This chapter describes the policies, procedures, and authorizations for providing financial assistance to qualified economically distressed counties, or to the Maryland Economic Development Corporation for use in those counties, for the purpose of financing approved economic development plans. In this chapter, the following terms have the meanings indicated. Terms Defined. “Act” means Economic Development Article, §10-105, Annotated Code of Maryland. “Applicant” means a qualified governmental entity that is seeking financial assistance from the Department. “Department” means the Department of Commerce. “Financial assistance” means a loan, an investment, or a loan convertible in whole or in part to a grant upon the satisfaction of specified conditions, all upon terms specified by the Department. “Fund” means the Smart Growth Economic Development Infrastructure Fund which is administered by the Department. “Loan” means a loan made from the Fund by the Department under the Program. “MEDCO” means the Maryland Economic Development Corporation which is a body politic and corporate and a public instrumentality of the State of Maryland established by Economic Development Article, §10-105, Annotated Code of Maryland. “Program” means the Smart Growth Economic Development Infrastructure Program, as authorized by the Act. “Qualified distressed county” means a county, including Baltimore City: That, in consultation with the municipal corporations located within the county, developed, submitted to the Secretary, and obtained from the Secretary approval for a local strategic plan for economic development; and For which the average: Rate of unemployment for the most recent 18-month period for which data are available is greater than 150 percent of the average rate of unemployment for the entire State during that same period, or Per capita personal income for the most recent 24-month period for which data are available is equal to or less than 67 percent of the average personal per capita income for the entire State during that same period. “Secretary” means the Secretary of Business Commerce or the Secretary's designee. To qualify for financial assistance, a county must, in consultation with the municipal corporations located within the county, develop, submit to the Secretary, and obtain from the Secretary approval for a local strategic plan for economic development. The Department may develop a local strategic plan for economic development in a qualified distressed county in consultation with a municipal corporation in that county if the qualified distressed county has: Not developed a local strategic plan for economic development; or Developed a local strategic plan for economic development but is not actively pursuing financial assistance from the Fund. The following may apply for financial assistance under this chapter: A qualified distressed county; MEDCO, as a coapplicant with a qualified distressed county; or Under the conditions set forth in §C of this regulation, MEDCO, as a coapplicant with a municipal corporation located in a qualified distressed county. To be eligible for financial assistance under this chapter, MEDCO shall enlist as a coapplicant a qualified distressed county or municipal corporation. A municipal corporation located in a qualified distressed county may coapply with MEDCO for financial assistance from the Fund in a manner consistent with the local strategic plan for economic development developed by the: Department in consultation with the municipal corporation if the qualified distressed county has not developed a local strategic plan for economic development; or Qualified distressed county if the qualified distressed county has developed a local strategic plan for economic development but is not actively pursuing financial assistance from the Fund. As a coapplicant with MEDCO, a qualified distressed county or municipal corporation applying shall: Certify that: It supports the project, and The proposed financial assistance is consistent with the qualified distressed county's plan for economic development; and Provide to the Department details of the qualified distressed county's support for and participation in the project. To be eligible for financial assistance under this chapter, an applicant shall: Request funding for a project located in a qualified distressed county; and Submit to the Department an application containing any information the Department or the Authority considers necessary in evaluating the request for financial assistance. Proceeds of the Fund may be used only for the purpose of providing financial assistance to qualified distressed counties and MEDCO. Proceeds of financial assistance may be used only for: Acquisition, improvements, and rehabilitation of land for industrial sites and parks; and Development of: Water and sewer lines, Shell buildings, Infrastructure serving existing retail and office oriented centers occupying at least 400,000 square feet on a limited basis of not more than one per jurisdiction, and Other needed infrastructure projects. Financial assistance from the Fund may be in the form of a loan, an investment, or a loan convertible in whole or in part to a grant upon the satisfaction of specified conditions, all upon terms specified by the Department. Financial assistance from the Fund may be used only for a project that is located in a priority funding area or meets an exception to the priority funding area requirements set forth in State Finance and Procurement Article, Title 5, Subtitle 7B, Annotated Code of Maryland. Security. The Department may require that financial assistance be secured by: Liens and security interests in real and personal property; Guarantees; Any other collateral required by the Department; or A combination of the items in §A(1)—(3) of this regulation. Late Charges. Late charges, as permitted by law, may be imposed. Additional Documentation. The Department or the Authority may require the applicant to provide title insurance, surveys, insurance, appraisals, and any other documentation that the Department determines is necessary or advisable. Application. An application for financial assistance shall be made on standard forms required by the Department. Each application shall include: A detailed local strategic plan for economic development for the qualified distressed county, approved by the relevant officials of the qualified distressed county or municipal corporation; A marketing plan designed to market the project to prospective businesses and a statement of planned marketing expenditures as a percent of the total financial assistance amount requested; A site plan for the project that is consistent with the county's local strategic economic development plan as to the location and type of project; The total amount of funds required for the project; The amount and type of funds available to the applicant without financial assistance from the Department; The amount of financial assistance sought from the Department and a description of the applicant's proposed use of proceeds; Information concerning the compliance of the applicant with State Finance and Procurement Article, Title 5, Subtitle 7B, Annotated Code of Maryland, concerning priority funding areas, including a written statement from the applicant that the project is located within a certified priority funding area or meets an exception; Information that relates to potential security for the loan; An environmental study on the project site; An “as built” appraisal of the project; and Any other relevant information the Department requests. Initial Review. The Department shall subject each application to an initial review for a preliminary determination of the applicant's eligibility in accordance with this chapter. Approval. The Secretary may not approve financial assistance for a project under this chapter unless the Secretary approves the local strategic plan for economic development, the marketing plan, and the site plan for the project submitted with the application. Fair Distribution. In approving financial assistance, the Secretary shall consider the aggregate amount of financial assistance that may already have been provided for a particular qualified distressed county under this chapter and under any other State economic development program to ensure that a particular qualified distressed county does not benefit disproportionately from financial assistance under this chapter. Loan Documents. The Department shall prepare and provide the applicant with copies of relevant loan documents. Loan documents shall include: The rate of interest on the loan; The amount of the loan; Provisions for repayment of the loan; and Other provisions the Department determines are necessary to secure the loan, including, if applicable, the taking of liens and security interests in real and personal property. Loan Agreement. Each loan agreement under this chapter shall include a provision for repayment of principal to begin only after the project is initially occupied. The Secretary may include in a loan agreement under this chapter a provision for payment of interest to begin only after the project is initially occupied. Loan documents may include those provisions the Department may require. Fees. The Department may require the applicant to pay for expenses incurred in processing and closing the financial assistance, such as fees for appraisals and credit reports. Violations. If an applicant violates any provision of the financial assistance documents or ceases to meet the requirements of the Act, the Department may: Withhold from the applicant further advances of proceeds until the applicant complies with the agreement or requirements; and Exercise any other remedy for which the financial assistance documents provide. Fund Limitations. The faith and credit of the State are not pledged to the Fund. The applicant shall: Comply with the State's policy concerning drug-free and alcohol-free workplaces as set forth in COMAR 01.01.1989.18; and Make a good-faith effort to eliminate illegal drug use and alcohol and drug abuse from places at which work is performed in accordance with a loan. The Secretary may waive or vary particular provisions of this chapter to the extent that the waiver is not inconsistent with the Act if: Conformance to the requirement of any federal, State, or local program in connection with a loan necessitates waiver or variance of a regulation; or In the determination of the Secretary, the application of a regulation in a specific case or in an emergency situation would be inequitable or contrary to the purposes of the Act. Economic Development Article, §2-108, Annotated Code of Maryland Effective date: December 27, 1999 (26:26 Md. R. 1961) Regulation .02B amended effective June 25, 2001 (28:12 Md. R. 1112) Regulation .04E amended effective June 25, 2001 (28:12 Md. R. 1112) Regulation .05B amended effective June 25, 2001 (28:12 Md. R. 1112) Regulation .06 amended effective June 25, 2001 (28:12 Md. R. 1112)