MD Session Ends on High Note for Tech Sector, University-based Economic Development

The FY15 budget bill passed by Maryland lawmakers increases funding for three of the state’s high-tech tax credits and provides level funding for continued innovation-focused investments. Lawmakers also passed bills to fund endowed chairs, create zones to incentivize businesses, and establish a statewide internship program connecting students to small, technology businesses.

Under the approved budget, $12 million is available for investors claiming the Biotech Tax Credit, a $2 million increase over last year. The program provides refundable income tax credits equal to 50 percent of an eligible investment in seed and early stage biotechnology companies. Lawmakers increased by $1 million each funding for the Cyber Tax Credit ($4 million total) and R&D Tax Credit ($9 million total).

Level funding of $18.6 million was approved for the Maryland Technology Development Corporation (TEDCO), which includes $10.4 million for the Maryland Stem Cell Research Fund. Lawmakers also approved a bill establishing a new Cybersecurity Investment Fund to provide early stage seed funding for emerging companies focused on cybersecurity and technology product development. TEDCO will administer the fund.

Two university-based economic development bills were passed during the session. The Maryland E-Nnovation Initiative program (SB 601) allows tax credits to be auctioned to the private sector to match higher education funding in order to attract endowed chairs focused on science and technology research. Another measure (SB 600) establishes the Regional Institution Strategic Enterprise Zone, or RISE program. This program uses property and income tax credits and accelerated depreciated schedules to spur investment in areas around universities and other state and federal facilities.  

A measure aimed at connecting college students with tech firms won legislative support with the passage of HB 1317. The purpose is to connect college students, recent graduates and veterans with small innovative businesses in the high-growth technology sector. Supporters sought first-year funding of $190,000 to provide small businesses with $3,000 each year per intern. No funding was included in the final budget, however. Officials at the Baltimore Collegetown Network said they will seek public support in future years and are looking into grant and private funding for the program in the interim.

View the FY15 budget bill (SB 170).

Read the Maryland Chamber of Commerce Session in Review: http://mdchamber.org/issues-legislation/session-review.