SB 577
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Third Reader - Revised
Senate Bill 577 (Senators McCray and Edwards)
Finance and Budget and Taxation Rules and Executive Nominations
Economic Development - Makerspace Initiative Pilot Program
This bill establishes the Makerspace Initiative Pilot Program in the Maryland Technology
Development Corporation (TEDCO), subject to specified requirements, including that
TEDCO partner with the Open Works Center for Advanced Fabrication Technologies in
Baltimore City. The Makerspace Initiative Fund (MIF) is established in TEDCO for the
administration of the program. The Governor must include an appropriation in the annual
budget bill of at least $275,000 in fiscal 2023 and at least $450,000 in fiscal 2024 and 2025
for MIF. The bill terminates September 30, 2025.
Fiscal Summary
State Effect: General fund expenditures increase by $275,000 in FY 2023 and by
$450,000 annually in FY 2024 and 2025, as discussed below. Special fund revenues and
expenditures for MIF in TEDCO increase correspondingly, and may further increase from
loan repayments. Additional operational effects are discussed below. The bill establishes
a mandated appropriation from FY 2023 through 2025.
(in dollars) FY 2022 FY 2023 FY 2024 FY 2025 FY 2026
SF Revenue $0 $275,000 $450,000 $450,000 $0
GF Expenditure $0 $275,000 $450,000 $450,000 $0
SF Expenditure $0 $275,000 $450,000 $450,000 $0
Net Effect $0 ($275,000) ($450,000) ($450,000) $0
Note:() = decrease; GF = general funds; FF = federal funds; SF = special funds; - = indeterminate increase; (-) = indeterminate decrease
Local Effect: Local revenues and expenditures may increase from FY 2023 through 2025
as program funding is received, subject to a matching requirement, and expended.
Small Business Effect: Potential meaningful.
 Analysis
Bill Summary: TEDCO is required to award financial assistance under the program and
may do so to (1) a local government; (2) an agency, an instrumentality, or a nonprofit
corporation that a local government designates; or (3) a nonprofit entity operating or
seeking to operate a makerspace in the State. Funding must be used each year as shown in
Exhibit 1.
Exhibit 1
Use of Program Funds under the Bill
FY 2023 FY 2024 FY 2025
Establish makerspace programs with WMW $50,000 $50,000 $50,000
Establish or expand makerspaces in up to 125,000 250,000 250,000
four counties not served by WMW
Reimbursement for assistance provided by Open 50,000 100,000 100,000
Works Center in Baltimore City*
TEDCO administrative costs* 50,000 50,000 50,000
Total $275,000 $450,000 $450,000
TEDCO: Maryland Technology Development Corporation
WMW: Western Maryland Works
*Up to the specified amounts.
Source: Department of Legislative Services
A recipient of financial assistance (grants, loans, or similar assistance) under the program
must provide matching funds or in-kind contributions for the project at least equal to the
amount of financial assistance awarded. Generally, TEDCO is prohibited from awarding
more than $150,000 in financial assistance within a single county in a single fiscal year.
The Makerspace Initiative Fund
MIF is established in TEDCO as a special, nonlapsing fund, consisting of money
appropriated in the State budget, interest earnings, loan repayments, and any other money
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from any other source. MIF must be used to cover the costs of the program, which are
detailed above in Exhibit 1.
The Office of Legislative Audits (OLA) must audit the accounts and transactions of MIF
in accordance with current law.
Current Law: TEDCO is an independent entity established by the Maryland General
Assembly in 1998 to facilitate the creation of technology companies and encourage
collaboration between these emerging businesses and federal and State research
laboratories. TEDCO also aims to promote new research activity and investments that lead
to business development in Maryland.
To achieve its goals, TEDCO provides nonequity investments to early-stage technology
businesses, and it funds development and patenting of new technologies at research
universities. TEDCO also develops linkages with federal research facilities in the State and
helps companies pursue research funds from federal and other sources. The corporation’s
role was expanded in fiscal 2016 with the enactment of Chapter 141 of 2015 to transfer the
operation of the Maryland Venture Fund (MVF) and the biotechnology grant program from
the Department of Commerce. Except for MVF, which is a special fund, State support for
TEDCO’s programs is typically in the form of general funds.
State Fiscal Effect: This estimate assumes that the Governor provides the minimum
amount required by the bill’s mandated appropriations. Accordingly, general fund
expenditures increase by $275,000 in fiscal 2023 and by $450,000 annually in fiscal 2024
and 2025. Special fund revenues and expenditures for MIF increase correspondingly as
funds are received and then used for authorized purposes.
TEDCO advises that it requires one half-time staff to administer the program, and that total
administrative costs are approximately $50,000 annually, consistent with funding for this
purpose as authorized by the bill. TEDCO employees are not State employees. The
remaining available funding each year is sufficient to both (1) provide the specified
financial assistance and (2) make the specified reimbursements to the Open Works Center
in Baltimore City.
As the bill authorizes TEDCO to make loans, special fund revenues for MIF may further
increase from fiscal 2023 through 2025 as funds are repaid, followed by additional special
fund expenditures as those funds are redistributed under the program. It is unclear what
happens to any outstanding loan obligations or remaining funds upon termination of the
program.
The bill adds a mandated audit of MIF to existing OLA audit requirements. OLA advises
that it cannot accommodate additional audits within existing resources without negatively
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impacting current audit work plans. Therefore, the bill either (1) results in the reallocation
of resources from other regular and required audits, which may result in significant delays
in their completion or (2) requires additional personnel. Hiring a staff auditor 1 at a salary
of $55,000 would cost approximately $85,000, including salary and fringe benefits.
Small Business Effect: Eligible recipients of program funding are local governments and
nonprofits, which are not considered small businesses; however, incentivizing the creation
of makerspaces may benefit small businesses by providing greater access to production
facilities.
Additional Information
Prior Introductions: HB 1455 of 2020, a similar bill as amended, passed the House and
was referred to the Senate Finance and Senate Budget and Taxation committees. No further
action was taken. Its cross file, SB 826, received a hearing from the Senate Finance and
Senate Budget and Taxation committees, but no further action was taken.
Designated Cross File: HB 443 (Delegate McKay) - Ways and Means.
Information Source(s): Maryland Technology Development Corporation; Department
of Commerce; Department of Budget and Management; Baltimore City; Garrett,
Montgomery, and Prince George’s counties; Department of Legislative Services
Fiscal Note History: First Reader - February 16, 2021
rh/vlg Third Reader - April 9, 2021
Revised - Amendment(s) - April 9, 2021
Analysis by: Stephen M. Ross Direct Inquiries to:
(410) 946-5510
(301) 970-5510
SB 577/ Page 4


Statutes affected:
Text - First - Economic Development - Makerspace Initiative Pilot Program: 9-101 Economic Development, 10-401 Economic Development, 10-473 Economic Development, 10-474 Economic Development, 10-475 Economic Development, 10-476 Economic Development, 10-477 Economic Development, 6-226 State Finance and Procurement
Text - Third - Economic Development - Makerspace Initiative Pilot Program: 9-101 Economic Development, 10-401 Economic Development, 10-473 Economic Development, 10-474 Economic Development, 10-475 Economic Development, 10-476 Economic Development, 10-477 Economic Development, 6-226 State Finance and Procurement