170/Maryland Manual

with the approval of the Governor. The Secretary
of Economic and Community Development or his
designee, and either the State Treasurer or Comp-
troller of the Treasury (as chosen by the Gover-
nor), serve as ex officio members. The Authority
elects its own officers 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 generally must meet three
basic requirements: legal eligibility, economic im-
pact, 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 of
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 community needs are
primary considerations. Additionally, the overall
financial condition of the company, as well as the
value of collateral securing the loan, is important.
The faith and credit of the State of Maryland are
not pledges for the repayment of the loan.

MIDFA has a dual purpose: 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. Yet, in some instances, a
company 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
buildings and up to 70 percent of the cost of
equipment. The loan, however, may be made to
cover up to 100 percent of eligible costs. The to-
tal amount of insured portions of MIDFA loans
outstanding cannot exceed an amount equal to
five times the balance in MIDFA'S Industrial
Project Mortgage Insurance Fund. As of August
1980, the balance in the Fund was $19,500,000.
MIDFA'S insurance is limited to $5,000,000 per
project.

Insured loans generally are secured by a first

lien mortgage on the project being financed. In
cases where MIDFA does not insure the loan,
however, the first lien requirement is eliminated.
The legal maximum term of an insured loan on
real estate is twenty-five years, while fifteen years
(or useful life, if less) is the maximum on equip-
ment. There are no term requirements for loans
not insured by MIDFA. MIDFA charges an in-
surance premium of 0.5 percent of the insured
balance on insurance loans. This premium is
waived in any political subdivision where unem-
ployment is high.

Generally, the local governmental body must
borrow the necessary funds to acquire a particu-
lar project. The project may be owned by or
leased to a company. Loan or lease payments are
made to the local governmental body to coincide
in amount and term with the loan payments re-
quired by the lender. In the case of a lease ar-
rangement, the property is conveyed to the com-
pany for a nominal sum when the loan is paid in
full.

By June 30, 1981, MIDFA had approved 208
loans totalling $244,935,000 (Code Financial In-
stitutions Article, secs. 13-101 through 13-155)

In 1981, the General Assembly granted
MIDFA the authority to issue "umbrella bonds"
to fund groups of small loans of less than $1 mil-
lion, each pooled together to comprise a single
bond offering.

OFFICE OF SEAFOOD MARKETING

Gordon P. Hallock, Program Director

1748 Forest Drive
Annapolis 21401 Telephone: 269-3461

The Office of Seafood Marketing (OSM) pro-
motes increased consumption and distribution of
Maryland seafood. In conjunction with this ob-
jective it seeks efficient methods to reduce cost
and improve the quality and marketability of the
product.

OFFICE OF TOURIST DEVELOPMENT

Kurt P. Alverson, Director

1748 Forest Drive
Annapolis 21401 Telephone: 269-2686

The Office of Tourist Development (OTD) pro-
motes Maryland's scenic, recreational, cultural,
and historic attractions. It also provides matching
funds for local jurisdictions to implement pro-
grams that complement State efforts to attract
new visitors to Maryland.