A rather bizarre sight greeted tax attorney Mark Vulcan when he arrived for work at the Maryland Department of Business and Economic Development (DBED) in Baltimore earlier this month.
Stretched out in front of the DBED office were a bunch of rumpled executives, several of whom had slept on the sidewalk all night, waiting for Vulcan to arrive.
No, they weren’t trying to purchase seats on the 50-yard-line for the Ravens’ upcoming NFL season. The folks in the wrinkled suits were investors queuing up for a chance to apply for a piece of Maryland’s $6 million Biotechnology Investment Tax Credit.
Vulcan is the fellow who accepts the applications.
Maryland’s biotech incentive program already has leveraged more than $24 million in private investment since its inception in 2006. The program provides tax credits equal to 50% of an eligible investment (investors make an equal match). To qualify, companies must be less than 12 years old; be headquartered in Maryland; employ fewer than 50 people; and have a valid certificate from the state DBED.
DBED reviews the applications and issues its initial credit certifications within 30 calendar days. During the first two years of the program, the $6 million credit allocation was not exhausted for several months.
This year, Maryland upped the ante, opening the program to a larger number of investors and giving out larger shares of the credit—up to $250,000 per investor—on a first-come, first-serve basis. The enhanced incentive program had biotech investors flocking to the DBED office like, well, ravens.
If a recent proposal from Gov. Martin O’Malley is enacted, the ravenous appetite of investors for the popular biotech incentives may expand dramatically, and next year’s pre-dawn gathering at the DBED office could resemble a well-dressed version of a signature scene from another famous vehicle for ravens—Alfred Hitchcock’s The Birds.
Gov. O’Malley recently announced the Bio 2020 Intitiative, a $1.1 billion program that would quadruple funding for the Biotechnology Investment Tax Credit by 2013, leveraging an estimated $50 million annually to biotech start-ups in Maryland.
Our guess is that the biotech incentive bonanza will spur at least one related economic development: somewhere in Baltimore, a very shrewd street vendor is preparing to ask city hall for a license to sell hot dogs in front of the DBED office.