In this subtitle the following words have the meanings indicated. “Fund” means the Maryland Economic Adjustment Fund. “Working capital” means money for current operations of a business. “Working capital” includes money for supplies, materials, labor, equipment, rent, software, marketing, insurance, and fees for professional services.

Financial assistance from the Fund may be approved by the Secretary or the Secretary’s designee. The exercise by the Department of the powers granted under this subtitle is the performance of an essential governmental function.

There is a Maryland Economic Adjustment Fund in the Department. The Department shall administer the Fund. The Secretary may: delegate to any unit in the Department the underwriting, closing, monitoring, and workout functions for Fund loans; or contract with another entity to perform these functions. The Maryland Economic Adjustment Fund is a special, nonlapsing revolving fund that is not subject to reversion under § 7-302 of the State Finance and Procurement Article. The Fund consists of: federal money allocated or granted to the Fund, including adjustment implementation grant money designated for the Fund under the Defense Conversion and Defense Economic Adjustment Program of the Economic Development Administration of the United States Department of Commerce; private money donated or granted to the Fund; money appropriated by the State to the Fund; premiums, fees, interest payments, and principal payments on loans made under this subtitle, including a loan financed by the Economic Development Opportunities Program Fund under § 7-314(f) of the State Finance and Procurement Article; proceeds from the sale, disposition, lease, or rental of collateral relating to loans under this subtitle; and any other money made available to the Fund. This subtitle does not require an appropriation to the Fund from the General Fund of the State, regardless of the availability of other funding sources for the Fund. The Fund shall be used to: make loans to new or existing companies with 50 or fewer employees; make grants to local or regional governmental or nonprofit economic development revolving loan funds in the State; and pay all expenses and disbursements authorized by the Department for administering the Fund. A loan to an eligible company under this subtitle may include: advances of loan proceeds for loans; and to the extent allowed by the regulations of the federal Economic Development Administration of the United States Department of Commerce, money for expenses for administrative, legal, actuarial, technical, and other services. Subject to the restrictions of this subtitle, the Department may make a loan from the Fund to an applicant only if: the applicant meets the qualifications under this subtitle; and the applicant meets any additional requirements imposed by the source of the money to be loaned. The Treasurer shall invest the money of the Fund in the same manner as other State money may be invested. Any investment earnings of the Fund shall be credited to the Fund. The Treasurer shall submit a report each year to the Department on: the status of the money invested under this subtitle; the market value of the assets in the Fund on the date of the report; and the interest received from investments for the Fund during the reporting period.

The Department shall adopt regulations to carry out this subtitle.

An applicant for a loan under this subtitle shall submit to the Department an application on the form that the Department requires. The application shall include: a detailed strategic business plan; the amount of money required for the activities described in the strategic business plan; the money available to the applicant without financial assistance from the Department; the amount of financial assistance requested from the Department; information relating to the financial status of the applicant, including, if applicable: a current balance sheet; a profit and loss statement; and credit references; and any other relevant information that the Department requests.

Except as otherwise provided in this subtitle, the Department may set the terms and conditions for loans and grants made under this subtitle. The Department shall: determine whether to approve loan requests from qualified applicants for loans under this subtitle; set the terms and conditions for loans made under this subtitle; and determine that the applicant was unable to obtain the financing necessary for the activities on affordable terms through the normal lending channels. The maximum amount of a loan made with money from the Economic Development Administration of the United States Department of Commerce may not exceed the limit it sets by regulation. The proceeds of a loan may be used for working capital, equipment, furnishings, fixtures, or the construction, rehabilitation, or purchase of real property for the activities that the Department approves. The Department may authorize a flexible repayment schedule for a loan under this subtitle.

The Department shall prepare the loan documents for loans under this subtitle. The loan documents shall include: the interest rate on the loan; the amount of the loan; repayment provisions for the loan; and any other provision that the Department determines is necessary, including a provision on taking liens and security interests in real or personal property.

If a recipient of a loan under this subtitle violates any provision of the loan documents or ceases to meet the requirements of this subtitle, the Department may, on reasonable notice to the loan recipient: withhold further advances of loan proceeds until the loan recipient complies with the agreement or requirements; or exercise any other remedy provided in the loan documents. If a loan made under this subtitle is in default, the Department may foreclose on a mortgage or deed of trust held as security for the loan in the manner provided under the Maryland Rules for foreclosures in private transactions. The Department may take title in the Department’s name to any property foreclosed and convey title to a bona fide purchaser.

A person may not knowingly make or cause to be made a false statement or report: in an application or document provided to the Department; or to influence Department action affecting financial assistance, whether or not the assistance already has been extended. A person who violates this section is guilty of a misdemeanor and on conviction is subject to imprisonment not exceeding 5 years or a fine not exceeding $50,000 or both.