218/Maryland Manual

MARYLAND INDUSTRIAL
DEVELOPMENT FINANCING AUTHORITY
Joseph Haskins, Jr., Chairperson^ 1994
Thomas H. Mullaney, Vice-Chairperson, 1992

Appointed by Secretary of Economic & Employment
Development with Governor's approval: Thomasine M.
Tarsell, 1991; Bernard Roman, 1992; Wlliam F.
Brooks, Jr., 1993; James H. Taylor, 1994; Edwin
F. Hale, 1995.

Ex officw; ]. Randall Evans, Secretary of Economic
& Employment Development; Louis L. Goldstein,
Comptroller of the Treasury.

Benjamin L. Hackcrman, Executive Director ^r
Secretary

217 E. Redwood St.
Baltimore, MD 21202 333-4263

The Maryland Industrial Development Financ-
ing Authority (MIDFA) was created in 1965
(Chapter 714, Acts of 1965). The Authority
provides financial assistance to enterprises seeking
to locate or expand operations in Maryland.
MIDFA operates four loan financing programs.
Under its tax-exempt Traditional Bond Programs,
companies can finance land acquisition and the pur-
chase of all types of buildings and equipment. The
Bond Insurance Fund is used as reserves for financial
assistance provided under the Bond Programs.
Under its Conventional Loan Program, MIDFA
insures many types of conventional loans made by
financial institutions. The Authorized Purpose In-
surance Fund is used as reserves for loans and other
obligations insured under the Conventional Loan
Program.
MIDFA also may issue bonds under and in ac-
cordance with the Maryland Economic Develop-
ment Revenue Bond Act.
Through the Traditional Program and its
Bond Insurance Fund, MIDFA may insure all or
any part of the payments of principal and interest
under tax-exempt economic development
revenue bonds issued by Maryland counties,
municipalities, industrial development
authorities, and other Maryland public bodies to
finance a specific facility for a manufacturing
company Certain revenue bonds are exempt from
federal and Maryland income tax (but not from
real estate or personal property taxes). Therefore,
interest rates on these bonds are generally lower
than interest rates on conventional loans.
The Bond Programs benefit companies by
providing loans for a higher percentage of the costs
of the facility, at a lower interest rate, and for a
longer term than conventional financing.
Under the Conventional Loan Program or the
Export Hnancing Program, MIDFA may insure a loan
or other obligation; insure the payment of premiums

or fees necessary to obtain insurance, guarantees,
or other credit support from a third party; or pay
such premiums or fees. Insurance provided by the
Authority may not exceed the lesser of either 80
percent (or 90 percent in the case of export financ-
ing) of the sum of the principal amount of the loan
or other obligations plus accrued interest thereon,
or $1 million per transaction.
To participate in MIDFA's programs, a company
must generally qualify in each of three basic
categories: legal eligibility economic impact, and
creditworthiness (Code Financial Institutions Ar-
ticle, sees. 13-101 through 13-141; Federal Inter-
nal Revenue Code, sec. 103).
MIDFA's policy and decision-making body is a
nine-member Authority. Seven members are ap-
pointed to five-year terms by the Secretary of
Economic and Employment Development with the
approval of the Governor. The Secretary of
Economic and Employment Development or
designee, and either the State Treasurer or Comp-
troller of the Treasury as designated by the Gover-
nor, or their designees serve ex officio. The
Authority appoints an Executive Director who ser-
ves as Secretary

MARYLAND ENTERPRISE INCENTIVE DEPOSIT
FUND
The Maryland Enterprise Incentive Deposit
Fund was created in 1989 (Chapter 822, Acts of
1989). The Fund assists eligible small businesses in
fixed asset financing. This financing assistance is
provided through the placement of a certificate of
deposit with a participating lender who agrees to
make a five-year term loan to the business at a loan
interest rate three percent less than the rate normal-
ly charged. Concurrendy the Fund agrees to accept
an interest rate on the certificate which is three
percent less than the market rate on certificates of
similar maturity This assistance may not exceed
$500,000.
An eligible business is a for-profit business,
employing 500 people or less, located in a county
with a population of less than 200,000 and an
unemployment rate at least 130% of the rate for the
State during the most recent four consecutive
quarters. The Fund is administered by the Maryland
Industrial Development Financing Authority

MARYLAND SEAFOOD & AQUACULTURE LOAN
FUND

Established in 1990, the Maryland Seafood and
Aquaculture Loan Fund fosters expansion, modern-
ization, and innovation in the seafood processing and
aquaculture industries (Chapter 511, Acts of 1990).
The Fund can provide a loan of up to half the
cost of a project with the maximum loan being
$250,000. The interest rate on loans is fixed at a
rate below the prime rate of interest at the time the
loan is approved. Loans may be used for equipment