Expedited Bill No. 40-12
Concerning: Economic Development - Green [[Organization Supplement]] Investor Incentive Program
Revised: 4/3/2013 Draft No. 3
Introduced: December 4, 2012
Enacted: April 16, 2013
Executive: April 24, 2013
Effective: July 24, 2013
Sunset Date: None
Ch. 12 , Laws of Mont. Co. 2013
For Montgomery County, Maryland
AN ACT to:
(1) authorize the County to provide qualified applicants a Green [[Organization Supplement]] Investor Incentive Payment; and
(2) generally amend the law governing County financial incentives for investment in certain businesses.
Montgomery County Code
Chapter 20, Finance
Boldface Heading or defined term. Underlining Added to existing law by original bill. [Single boldface
from existing law by original bill. Double
by amendment. [[Double boldface
from existing law or the bill by amendment. *
* * Existing law unaffected by bill.
Boldface Heading or defined term.
Underlining Added to existing law by original bill.
[Single boldface brackets] Deleted from existing law by original bill.
Double underlining Added by amendment.
[[Double boldface brackets]] Deleted from existing law or the bill by amendment.
* * * Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
Sec. 1. Section 20-76C is inserted as follows:
20-76C. Green [[Organization Supplement]] Investor Incentive Program.
(a) Definitions. In this Section, the following words have the meanings indicated:
Green product or service means [[the delivery of a product or service in the following areas:
(1) renewable, clean, or distributed energy;
(2) energy efficiency products or services;
(3) sustainable farming and food distribution;
(4) water quality and conservation;
(5) pollution reduction and remediation;
(6) recycling, reuse, and resource recovery; or
(7) biodiversity and natural resource conservation.]]
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 [[organization]] company means any [[business, cooperative, or non-profit]] 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) [[provides a green product or service]] 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 [[$5,000]] $25,000 in a qualified [[Montgomery County]] green [[organization]] 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 [[Certified]] Green Business Certification Program, as certified by the Department of Environmental Protection;
(2) [[Certified]] B Corp Certification from B Lab;
(3) Green America Gold Certification;
(4) Green Seal Certification;
(5) International Organization for Standardization ISO 14001 [[certified]] Certification; or
(6) any other third party validation approved by the Department of Environmental Protection.
(b) Incentive Payment [[of supplement]]. The Director of Finance must pay, subject to the amount of the annual appropriation in that fiscal year, [[a Green Organization Supplement]] an incentive payment to each [[applicant]] qualified investor who meets certain eligibility standards.
(c) Eligibility standards. [[An applicant]] A qualified investor, who need not be a County resident, is eligible to receive the [[Supplement]] incentive payment if the [[applicant]] qualified investor:
[[(1) is a qualified investor; and
(2)]] invests in a qualified green [[organization]] company that:
[[(A)]] (1) has its headquarters and base of operations in the County; or
[[(B)]] (2) has signed a lease for at least 5 years to open a [[facility]] 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 [[Supplement]] incentive payment who would be eligible under subsection (c).
(e) Ineligible investments. [[A qualified]] An investor must not receive [a supplement for capital] an incentive payment [[used]] for [[any]]:
(1) the installation of any geothermal, or solar photovoltaic, or similar system; or
(2) any building green or energy efficiency improvement.
(f) Amount of [[supplement]] incentive payment. The [[Supplement paid]] incentive payment made, subject to the amount of the annual appropriation in that fiscal year, to each [[recipient is a one-time Supplement and must equal 50% of the recipient’s investment in a qualified green organization, or a lower percentage set in the annual operating budget resolution, up to $25,000.]] 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 payment 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
(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 Economic Development 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.
[[(g)]] (h) Application required. The Director of the Department of Economic Development must require each [[eligible person]] qualified investor to submit an application for the [[Supplement]] incentive payment and may take any other action necessary to administer the [[Supplement]] incentive payment. The Executive may issue regulations under Method (2) to specify an application process and otherwise implement this Section.
[[(h)]] (i) Fraudulent applications. A person who submits a false or fraudulent application, or withholds material information, to obtain [[a]] 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.