PART A

Sec. A-1. 10 MRSA §1026-J, first ¶, as enacted by PL 1991, c. 849, §1 and affected by §7, is amended to read:

The Economic Recovery Program, referred to in this section as the "program," is established to provide loans to businesses that do not have sufficient access to credit but demonstrate the ability to survive, preserve and create jobs, and repay the loans obligations.

Sec. A-2. 10 MRSA §1026-J, sub-§1, ¶D, as amended by PL 1997, c. 563, Pt. A, §1, is repealed.

Sec. A-3. 10 MRSA §1026-J, sub-§2, as enacted by PL 1991, c. 849, §1 and affected by §7, is amended to read:

2. Loan terms and conditions. Loans may not exceed $1,000,000 per project. The authority may establish prudent terms and conditions for loans, including limits on the amount of loans for any one project and requiring adequate collateral for the loans. Loan terms may not exceed 20 years in the case of loans primarily secured by real estate, 10 years in the case of loans secured primarily by machinery and equipment and 7 years for other loans. The interest rate charged on each loan may not exceed the prime rate for interest plus 4%, as determined by the authority. The authority may establish conditions, such as balloon payments, to encourage borrowers to make the transition to conventional financing as soon as they are reasonably able to do so. The authority may further assist the borrower__by allowing for the deferral of interest or principal payments for a period of time.__Loans may be subject to conditions that allow the authority to make a reasonable return based on the risk of the investment, which may include royalties or additional payments based on sales, net cash flow or other financial measures and rights to equity in the company.

PART B

Sec. B-1. 10 MRSA §1026-N, sub-§§1 and 2, as enacted by PL 1995, c. 424, §1, are amended to read:

1. Established. The Maine Economic Development Venture Capital Revolving Investment Program, referred to in this section as the "program," is established to provide venture capital to businesses that need assistance in order to create or retain jobs. The Maine Economic Development Venture Capital Revolving