In this subtitle the following words have the meanings indicated. “Authority” means the Maryland Small Business Development Financing Authority. “Financial institution” means: a financial institution, as defined in § 1–101 of the Financial Institutions Article; and any other lender that the Authority approves. “Fund” means the Maryland Small Business Development Financing Fund. “Loan document” means an instrument or agreement that evidences, secures, or guarantees a loan. “Loan document” includes a note, financing statement, mortgage, pledge, assignment, loan and security agreement, or guaranty. “Working capital” means money used to meet the cash needs of an operating business entity. “Working capital” does not include money used for a capital purchase.

The General Assembly finds that: the inability of socially or economically disadvantaged individuals to obtain working capital is a major limitation on their opportunity to win and perform government and other contracts; because socially or economically disadvantaged individuals frequently have been awarded government or other contracts but have lacked the working capital to post a bond, buy supplies needed to begin the work, or pay employees, these individuals have been unable to accept the contracts; some individuals are unable to obtain government and other contracts for reasons other than the cost to the owner or the ability to perform the contract work competently; socially or economically disadvantaged individuals frequently lack adequate capital to sustain and expand their businesses and to hire and train employees; because high risk, problem, or uncollectible loans are not in the interest of financial institutions, financial institutions generally are reluctant to lend money to socially or economically disadvantaged individuals with insufficient records of performance; the inability of businesses owned by socially or economically disadvantaged individuals to obtain long–term financing is a major limitation on their opportunity to survive and expand; and the public welfare is served by promoting the viability and expansion of businesses owned by economically or socially disadvantaged individuals, retaining or increasing the employment of these individuals, and expanding the taxable base of the economy of the State. The purposes of the Fund are: to assist socially or economically disadvantaged individuals to obtain adequate working capital to begin, continue, and complete projects; to encourage socially or economically disadvantaged individuals to seek government and other contracts; to encourage financial institutions to make loans to these individuals; and to assist small businesses that are unable to obtain adequate business financing on reasonable terms through normal financing channels because the businesses do not meet the established credit criteria of financial institutions.

There is a Maryland Small Business Development Financing Authority in the Department.

The Authority consists of the following nine members: seven members appointed by the Governor; the Secretary or the Secretary’s designee; and the Comptroller or the Treasurer as designated by the Governor; or the designee of the Governor’s designee. The term of an appointed member is 5 years. The terms of appointed members are staggered as required for appointments to the Authority on October 1, 2008. At the end of a term, an appointed member continues to serve until a successor is appointed and qualifies. A member who is appointed after a term has begun serves only for the rest of the term and until a successor is appointed and qualifies. The Governor may remove an appointed member for cause.

The Authority shall elect a chair, vice chair, and treasurer from among its members. The Authority shall determine the manner of election of officers and their terms.

Four members of the Authority are a quorum. The Authority may not act on any matter unless at least four members in attendance concur. The Authority shall determine the times and places of its meetings. A member of the Authority is entitled to reimbursement for expenses under the Standard State Travel Regulations, as provided in the State budget. The Authority may employ a staff in accordance with the State budget.

The Executive Director is the chief administrative officer of the Authority. With the approval of the Secretary, the Authority may: appoint the Executive Director; or contract with a private entity to perform the duties of the Executive Director. The Executive Director serves at the pleasure of the Authority, with the concurrence of the Secretary. In addition to any other duties set forth in this subtitle, the Executive Director shall: supervise the administrative affairs and technical activities of the Authority in accordance with its regulations and policies; attend all meetings of the Authority; keep minutes of all proceedings of the Authority; approve all accounts for salaries, per diem payments, and allowable expenses of the Authority, its employees, and its consultants; approve all expenses incidental to the operation of the Authority; and perform any other duty that the Authority or the Secretary requires to carry out this subtitle.

A member of the Authority may not participate in any decision related to the approval of financial assistance if the member has any interest in: the applicant for the assistance; or the financial institution seeking a guaranty or an interest subsidy or both.

The Department may contract for and engage the services of a private Maryland corporation to administer some or all of the programs of the Authority. The Department may: extend the termination date of a contract in effect and modify that extended contract as needed; and renew the extended contract for up to one additional 3–year term, and modify that renewed and extended contract as needed. An extension or renewal contract shall include standards to evaluate the performance of the private contractor in rendering services under the contract.

The Authority exercises its powers and performs its duties subject to the authority of the Secretary. The Authority may: adopt bylaws for the conduct of its business; adopt a seal; maintain offices in the State; sue and be sued in its own name; retain consultants; use the services of governmental units; contract for and accept, to carry out this subtitle, a loan or grant from the federal government, a political subdivision of the State, or any other source; purchase, receive, lease as lessee, or otherwise acquire, sell, mortgage, lease as lessor, pledge, administer, dispose of, or otherwise deal with property given as collateral under a loan agreement on the terms and conditions it considers advisable; adopt regulations necessary to carry out its powers; acquire or take assignments of loan documents; and do anything necessary or convenient to carry out its powers. The Authority shall: in its internal functions, follow the procedures of the State that govern the purchase of office space, supplies, facilities, materials, equipment, and professional services; keep proper records of its accounts; keep separate records for: the Small Business Development Contract Financing Fund under Part III of this subtitle; the Small Business Development Guaranty Fund under Part IV of this subtitle; the Equity Participation Investment Program Fund under Part V of this subtitle; and the Small Business Surety Bond Fund under Part VI of this subtitle; and in accordance with § 2.5–109 of this article, submit a report on its condition and operations.

In any action, service of process on the Authority shall be made by service on the Executive Director of the Authority. Service may be made in person or by leaving a copy of the process at the office of the Executive Director with the individual in charge of the office.

Notwithstanding § 10–469(e) and (f) of this article or any other law, the following money shall be payable into the funds under this subtitle: any recovery of investments made under § 10–469 of this article that were funded by a transfer of money from the funds under this subtitle to the Enterprise Fund, including an investment in MMG Ventures LLP; and any repayment of a grant made under § 10–469 of this article that was funded by a transfer of money from the funds under this subtitle to the Enterprise Fund. The Authority shall determine the proportion of the recovery or repayment payable under subsection (a) of this section that shall be deposited into each of the funds under this subtitle.

There is a Maryland Small Business Development Financing Fund in the Department. The Fund is a special, nonlapsing fund that is not subject to reversion under § 7–302 of the State Finance and Procurement Article. The State Treasurer shall: invest the money in the Fund in the same manner as other State money may be invested; credit any investment earnings to the Fund; and 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 as of the date of the report; and the interest received from investments during the period covered by the report. The Fund is the successor of the Small Business Development Contract Financing Fund, the Small Business Development Guaranty Fund, the Equity Participation Investment Incentive Program Fund, and the Small Business Surety Bond Fund established under the Maryland Small Business Development Financing Authority. All financial assistance transactions and obligations approved by the Maryland Small Business Development Financing Authority shall continue as obligations of the Fund and are authorized under this subtitle. The Fund consists of: premiums for guaranteeing loans under this subtitle; premiums for guaranteeing equity investments under this subtitle; repayments of principal of and interest on direct loans and equity participation financing made under this subtitle; proceeds from the sale, disposition, lease, or rental of collateral for direct loans, loan guaranties, or equity participation financing made under this subtitle; loans and grants from the federal government or a unit or instrumentality of the federal government; grants and contributions of funds from the State, a political subdivision, or any other source; premiums for guaranteeing long–term loans under this subtitle; notwithstanding § 10–469(e) and (f) of this article or any other law, any recovery of investments made under § 10–469 of this article that were funded by a transfer of money from the funds under this subtitle to the Enterprise Fund, including an investment in MMG Ventures LLP; notwithstanding § 10–469(e) and (f) of this article or any other law, any repayment of a grant made under § 10–469 of this article that was funded by a transfer of money from the funds under this subtitle to the Enterprise Fund; money the State appropriates to the Fund; money made available to the Fund through federal programs or private contributions; premiums, fees, royalties, and repayments of investments made under the terms of bonding assistance and equity participation financing; and all other receipts of the Department under this subtitle.

In this part, “Program” means the Small Business Development Contract Financing Program.

There is a Small Business Development Contract Financing Program within the Fund.

The Authority may use the Fund for: loan guaranties made under § 5–520(a) of this subtitle; equity investment guaranties made under § 5–520(b) of this subtitle; direct loans made under § 5–520(c) of this subtitle; and expenses for administrative, legal, actuarial, and other services.

The Authority may use the Fund to guarantee a loan made to an applicant only if: the applicant meets the requirements of this part; the maximum amount payable by the Authority under the guaranty does not exceed $3,000,000; and the guaranteed loan is to be used for: working capital; or equipment needed to perform the contract, the cost of which can be repaid from contract proceeds, if the Authority has entered into an agreement with the applicant to secure the loan or guaranty. A guaranty made by the Authority may not exceed the term of the contract, unless the Authority determines that a longer term better serves the purposes of this subtitle. The Authority may use the Fund to guarantee a person’s proposed equity investment in the applicant only if: the applicant meets the requirements of this part; the amount of the equity investment to be guaranteed does not exceed the lesser of: 10% of the person’s equity investment in the applicant; or $250,000; and the equity investment to be guaranteed is to be used for: working capital; or equipment needed to perform the contract, the cost of which can be repaid from contract proceeds, if the Authority has entered into an agreement with the applicant to secure the guaranty. The Authority may not guarantee the equity investment of a person who: previously held an equity investment in the applicant; previously participated in the management of the applicant; or in any other manner is related to: the applicant; or any of the current stockholders, officers, or management personnel of the applicant. The Authority may use the Fund to lend money to an applicant only if: the applicant meets the requirements of this part; the applicant is unable to obtain money on reasonable terms through normal lending channels from another source; the loan does not exceed $3,000,000; and the loan is to be used for: working capital; or equipment needed to perform the contract, if the contract proceeds can repay the cost of the equipment and if the Authority has entered into an agreement with the applicant to secure the loan. A loan that the Authority makes shall mature not later than the term of the contract, unless the Authority finds that a longer term better serves the purposes of this part. In providing financial assistance under this section, the Authority shall recognize the need to serve applicants from all political subdivisions in the State.

If the applicant is an individual, to qualify for financial assistance under this part the applicant shall satisfy the Authority that: the applicant is of good moral character; the applicant has a reputation for financial responsibility, as determined from creditors, employers, and other individuals who have personal knowledge of the applicant; the applicant is a resident of the State or the principal place of business of the applicant is in the State; and the applicant is unable to obtain adequate business financing on reasonable terms through normal lending channels because the applicant: belongs to a group that historically has been deprived of access to normal economic or financial resources; has a documented disability; has any other social or economic impediment that is beyond the control of the applicant but that does not limit the ability of the applicant to perform the contract or other activity for which the applicant would be receiving financial assistance, including: the lack of formal education or financial capacity; or geographical or regional economic distress; or does not meet the established credit criteria of at least one financial institution. If the applicant is a business enterprise that is not a sole proprietorship, to qualify for financial assistance under this part at least 70% of the business enterprise shall be owned by individuals who meet the qualifications for an individual applicant under subsection (a) of this section. An applicant for a loan guaranty shall have applied for and been denied a loan by a financial institution.

To apply for financial assistance from the Fund under § 5–520 of this subtitle, an applicant shall submit to the Authority an application on the form that the Authority provides with the information the Authority requires. The Authority may require an applicant to provide an audited balance sheet before the Authority approves or denies the application.

The Authority may set the terms and conditions for a loan guaranty made under § 5–520(a) of this subtitle. If the Authority decides to lend money from the Fund to an applicant under § 5–520(c) of this subtitle, the Authority shall prepare loan documents that include: the interest rate on the loan that equals the market rate for a conventional loan of comparable risk unless the Authority determines that a lower rate better serves the purposes of this subtitle; a disbursement schedule that provides enough money to the applicant when the applicant needs it to perform the contract; a requirement that the applicant and the Authority co–sign each request for an advance of money before release of the money; and provisions for repayment of the loan. The loan documents may include any other provision that the Authority determines is necessary to secure the loan, including an assignment of or a lien on payment under the contract.

A person may not knowingly make or cause to be made a false statement or report in an application or document submitted to the Authority under this part. A person may not knowingly make or cause to be made a false statement or report to influence an action of the Authority under this part: on an application for financial assistance; or affecting financial assistance whether or not the assistance has already 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.

In this part, “Program” means the Small Business Development Guaranty Program.

There is a Small Business Development Guaranty Program within the Fund.

The Authority may use the Fund for: guaranty payments made under § 5–530(a) of this subtitle; interest subsidy payments under § 5–530(b) of this subtitle; and expenses for administrative, legal, actuarial, and other services.

The Authority may use the Fund to guarantee up to 80% of the principal of and interest on a long–term loan made by a financial institution to an applicant only if: the applicant meets the requirements under § 5–531 of this subtitle and has not violated § 5–534 of this subtitle; the loan amount is $5,000 or more and the maximum amount payable by the Authority under the guaranty does not exceed $3,000,000; the loan is used for: working capital; refinancing the applicant’s existing debt; acquisition and installation of equipment; making necessary improvements to real property that the applicant leases or owns in fee simple; or acquiring real property that the applicant will own in fee simple if the property is to be used in the applicant’s trade or business for which the guaranty is sought and the financial institution or the Authority places a lien on the property; the loan matures within 10 years after the closing date of the loan; and the interest rate does not exceed the monthly weighted average of the prime lending rate prevailing in Baltimore City on unsecured commercial loans, plus 2%, as determined by the Authority. The Authority may authorize the provision of a guaranty under this section in the following forms: an irrevocable letter of credit; an official treasurer’s check; funds on deposit in an escrow or other depository account; or any other legal instrument promising a financial institution restitution or reimbursement for its loan losses, within the limits of the guaranty. Any terms and conditions governing the instruments described under paragraph (2) of this subsection may not be so onerous as to discourage the financial institution from offering the loan. The Authority may only approve a guaranty under this section if the Authority determines that the loan to be guaranteed will have a substantial economic impact. To determine the economic impact of a loan, the Authority may consider: the amount of the guaranty obligation; the terms of the loan to be guaranteed; the number of new jobs that the loan will create; and any other factor that the Authority considers relevant. In addition to a loan guaranty, the Authority may provide an interest subsidy for the benefit of the applicant. The subsidy: may be for the life of the loan; may not exceed 4%; shall be payable quarterly; and shall be made to the financial institution that makes the loan that the Authority guarantees. The subsidy may not exceed the difference between: the interest rate on the guaranteed loan; and the discount interest rate that the Federal Reserve Bank uses. The interest rate may not exceed the monthly weighted average of the prime lending rate that prevails in Baltimore City on unsecured commercial loans, as the Authority determines as of the date of closing, plus 2%. The subsidy may not be paid during any period in which the loan is in default. In providing financial assistance under this section, the Authority shall recognize the need to serve applicants from all political subdivisions in the State.

If the applicant is a sole proprietor, to qualify for financial assistance under this part the applicant shall satisfy the Authority that: the applicant is of good moral character; the applicant has a reputation for financial responsibility, as determined from creditors, employers, and other individuals who have personal knowledge of the applicant; the applicant is a resident of the State or the principal place of business of the applicant is in the State; and the applicant is unable to obtain adequate business financing on reasonable terms through normal lending channels because the applicant: belongs to a group that historically has been deprived of access to normal economic or financial resources; has a documented disability; has any other social or economic impediment that is beyond the control of the applicant, but that does not limit the ability of the applicant to perform the contract or other activity for which the applicant would be receiving financial assistance, including: the lack of formal education or financial capacity; or geographical or regional economic distress; or does not meet the established credit criteria of at least one financial institution. If the applicant is not a sole proprietorship, to qualify for financial assistance under this part at least 70% of the business enterprise shall be owned by individuals who meet the qualifications for an individual applicant under subsection (a) of this section. An applicant for a loan guaranty shall have applied for and been denied a loan by a financial institution.

To apply for financial assistance from the Fund, a financial institution shall submit to the Authority an application on the form that the Authority provides with the information the Authority requires. The Authority may require an applicant to provide an audit report and balance sheet certified by an independent certified public accountant in accordance with generally accepted accounting principles before the Authority approves or denies the application.

A guaranty shall contain terms and conditions that the Authority determines to be appropriate.

If an applicant or financial institution violates any provision of the loan documents or ceases to meet the requirements of this part, on reasonable notice to the applicant or financial institution, the Authority may: withhold from the applicant further loan payments until the applicant complies with the documents or requirements; withhold from the financial institution further interest subsidy payments until the financial institution complies with the loan documents or requirements; and exercise any other remedy for which the loan documents provide.

In this part the following words have the meanings indicated. “Enterprise” means a business entity proposing to carry on a business in the State that meets the requirements of § 5–521 of this subtitle. “Enterprise” includes: a sole proprietorship; a partnership; a limited liability corporation; a limited partnership; a corporation; or a joint venture. “Equity participation financing” includes investment or guaranty of investment in an enterprise. “Existing business” means a business whose board of directors or owners approve the sale of the business to an enterprise receiving equity participation financing. “Program” means the Equity Participation Investment Program. “Qualified security” means: a note, bond, debenture, or other evidence of indebtedness; stock or other form of equity participation; a certificate of interest or participation in a profit–sharing agreement; an investment contract; a certificate of deposit for a security; a certificate of interest or participation in a patent or patent application or in royalty or other payments under a patent or patent application; or an interest or instrument commonly known as a “security” or a certificate for, receipt for, guaranty of, or option, warrant, or right to subscribe to or purchase a qualified security. “Small business” means a business that is classified as a small business under the U.S. Small Business Administration size standards.

The General Assembly finds that: small businesses have proven to be a fast growing and reliable form of successful business expansion and successful new business creation; small businesses play a major role in the economy of the State and have been a continuing source of increasing tax revenues and job opportunities; the growth of small businesses should be encouraged and should be an integral part of the State’s economic development effort; socially or economically disadvantaged individuals often lack adequate capital and are unable to obtain financing from financial institutions or venture capital firms to begin and develop a small business, or to purchase an existing business; and promoting the creation and viability of small businesses and the purchase of existing businesses by socially or economically disadvantaged individuals is in the public interest. The purposes of the Equity Participation Investment Program are to: encourage and help socially or economically disadvantaged individuals to create and develop small businesses and acquire existing businesses in the State; and assist small businesses that, because they do not meet the established credit criteria of financial institutions, cannot obtain adequate business financing on reasonable terms through normal financing channels.

There is an Equity Participation Investment Program in the Fund.

The Authority may: provide equity participation financing to help socially or economically disadvantaged individuals in the State create and develop small businesses and acquire existing businesses; buy, hold, and sell qualified securities; prepare, publish, and distribute technical studies, reports, and other materials with or without charge; and provide and pay for advisory services and technical assistance that are necessary or desirable to carry out the Program.

The Authority shall use the Fund to: purchase qualified securities that an enterprise issues to provide equity participation financing as the Program allows; provide guaranties of investments to expand the capital resources of enterprises; purchase advisory services and technical assistance consistent with the Program; purchase securities in which a fiduciary of the State may lawfully invest; provide equity participation financing as the Program allows; and pay for administrative, legal, and actuarial services that relate to the Program.

The Authority may provide equity participation financing under the Program only after the enterprise submits an application on the form that the Authority provides with the information the Authority requires.

Under the Program the Authority may not: own securities representing more than 49% of the voting stock of a small business or own an interest greater than 49% in a small business; or own securities representing more than 49% of the voting stock of an enterprise acquiring an existing business or own an interest greater than 49% in an enterprise acquiring an existing business. The amount of the Authority’s equity participation financing in an enterprise may not exceed $3,000,000. Before providing equity participation financing, the Authority shall find that there is a reasonable probability that the Authority will recover its initial investment and an adequate return on investment from the equity participation financing. The Authority’s investment shall be recoverable within 7 years after the equity participation financing. The Authority’s recovery shall be the greater of: the current value of the percentage of the equity investment in the enterprise; or the amount of the initial investment in the enterprise. If there is a dispute between the borrower and the Authority as to the value of the business entity at the time of recovery, the value shall be determined after obtaining at least one independent appraisal of the value from an appraiser selected from a list of at least three appraisers supplied by the Authority. When an enterprise applies to the Authority for equity participation financing to acquire an existing business, an enterprise or its principals shall have: an equity investment equal to at least 5% of the total cost of acquisition; and at least 3 years of successful experience with demonstrated achievements and management responsibilities. The Authority may provide equity participation financing for the acquisition of an existing business if the existing business: has been in existence for at least 5 years; has been profitable for at least 2 of the previous 3 years; has sufficient cash flow to service the debt and ensure adequate return of the Authority’s investment; has the capacity for growth and job creation; has its principal place of business in the State; and has a strong customer base. If the applicant enterprise is a sole proprietorship, to qualify for financial assistance under this part, the applicant shall satisfy the Authority that: the applicant is of good moral character; the applicant has a reputation for financial responsibility, as determined from creditors, employers, and other individuals who have personal knowledge of the applicant; the applicant is a resident of the State or the principal place of business of the applicant is in the State; and the applicant is unable to obtain adequate business financing on reasonable terms through normal lending channels because the applicant: belongs to a group that historically has been deprived of access to normal economic or financial resources; has a documented disability; has any other social or economic impediment that is beyond the control of the applicant, but that does not limit the ability of the applicant to perform the contract or other activity for which the applicant would be receiving financial assistance, including: the lack of formal education or financial capacity; or geographical or regional economic distress; or does not meet the established credit or investment criteria of at least one financial institution. If the applicant enterprise is not a sole proprietorship, to qualify for financial assistance under this part, at least 51% of the enterprise shall be owned by individuals who meet the qualifications for applicants under subsection (d) of this section.

The liability of the State and of the Authority in providing equity participation financing is limited to investments under the Program.

In this part the following words have the meanings indicated. “Principal” means a small business entity that has assets, income, or employees that do not exceed limits that the Authority sets by regulation. “Program” means the Small Business Surety Bond Program.

There is a Small Business Surety Bond Program within the Fund.

In administering the Program, the Authority may: use the services of other governmental units; contract for and accept loans and grants from the federal government, the State government, or a local government and their units; and on the terms and conditions it considers advisable: acquire, manage, operate, dispose of, or otherwise deal with property; take assignments of rentals and leases; and make contracts, leases, agreements, and arrangements that are necessary or incidental to the performance of its duties.

The Authority may: prescribe or approve the form of and terms and conditions in applications, guaranty agreements, or any other documents entered into by the Authority, principals, or sureties under the Program; acquire or take assignments of documents executed, obtained, or delivered in connection with any assistance the Authority provides under the Program; set and collect premiums, fees, charges, costs, and expenses in connection with any assistance the Authority provides under the Program; adopt regulations to carry out the Program; and do anything necessary or convenient to carry out its powers and the purposes of the Program.

The Authority may guarantee a surety up to the lesser of 90% or $3,000,000 of its loss under a bid bond, payment bond, or performance bond on a contract. The term of a guaranty under this part may not exceed the contract term, including: the maintenance or warranty period required by the contract; and the period during which the surety may be liable for latent defects. The Authority may vary the terms and conditions of a guaranty based on: the Authority’s history of experience with a surety; and any other factor the Authority considers relevant.

The Authority may execute and perform a bid bond, performance bond, and payment bond as a surety for the benefit of a principal in connection with a contract. This subsection does not apply if the sources of funding for the bonds are grants. The bonds may not exceed $5,000,000 each. Bonds are subject to the approval of the Authority based on the bond worthiness of the principal.

The Authority may only approve a guaranty or a bond under this part if the Authority determines that the contract, for which a bond is sought to be guaranteed or issued, will have a substantial economic impact. To determine the economic impact of a contract, the Authority may consider: the amount of the guaranty obligation; the terms of the bond to be guaranteed; the number of new jobs that the contract to be bonded will create; and any other factor that the Authority considers relevant.

The Authority may establish a surety bonding line to issue or guarantee multiple bonds to a principal within preapproved terms, conditions, and limitations.

To qualify for financial assistance under this part the principal shall satisfy the Authority that the principal: is of good moral character or is owned by individuals of good moral character; as determined from creditors, employers, and other individuals who have personal knowledge, is an individual with a reputation for financial responsibility or is owned by individuals, a majority of whom have a reputation for financial responsibility; is a resident of the State or the principal place of business of the applicant is in the State; and is unable to obtain adequate bonding on reasonable terms through normal channels. To qualify for financial assistance under this part the principal shall certify to the Authority, and the Authority shall be satisfied, that: a bond is required to bid on a contract or to serve as prime contractor or subcontractor; a bond cannot be obtained on reasonable terms and conditions without assistance from the Program; and the principal will not subcontract more than 75% of the monetary value of the contract.

To apply for financial assistance from the Program under this part, a principal and, if applicable, a surety shall submit to the Authority an application on the form that the Authority provides with the information the Authority requires. The Authority may require an applicant to provide an audited balance sheet before the Authority approves or denies the application. The Authority may not approve a guaranty or bond under this part for a principal that has defaulted on a loan or guaranty from the Authority unless: 2 years have passed since the time of the default; and the principal has cured any default in any financing program administered by the Department.

In its sole discretion, the Authority may set: the premiums and fees for providing bonding assistance under the Program; and the terms and conditions when the premiums and fees are payable. The premiums and fees may vary in amount among transactions and at different stages of a transaction. A determination by the Authority on premiums and fees remains effective for as long as the bonding assistance provided by the Authority is in effect.

A person may not knowingly make or cause to be made a false statement or report in an application or document submitted to the Authority under this part. A person may not knowingly make or cause to be made a false statement or report to influence an action of the Authority under this part: on an application for assistance; or affecting bonding assistance whether or not the assistance 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.