Bill No.                25-13                        

Concerning: Economic Development – Cybersecurity Credit – County Supplement           

Revised:    6/28/2013        Draft No. 2  

Introduced:      September 10, 2013

Enacted:         October 1, 2013

Executive:       October 4, 2013

Effective:        January 3, 2014

Sunset Date:  None

Ch.   25 , Laws of Mont. Co.    2013

County Council

For Montgomery County, Maryland

By: Councilmembers Riemer, Floreen, and Leventhal

AN ACT to:

(1)        authorize the County to supplement the state cybersecurity investment incentive tax credit; and

(2)        generally amend the law governing County financial incentives for investment in certain businesses.

By amending

            Montgomery County Code

            Chapter 20, Finance

            Section 20-76D

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 20-76D is added as follows:

20-76D. Cybersecurity Investment Incentive Tax Credit Supplement.

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

(b)     A Cybersecurity Company is eligible to receive the Supplement if:

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

(2)     the tax credit received by the Cybersecurity Company was generated by an investment in a qualified Maryland cybersecurity 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 Cybersecurity Company ineligible to receive the Supplement who would be eligible under subsection (b).

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

(A)    the amount of the credit the Company received under the State Cybersecurity Investment Tax Credit Program, divided by the total amount of credits all Montgomery County cybersecurity companies received under the State Cybersecurity 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 Cybersecurity Company must not exceed:

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

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

(e)      The Director of Economic Development must request from the Comptroller of the Treasury and Department of Business and Economic Development, by April 30 of each year, a list of each Cybersecurity Company, headquartered and based in Montgomery County that was issued a final credit certificate by the State during the preceding calendar year.  The Executive may issue regulations under Method (1) to implement this Section.

(f)      If the Comptroller of the Treasury agrees, the Director of Finance 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 the supplement within 60 days after receiving this list to each qualified Cybersecurity Company that was issued a final credit certificate from the State.

(g)     A Cybersecurity Company 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 Cybersecurity Company 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 Cybersecurity Company 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 Cybersecurity Company must repay the County within 60 days the portion of any Supplement paid by the County that was based on the recaptured credit. 

Approved: