In this subtitle the following words have the meanings indicated. “Board” means the Board of Trustees of the Maryland Venture Capital Trust. “Investor” means a person or governmental entity that invests money in the Maryland Venture Capital Trust. “Seed capital financing” means financing provided to a business during the initial stages of its development. “Seed capital financing” includes financing for a business: to finish research and development of a product; to develop marketing plans; and to provide for initial facilities, inventory, and working capital. “Trust” means the Maryland Venture Capital Trust. “Venture capital fund” means an investment fund that provides capital to a business at any stage of its development before the business makes a public offering of stock.

The General Assembly finds that: small businesses are a major source of new jobs and innovations in the State; the State’s research capacity could spur innovation in new and existing businesses to create and maintain jobs in the State; and an inadequate supply of seed capital financing and venture capital funds has limited the commercialization of research and development in the State. The General Assembly intends for the Trust to: help fill the gap in the State’s economy caused by the inadequate supply of seed capital financing and venture capital funds; and stimulate the commercialization of research and development to create and sustain businesses throughout the State.

This subtitle shall be liberally construed to accomplish its purposes.

There is a Maryland Venture Capital Trust. The Trust is a body politic and corporate and is an instrumentality of the State.

There is a Board of Trustees of the Trust. The Board consists of seven members appointed by the Governor with the advice and consent of the Senate. Of the seven members: four shall represent the investors and have been recommended to the Governor by the investors; at least one shall have expertise in venture capital financing; and at least one shall have experience as a small business owner. Each member shall be a resident of the State. The Governor shall consider geographic diversity of the State when appointing members of the Board. The term of a member is 4 years. The terms of members are staggered as required by the terms provided for members of the Board on October 1, 2008. At the end of a term, a member continues to serve until a successor is appointed and qualifies. A member who is appointed after a term has begun serves only for the rest of the term and until a successor is appointed and qualifies. The Governor may remove a member with or without cause. The Governor shall appoint a chair from among the Board members. A majority of the members then serving on the Board is a quorum. A majority vote of the members present at a meeting having a quorum is needed for the Board to act. A member of the Board: may not receive compensation as a member of the Board; but is entitled to reimbursement for expenses under the Standard State Travel Regulations, as provided in the State budget. The Board: shall manage the Trust; and exercises all of the corporate powers of the Trust.

The Trust is: exempt from the General Procurement Law provisions of Division II of the State Finance and Procurement Article; but subject to Title 12, Subtitle 4 of the State Finance and Procurement Article. The Trust is exempt from the provisions of Division I of the State Personnel and Pensions Article that govern the State Personnel Management System.

The Trust may: solicit and accept for investment in the Trust money from any source including not more than $2,000,000 in appropriations from the State; enter into agreements with the investors that set forth the terms governing the investment of money in the Trust by the investors; by preparing and publishing requests for proposals, solicit offerings by venture capitalists and venture capital funds that meet the purposes and requirements of the Trust, which shall be set forth in the requests for proposals; subject to § 10-708 of this subtitle, select the venture capital funds in which to invest money from the Trust; retain investment earnings that exceed the investment earnings that the Trust must pay to investors; and take any action necessary to carry out the powers expressly granted by this subtitle. The Trust may not accept a cumulative investment of more than $15,000,000 from the State Retirement and Pension System. The Trust may not accept a cumulative investment of more than $5,000,000 from any other single investor.

The Board shall give preference to venture capital fund proposals that: provide financing predominately to businesses that conduct a substantial amount of business in the State; require venture capital funds to match the money invested by the Trust with money invested by private investors on at least a 1 to 3 ratio; and ensure that a majority of the money that the Trust invests is for seed capital financing in the State.

Seed capital financing may not exceed $1,000,000 for a single business.

A debt, claim, obligation, or liability of the Trust is not a debt, claim, obligation, or liability of the State or a unit or instrumentality of the State or a pledge of the State’s credit.

The Trust is exempt from taxation by the State and local governments.

Each year, an independent auditor approved by the State shall audit the books and records of the Trust. At its discretion, the State may audit the books and records of the Trust. The Trust shall pay the expense of an audit conducted under this section.