; 18

(5) has its principal place of business in the State; and 19

(6) has a strong customer base. 20

(d) If the applicant enterprise is a sole proprietorship, to qualify for financial 21
assistance under this part, the applicant shall satisfy the Authority that: 22

(1) the applicant is of good moral character; 23

(2) the applicant has a reputation for financial responsibility, as 24
determined from creditors, employers, and other individuals who have personal knowledge 25
of the applicant; 26

(3) the applicant is a resident of the State or the principal place of business 27
of the applicant is in the State; and 28

(4) the applicant is unable to obtain adequate business financing on 29
reasonable terms through normal lending channels because the applicant: 30
SENATE BILL 388 49

(i) belongs to a group that historically has been deprived of access 1
to normal economic or financial resources [because of race, color, creed, sex, religion, or 2
national origin]; 3

(ii) has [an identifiable physical handicap that severely limits the 4
ability of the applicant to obtain financial assistance, but that does not limit the ability of 5
the applicant to perform the contract or other activity for which the applicant would be 6
receiving financial assistance] A DOCUMENTED DISABILITY; 7

(iii) has any other social or economic impediment that is beyond the 8
control of the applicant, but that does not limit the ability of the applicant to perform the 9
contract or other activity for which the applicant would be receiving financial assistance, 10
including: 11

1. the lack of formal education or financial capacity; or 12

2. geographical or regional economic distress; or 13

(iv) does not meet the established credit or investment criteria of at 14
least one financial institution. 15

(e) If the applicant enterprise is not a sole proprietorship, to qualify for financial 16
assistance under this part, at least 51% of the enterprise shall be owned by individuals who 17
meet the qualifications for applicants under subsection (d) of this section. 18

[5–558.] 5–545. 19

The liabilit y of the State and of the Authority in providing equity participation 20
financing is limited to investments under the Program. 21

[5–559. 22

(a) This section applies to financing provided under the Program during fiscal 23
years 2021 and 2022 for the purpose of re lieving the adverse effects of the coronavirus 24
pandemic. 25

(b) The Authority may convert to a grant up to $50,000 of the financing described 26
under subsection (a) of this section that is provided to a small business.] 27

5–546. RESERVED. 28

5–547. RESERVED. 29

Part VI. Small Business Surety Bond Program. 30

50 SENATE BILL 388

[5–561.] 5–548. 1

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

(b) [“Fund” means the Small Business Surety Bond Fund. 3

(c)] “Principal” means a small business entity that has assets, income, or 4
employees that do not exceed limits that the Authority sets by regulation. 5

[(d)] (C) “Program” means the Small Business Surety Bond Program. 6

[5–562.] 5–549. 7

There is a Small Business Surety Bond PROGRAM WITHIN THE Fund. 8

[5–563. 9

(a) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 10
under § 7–302 of the State Finance and Procurement Article. 11

(2) The Treasurer shall hold the Fund separately, and the Comptroller 12
shall account for the Fund. 13

(b) (1) The Treasurer shall invest the money of the Fund in the same manner 14
as other State money may be invested. 15

(2) Any investment earnings of the Fund shall be credited to the Fund.] 16

[5–564. 17

The Fund consists of: 18

(1) money the State appropriates to the Fund; 19

(2) premiums, fees, and any other amounts the Authority receives with 20
respect to bonding assistance it provides; 21

(3) proceeds the Authority designates from the sale, lease, or other 22
disposition of property or contracts the Authority holds or acquires; and 23

(4) any other money available under the Program.] 24

[5–565. 25

The Fund shall be used: 26

SENATE BILL 388 51

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

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

[5–566.] 5–550. 3

In administering the Program, the Authority may: 4

(1) use the services of other governmental units; 5

(2) contract for and accept loans and grants from the federal government, 6
the State government, or a local government and their units; and 7

(3) on the terms and conditions it considers advisable: 8

(i) acquire, manage, operate, dispose of, or otherwise deal with 9
property; 10

(ii) take assignments of rentals and leases; and 11

(iii) make contracts, leases, agreements, and arrangements that are 12
necessary or incidental to the performance of its duties. 13

[5–567.] 5–551. 14

The Authority may: 15

(1) prescribe or approve the form of and terms and conditions in 16
applications, guaranty agreements, or any other documents entered into by the Authority, 17
principals, or sureties under the Program; 18

(2) acquire or take assignments of documents executed, obtained, or 19
delivered in connection with any assistance the Authority provides under the Program; 20

(3) set and collect premiums, fees, charges, costs, and expenses in 21
connection with any assistance the Authority provides under the Program; 22

(4) adopt regulations to carry out the Program; and 23

(5) do anything necessary or convenient to carry out its powers and the 24
purposes of the Program. 25

[5–568.] 5–552. 26

(a) The Authority may guarantee a surety up to the lesser of 90% or [$2,250,000] 27
$3,000,000 of its loss under a bid bond, payment bond, or performance bond on a contract 28
52 SENATE BILL 388

[financed by the federal government, a state government, a local government, a private 1
entity, or a utility that the Public Service Commission regulates]. 2

(b) The term of a guaranty under this part may not exceed the contract term, 3
including: 4

(1) the maintenance or warranty period required by the contract; and 5

(2) the period during which the surety may be liable for latent defects. 6

(c) The Authority may vary the terms and conditions of a guaranty based on: 7

(1) the Authority’s history of experience with a surety; and 8

(2) any other factor the Authority considers relevant. 9

[5–569.] 5–553. 10

(a) The Authority may execute and perform a bid bond, performance bond, and 11
payment bond as a surety for the benefit of a principal in connection with a contract 12
[financed by the federal government or a state government, a local government, a pri vate 13
entity, or a utility regulated by the Public Service Commission]. 14

(b) (1) This subsection does not apply if the sources of funding for the bonds 15
are grants. 16

(2) The bonds may not exceed [$2,500,000] $5,000,000 each. 17

(c) Bonds are subject to the approval of the Authority based on the bond 18
worthiness of the principal. 19

[5–570.] 5–554. 20

(a) The Authority may only approve a guaranty or a bond under this part if the 21
Authority determines that the contract, for which a bond is sought to be guaranteed or 22
issued, will have a substantial economic impact. 23

(b) To determine the economic impact of a contract, the Authority may consider: 24

(1) the amount of the guaranty obligation; 25

(2) the terms of the bond to be guaranteed; 26

(3) the number of new jobs that the contract to be bonded will create; and 27

(4) any other factor that the Authority considers relevant. 28
SENATE BILL 388 53

[5–571.] 5–555. 1

The Authority may establish a surety bonding line to issue or guarantee multiple 2
bonds to a principal within preapproved terms, conditions, and limitations. 3

[5–572.] 5–556. 4

(a) To qualify for financial assistance under this part the principal shall satisfy 5
the Authority that the principal: 6

(1) is of good moral character or is owned by individuals of good moral 7
character; 8

(2) as determined from creditors, employers, and other individuals who 9
have personal knowledge, is an individual with a reputation for financial responsibility or 10
is owned by individuals, a majority of whom have a reputation for financial responsibility; 11

(3) is a resident of the State or the principal place of business of the 12
applicant is in the State; and 13

(4) is unable to obtain adequate bonding on reasonable terms through 14
normal channels. 15

(b) To qualify for financial assistance under this part the principal shall certify to 16
the Authority, and the Authority shall be satisfied, that: 17

(1) a bond is required to bid on a contract or to serve as prime contractor 18
or subcontractor; 19

(2) a bond cannot be obtained on reasonable terms and conditions without 20
assistance from the Program; and 21

(3) the principal will not subcontract more than 75% of the monetary value 22
of the contract. 23

[5–573.] 5–557. 24

(a) To apply for financial assistance from the Program under this part, a principal 25
and, if applicabl e, a surety shall submit to the Authority an application on the form that 26
the Authority provides WITH THE INFORMATION THE AUTHORITY REQUIRES. 27

(b) [The application shall include: 28

(1) a detailed description of the project; 29

54 SENATE BILL 388

(2) an itemization of known and estimated costs; 1

(3) the total investment required to perform the contract; 2

(4) the working capital available to the principal; 3

(5) the bonding assistance sought; 4

(6) information that demonstrates the inability of the principal to obtain 5
adequate bonding on reasonable terms and conditions through normal channels without 6
assistance from the Program; 7

(7) a current balance sheet, a profit and loss statement, and credit 8
references about the financial status of the principal; 9

(8) a schedule of the status of existing and pending contracts; and 10

(9) any other relevant information the Authority requests. 11

(c)] The Authority may require an applicant to provide an audited balance sheet 12
before the Authority approves or denies the application. 13

[(d)] (C) The Authority may not approve a guaranty or bond under this part for 14
a principal that has defaulted on a loan or guaranty from the Authority unless: 15

(1) 2 years have passed since the time of the default; and 16

(2) the principal has c ured any default in any financing program 17
administered by the Department. 18

[5–574.] 5–558. 19

(a) In its sole discretion, the Authority may set: 20

(1) the premiums and fees for providing bonding assistance under the 21
Program; and 22

(2) the terms and conditions when the premiums and fees are payable. 23

(b) The premiums and fees may vary in amount among transactions and at 24
different stages of a transaction. 25

(c) A determination by the Authority on premiums and fees remains effective for 26
as long as the bonding assistance provided by the Authority is in effect. 27

[5–575.] 5–559. 28
SENATE BILL 388 55

(a) A person may not knowingly make or cause to be made a false statement or 1
report in an application or document submitted to the Authority under this part. 2

(b) A person may not knowingly make or cause to be made a false statement or 3
report to influence an action of the Authority under this part: 4

(1) on an application for assistance; or 5

(2) affecting bonding assistance whether or not the assistance has been 6
extended. 7

(c) A person who violates this section is guilty of a misdemeanor and on conviction 8
is subject to imprisonment not exceeding [6 months ] 5 YEARS or a fine not exceeding 9
[$1,000] $50,000 or both. 10

5–1501. 11

(a) In this section, “eligible fund manager” means: 12

(1) an entity that has significant financial or investment experience, under 13
criteria developed by the Department; and 14

(2) includes an entity that the Department designates to manage funds 15
received under subsection (c)(1) of this section. 16

(d) (1) (i) Subject to the provisions of paragraph (2) of this subsection, the 17
Department shall make grants to eligible fund managers to provide investment capital and 18
financial assistance to small, minority, and women–owned businesses in the State. 19

(ii) 1. Financial assistance provided by eligible fund managers 20
shall be in the form of: 21

A. a loan; or 22

B. subject to subsubparagraph 2 of this subparagraph, a 23
grant. 24

2. Financial assistance in the form of a grant: 25

A. may not exceed $10,000 and shall be issued in conjunction 26
with a loan of any amount; or 27

B. shall be made pursuant to subsection (i) of this section. 28

56 SENATE BILL 388

(III) THE DEPARTMENT SHALL APPR OVE A LOAN 1
DISBURSEMENT REQUEST FROM AN ELIGIBLE FUND MANAGER WITHIN 30 DAYS OF 2
RECEIVING THE REQUEST. 3

(2) Except for money received from the Strategic Energy Investment Fund, 4
the Department shall ensure that eligible fund managers allocate at least 50% of the funds 5
from this Account to small, minority, and women–owned businesses in the jurisdictions and 6
communities surrounding a video lottery facility. 7

(3) WHEN DETERMINING THE GRANT AMOUNT TO AWAR D TO AN 8
ELIGIBLE FUND MANAGE R, THE DEPARTMENT SHALL CONS IDER PERFORMANCE 9
METRICS, INCLUDING FUND MANAGER ACTIVITY. 10

(4) THE DEPARTMENT SHALL CONDUCT AN ANNUAL REVIEW OF THE 11
GRANT AMOUNT AWARDED TO EACH ELIGIBLE FUN D MANAGER TO DETERMI NE 12
WHETHER THE AMOUNT IS SUFFICIENT. 13

(5) AT LEAST ONCE EVERY 3 YEARS, THE DEPARTMENT SHALL ISSUE 14
A REQUEST FOR PROPOSALS TO ADD NEW ELIGIBLE FUND MANAGERS. 15

(g) (1) Subject to paragraph (2) of this subsection, an eligible fund manager 16
may use money from grants received under this section to pay expenses for administrative, 17
actuarial, legal, MARKETING, and technical services. 18

(M) (1) ON OR BEFORE JUNE 30, 2027, AND EACH JUNE 30 THEREAFTER, 19
THE DEPARTMENT SHALL PUBLISH AN ANNUAL FINANCIAL STATUS REPORT ON THE 20
DEPARTMENT’S WEBSITE. 21

(2) THE REPORT UNDER THIS SUBSECTION SHALL INCLUDE: 22

(I) FUND MANAGER ACTIVITY; 23

(II) A FUND MANAGER SATISFACTION SURVEY; 24

(III) FUND MANAGER DESCRIPTIONS; AND 25

(IV) FUND MANAGER DISBURSEMENTS. 26

6–309. 27

(a) Subject to subsection (b) of this section, this subtitle and the tax credit 28
authorized under it shall terminate on January 1, [2027] 2032. 29

(b) After termination of this subtitle: 30

SENATE BILL 388 57

(1) a business entity may be considered for eligibility for the tax credit 1
authorized under this subtitle based on positions filled before termination of this subtitle, 2
provided that the other requirements of the subtitle are satisfied; and 3

(2) tax credits earned may be carried forward and are subject to recapture 4
in accordance with § 6–305 of this subtitle. 5

PART I. MARYLAND ECONOMIC DEVELOPMENT CORPORATION. 6

10–101. 7

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

(d) “Corporation” means the Maryland Economic Development Corporation. 9

10–135. RESERVED. 10

10–136. RESERVED. 11

Part II. Regional Institution Strategic Enterprise Zone Program. 12

10–137. 13

(a) In this [subtitle] PART the following words have the meanings indicated. 14

(b) “Area” means a geographic area in one or more political subdivisions in the 15
State described by a closed perimeter boundary. 16

(c) “Fund” means the Regional Institution Strategic Enterprise Zone Fund 17
created under [§ 5–1408] § 10–144 of this subtitle. 18

(d) “Nonprofit organization” means an organization that is exempt or eligible for 19
exemption from taxation under § 501(c)(3) of the Internal Revenue Code. 20

(e) “Qualified institution” means an entity that is designated as a qualified 21
institution under [§ 5–1403] § 10–139 of this subtitle and may include: 22

(1) a regional higher education center as defined under § 10 –101 of the 23
Education Article; 24

(2) an institution of higher education as defined under § 10 –101 of the 25
Education Article; or 26

(3) a nonprofit organization that is affiliated with a federal agency. 27

58 SENATE BILL 388

(f) “RISE zone” means a geographic area in immediate proximity to a qualified 1
institution that is targeted for increased economic and community development that meets 2
the requirements of [§ 5–1404] § 10–140 of this subtitle and is designated as a Regional 3
Institution Strategic Enterprise zone by the [Secretary] CORPORATION under [§ 5–1404] 4
§ 10–140 of this subtitle. 5

10–138. 6

The purposes of the Regional Institution Strategic Enterprise Zone Program are to 7
access institutional assets that have a strong and dem onstrated history of commitment to 8
economic development and revitalization in the communities in which they are located and 9
incentivize the location of innovative start –up businesses based on technology developed, 10
licensed, or poised for commercialization at or in collaboration with qualified Maryland 11
institutions. 12

10–139. 13

(a) An institution may apply to the [Secretary] CORPORATION to be designated 14
as a qualified institution. 15

(b) To be eligible for designation as a qualified institution, the applicant shall: 16

(1) evidence an intention: 17

(i) to make a significant financial investment or commitment in an 18
area of the State that the applicant intends to become a RISE zone; 19

(ii) to use the resources and expertise of the applicant to spur 20
economic de velopment and community revitalization in an area of the State that the 21
applicant intends to become a RISE zone; and 22

(iii) to create a significant number of new jobs within an area of the 23
State that the applicant intends to become a RISE zone; 24

(2) have a demonstrated history of community involvement and economic 25
development within the communities that the applicant serves; and 26

(3) meet the minimum financial qualifications established by the 27
[Secretary] CORPORATION. 28

(c) If the applicant is a nonprofit organization that is not an institution of higher 29
education, the application shall demonstrate an affiliation with a federal agency. 30

(d) (1) In addition to the requirements under subsection (b) of this section, the 31
[Secretary] CORPORATION may establish by regulation any other requirements necessary 32
and appropriate in order for an applicant to be designated as a qualified institution. 33
SENATE BILL 388 59

(2) The [Secretary] CORPORATION shall adopt regulations that establish 1
factors for evaluating applications under subsection (b) of this section. 2

(e) In the form and content acceptable to the [Secretary] CORPORATION, an 3
applicant shall submit to the [Secretary] CORPORATION an application that contains the 4
information that the Secretary considers necessary to evaluate the request for designation 5
as a qualified institution. 6

(f) (1) Within 90 days after submission of an application under this section, 7
the [Secretary] CORPORATION shall approve or reject the application of an institution to 8
be designated as a qualified institution. 9

(2) At least 30 days before approval or rejection of an application under this 10
section, the [Secretary] CORPORATION shall notify the Legislative Policy Committee. 11

(3) The Legislative Policy Committee may provide advice to the [Secretary] 12
CORPORATION regarding the approval or rejection of an institution as a qualified 13
institution. 14

10–140. 15

(a) On or after July 1, [2015] 2026, a qualified institution shall apply jointly with 16
a county, a municipal corporation, or the economic dev elopment agency of a county or 17
municipal corporation to the [Secretary] CORPORATION to designate an area as a 18
Regional Institution Strategic Enterprise zone. 19

(b) The application shall: 20

(1) be in the form and contain the information that the [Secretary] 21
CORPORATION requires by regulation; 22

(2) state the boundaries of the area of the proposed RISE zone, not 23
exceeding 500 acres; 24

(3) describe the nexus of the RISE zone with the qualified institution; and 25

(4) contain a plan that identifies the target strategy and anticipated 26
economic impacts of the RISE zone. 27

(c) The [Secretary] CORPORATION may establish, by regulation, any other 28
requirements necessary and appropriate for an area to be designated as a RISE zone. 29

(d) (1) Unless a county in wh ich a municipal corporation is located agrees to 30
designation of a RISE zone in the municipal corporation, qualified property in the 31
municipal corporation may not receive a tax credit against county property tax. 32
60 SENATE BILL 388

(2) Unless a municipal corporation locate d within a county agrees to 1
designation of a RISE zone within its boundaries, qualified property in the county may not 2
receive a tax credit against the municipal property tax. 3

(e) (1) Within 120 days after submission of an application under this section, 4
the [Secretary] CORPORATION shall: 5

(i) approve or reject an application for designation of a RISE zone, 6
including approval or modification of the proposed boundaries of the RISE zone; and 7

(ii) define the boundaries of the approved RISE zone. 8

(2) At least 45 days before approval or rejection of an application under this 9
section, the [Secretary] CORPORATION shall notify the Legislative Policy Committee. 10

(3) The Legislative Policy Committee may provide advice to the [Secretary] 11
CORPORATION regarding: 12

(i) the approval or rejection of the RISE zone; or 13

(ii) the boundaries of the RISE zone proposed by the [Secretary] 14
CORPORATION. 15

(f) (1) (i) Subject to subparagraph (ii) of this paragraph, the designation of 16
an area as a RISE zone is effective for 10 years. 17

(ii) Upon a joint application of a qualified institution, a county and, 18
if applicable, a municipal corporation, or the economic development agency of a county or 19
municipal corporation, the [Secretary] CORPORATION may renew a RISE zone for an 20
additional [5] 10 years. 21

(2) The [Secretary] CORPORATION may not: 22

(i) 1. except as provided in item 2 of this item OR PARAGRAPH 23
(3) OF THIS SUBSECTION , approve more than three RISE zones in a single county or 24
municipal corporation; or 25

2. EXCEPT AS PROVIDED I N PARAGRAPH (3) OF THIS 26
SUBSECTION, approve more than four RISE zones in Baltimore City; or 27

(ii) approve a RISE zone the geographic area of which exceeds 500 28
acres. 29

SENATE BILL 388 61

(3) THE CORPORATION MAY APPRO VE ONE EXTRA ORDINARY RISE 1
ZONE IN A SINGLE COUNTY OR MUNICIPAL CORPORATION FOR AN AREA THAT, IN THE 2
DETERMINATION OF THE SECRETARY, PROMOTES QUANTUM COMPUTING. 3

(g) (1) A RISE zone may not be required to be in the immediate geographic 4
proximity of a qualified institution if an appropriate nexus for the increased economic and 5
community development is established with the qualified organization. 6

(2) If the proposed RISE zone is in a rural part of the State, a qualified 7
institution may not be required to be in the immediate area of the RISE zone. 8

(h) [The Secretary may not designate a RISE zone in: 9

(1) a development district established under Title 12, Subtitle 2 of this 10
article; or 11

(2) a special taxing district established under Title 21 of the Local 12
Government Article or Section 62A of the Baltimore City Charter. 13

(i)] The designation of an area as a RISE zone may not be construed to limit or 14
supersede a provision of a comprehensive plan, zoning ordinance, or other land use policy 15
adopted by a county, municipal corporation, or bicounty agency with land use authority 16
over the area designated as a RISE zone. 17

10–141. 18

(a) The [Secretary] CORPORATION shall assign to a RISE zone a business and 19
community development concierge who is an employee of the [Department] 20
CORPORATION. 21

(b) A business and community development concierge shall assist entities 22
locating in the RISE zone with: 23

(1) State, county, or municipal corporation permit and license applications; 24

(2) accessing existing programs at the CORPORATION, THE Department, 25
the Department of Housing and Community Development, the Maryland Department of 26
Labor, the Maryland Technology Development Corporation, or the Department of 27
Transportation; and 28

(3) any other activities the [Secretary] CORPORATION authorizes that 29
relate to the development of the RISE zone. 30

10–142. 31

62 SENATE BILL 388

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

(i) for a business entity that locates in the RISE zone before January 3
1, 2023, the property tax credit under § 9–103.1 of the Tax – Property Article; 4

(ii) for a taxable year beginning before January 1, 2023, the income 5
tax credit under § 10–702 of the Tax – General Article; and 6

(iii) priority consideration for financial assistance from programs in 7
TITLE 5, Subtitle 1 of this [title] ARTICLE. 8

(2) For purposes of the income tax credit authorized under paragraph (1)(ii) 9
of this subsection, the business entity is treated as being located in an enterprise zone. 10

(b) Subject to the limitations under subsection (a) of this section, a business entity 11
that moves into or locates in a RISE zone on or after the date that the zone is designated 12
under this [subtitle] PART may qualify for the incentives under this section. 13

(c) A business entity may not qualify for the incentives under subsection (a) of 14
this section unless the [Department] CORPORATION, in consultation with the county or 15
municipal corporation in which a RISE zone is located, certifies the business entity and its 16
location as consistent with the target strategy of the RISE zone. 17

(d) (1) Unless a business entity makes a significant capital investment or 18
expansion of its labor force after a RISE zone is designated, the incentives under this 19
section are not available to a business entity that was in a RISE zone before the date that 20
the zone is designated. 21

(2) The [Department] CORPORATION shall adopt regulations 22
establishing factors to determine if a business entity makes a significant capital investment 23
or expansion of its labor force under paragraph (1) of this subsection. 24

10–143. 25

(a) (1) (i) A qualified institution, THE CORPORATION, a county and, if 26
applicable, a municipal corporation, or the economic development agency of a county or 27
municipal corporation may establish a program to provide rental assistance to a business 28
entity that[: 29

1.] moves into or locates in a RISE zone on or after the date 30
that the zone is designated under this [subtitle; PART; AND 31

2. has nexus with a qualified institution located in the RISE 32
zone; 33

SENATE BILL 388 63

3. 2. has been in active business not longer than 7 years] PART 1
AT THE TIME THAT THE BUSINESS ENTITY APPLIES TO RECEIVE RENTAL ASSISTANCE 2
FROM THE PROGRAM. 3

(ii) A business entity may not receive rental assista nce under a 4
rental assistance program established in accordance with subparagraph (i) of this 5
paragraph for more than [3] 5 years. 6

(2) (i) A qualified institution, a county and, if applicable, a municipal 7
corporation, or the economic development agency of a county or municipal corporation that 8
establishes a rental assistance program in accordance with paragraph (1) of this subsection 9
may submit a request to receive a distribution [of matching funds] from the Fund. 10

(ii) The application shall include: 11

1. a description of the rental assistance program; 12

2. [the amount of funding that the applicant has secured to 13
provide rental assistance under the rental assistance program; 14

3.] the amount requested for distribution from the Fund in 15
accordance with this section; and 16

[4.] 3. any other information requested by the [Department] 17
CORPORATION. 18

(iii) The applicant shall submit the application on or before the date 19
that the [Department] CORPORATION specifies. 20

(b) (1) The [Department] CORPORATION shall review each request for 21
distribution of [matching] funds from the Fund for compliance with the provis ions of this 22
section and [Department] CORPORATION regulations. 23

(2) [Subject to the availability of funds in the Fund and paragraph (3) of 24
this subsection, if the Department approves a request for distribution of matching funds 25
from the Fund, the Department shall distribute to a fund dedicated to the applicant’s rental 26
assistance program an amount equal to three times the amount of funding specified under 27
subsection (a)(2)(ii)2 of this section. 28

(3) Except as provided in subsection (c) of this section, the Department] 29
THE CORPORATION shall make available not more than 25% of cumulative program funds 30
from the Fund for rental assistance programs in a single RISE zone. 31

(c) [(1) Within 90 days after approval by the Department of a request for 32
matching funds under subsection (a) of this section, the applicant shall deposit an amount 33
64 SENATE BILL 388

equal to or greater than the amount specified under subsection (a)(2)(ii)2 of this section into 1
a fund dedicated to the applicant’s rental assistance program. 2

(2) If an applic ant fails to have deposited the amount required under 3
paragraph (1) of this subsection, any portion of funds allocated to the applicant that has 4
not been distributed shall be reallocated to another applicant in accordance with this 5
section. 6

(3)] If the [Department] CORPORATION fails to allocate the funds in the 7
Fund under this [subtitle] PART and rental assistance programs in a single RISE zone 8
have previously received 25% of cumulative program funds from the Fund, the Department 9
may distribute additiona l funds to applicants for that RISE zone in accordance with this 10
[subtitle] PART. 11

(d) (1) On or before September 15 each year, a rental assistance program that 12
has received a distribution of funds from the Fund shall submit to the [Department] 13
CORPORATION an annual report in the form and containing the information required by 14
the [Secretary] CORPORATION. 15

(2) The report required under paragraph (1) of this subsection shall detail 16
the use of funds received under this section for the immediately preceding fiscal year and 17
provide an update on any funds that were not disbursed during that fiscal year. 18

(3) The [Department] CORPORATION may not distribute [matching] 19
funds from the Fund to a rental assistance program under this section if the rental 20
assistance program has failed to submit the report required under paragraph (1) of this 21
subsection. 22

(e) A rental assistance program that receives a distribution of [matching] funds 23
from the Fund shall be subject to an audit at least once every 3 years by an independent 24
certified public accountant that the applicant and the [Department] CORPORATION 25
select. 26

(f) Based on the findings of an audit conducted under subsection (e) of this 27
section, the [Department] CORPORATION may make an assessment against a qualified 28
institution, a county, a municipal corporation, or an economic development agency to 29
recapture any misused or undistributed funds. 30

10–144. 31

(a) There is a Region al Institution Strategic Enterprise Fund in the 32
[Department] CORPORATION. 33

(b) The [Secretary] EXECUTIVE DIRECTOR OF THE CORPORATION shall 34
manage and supervise the Fund. 35

SENATE BILL 388 65

(c) (1) The Fund is a special, nonlapsing fund that is not subject to § 7–302 of 1
the State Finance and Procurement Article. 2

(2) The State Treasurer shall hold the Fund separately, and the 3
Comptroller shall account for the Fund. 4

(d) The Fund consists of: 5

(1) money appropriated in the State budget to the Fund; and 6

(2) any other money from any other source accepted for the benefit of the 7
Fund. 8

(e) The [Department] CORPORATION may use the Fund to: 9

(1) finance, in coordination with qualified institutions, counties, and 10
municipal corporations, the provision of rental assistance to business entities located in 11
RISE zones; and 12

(2) pay the related administrative, legal, and actuarial expenses of the 13
[Department] CORPORATION. 14

(f) (1) The State Treasurer shall invest the money of the Fund in the same 15
manner as other State money may be invested. 16

(2) Any investment earnings of the Fund shall be credited to the Fund. 17

(g) Expenditures from the Fund may be made only in accordance with the State 18
budget. 19

10–145. 20

(A) [In accordance with § 2.5 –109 of this article, the Department ] THE 21
CORPORATION shall submit a report on the effectiveness of the tax incentives authorized 22
under this [subtitle] PART WITH THE ANNUAL REPORT SUBMITTED IN ACCORDANCE 23
WITH § 10–133 OF THIS SUBTITLE. 24

(B) THE REPORT REQUIRED U NDER THIS SECTION SH ALL INCLUDE THE 25
FOLLOWING INFORMATION FOR THE PRECEDING FISCAL YEAR: 26

(1) THE NUMBER OF BUSINESS ENTITIES THAT RECEIVED ASSISTANCE 27
FROM THE CORPORATION UNDER § 10–141 OF THIS SUBTITLE AND THE TYPE OF 28
ASSISTANCE PROVIDED; 29

(2) THE NUMBER OF BUSINE SS ENTITIES CERTIFIED BY THE 30
CORPORATION UNDER § 10–142 OF THIS SUBTITLE; 31
66 SENATE BILL 388

(3) THE NUMBER OF BUSINE SS ENTITIES THAT REC EIVED RENTAL 1
ASSISTANCE FROM A PR OGRAM ESTABLISHED IN ACCORDANCE WITH § 10–143 OF 2
THIS SUBTITLE THAT RECEIVED A DISTRIBUTION FROM THE FUND; AND 3

(4) THE NUMBER OF SMALL , MINORITY–OWNED, OR WOMEN –OWNED 4
BUSINESSES DESCRIBED UNDER EACH OF ITEMS (1) THROUGH (3) OF THIS 5
SUBSECTION. 6

10–146. 7

(A) SUBJECT TO SUBSECTION (B) OF THIS SECTION , THIS This [subtitle] 8
PART and the tax credits and benefits authorized under it shall terminate on January 1, 9
2030. 10

(B) AFTER THE TERMINATION OF THIS PART , A BUSINESS ENTITY MA Y 11
CONTINUE TO RECEIVE A BENEFIT AUTHORIZED UNDER THIS PART UNTIL THE DATE 12
THAT THE RISE ZONE IN WHICH TH E BUSINESS ENTITY IS LOCATED WOULD 13
OTHERWISE HAVE EXPIRED BUT FOR SUBSECTION (A) OF THIS SECTION. 14

10–147. RESERVED. 15

10–148. RESERVED. 16

Part III. Build Our Future Grant [Pilot] Program. 17

10–149. 18

(a) In this [subtitle] PART the following words have the meanings indicated. 19

(b) “Fund” means the Build Our Future Grant Fund. 20

(c) “Program” means the Build Our Future Grant [Pilot] Program. 21

10–150. 22

(a) There is a Build Our Future Grant [Pilot] Program in the [Department] 23
CORPORATION. 24

(b) The purpose of the Program is to provide grant funding for infrastructure 25
projects intended to support innovation in an eligible technology sector. 26

(c) Grants may be awarded to private companies, nonprofit entities, local 27
governments, or colleges and universities in the State. 28

SENATE BILL 388 67

(d) The [Department] CORPORATION shall administer the Program. 1

10–151. 2

(a) To carry out the purpose of the Program, the [Department] CORPORATION 3
may award grants in accordance with this [subtitle] PART to approved recipients carrying 4
out infrastructure projects intended to support innovation in any of the following eligible 5
technology sectors: 6

(1) advanced manufacturing; 7

(2) aerospace; 8

(3) agriculture; 9

(4) artificial intelligence; 10

(5) biotechnology; 11

(6) blue technology; 12

(7) cybersecurity; 13

(8) defense; 14

(9) energy and sustainability; 15

(10) life sciences; 16

(11) quantum; and 17

(12) sensor and robotics. 18

(b) Examples of eligible projects include: 19

(1) sensitive compartmented information facilities; 20

(2) wet laboratories; 21

(3) cyber ranges; 22

(4) prototype manufacturing centers; and 23

(5) other specialized workforce training, skill certification, or 24
research–related spaces. 25

68 SENATE BILL 388

(c) Grant awards may be used to defray the co st a grantee incurs to acquire, 1
construct, rehabilitate, install, improve, or equip an eligible innovation infrastructure 2
project. 3

(d) (1) A single entity may be awarded not more than $2,000,000 in grant 4
funds in a fiscal year. 5

(2) (i) For a grant awa rd up to $1,000,000, a grantee shall provide 6
matching funds that are at least 200% of the grant amount. 7

(ii) For a grant award exceeding $1,000,000, and up to $2,000,000, a 8
grantee shall provide matching funds that are at least 400% of the grant amount. 9

(iii) Funds received by a grantee through other State grant programs 10
are not counted toward the grantee’s matching funds requirement. 11

(3) A grantee must demonstrate an ability to cover the full estimated costs 12
of the project for which the grant is awarded. 13

(4) (i) Not more than 50% of the appropriation to the Fund in a fiscal 14
year may be awarded to colleges and universities in that fiscal year. 15

(ii) Grants to colleges and universities from the Fund must be 16
awarded to projects that: 17

1. are performed in collaboration with private industry; or 18

2. offer the prospect of significant economic impact and the 19
opportunity to develop entrepreneurship or clusters of technological innovation in the 20
State. 21

(E) WHEN PROVIDING FUNDIN G FROM THE FUND, THE CORPORATION 22
SHALL PRIORITIZE APPLICANTS LOCATED IN A REGIONAL INSTITUTION STRATEGIC 23
ENTERPRISE ZONE THAT IS DESIGNATED UNDER PART II OF THIS SUBTITLE. 24

10–152. 25

A grantee may be subject to repayment of the grant in an amount determined by the 26
[Department] CORPORATION if the grantee fails to: 27

(1) comply with reporting requirements established by the [Department] 28
CORPORATION; or 29

(2) demonstrate appropriate use of grant funds. 30

10–153. 31
SENATE BILL 388 69

(a) There is a Build Our Future Grant Fund. 1

(b) The [Department] CORPORATION shall administer the Fund. 2

(c) The purpose of the Fund is to provide grants for infrastructure projects to 3
support innovation in eligible technology sectors under this [subtitle] PART. 4

(d) (1) The Fund is a special, nonlapsing fund that is not subject to reversion 5
under § 7–302 of the State Finance and Procurement Article. 6

(2) The State Treasurer shall hold the Fund separately, and the 7
Comptroller shall account for the Fund. 8

(e) The Fund consists of: 9

(1) money appropriated in the State budget to the Fund; 10

(2) any interest earnings of the Fund; and 11

(3) any other money from any other source accepted for the benefit of the 12
Fund. 13

(f) (1) The Fund may be used to: 14

(i) provide grants in accordance with this [subtitle] PART; and 15

(ii) pay the administrative costs of the Program. 16

(2) During each fiscal year, the [Department] CORPORATION may use not 17
more than 10% of the money appropriated to the Fund to administer the Program. 18

(g) (1) The State Treasurer shall in vest the money of the Fund in the same 19
manner as other State money may be invested. 20

(2) Any interest earnings of the Fund shall be credited to the Fund. 21

(h) Expenditures from the Fund may be made only in accordance with the State 22
budget. 23

10–154. 24

On or before July 1, 2026, AND EACH JULY 1 THEREAFTER, the [Department] 25
CORPORATION shall report to the Governor and, in accordance with § 2–1257 of the State 26
Government Article, the General Assembly on the projects funded through and the 27
economic impact of the Program. 28
70 SENATE BILL 388

10–155. 1

The [Secretary] CORPORATION may adopt regulations to carr y out this [subtitle] 2
PART. 3

10–156. 4

THIS PART AND THE GRANT PROGRAM UNDER IT SHALL TERMINATE ON JUNE 5
30, 2030. 6

10–470. 7

(b) (1) Whenever the Corporation is authorized by law to make a grant, 8
[including a grant from the Economic Development Opportunitie s Program Account 9
authorized under § 7–314 of the State Finance and Procurement Article, ] the Corporation 10
may use money appropriated for the grant to make an equity investment in a qualified 11
business. 12

12–201. 13

(a) In this subtitle the following words have the meanings indicated. 14

(p) “RISE zone” means an area designated as a Regional Institution Strategic 15
Enterprise zone under [§ 5–1404] § 10–140 of this article. 16

Article – Corporations and Associations 17

1–203. 18

(b) (14) BEGINNING IN FISCAL Y EAR 2027, THE DEPARTMENT SHALL 19
WAIVE THE FILING FEE FOR A BUSINESS ENTIT Y DESCRIBED UNDER PA RAGRAPH 20
(3)(II) OF THIS SUBSECTION FOR EACH YEAR THAT THE ENTITY PROVIDES EVIDENCE 21
TO THE DEPARTMENT THAT THE ENTITY: 22

(I) HAS LOCATED WITHIN A REGIONAL INSTITUTION 23
STRATEGIC ENTERPRISE ZONE THAT IS DESIGNATED UNDER TITLE 10, SUBTITLE 1 24
OF THE ECONOMIC DEVELOPMENT ARTICLE WITHIN 3 YEARS OF THE DATE BY 25
WHICH THE FILING FEE IS DUE; AND 26

(II) IS IN AN ELIGIBLE TEC HNOLOGY SECTOR DESCR IBED 27
UNDER § 10–151 OF THE ECONOMIC DEVELOPMENT ARTICLE. 28

[(14)] (15) There is no processing fee for documents filed to dissolve, cancel, 29
or terminate an entity under this subsection. 30
SENATE BILL 388 71

Article – State Finance and Procurement 1

7–309. 2

(a) There is a State Reserve Fund. 3

(b) The State Reserve Fund comprises: 4

(1) the Dedicated Purpose Account; 5

(2) the Revenue Stabilization Account; AND 6

(3) the [Economic Development Opportunities Program Account ] 7
STRATEGIC CLOSING FUND; and 8

(4) the Catastrophic Event Account. 9

Article – State Government 10

9–1A–27. 11

(a) Except as provided in subsections (b) and (c) of this section and § 12
9–1A–26(a)(3) of this subtitle, on a properly approved transmittal prepared by the 13
Commission, the Comptroller shall pay the following amounts from the proceeds of video 14
lottery terminals at each video lottery facility: 15

(6) [(i) except as provided in items (ii) and (iii) of this item,] 1.5% to BE 16
DISTRIBUTED: 17

(I) $5,000,000 TO THE MARYLAND SMALL BUSINESS 18
DEVELOPMENT FINANCING FUND ESTABLISHED UNDER § 5–515 OF THE ECONOMIC 19
DEVELOPMENT ARTICLE; AND 20

(II) THE REMAINDER TO BE DISTRIBUTED EQUAL LY BETWEEN 21
THE MARYLAND SMALL BUSINESS DEVELOPMENT FINANCING FUND ESTABLISHED 22
UNDER § 5–515 OF THE ECONOMIC DEVELOPMENT ARTICLE AND the Small, Minority, 23
and Women –Owned Businesses Account established under § 5 –1501 of the Economic 24
Development Article; 25

[(ii) for fiscal year 2018, 1.5% to the General Fund to pay a portion of 26
the costs of the grants provided under Chapters 6 and 607 of the Acts of the General 27
Assembly of 2017; and 28

(iii) for fiscal years 2019 and 2020, 1.5% to the Education Trust Fund 29
established under § 9–1A–30 of this subtitle;] 30
72 SENATE BILL 388

(c) (1) For the first 10 years of operations at a video lottery facility in Allegany 1
County, on a properly approved transmittal prepared by the Commission, the Comptroller 2
shall pay the following amounts from the proceeds of video lottery terminals at a video 3
lottery facility in Allegany County: 4

(v) 1. except as provided in items 2 and 3 of this item, 0.75% to 5
the Small, Minority, and Women–Owned Businesses Account established under § 5 –1501 6
of the Economic Development Article; 7

Article – Tax – General 8

11–247. 9

(A) (1) IN THIS SECTION , “AFFILIATED GROUP ” HAS THE MEANING 10
STATED UNDER § 1504 OF THE INTERNAL REVENUE CODE AND INCLUDES RELATED 11
PARTIES DESCRIBED UNDER § 267(B)(10), (11), OR (12) OF THE INTERNAL REVENUE 12
CODE. 13

(2) FOR THE PURPOSES OF THIS SUBSECTION: 14

(I) ALL REFERENCES TO A CORPORATION OR PARTN ERSHIP 15
UNDER § 267(B)(10) OF THE INTERNAL REVENUE CODE INCLUDE AN S 16
CORPORATION; AND 17

(II) ALL REFERENCES TO AN S CORPORATION UNDER § 18
267(B)(10), (11), AND (12) INCLUDE A QUALIFIED SUBCHAPTER S CORPORATION 19
SUBSIDIARY. 20

(B) THE SALES AND USE TAX IMPOSED ON A TAXABLE SERVICE DESCRIBED 21
UNDER § 11–101(M)(14) OR (15) OF THIS TITLE OR A D IGITAL CODE OR DIGIT AL 22
PRODUCT DOES NOT APP LY TO A SALE IF BOTH THE VENDOR AND THE B UYER ARE 23
MEMBERS OF THE SAME AFFILIATED GROUP. 24

SECTION 4. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 25
as follows: 26

Article – Tax – General 27

10–702. 28

(a) (1) In this section the following words have the meanings indicated. 29

SENATE BILL 388 73

(4) (ii) “Enterprise zone” includes a Regional Institution Strategic 1
Enterprise zone established under [Title 5, Subtitle 14 ] TITLE 10, SUBTITLE 1 of the 2
Economic Development Article. 3

(c) If a business entity does not claim an enhanced tax credit under subsection (e) 4
of this section for a focus area employee, for the taxable year in which a business entity 5
satisfies the requirements of § 5–707 or [§ 5–1406] § 10–142 of the Economic Development 6
Article, a credit is allowed that equals: 7

(1) up to $3,000 of the wages paid to each qualified employee who: 8

(i) is an economically disadvantaged individual; and 9

(ii) is not hired to replace an ind ividual whom the business entity 10
employed in that or any of the 3 preceding taxable years; and 11

(2) up to $1,000 of the wages paid to each qualified employee who: 12

(i) is not an economically disadvantaged individual; and 13

(ii) is not hired to replace an individual whom the business entity 14
employed in that or any of the 3 preceding taxable years. 15

(e) (1) For the taxable year in which a business entity satisfies the 16
requirements of §§ 5–706 and 5–707 or [§ 5–1406] § 10–142 of the Economic Development 17
Article, a credit is allowed that equals: 18

(i) up to $4,500 of the wages paid to each focus area employee who: 19

1. is an economically disadvantaged individual; and 20

2. is not hired to replace an individual whom the business 21
entity employed in that year or any of the 3 preceding taxable years; and 22

(ii) up to $1,500 of the wages paid to each focus area employee who: 23

1. is not an economically disadvantaged individual; and 24

2. is not hired to replace an individual whom the busines s 25
entity employed in that year or any of the 3 preceding taxable years. 26

10–721. 27

(a) (1) In this section the following words have the meanings indicated. 28

(2) “Department” means the Department of Commerce. 29
74 SENATE BILL 388

(3) “Maryland base amount” means the base amount as defined in § 41(c) 1
of the Internal Revenue Code that is attributable to Maryland, determined by: 2

(i) substituting “Maryland qualified research and development 3
expense” for “qualified research expense”; 4

(ii) substituting “Maryland qualified research and development” for 5
“qualified research”; and 6

(iii) using, instead of the “fixed base percentage”: 7

1. the percentage that the Maryland qualified research and 8
development expense for the 4 taxable years immediately preceding the taxable year in 9
which the expense is incurred is of the gross receipts for those years; or 10

2. for a taxpayer who has fewer than 4 but at least 1 prior 11
taxable year, the percentage as determined under item 1 of this item, determined using the 12
number of immediately preceding taxable years that the taxpayer has. 13

(4) “Maryland gross receipts” means gross receipts that are reasonably 14
attributable to the conduct of a trade or business in this State, determined under methods 15
prescribed by the Comptroller based on standards similar to the standards under § 10–402 16
of this title. 17

(5) “Maryland qualified research and development” means qualified 18
research as defined in § 41(d) of the Internal Revenue Code that is conducted in this State. 19

(6) “Maryland qua lified research and development expenses” means 20
qualified research expenses as defined in § 41(b) of the Internal Revenue Code incurred for 21
Maryland qualified research and development. 22

(7) “Net book value assets” means the total of a business’s net valu e of 23
assets, including intangibles but not including liabilities, minus depreciation and 24
amortization. 25

(8) “Small business” means a for –profit corporation, limited liability 26
company, partnership, or sole proprietorship with net book value assets totalin g, at the 27
beginning or the end of the taxable year for which Maryland qualified research and 28
development expenses are incurred, as reported on the balance sheet, less than $5,000,000. 29

(b) (1) The purpose of the Research and Development Tax Credit Program is 30
to foster increased research activities and expenditures in Maryland. 31

(2) Subject to the limitations of this section, an individual or a corporation 32
may claim credits against the State income tax in an amount equal to 10% of the amount 33
by which the Maryland qualified research and development expenses paid or incurred by 34
SENATE BILL 388 75

the individual or corporation during the taxable year exceed the Maryland base amount for 1
the individual or corporation. 2

(I) (1) THE DEPARTMENT MAY NOT AP PROVE A CREDIT UNDER THIS 3
SECTION FOR A TAXABLE YEAR BEGINNING AFTER DECEMBER 31, 2030. 4

(2) IF A TAXPAYER ’S TAXABLE YEAR FOR I NCOME TAX PURPOSES I S 5
NOT THE CALENDAR YEA R, FOR THE TAXABLE YEAR THAT BEGINS IN CALEN DAR 6
YEAR 2030, THE TAXPAYER MAY APP LY FOR ONLY A PRORAT ED CREDIT FOR 7
RESEARCH AND DEVELOP MENT EXPENSES PAID O R INCURRED IN THE TA XABLE 8
YEAR FOR THAT PART OF THE TAXABLE YEAR THAT FALLS IN CALENDAR YEAR 2030. 9

10–725. 10

(a) (1) In this section the following words have the meanings indicated. 11

(2) “Biotechnology company” means a company organized for profit that is 12
primarily engaged in, or within 2 months will be primarily engaged in, the research, 13
development, or commercialization of innovative and proprietary technology that 14
comprises, interacts with, or analyzes biologi cal material including biomolecules (DNA, 15
RNA, or protein), cells, tissues, or organs. 16

(3) (i) “Company” means any entity of any form duly organized and 17
existing under the laws of any jurisdiction for the purpose of conducting business for profit. 18

(ii) “Company” does not include a sole proprietorship. 19

(4) “Department” means the Department of Commerce. 20

(5) (i) “Investment” means the contribution of money in cash or cash 21
equivalents expressed in United States dollars, at a risk of loss, to a qual ified Maryland 22
biotechnology company in exchange for stock, a partnership or membership interest, or 23
other ownership interest in the equity of the qualified Maryland biotechnology company, 24
title to which ownership interest shall vest in the qualified investor. 25

(ii) “Investment” does not include debt. 26

(iii) For purposes of this section, an investment is at risk of loss when 27
its repayment entirely depends upon the success of the business operations of the qualified 28
company. 29

(6) (i) “Qualified investor” means any individual or entity that invests 30
at least $25,000 in a qualified Maryland biotechnology company and that is required to file 31
an income tax return in any jurisdiction. 32

(ii) “Qualified investor” does not include: 33
76 SENATE BILL 388

1. a qualified pension plan, individual retirement account, or 1
other qualified retirement plan under the Employee Retirement Income Security Act of 2
1974, as amended, or fiduciaries or custodians under such plans, or similar tax –favored 3
plans or entities under the laws of other countries; or 4

2. a founder or current employee of the qualified Maryland 5
biotechnology company, if the company has been in active business for more than 5 years. 6

(7) (i) “Qualified Maryland biotechnology company” means a 7
biotechnology company that: 8

1. has its headquarters and base of operations in this State; 9

2. has fewer than 50 full–time employees; 10

3. has been in active business no longer than 12 years; 11

4. does not have its securities publicly traded on any 12
exchange; 13

5. has been certified as a biotechnology company by the 14
Department; and 15

6. the qualified investors in the company have not received 16
more than $7,000,000 in tax credits in the aggregate under this section. 17

(ii) “Qualified Maryland biotechnology compan y” includes a 18
company that, within 2 months of the receipt of the investment, has met the requirements 19
of subparagraph (i) of this paragraph. 20

(8) “Secretary” means the Secretary of Commerce. 21

(b) (2) Subject to paragraphs (3) and (4) of this subsection and subsections (d) 22
and (e) of this section, for the taxable year in which an investment in a qualified Maryland 23
biotechnology company is made, a qualified investor may claim a credit against the State 24
income tax in an amount equal to the amount of tax cr edit stated in the final credit 25
certificate approved by the Secretary for the investment as provided under this section. 26

(3) To be eligible for the tax credit described in paragraph (2) of this 27
subsection, the qualified investor shall be: 28

(i) for a company WITH ITS BASE OF OPERATIONS OUTSIDE THE 29
STATE, duly organized and in good standing in the jurisdiction under the laws under which 30
it is organized; 31

SENATE BILL 388 77

(ii) for a company WITH ITS BASE OF OPERATIONS IN THE STATE, 1
in good standing and authorized or registered to do business in the State; 2

(iii) current in the payment of all tax obligations to the State or any 3
unit or subdivision of the State; and 4

(iv) not in default under the terms of any contract with, indebtedness 5
to, or grant from the State or any unit or subdivision of the State. 6

(5) IF THE QUALIFIED INVE STOR ALLOWED TO CLAI M A CREDIT 7
UNDER PARAGRAPH (2) OF THIS SUBSECTION I S A PASS –THROUGH ENTITY THAT 8
PAYS THE INCOME TAX IMPOSED UNDER § 10–102.1 OF THIS TITLE ON BEH ALF OF 9
ALL MEMBERS OF THE PASS–THROUGH ENTITY, THE PASS–THROUGH ENTITY MAY 10
CLAIM AND ALLOCATE T HE CREDIT AMONG MEMB ERS OF THE PASS –THROUGH 11
ENTITY IN ANY MANNER. 12

(d) (1) The tax credit allowed in an initial tax credit certificate issued under 13
this section is: 14

(i) except as provided in item (ii) of this paragraph, 33% of the 15
investment in a qualified Maryland biotechnology company, not to exceed $250,000; or 16

(ii) [50%] 75% of the investment in the qualified Maryland 17
biotechnology company, not to exceed [$500,000] $750,000, if a qualified Maryland 18
biotechnology company: 19

1. is located in Allegany County, Dorchester County, Garrett 20
County, or Somerset County; or 21

2. is located in a Regional Institution Strategic Enterprise 22
zone that is designated under [Title 5, Subtitle 14] TITLE 10, SUBTITLE 1 of the Economic 23
Development Article[, is based on technology that was developed at a qualified institution 24
within that zone, and has been in active business not longer than 7 years]. 25

(2) During any fiscal year, the Secretary may not certify eligibility for tax 26
credits for investments in a single qualified Maryland biotechnology company that in the 27
aggregate exceed 10% of the total appropriations to the Maryland Biotechnology 28
Investment Tax Credit Reserve Fund for that fiscal year. 29

(3) (I) If the tax credit allowed under this section in any taxable year 30
exceeds the total tax otherwise payable by the qualified investor for that taxable year, the 31
qualified investor may claim a refund in the amount of the excess. 32

(II) FOR A TAXABLE YEAR BE GINNING AFTER DECEMBER 31, 33
2026, IF THE QUALIFIED INV ESTOR ALLOWED TO CLA IM A CREDIT UNDER 34
78 SENATE BILL 388

SUBPARAGRAPH (I) OF THIS PARAGRAPH IS A PASS–THROUGH ENTITY THAT PAYS 1
THE INCOME TAX IMPOS ED UNDER § 10–102.1 OF THIS TITLE ON BEH ALF OF ALL 2
MEMBERS OF THE PASS–THROUGH ENTITY, THE PASS–THROUGH ENTITY MAY CLAIM 3
AND ALLOCATE THE CRE DIT AMONG MEMBERS OF THE PASS–THROUGH ENTITY IN 4
ANY MANNER. 5

(K) FOR A TAXABLE YEAR BE GINNING AFTER DECEMBER 31, 2025, THE 6
COMPTROLLER SHALL PROVIDE THE MEANS FO R A QUALIFIED INVEST OR TO FILE 7
THE INVESTOR’S RETURN ELECTRONICALLY. 8

10–730. 9

(a) (1) In this section the following words have the meanings indicated. 10

(4) (i) “Film production activity” means: 11

1. the production of a film or video project that is intended 12
for nationwide commercial distribution; and 13

2. for a television series, each season of the television series. 14

(ii) “Film production activity” includes the production of: 15

1. a feature film; 16

2. a television project; 17

3. a commercial; 18

4. a corporate film; 19

5. a music video; 20

6. a digital animation project; 21

7. a documentary; or 22

8. a talk, reality, or game show. 23

(iii) “Film production activity” does not include the production of: 24

1. a student film; 25

2. a noncommercial personal video; 26

3. a sports broadcast; 27
SENATE BILL 388 79

4. a broadcast of a live event; 1

5. a video, computer, or social networking game; 2

6. pornography; 3

7. an infomercial; 4

8. a digital product or an animation project other than a 5
digital animation project; or 6

9. a multimedia project. 7

(7) “Qualified film production entity” means an entity that: 8

(i) is carrying out a film production activity; and 9

(ii) the Secretary determines to be eligible for the tax credit under 10
this section in accordance with subsection (c) of this section. 11

(A–1) THE PURPOSE OF THE TAX CREDIT ALLOWED UNDER THIS SECTION IS TO 12
INCENTIVIZE AND PROM OTE FILM PRODUCTION ACTIVITY IN THE STATE TO 13
STIMULATE THE LOCAL ECONOMY BY CREATING JOBS, FOSTERING INVESTMENT IN 14
INDUSTRY INFRASTRUCTURE, AND BOOSTING TOURISM. 15

(b) (1) A qualified film production entity may claim a credit against the State 16
income tax for film production activities in the State in an amount equal to the amount 17
stated in th e final tax credit certificate approved by the Secretary for film production 18
activities. 19

(2) If the tax credit allowed under this section in any taxable year exceeds 20
the total tax otherwise payable by the qualified film production entity for that taxable year, 21
the qualified film production entity may claim a refund in the amount of the excess. 22

(c) (1) Before beginning a film production activity, a film production entity 23
shall submit to the Department an application to qualify as a film production entity. 24

(2) The application shall describe the anticipated film production activity, 25
including: 26

(i) the projected total budget; 27

(ii) the estimated number of Maryland resident and out –of–state 28
employees and total wages to be paid; and 29

80 SENATE BILL 388

(iii) the anticipated dates for carrying out the major elements of the 1
film production activity. 2

(3) Except as provided in subsection (h) of this section, to qualify as a film 3
production entity, the estimated total direct costs incurred in the State must excee d 4
$250,000. 5

(4) The application shall include any other information required by the 6
Secretary. 7

(5) For a film production entity with total direct costs that exceed $250,000, 8
the Secretary may require the information provided in an application to be v erified by an 9
independent auditor selected and paid for by the film production entity seeking 10
certification. 11

(6) The Secretary shall: 12

(i) determine if the film production entity qualifies for the credit 13
under this section; and 14

(ii) notify the Co mptroller of the estimated amount of total direct 15
costs and the taxable year the credit will be claimed. 16

(7) (I) A QUALIFIED FILM PRODU CTION ENTITY MAY AME ND ITS 17
INITIAL APPLICATION SUBMITTED UNDER PARAGRAPH (1) OF THIS SUBSECTION IF 18
AN INDEPENDENT AUDITOR SELECTED AND PAID FOR BY THE QUAL IFIED FILM 19
PRODUCTION ENTITY HA S VERIFIED THAT THE PROJECTED TOTAL BUDGET IN ITS 20
INITIAL APPLICATION HAS INCREASED OR DECREASED BY AT LEAST 50%. 21

(II) THE SECRETARY SHALL: 22

1. EVALUATE AN AMENDED APPLICATION SUBMITTED 23
UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH; 24

2. DETERMINE IF THE FIL M PRODUCTION ENTITY 25
CONTINUES TO QUALIFY FOR THE CREDIT UNDER THIS SECTION; AND 26

3. SUBJECT TO THE AVAIL ABILITY OF CREDIT AM OUNT 27
IN THE FISCAL YEAR , IF THE SECRETARY APPROVES THE AMENDED APPLI CATION, 28
NOTIFY THE COMPTROLLER OF THE AM ENDED ESTIMATED AMOU NT OF TOTAL 29
DIRECT COSTS AND THE TAXABLE YEAR THE CREDIT WILL BE CLAIMED. 30

(f) (1) Except as provided in paragraph (2) of this subsection, the Secretary 31
may not issue tax credit certificates for credit amounts in the aggregate totaling more than: 32

SENATE BILL 388 81

(i) for fiscal year 2014, $25,000,000; 1

(ii) for fiscal year 2015, $7,500,000; 2

(iii) for fiscal year 2016, $7,500,000; 3

(iv) for fiscal year 2019, $8,000,000; 4

(v) for fiscal year 2020, $11,000,000; 5

(vi) for fiscal years 2021 through 2023, $12,000,000; 6

(vii) for fiscal year 2024, $15,000,000; 7

(viii) for fiscal year 2025, $17,500,000; and 8

(ix) for fiscal year 2026 and each fiscal year thereafter, $12,000,000. 9

(2) If the aggregate credit amounts under the tax credit certificates issued 10
by the Secretary total less than the maximum provided under paragraph (1) of this 11
subsection in any fiscal year, any excess amount may be carried forward and issued under 12
tax credit certificates in a subsequent fiscal year. 13

(3) [The Secretary may not issue tax credit certificates for credit amounts 14
totaling more than $10,000,000 in the aggregate for a single film production activity. 15

(4)] (i) For fiscal year 2019 and each fiscal year thereafter, the Secretary 16
shall make 10% of the credit amount authorized under paragraph (1) of this subsection 17
available for Maryland small or independent film entities. 18

(ii) If the total amount of credits applied for by Mary land small or 19
independent film entities is less than the amount made available under subparagraph (i) 20
of this paragraph, the Secretary shall make available the unused amount of credits for use 21
by qualified film production entities. 22

10–732. 23

(a) (1) In this section the following words have the meanings indicated. 24

(2) “Costs” means the costs to an individual or corporation for: 25

(i) security clearance administrative expenses incurred with regard 26
to an employee in the State including, but not limited to: 27

1. processing application requests for clearances for 28
employees in the State; 29

82 SENATE BILL 388

2. maintaining, upgrading, or installing computer systems in 1
the State required to obtain federal security clearances; and 2

3. training employees in the State to administer the 3
application process; and 4

(ii) construction and equipment costs incurred to construct or 5
renovate a sensitive compartmented information facility (“SCIF”) located in the State as 6
required by the federal government. 7

(3) “Department” means the Department of Commerce. 8

(4) “Secretary” means the Secretary of Commerce. 9

(5) “Small business” has the meaning stated in § 7–218 of this article. 10

(b) (1) Subject to the limitations of this section, for a taxable year beginning 11
after December 31, 2022, but before January 1, [2028] 2033, an individual or a corporation 12
that employs not more than 500 employees may claim credits against the State income tax 13
for: 14

(i) security clearance administrative expenses, not to exceed 15
$200,000; 16

(ii) expenses incurred for rental payments owed during the first year 17
of a rental agreement for spaces leased in the State if the individual or corporation is a 18
small business that performs security–based contracting, not to exceed $200,000; and 19

(iii) Subject to paragraph (2) of this subsection, construction and 20
equipment costs incurred to construct or renovate a single SCIF in an amount equal to the 21
lesser of 50% of the costs or $200,000. 22

(2) The total amount of construction and equipment costs incurred to 23
construct or renovate multiple SCIFs for which an individual or a corporation is eligible to 24
claim as a credit against the State income tax is $500,000. 25

SECTION 5. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 26
as follows: 27

Article – Tax – Property 28

9–103. 29

(a) (1) In this section the following words have the meanings indicated. 30

(6) (i) “Qualified property” means real property that is: 31

SENATE BILL 388 83

1. not used for residential purposes; 1

2. used in a trade or business by a business entity that meets 2
the requirements of § 5–707 of the Economic Development Article; and 3

3. located in an enterprise zone that is designated under 4
Title 5, Subtitle 7 of the Economic Development Article. 5

(ii) “Qualified property” includes personal property on real property 6
that is located in a focus area as defined in § 5–701 of the Economic Development Article. 7

(b) (1) The governing body of a county or of a municipal corporation shall grant 8
a tax credit under this section against the property tax imposed on the eligible assessment 9
of qualified property. 10

(d) (2) For newly constructed qualified property that provides both office and 11
retail space and became eligible for t he credit under this section on or after [January 1, 12
2019] JULY 1, 2018, but before January 1, 2022, the appropriate governing body shall 13
calculate the amount of the tax credit under this section equal to a percentage of the amount 14
of property tax imposed on the eligible assessment of the qualified property as follows: 15

(i) 80% in each of the 1st 8 taxable years following the calendar year 16
in which the property initially becomes a qualified property; 17

(ii) 70% in the 9th taxable year; 18

(iii) 60% in the 10th taxable year; 19

(iv) 50% in the 11th taxable year; 20

(v) 40% in the 12th taxable year; and 21

(vi) 30% in the 13th taxable year. 22

(5) For qualified property located in a focus area, the appropriate governing 23
body shall calculate the amount of the tax credit under this section equal to 80% of the 24
amount of property tax imposed on the eligible assessment of the qualified property: 25

(i) for newly constructed qualified property that provides both office 26
and retail space and became eligible f or the credit under this section on or after [January 27
1, 2019 ] JULY 1, 2018, but before January 1, 2022, for each of the 13 taxable years 28
following the calendar year in which the property initially becomes a qualified property; or 29

(ii) for any other qualified property, for each of the 10 taxable years 30
following the calendar year in which the property initially becomes a qualified property. 31

84 SENATE BILL 388

(e) (1) A tax credit under this section is available to a qualified property for no 1
more than 10 consecutive years or, in the case of newly constructed qualified property that 2
provides both office and retail space and became eligible for the credit under this section 3
on or after [January 1, 2019] JULY 1, 2018, but before January 1, 2022, no more than 13 4
consecutive years, beginning with: 5

(i) the taxable year following the calendar year in which the real 6
property initially becomes a qualified property; or 7

(ii) the taxable year in which the real property initially becomes a 8
qualified property, subject to the approval of the appropriate local governing body and the 9
Secretary of Commerce. 10

9–103.1. 11

(a) (1) In this section the following words have the meanings indicated. 12

(6) “Qualified property” means real property that is: 13

(i) located in a RISE zone; 14

(ii) not used for residential purposes; and 15

(iii) used in a trade or business by a business entity that locates in 16
the RISE zone before January 1, 2023. 17

(7) “RISE zone” has the meaning stated in [§ 5 –1401] § 10–137 of the 18
Economic Development Article. 19

(b) The governing body of a county or of a municipal corporation shall grant a tax 20
credit under this section against the property tax imposed on the eligible assessment of 21
qualified property. 22

(c) (3) [For] EXCEPT AS PROVIDED IN PARAGRAPH (4) OF TH IS 23
SUBSECTION, FOR purposes of calculating the amount of the credit allowed under this 24
section, the amount of property tax imposed on the eligible assessment shall be calculated 25
without reduction for any credits allowed under this title. 26

(4) (i) For qualified property located in an enterprise zone designated 27
under Title 5, Subtitle 7 of the Economic Development Article, the appropriate governing 28
body shall calculate the amount of the tax credit under this section equal to 80% of the 29
amount of property tax imposed on the eligible assessment of the qualified property, AFTER 30
FIRST APPLYING ANY CREDITS REQUIRED UNDER § 9–103 OF THIS SUBTITLE, for each 31
of the 5 taxable years following the calendar year in which the property initially becomes a 32
qualified property. 33

SENATE BILL 388 85

(ii) For qualified property located in a focus area designated under § 1
5–706 of the Economic Development Article, the appropriate governing body shall calculate 2
the amount of the tax credit under this section equal to 100% of the amount of property tax 3
imposed on the eligible assessment of the qualified property, AFTER FIRST APPLYING ANY 4
CREDITS REQUIRED UNDER § 9–103 OF THIS SUBTITLE, for each of the 5 taxable years 5
following the calendar year in which the property initially becomes a qualified property. 6

(iii) 1. If a business entity is certified as consistent with the 7
target strategy of the RISE zone and the qualified property is located in an enterprise zone 8
or focus area, the amount of the required reimbursement under § 9 –103(h) of this subtitle 9
may only be for the amount required for the required property tax credits under § 9–103 of 10
this subtitle. 11

2. The property tax credits required under subparagraphs (i) 12
and (ii) of this paragraph do not alter the amount of funds required to be reimbursed under 13
§ 9–103(h) of this subtitle. 14

3. IF A BUSINESS ENTITY IS CERTIFIED AS CONS ISTENT 15
WITH THE TARGET STRA TEGY OF THE RISE ZONE AND THE QUALIFI ED PROPERTY 16
IS LOCATED IN AN ENT ERPRISE ZONE OR FOCUS AREA, THE BUSINESS ENTITY MAY 17
CONCURRENTLY CLAIM THE PROPERTY T AX CREDITS UNDER THI S SECTION AND § 18
9–103 OF THIS SUBTITLE, PROVIDED THAT THE TO TAL PROPERTY TAX CRE DITS IN 19
ANY TAXABLE YEAR MAY NOT EXCEED 100% OF THE PROPERTY TAX THAT WOULD 20
OTHERWISE BE DUE TO THE STATE AND LOCAL JURISDICTION. 21

4. THE CONCURRENT APPLIC ATION OF PROPERTY TA X 22
CREDITS UNDER THIS S ECTION MAY NOT ALTER THE TIME LIMITATION ON THE 23
AVAILABILITY OF ANY PROPERTY TAX CREDIT. 24

(5) The governing body of a county or municipal corporation may increase, 25
by local law, the percentage under paragraph (1) of this subsection. 26

(6) (i) If a RISE zone is renewed as provided under [§ 5 –1404] § 27
10–140 of the Economic Development Article, the governing body of a county or municipal 28
corporation shall calculate the amount of the tax credit under this section equal to at least 29
10% of the amount of property tax imposed on the eligible assessment of the qualified 30
property, AFTER FIRST APPLYING ANY CREDITS REQUIRED UNDER § 9–103 OF THIS 31
SUBTITLE, for the sixth through tenth taxable years. 32

(ii) The governing body of a county or municipal corporation may 33
increase, by local law, the percentage under subparagraph (i) of this paragraph. 34

(d) (1) Except as provided in subsection (c)(6) of this section, a tax credit under 35
this section is available to a qualified property for no more than 5 consecutive years 36
beginning with: 37
86 SENATE BILL 388

(I) the taxable year following the calendar year in which the real 1
property initially becomes a qualified property; OR 2

(II) THE TAXABLE YEAR IN WHICH THE REAL PR OPERTY 3
INITIALLY BECOMES A QUALIFIED PROPERTY, SUBJECT TO THE APPROVAL OF THE 4
APPROPRIATE LOCAL GOVERNING BODY AND THE DEPARTMENT OF COMMERCE. 5

(2) If the designation of a RISE zone expires, the tax credit under this 6
section continues to be available to a qualified property. 7

(3) State property tax imposed on real property is not affected by this 8
section. 9

(e) When a Regional Institution Strategic Enterprise zone is designated by the 10
[Secretary of Commerce] MARYLAND ECONOMIC DEVELOPMENT CORPORATION, the 11
[Secretary] CORPORATION shall certify to the State Department of Assessments and 12
Taxation: 13

(1) the real properties in the zone that are qualified properties for each 14
taxable year for which the property tax credit under this section is to be granted; and 15

(2) the date that the real properties became qualified properties. 16

(f) Before property tax bills are sent, the State Department of Assessments and 17
Taxation shall submit to the [Secretary of Commerce ] MARYLAND ECONOMIC 18
DEVELOPMENT CORPORATION a list containing: 19

(1) the location of each qualified property; 20

(2) the amount of the base year value for each qualified property; and 21

(3) the amount of the eligible assessment for each qualified property. 22

9–230. 23

(m) (1) On October 1 [of each year], 2026, AND EACH OCTOBER 1 24
THEREAFTER, each county and municipal corporation that has granted tax credits under 25
this section shall report to the Department [, the Department of Commerce, and the 26
Comptroller]: 27

[(1)] (I) [the amount of ] FOR each credit granted for that year , THE 28
FOLLOWING INFORMATION: 29

1. THE AMOUNT OF THE CREDIT; 30
SENATE BILL 388 87

2. THE NAME AND ADDRESS OF THE BUSINESS ENTITY; 1

3. THE INVESTMENT ASSOCIATED WITH THE CREDIT; 2

4. WHETHER THE CREDIT R ESULTED FROM AN 3
EXPANSION, A RELOCATION, OR A NEW BUSINESS; 4

5. THE NUMBER OF JOBS ASSOCIATED WITH THE CREDIT; 5

6. WHETHER THE BUSINESS ENTITY HAD A PRESENCE IN 6
THE STATE PRIOR TO RECEIV ING THE CREDIT AND T HE BUSINESS ENTITY’S YEARS 7
OF OPERATION; AND 8

7. THE TOTAL NUMBER OF INDIVIDUALS EMPLO YED BY 9
THE BUSINESS ENTITY; and 10

[(2)] (II) whether the business entity is in compliance with the 11
requirements for the tax credit. 12

(2) ON OR BEFORE DECEMBER 31, 2026, AND EACH DECEMBER 31 13
THEREAFTER, THE DEPARTMENT SHALL AGGR EGATE THE REPORTS RECEIVED 14
UNDER PARAGRAPH (1) OF THIS SUBSECTION AND SUBMIT A COMBINED REPORT TO 15
THE GENERAL ASSEMBLY, IN ACCORDANCE WITH § 2–1257 OF THE STATE 16
GOVERNMENT ARTICLE, INCLUDING ANY FINDINGS OR RECOMMENDATIONS. 17

SECTION 6. AND BE IT FURTHER ENACTE D, That the Laws of Maryland read 18
as follows: 19

Chapter 430 of the Acts of 2023 20

SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 21
1, 2023. [It shall remain effective for a period of 4 years and, at the end of June 30, 2027, 22
this Act, with no further action required by the General Assembly, shall be abrogated and 23
of no further force and effect.] 24

Chapter 431 of the Acts of 2023 25

SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 26
1, 2023. [It shall remain effective for a period of 4 years and, at the end of June 30, 2027, 27
this Act, with no further action required by the General Assembly, shall be abrogated and 28
of no further force and effect.] 29

88 SENATE BILL 388

Chapter 515 of the Acts of 2000, as amended by Chapter 98 of the Acts of 2005, 1
Chapter 20 of the Acts of 2010, Chapter 85 of the Acts of 2019, and Chapter 114 of 2
the Acts of 2021 3

SECTION 2. AND BE IT FURTHER ENACTED, That: 4

(a) Except as otherwise provided in this section, this Act shall be applicable to all 5
taxable years beginning after December 31, 1999 [but before January 1, 2026]. 6

(b) If a taxpayer’s taxable year for income tax purposes is not the calendar year[: 7

(1)], for the taxable year that ends in calendar year 2000, the taxpayer may 8
apply for a prorated credit for research and development expenses paid or incurred in the 9
taxable year for that part of the taxable year that falls in calendar year 2000[; and 10

(2) for the taxable year that begins in calendar year 2025, the taxpayer 11
may apply for only a pror ated credit for research and development expenses paid or 12
incurred in the taxable year for that part of the taxable year that falls in calendar year 13
2025]. 14

SECTION 4. AND BE IT FURTHER ENACTED, That this Act shall take effect July 15
1, 2000. [It shall remain effective for a period of 27 years and, at the end of June 30, 2027, 16
with no further action required by the General Assembly, this Act shall be abrogated and 17
of no further force and effect.] 18

Chapter 516 of the Acts of 2000, as amended by Chapter 98 of the Acts of 2005, 19
Chapter 20 of the Acts of 2010, Chapter 85 of the Acts of 2019, and Chapter 114 of 20
the Acts of 2021 21

SECTION 2. AND BE IT FURTHER ENACTED, That: 22

(a) Except as otherwise provided in this section, this Act shall be applicable to all 23
taxable years beginning after December 31, 1999 [but before January 1, 2026]. 24

(b) If a taxpayer’s taxable year for income tax purposes is not the calendar year[: 25

(1)], for the taxable year that ends in calendar year 2000, the taxpayer may 26
apply for a prorated credit for research and development expenses paid or incurred in the 27
taxable year for that part of the taxable year that falls in calendar year 2000[; and 28

(2) for the taxable year that begins in calendar year 2025, the taxpayer 29
may apply for on ly a prorated credit for research and development expenses paid or 30
incurred in the taxable year for that part of the taxable year that falls in calendar year 31
2025]. 32

SENATE BILL 388 89

SECTION 4. AND BE IT FURTHER ENACTED, That this Act shall take effect July 1
1, 2000. [It shall remain effective for a period of 27 years and, at the end of June 30, 2027, 2
with no further action required by the General Assembly, this Act shall be abrogated and 3
of no further force and effect.] 4

SECTION 7. AND BE IT FURTHER ENACTED, That the publ isher of the 5
Annotated Code of Maryland, in consultation with and subject to the approval of the 6
Department of Legislative Services, shall correct, with no further action required by the 7
General Assembly, cross –references and terminology rendered incorrect by this Act. The 8
publisher shall adequately describe any correction that is made in an editor’s note following 9
the section affected. 10

SECTION 8. AND BE IT FURTHER ENACTED, That: 11

(a) On or before December 1, 2026, the Office of the Comptroller shall report to the 12
General Assembly, in accordance with § 2 –1257 of the State Government Article, on its 13
current ability to track credits carried forward under § 10 –721 of the Tax – General Article 14
and potential methods to improve that tracking. 15

(b) On or before December 1, 2026, the Department of Commerce shall report to the 16
General Assembly, in accordance with § 2–1257 of the State Government Article, on whether 17
the refundable credit allowed under § 10 –721(d)(2) of the Tax – General Article for small 18
businesses is underutilized and, if so, potential reasons for and methods to address that 19
underutilization. 20

SECTION 9. AND BE IT FURTHER ENACTED, That: 21

(a) On or before December 1, 2026, the Department of Commerce shall evaluate the 22
tax credit allowed under § 10–730 of the Tax – General Article, as enacted under Section 5 23
of this Act, and report to the General Assembly, in accordance with § 2 –1257 of the State 24
Government Article, on the tax credit. 25

(b) The report under subsection (a) of this section shall include recommendations 26
on how the tax credit could be improved or streamlined, including potential reforms to: 27

(1) the list of eligible production activities; 28

(2) the small or independent film entity eligibility requirements, including 29
hiring requirements, and designated funding levels; 30

(3) the minimum in–State spending requirements for larger film production 31
entities; and 32

(4) the qualifying costs, including whether qualifying costs would be better 33
defined by administrative regulation. 34

90 SENATE BILL 388

SECTION 8. 10. AND BE IT FURTHER ENACTED, That Section 4 of this Act shall 1
be applicable to all taxable years beginning after December 31, 2025. 2

SECTION 9. 11. AND BE IT FURTHER ENACTED, That Section 5 of this Act shall 3
be applicable to all taxable years beginning after June 30, 2026. 4

SECTION 10. 12. AND BE IT FURTHER ENACTED, That Sections 1, 2, 3, 4, and 6 5
of this Act shall take effect July 1, 2026. 6

SECTION 11. 13. AND BE IT FURTHER ENACTED, That, except as provided in 7
Section 10 12 of this Act, this Act shall take effect June 1, 2026. 8

Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.