MD
Maryland House Bill HB601

Maryland 2025 Regular Session

Maryland House Bill HB601 Compare Versions

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1- WES MOORE, Governor Ch. 3
21
3-– 1 –
4-Chapter 3
5-(House Bill 601)
62
7-AN ACT concerning
3+EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4+ [Brackets] indicate matter deleted from existing law.
5+ Underlining indicates amendments to bill.
6+ Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7+amendment.
8+ *hb0601*
89
9-Economic Development – Small Business Guaranty Fund – Alterations
10+HOUSE BILL 601
11+C8 5lr2247
12+ CF SB 1008
13+By: Delegates Phillips, Amprey, Boyce, Conaway, Crutchfield, Pasteur, Patterson,
14+Pena–Melnyk, Roberson, Ruff, Simmons, Taveras, Toles, Wells,
15+White Holland, and Woods
16+Introduced and read first time: January 23, 2025
17+Assigned to: Ways and Means
18+Committee Report: Favorable with amendments
19+House action: Adopted
20+Read second time: March 4, 2025
1021
11-FOR the purpose of providing that authorizing the Maryland Small Business Development
12-Financing Authority to authorize the provision of a guaranty under the Small
13-Business Guaranty Fund may be supported by the full faith and credit of the State
14-of Maryland or approved in a certain other manner; and generally relating to the
15-Small Business Guaranty Fund.
22+CHAPTER ______
1623
17-BY repealing and reenacting, with amendments,
18- Article – Economic Development
19-Section 5–540(a)
20- Annotated Code of Maryland
21- (2024 Replacement Volume and 2024 Supplement)
24+AN ACT concerning 1
2225
23- SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
24-That the Laws of Maryland read as follows:
26+Economic Development – Small Business Guaranty Fund – Alterations 2
2527
26-Article – Economic Development
28+FOR the purpose of providing that authorizing the Maryland Small Business Development 3
29+Financing Authority to authorize the provision of a guaranty under the Small 4
30+Business Guaranty Fund may be supported by the full faith and credit of the State 5
31+of Maryland or approved in a certain other manner; and generally relating to the 6
32+Small Business Guaranty Fund. 7
2733
28-5–540.
34+BY repealing and reenacting, with amendments, 8
35+ Article – Economic Development 9
36+Section 5–540(a) 10
37+ Annotated Code of Maryland 11
38+ (2024 Replacement Volume and 2024 Supplement) 12
2939
30- (a) (1) The Authority may use the Fund to guarantee up to 80% of the principal
31-of and interest on a long–term loan made by a financial institution to an applicant only if:
40+ SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 13
41+That the Laws of Maryland read as follows: 14
3242
33- (i) the applicant meets the requirements under § 5–541 of this
34-subtitle and has not violated § 5–545 of this subtitle;
43+Article – Economic Development 15
3544
36- (ii) the loan amount is $5,000 or more and the maximum amount
37-payable by the Authority under the guaranty does not exceed $2,000,000;
45+5–540. 16
3846
39- (iii) the loan is used for:
47+ (a) (1) The Authority may use the Fund to guarantee up to 80% of the principal 17
48+of and interest on a long–term loan made by a financial institution to an applicant only if: 18 2 HOUSE BILL 601
4049
41- 1. working capital;
4250
43- 2. refinancing the applicant’s existing debt;
4451
45- 3. acquisition and installation of equipment;
52+ (i) the applicant meets the requirements under § 5–541 of this 1
53+subtitle and has not violated § 5–545 of this subtitle; 2
4654
47- 4. making necessary improvements to real property that the
48-applicant leases or owns in fee simple; or
49- Ch. 3 2025 LAWS OF MARYLAND
55+ (ii) the loan amount is $5,000 or more and the maximum amount 3
56+payable by the Authority under the guaranty does not exceed $2,000,000; 4
5057
51-– 2 –
52- 5. acquiring real property that the applicant will own in fee
53-simple if the property is to be used in the applicant’s trade or business for which the
54-guaranty is sought and the financial institution or the Authority places a lien on the
55-property;
58+ (iii) the loan is used for: 5
5659
57- (iv) the loan matures within 10 years after the closing date of the
58-loan; and
60+ 1. working capital; 6
5961
60- (v) the interest rate does not exceed the monthly weighted average
61-of the prime lending rate prevailing in Baltimore City on unsecured commercial loans, plus
62-2%, as determined by the Authority.
62+ 2. refinancing the applicant’s existing debt; 7
6363
64- (2) A GUARANTY PROVIDED UN DER THIS SECTION MAY :
64+ 3. acquisition and installation of equipment; 8
6565
66- (I) BE SUPPORTED BY THE FULL FAITH AND CREDI T OF THE
67-STATE OF MARYLAND; OR
66+ 4. making necessary improvements to real property that the 9
67+applicant leases or owns in fee simple; or 10
6868
69- (II) BE APPROVED IN ONE O F THE FOLLOWING FORM S:
69+ 5. acquiring real property that the applicant will own in fee 11
70+simple if the property is to be used in the applicant’s trade or business for which the 12
71+guaranty is sought and the financial institution or the Authority places a lien on the 13
72+property; 14
7073
71- (2) THE AUTHORITY MAY AUTHORI ZE THE PROVISION OF A
72-GUARANTY UNDER THIS SECTION IN THE FOLLO WING FORMS:
74+ (iv) the loan matures within 10 years after the closing date of the 15
75+loan; and 16
7376
74- 1. (I) AN IRREVOCABLE LETTE R OF CREDIT;
77+ (v) the interest rate does not exceed the monthly weighted average 17
78+of the prime lending rate prevailing in Baltimore City on unsecured commercial loans, plus 18
79+2%, as determined by the Authority. 19
7580
76- 2. (II) AN OFFICIAL TREASURE R’S CHECK;
81+ (2) A GUARANTY PROVIDED UN DER THIS SECTION MAY : 20
7782
78- 3. (III) FUNDS ON DEPOSIT IN AN ESCROW OR OTHER
79-DEPOSITORY ACCOUNT; OR
83+ (I) BE SUPPORTED BY THE FULL FAITH AND CREDI T OF THE 21
84+STATE OF MARYLAND; OR 22
8085
81- 4. (IV) ANY OTHER LEGAL INST RUMENT PROMISING A
82-FINANCIAL INSTITUTIO N RESTITUTION OR REI MBURSEMENT FOR ITS L OAN LOSSES,
83-WITHIN THE LIMITS OF THE GUARANTY .
86+ (II) BE APPROVED IN ONE O F THE FOLLOWING FORM S: 23
8487
85- (3) ANY TERMS AND CONDITI ONS GOVERNING THE IN STRUMENTS
86-DESCRIBED UNDER PARA GRAPH (2)(II) (2) OF THIS SUBSECTION M AY NOT BE SO
87-ONEROUS AS TO DISCOU RAGE THE FINANCIAL I NSTITUTION FROM OFFE RING THE
88-LOAN.
88+ (2) THE AUTHORITY MAY AUTHORIZE THE PR OVISION OF A 24
89+GUARANTY UNDER THIS SECTION IN THE FOLLO WING FORMS: 25
8990
90- [(2)] (4) (i) The Authority may only approve a guaranty under this
91-section if the Authority determines that the loan to be guaranteed will have a substantial
92-economic impact.
91+ 1. (I) AN IRREVOCABLE LETTE R OF CREDIT; 26
9392
94- (ii) To determine the economic impact of a loan, the Authority may
95-consider:
96- WES MOORE, Governor Ch. 3
93+ 2. (II) AN OFFICIAL TREASURE R’S CHECK; 27
9794
98-– 3 –
99- 1. the amount of the guaranty obligation;
95+ 3. (III) FUNDS ON DEPOSIT IN AN ESCROW OR OTHER 28
96+DEPOSITORY ACCOUNT ; OR 29 HOUSE BILL 601 3
10097
101- 2. the terms of the loan to be guaranteed;
10298
103- 3. the number of new jobs that the loan will create; and
10499
105- 4. any other factor that the Authority considers relevant.
100+ 4. (IV) ANY OTHER LEGAL INST RUMENT PROMISING A 1
101+FINANCIAL INSTITUTIO N RESTITUTION OR REI MBURSEMENT FOR ITS L OAN LOSSES, 2
102+WITHIN THE LIMITS OF THE GUARANTY . 3
106103
107- SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
108-October 1, 2025.
104+ (3) ANY TERMS AND CONDITI ONS GOVERNING THE IN STRUMENTS 4
105+DESCRIBED UNDER PARA GRAPH (2)(II) (2) OF THIS SUBSECTION MAY NO T BE SO 5
106+ONEROUS AS TO DISCOU RAGE THE FINANCIAL I NSTITUTION FROM OFFE RING THE 6
107+LOAN. 7
109108
110-Approved by the Governor, April 8, 2025.
109+ [(2)] (4) (i) The Authority may only approve a guaranty under this 8
110+section if the Authority determines that the loan to be guaranteed will have a substantial 9
111+economic impact. 10
112+
113+ (ii) To determine the economic impact of a loan, the Authority may 11
114+consider: 12
115+
116+ 1. the amount of the guaranty obligation; 13
117+
118+ 2. the terms of the loan to be guaranteed; 14
119+
120+ 3. the number of new jobs that the loan will create; and 15
121+
122+ 4. any other factor that the Authority considers relevant. 16
123+
124+ SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 17
125+October 1, 2025. 18
126+
127+
128+
129+
130+Approved:
131+________________________________________________________________________________
132+ Governor.
133+________________________________________________________________________________
134+ Speaker of the House of Delegates.
135+________________________________________________________________________________
136+ President of the Senate.