In this subtitle the following words have the meanings indicated. “Approved project” means a project that the Department approves under § 6–405 of this subtitle. “Business entity” means a person that conducts a trade or business in the State and is subject to: the State income tax on individuals or corporations; the public service company franchise tax; or the insurance premiums tax. “Individual” means an individual as defined under § 10–101 of the Tax – General Article. “Nonprofit organization” means a nonprofit corporation, foundation, or other legal entity that is exempt from federal income tax under § 501(c)(3) of the Internal Revenue Code. “Priority funding area” means a priority funding area under § 5–7B–02 of the State Finance and Procurement Article. “Redevelopment assistance” means the money that nonprofit organizations spend for labor and materials used directly in the physical improvement of part or all of a priority funding area.

There is a Neighborhood and Community Assistance Program.

The purposes of the Neighborhood and Community Assistance Program are to: help nonprofit organizations to carry out approved projects in priority funding areas; encourage business entities and individuals to invest in priority funding areas; and strengthen partnerships between public and private entities.

For a contribution worth $500 or more in goods, money, or real property to an approved project, a business entity or an individual is entitled to a tax credit in the amount determined under subsection (b) of this section. No part of a tax credit under this section may be taken more than once. Except as provided in paragraph (2) of this subsection, the credit allowed to a business entity or an individual under this section equals 50% of the amount of contributions: that the Department approves under subsection (c) of this section; and that were made during the taxable year for which the credit is claimed. The credit allowed under this section for any taxable year may not exceed the lesser of: $250,000; and the total amount of tax otherwise payable by the business entity or individual for the taxable year. Any excess credit that would be allowed but for the limits of paragraph (2) of this subsection may be carried over and applied as a credit for up to 5 taxable years after the taxable year in which the contribution was made, until the full amount of the excess is used. To qualify for a credit for a contribution under this section, before making a contribution, a business entity or an individual shall apply for and receive approval of the contribution from the Department. Each application for approval of a contribution shall contain: the name of the approved project to which the contribution will be made; the amount of the contribution; and a certification by an independent and unrelated third party as to the value of any nonmonetary contribution included or, for new goods, an invoice or receipt certifying the contribution’s net cost to the business entity or individual. The Department may not approve an application if it determines that: the maximum amount of contributions eligible for a tax credit for the project for the fiscal year will be exceeded by the sum of: the amount of the proposed contribution; and the total amount of contributions previously approved for that project for the fiscal year; or the applicant has overstated the value of a nonmonetary contribution. On or before January 31 of each year, the Department shall report to the Department of Assessments and Taxation, the Comptroller, and the Maryland Insurance Administration the contributions that the Department has approved under this section in the preceding calendar year.

For each fiscal year, a nonprofit organization may submit to the Department, for approval under the Neighborhood and Community Assistance Program, a proposal for a project to provide services to a priority funding area. The project may include: community services, including child care and recreational services; educator workforce housing; redevelopment assistance; job training for individuals whose incomes do not exceed the upper income limits that the Secretary sets under § 4–212 of this article; education; and crime prevention. A proposal under this section shall include: the project to be conducted; the priority funding area that will benefit from the project; a description of the applicant’s experience and capabilities; the estimated costs of the project; a description of the plans for implementing the project; and any other information that the Department determines is necessary. The Department shall provide written notice to the political subdivision or if the proposed project is an educator workforce housing development project, the local school system, in which the proposed project is located. Subject to paragraph (3) of this subsection and except as provided in paragraph (5) of this subsection, the Department may not approve a proposal submitted under this section unless the proposal is approved by the governing body or authorized designee of: each county that includes any of the priority funding area that benefits from the project, if the project is not in a municipal corporation; each municipal corporation that includes any of the priority funding area that benefits from the project; or each political subdivision that includes any of the priority funding area that benefits from the project, if the priority funding area is partly within and partly outside of any municipal corporation. If the project is an educator workforce housing development project: approval by a county board of education or an authorized designee of a local school system that benefits from a project is not required; but the Department may not approve a proposal submitted under this section without notifying the county board of education or authorized designee of at least one local school system that benefits from the project in accordance with paragraph (1) of this subsection. An approval shall: be in writing; and state the maximum amount of contributions to the approved project that are eligible for a tax credit under § 6–404 of this subtitle. If the Department does not receive notice of approval or denial of an application from the affected jurisdictions within 45 days after notice of the proposed project is given in accordance with paragraph (1) of this subsection, the Department may approve the application. The sum of contributions eligible for a tax credit under § 6–404 of this subtitle for all approved projects for a fiscal year may not exceed $3,500,000. In approving or disapproving a proposal and in determining the maximum amount of contributions eligible for tax credits under § 6–404 of this subtitle, the Department: shall consider: the need for the project in relation to the need for other proposed projects; the anticipated benefit to the priority funding area; the capacity of the applicant to raise money for the project; the readiness of the applicant to proceed with the project; the ability of the applicant to complete the project as proposed; the geographic distribution of projects; and any other relevant factors; may give preference to a proposal that benefits: a sustainable community under § 6–305 of this title; or a neighborhood conservation district that is locally designated in coordination with the Department’s Neighborhood and Community Assistance Program; may request data and assistance from other units of the State; and shall apportion among all approved projects the limit imposed by subsection (c)(6) of this section.

The Department shall adopt regulations to carry out this subtitle.