Sec. 20-75. Use of Fund.

   (a)   The Director may spend or allocate funds from this Fund consistent with the economic development strategic plan approved under Section 15A-4A, including the following criteria:

      (1)   the proposed assistance will materially improve the County’s economy and advance County economic development objectives and strategies; or

      (2)   the assistance is necessary to:

         (A)   bring a significant number of new jobs to the County;

         (B)   add a significant number of new jobs to an existing operation in the County;

         (C)   retain a significant number of jobs at an existing operation in the County or

         (D)   respond to other economic development objectives.

   (b)   The Director must provide the Council with all fiscal analyses and other supporting documents for any proposed offer of assistance to a private employer valued at more than $100,000. The supporting documents must include:

      (1)   the name, industry, location, employee compensation profile, and estimated current and future taxes paid by the prospective recipient;

      (2)   the estimated employment and tax revenue gains resulting from the proposed assistance;

      (3)   each assumption, variable, and model used to generate estimates of employment and tax revenue gains;

      (4)   the number of new residents estimated to move into the County resulting from gains in employment by the proposed recipient;

      (5)   the number and cost of new students estimated to enroll in County public schools;

      (6)   an analysis of how the proposed assistance supports the overall goals of the economic development strategy; and

      (7)   offers, if any, made by or expected from other competing jurisdictions.

   (c)   The Executive must notify the Council at least 5 working days before the Executive tentatively offers assistance valued at more than $100,000 to a private employer, including all fiscal analyses and other supporting documents described in subsection (b). During a Council recess of one week or longer, the Executive must notify the Council at least 10 working days before the Executive tentatively offers assistance valued at more than $100,000 to a private employer. If during either notice period the Council President notifies the Executive that more time is necessary for the Council to review the tentative offer, the Executive must wait an additional 5 working days (or 10 working days during a Council recess) before making a tentative offer of assistance to the private employer.

   (d)   The Executive must not provide assistance to a private employer valued at more than $500,000 unless the grant, loan, or equity investment is approved by the Council in a special or supplemental appropriation. The amount of any discount from market value in the sale of County property offered as part of the assistance must be included in the value of assistance. The Executive must submit an economic development agreement to the Council within 60 days after all parties to the agreement execute it.

   (e)   The notice required under subsection (c) must also specify the proposed terms of any assistance offered, including any repayment provisions.

   (f)   Except as provided in subsection (h), the terms and conditions of any assistance from the Fund:

      (1)   must be specified in a written agreement between the County and the recipient; and

      (2)   except to the extent expressly inconsistent with any other federal, state, or County law, must:

         (A)   require the recipient to meet certain eligibility criteria and, if applicable, performance criteria specified in the offer of assistance;

         (B)   grant the Director the right to audit or monitor the recipient’s compliance with the terms and conditions of assistance;

         (C)   require periodic reports, if applicable, from the recipient;

         (D)   prohibit the use of assistance from the Fund for unauthorized purposes; and

         (E)   provide remedies for the County, including the repayment of assistance, if the recipient:

            (i)   uses the assistance for an unauthorized purpose;

            (ii)   fails to meet eligibility criteria and, if applicable, performance criteria specified in the written agreement; or

            (iii)   otherwise breaches the written agreement.

   (g)   Each recipient of assistance from the fund, or of any other economic development financial assistance provided by the County, that cumulatively exceeds $500,000 and is designated for construction, must meet the prevailing wage requirements of Section 11B-33C for each employee (including an employee of a contractor or subcontractor) performing direct and measurable work on the construction for which the assistance is received. In addition to any repayment requirement under this Section, the enforcement provisions of Section 11B-33C(i) apply to noncompliance with this requirement by a recipient of economic development assistance.

   (h)   The requirements of subsection (f) do not apply to assistance from the Fund if the Director determines that the assistance program does not require program recipients to comply with any terms or conditions after receipt of the assistance. (1995 L.M.C., ch. 29, § 1; 2008 L.M.C., ch. 31, § 2; 2012 L.M.C., ch. 17, § 1; 2013 L.M.C., ch. 10, § 1; 2021 L.M.C., ch. 5, § 1; 2021 L.M.C., ch. 12, § 1.)

   Editor’s note—See County Attorney Opinion dated 12/21/99 indicating that the Maryland Economic Development Corporation (MEDCO) may be appointed as the agent of the County Department of Economic Development to carry out a variety of tasks, but loan payments must be made to the Economic Development Fund.

   2008 L.M.C., ch. 31, § 3, states: Effective Date. This Act applies to any County financed construction contract that takes effect on or after July 1, 2009, but does not apply to any renewal or extension of a contract that took effect before July 1, 2009.

Sec. 20-75A. Equity investments.

   (a)   Subject to Section 20-75, the County may make and equity investment through the Economic Development Fund in a company that is located in the County or that agrees to relocate its business to the County.

   (b)   The proceeds of an equity investment made under subsection (a) may be used for:

      (1)   working capital;

      (2)   salaries;

      (3)   marketing materials;

      (4)   acquisition of inventory, equipment, or real property;

      (5)   construction;

      (6)   renovation;

      (7)   leasehold improvements; or

      (8)   research and development.

   (c)   The County may not acquire an ownership interest exceeding 25% of any company.

   (d)   The terms of an equity investment must be set forth in a funding agreement that prohibits the County from:

      (1)   participating in the selection of the management of the company;

      (2)   overseeing the operation of the company; and

      (3)   assuming any present or future liability of the company.

   (e)   A funding agreement may be:

      (1)   an investment agreement;

      (2)   a limited partnership agreement;

      (3)   a preferred stock purchase agreement; or

      (4)   other documents that the County may require.

   (f)   The Director of Finance must:

      (1)   record the value of the equity investment in the County’s Financial Statements consistent with Generally Accepted Accounting Principles;

      (2)   manage all equity investments acquired in accordance with the funding agreement and State and County law; and

      (3)   post notice of each equity investment made under this Section in a readily accessible and clearly identified location on the County website within 5 days after the date on which the County initiates the equity investment transaction.

   (g)   If an equity investment is liquidated through a sale or other disposition, the proceeds must be deposited in the County’s general fund. (2013 L.M.C., ch. 10, § 1.)

Sec. 20-76. Economic Development Fund Administration.

   (a)   The Executive may adopt Regulations under method (1) to administer the Economic Development Fund.

   (b)   The Executive must report by March 15 each year on the status and use of the Fund. This report can be included in the Executive’s proposed operating budget. The annual report must:

      (1)   describe the success of each award of financial assistance in satisfying the economic development goals supporting the assistance;

      (2)   identify any assistance agreement where the recipient did not satisfy the performance criteria in the agreement; and

      (3)   track the progress of the Fund in satisfying the overall goals of the approved economic development strategic plan. (1995 L.M.C., ch. 29, § 1; 2012 L.M.C., ch. 17, § 1; 2015 L.M.C., ch. 27, § 1; 2015 L.M.C., ch. 36, § 1; 2021 L.M.C., ch. 12, § 1.)

   Editor’s note—2015 L.M.C., ch. 36, § 8 also states, in part: All other provisions of this Act take effect 180 days after the Montgomery County Economic Development Corporation is designated under Section 30B-2.

   2012 L.M.C., ch. 17, § 2, states: Transition. The County Executive must submit the initial method 1 regulation containing an economic development strategic plan to the Council for approval not later than 180 days after this Act becomes law [September 20, 2012]. In addition to the requirements of 20-76(a), the initial proposed economic development strategic plan must:

   (a)   analyze the County’s economic development structure;

   (b)   compare the County’s structure with peer jurisdictions;

   (c)   identify and analyze different alternative government and non-government entities that could perform each core function of economic development;

   (d)   determine the total amount of public and private money spent in each peer jurisdiction to achieve current levels of service; and

   (e)   recommend changes, if appropriate, to the County’s structure.

Sec. 20-76A. Investment Incentive Tax Credit Supplement.

   (a)   The Director of Finance must pay, subject to appropriation, a Biotechnology Investment Incentive Tax Credit Supplement to each applicant who meets certain eligibility standards.

   (b)   An applicant, who need not be a County resident, is eligible to receive the Supplement if:

      (1)   the applicant has been designated as a qualified investor under state law and has received a final tax credit certificate for the Maryland biotechnology investment incentive tax credit for the preceding calendar year; and

      (2)   the tax credit received by the applicant was generated by an investment in a qualified Maryland biotechnology company, as defined in state law, that has its headquarters and base of operations in the County.

   (c)   The County Executive, by regulations issued under Method (1), may impose other eligibility standards. However, those standards must not make any person ineligible to receive the Supplement who would be eligible under subsection (b).

   (d)   (1)   The Supplement paid to each eligible applicant must equal the product of:

         (A)   the amount of the credit received by the applicant under the State Biotechnology Investment Tax Credit Program, divided by the total amount of credits received by all Montgomery County biotechnology companies under the State Biotechnology Investment Tax Credit Program during the preceding calendar year; and

         (B)   the total amount of funds appropriated to the Supplement Program for that fiscal year.

      (2)   The Supplement paid to any recipient must not exceed:

         (A)   50% of the State tax credit that recipient receives from the Maryland Biotechnology Investment Tax Credit Program in the preceding calendar year; or

         (B)   15% of the total annual appropriation for the Supplement program.

   (e)   The Director must request from the Comptroller of the Treasury and Department of Business and Economic Development, by January 15 of each year, a list of each qualified investor for a qualified Maryland biotechnology company that was issued a final credit certificate during the preceding calendar year in order to calculate the Supplement paid under subsection (d), and may take any other action necessary to administer the Supplement. The Executive may issue regulations under Method (1) to implement this Section.

   (f)   If the Comptroller of the Treasury agrees, the Director may arrange for the Comptroller to pay the Supplement on behalf of the County. To the extent that the Comptroller does not pay the supplement, the Director must pay it directly to each recipient.

   (g)   A person who submits a false or fraudulent application, or withholds material information, to obtain a payment under this Section has committed a Class A violation. In addition, the person must repay the County for all amounts improperly paid and all accrued interest and penalties that would apply to those amounts as if they were overdue taxes. A person who violates this Section is liable for all court costs and expenses of the County in any civil action brought by the County to recover any payment, interest, or penalty. The County may collect any amount due, and otherwise enforce this Section, by any appropriate legal action.

   (h)   If all or part of the allowed state tax credit is recaptured under the applicable state law, the recipient must repay the County within 60 days the portion of any Supplement paid by the County that was based on the recaptured credit. (2010 L.M.C., ch. 9, § 1; 2011 L.M.C., ch. 23, § 1; 2015 L.M.C., ch. 36, § 1.)

   Editor’s note—2015 L.M.C., ch. 36, § 8 also states, in part: All other provisions of this Act take effect 180 days after the Montgomery County Economic Development Corporation is designated under Section 30B-2.

Sec. 20-76B. Small Business Assistance Program.

   (a)   Definitions. As used in this Section:

      Adverse impact means a loss of revenue resulting from a redevelopment project.

      Director means the Director of the Department of Finance.

      Enterprise zone means an area designated under Maryland Code, Economic Development Article, Section 5-704 or any successor provision.

      Fund means the Economic Development Fund established in Section 20-73.

      Program means the Small Business Assistance Program.

      Redevelopment project means any construction, alteration, or improvement in an urban renewal area or enterprise zone where the existing land use is commercial or industrial and is:

      (1)   located on property owned by the County; or

      (2)   financed in whole or part by the County.

      Small business means a privately owned business that meets the requirements of Section 11B-65(a).

      Technical assistance means training directly related to operating a small business provided by an educational institution or a non-profit organization approved by the Director.

      Urban renewal area means an area of the County as defined in Section 56-9(f).

   (b)   Establishment of Program. Subject to appropriation, the Director must create and administer a Small Business Assistance Program to assist small businesses who are adversely impacted by a redevelopment project.

   (c)   Eligibility. The Director, based upon information submitted by the applicant for assistance, must find that:

      (1)   the applicant is the owner of an existing small business located near an ongoing or future redevelopment project that is planned to begin construction in less than 12 months after the application;

      (2)   the applicant’s small business is currently or is likely to be adversely impacted by the redevelopment project; and

      (3)   the applicant’s small business is financially healthy and likely to continue operating for the foreseeable future.

   (d)   Conditions. The Director may impose reasonable conditions on a small business, including the successful completion of approved technical assistance training, in order to receive financial assistance from the Fund under the Program.

   (e)   Financial assistance. The Director may award a grant or loan from the Fund to an eligible small business under the Program.

   (f)   Regulations. The Executive must adopt method 2 regulations to implement this Section. The regulations must:

      (1)   require the Director to compile and maintain a list of approved technical training courses on the appropriate website;

      (2)   specify the application procedures and eligibility criteria for a grant or loan to a small business under the Program;

      (3)   specify conditions that the Director may impose on a small business in order to receive financial assistance from the Fund under the Program;

      (4)   define what constitutes an adverse impact on a small business;

      (5)   define what constitutes financial health of a small business; and

      (6)   identify outreach methods and marketing strategies to inform local small businesses of the program.

   (g)   Reports. On or before March 31 of each year, the Executive must report to the Council on the activities of the Program. The report must include:

      (1)   the number of small businesses participating in the Program;

      (2)   the number and dollar amount of grants and loans made; and

      (3)   an evaluation of the impact of each grant or loan on the operation of the small business. (2012 L.M.C., ch. 6, § 1; 2015 L.M.C., ch. 36, § 1.)

   Editor’s note—2015 L.M.C., ch. 36, § 8 also states, in part: All other provisions of this Act take effect 180 days after the Montgomery County Economic Development Corporation is designated under Section 30B-2.

Sec. 20-76C. Green Investor Incentive Program.

   (a)   Definitions. In this Section, the following words have the meanings indicated:

      Green product or service means a product or service that measures, prevents, limits, minimizes, or corrects environmental damage to water, air, or soil, as well as problems related to waste, ecosystems, biodiversity, habitat or natural resource depletion. All claims related to environmental attributes, as applicable, for a product or service, must conform to guidelines published by the Federal Trade Commission or other appropriate entity designated by the Director of Environmental Protection.

      Investment means the contribution of money in cash or cash equivalents expressed in United States dollars, at a risk of loss, to a qualified green company in exchange for stock, a partnership or membership interest, or other ownership interest in the equity of the qualified green company, title to which ownership interest vests in the qualified investor but does not include debt.

      Qualified green company means any entity of any form duly organized and existing under the laws of any jurisdiction for the purpose of conducting business for profit, excluding a sole proprietorship, that:

      (1)   develops an innovative, new to the market, technology, or a unique combination of technologies, available only from that company, which adds significant value to a green product or service or is engaged in research or development of a such technology or technologies; and

      (2)   implements a sustainable operation as verified by a third party.

      Qualified investor means any individual or entity that invests at least $25,000 in a qualified green company and that is required to file an income tax return in any jurisdiction. Qualified investor does not include:

      (1)   a qualified pension plan, individual retirement account, or other qualified retirement plan under the Employee Retirement Income Security Act of 1974, as amended, or fiduciaries or custodians under such plans, or similar tax-favored plans or entities under the laws of other countries;

      (2)   an individual or entity that has an ownership interest in the qualified green company other than from a previous investment, which previous investment by itself or with the additional investment does not create a 25% or greater equity holding by the qualified investor in the qualified green company; or

      (3)   an individual or entity deriving any financial benefit, including salary or other compensation, from the qualified green company in which the qualified investor makes an investment.

      Sustainable operation means an organization validated by a third party under one of the following:

      (1)   Montgomery County Green Business Certification Program, as certified by the Department of Environmental Protection;

      (2)   B Corp Certification from B Lab;

      (3)   Green America Gold Certification;

      (4)   Green Seal Certification;

      (5)   International Organization for Standardization ISO 14001 Certification; or

      (6)   any other third party validation approved by the Department of Environmental Protection.

   (b)   Incentive Payment. The Director of Finance must pay, subject to the amount of the annual appropriation in that fiscal year, an incentive payment to each qualified investor who meets certain eligibility standards.

   (c)   Eligibility standards. A qualified investor, who need not be a County resident, is eligible to receive the incentive payment if the qualified investor invests in a qualified green company that:

      (1)   has its headquarters and base of operations in the County; or

      (2)   has signed a lease for at least 5 years to open a qualified green company with its headquarters and base of operations in the County; and

      (3)   has been in business for less than 10 years and employs less than 50 people and does not have its securities publicly traded on any exchange.

   (d)   Additional eligibility standards. The County Executive, by Method 2 regulation, may impose other eligibility standards. However, those standards must not make any person ineligible to receive the incentive payment who would be eligible under subsection (c).

   (e)   Ineligible investments. An investor must not receive an incentive payment for:

      (1)   the installation of any geothermal, or solar photovoltaic, or similar system; or

      (2)   any building green or energy efficiency improvement.

   (f)   Amount of incentive payment. The incentive payment made, subject to the amount of the annual appropriation in that fiscal year, to each qualified investor must equal the amount of the investment made by the qualified investor, divided by the total amount of investments made by all qualified investors in the same calendar year, multiplied by the total amount of funds appropriated for the green investor incentive program in that year. The incentive program made to any qualified investor in any single fiscal year must not exceed the lesser of:

      (1)   50% of the investment made by the qualified investor in that fiscal year;

      (2)   15% of the total annual and supplement appropriation for the green investor incentive program in that fiscal year; or

      (3)   $50,000.

   (g)   In order to calculate the amount of the incentive payment to be made to a qualified investor under Subsection (f), the Director of the Department of Finance must, by January 15 of each calendar year, compile a list of each qualified investor making an investment in a qualified green company and the amount of that investment during the preceding calendar year. This list must be determined using the applications and any supporting documents qualified investors submit. The Director may take any other action necessary to administer the incentive payment. The Executive may issue regulations under Method (2) to implement this Section.

   (h)   Application required. The Director of the Department of Finance must require each qualified investor to submit an application for the incentive payment and may take any other action necessary to administer the incentive payment. The Executive may issue regulations under Method (2) to specify an application process and otherwise implement this Section.

     (i)   Fraudulent applications. A person who submits a false or fraudulent application, or withholds material information, to obtain an incentive payment under this Section has committed a Class A violation. In addition, the person must repay the County for all amounts improperly paid and all accrued interest and penalties that would apply to those amounts as if they were overdue taxes. A person who violates this Section is liable for all court costs and expenses and reasonable attorney's fees of the County incurred in any civil action brought by the County to recover any payment, interest, or penalty. The County may collect any amount due, and otherwise enforce this Section, by any other appropriate legal action. (2013 L.M.C., ch. 12, § 1; 2015 L.M.C., ch. 36, § 1.)

   Editor’s note—2015 L.M.C., ch. 36, § 8 also states, in part: All other provisions of this Act take effect 180 days after the Montgomery County Economic Development Corporation is designated under Section 30B-2.