In this subtitle the following words have the meanings indicated. “Authority” means the Maryland E–Nnovation Initiative Fund Authority established under § 6–605 of this subtitle. “Endowment proceeds” means those investment earnings accruing to a research endowment of a nonprofit institution of higher education and available for expenditure by the institution in accordance with § 6–612 of this subtitle. “Fund” means the Maryland E–Nnovation Initiative Fund created under § 6–604 of this subtitle. “Governing board” has the meaning stated in § 10–101 of the Education Article. “Governing body” means: a governing board; the governing entity of a private nonprofit institution of higher education; or the governing entity of a regional higher education center. “Nonprofit institution of higher education” means an institution of postsecondary education located in the State, that receives State funds in the annual operating budget and that generally limits enrollment to graduates of secondary schools and awards degrees at either the associate, baccalaureate, or graduate level. “Nonprofit institution of higher education” includes public and private nonprofit institutions of higher education located in the State. “Private nonprofit institution of higher education” has the meaning stated in § 10–101 of the Education Article. “Program” means the Maryland E–Nnovation Initiative Program under this subtitle. “Qualified donation” means any private donation, gift, irrevocable pledge, or bequest to a research endowment in accordance with § 6–613 of this subtitle. “Regional higher education center” has the meaning stated in § 10–101 of the Education Article. “Research endowment” means an account established at or administered by a nonprofit institution of higher education in accordance with § 6–612 of this subtitle.

There is a Maryland E–Nnovation Initiative Fund in the Department. The Secretary shall manage and supervise the Fund. The Fund is a special, nonlapsing fund that is not subject to § 7–302 of the State Finance and Procurement Article. The State Treasurer shall hold the Fund separately, and the Comptroller shall account for the Fund. The Fund consists of: revenue distributed to the Fund under § 2–202(a)(1) of the Tax – General Article; money appropriated in the State budget to the Fund; and any other money from any other source accepted for the benefit of the Fund. For each of fiscal years 2016 through 2026, the Governor shall include in the budget bill an appropriation to the Fund in an amount that when combined with the amount estimated to be distributed to the Fund under subsection (d)(1) of this section equals at least $8,500,000. The Department may use the Fund to: finance research endowments at nonprofit institutions of higher education in scientific and technical fields of study; and pay the related administrative, legal, and actuarial expenses of the Department. The State Treasurer shall invest the money of the Fund in the same manner as other State money may be invested. Any investment earnings of the Fund shall be credited to the Fund. Expenditures from the Fund may be made only in accordance with the State budget.

There is a Maryland E–Nnovation Initiative Fund Authority in the Department.

The Authority consists of: the Chief Executive Officer of the Maryland Technology Development Corporation, or the Chief Executive Officer’s designee; the Executive Vice President of the Maryland Technology Development Corporation, or the Executive Vice President’s designee; the Secretary of Commerce, or the Secretary’s designee; the Managing Director of the Maryland Venture Fund, or the Managing Director’s designee; the Chancellor of the University System of Maryland, or the Chancellor’s designee; and two individuals from the private sector not affiliated with higher education appointed by the President of the Senate and the Speaker of the House to the Maryland Innovation Initiative under § 10–455 of this article.

The chair of the Authority shall be chosen by the members of the Authority. The Authority shall determine the manner of election of officers and their terms of office.

Four members of the Authority are a quorum. An act of the Authority shall be approved by a majority vote of the members attending a meeting at which a quorum is present. A member of the Authority: may not receive compensation as a member of the Authority; but is entitled to reimbursement for expenses under the Standard State Travel Regulations, as provided in the State budget.

The Authority shall provide advice to and consult with the Department in connection with the administration of the Program under this subtitle.

The governing body of each nonprofit institution of higher education may create and administer one or more research endowments to receive funding from the Fund. A research endowment consists of funds distributed by the Authority from the Fund in accordance with § 6–618 of this subtitle and qualified donations. The governing body of a nonprofit institution of higher education may invest funds deposited into the research endowment in a manner consistent with other institutional endowments managed by the institution. Any interest or other investment earnings on the funds invested are retained by the nonprofit institution of higher education to be used for the purposes set forth in this subtitle. Investment earnings accruing to the research endowment of a nonprofit institution of higher education may be expended by the governing body of the institution only for the eligible uses under § 6–614 of this subtitle. The governing body of a nonprofit institution of higher education is exempt from liability for any loss or decrease in value of the assets or income of a research endowment, unless the losses or decreases in value result from bad faith, gross negligence, or intentional misconduct. The governing body of a nonprofit institution of higher education shall issue rules for the administration of research endowments that fulfill the purposes and requirements of this subtitle.

Private donations to a research endowment shall be considered a qualified donation if: the donation or pledge is expressly or specifically restricted by the donor for one or more of the eligible uses under § 6–614 of this subtitle; except as provided in item (ii) of this item, the individual donation or pledge is a minimum of $500,000 or is bundled with other qualified donations to meet the $500,000 threshold; or for an individual donation or pledge made to a research endowment of a nonprofit institution of higher education that has an annual unrestricted current funds budget of less than $250,000,000, the individual donation or pledge is a minimum of $200,000 or is bundled with other qualified donations to meet the $200,000 threshold; and the nonprofit institution of higher education accepts the donation from individuals, partnerships, associations, public or private for–profit and nonprofit corporations, or nongovernmental foundations. Notwithstanding subsection (a) of this section, a nonprofit institution of higher education may designate unrestricted gifts or bequests, or a portion of an unrestricted gift or bequest, for use as a qualified donation. A qualified donation excludes: any donation received by a nonprofit institution of higher education prior to October 1, 2014; educational or general fees, auxiliary fees, or other student fees generated by the institution; proceeds from promissory notes, bonds, loans, or other instruments evidencing an indebtedness or any other obligation of repayment by the governing body of a nonprofit institution of higher education to the maker of the instrument; or any other funds received from the State or federal government. The president of each nonprofit institution of higher education or the president’s designee shall make the initial determination of whether a donation constitutes a qualified donation. The president of the nonprofit institution of higher education shall provide a report to the governing body of the institution at least once each fiscal year regarding the amount of qualified donations the institution has received.

Endowment proceeds shall be expended by a nonprofit institution of higher education to further basic and applied research in scientific and technical fields of study as designated by the Authority that offer promising and significant economic impacts and the opportunity to develop clusters of technological innovation in the State, including: physical sciences; life and neuro sciences; engineering; mathematical and computational sciences; regulatory science; autonomous systems; aeronautical and space science; environmental sciences; behavioral and language science; health sciences; agriculture; or cybersecurity. Endowment proceeds may be expended by a nonprofit institution of higher education for: the payment of the base salaries of newly endowed department chairs, new professorship positions, new research scientists, or new research staff positions, including research technicians and support personnel, and to fund affiliated graduate or undergraduate student research fellowships, if the positions or fellowships are engaged in the areas of research identified in subsection (a) of this section; or the purchase of basic infrastructure, including laboratory and scientific equipment or other essential equipment and materials, related to an area of research identified in subsection (a) of this section. An individual in a position that is funded by endowment proceeds under subsection (b)(1) of this section shall: work at least 20% of the year in support of a federal laboratory or associated federal laboratory research support organization; hold a joint appointment or secondary position at another nonprofit institution of higher education in the State; or work at least 20% of the year in support of entrepreneurial activities with a company engaged in one or more of the research areas identified in subsection (a) of this section. The Authority shall issue eligibility criteria regarding the expenditure of endowment proceeds to pay the base salaries of personnel, fund student fellowships, and purchase basic infrastructure.

The governing body of each nonprofit institution of higher education shall submit a research endowment plan to the Authority prior to submitting its first request for a distribution of matching funds from the Fund. The research plan shall include: any information requested by the Authority to ensure compliance with the requirements of this subtitle; and a demonstration of interest from qualified private donors to meet the criteria established by the Authority.

Except as provided in § 6–619 of this subtitle, the Authority shall make available no more than 25% of cumulative program funds from the Fund to a single nonprofit institution of higher education to match qualified donations. A nonprofit institution of higher education seeking a distribution of matching funds from the Fund shall first obtain qualified donations in an amount equal to the amount of matching funds requested for distribution and shall submit a request to the Authority. The request shall include: the amount requested for distribution to the nonprofit institution of higher education in accordance with subsection (a) of this section; the amount of qualified donations designated for use in requesting the distribution of matching funds from the Fund; an explanation of how the proposed use satisfies the criteria for eligible uses of endowment proceeds under § 6–614 of this subtitle; an explanation of how the proposed use of the endowment proceeds furthers the purposes of this subtitle and addresses the research needs of the institution as identified in the research plan; and a designation of the applicable research endowment into which the requested matching funds are to be deposited. The Authority shall review each request for distribution of matching funds from the Fund for compliance with the provisions of this subtitle and Department regulations. If the Authority approves the request of a nonprofit institution of higher education, the Authority shall distribute matching funds to the applicable research endowment in an amount equal to the amount of qualified donations.

Within 90 days after approval by the Authority of a request for matching funds under § 6–618 of this subtitle, each nonprofit institution of higher education shall deposit an amount of qualified donations equal to or greater than the total amount of funds allocated for distribution to the nonprofit institution of higher education in accordance with § 6–618 of this subtitle. If a nonprofit institution of higher education fails to have deposited into its research endowments the required amount of qualified donations as required under subsection (a) of this section, any portion of the funds allocated to the institution that has not been distributed shall be reallocated to another nonprofit institution of higher education in accordance with this subtitle. This subsection applies to a nonprofit institution of higher education that anticipates that the institution will not receive the entire amount of a qualified donation on which the institution intends to rely for purposes of requesting matching funds from the Authority before the end of the fiscal year in which the research endowment plan is approved. Except for the type of funds set forth in § 6–613(c)(2), (3), and (4) of this subtitle, a nonprofit institution of higher education may deposit available funds from other sources within the nonprofit institution of higher education into the research endowment for purposes of satisfying the 90–day deposit requirement in subsection (a) of this section if the nonprofit institution of higher education has disclosed the following information in the research endowment plan approved by the Authority: the intent of the nonprofit institution of higher education to rely on the other funds; the source of the other funds; and other information the Authority may have requested regarding other funds at the time of its consideration of the approved research endowment plan. If the Authority fails to allocate the funds in the Fund under this subtitle and a nonprofit institution of higher education has previously received 25% of cumulative program funds from the Fund, the Authority may distribute additional funds to the nonprofit institution in accordance with this subtitle.

The Department shall administer this subtitle and shall adopt regulations to carry out this subtitle.

On or before January 1, 2016, and January 1 of each subsequent year, the Department shall submit a report on the implementation of the Program to the Governor and, in accordance with § 2–1257 of the State Government Article, the Senate Budget and Taxation Committee and the House Ways and Means Committee. The Department shall publish the report on the Department’s website in a publicly available format. The report published on the website may not include any proprietary or confidential information. The report shall include, with respect to each nonprofit institution of higher education that has received an allocation of funds from the Fund: the name and address of the institution; the names of the individuals making decisions on behalf of the institution regarding expenditure of the funds allocated; the amount of funds received during the previous fiscal year; the cumulative amount of funds received; and the amount of funds remaining unspent at the end of the previous fiscal year.