State Agencies

capital available to businesses owned by minority
or disadvantaged individuals to fulfill contracts
awarded by any level of government (Chapter
879, Acts of 1978). The Authority does not com-
pete with private lending institutions since it must
be assured prior to the granting of a loan that
private capital is not available and loans are
made at the prevailing market rate. Recipient
firms, historically small in size and brief in expe-
rience, are usually considered "high risk" busi-
nesses by the private lender. The functions of the
Authority relate entirely to federal. State, and lo-
cal contracts. The Maryland Small Business De-
velopment Financing Authority is governed by
five appointed directors, in addition to the Secre-
tary of the Department of Economic and Com-
munity Development and either the State Trea-
surer or Comptroller.

MARYLAND INDUSTRIAL
DEVELOPMENT FINANCING
AUTHORITY (MIDFA)

Chairperson: James C. Johnson, 1983
Vice-Chairperson: Patricia B. Bissell, 1984

Ex officio members: James 0. Roberson, Secretary
of Economic and Community Development; Wil-
liam S. James, State Treasurer

Appointed members: Nicholas F. Mueller, 1980;
J. Michael McWilliams, 1981; Thomas H.
Mullaney, 1982; Richard N. Dixon, 1984; one
vacancy.

Oliver H. Fulton, Executive Director and Secre-
tary

John G. Fitzpatrick, Associate Director and Assis-
tant Secretary

Judith S. Waranch, Assistant Attorney General—
Counsel

World Trade Center
Suite 2244
401 E. Pratt Street
Baltimore 21202 Telephone: 659-4262

The Maryland Industrial Development Financ-
ing Authority (MIDFA) was created by the Gen-
eral Assembly of 1965 (Chapter 714, Acts of
1965) for the purpose of aiding the financing of
business enterprises seeking to locate or expand
their operations in Maryland. MIDFA consists of

Economic and Community Development/143

a nine-member Authority, seven of whom are
appointed by the Secretary of Economic and
Community Development with the approval of
the Governor. The Secretary of Economic and
Community Development or his designee, and ei-
ther the State Treasurer or Comptroller of the
Treasury (as chosen by the Governor), serve as ex
officio members. The Authority elects its own of-
ficers and appoints an Executive Director who
serves as Secretary.

By approving mortgage loans made by private
lenders, MIDFA enables companies to obtain
loans at a higher percentage of project cost, at a
lower interest rate, and for a longer term than is
normally available from conventional sources.
Land, buildings, and equipment can be financed
through this program. A company seeking
midfa's assistance must generally qualify in
each of three basic requirements: legal eligibility,
economic impact, and credit worthiness.

To be legally eligible, a company must be en-
gaged in one of the following types of business
activity: manufacturing; warehousing of manufac-
tured, agricultural, or seafood products; research
and development; certain tourist and convention
facilities; mercantile, retail, or service facilities
that primarily serve out-of-state markets; office
buildings for corporate headquarters or regional
offices; certain port improvements and public use,
privately owned, airport facilities; gasohol; and
racetracks or sports arenas. Each project or activ-
ity seeking loan assistance must hold promise for
resulting in substantial economic impact on
Maryland and the community where the project
is located. The number of new jobs to be created,
the generation of taxes, and meeting local com-
munity needs are primary considerations. Addi-
tionally, the overall financial condition of the
company, as well as the value of collateral secur-
ing the loan, is important. The faith and credit of
the State of Maryland are not pledges for the re-
payment of the loan,

MIDFA has a dual function: first, it approves
loans for tax-exempt financing; and second, it in-
sures a portion of the loan. Usually the two func-
tions are combined, but in some instances a com-
pany may request approval for tax-exempt status
but the lender will not require insurance. MIDFA
is permitted to insure any portion of the loan up
to 90 percent of the cost of the land and build-
ings and up to 70 percent of the cost of equip-
ment. The loan, however, may be made up to 100
percent of eligible costs. The total amount of the
insured portions of the MIDFA loans outstand-
ing cannot exceed an amount equal to five times
the balance in midfa's Industrial Project Mort-