Highlights from Maryland's Legislative Session

Before the 2025 Legislative Session began, we knew the budget deficit would shape the 447th Maryland General Assembly. The federal administration transition has brought additional unknown budgetary impacts to Maryland. 

Today, I'll summarize some of the key Bills we provided testimony on this year. 

Modernizing the Buy Maryland Cyber Tax Credit

The Buy Maryland Cyber Tax Credit was originally established to encourage small businesses
to invest in cybersecurity technologies and services from Maryland-based vendors. However, as
outlined in the Department of Legislative Services’ December 2023 evaluation, the program has
been underutilized due to restrictive eligibility criteria, administrative complexity, and lack of
clear intent language.

Beginning in spring 2024, we conferred with the Maryland Department of Commerce and other stakeholders to modernize the Tax Credit. We were thrilled to learn that our proposals were included in the Delivering Economic Competitiveness and Advancing Development Efforts (DECADE) Act (HB498/SB427), a landmark Bill introduced by Gov. Wes Moore to stimulate Maryland's economy.

The key aspects of modernization include: 

Buyer-Side Enhancements

1. Streamlined Buyer Qualification – The qualification process should be simplified to
allow for rapid eligibility determination, ensuring that businesses can quickly access
cybersecurity resources.
2. Refundable Tax Credits – Converting the tax credit into a refundable credit will enable
businesses with little or no tax liability to fully benefit from the program.
3. Elimination of the Employee Cap – Removing the current employee limit will allow
more businesses to participate and strengthen Maryland’s cybersecurity resilience.
Seller-Side Enhancements

Seller-Side Enhancements
1. Increase Sales Cap for Sellers – Raising the maximum revenue threshold for
participating sellers from $5 million to $10 million will expand the pool of qualified
cybersecurity providers.
2. Eliminate Service Cap – Removing the 25% cap on services will allow businesses to
fully utilize the tax credit for both cybersecurity products and services, reflecting the
reality of modern cybersecurity needs.
3. Raising Per-Seller Cap – Raising the individual cap on sellers will ensure fair
competition and better access to cybersecurity solutions.

We were proud that Chris Riismandel, owner of Epoch, a Qualified Buyer who has partnered with countless businesses to improve their cybersecurity posture, could join us in Annapolis to provide favorable testimony. 

Updating the Cyber Maryland Program

The Cyber Maryland program was established in 2023 with a strong mission - narrow the gap between the hiring needs and the available talent pool to fill the 25K open jobs in Maryland. We provided favorable testimony the Cyber Maryland Program - Revisions (SB 241/HB 082), which includes moving the program from TEDCO to the Maryland Department of Labor. This alignment will enable the Cyber Maryland program to:

• Enhance collaboration: By residing within the Department of Labor, the program can more effectively collaborate with other workforce development initiatives, maximizing resources and avoiding duplication of efforts.
• Expand reach: The Department of Labor's established network and connections within the workforce ecosystem will allow the Cyber Maryland program to reach a broader audience, including individuals from diverse backgrounds and underserved communities.
• Increase access to resources: The Department of Labor has access to a wider range of funding streams and support services that can be leveraged to expand the program's impact and reach.
• Improve program effectiveness: Closer alignment with the Department of Labor's mission and expertise will facilitate more targeted and impactful program development and implementation.

TEDCO has done a commendable job in supporting the Cyber Maryland Program. However, this strategic move to the Department of Labor represents a natural evolution that will enable the program to thrive and better serve the needs of Maryland's cybersecurity industry and its workforce. Another Bill, was introduced to update the Cyber Maryland program, which we supported with amendments to allow for more flexible deployment of the funds. The Department of Labor and Bill sponsors are working together to reconcile their respective Bills and we anticipate a positive outcome. 

We were excited to see that Gov. Moore included $5M funding for the Cyber Maryland program in his proposed budget, and are advocating with the legislative bodies to approve funding for this program. 

Safe Harbor for Proactive Healthcare Entities

Cybersecurity - Healthcare Ecosystem (SB 691/HB 333) addresses the critical need for strong cybersecurity defenses in healthcare, an industry that is highly targeted by adversaries to extort data and interrupt operations. The Bill would increase cybersecurity oversight, establish cybersecurity standards and practices, improve incident response, and foster collaboration and planning. We acknowledge the importance of cybersecurity for the healthcare ecosystem, but any legislation should ensure alignment with federal standards and regular updates. Additionally, we submitted an amendment granting affirmative defense in tort actions for healthcare entities that implement and maintain reasonable cybersecurity measures based on recognized industry standards. This approach incentivizes compliance while protecting hospitals and other covered entities from undue liability when they make good-faith efforts to secure sensitive information.

Looking Forward

This week, we will oppose Taxable Business Services - Alterations (SB 1045/HB 1154) which poses a direct threat to Maryland’s cybersecurity industry by imposing a 2.5% sales tax on critical business services—including IT and cybersecurity consulting. This new tax will increase costs for businesses, discourage investment, and put Maryland companies at a competitive disadvantage. We will provide an update on this Bill and previous Bills shortly. 

Onwards!

Tasha Cornish

Executive Director