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(a) Subject to the restrictions of this subtitle, the Department or Authority may impose the terms and conditions on financial assistance from the Fund as either considers appropriate.
(b)(1) Except as provided in paragraph (2), (3), or (4) of this subsection, financial assistance from the Fund may not exceed 70% of the total costs of the project being financed.
(2) Financial assistance from the Fund may constitute 100% of the total costs of the project being financed if:
(i) the recipient is the Corporation; or
(ii) the financial assistance is for:
1. an arts and entertainment enterprise;
2. an arts and entertainment project; or
3. a Tier I county project.
(3)(i) Except as provided in subparagraph (ii) of this paragraph, financial assistance from the Fund:
1. may be used to finance up to 50% of the costs of construction, purchase, or renovation of real property, fixtures, or equipment related to a child care facility; but
2. may not be used for working capital, supplies, or inventory related to a child care facility.
(ii) Financial assistance from the Fund may be used to finance up to 20% of the costs described in subparagraph (i) of this paragraph incurred by a business that has received or will receive a day care loan insured by the Maryland Industrial Development Financing Authority.
(4) Financial assistance for preparation of a strategy or plan for economic development of a county or municipal corporation may not exceed:
(i) 50% of the costs of preparation; or
(ii) $50,000 in a 3-year period.
(c)(1) A loan from the Fund shall bear an interest rate below the market rate of interest, as determined by the Department, if the loan is for:
(i) a significant strategic economic development opportunity; or
(ii) a specialized economic development opportunity.
(2) A loan from the Fund for a Tier I county project shall bear an interest rate determined by the Department or the Authority.
(3) A loan from the Fund shall bear an interest rate not exceeding one-eighth of 1% plus the net interest cost of the most recent State general obligation bond issue preceding the approval of the loan if the loan is:
(i) for a local economic development opportunity; or
(ii) to a local government.
(4) A loan from the Fund may not bear an interest rate of less than 3% unless:
(i) the project funded by the loan is located in an area of high unemployment; or
(ii) the Department determines that the borrower is carrying out a compelling economic development initiative.
(d)(1) The Department may waive interest during the first 2 years of the term of a loan from the Fund.
(2) If a borrower defaults on a loan from the Fund, the Department may impose an interest rate that exceeds the limits set forth in subsection (c)(1) or (3) of this section.
(e) The term of a loan from the Fund may not exceed:
(1) for working capital, 3 years;
(2) for financing equipment, furnishings, or fixtures, the lesser of 15 years or the useful life of the asset, as determined by the Department;
(3) for financing the construction or acquisition of buildings and real property, 25 years; and
(4) for financing the redevelopment of a qualified brownfields site or a Tier I county project, a term approved by the Department or Authority.
Cite this article: FindLaw.com - Maryland Code, Economic Development § 5-325 - last updated December 31, 2021 | https://codes.findlaw.com/md/economic-development/md-code-econ-dev-sect-5-325/
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