Agenda Item 4
November 15,2011
Public Hearing
MEMORANDUM
TO:
County Council
FROM:
~
Michael Faden, Senior Legislative Attorney
Public Hearing:
Bill 34-11, Biotechnology Investment Incentive Tax Credit
Supplement - Amendment
SUBJECT:
Bill 34-11, Biotechnology Investment Incentive Tax Credit Supplement - Amendment,
sponsored by the Council President at the request of the County Executive, was introduced on
October 25, 2011. A Planning, Housing and Economic Development Committee worksession is
tentatively scheduled for November 21 at 9:30 a.m.
Bill 34-11 would clarify the proportion of the annual Biotechnology Investment Incentive
Tax Credit Supplement an applicant may receive.
This packet contains:
Bill 34-11
Legislative Request Report
Memo from County Executive
Circle
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F:\LAW\BILLS\1 134 Biotech Tax Credit\Public Hearing Memo.Doc
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Expedited Bill No.
34-11
Concerning: Biotechnology Investment
Incentive Tax Credit Supplement ­
Amendment
Revised: 10-20-11
Draft No. 4
Introduced:
October 25, 2011
Expires:
April 25. 2013
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date:
~No~n.!.!:e.:_..
_ _ _ _ __
ChI _ _ Laws of Mont. Co. _ __
I
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President at the Request of the County Executive
AN EXPEDITED ACT
to:
(I)
clarify the proportion of the annual Biotechnology Investment Incentive Tax Credit
(2)
Supplement an applicant may receive; and
generally amend the law relating to the Biotechnology Investment Incentive Tax
Credit Supplement.
By amending
Montgomery County Code
Chapter 20, Finance
Section 20-76A
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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EXPEDITED BILL. 34-11
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Sec.
1.
Section 20-76A is amended as follows:
20-76A. Biotechnology [investment incentive tax credit supplement] Investment
Incentive Tax Credit Supplement.
*
(d)
must equal the product of:
*
*
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The Supplement paid to each [recipient must equal] eligible applicant
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ill
the amount of the credit received
Qy
the applicant under the State
Biotechnology Investment Tax Credit Program, divided
Qy
the
total amount of credits received
Qy
all Montgomery County
biotechnology companies under the
Investment Tax Credit Program; and
State Biotechnology
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ill
the
total amount of funds appropriated to the Supplement
Program. The Supplement must not exceed 50% of [any] the
State tax credit [the recipient] an eligible applicant receives from
the [State biotechnology investment incentive tax credit program,
or a lower percentage, set in the annual operating budget
resolution, which reflects the relative proportions of the
respective annual appropriations for the state tax credit and the
County supplement] Maryland Biotechnology Investment Tax
Credit Program in any given year. An eligible applicant must not
receive more than 15% of the total annual appropriation for the
Supplement program.
Sec. 2. Expedited Effective Date.
The Council declares that this legislation
IS
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necessary for the immediate
protection of the public interest. This Act takes effect on the date when it becomes
law.
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F:\LAw\BILLS\1134 Biotech Tax Credit\1134 8i112.Doc
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LEGISLATIVE REQUEST REPORT
Bill 34-11
Biotechnology Investment Incentive Tax Credit Supplement
-
Amendment
DESCRIPTION:
Clarify the proportion of the annual Biotechnology Investment
Incentive Tax Credit Supplement (Supplement) an applicant may
receive and generally amend the law relating to the Biotechnology
Investment Incentive Tax Credit Supplement.
Current law contains language mandating that the County provide an
eligible applicant with 50% of the amount the State Biotech Tax
Credit issued to eligible investors (applicants), unless a lower
percentage is set in the annual operating budget resolution.
The attached bill deletes language that requires the amount of the
supplement to equal 50% of the SBITCP and substitutes language
that provides that an eligible company will receive a supplement
amount that is proportionate to the amount of the credit received by
that company under the SBITCP as a percentage of the total amount
of credits allocated under the SBITCP to Montgomery County
biotechnology companies.
County Attorney, Department of Economic Development
Same as the original bill as this amendment will provide the County
with flexibility of providing matches.
The amendment will continue to support the same mission as the
original bill, i.e., stimulate investment activities in the biotechnology
industry in the County and provide the incentives to support the
growth of biotech companies in the County.
Department of Economic Development will monitor the business
growth of the tax credit supplement recipients and report annually.
State of Maryland is operating the program very successfully since
2008.
Department of Economic Development.
None. All applicants in the County will be eligible.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMP ACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENAL TIES:
None.
F:\LAW\BILLS\1134 Biotech
Tax
Credit\Legislatlve Request Report.Doc
f:\law\bills\1134 biotech tax credit\legislative request report. doc
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OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE. MARYLANDl0850
Isiab Leggett
County Executive
MEMORANDUM
October 17, 2011
TO:
FROM:
Valerie Ervin, County Council President
Ike Leggett, County
ExecUtiV~~
.
SUBJECT: Proposed Legislation re: Montgomery County Biotechnology Investment Incentive
Tax Credit Supplement
I am submitting for Council introduction a bill that would modify the
Biotechnology Investment Incentive Tax Credit Supplement (Biotech Credit Supplement
Program) that was established when Bill 5-10, Biotechnology Credit - Local Supplement was
enacted on March 16, 2010. I am also enclosing a Legislative Request Report for this bill.
Under current law, the County is required to pay each eligible biotechnology
company an amowlt that is equal to 50% of the tax credit that the recipient receives from the
State Biotechnology Investment Tax Credit Program (SBITCP). However, due to County's
limited initial budget of $500,000 in FY12 and the uncertainty of future appropriations to the
program, the current mandatory supplement amount will make it impossible to implement the
Biotech Credit Supplement Program. The attached bill deletes language that requires the amount
of the supplement to equal 50% of the SBITCP and substitutes language that provides that an
eligible company will receive a supplement amount that is proportionate to the amowlt of the
credit received by that company under the SBITCP as a percentage of the total amount of credits
allocated under the SBITCP to Montgomery County biotechnology companies.
Please contact Steve Silverman, Director, Department of Economic Development,
at 240-777-2005 ifyou have questions about the Biotech Credit Supplement Program or any
aspect of this bill. Thank you for your consideration ofthis item.
Attachments (2)
cc: Steve Silverman, DED Director