Bill Summary – FastDemocracy

HB 1169
                                  Department of Legislative Services
                                              Maryland General Assembly
                                                    2021 Session
                                         FISCAL AND POLICY NOTE
                                                First Reader
House Bill 1169                                 (Delegate Buckel)
Ways and Means
    Economic Development – Maryland Innovation Initiative University Expansion
                         Pilot Program – Establishment
This bill establishes the Maryland Innovation Initiative (MII) University Expansion Pilot
Program. The pilot program is implemented and administered by MII, which already exists
in the Maryland Technology Development Corporation (TEDCO). The purpose of the pilot
program is to – at Frostburg State University (FSU) – expand opportunities for technology
validation, entrepreneurial development, and industry engagement. FSU must pay an
annual contribution of $50,000 to qualify for participation in the program, and only FSU
is eligible to submit project proposals for funding under the pilot program. The Governor
must include an appropriation of $500,000 in fiscal 2023 and 2024 for the program. By
July 1, 2024, TEDCO must include information on the pilot program in its annual report to
the General Assembly. The bill takes effect July 1, 2021, and terminates June 30, 2024.
                                                      Fiscal Summary
State Effect: General fund expenditures increase by $500,000 in FY 2023 and 2024.
Higher education expenditures for FSU increase by $50,000 in FY 2023 and 2024. Special
fund revenues and expenditures for the MII Fund (MIIF) increase correspondingly. This
bill establishes a mandated appropriation in FY 2023 and 2024.
          (in dollars)              FY 2022               FY 2023                FY 2024               FY 2025               FY 2026
   SF Revenue                                 $0           $550,000               $550,000                       $0                    $0
   GF Expenditure                             $0           $500,000               $500,000                       $0                    $0
   SF Expenditure                             $0           $550,000               $550,000                       $0                    $0
   Higher Ed Exp.                             $0            $50,000                $50,000                       $0                    $0
   Net Effect                                 $0         ($550,000)             ($550,000)                       $0                    $0
Note:() = decrease; GF = general funds; FF = federal funds; SF = special funds; - = indeterminate increase; (-) = indeterminate decrease
Local Effect: The bill does not materially affect local government finances or operations.
Small Business Effect: Potential meaningful.
                                         Analysis
Bill Summary: To qualify for a grant under the pilot program, a project proposal must:
      support the creation of a new technology-based business in Maryland;
      advance technology toward commercialization of a product or service;
      foster entrepreneurial development at FSU;
      create an opportunity for meaningful economic impact in the region around FSU; or
      foster collaboration between FSU and an industry partner, including (1) product
       development with commercialization potential and (2) matching funds provided by
       the industry partner.
MII must develop criteria to review, evaluate, and rate project proposals for funding under
the pilot program, and grants must be distributed to projects based on the criteria.
The funding provided under the bill must supplement, not supplant, any funds that would
otherwise be provided to MII.
Current Law: Chapter 450 of 2012 established MII in TEDCO to promote technology
transfer from Maryland’s public and private nonprofit research institutions to the private
sector. The initiative is authorized to provide grant funding or equity investment financing
to a qualifying university, qualifying university-based entrepreneur, or other start-up entity
to promote the commercialization of technology developed in whole or in part by a
qualifying university.
The grant funding or equity investment financing must be awarded (1) to support
pre-commercial research on intellectual property; (2) to defray costs of evaluating the
feasibility of a technology becoming commercialized through a start-up company;
(3) to defray the direct costs of developing early-stage technology through a start-up
company; (4) to assess intellectual property issues, including licensing and patents; or
(5) for any other costs that the initiative’s participating members determine are appropriate,
given the initiative’s purpose.
Only qualifying universities may submit proposals for grant funding from the initiative.
Eligible universities must contribute specified amounts each year ($100,000 or $200,000,
depending on the university) to qualify for the program. The eligible universities are the
Johns Hopkins University; the University of Maryland, Baltimore Campus; the University
of Maryland, College Park Campus; Morgan State University; and the University of
Maryland Baltimore County.
HB 1169/ Page 2
State Fiscal Effect: General fund expenditures increase by $500,000 in fiscal 2023 and
2024 to fund the pilot program, as required by the bill, and higher education expenditures
for FSU increase by $50,000 annually in those years to qualify for the program.
Accordingly, special fund revenues for MIIF increase by $550,000 annually in fiscal 2023
and 2024. Special fund expenditures increase correspondingly to provide grants for eligible
purposes and to pay administrative expenses. TEDCO estimates administrative expenses
of approximately $130,000 annually for travel, marketing, legal services, information
technology, and on-site contractual assistance at FSU, leaving $420,000 available to be
distributed as grants in each year.
Small Business Effect: Small businesses likely benefit from projects funded under the
pilot program, although the overall program size and duration is limited.
Additional Comments: Chapter 207 of 2020 established the Task Force on the Economic
Future of Western Maryland, staffed by the Department of Commerce. The task force must
study the current economic conditions of Western Maryland and make recommendations
on potential methods to improve the economies of Allegany, Garrett, and Washington
counties. TEDCO participated as a member of the task force. The bill implements a
recommendation in the task force’s interim report.
                               Additional Information
Prior Introductions: None.
Designated Cross File: SB 802 (Senators Edwards and Corderman) - Finance and Budget
and Taxation.
Information Source(s): Maryland Technology Development Corporation; University
System of Maryland; Department of Budget and Management; Department of Legislative
Services
Fiscal Note History:      First Reader - March 3, 2021
rh/vlg
Analysis by: Stephen M. Ross                           Direct Inquiries to:
                                                       (410) 946-5510
                                                       (301) 970-5510
HB 1169/ Page 3
Statutes affected: 
Text - First - Economic Development – Maryland Innovation Initiative University Expansion Pilot Program – Establishment: 10-454 Economic Development, 10-455 Economic Development, 10-455 Economic Development, 10-457 Economic Development, 10-456 Economic Development, 10-461 Economic Development