Planning, Housing and Economic Development Committee
Michael Faden, Senior Legislative Attorney
Worksession: Expedited Bill 5-10, Economic Development - Biotechnology
Credit - County Supplement
Expedited Bill 5-10, Economic Development - Biotechnology Credit - County
Supplement, sponsored by Councilmember Knapp, Council Vice President Ervin,
Councilmember Leventhal, Council President Floreen, and Councilmember Trachtenberg, was
introduced on February 2,2010. A public hearing was held on February 23, at which Janis Pitts,
Director of the County Life Sciences Strategy in the County Department of Economic
Development, representing the County Executive, and 2 representatives of County biotechnology
firms, supported the Bill.
Bill 5-10 would commit the County to supplement the state biotechnology investment
incentive tax credit, allowed under Maryland Code, Tax-General Article § I 0-725 (see ©5-9).
The County supplement, which is a direct subsidy rather than a tax credit, would be 50% of the
state tax credit for an investment in a qualified Montgomery County biotechnology company.
For more details on the state credit, see the fact sheet prepared by County Department of
Economic Development staff on
Fiscal impact: $44,545 (operating costs), $2 million/year (credit supplement).
Economic impact: not estimated, but substantial positive. See OMB fiscal impact statement on
1) Would this spending he effective?
At the hearing Councilmember Andrews noted
that, if this supplement were offered, investors would respond to this government incentive
rather than focus on the prospects for success of the affected firms, thus negating the "pure
market response" that would otherwise govern the investors' decisions. The 2 counterarguments
to this position are, first, that the state will have already affected the investors' market response
by its larger credit and this supplement will further enhance the attractiveness of County firms