A bill presented to the Senate Budget and Taxation Committee would create a program to enable early-stage technology and biotech companies to transfer unused net operating losses (NOLs) or research-and-development tax credits to larger companies in return for cash, supporters said.

Sen. Richard S. Feldman (sponsor) and witnesses described the bill as modeled on a long-standing New Jersey program: a department-run mechanism administered by the Department of Commerce and the comptroller that would certify transfers and set guardrails including a requirement that transfers trade for at least 80 cents on the dollar. The bill includes an overall cap on program value and a per-company limit to guard against concentrated benefits, and it contains a recapture provision that can claw back benefits if a recipient leaves Maryland within a set period.

Supporters from the Maryland Energy Innovation Institute, the Maryland Clean Energy Center and startup executives including Ion Storage Systems called the transfer mechanism a practical tool to provide liquidity to companies in the “valley of death” between invention and commercialization. Panelists described the program as a complement to direct early-stage funding initiatives, arguing that converting unused tax attributes into cash can help companies hire, test products and attract follow-on investment.

Witnesses described an advisory role for the Maryland Economic Development Commission (which was listed in the bill as the body to recommend targeted sectors) and said the program’s design could be refined in committee, including possible adjustments to the cap, eligible sectors and other guardrails. Senators asked about recapture timelines and the number-of-jobs requirements; sponsors said the bill includes staffing and headquarters commitments to keep beneficiaries in state for a period (testimony referenced a five-year maintenance requirement in committee remarks).

Proponents urged a favorable report and said the bill is intended to support high-value economic growth in targeted sectors such as climate tech and biotech; the committee heard testimony from incubator and accelerator operators as well as company founders about capital access challenges for early-stage firms.