In this subtitle the following words have the meanings indicated. “Application” means an application to the Secretary that includes a request to: designate an area as a sustainable community; approve a sustainable community plan; or approve a community legacy project. “Community development financial institution” has the meaning stated in 12 U.S.C. § 4702. “Community development organization” means an entity that meets the qualifications of § 6–203 of this subtitle. “Community legacy agreement” means an agreement between the Department and a sponsor to develop a sustainable community plan or to implement one or more community legacy projects in a designated sustainable community or an eligible opportunity zone. “Community legacy project” includes a project in a sustainable community or an eligible opportunity zone to: create, improve, or preserve housing opportunities by acquiring, constructing, rehabilitating, or improving new or existing residential properties; demolish buildings or improvements strategically to enhance the use of land; create, improve, or preserve commercial or mixed–use development, including an appropriate combination of properties related to business, housing, open–space, and institutional uses; develop public infrastructure that is incidental to the implementation of a community legacy project, such as streets, parking, public utilities, landscaping, lighting, and improvements to pedestrian and bicycle circulation; encourage and develop cooperative ownership or control of open space; develop or create strategies designed to increase investment in existing communities, including outreach activities to attract business, capital, residents, and visitors and the development and maintenance of resources directly related to the development of a sustainable community plan or the implementation of a community legacy project; engage in landbanking or otherwise acquire or improve vacant buildings or unimproved land; provide financial assistance for neighborhood intervention projects; or develop other plans or implement other projects as the Department considers necessary to further the purposes of this subtitle. “Eligible opportunity zone” means an area designated as a qualified opportunity zone under § 1400Z–1 of the Internal Revenue Code that is located in Allegany County, Garrett County, Somerset County, or Wicomico County. “Financial assistance” includes: a grant; a loan; a reduction in the principal obligation of or rate of interest payable on a loan or portion of a loan; a prepayment of interest on a subordinate or superior loan or portion of a loan; an assurance; a guarantee; and any other form of credit enhancement. “Landbanking” means acquiring or holding improved and unimproved property: in anticipation of future development of the property; or to keep the future use of the property and improvements affordable. “Priority funding area” means an area designated as a priority funding area under § 5–7B–02 of the State Finance and Procurement Article. “Program” means the Community Legacy Program established by this subtitle. “Sustainable community” means the part of a priority funding area that: as determined by the Sustainable Growth Subcabinet, satisfies the requirements of § 6–205 of this subtitle; has been designated as a BRAC Revitalization and Incentive Zone under Title 5, Subtitle 13 of the Economic Development Article; or has been designated a transit–oriented development under § 7–101 of the Transportation Article. “Sustainable community plan” means a plan consisting of one or more community legacy projects or other revitalization projects to prevent or reverse the decline of or disinvestment in a sustainable community through improvements in residential, commercial, or other public or private properties. “Sustainable Growth Subcabinet” means the subcabinet established under § 9–1406 of the State Government Article.

There is a Community Legacy Program. The Department shall administer the Program. The purposes of the Program are to: preserve existing communities as desirable places to live and conduct business to reduce outward pressure for sprawl development; and provide financial assistance to sponsors or their designees to develop sustainable community plans or community legacy projects. The Program shall encourage partnerships among the federal government, the State government, political subdivisions, and community development organizations to develop and implement sustainable community plans and community legacy projects. A sustainable community plan or a community legacy project may be sponsored by a political subdivision, a group of political subdivisions, a community development organization, or a community development financial institution.

A corporation, foundation, or other legal entity qualifies as a community development organization if: its purpose is to improve the physical, economic, or social environment of the area where it operates; and no part of its net earnings inures to the benefit of a private shareholder or individual holding an interest in that entity.

A sponsor may file one or more applications in accordance with the schedules that the Department establishes. An application shall set forth: a description of one or more sustainable communities where the sponsor proposes to develop a sustainable community plan or to carry out a community legacy project using the standards listed in § 6–205 of this subtitle; a detailed description of the proposed sustainable community plan or proposed community legacy project; the amount and type of financial assistance sought; the ability of the sponsor to carry out the proposed sustainable community plan or community legacy project; the strength and quality of partnerships created among the federal government, the State government, political subdivisions, community development organizations, and other private organizations to develop the sustainable community plan or carry out the community legacy project, including: financial support; dedication of staff and resources; and commitment to and development of local smart growth policies; proposed benchmarks for evaluating whether the proposed sustainable community plan or community legacy project results in a desired outcome for a proposed sustainable community, such as: stabilizing it; reversing its social, economic, or physical decline; or encouraging growth in it; and the process used to seek and receive public input on the proposed sustainable community plan or community legacy project, including the nature and extent of public support or opposition. The Sustainable Growth Subcabinet, on the recommendation of the Secretary, may designate an area as a sustainable community. If the Sustainable Growth Subcabinet has not acted within 90 days of a recommendation from the Secretary, the Secretary may designate an area as a sustainable community without the approval of the Sustainable Growth Subcabinet.

The Sustainable Growth Subcabinet, on the recommendation of the Secretary, may designate an area as a sustainable community if the sponsor demonstrates that past and current trends in homeownership, property values, commercial and residential vacancy, and business or housing investment show a need for reinvestment in the area and if: entities in the community, such as local governments, employers, educational institutions, civic organizations, community organizations, or cultural organizations, support the proposed sustainable community plan and have pledged resources to develop or implement it; the proposed sustainable community plan addresses the need for reinvestment in the area and will enhance the area, and give individuals of different incomes a range of housing options, employment opportunities, and other amenities; a community in the proposed area is culturally or historically significant; the proposed area is near a town center or a transportation center; the proposed sustainable community plan is consistent with and complements other existing or proposed projects for housing, commercial or community development, education, historic preservation, neighborhood revitalization, transportation, or other things significant to the comprehensive enhancement of the community; or there is a demonstrated need for financing assistance for small businesses, nonprofit organizations, or microenterprises. To maintain a sustainable community designation: every 5 years a sponsor shall file an updated plan and application with the Department; and the Secretary shall make designation recommendations for approval by the Sustainable Growth Subcabinet under § 6–204 of this subtitle. The Department shall convene an interagency review team from the agencies of the Sustainable Growth Subcabinet to: review applications and plans; provide assistance and guidance to applicants; and make recommendations to the Secretary. The Sustainable Growth Subcabinet may redesignate an area as a sustainable community taking into consideration the factors in subsection (a) of this section.

The Department shall: review each application and may request more information from the sponsor; accept public input on each application; submit each application to appropriate State units and appropriate members of the Sustainable Growth Subcabinet; consider any recommendation a State unit or member of the Sustainable Growth Subcabinet makes; consider geographic balance when reviewing applications; and give priority in awarding financial assistance to applicants that are likely to repay the financial assistance to a community development financial institution or to the Community Legacy Financial Assistance Fund. The Department shall provide written notice to the political subdivision in which the proposed project is located. Except as provided in paragraph (5) of this subsection, the Department may not approve an application unless the political subdivision in which the proposed project is located approves the application by: resolution; or letter, delivered to the Department by the political subdivision’s authorized designee, expressing support for the plan or project. If an application affects a sustainable community or an eligible opportunity zone entirely within a municipal corporation, the approval must come from the municipal corporation rather than the surrounding county. If an application affects a sustainable community or an eligible opportunity zone within more than one political subdivision, each political subdivision must approve it by: resolution; or letter, delivered to the Department by the political subdivision’s authorized designee, expressing support for the plan or project. If the Department does not receive notice of approval or denial of an application from the affected jurisdictions within 45 days after notice of the proposed project is given in accordance with paragraph (1) of this subsection, the Department may approve the application. The Secretary shall award financial assistance to a sponsor or a sponsor’s designee: in the amount and of the type that the Secretary determines; and under the terms of a community legacy agreement.

The Department and the sponsor shall execute a community legacy agreement. The sponsor shall comply with the terms of the community legacy agreement and any regulations the Department adopts to carry out this subtitle. Not more than 15% of the total financial assistance that the Program provides may be used for noncapital expenditures. The Department may exercise any remedy provided under the community legacy agreement or by law if a sponsor: violates any provision of the community legacy agreement; or ceases to meet the requirements of this subtitle.

Subject to this section, the Department has the powers necessary or desirable to implement the Program. The Department may determine the terms and conditions for financial assistance awarded under § 6–206(c) of this subtitle. Financial assistance may be secured by a mortgage, lien, or security interest that is superior to or subordinate to other mortgages, liens, or security interests. The Department may establish time limits for the use of financial assistance. The Department may enforce the terms and conditions of the financial assistance given under this subtitle. Notwithstanding any other law, if a loan or grant is secured by a first or subordinate mortgage or other lien, the Department may: begin an action to protect or enforce any right given by law, a contract, or other agreement; foreclose on property; purchase property at any foreclosure or other sale, or acquire or take possession of the property through conveyance in lieu of foreclosure or otherwise, and convey property after acquiring it; settle or compromise any debt or obligation owed to the Department; pay the principal of and interest on any obligation incurred in connection with the property, and dispose of or otherwise deal with the property to protect the interests of the Program; or release or sell any mortgage, obligation, or property that the Department holds at public or private sale, with or without public bidding. The Department may contract with any person, including a private property manager, mortgage servicer, architect, engineer, or other property consultant, or with any governmental unit, for property or services necessary to operate the Program or to implement community legacy projects. The Department may make agreements with other governmental units to establish partnerships to carry out the Program. The Department may contract for and accept any grant, contribution, or loan of money, property, or other aid from the federal government and may do all things consistent with this subtitle to qualify for the aid or participate in or administer a federal program. In connection with loans that it makes, the Department may: require and obtain appraisals, credit information, and other pertinent information; and charge interest. When it is consistent with the best interests of the State to do so, the Department may consent to the modification of any provision of any loan or other financial assistance.

The purposes of a neighborhood intervention project are to provide financial assistance for: buying properties that need rehabilitation and redeveloping the properties through rehabilitation, demolition, reconstruction, or re–use; or demolishing property improvements and preparing property for revitalization, redevelopment, or re–use. To be eligible for financial assistance for a neighborhood intervention project, an applicant shall be: a political subdivision; or a community development finance institution. To be eligible for financial assistance, the applicant must provide evidence at the time of application that: the applicant has a legal interest in the property through: ownership of the property; a contract, option, or other legal right to acquire the property; or the right to demolish the improvements on the property; the applicant intends to revitalize, redevelop, sell, or re–use the property as part of a redevelopment strategy for the property or a redevelopment plan; the applicant has complied with the requirements of §§ 5A–325 and 5A–326 of the State Finance and Procurement Article and § 13–1112(b) of the Financial Institutions Article; the financial assistance from the Program is the least amount necessary to complete the project; and the project meets any other condition that the Department may require under this subtitle. Unless waived by the Secretary, a neighborhood intervention project shall meet the additional following requirements: the project shall be located in a sustainable community and be a part of a sustainable community plan in accordance with §§ 6–204(b)(1) and 6–205 of this subtitle; and for a project under subsection (a)(2) of this section, the applicant shall agree to repay the financial assistance to the Community Legacy Financial Assistance Fund, up to the amount the applicant receives from: the net proceeds of the sale of the property on which the demolition took place; or any payment to the applicant relating to the property, including any payment for the costs of demolishing the improvements on the property. The Secretary may not allocate annually more than 15% of the Community Legacy Financial Assistance Fund to neighborhood intervention projects. The Secretary may not award more than $500,000 for any neighborhood intervention project. The restrictions in paragraphs (1) and (2) of this subsection do not apply to projects approved by the Secretary in the case of an emergency or when the project requires urgent approval if the project is funded from the reserve established under § 6–211(h) of this subtitle.

The sponsor shall submit to the Department quarterly progress reports on the development of a sustainable community plan or the implementation of a community legacy project. The Department shall submit an annual report to the Governor and, subject to § 2–1257 of the State Government Article, to the General Assembly on or before each October 31. The report shall include: the financial status of the Program for the preceding fiscal year, including the amount and type of financial assistance encumbered and disbursed; the number of applications received; the number and location of sustainable communities designated; and a summary of the quarterly reports submitted by sponsors under subsection (a) of this section.

In this section, “Fund” means the Community Legacy Financial Assistance Fund. There is a Community Legacy Financial Assistance Fund. The Fund shall be used to carry out this subtitle. The Secretary shall administer the Fund in accordance with this subtitle. The State Treasurer shall hold and the Comptroller shall account for the Fund. The Fund is a continuing, nonlapsing special fund that is not subject to § 7–302 of the State Finance and Procurement Article. The Fund consists of: money appropriated in the State budget to the Fund; earnings from the investment of money in the Fund; repayments and prepayments of financial assistance provided by the Program; and any other money accepted for the benefit of the Fund from any governmental or private source. Notwithstanding any other law, the State Treasurer may invest money in the Fund in the same way as money is invested by the State Retirement and Pension System. In any fiscal year, the Secretary may hold up to 10% of the money in the Fund in reserve for emergency use or urgent projects in accordance with this subtitle.

Subject to subsection (b) of this section, a sustainable community shall receive priority for State funding under the: Community Legacy Program under this subtitle; Sustainable Communities Tax Credit Program for commercial properties under Title 5A, Subtitle 3 of the State Finance and Procurement Article; Neighborhood Business Development Program under Subtitle 3 of this title; Maryland Historical Trust Grant Program under Title 5A, Subtitle 3 of the State Finance and Procurement Article; and Speaker Adrienne A. Jones African American Heritage Preservation Program under Title 5A, Subtitle 3 of the State Finance and Procurement Article. Priority for State funding provided under subsection (a) of this section is available in a sustainable community only if: a political subdivision issues bonds, notes, or other similar instruments for that sustainable community under: Title 21, Subtitle 4, Part II of the Local Government Article; Title 21, Subtitle 5 of the Local Government Article; or Title 12, Subtitle 2 of the Economic Development Article; or a political subdivision demonstrates to the appropriate unit of State government that the political subdivision has funded infrastructure improvements in that sustainable community.