HOUSE BILL 1279
C8, Q3, Q2 1lr2239
CF SB 778
By: Delegate Luedtke
Introduced and read first time: February 8, 2021
Assigned to: Ways and Means
A BILL ENTITLED
1 AN ACT concerning
2 Regional Institution Strategic Enterprise Zone Program – Alterations
3 FOR the purpose of expanding the purposes of the Regional Institution Strategic Enterprise
4 Zone Program; establishing the Regional Institution Strategic Enterprise Zone Fund
5 in the Department of Commerce to be used for certain purposes; providing for the
6 investment of money in and expenditures from the Fund; prohibiting the Secretary
7 of Commerce from approving a Regional Institution Strategic Enterprise (RISE) zone
8 the geographic area of which exceeds a certain amount; providing for the termination
9 of the Program; altering eligibility for tax incentives that a business entity that
10 locates in a RISE zone may receive under certain circumstances; authorizing a
11 certain qualified institution, a county, a municipal corporation, or a certain entity of
12 a county or a municipal corporation to establish a certain program to provide rental
13 assistance to a business entity that moves into or locates in a RISE zone; authorizing
14 a qualified institution, a county, a municipal corporation, or a certain entity of a
15 county or a municipal corporation that establishes a rental assistance program in
16 accordance with this Act to submit a certain request to receive a distribution of
17 certain funds from the Fund; requiring the Department to make available a certain
18 amount of funds to match certain rental assistance funds; requiring the Department
19 to review certain requests and distribute certain funds under certain circumstances;
20 requiring a certain applicant to deposit certain rental assistance funds into a certain
21 fund within a certain period of time; providing for the reallocation of certain funds
22 under certain circumstances; requiring the Department to submit an annual report
23 to the Governor and certain committees of the General Assembly on certain matters;
24 authorizing certain companies to claim an enhanced State income tax credit under
25 certain circumstances; defining certain terms; making conforming changes;
26 providing for the application of certain provisions of this Act; providing for the
27 effective dates of this Act; and generally relating to the Regional Institution Strategic
28 Enterprise Zone Program.
29 BY repealing and reenacting, with amendments,
EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb1279*
2 HOUSE BILL 1279
1 Article – Economic Development
2 Section 5–1401, 5–1402, 5–1404(b) and (f), 5–1406, and 5–1407
3 Annotated Code of Maryland
4 (2018 Replacement Volume and 2020 Supplement)
5 BY repealing and reenacting, without amendments,
6 Article – Economic Development
7 Section 5–1404(a)
8 Annotated Code of Maryland
9 (2018 Replacement Volume and 2020 Supplement)
10 BY adding to
11 Article – Economic Development
12 Section 5–1407, 5–1408, and 5–1410
13 Annotated Code of Maryland
14 (2018 Replacement Volume and 2020 Supplement)
15 BY repealing and reenacting, without amendments,
16 Article – State Finance and Procurement
17 Section 6–226(a)(2)(i)
18 Annotated Code of Maryland
19 (2015 Replacement Volume and 2020 Supplement)
20 BY repealing and reenacting, with amendments,
21 Article – State Finance and Procurement
22 Section 6–226(a)(2)(ii)122. and 123.
23 Annotated Code of Maryland
24 (2015 Replacement Volume and 2020 Supplement)
25 BY adding to
26 Article – State Finance and Procurement
27 Section 6–226(a)(2)(ii)124.
28 Annotated Code of Maryland
29 (2015 Replacement Volume and 2020 Supplement)
30 BY repealing and reenacting, without amendments,
31 Article – Tax – General
32 Section 10–725(b)(1) and 10–733(b)(1)
33 Annotated Code of Maryland
34 (2016 Replacement Volume and 2020 Supplement)
35 BY repealing and reenacting, with amendments,
36 Article – Tax – General
37 Section 10–725(d)(1) and 10–733(d)(1)
38 Annotated Code of Maryland
39 (2016 Replacement Volume and 2020 Supplement)
HOUSE BILL 1279 3
1 BY repealing and reenacting, without amendments,
2 Article – Tax – Property
3 Section 9–103.1(a)(1) and (b)
4 Annotated Code of Maryland
5 (2019 Replacement Volume and 2020 Supplement)
6 BY repealing and reenacting, with amendments,
7 Article – Tax – Property
8 Section 9–103.1(a)(4) and (6) and (d)(2)
9 Annotated Code of Maryland
10 (2019 Replacement Volume and 2020 Supplement)
11 BY adding to
12 Article – Tax – Property
13 Section 9–103.1(a)(7)
14 Annotated Code of Maryland
15 (2019 Replacement Volume and 2020 Supplement)
16 SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
17 That the Laws of Maryland read as follows:
18 Article – Economic Development
19 5–1401.
20 (a) In this subtitle the following words have the meanings indicated.
21 (b) “Area” means a geographic area in one or more political subdivisions in the
22 State described by a closed perimeter boundary.
23 (C) “FUND” MEANS THE REGIONAL INSTITUTION STRATEGIC ENTERPRISE
24 ZONE FUND CREATED UNDER § 5–1408 OF THIS SUBTITLE.
25 [(c)] (D) “Nonprofit organization” means an organization that is exempt or
26 eligible for exemption from taxation under § 501(c)(3) of the Internal Revenue Code.
27 [(d)] (E) “Qualified institution” means an entity that is designated as a qualified
28 institution under § 5–1403 of this subtitle and may include:
29 (1) a regional higher education center as defined under § 10–101 of the
30 Education Article;
31 (2) an institution of higher education as defined under § 10–101 of the
32 Education Article; or
33 (3) a nonprofit organization that is affiliated with a federal agency.
4 HOUSE BILL 1279
1 [(e)] (F) “RISE zone” means a geographic area in immediate proximity to a
2 qualified institution that is targeted for increased economic and community development
3 that meets the requirements of § 5–1404 of this subtitle and is designated as a Regional
4 Institution Strategic Enterprise zone by the Secretary under § 5–1404 of this subtitle.
5 5–1402.
6 The [purpose] PURPOSES of the Regional Institution Strategic Enterprise Zone
7 Program [is] ARE to access institutional assets that have a strong and demonstrated
8 history of commitment to economic development and revitalization in the communities in
9 which they are located AND INCENTIVIZE THE LOCATION OF INNOVATIVE START–UP
10 BUSINESSES BASED ON TECHNOLOGY DEVELOPED, LICENSED, OR POISED FOR
11 COMMERCIALIZATION AT OR IN COLLABORATION WITH QUALIFIED MARYLAND
12 INSTITUTIONS.
13 5–1404.
14 (a) On or after July 1, 2015, a qualified institution shall apply jointly with a
15 county, a municipal corporation, or the economic development agency of a county or
16 municipal corporation to the Secretary to designate an area as a Regional Institution
17 Strategic Enterprise zone.
18 (b) The application shall:
19 (1) be in the form and contain the information that the Secretary requires
20 by regulation;
21 (2) state the boundaries of the area of the proposed RISE zone, NOT
22 EXCEEDING 500 ACRES;
23 (3) describe the nexus of the RISE zone with the qualified institution; and
24 (4) contain a plan that identifies the target strategy and anticipated
25 economic impacts of the RISE zone.
26 (f) (1) (i) Subject to subparagraph (ii) of this paragraph, the designation of
27 an area as a RISE zone is effective for 5 years.
28 (ii) Upon a joint application of a qualified institution, a county and,
29 if applicable, a municipal corporation, or the economic development agency of a county or
30 municipal corporation, the Secretary may renew a RISE zone for an additional 5 years.
31 (2) The Secretary may not:
32 (I) approve more than three RISE zones in a single county or
33 municipal corporation; OR
HOUSE BILL 1279 5
1 (II) APPROVE A RISE ZONE THE GEOGRAPHIC AREA OF WHICH
2 EXCEEDS 500 ACRES.
3 5–1406.
4 (a) (1) To the extent provided for in this section, a business entity that locates
5 in a RISE zone is entitled to:
6 (i) FOR A BUSINESS ENTITY THAT LOCATES IN THE RISE ZONE
7 BEFORE JANUARY 1, 2023, the property tax credit under § 9–103.1 of the Tax – Property
8 Article;
9 (ii) FOR A TAXABLE YEAR BEGINNING BEFORE JANUARY 1,
10 2023, the income tax credit under § 10–702 of the Tax – General Article; and
11 (iii) priority consideration for financial assistance from programs in
12 Subtitle 1 of this title.
13 (2) For purposes of the income tax credit authorized under paragraph (1)(ii)
14 of this subsection, the business entity is treated as being located in an enterprise zone.
15 (b) [A] SUBJECT TO THE LIMITATIONS UNDER SUBSECTION (A) OF THIS
16 SECTION, A business entity that moves into or locates in a RISE zone on or after the date
17 that the zone is designated under this subtitle may qualify for the incentives under this
18 section.
19 (c) A business entity may not qualify for the incentives under subsection (a) of
20 this section unless the Department, in consultation with the county or municipal
21 corporation in which a RISE zone is located, certifies the business entity and its location as
22 consistent with the target strategy of the RISE zone.
23 (d) (1) Unless a business entity makes a significant capital investment or
24 expansion of its labor force after a RISE zone is designated, the incentives under this
25 section are not available to a business entity that was in a RISE zone before the date that
26 the zone is designated.
27 (2) The Department shall adopt regulations establishing factors to
28 determine if a business entity makes a significant capital investment or expansion of its
29 labor force under paragraph (1) of this subsection.
30 5–1407.
31 (A) (1)
A QUALIFIED INSTITUTION, A COUNTY AND, IF APPLICABLE, A
32 MUNICIPAL CORPORATION, OR THE ECONOMIC DEVELOPMENT AGENCY OF A
33 COUNTY OR MUNICIPAL CORPORATION MAY ESTABLISH A PROGRAM TO PROVIDE
6 HOUSE BILL 1279
1 RENTAL ASSISTANCE TO A BUSINESS ENTITY THAT:
2 (I)MOVES INTO OR LOCATES IN A RISE ZONE ON OR AFTER
3 THE DATE THAT THE ZONE IS DESIGNATED UNDER THIS SUBTITLE; AND
4 (II) HAS BEEN IN ACTIVE BUSINESS NOT LONGER THAN 7 YEARS.
5 (2) (I)
A QUALIFIED INSTITUTION, A COUNTY AND, IF APPLICABLE,
6 A MUNICIPAL CORPORATION, OR THE ECONOMIC DEVELOPMENT AGENCY OF A
7 COUNTY OR MUNICIPAL CORPORATION THAT ESTABLISHES A RENTAL ASSISTANCE
8 PROGRAM IN ACCORDANCE WITH PARAGRAPH (1) OF THIS SUBSECTION MAY SUBMIT
9 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
12 PROGRAM;
13 2.
THE AMOUNT OF FUNDING THAT THE APPLICANT HAS
14 SECURED TO PROVIDE RENTAL ASSISTANCE UNDER THE RENTAL ASSISTANCE
15 PROGRAM;
16 3.
THE AMOUNT REQUESTED FOR DISTRIBUTION FROM
17 THE FUND IN ACCORDANCE WITH THIS SECTION; AND
18 4. ANY OTHER INFORMATION REQUESTED BY THE
19 DEPARTMENT.
20 (B) (1) THE DEPARTMENT SHALL REVIEW EACH REQUEST FOR
21 DISTRIBUTION OF MATCHING FUNDS FROM THE FUND FOR COMPLIANCE WITH THE
22 PROVISIONS OF THIS SECTION AND DEPARTMENT REGULATIONS.
23 (2) SUBJECT TO THE AVAILABILITY OF FUNDS IN THE FUND AND
24 PARAGRAPH (3) OF THIS SUBSECTION, IF THE DEPARTMENT APPROVES A REQUEST
25 FOR DISTRIBUTION OF MATCHING FUNDS FROM THE FUND, THE DEPARTMENT
26 SHALL DISTRIBUTE TO A FUND DEDICATED TO THE APPLICANT’S RENTAL
27 ASSISTANCE PROGRAM AN AMOUNT EQUAL TO THREE TIMES THE AMOUNT OF
28 FUNDING SPECIFIED UNDER SUBSECTION (A)(2)(II)2 OF THIS SECTION.
29 (3) EXCEPT AS PROVIDED IN SUBSECTION (C) OF THIS SECTION, THE
30 DEPARTMENT SHALL MAKE AVAILABLE NOT MORE THAN 25% OF CUMULATIVE
31 PROGRAM FUNDS FROM THE FUND FOR RENTAL ASSISTANCE PROGRAMS IN A
32 SINGLE RISE ZONE.
HOUSE BILL 1279 7
1 (C) (1)WITHIN 90 DAYS AFTER APPROVAL BY THE DEPARTMENT OF A
2 REQUEST FOR MATCHING FUNDS UNDER SUBSECTION (A) OF THIS SECTION, THE
3 APPLICANT SHALL DEPOSIT AN AMOUNT EQUAL TO OR GREATER THAN THE AMOUNT
4 SPECIFIED UNDER SUBSECTION (A)(2)(II)2 OF THIS SECTION INTO A FUND
5 DEDICATED TO THE APPLICANT’S RENTAL ASSISTANCE PROGRAM.
6 (2)IF AN APPLICANT FAILS TO HAVE DEPOSITED THE AMOUNT
7 REQUIRED UNDER PARAGRAPH (1) OF THIS SUBSECTION, ANY PORTION OF FUNDS
8 ALLOCATED TO THE APPLICANT THAT HAS NOT BEEN DISTRIBUTED SHALL BE
9 REALLOCATED TO ANOTHER APPLICANT IN ACCORDANCE WITH THIS SECTION.
10 (3) IF THE DEPARTMENT FAILS TO ALLOCATE THE FUNDS IN THE
11 FUND UNDER THIS SUBTITLE AND RENTAL ASSISTANCE PROGRAMS IN A SINGLE
12 RISE ZONE HAVE PREVIOUSLY RECEIVED 25% OF CUMULATIVE PROGRAM FUNDS
13 FROM THE FUND, THE DEPARTMENT MAY DISTRIBUTE ADDITIONAL FUNDS TO
14 APPLICANTS FOR THAT RISE ZONE IN ACCORDANCE WITH THIS SUBTITLE.
15 5–1408.
16 (A) THERE IS A REGIONAL INSTITUTION STRATEGIC ENTERPRISE FUND IN
17 THE DEPARTMENT.
18 (B) THE SECRETARY SHALL MANAGE AND SUPERVISE THE FUND.
19 (C) (1) THE FUND IS A SPECIAL, NONLAPSING FUND THAT IS NOT
20 SUBJECT TO § 7–302 OF THE STATE FINANCE AND PROCUREMENT ARTICLE.
21 (2)THE STATE TREASURER SHALL HOLD THE FUND SEPARATELY,
22 AND THE COMPTROLLER SHALL ACCOUNT FOR THE FUND.
23 (D) THE FUND CONSISTS OF:
24 (1) MONEY APPROPRIATED IN THE STATE BUDGET TO THE FUND; AND
25 (2) ANY OTHER MONEY FROM ANY OTHER SOURCE ACCEPTED FOR
26 THE BENEFIT OF THE FUND.
27 (E) THE DEPARTMENT MAY USE THE FUND TO:
28 (1) FINANCE, IN COORDINATION WITH QUALIFIED INSTITUTIONS,
29 COUNTIES, AND MUNICIPAL CORPORATIONS, THE PROVISION OF RENTAL
30 ASSISTANCE TO BUSINESS ENTITIES LOCATED IN RISE ZONES; AND
8 HOUSE BILL 1279
1 (2)
PAY THE RELATED ADMINISTRATIVE, LEGAL, AND ACTUARIAL
2 EXPENSES OF THE DEPARTMENT.
3 (F) (1)
THE STATE TREASURER SHALL INVEST THE MONEY OF THE FUND
4 IN THE SAME MANNER AS OTHER STATE MONEY MAY BE INVESTED.
5 (2) ANY INVESTMENT EARNINGS OF THE FUND SHALL BE CREDITED
6 TO THE FUND.
7 (G)
EXPENDITURES FROM THE FUND MAY BE MADE ONLY IN ACCORDANCE
8 WITH THE STATE BUDGET.
9 [5–1407.] 5–1409.
10 (a) The Department and the Comptroller jointly shall assess each year the
11 effectiveness of the tax incentives provided to business entities in RISE zones, including:
12 (1) the number and amounts of tax incentives granted each year; and
13 (2) the success of the tax incentives in attracting and retaining business
14 entities in RISE zones.
15 (b) On or before December 15 of each year, the Department and the Comptroller
16 shall submit to the Governor and, in accordance with § 2–1257 of the State Government
17 Article, the Senate Budget and Taxation Committee, the House Committee on Ways and
18 Means, and the Tax Credit Evaluation Committee a report outlining the findings of the
19 Department and the Comptroller and any other information of value in determining the
20 effectiveness of the tax incentives authorized under this subtitle.
21 (C)
ON OR BEFORE DECEMBER 15 EACH YEAR, THE DEPARTMENT SHALL
22 SUBMIT TO THE GOVERNOR AND, IN ACCORDANCE WITH § 2–1257 OF THE STATE
23 GOVERNMENT ARTICLE, THE SENATE BUDGET AND TAXATION COMMITTEE AND
24 THE HOUSE COMMITTEE ON WAYS AND MEANS A REPORT DETAILING WITH
25 RESPECT TO EACH RISE ZONE IN WHICH A RENTAL ASSISTANCE PROGRAM HAS
26 BEEN ESTABLISHED:
27 (1) THE ENTITY ADMINISTERING THE RENTAL ASSISTANCE PROGRAM;
28 (2) THE AMOUNT OF FUNDS RECEIVED DURING THE PREVIOUS FISCAL
29 YEAR;
30 (3) THE CUMULATIVE AMOUNT OF FUNDS RECEIVED; AND
31 (4) THE AMOUNT OF FUNDS REMAINING UNSPENT AT THE END OF THE
HOUSE BILL 1279 9