ANNAPOLIS — A Senate work group held a closed-door meeting Monday to pore over the details of legislation that would alter Maryland’s $84 million venture capital program.
The group, composed of five members from the Budget and Taxation Committee, was formed this month to review Senate Bill 70, a measure requested by the state Department of Business and Economic Development that alters the state’s InvestMaryland program.
DBED officials said last month that the bill needs to be passed so the state can secure the services of wary private investment firms that would be selected to funnel state money into early-stage technology companies in Maryland.
Other changes the bill would make have been called “technical” by the agency, a term usually used by lawmakers to describe items that do not impact the actual function of a statute. But Sen. Edward J. Kasemeyer, a Baltimore County Democrat who chairs the Senate’s budget panel, decided to kick the bill into a work group because some of DBED’s requested changes were complicated.
The first meeting of that work group was held Monday, but a Daily Record reporter was denied access to the meeting. Budget and Taxation Committee staff said the meeting did not have to be open to the public because a quorum of the panel was not present. Committee staff also declined to provide the names of senators serving on the work group.
Under the state Open Meetings Act, unless a quorum of the full committee is present, a smaller group of panel members may meet in private. An ad-hoc committee — that is, one not created by statute — is also not subject to the state’s transparency law.
The $84 million InvestMaryland program makes $56 million available for investment via private equity firms. Those firms are supposed to pump that money into Maryland startups. The balance is invested directly by the state through the Maryland Venture Fund.
Some private firms have been wary of taking program money because the state demands the cash be invested in Maryland startups. To solve that problem, some firms have proposed creating a “sidecar fund” in which the state would invest its money.
In order to do that, however, a cap on the state’s potential ownership stake in such a fund would have to be raised. Current law says the department cannot hold greater than a 25 percent interest in an entity, a measure meant to prevent government from taking a controlling share of a private fund. SB 70 would change that, and make a host of other changes to the program created by Gov. Martin O’Malley’s signature economic development legislation in 2011.