HB 1342
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Third Reader
House Bill 1342 (Chair, Ways and Means Committee)(By Request -
Departmental - Commerce)
Ways and Means Finance
Economic Development - Partnership for Workforce Quality Program -
Alterations
This departmental bill expands the eligible use of funds under the Partnership for
Workforce Quality (PWQ) Program to include training for new employees. The bill takes
effect July 1, 2021.
Fiscal Summary
State Effect: Altering the permissible uses of program funding does not affect overall
State revenues or expenditures; however, program funds may be reallocated to different
recipients and used for different purposes. Accordingly, Baltimore City Community
College, as an eligible recipient of program funding, may be affected.
Local Effect: Minimal; however, community colleges are eligible recipients of program
funding and may be affected by the potential reallocation and use of program funds.
Small Business Effect: The Department of Commerce has determined that this bill has a
meaningful impact on small business (attached). The Department of Legislative Services
concurs with this assessment.
 Analysis
Current Law: The purpose of the PWQ Program, administered by Commerce, is to
provide training services to:
 improve the competitiveness and productivity of the State’s workforce and business
community;
 upgrade employee skills for new technologies or production processes; and
 assist employers located in the State in promoting employment stability.
In order to receive assistance under the program, a Maryland-based employer must request
training assistance in job-specific skills to upgrade or retain existing Maryland-based
employees (as covered under the State unemployment insurance law). Grants may be
awarded for job-specific training assistance to an eligible business, community college,
private career school, State-accredited training agency, trade association, or
union-sponsored training program. Manufacturers and employers threatened by the
pressures of increased foreign or domestic competition must be prioritized.
Program funds may be used for costs associated with the direct delivery of instruction,
including curriculum development, course materials, and instructors’ salaries and expenses
for training. The program may not contribute more than 50% of direct training costs for
job-specific training assistance. Program money may not be used for capital equipment for
an employer or trainee wages. An employer may not receive more than $200,000 per year
from the program.
The PWQ Fund is a special fund established to provide grants and cover the program’s
administrative and related costs. The Governor must include at least $1.0 million annually
in the State budget for the program. At least 60% of the money available to the program
must be reserved for employers with 150 or fewer employees based in the State. Up to 20%
of available program funding may be provided to an employer with more than
500 employees in limited circumstances.
Background: The PWQ Program provides reimbursable grants that match investments
made by Maryland’s manufacturing and technology companies in employee training. The
program was established in 1989 but slowly received less funding over time. The program
has received little or no funding for most of the past decade, but funding was provided
again beginning in fiscal 2018 – $1.0 million each year. In fiscal 2018 and 2019, program
grant funding supported 59 companies.
Commerce advises that the PWQ Program is designed specifically to upskill or retain
existing Maryland-based employees of manufacturers or businesses threatened by the
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pressure of increased competition. Consequently, the program does not cover new
employee workforce development or technology-based training.
The PWQ Program offers similar training support as the Maryland Business Works
(MBW) Program in the Maryland Department of Labor. However, the MBW Program is
primarily focused on encouraging apprenticeships and other areas that are not within the
purview of PWQ.
Additional Information
Prior Introductions: Legislation containing a similar expansion of the program was
considered during the 2020 legislative session. SB 26 passed the Senate and was referred
to the House Economic Matters Committee, but no further action was taken. Its cross file,
HB 851, passed the House with amendments and was referred to the Senate Finance
Committee, but no further action was taken.
Designated Cross File: None.
Information Source(s): Department of Commerce; Maryland Department of Labor;
Department of Legislative Services
Fiscal Note History: First Reader - March 10, 2021
rh/vlg Third Reader - March 22, 2021
Analysis by: Stephen M. Ross Direct Inquiries to:
(410) 946-5510
(301) 970-5510
HB 1342/ Page 3
 ANALYSIS OF ECONOMIC IMPACT ON SMALL BUSINESSES
TITLE OF BILL: Economic Development - Partnership for Workforce Quality Program -
Alterations
BILL NUMBER: HB 1342
PREPARED BY: Michael Siers
PART A. ECONOMIC IMPACT RATING
This agency estimates that the proposed bill:
___ WILL HAVE MINIMAL OR NO ECONOMIC IMPACT ON MARYLAND SMALL
BUSINESS
OR
X WILL HAVE MEANINGFUL ECONOMIC IMPACT ON MARYLAND SMALL
BUSINESSES
PART B. ECONOMIC IMPACT ANALYSIS
Skilled labor is critical to ensuring businesses are able to grow and thrive in Maryland. In 2020, a
survey of corporate executives found that skilled labor was the second most important factor for
site selection after highway access; 92.3 percent of respondents rated skilled labor as either “very
important” or “important.”
Nationally, there is a shortage of skilled workers in manufacturing and technology occupations.
A 2018 study by Deloitte estimated that 4.6 million manufacturing jobs will need to be filled
over the next decade, but that 2.4 million of those jobs may remain unfilled due to a lack of
skilled workers. Even in the current economic landscape, Maryland employers are facing
challenges in hiring skilled workers. In August 2020, according to data from the Maryland
Workforce Exchange, there were 2,642 openings for production workers but only 1,095
candidates registered with the exchange. For computer and math occupations, there were 12,186
job openings and only 2,616 candidates in the system.
Skills shortages inhibit the ability of businesses to expand or even open their doors in Maryland
in the first place. This has significant impacts on Maryland’s economy. For example, jobs in
manufacturing and technology generally pay more than the average wage in Maryland. For
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example, in 2019 the average wage in manufacturing was $79,011 while the average Maryland
salary from a private employer was $60,498.
The proposed legislation aims to reduce the skilled labor gap in two critical sectors,
manufacturing and technology, by altering the Partnership for Workforce Quality (PWQ)
program. Currently, the PWQ program provides matching grants to companies for them to
upskill and train existing workers. This approach has successfully supported the training of tens
of thousands of Maryland employees since its inception. The program provided funding that
helped support training 1,210 workers in fiscal year 2018 and 1,038 workers in fiscal year 2019.
However, the current approach is limited only to helping retrain existing workers.
If PWQ is expanded and funds can be used to train new employees, small businesses will have
an easier time hiring and expanding within Maryland. This will lead to a number of benefits for
Maryland’s economy, including:
 In the short-run, Maryland’s manufacturing and technology companies will be able to
expand their operations. This expansion will lead to higher levels of employment,
income, and economic activity at supplier firms. This in turn will bring in more tax
revenue for state and local governments.
 Expanded workforce training programs will provide greater access to high-quality jobs
for traditionally disadvantaged workers. Broadly, traditionally disadvantaged workers
face higher levels of unemployment and one of the key barriers to employment for these
workers is a lack of the specialized skills employers are currently requesting. By
supporting businesses in conducting workforce training, the state can help promote better
outcomes for many of Maryland’s more vulnerable residents.
 Expanding the talent base in Maryland will encourage other companies to relocate in
Maryland or to form in the state over the long-run. Agglomeration, or the practice of
similar businesses locating near each other, helps create a feedback loop attracting more
and more companies to locate in an area. Agglomeration occurs as companies take
advantage of a broad talent base, the ability to work and share knowledge with firms in
the area, and the established network of suppliers in the area. By helping Maryland
companies expand the state’s talent base, the proposed legislation can help create the
feedback loops that will hopefully drive economic development in the state far into the
future.
HB 1342/ Page 5


Statutes affected:
Text - First - Economic Development - Partnership for Workforce Quality Program - Alterations: 3-401 Economic Development, 3-402 Economic Development, 3-403 Economic Development, 3-405 Economic Development
Text - Third - Economic Development - Partnership for Workforce Quality Program - Alterations: 3-401 Economic Development, 3-402 Economic Development, 3-403 Economic Development, 3-405 Economic Development