1) Q: What safeguards will DBED take with critical information such as Social Security numbers or stockholder information?

A: The department will comply with the Maryland Public Information Act. The PIA provides in pertinent part as follows (Maryland Code, Title 10. Governmental Procedures: Subtitle 6. Records):

Ҥ 10-617. Required denials - Specific Information

(a)  In general. Unless otherwise provided by law, a custodian shall deny inspection of a part of a public record, as provided in this section.

…

d)  Commercial information. - A custodian shall deny inspection of the part of a public record that contains any of the following information provided by or obtained from any person or governmental unit: 

 (1) a trade secret; 

 (2) confidential commercial information; 

 (3) confidential financial information; or 

 (4) confidential geological or geophysical information.”

Applicants should consider segregating confidential information within the application, accompanied by a notice identifying the items of information that the applicant asserts constitute protected confidential information, and explicitly designating such information by the applicable type or types described in SG § 10-617(d).

Applicants should also be aware that notwithstanding the PIA,  Maryland Code, Tax General Article, §10-725(h)(1) requires DBED to report annually to the governor and to the General Assembly the following information with respect to the Biotechnology Investment Incentive Tax Credit:

“…

(2) The report required under paragraph (1) of this subsection shall include for each initial tax credit certificate awarded:  

(i) the name of the qualified investor or the name of the qualified Maryland venture capital firm and the amount of credit awarded or allocated to each investor or firm;  

(ii) the name and address of the qualified Maryland biotechnology company that received the investment giving rise to the credit under this section and the county where the qualified Maryland biotechnology company is located; and

(iii) the dates of receipt and approval by the department of all applications for initial tax credit certificates. 

(3) The report required under paragraph (1) of this subsection shall summarize for the category of qualified investors and qualified Maryland venture capital firms:  

(i) the total number of applicants for initial tax credit certificates under this section in each calendar year;  

(ii) the number of applications for which initial tax credit certificates were issued in each calendar year; and 

(iii) the total initial tax credit certificates authorized under this section for all calendar years under this section.”

2) Q: Why is DBED seeking the information in the “additional information” sections of all of the application forms, and how is that information weighted in the eligibility process, if at all?

A: This information is for the purpose of the department’s better administration of the tax credit and as a basis for supplying the governor and the General Assembly with information to be used in analyzing and assessing the fiscal and economic efficacy of the biotechnology investment incentive tax credit. The additional information will not used to determine the eligibility of applicants to claim the tax credit.

3) Q: If an applicant honestly answers “yes” to any of the “additional information” questions, does DBED need or want any expanded information on these answers?

A: No.

4) Q: Since the statute has some clawback or recapture provisions of the tax credits issued under certain circumstances, do those recaptured tax credits flow back to the program to be reissued in future years?

A: No. The statute does not provide for re-crediting recapture amounts to the Maryland Biotechnology Investment Tax Credit Reserve Fund. The qualified investor or a qualified Maryland venture capital firm that claimed the credit must pay the amount recaptured as taxes payable to the State for the taxable year in which the prohibited disposition occurs. Maryland Code, Tax General Article, § 10-725(f) (3).

5) Q: What is meant by “proposed date upon which the investment will be made?”

A: The “proposed date upon which the investment will be made” is the date by which the investor would like to complete the investment transaction with the Qualified Maryland Biotechnology Company.  The proposed date of investment should be at least 30 calendar days but no more than 60 calendar days from the day of receipt of the application by the MVF.  It is important to note that investments made to biotechnology companies prior to the issuance of an initial tax credit certificate certifying the biotechnology company as a Qualified Maryland Biotechnology Company will not be eligible for the tax credit. 

6) Q: Can a Limited Liability Company (LLC) be certified as a Qualified Corporate Investor?

A: No, a LLC cannot be certified as a Qualified Corporate Investor. Corporations are created under state corporation statutes that define a corporation.  Limited Liability Companies exist under another, entirely separate and different statutory scheme that defines what a LLC is, how it is created and managed and also the relations between its members and each other and management.  The Biotechnology Investment Incentive Tax Credit Act defines one class of Qualified Investor as a “corporation.” There is no room to make that legislated term fit a Limited Liability Company.