With less than a week left in the legislative session, a House of Delegates committee will vote today on whether to approve a bill that could give $6 million in tax credits to investors in early-stage businesses in Maryland - half as much as originally proposed.
The bill is one of a handful introduced to bolster investment in Maryland businesses, particularly in biotechnology. But one of the bills is stalled in committee and the fate of two others remains uncertain in the session's waning days. The proposals have also been greatly whittled back as various interests seek part of the proposed $26 billion state budget for the fiscal year beginning July 1.
Senate Bill 217, the research and development bill before the House Ways and Means Committee today, would continue $6 million in tax credits in a program that expired last year. Ehrlich, who asked for the bill's introduction, had suggested up to $12 million in credits, but a Senate committee halved that amount last month.
"Is it enough? No," Aris Melissaratos, the state's secretary of business and economic development, said after a hearing in Annapolis yesterday. "But cutting back to $6 [million] is something we can live with."
The Senate unanimously passed the amended bill, which is now before the House. Another bill, House Bill 664, was designed to offer $12 million in credits for individuals or corporations that invested specifically in young biotech businesses. But the "Biotechnology Investment Incentive Act," introduced by Del. Brian J. Feldman, a Montgomery County Democrat, was amended so that the governor will allocate the amount in a reserve fund in each annual budget. The House unanimously passed the amended bill. It is before a Senate committee.
"I feel strongly that the biotech bill is an extremely important bill," said Jonathan Cohen, president and chief executive officer of 20/20 GeneSystems Inc. of Rockville, a biodefense and life sciences startup. However, he opposed the bill's age limit on companies that may participate, which has shrunk to 5 years from 10.
"The five-year limitation makes no sense," said Cohen, who declined to state the age of his company, though his Web site says it was founded in May 2000. Biotech businesses are often still in the development stage after a dozen years of research, in large part because it takes that long to gain approval for their products, he said.
Some fear that the two bills are in a showdown of sorts: The Senate wants the research and development bill passed by the House. The House wants the biotechnology bill passed by the Senate.
"Both chambers promised that it will follow the other," Melissaratos said yesterday, certain both bills would pass.
"They're the top two priorities for the council this year," said Charlie Scott, director of government relations for the Technology Council of Maryland, a nonprofit that lobbies for the interests of technology companies.
Another piece of technology business legislation, the "Entrepreneurial Investment Technology Tax Credit," would provide $8 million worth of tax credits to wealthy individuals who invest in state technology startups. Identical versions of the bill in the House and Senate have stalled in committee.
"We have not had a chance to discuss it in great detail," said Sen. Patrick J. Hogan, a Montgomery County Democrat who co-sponsored the bill. "We've been preoccupied with passing the budget."
Hogan said the Senate will not likely pass both the entrepreneurial tax credit and Feldman's bill: "It will be one or the other," he said, with the deciding factor being which offers the "most bang for its buck" in drawing venture capital investment to Maryland.
Only days remain before the legislature's scheduled adjournment at midnight Monday, but Feldman, for one, wasn't fazed.
"That's an eternity down here," Feldman said. "Things can happen within an hour when it comes down to the last week."