702

LAWS OF MARYLAND

Ch. 33

The second clause of present Art. 41, §
266HH-5(5), which requires an applicant be denied
a loan to be eligible for a loan guarantee now
appears in § 13—231 of this subtitle.

13-229. LIMITATIONS ON POWER TO GUARANTEE EQUITY;
PROHIBITED INVESTORS.

(A)   IN GENERAL.

THE AUTHORITY MAY GUARANTEE A PERSON'S PROPOSED EQUITY
INVESTMENT IN THE APPLICANT ONLY IF:

(1)      THE APPLICANT MEETS THE REQUIREMENTS OF THIS
SUBTITLE;

(2)      THE AMOUNT OF THE EQUITY INVESTMENT TO BE
GUARANTEED DOES NOT EXCEED THE LESSEE OF:

(I)       10 PERCENT OF THE PERSON'S EQUITY
INVESTMENT IN THE APPLICANT; OR

(II)      $150,000; AND

(3)   THE EQUITY INVESTMENT TO BE GUARANTEED IS TO
BE USED PRIMARILY FOR WORKING CAPITAL.

(B)   PROHIBITED INVESTORS.

THE AUTHORITY MAY NOT GUARANTEE THE EQUITY INVESTMENT
OF A PERSON WHO:

(1)   PREVIOUSLY HELD AN EQUITY INVESTMENT IN THE
APPLICANT;

(2)   PREVIOUSLY PARTICIPATED IN THE MANAGEMENT OF
THE APPLICANT; OR

(3)   IN ANY OTHER MANNER IS RELATED TO:

(I)   THE APPLICANT; OR

(II)   ANY OF ITS CURRENT STOCKHOLDERS,
OFFICERS, OR OTHER MANAGEMENT PERSONNEL.

REVISOR'S NOTE: This section is new language derived
without substantive change from Art. 41, §
266HH-5(3) and (4) — as that paragraph relates
to guarantees of equity investments.

Subsection (a) (1) of this section is new language
substituted for the present references to
"eligible applicants" and "eligible corporation".
In this regard, see the revisor's note to §
13-228 of this subtitle. The limitation that
only corporations may apply for a guarantee of an