HB 654
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Enrolled - Revised
House Bill 654 (Delegate Qi)
Ways and Means Finance
Maryland Small Business Innovation Research and Technology Transfer
Incentive Program - Alterations
This bill modifies and clarifies requirements for the Maryland Small Business Innovation
Research and Technology Transfer (SBIR/STTR) Incentive Program established by
Chapters 8 and 25 of 2021. Under the bill, the program must prioritize awards and
investments to eligible small businesses that are engaged in research and development
activities that assist in the prevention of, preparedness for, or response to a public health
crisis in the State. A recipient of funding under the program must remain a “qualified
business” for at least two years, or return the funds. An existing coordination and marketing
requirement is broadened to specifically include minority-owned, women-owned, and rural
small businesses. Finally, defined terms used for purposes of qualifying under the program
are clarified. The bill takes effect July 1, 2021.
Fiscal Summary
State Effect: The bill is not anticipated to affect overall revenues or expenditures for the
program, but it may reallocate funding between eligible recipients.
Local Effect: The bill does not materially affect local government finances or operations.
Small Business Effect: Potential meaningful.
Analysis
Current Law: Chapters 8 and 25 of 2021 established the Maryland SBIR/STTR program
in the Maryland Technology Development Corporation (TEDCO) following a veto
override of 2020 legislation.
SBIR/STTR grants are those awarded by the National Institutes of Health under the SBIR
and STTR grant programs, respectively, or a similar program administered by another
federal agency, for a business to engage in research and development that has a strong
potential for commercialization.
To qualify for an award or investment under the program, a small business must (1) meet
the existing definition of a qualified business in State law and (2) have received an
SBIR/STTR Phase I or Phase II award during the six months immediately preceding the
submission of its program application.
Subject to the above eligibility requirements, specified application requirements, and the
availability of funding for the program, an eligible small business may apply for an award
or investment of 25% of an SBIR/STTR award, limited to $25,000 for Phase I funding or
$75,000 for Phase II funding. Awards or investments may exceed the maximum amount
under specified circumstances. TEDCO may make up to 20 Phase I awards or investments
and 10 Phase II awards or investments per fiscal year. Businesses are limited to 1 award or
investment per fiscal year and up to 3 awards or investments in total.
An award or investment recipient that fails to fulfill the eligibility and maintenance
requirements of the program may be required to return all or part of the funds received
under the program, as well as any accrued interest or fees. If the recipient does not remain
in the State for at least two years after receiving program funds, the return is mandatory.
The program must coordinate with comparable State and county programs to conduct
marketing and outreach and to provide assistance to eligible businesses under the program.
Maryland SBIR/STTR Incentive Matching Fund
The Maryland SBIR/STTR Incentive Matching Fund is established as a special, nonlapsing
fund, administered by TEDCO. The fund may be used only to provide awards or
investments to eligible small businesses and to pay the costs necessary to administer the
program, including marketing, outreach, and technical assistance.
Qualified Business
For the purposes of TEDCO programs, “qualified business” generally means a business
that, at the time of the first investment in the business under a program:
either (1) has its principal business operations located in the State, has over half its
workforce working in the State, and intends to maintain its principal business
operations in the State after receiving an investment under the program or (2) is a
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start-up business that is approved by the TEDCO investment committee and will, as
a result of the investment, have a substantial economic impact in the State;
has agreed to use the investment primarily to support business operations in the State
or, in the case of a start-up company, establish and support business operations in
the State;
has up to 250 employees; and
is not primarily engaged in specified industries or activities.
Small Business Effect: Under the bill, the program must prioritize awards and
investments to eligible small businesses that are engaged in research and development
activities that assist in the prevention of, preparedness for, or response to a public health
crisis in the State. Depending on available funding for the program, this may lead to some
small businesses receiving funding when they otherwise would not, and some small
businesses not receiving funding when they otherwise would. The effect on any particular
small business could be meaningful.
Additional Comments: The U.S. Small Business Administration Office of Technology
administers the SBIR Program and the STTR Program. Phase I awards are made to evaluate
the feasibility and merit of a scientific or technical idea. Phase II awards are granted to
expand on the results of a Phase I concept.
Additional Information
Prior Introductions: None.
Designated Cross File: None.
Information Source(s): Maryland Technology Development Corporation; Department of
Legislative Services
Fiscal Note History: First Reader - February 3, 2021
rh/vlg Third Reader - March 20, 2021
Revised - Amendment(s) - March 20, 2021
Enrolled - April 10, 2021
Revised - Amendment(s) - April 10, 2021
Analysis by: Stephen M. Ross Direct Inquiries to:
(410) 946-5510
(301) 970-5510
HB 654/ Page 3
Statutes affected: Text - First - Maryland Small Business Innovation Research and Technology Transfer Incentive Program: 6-226 State Finance and Procurement
Text - Third - Maryland Small Business Innovation Research and Technology Transfer Incentive Program - Alterations: 10-473 State Finance and Procurement, 10-474 State Finance and Procurement, 10-475 State Finance and Procurement, 10-476 State Finance and Procurement, 10-476 State Finance and Procurement, 10-477 State Finance and Procurement, 6-226 State Finance and Procurement
Text - Enrolled - Maryland Small Business Innovation Research and Technology Transfer Incentive Program - Alterations: 10-473 Economic Development, 10-474 Economic Development, 10-475 Economic Development, 10-476 Economic Development, 10-476 Economic Development, 10-477 Economic Development, 6-226 State Finance and Procurement