Bill Text: PA SB1257 | 2011-2012 | Regular Session | Amended

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Bill Title: Further providing for revolving loan program accounts; repealing First Industries Program and Second Stage Loan Program; providing for the Liberty Financing Authority; imposing duties on the Department of Community and Economic Development; providing for First Industries Program, for Second Stage Loan Program and for transfer from Commonwealth Financing Authority to Liberty Financing Authority for First Industries Program and Second Stage Program; and making related repeals.

Spectrum: Moderate Partisan Bill (Republican 10-2)

Status: (Introduced - Dead) 2012-03-28 - Re-referred to APPROPRIATIONS [SB1257 Detail]

Download: Pennsylvania-2011-SB1257-Amended.html

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PRIOR PRINTER'S NO. 1579 PRINTER'S NO. 2048
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 1257 Session of2011
INTRODUCED BY EARLL, M. WHITE, MENSCH, ARGALL, FOLMER, WAUGH, BROWNE, BRUBAKER, ALLOWAY, GORDNER, FONTANA AND BLAKE, SEPTEMBER 21, 2011
SENATOR EARLL, COMMUNITY, ECONOMIC AND RECREATIONAL DEVELOPMENT, AS AMENDED, MARCH 27, 2012
AN ACT
Amending Titles 12 (Commerce and Trade) and 64 (Public
Authorities and Quasi-Public Corporations) of the
Pennsylvania Consolidated Statutes, further providing for <--
revolving loan program accounts; repealing First Industries
Program and Second Stage Loan Program; providing for the
Liberty Financing Authority; imposing duties on the
Department of Community and Economic Development; providing <--
for First Industries Program, for Second Stage Loan Program
and for transfer from Commonwealth Financing Authority to
Liberty Financing Authority for First Industries Program and
Second Stage Program; and making related repeals.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Chapters 23 and 29 of Title 12 of the
Pennsylvania Consolidated Statutes are repealed:
[CHAPTER 23
SMALL BUSINESS FIRST
Sec.
2301. Scope.
2302. Definitions.
2303. Establishment.
2304. Fund and accounts.
2305. Department responsibilities.
2306. Capital development loans.
2307. EDA loans.
2308. Loans in distressed communities.
2309. Pollution prevention assistance loans.
2310. Export financing loans.
2311. Reporting and inspection.
2312. Limitations.
§ 2301. Scope.
This chapter relates to the Small Business First Program.
§ 2302. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Agricultural processor." A person that adds value by
subjecting one or more farm commodities to a process of
manufacture, development or preparation for sale or a person
that converts a farm product into a marketable form.
"Agricultural producer." A person involved in the management
and use of a normal agricultural operation for the production of
a farm commodity.
"Apparel products." Products manufactured, woven, cut, sewn
or otherwise similarly processed by mechanical or human effort
from fabrics, leather or cloth and made for use as clothing,
shoes or other attire.
"Applicant." A person that applies for a loan in accordance
with this chapter.
"Area loan organization." A local development district, an
industrial development agency organized and existing under the
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act of May 17, 1956 (1955 P.L.1609, No.537), known as the
Pennsylvania Industrial Development Authority Act, or any other
nonprofit economic development organization certified by the
department as possessing the qualifications necessary to
evaluate and administer loans made under this chapter.
"Capital development project." Land, buildings, equipment
and machinery and working capital which is acquired,
constructed, renovated or used by a small business in accordance
with any of the following:
(1) As part of a for-profit project or venture not of a
mercantile or service-related nature, except for hospitality
industry projects.
(2) As part of an effort to:
(i) bring a small business into compliance with
Federal or State environmental laws or regulations;
(ii) complete an approved remediation project; or
(iii) permit a small business to adopt generally
acceptable pollution prevention practices.
(3) As part of an effort to provide assistance to a
small business that is a recycler of municipal or commercial
waste or that is a manufacturer using recycled municipal or
commercial waste materials.
(4) As part of an effort to assist a small business with
defense conversion activities.
(5) As part of a for-profit project or venture to
manufacture products to be exported out of the United States
by a small business which is not of a mercantile or service-
related nature, except for export-related services and
international export-related mercantile ventures or advanced
technology and computer-related services and mercantile
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ventures and which will increase this Commonwealth's national
or international market shares.
(6) As part of a for-profit project or venture that
meets the requirements of section 2308 (relating to loans in
distressed communities)
(7) As part of an effort to assist in the start-up or
expansion of a for-profit or not-for-profit child day-care
center subject to licensure by the Commonwealth.
"Child day-care center." Any premises in which child day
care is provided simultaneously for seven or more children who
are not related to the provider.
"Community development institution." Any of the following:
(1) An area loan organization for a distressed
community.
(2) A community development financial institution
located in a distressed community and approved by the
department.
"Distressed community." A community which has any of the
following:
(1) A census tract or other specifically defined
geographic area in which there is any of the following:
(i) A median income below 80% of the median income
for the United States or this Commonwealth.
(ii) Twenty percent or more of the population is
below the poverty level by family size published by the
Bureau of the Census.
(iii) An unemployment rate 50% higher than the
national average.
(2) An area which is designated a subzone, expansion
subzone or improvement subzone under the act of October 6,
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1998 (P.L.705, No.92), known as the Keystone Opportunity Zone
and Keystone Opportunity Expansion Zone Act.
(3) Any other geographic area designated by the
department as distressed. The designation shall be published
in the Pennsylvania Bulletin.
"EDA loan." A loan made under this chapter utilizing funds
made available to the department under the Public Works and
Economic Development Act of 1965 (Public Law 89-136, 42 U.S.C. §
3121 et seq.).
"Ex-Im Bank." The Export-Import Bank of the United States.
"Export activity." An activity undertaken by a person within
this Commonwealth related to exports.
"Export business." A person that is engaged in a for-profit
enterprise involving export activities and that employs 250 or
fewer individuals.
"Exports." Goods or services to be sold or performed outside
the United States.
"Farm commodity." Any Pennsylvania-grown agricultural,
horticultural, aquacultural, vegetable, fruit and floricultural
product of the soil, livestock and meats, wools, hides, furs,
poultry, eggs, dairy products, nuts, mushrooms, honey products
and forest products.
"Fund." The Small Business First Fund continued under
section 2304 (relating to fund and accounts).
"Hazardous substance." Any element, compound or material
which is any of the following:
(1) Regulated as a hazardous air pollutant under section
6.6 of the act of January 8, 1960 (1959 P.L.2119, No.787),
known as the Air Pollution Control Act.
(2) Defined as a hazardous waste under section 103 of
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the act of July 7, 1980 (P.L.380, No.97), known as the Solid
Waste Management Act.
(3) Regulated under the act of December 7, 1990
(P.L.639, No.165), known as the Hazardous Material Emergency
Planning and Response Act.
"Hospitality industry project." A for-profit project or
venture which involves a small business that operates a hotel,
motel or other lodging facility and that employs at least five
full-time equivalent employees at the time an application is
submitted to the department for financing. The term includes a
for-profit project or venture which involves a small business
that operates a restaurant or food service operation open to the
public, that has been in continuous operation for at least five
years and that employs at least five full-time equivalent
employees at the time an application is submitted.
"Insurance policy." An export credit insurance policy for
small businesses offered by the Export-Import Bank of the United
States.
"Natural disaster." As defined in 35 Pa.C.S. § 7102
(relating to definitions).
"Normal agricultural operation." As defined in section 2 of
the act of June 10, 1982 (P.L.454, No.133), entitled "An act
protecting agricultural operations from nuisance suits and
ordinances under certain circumstances."
"Pollution prevention." The reduction or elimination of
pollution at its source. The term does not include any of the
following:
(1) A substitution of one hazardous or toxic substance
for another which will cause an increased risk to the
environment or to human health.
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(2) A cross-media transfer.
(3) A delisting of a hazardous waste or toxic chemical.
"Pollution prevention assistance agency." Any of the
following:
(1) An area loan organization.
(2) An industrial resource center created pursuant to
the act of June 22, 2001 (P.L.400, No.31), known as the
Industrial Resources Center Partnership Act.
"Pollution prevention infrastructure." A capital development
project which permits a small business to adopt or install
pollution prevention equipment or processes to:
(1) Reduce or reuse raw materials onsite.
(2) Reduce the production of waste.
(3) Reduce energy consumption.
"Program." The Small Business First Program established
under section 2303 (relating to establishment).
"Reuse." Use of a product or component in its original form
more than once.
"Small business." A person that is engaged in a for-profit
enterprise and that employs 100 or fewer individuals. The term
includes the following:
(1) An enterprise located in a small business incubator
facility.
(2) An agricultural processor.
(3) An agricultural producer.
(4) An enterprise which manufactures apparel products.
(5) An enterprise which is a for-profit or not-for-
profit child day-care center subject to licensure by the
Commonwealth.
"Working capital." Capital used by a small business for
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operations, excluding fixed assets and production machinery and
equipment.
§ 2303. Establishment.
There is established within the department a program to be
known as the Small Business First Program. The program shall be
administered by the department and provide loans to eligible
persons for certain projects which encourage job-creating and
job-preserving economic development within this Commonwealth.
§ 2304. Fund and accounts.
(a) Fund.--The Small Business First Fund, created under
section 1302(a) of the act of June 29, 1996 (P.L.434, No.67),
known as the Job Enhancement Act, is continued. The Treasury
Department shall credit the following to the fund:
(1) Appropriations made by the General Assembly to the
department for the program.
(2) Federal funds made available under the Public Works
and Economic Development Act of 1965 (Public Law 89-136, 42
U.S.C. § 3121 et seq.) or any other Federal statute,
regulation or program for the program.
(3) Payments from recipients of loans made from the
fund.
(4) Payments from recipients of loans made under the
former act of July 2, 1984 (P.L.545, No.109), known as the
Capital Loan Fund Act.
(5) Interest income derived from investment of the money
in the fund.
(6) Any other deposits, payments or contributions from
any other source made available to the department for the
program.
(b) Pollution prevention assistance.--The Pollution
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Prevention Assistance Account, created under the act of June 29,
1996 (P.L.434, No.67), known as the Job Enhancement Act, is
continued. The Treasury Department shall credit the following to
this account:
(1) Appropriations made by the General Assembly to the
department for pollution prevention assistance.
(2) Payments from recipients of loans made from the
Pollution Prevention Assistance Account.
(3) Transfers from the Hazardous Sites Cleanup Fund as
established in section 602.3 of the act of March 4, 1971
(P.L.6, No.2), known as the Tax Reform Code of 1971.
(4) Interest income derived from investment of the money
in the Pollution Prevention Assistance Account.
(5) Any other deposits, payments or contributions from
any other source made available to the department for
pollution prevention assistance.
(c) Use of fund.--
(1) Money in the fund may be used as follows:
(i) By the department to make loans in accordance
with this chapter and for administrative costs of the
department in administering the program.
(ii) By area loan organizations for administrative
costs associated with the program which are approved by
the department.
(2) Money from the fund derived from appropriations
specified for export financing assistance may be deposited by
the department in banks or trust companies in special
accounts. The special accounts must be continuously secured
by a pledge of direct obligations of the United States or of
the Commonwealth having an aggregate market value, exclusive
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of accrued interest, at least equal to the balance on deposit
in the account. The securities shall be deposited with the
department to be held by a trustee or agent satisfactory to
the department. Banks and trust companies are authorized to
give security under this paragraph. Money in these special
accounts shall be paid out on order of the department.
(d) Use of Pollution Prevention Assistance Account.--Money
in the Pollution Prevention Assistance Account may be used by
the department to provide loans to small businesses for the
adoption or installation of pollution-prevention or energy-
efficient equipment or processes in accordance with section 2309
(relating to pollution prevention assistance loans).
§ 2305. Department responsibilities.
(a) General rule.--The department shall do all of the
following:
(1) Administer the program.
(2) Establish written guidelines as necessary. Any
guidelines established shall be included in the report
required by Chapter 3 (relating to economic development
financing strategy).
(3) Deposit payments made by recipients in the fund or
the Pollution Prevention Assistance Account, as appropriate.
(4) Approve standards for area loan organization
application fees.
(5) Approve community development financial
institutions.
(b) Program.--In administering the program, the department
may do any of the following:
(1) Provide grants or other financial assistance to area
loan organizations for any of the following purposes:
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(i) To establish loan reserve funds.
(ii) To reimburse loan losses to commercial banks
and other financial institutions as a means of
encouraging the expansion and financing of small
businesses.
(2) Apply to the Ex-Im Bank for delegated authority
lender status under the Ex-Im Bank's Working Capital Guaranty
Program.
(3) Utilize the outstanding portfolio of loans made
under this chapter to raise additional funds by selling,
securing, hypothecating or otherwise using such loan proceeds
as a financing vehicle if the funds raised are used by the
department for either of the following purposes:
(i) To make new and additional loans under this
chapter.
(ii) To pay costs associated with financing.
§ 2306. Capital development loans.
(a) Application.--A small business may submit an application
and any applicable application fee to its area loan organization
requesting a loan for certain costs of a capital development
project. The application shall be on the form required by the
department and shall include or demonstrate all of the
following:
(1) The name and address of the applicant.
(2) A statement of the amount of loan assistance sought.
(3) A statement of the capital development project,
including a detailed statement of the cost of the project.
(4) A financial commitment from a responsible source for
any cost of the capital development project in excess of the
amount requested.
20110SB1257PN2048 - 11 -
(5) Any other information required by the department.
(b) Area loan organization review.--
(1) Upon receipt of a completed application, an area
loan organization shall investigate and determine all of the
following:
(i) If the applicant is a small business.
(ii) If the project is a capital development
project.
(iii) If, when the applicant is a small business,
the capital development project demonstrates a
substantial likelihood of creating or preserving
employment activities in this Commonwealth or if, when
the applicant is an agricultural producer, the project
demonstrates a substantial likelihood of enhancing and
growing normal agriculture operations.
(iv) The ability of the applicant to meet and
satisfy the debt service as it becomes due and payable.
(v) The existence and sufficiency of collateral for
the loan.
(vi) Relevant criminal and credit history and
ratings of the applicant as determined from outside
credit reporting services and other sources.
(vii) The number of employment opportunities to be
created or preserved by the proposed capital development
project.
(viii) If the applicant complied with all other
criteria established by the department.
(2) Upon being satisfied that all requirements have been
met, the area loan organizations shall recommend the
applicant to the department and forward the application with
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all supporting documentation to the department for its review
and approval.
(c) Department review.--
(1) Within 30 days of receiving a recommendation and a
completed application, the department shall review the
application. If the department is satisfied that all
requirements have been met, the department may approve the
loan request in accordance with the following:
(i) A loan for land, buildings and machinery and
equipment may not exceed $200,000 or 50% of the total
capital development project costs, whichever is less. For
the purposes of this subparagraph, capital development
project costs incurred during the 12-month period prior
to the date of submission of the application to the
department shall be considered part of the total capital
development project costs.
(ii) A loan for working capital may not exceed
$100,000 or 50% of the total capital development project
costs, whichever is less.
(iii) Except for loans to agricultural producers, a
loan must create or preserve one job for every $25,000
loaned.
(2) The department shall notify the area loan
organization and applicant of its decision.
(d) Approvals.--For applications which are approved, the
department shall draw an advance equal to the principal amount
of the loan from the fund. The advance shall be forwarded to the
area loan organization and, upon receipt by the area loan
organization, shall become an obligation of the area loan
organization. Prior to providing loan funds to the applicant,
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the area loan organization shall require the applicant to
execute a note and to enter into a loan agreement. In addition
to the requirements of subsection (e), the loan agreement shall
include a provision requiring the recipient to use the loan
proceeds to pay the costs of the capital development project.
The department may require the area loan organization to impose
other terms and conditions on the recipient if the department
determines that they are in the best interests of this
Commonwealth, including a provision requiring collateral for any
penalty imposed under subsection (g).
(e) Loan terms.--A loan agreement entered into in accordance
with subsection (c) shall do all of the following:
(1) State the collateral securing the loan. All loans
shall be secured by lien positions on collateral at the
highest level of priority as may be determined by the area
loan organization with the approval of the department.
(2) State the repayment period in accordance with the
following:
(i) A loan for real property shall have a repayment
period of up to 15 years.
(ii) A loan for machinery and equipment shall have a
repayment period of up to ten years.
(iii) A loan for working capital shall have a
repayment period of up to three years.
(iv) If, in a capital development project, there are
two or more uses planned, the loan terms may be blended.
(3) State the interest rate in accordance with the
following:
(i) Except as provided in subparagraph (ii), loans
shall be made at an interest rate not to exceed 5% for
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the term of the loan.
(ii) A loan to a small business which is an
agricultural producer shall be made at an interest rate
of not less than 2% for the term of the loan if all of
the following apply:
(A) A declaration under 35 Pa.C.S. § 7301(c)
(relating to general authority of Governor) is in
effect for at least ten days prior to the date of
application.
(B) The application is made within nine months
of termination of the declaration.
(C) The agricultural producer is in the area
which has been declared to be a natural disaster
area.
(f) Loan administration.--A loan made under this section
shall be administered in accordance with departmental policies
and procedures by the area loan organization which made the
loan. Each area loan organization shall submit an annual report
on the form required by the department and which includes or
demonstrates all of the following:
(1) Each outstanding loan.
(2) The date approved.
(3) The original principal amount.
(4) The current principal balance.
(5) The interest rate.
(6) The purpose for which the loan was made.
(7) An enumeration of any problems or issues which have
arisen with regard to each loan.
(8) A statement regarding the progress of the small
business in creating or preserving its requisite number of
20110SB1257PN2048 - 15 -
employment opportunities.
(9) Any other information or documentation required by
the department.
(g) Penalty.--
(1) Except as provided in paragraph (2), the department
shall impose a penalty upon a recipient if the recipient
fails to create or preserve the number of employment
opportunities specified in its approved application.
(2) The department may waive the penalty required by
paragraph (1) if the department determines that the failure
was due to circumstances outside the control of the
recipient.
(3) The amount of the penalty imposed under paragraph
(1) shall be equal to an increase in the interest rate to 2%
greater than the current prime interest rate for the
remainder of the loan.
(h) Defaults.--The department may by foreclosure take title
to a capital development project which it financed if
acquisition is necessary to protect a loan made under this
section. The department shall pay all costs arising out of the
foreclosure and acquisition from moneys held in the fund. The
department may, in order to minimize financial losses and
sustain employment, lease the capital development project. The
department may withdraw moneys from the fund to purchase first
mortgages and to make payments on first mortgages on any capital
development project which it financed where purchase or payment
is necessary to protect a loan made under this section. The
department may sell, transfer, convey and assign the first
mortgages and shall deposit any moneys derived from the sale of
any first mortgages in the fund.
20110SB1257PN2048 - 16 -
§ 2307. EDA loans.
(a) Application and administration procedures.--The
department shall establish application and administration
procedures to be used for EDA loans. The procedures shall be
established by guidelines and shall conform in all respects to
those procedures required or established by the Economic
Development Administration for use of Federal funds under the
Public Works and Economic Development Act of 1965 (Public Law
89-136, 42 U.S.C. § 3121 et seq.).
(b) Eligibility for EDA loans.--The department shall
establish eligibility requirements to be used for EDA loans. The
requirements shall be established by guidelines and shall
conform in all respects to those procedures required or
established by the Economic Development Administration for use
of Federal funds under the Public Works and Economic Development
Act of 1965.
§ 2308. Loans in distressed communities.
(a) Application.--A small business located in a distressed
community may submit an application and any applicable
application fee to a community development institution
requesting a loan for certain costs of a capital development
project. The application shall be on the form required by the
department and shall include or demonstrate all of the
following:
(1) The name and address of the applicant.
(2) A statement that the small business is engaged in
business-to-public service or in the mercantile, commercial
or point-of-sale retail business sectors.
(3) A statement of the amount of loan assistance sought.
(4) A statement of the capital development project,
20110SB1257PN2048 - 17 -
including a detailed statement of the cost of the project.
(5) A financial commitment from a responsible source for
the cost of the capital development project in excess of the
amount requested.
(6) Any other information required by the department.
(b) Community development institution review.--
(1) Upon receipt of a completed application, a community
development institution shall investigate and determine all
of the following:
(i) If the applicant is a small business which is
engaged in business-to-public service or in the
mercantile, commercial or point-of-sale retail business
sectors in accordance with conditions or criteria
established by the department.
(ii) If the project is a capital development
project.
(iii) If the applicant has demonstrated a direct
impact on the community in which the capital development
project is or will be located, on residents of that
community or on the local and/or regional economy. The
department shall establish criteria that will assist in
making this demonstration.
(iv) Number of employment opportunities to be
created or preserved by the proposed capital development
project.
(v) If the applicant complied with all other
criteria established by the department.
(2) Upon being satisfied that all requirements have been
met, the community development institution shall recommend
the applicant to the department and forward the application
20110SB1257PN2048 - 18 -
with all supporting documentation to the department for its
review and approval.
(c) Department review.--
(1) Upon receipt of a recommendation and a completed
application, the department shall investigate and determine
all of the following:
(i) The ability of the applicant to meet and satisfy
the debt service as it becomes due and payable. In
reviewing repayment obligations, loans shall not be
approved on the basis of direct financial return on
investment and shall not be held to the loan loss
standards of private commercial lenders. Loans shall be
reviewed for the purpose of establishing a strong
economic base and promoting entrepreneurial activity
within the distressed community.
(ii) The existence and sufficiency of collateral for
the loan.
(iii) Relevant criminal and credit history and
ratings of the applicant as determined from outside
credit reporting services and other sources.
(2) If the department is satisfied that all requirements
have been met, the department may approve the loan request in
an amount not to exceed $200,000 or 50% of the total capital
development project costs, whichever is less. For the purpose
of this paragraph, capital development project costs, except
the costs related to working capital, incurred during the 12-
month period prior to the date of submission of the
application to the department shall be considered part of the
total capital development project costs.
(3) The department shall notify the community
20110SB1257PN2048 - 19 -
development institution and applicant of its decision.
(d) Approvals.--For applications which are approved, the
department shall draw an advance equal to the principal amount
of the loan from the fund and, prior to providing loan funds to
the applicant, the department shall require the applicant to
execute a note and to enter into a loan agreement. In addition
to the requirements of subsection (e), the loan agreement shall
include a provision requiring the recipient to use the loan
proceeds to pay the costs of the capital development project.
The department may impose other terms and conditions on the
recipient if the department determines they are in the best
interests of this Commonwealth, including a provision requiring
collateral for any penalty imposed under subsection (g).
(e) Loan terms.--A loan agreement entered into in accordance
with subsection (d) shall do all of the following:
(1) State any collateral securing the loan. The
department may use its best judgment to identify and secure
collateral.
(2) State the repayment period which may be flexible.
(3) State the interest rate which may not be less than
2% nor more than 5% for the term of the loan.
(4) State that the recipient agrees to maintain, at a
minimum, the number of jobs in existence as of the date of
loan application.
(f) Loan administration.--A loan made under this section
shall be administered in accordance with departmental policies
and procedures.
(g) Penalty.--
(1) Except as provided in paragraph (2), the department
shall impose a penalty upon a recipient if the recipient
20110SB1257PN2048 - 20 -
fails to preserve the number of employment opportunities
specified in its approved application.
(2) The department may waive the penalty required by
paragraph (1) if the department determines that the failure
was due to circumstances outside the control of the
recipient.
(3) The amount of any penalty imposed under paragraph
(1) shall be equal to an increase in the interest rate to 2%
greater than the current prime interest rate for the
remainder of the loan.
(h) Defaults.--The department may take title by foreclosure
to a capital development project which it financed where
acquisition is necessary to protect a loan made under this
section. The department shall pay all costs arising out of the
foreclosure and acquisition from money held in the fund. The
department may, in order to minimize financial losses and
sustain employment, lease the capital development project. The
department may withdraw money from the fund to purchase first
mortgages and to make payments on first mortgages on any capital
development project which it financed if purchase or payment is
necessary to protect a loan made under this section. The
department may sell, transfer, convey and assign the first
mortgages and shall deposit in the fund money derived from the
sale of any first mortgages.
§ 2309. Pollution prevention assistance loans.
(a) Application.--A small business may submit an application
and any application fee to a pollution prevention assistance
agency requesting a loan for a pollution prevention
infrastructure. The application shall be on the form required by
the department and shall include or demonstrate all of the
20110SB1257PN2048 - 21 -
following:
(1) The name and address of the applicant.
(2) A statement of the amount of loan assistance sought.
(3) A statement of the pollution prevention
infrastructure, including a detailed statement of the cost of
the infrastructure.
(4) A financial commitment from a responsible source for
the cost of the pollution prevention infrastructure in excess
of the amount requested.
(5) Any other information required by the department.
(b) Pollution prevention assistance agency review.--
(1) Upon receipt of a completed application, a pollution
prevention assistance agency shall investigate and determine
all of the following:
(i) If the applicant is a small business.
(ii) If the project is for pollution prevention
infrastructure.
(iii) If the applicant complied with all other
criteria established by the department.
(2) Upon being satisfied that all requirements have been
met, the pollution prevention assistance agency shall
recommend the applicant to the department and forward the
application with all supporting documentation to the
department for its review and approval.
(c) Department review.--
(1) Upon receipt of a recommendation and a completed
application, the department shall investigate and determine
all of the following:
(i) If the pollution prevention infrastructure
demonstrates a substantial likelihood of preventing or
20110SB1257PN2048 - 22 -
reducing pollution. The Department of Environmental
Protection shall assist the department in reviewing the
applications and provide technical assistance.
(ii) The ability of the applicant to meet and
satisfy the debt service as it becomes due and payable.
In reviewing repayment obligations, loans shall not be
approved on the basis of direct financial return on
investment and shall not be held to the loan loss
standards of private commercial lenders. Loans shall be
reviewed for the purpose of reducing pollution through
source reduction technologies or processes.
(iii) The existence and sufficiency of collateral
for the loan.
(iv) Relevant criminal and credit history and
ratings of the applicant as determined from outside
credit reporting services and other sources.
(2) If the department is satisfied that all requirements
have been met, the department may approve the loan request. A
loan approved under this subsection may not exceed the lesser
of:
(i) $100,000; or
(ii) 75% of infrastructure costs.
(3) The department shall notify the pollution prevention
assistance agency and applicant of its decision.
(d) Approvals.--For applications which are approved, the
department shall draw an advance equal to the principal amount
of the loan from the Pollution Prevention Assistance Account.
Prior to providing loan funds to the applicant, the department
shall require the applicant to execute a note and to enter into
a loan agreement. In addition to the requirements of subsection
20110SB1257PN2048 - 23 -
(e), the loan agreement shall include a provision requiring the
recipient to use the loan proceeds to pay the costs of the
pollution prevention infrastructure. The department may impose
other terms and conditions on the recipient if the department
determines they are in the best interests of this Commonwealth,
including a provision requiring collateral for any penalty
imposed under subsection (g).
(e) Loan terms.--A loan agreement entered into in accordance
with subsection (d) shall do all of the following:
(1) State the collateral securing the loan. All loans
shall be secured by lien positions on collateral at the
highest level of priority as may be determined by the
department.
(2) State the repayment period which may not exceed 10
years.
(3) State that the interest rate is 2%.
(4) State that any loan fee is not to exceed 5% of the
loan amount.
(f) Loan administration.--A loan made under this section
shall be administered in accordance with departmental policies
and procedures.
(g) Penalty.--
(1) Except as provided in paragraph (2), the department
shall impose a penalty upon a recipient if the recipient
fails to carry out the pollution prevention infrastructure
project as specified in its approved application.
(2) The department may waive the penalty required by
paragraph (1) if the department determines that the failure
was due to circumstances outside the control of the
recipient.
20110SB1257PN2048 - 24 -
(3) The amount of any penalty imposed under paragraph
(1) shall be equal to an increase in the interest rate to 2%
greater than the current prime interest rate for the
remainder of the loan.
(h) Defaults.--The department may take title by foreclosure
to a pollution prevention infrastructure which it financed if
acquisition is necessary to protect a loan made under this
section. The department shall pay all costs arising out of the
foreclosure and acquisition from money held in the Pollution
Prevention Assistance Account. The department may, in order to
minimize financial losses and sustain employment, lease the
pollution prevention infrastructure. The department may withdraw
money from the Pollution Prevention Assistance Account to
purchase first mortgages and to make payments on first mortgages
on any pollution prevention infrastructure which it financed if
the purchase or payment is necessary to protect a loan made
under this section. The department may sell, transfer, convey
and assign the first mortgages and shall deposit any money
derived from the sale of any first mortgages in the Pollution
Prevention Assistance Account.
§ 2310. Export financing loans.
(a) Application.--A person may submit an application and any
applicable application fee to the department or its area loan
organization requesting a loan for certain costs of a capital
development project which will be used in export activities. The
application must be on the form required by the department and
must include or demonstrate all of the following:
(1) The name and address of the applicant.
(2) A statement of the amount of loan assistance sought.
(3) A statement of the capital development project,
20110SB1257PN2048 - 25 -
including a detailed statement of the cost of the project.
(4) A financial commitment from a responsible source for
any cost of the capital development project in excess of the
amount requested.
(5) A statement that the loan, if approved, would not
supplant funding from private sector sources on commercially
reasonable terms.
(6) Any other information required by the department.
(b) Review.--Upon receipt of a completed application, the
department shall investigate and determine all of the following:
(1) If the applicant is an export business.
(2) If the project is a capital development project.
(3) The ability of the applicant to meet and satisfy the
debt service as it becomes due and payable.
(4) The existence and sufficiency of collateral for the
loan.
(5) Relevant criminal and credit history and ratings of
the applicant as determined from outside credit reporting
services and other sources.
(6) Number of employment opportunities to be created or
preserved by the proposed capital development project.
(7) If the applicant complied with all other criteria
established by the department.
(c) Approvals.--If the department is satisfied that all
requirements have been met, the department may approve the loan
request. A loan approved under this section may not exceed
$350,000. The department shall notify the applicant and, if
applicable, the area loan organization of its decision. The
department shall reserve an amount equal to the principal amount
of the loan within the fund or the special account authorized by
20110SB1257PN2048 - 26 -
section 2304(c)(2) (relating to fund and accounts). Prior to
providing funds to the applicant, the department shall require
the applicant to execute a note and enter into a loan agreement.
In addition to the requirements of subsection (d), the loan
agreement shall include a provision requiring the recipient to
use the loan proceeds to pay the costs of the capital
development project. The department may impose other terms and
conditions on the recipient if the department determines they
are in the best interests of this Commonwealth, including any of
the following:
(1) A provision requiring collateral for any penalty
imposed under subsection (f).
(2) A provision requiring the person to be eligible for
an insurance policy.
(3) A provision requiring the loan to be guaranteed by
the Working Capital Guaranty Program offered by the Ex-Im
Bank.
(4) A provision requiring an export credit sales
contract insured by an insurance policy.
(d) Loan terms.--A loan agreement entered into in accordance
with subsection (c) shall do all of the following:
(1) State the collateral securing the loan. All loans
shall be secured by lien positions on collateral at the
highest level of priority as may be determined by the
department.
(2) State the repayment period as determined by the
department.
(3) State the interest rate as determined by the
department.
(e) Loan administration.--A loan made under this section
20110SB1257PN2048 - 27 -
shall be administered in accordance with departmental policies
and procedures.
(f) Penalty.--
(1) Except as provided in paragraph (2), the department
shall impose a penalty upon a recipient if the recipient
fails to carry out the export activities specified in its
approved application.
(2) The department may waive the penalty required by
paragraph (1) if the department determines that the failure
was due to circumstances outside the control of the
recipient.
(3) The amount of the penalty imposed under paragraph
(1) shall be equal to an increase in the interest rate to 2%
greater than the current prime interest rate for the
remainder of the loan.
(g) Defaults.--The department may, by foreclosure, take
title to a capital development project which it financed if
acquisition is necessary to protect a loan made under this
section. The department shall pay all costs arising out of the
foreclosure and acquisition from money held in the fund or a
special account authorized by section 2304(c)(2). The department
may, in order to minimize financial losses and sustain
employment, lease the capital development project. The
department may withdraw money from the fund or a special account
authorized by section 2304(c)(2) to purchase first mortgages and
to make payments on first mortgages on any capital development
project which it financed if purchase or payment is necessary to
protect a loan made under this section. The department may sell,
transfer, convey and assign the first mortgages and shall
deposit any money derived from the sale of any first mortgages
20110SB1257PN2048 - 28 -
in the fund or a special account authorized by section 2304(c)
(2).
§ 2311. Reporting and inspection.
(a) Inspection.--An applicant or a recipient shall, upon
request, permit authorized employees of the department or its
agent to inspect the plant, books and records of the applicant
or recipient.
(b) Updating.--An applicant or a recipient shall provide
updated information to the department and its agents if
conditions change or to the extent that the information
originally given becomes inaccurate or misleading.
(c) Periodic reports.--A recipient shall provide the
department and its agents with such periodic financial reports
as the department may require until the loan is repaid in full.
(d) Financial and performance audits.--An agent of the
department shall annually submit to the department, at the
agent's expense, an independent financial audit. If the audit
reveals misconduct of a material nature on the part of the
agent, the department shall take appropriate action.
§ 2312. Limitations.
No loans shall be recommended or approved if the proceeds of
the loan could do any of the following:
(1) Cause, aid or assist directly in the relocation of
any business operations from one part of this Commonwealth to
another unless there is at least a 25% net increase in
employment.
(2) Refinance any portion of the total cost of a capital
development project, pollution prevention infrastructure or
other existing loans or debt.
(3) Finance a capital development project or pollution
20110SB1257PN2048 - 29 -
prevention infrastructure located outside the geographic
boundaries of this Commonwealth.
(4) Provide funds, directly or directly, for payment
distribution or as loan owners, partners or shareholders of a
small business, except as ordinary compensation for services
rendered.
(5) Provide funds for speculation in real or personal
property, whether tangible or intangible.
CHAPTER 29
MACHINERY AND EQUIPMENT LOANS
Sec.
2901. Scope.
2902. Definitions.
2903. Establishment.
2904. Machinery and Equipment Loan Fund.
2905. Eligibility for loans; terms and conditions.
2906. Application and administration.
2907. Powers of secretary.
2908. Reporting and inspection.
2909. Nondiscrimination.
2910. Conflict of interest.
2911. Reports to General Assembly.
2912. Guidelines.
§ 2901. Scope.
This chapter relates to the Machinery and Equipment Loan
Program.
§ 2902. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
20110SB1257PN2048 - 30 -
context clearly indicates otherwise:
"Business enterprise." A for-profit corporation, partnership
or proprietorship. The term includes a medical facility.
"Farm commodity." Any Pennsylvania-grown agricultural,
horticultural, aquacultural, vegetable, fruit and floricultural
product of the soil, livestock and meats, wools, hides, furs,
poultry, eggs, dairy products, nuts, mushrooms, honey products
and forest products.
"Fund." The Machinery and Equipment Loan Fund created and
established by this chapter.
"Medical facility." An entity licensed as a hospital under
the act of June 13, 1967 (P.L.31, No.21), known as the Public
Welfare Code, or the act of July 19, 1979 (P.L.130, No.48),
known as the Health Care Facilities Act.
"Normal agricultural operation." The term shall have the
same meaning as given to it in section 2 of the act of June 10,
1982 (P.L.454, No.133), entitled "An act protecting agricultural
operations from nuisance suits and ordinances under certain
circumstances."
"Production agriculture." The management and use of a normal
agricultural operation for the production of a farm commodity.
§ 2903. Establishment.
There is established within the department a program to be
known as the Machinery and Equipment Loan Program. The program
shall be administered by the department and provide loans to
business enterprises for machinery and equipment.
§ 2904. Machinery and Equipment Loan Fund.
(a) Creation.--There is created a special account in the
Treasury Department, to be known as the Machinery and Equipment
Loan Fund, to which shall be credited all program appropriations
20110SB1257PN2048 - 31 -
made by the General Assembly, all proceeds from loan repayments
and any and all other deposits, payments or contributions from
any other source made available to the fund. The fund shall
operate as a revolving fund whereby all appropriations, payments
and interest made thereto may be applied and reapplied to the
purposes of this chapter.
(b) Credits to fund.--All appropriations, deposits and
contributions made to the fund shall be immediately credited in
full to the fund, and earnings on the moneys held in the fund
shall also be credited to the fund for the purposes of this
chapter.
§ 2905. Eligibility for loans; terms and conditions.
(a) Loans; general rules.--The secretary may make advances
from the fund, subject to the terms, conditions and restrictions
provided under this chapter, for the purpose of making loans to
business enterprises involved in industrial processes, mining,
manufacturing, production agriculture, information technology,
biotechnology, service as a medical facility or other industrial
or technology sectors, as defined by the department, to acquire
and install new machinery and equipment or upgrade existing
machinery and equipment, including the acquisition, application
and utilization of computer hardware and software.
(1) All loans shall be subject to all of the following
conditions:
(i) Be made to eligible business enterprises under
the provisions of this chapter.
(ii) Have a maximum loan ceiling of $5,000,000 or
50% of the cost of the project, whichever is less.
(iii) Be limited to the purchase and installation of
new equipment and machinery or the upgrade of existing
20110SB1257PN2048 - 32 -
machinery and equipment. This subparagraph includes the
acquisition, application and utilization of computer
hardware and software.
(iv) Be limited to projects that demonstrate the
creation or retention of one job for every $25,000
received from the fund. This subparagraph does not apply
to loans made to business enterprises involved in
production agriculture or to loans made to medical
facilities.
(v) Have an interest rate which shall be established
by the secretary.
(vi) Have a term of not in excess of ten years.
(2) For loans to medical facilities, loan funds may be
used only to finance the acquisition, installation and
utilization of machinery and equipment, including computer
hardware and software components, to be used in the
prescribing and dispensing of medication for medical facility
patients.
(b) Restrictions.--No loans shall be made that do any of the
following:
(1) Cause, aid or assist in, directly or indirectly, the
relocation of any business enterprise from one part of this
Commonwealth to another unless there is at least a 25%
increase in net employment.
(2) Supplant funding that is otherwise available
expeditiously from private sector sources on commercially
reasonable terms.
(3) Be for the purpose of refinancing any portion of the
total project cost or other existing loans or debt.
(4) Be for the purpose of financing projects located
20110SB1257PN2048 - 33 -
outside the geographic boundaries of this Commonwealth.
(5) Be for the purpose of paying off a creditor that is
inadequately secured and is in a position to sustain a loss.
(6) Be for the purpose of repaying a debt owed to a
small business investment company.
(7) Provide funds for speculation in any kind of
property, real or personal, tangible or intangible.
(c) Security.--All loans shall be secured by no less than a
second lien position on the equipment purchased and other
sufficient collateral as determined by the secretary.
§ 2906. Application and administration.
(a) Procedures.--Application and administration procedures
for fund loans shall be established by the secretary.
(b) Receipt.--The secretary shall receive applications from
eligible business enterprises for machinery and equipment loans.
Applications shall be made to the secretary in the form and
manner as the department may require.
(c) Investigation.--Upon receipt of the application, the
secretary shall investigate and review the application and
either approve or disapprove the loan application by proper
action of the department. The decision of the secretary shall be
based, in whole or in part, upon the following criteria:
(1) Ability of the applicant to meet and satisfy all
debt service as it becomes due and payable.
(2) Sufficiency of available collateral, including
satisfactory lien positions on real and personal property.
(3) Eligibility of the applicant as a business
enterprise involved in industrial processes, manufacturing,
mining, production agriculture, information technology,
biotechnology, services as a medical facility or other
20110SB1257PN2048 - 34 -
industrial or technology sectors as defined by the secretary.
(4) Sufficient evidence that funds shall be used only to
acquire and install new equipment and machinery or upgrade
existing equipment and machinery, including the acquisition,
application and utilization of computer hardware and
software.
(5) Capital needs of the applicant.
(6) Conformity of the project to the provisions of this
chapter.
(7) Relevant criminal and credit history and ratings of
applicant as determined from outside credit reporting
services and other sources.
(8) Number of net employment opportunities created and
retained by the proposed project. This paragraph does not
apply to business enterprises involved in production
agriculture or medical facilities.
(9) Supporting evidence that the loan project will
increase the firm's competitiveness and value added within
its respective industry.
(10) Explanation of how the loan will aid the
Commonwealth in its efforts to assist business enterprises to
increase their productivity and improve the future
competitive position of this Commonwealth's industries.
(11) Compliance with the loan amount limitations
provided for machinery and equipment loans.
(12) Payment to date of all tax obligations due and
owing to the Commonwealth or any political subdivision
thereof.
(13) Conformity of all aspects of the loan transaction
with the substantive and procedural provisions of this
20110SB1257PN2048 - 35 -
chapter and regulations promulgated hereunder.
(14) Such information and documentation as the secretary
shall require.
(d) Notification.--The secretary shall notify the applicant
of final approval or disapproval of the loan application within
a reasonable period of time following the receipt of the
application. In the case of approval of a loan application, the
secretary shall arrange to draw the loan amount from the fund
and advance the sum to the recipient. The advance shall be made
available in the form of a loan transaction, which loan shall be
evidenced by a note executed by the recipient and secured in a
manner as the secretary shall require in conformity in all
respects to the loan as approved by the secretary.
(e) Policy requirements and report.--All loans shall be
administered and monitored by the department in accordance with
the policies and procedures prescribed by the secretary. On or
before September 1 of each year, the secretary shall prepare a
report that includes the following:
(1) Each outstanding loan.
(2) The date of approval.
(3) The original principal balance.
(4) The current principal balance.
(5) The interest rate.
(6) The purpose for which the loan was made.
(7) An enumeration of any problems or issues which have
arisen with regard to each loan.
(8) A statement regarding the progress of the business
enterprise in creating and retaining its requisite number of
employment opportunities.
(9) Such other information and documentation as the
20110SB1257PN2048 - 36 -
secretary shall require.
(f) Penalty for noncompliance.--In the event that a loan
recipient shall not comply with its approved application by
failing to create or preserve the number of employment
opportunities specified in its approved application, the
secretary shall impose a penalty equal to an increase in the
interest rate to 2% greater than the current prime interest rate
for the remainder of the loan unless the penalty is waived by
the secretary because the failure is due to circumstances
outside the control of the loan recipient. The penalty shall be
payable in installments that the secretary deems appropriate.
§ 2907. Powers of secretary.
The secretary shall have and may exercise all powers and
authority necessary to the proper administration and
implementation of this chapter and shall have the authority to
adopt policies, procedures and guidelines and promulgate rules
and regulations necessary to effectuate the provisions of this
chapter.
§ 2908. Reporting and inspection.
(a) Inspection.--Each business enterprise which applies for
or receives assistance under this chapter, upon reasonable
request of the department, shall permit duly authorized
employees of the department to inspect the plant, books and
records of the business enterprise.
(b) Updating.--Each business enterprise shall update the
information given to the department in its application if
conditions change or to the extent that the information given
originally becomes inaccurate or misleading.
(c) Periodic reports.--Each recipient of assistance under
this chapter shall provide the department with periodic
20110SB1257PN2048 - 37 -
financial reports as the secretary may require until such time
as the loan is paid off.
§ 2909. Nondiscrimination.
No loan shall be made to a business enterprise unless the
business enterprise certifies to the department, in a form
satisfactory to the department, that it shall not discriminate
against any employee or any applicant for employment because of
race, religion, color, national origin, sex or age. The business
enterprise shall also certify to the department that it is not
currently under citation for pollution violations and that in
the future it will meet all applicable antipollution standards.
§ 2910. Conflict of interest.
No employee of the department shall, either directly or
indirectly, be a party to or have any financial interest in any
contract or agreement arising pursuant to this chapter.
§ 2911. Reports to General Assembly.
(a) Annual reports.--On or before September 1 of each year,
the secretary shall provide a report to the Secretary of the
Senate and to the Chief Clerk of the House of Representatives.
The report shall describe all relevant activities of the
department pursuant to this chapter and shall include the
following:
(1) List of business enterprises receiving loans from
the fund and the amounts and terms of this assistance.
(2) Loan amounts repaid. Information under this
paragraph may be reported in the aggregate.
(3) Loans outstanding, balances due and any penalties
imposed. Information under this paragraph may be reported in
the aggregate.
(4) Jobs created by businesses receiving funds in
20110SB1257PN2048 - 38 -
previous years. Information under this paragraph may be
reported in the aggregate.
(5) Other relevant information as determined by the
secretary.
(b) Availability of departmental reports.--Reports prepared
by the secretary under section 2906(e) (relating to application
and administration) shall be made available upon request to
members of the General Assembly.
§ 2912. Guidelines.
The department shall develop written guidelines for the
implementation of this chapter.]
Section 2. Title 64 is amended by adding a section to read: <--
§ 1545. Transfer of funds.
The authority may transfer funds to the Liberty Financing
Authority established under Chapter 17 (relating to Liberty
Financing Authority) with the approval of a super-majority of
the board. The Liberty Financing Authority may approve a
transfer from the authority by acting under section 1712(e)
(relating to board).
Section 3. Title 64 is amended by adding a chapter to read:
Section 2. Section 1542(b) of Title 64 is amended to read: <--
§ 1542. Revolving loan program accounts.
* * *
[(b) The First Industries Program account.--The authority
shall establish an account for the program established in
section 1552 (relating to First Industries Program). Proceeds of
bonds issued to fund the First Industries Program, any moneys
received as loan repayments or in repayment or recovery of loan
guarantees under the program, or moneys otherwise made available
to the program, shall be deposited in the account and made
20110SB1257PN2048 - 39 -
available for additional planning grants or loans or used for
additional loan guarantees as provided in section 1552, subject
to the provisions of any pledge to or agreement made by the
authority with obligees of the authority.]
Section 3. Section 1552 of Title 64, amended June 30, 2011
(P.L.193, No.27), is repealed:
[§ 1552. First Industries Program.
(a) Establishment.--There is established a program to be
known as the First Industries Program. The program shall provide
financial assistance for projects related to tourism and
agriculture located within this Commonwealth. The board shall
allocate funds made available to the program among the different
methods of financing authorized in this section.
(b) Applications for planning grants.--An applicant may
submit an application to the authority requesting a planning
grant in an amount not to exceed $250,000 for the costs of
predevelopment activities and feasibility studies for a project
related to tourism or agriculture. The application shall be on
the form required by the board and shall include or demonstrate
all of the following:
(1) The applicant's name and address.
(2) The location of the project.
(3) A description of the project.
(4) An estimate of the cost of the predevelopment
activities and feasibility studies and the goal to be
achieved by carrying out the proposed activities or studies.
(5) A statement of the amount of the planning grant
sought.
(6) Any other information required by the board.
(c) Review and approval of planning grant applications.--
20110SB1257PN2048 - 40 -
(1) The board shall review the application to determine
that the project demonstrates one or more of the following:
(i) The project will have a demonstrable impact on
the economy or well-being of the neighborhood, community
or region where the project will be located.
(ii) The project will promote research and
development efforts leading to increased
commercialization or utilization of farm commodities.
(iii) The project will result in environmentally
friendly or energy efficient operations related to
agriculture, including projects authorized by the act of
December 12, 1994 (P.L.888, No.128), known as the
Agricultural By-Product Management Technology Act.
(iv) The project will result in more cost-effective
and efficient marketing of regional assets related to
tourism or agriculture.
(v) The project will result in a substantial
increase in revenues for the Commonwealth or the host
municipality.
(vi) The project proposes to utilize Commonwealth-
owned natural resources for public/private development of
tourism.
(2) Upon being satisfied that the requirements of
paragraph (1) have been met, the board may approve the
application, and, if approved, the authority shall award a
planning grant.
(3) Copies of all reports and studies prepared with
planning grant funds shall be filed with the authority and
shall be made available to any person upon request.
(d) Loans to applicants.--If the department approves an
20110SB1257PN2048 - 41 -
application for a loan under the programs established in 12
Pa.C.S. Ch. 23 (relating to small business first) or 29
(relating to machinery and equipment loans), the department may
request that the authority finance the loan. Upon being
satisfied that the project is related to agriculture or tourism,
the board may approve the request, and, if approved, the
authority shall award a loan. Loans made under this subsection
shall be administered by the department. Payments received shall
be forwarded to the authority and credited to the account
established in accordance with section 1542(b) (relating to
revolving loan program accounts).
(e) Loan guarantees.--
(1) An applicant may request a guarantee for a loan to
be made by a commercial lending institution or community
development financial institution to assist with the
financing of a project related to tourism or agriculture. The
applicant may be the commercial lending institution or
community development financial institution applying on
behalf of a borrower. The application must be on the form
required by the board and must include or demonstrate all of
the following:
(i) The applicant's name and address. If the
applicant is a commercial lending institution or
community development financial institution, the
borrower's name and address.
(ii) A description of the project.
(iii) A statement describing the anticipated
economic impact to the Commonwealth and the host
municipality as a result of the project.
(iv) A description of the proposed project
20110SB1257PN2048 - 42 -
financing, including terms, conditions and the collateral
or security required for the loan for which the guarantee
is being requested.
(v) A copy of the applicant's last two years of
financial statements prepared or reported on by an
independent certified public accountant. If the applicant
is a commercial lending institution or a community
development financial institution, a copy of the
borrower's last two years of financial statements
prepared or reported on by an independent certified
public accountant.
(vi) The amount of the loan guarantee that is being
requested.
(vii) The total project cost and the identification
of all sources of capital for the project.
(viii) Any other information required by the board.
(2) The board shall review the application to determine
all of the following:
(i) (A) Except as set forth in clause (B), that the
project has been awarded a planning grant under this
section or that at least $1,000,000 of private funds
are being invested in the project.
(B) Beginning on the effective date of this
paragraph through July 15, 2015, that the project has
been awarded a planning grant under this section or
that at least $500,000 of private funds are being
invested in the project.
(ii) That the value of the proposed collateral is
sufficient to cover the full amount of the loan.
(iii) That the applicant complied with all other
20110SB1257PN2048 - 43 -
criteria established by the board.
(3) Upon being satisfied that all requirements have been
met, the board may approve the guarantee, and, if approved,
the authority shall execute a guarantee agreement in favor of
the commercial lending institution or community development
financial institution stating the terms and amounts of the
guarantee. Except as provided in paragraph (3.1), the
guarantee may not exceed 50% of the outstanding principal
amount of the loan or $2,500,000 at any point in time,
whichever is less. In addition to any other terms and
conditions required by the board, the guarantee agreement
shall provide for all of the following:
(i) The procedure for the submission by the
commercial lending institution or community development
financial institution of a claim for payment. This
procedure shall require that the commercial lending
institution or community development financial
institution demonstrate that it has exhausted all
available remedies against the borrower, other guarantors
and collateral before seeking payment under the
agreement.
(ii) A requirement that a percentage of any moneys
recovered subsequent to the payment of a claim by the
authority be remitted to the authority.
(iii) Periodic reporting requirements by the
commercial lending institution or community development
financial institution regarding itself and regarding the
loans which have been awarded guarantees under this
section.
(3.1) Beginning on the effective date of this paragraph
20110SB1257PN2048 - 44 -
through July 15, 2015, a guarantee of 51% to 90% of the
principal amount of the loan to assist with the financing of
a project related to agriculture may be awarded by the board.
The guarantee shall be subject to a one-time fee of 2% of the
amount of the loan multiplied by the percentage of the
guarantee.
(3.2) The amount of a guarantee under this subsection,
if any, shall be set at the discretion of the board based
upon its determination of the potential financial risk to the
Commonwealth.
(4) The board may establish a subcommittee composed of
one or more board members and department staff to supervise
the progress of projects for which loan guarantees have been
awarded under this section.
(e.1) Limitation.--A Farm Credit Institution under the Farm
Credit Act of 1971 (Public Law 92-181, 85 Stat. 583) shall only
be permitted to participate in the First Industries Program
established under this section and may not participate in any
other loan guarantee program established under this chapter.
(e.2) Sunset.--After July 15, 2015, no Farm Credit
Institution under the Farm Credit Act of 1971 shall be eligible
for any loan guarantees under this chapter.
(f) Limitations.--
(1) No more than $10,000,000 of the funds available for
the program authorized by this section may be used for
planning grants awarded under subsection (c).
(2) At least two-thirds of the funds available for the
program authorized by this section shall be used for
financing of projects related to agriculture.]
Section 4. Section 1553 of Title 64 is repealed:
20110SB1257PN2048 - 45 -
[§ 1553. Second Stage Loan Program.
(a) Establishment.--There is established a program to be
known as the Second Stage Loan Program. The program shall
provide loan guarantees to commercial lending institutions that
make loans to life sciences, advanced technology or
manufacturing businesses.
(b) Application for enrollment.--A commercial lending
institution may apply for enrollment in the program authorized
by this section. The application shall be on the form prescribed
by the board and shall include or demonstrate all of the
following:
(1) The name and address of the commercial lending
institution and the name and title of the individual who will
serve as the point of contact for the commercial lending
institution.
(2) A statement defining the service area of the
commercial lending institution.
(3) A statement describing the commercial lending
activities engaged in by the commercial lending institution
and how the institution intends to expand those activities as
a result of its participation in the program authorized by
this section.
(4) Any other information required by the board.
(c) Enrollment approval.--Upon being satisfied that all
requirements have been met, the board may enroll the commercial
lending institution in the program authorized by this section,
and, if enrolled, the authority shall execute a master guarantee
agreement in favor of the commercial lending institution. In
addition to any other terms and conditions required by the
board, the master guarantee agreement shall provide for the
20110SB1257PN2048 - 46 -
following:
(1) The procedure for the submission of a claim for
payment by the commercial lending institution. This procedure
shall require that the commercial lending institution
demonstrate that it has exhausted all available remedies
against the borrower, other guarantors and collateral for the
loan before seeking payment under the agreement.
(2) A requirement that a percentage of any moneys
recovered by the commercial lending institution subsequent to
any payment made under the master guarantee agreement by the
authority be remitted to the authority.
(3) Periodic reporting requirements by the commercial
lending institution regarding itself and regarding the loans
for which guarantee certificates have been issued under this
section.
(d) Application for guarantee.--A commercial lending
institution enrolled in the program authorized by this section
may submit an application to the authority for the guarantee of
a proposed loan. The application shall be on the form prescribed
by the board and shall include or demonstrate all of the
following:
(1) The name and address of the borrower, the type of
business the borrower conducts, the location and age of the
business and the names and addresses of the principals of the
borrower.
(2) The number of projected new or retained employees of
the borrower as a result of the loan.
(3) A copy of the borrower's last two years of financial
statements prepared or reported on by an independent
certified public accountant.
20110SB1257PN2048 - 47 -
(4) A statement describing the purpose of the loan, the
requested amount of the loan, a copy of the commercial
lending institution's commitment letter and applicable credit
underwriting that supports the repayment of the loan, as well
as the collateral and other guarantees offered by the
borrower to support the loan.
(5) Any other information required by the board.
(e) Application review.--
(1) The board shall review the application to determine
all of the following:
(i) That the borrower owns and operates a life
sciences, advanced technology or manufacturing business.
(ii) That the borrower's business has been in
existence for at least two years but no more than seven
years at the time of application.
(iii) That the borrower is financially responsible
and has the ability to repay the loan.
(iv) That the use of loan proceeds by the borrower
will result in jobs being created or retained within this
Commonwealth.
(v) That the borrower's business is located within
the commercial lending institution's service area and
within this Commonwealth.
(vi) That the borrower and the commercial lending
institution have met all other requirements established
by the board.
(2) Upon being satisfied that all requirements have been
met, the board may approve the guarantee, and, if approved,
the authority shall issue a guarantee certificate for the
loan to the commercial lending institution stating the terms
20110SB1257PN2048 - 48 -
and amount of the guarantee.
(3) The board may establish a subcommittee composed of
one or more members of the board and staff of the department
to review and approve applications for guarantees under this
section.
(f) Limitations.--
(1) During the first two years of the term of a loan for
which a guarantee certificate has been issued, the guarantee
may not exceed 50% of the outstanding principal amount of the
loan. From the end of year two through either the end of year
seven or the end of the term of the loan, whichever occurs
first, the guarantee may not exceed 25% of the outstanding
principal amount of the loan. The guarantee will terminate at
the end of seven years.
(2) At no time may a guarantee exceed $1,000,000 for any
one loan.]
Section 5. Title 64 is amended by adding a chapter to read:
CHAPTER 17
LIBERTY FINANCING AUTHORITY
Subchapter
A. General Provisions
B. Structure and Powers
C. Bonds
D. Accounts
E. Programs
F. Miscellaneous Provisions
SUBCHAPTER A
GENERAL PROVISIONS
Sec.
1701. Scope of chapter.
20110SB1257PN2048 - 49 -
1702. Construction.
1703. Findings and declaration of policy.
1704. Definitions.
§ 1701. Scope of chapter.
This chapter relates to the Liberty Financing Authority.
§ 1702. Construction.
(a) General rule.--This chapter shall be liberally prudently <--
construed in order to effect the legislative and public purposes
as set forth in this subchapter.
(b) Rights of obligees.--The provisions of this chapter
providing for security, rights and remedies of obligees of the
authority shall be liberally prudently construed to achieve the <--
legislative and public purposes as public policy set forth in <--
this subchapter.
(c) Limitation.--If a provision of this chapter is judged to
be invalid by a court of competent jurisdiction, the order or
judgment shall be confined in its operation to the controversy
in which it was rendered and shall not affect or invalidate a
remaining provision of this chapter.
§ 1703. Findings and declaration of policy.
The General Assembly finds and declares as follows:
(1) Many existing businesses in this Commonwealth could
expand or otherwise and become more competitive if provided <--
with additional sources of financing for modernization,
expansion and other capital needs. This, in turn, could
increase employment levels, which would help to develop a
stable and healthy economy and revitalize communities,
thereby improving the health, safety and general welfare of
the citizens of this Commonwealth.
(2) A minimum level of unemployment and a maximum level
20110SB1257PN2048 - 50 -
of business opportunity can best be attained through the
promotion, stimulation and revitalization of industrial,
manufacturing, commercial, technological, agricultural and <--
tourism activities in this Commonwealth. Through such
efforts, the Commonwealth's competitiveness in the global <--
economy may also global and United States economies may be <--
enhanced.
(3) The Commonwealth has developed a great number of
programs with the objective of furthering these economic <--
purposes economic development within its borders. There have <--
also been a correspondingly great number of boards and
authorities to administer the various programs. While many of
these economic development programs have been successful,
others have fallen short.
(4) The economic health of our communities will improve
and efficiency and transparency will increase by eliminating <--
programs that have not worked for this Commonwealth, keeping <--
those that perform and consolidating the management of the
remaining programs will increase efficiency and transparency <--
successful programs that remain. <--
(5) The Liberty Financing Authority shall fund disburse <--
the money for and administer the economic development
programs encompassed in this chapter. It shall do so with the
prudence, proficiency and transparency that the citizens of
this Commonwealth expect, and will have as resources the
expertise and administrative assistance of the Department of
Community and Economic Development, as well as the other
State agencies. Resources will be more accessible to
businesses in this Commonwealth, citizens will be able to see
where their tax dollars are being invested and the overall
20110SB1257PN2048 - 51 -
health of this Commonwealth's economy will improve, beginning
in individual communities and spreading throughout this
Commonwealth.
§ 1704. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Agricultural processor." An entity that adds value by
subjecting one or more farm commodities to a process of
manufacture, development or preparation for sale or a person
that converts a farm product into a marketable form.
"Agricultural producer." A person or entity involved in the
management and use of an agricultural operation for the
production of a farm commodity.
"Agriculture." Any of the following:
(1) the management and use of an agricultural operation
for the production of a farm commodity;
(2) the sale of farm commodities at wholesale;
(3) the sale of farm commodities at retail by
supermarkets or farmers' markets; or
(4) energy-related activities impacting production
agriculture.
"Authority." The Liberty Financing Authority established in
section 1711 (relating to authority).
"Board." The board of the Liberty Financing Authority
established in section 1712 (relating to board).
"Bonds." Except where otherwise provided, bonds, notes,
instruments, refunding notes and bonds and other evidences of
indebtedness or obligations which the Liberty Financing
Authority is authorized to issue or assume under this chapter.
20110SB1257PN2048 - 52 -
"Business." A corporation, partnership, sole proprietorship,
limited liability company, business trust or other commercial
entity. The term shall include not-for-profit entities.
"Capital development project." The acquisition, development,
construction, renovation or use of land, buildings, equipment
and machinery and working capital by a business as part of:
(1) A for-profit venture not of a mercantile or service-
related nature, except for hospitality industry projects.
(2) An effort to:
(i) comply with Federal or State environmental laws
or regulations;
(ii) complete an approved remediation project; or
(iii) adopt generally acceptable pollution
prevention practices.
(3) An effort to recycle municipal or commercial waste,
or to use recycled municipal or commercial waste materials in
manufacturing.
(4) A for-profit project or venture to manufacture
products to be exported out of the United States, which will
increase this Commonwealth's market share.
"Commercial lending activities." The making of loans and the
provision of deposit services to business entities, except that
a farm credit system institution under the Farm Credit Act of
1971 (Public Law 92-181, 85 Stat. 583) need not offer deposit
services to qualify as a provider of commercial lending
activities under this chapter.
"Commercial lending institutions institution." A federally <--
chartered or State-chartered bank, savings bank, savings and
loan association or farm credit system institution under the
Farm Credit Act of 1971 (Public Law 92-181, 85 Stat. 583) which
20110SB1257PN2048 - 53 -
has a satisfactory rating from its primary regulator and which
is engaged in commercial lending activities. The institution
must operate at least one full-service branch for deposit
gathering and lending located within this Commonwealth or be a
farm credit system institution under the Farm Credit Act of
1971.
"Commonwealth agency." An agency, authority or other
instrumentality of the Commonwealth.
"Community development financial institution." A community
development financial institution certified in accordance with
the Community Development Banking and Financial Institutions Act
of 1994 (Public Law 103-325, 108 Stat. 2163).
"Comprehensive county plan" or "comprehensive municipal
plan." The comprehensive plan adopted under applicable law by a
county, municipality, city of the first class or city of the
second class.
"Consumer energy conservation project." The purchase or <--
installation of any of the following:
(1) energy-efficient windows and doors;
(2) geothermal heat pumps;
(3) insulation, air-sealing and other energy-saving
projects approved by the Department of Environmental
Protection;
(4) energy-efficient or alternative energy heating and
cooling equipment or systems;
(5) energy-efficient solid fuel residential furnaces, as
approved by the Department of Environmental Protection, to
include furnaces that burn coal or wood pellets; or
(6) energy-efficient lighting systems.
"Cost of the project" or "cost." Any of the following:
20110SB1257PN2048 - 54 -
(1) Costs and expenses of acquisition of interests in
land, infrastructure, buildings, structures, equipment,
furnishings, fixtures and other tangible or intangible
property.
(2) Costs and expenses of construction, reconstruction,
erection, equipping, expansion, extension, improvement,
installation, rehabilitation, renovation or repair of the
buildings, structures and equipment.
(3) Costs and expenses of demolishing, removing or
relocating buildings or structures on lands acquired or to be
acquired and the expense of acquiring land to which buildings
or structures may be moved or relocated.
(4) Costs and expenses of preparing land for
development.
(5) Costs and expenses incidental to determining the
feasibility or practicality of the project, including
engineering, legal and accounting and financial services, as
well as any necessary studies or surveys. No more than 10% of <--
grant or loan funds may be used under this paragraph.
(6) Working capital or other capital needs related to
the project.
"Data center." A facility used to house computer systems and <--
associated components, such as telecommunications and storage
systems.
"Data center consolidation project." A project, as
determined by the Liberty Financing Authority, that utilizes
server virtualization technology to consolidate and reduce the
required number of servers at a data center for the purpose of
increased energy efficiency and reduced energy demand.
"Department." Except where otherwise provided, the
20110SB1257PN2048 - 55 -
Department of Community and Economic Development of the
Commonwealth.
"Distressed community." Any of the following:
(1) A geographic area in which: <--
(i) the median income is below 80% of the median
income for the United States or this Commonwealth;
(ii) 20% or more of the population is below the
poverty level by family size published by the United
States Bureau of the Census; or
(iii) the unemployment rate is 50% higher than the
national average.
(2) (1) An area which is designated a subzone, expansion <--
subzone or improvement subzone under the act of October 6,
1998 (P.L.705, No.92), known as the Keystone Opportunity
Zone, Keystone Opportunity Expansion Zone and Keystone
Opportunity Improvement Zone Act.
(3) (2) Any other area designated as distressed <--
according to standards adopted by the Liberty Financing
Authority.
"Economic development organization." A community development <--
financial institution, an industrial development agency or a
local development district that is certified by the authority as
possessing the qualifications necessary to evaluate and approve
applications to the authority for financial assistance.
"Ex-Im Bank." The Export-Import Bank of the United States.
"Exports." Goods or services to be sold or performed outside
the United States.
"Export business." Any for-profit corporation, limited
liability company, partnership, proprietorship or other business
entity involving export activities and employing 250 or fewer
20110SB1257PN2048 - 56 -
individuals.
"Farm commodity." Any agricultural, horticultural,
aquacultural, vegetable, fruit and floricultural product of the
soil, livestock and meats, wools, hides, furs, poultry, eggs,
dairy products, nuts, mushrooms, honey products and forest
products.
"Federal agency." The United States of America, the
President of the United States, the Congress of the United
States and any department, corporation, agency or
instrumentality designated or established by the United States
of America.
"Governing body." The body or board authorized by law to
enact ordinances or adopt resolutions for a political
subdivision.
"Hazardous substance." Any element, compound or material
which is:
(1) Regulated as a hazardous air pollutant under section
6.6 of the act of January 8, 1960 (1959 P.L.2119, No.787),
known as the Air Pollution Control Act.
(2) A hazardous waste, as defined under section 103 of
the act of July 7, 1980 (P.L.380, No.97), known as the Solid
Waste Management Act.
(3) Regulated under the act of December 7, 1990
(P.L.639, No.165), known as the Hazardous Material Emergency
Planning and Response Act.
"Hospitality industry project." A for-profit project or
venture which involves a business that operates a hotel, motel
or other lodging facility, or a restaurant or other food service
operation that is open to the public.
"Industrial development agency." A nonprofit organization
20110SB1257PN2048 - 57 -
which has as its purpose the promotion, encouragement,
construction, development and expansion of new or existing
industrial development projects.
"Industrial development project." A project sponsored by an
industrial development agency economic development organization <--
involving the acquisition or improvement of real property within
this Commonwealth to be occupied and operated by any of the
following:
(1) An industrial enterprise.
(2) A manufacturing enterprise.
(3) A research and development enterprise.
(4) An agricultural producer.
(5) An agricultural processor.
"Industrial enterprise." An enterprise other than a
mercantile, commercial or retail enterprise which has created or
will create substantial employment opportunities. The term may
include warehouses, terminal facilities and office buildings
utilized as national or regional headquarters or computer or
clerical operations centers.
"Industrial park." Land areas acquired, including existing <--
buildings previously erected thereon, excluding existing
buildings, if any, improved and prepared by an industrial
development agency in accordance with plans and specifications
as approved by the Liberty Financing Authority as sites for the
establishment thereon of two or more industrial development
projects.
"Issuing authority." As defined in section 3 of the act of
July 11, 1990 (P.L.465, No.113), known as the Tax Increment
Financing Act.
"Industrial park project." A project sponsored by an <--
20110SB1257PN2048 - 58 -
economic development organization for the purpose of creating
sites for the establishment of two or more industrial
development projects.
"Local development district." Multicounty economic and
community development organizations established under the act of
December 7, 1994 (P.L.845, No.120), known as the Local
Development District Act, to provide regional planning and
development services to improve the economy and quality of life
in their respective regions through a variety of activities,
including, but not limited to, the fostering of public and
private partnerships and providing assistance to businesses.
"Manufacturing enterprise." An enterprise which is engaged
in the giving of new shapes, new qualities or new combinations
to matter by the application of skill and labor.
"Multiple-tenancy building project." Any A project sponsored <--
by an economic development organization involving the
acquisition or construction of any land, site, structure, <--
facility or undertaking acquired or constructed by an industrial
development agency or facility for occupancy by two or more <--
industrial enterprises, manufacturing enterprises, research and
development enterprises, agricultural producers or agricultural
processors, as those terms are defined in this chapter.
"Municipal authority." A public authority created under 53
Pa.C.S. Ch. 56 (relating to municipal authorities) or under the
former act of May 2, 1945 (P.L.382, No.164), known as the
Municipality Authorities Act of 1945.
"Municipality." Any city, borough, town or township of the
Commonwealth, each of which political subdivisions are separate
incorporated municipalities of the Commonwealth for the purposes
of this chapter.
20110SB1257PN2048 - 59 -
"Natural disaster." As defined in 35 Pa.C.S. § 7102
(relating to definitions).
"Normal agricultural operation." As defined in the act of
June 10, 1982 (P.L.454, No.133), referred to as the Right-to-
Farm Law.
"Obligee of the authority." Any of the following:
(1) A holder or owner of bonds of the Liberty Financing
Authority, the Commonwealth Financing Authority, the <--
Pennsylvania Industrial Development Authority or the
Pennsylvania Minority Business Development Authority.
(2) A trustee or other fiduciary for any holder or owner
of bonds of the Liberty Financing Authority or its
predecessors.
(3) A provider of a letter of credit, policy of
municipal bond insurance or other credit enhancement or
liquidity facility for bonds of the Liberty Financing
Authority or its predecessors.
(4) A lessor or installment seller demising property to
the Liberty Financing Authority or its predecessors in
connection with a project.
(5) A provider of an interest rate management agreement
or other agreement or arrangement authorized under section
1714 (relating to powers).
"Pennsylvania-related company." A business entity which has
significant operations in this Commonwealth or which will, as a
condition of any agreement under this chapter, locate
significant business operations in this Commonwealth.
"Philadelphia metropolitan statistical area." The
Philadelphia, Pennsylvania, metropolitan division of the
Philadelphia-Camden-Wilmington, Pennsylvania-New Jersey,
20110SB1257PN2048 - 60 -
Delaware-Maryland metropolitan statistical area as announced on
June 6, 2003, by the United States Office of Management and
Budget under standards for defining metropolitan and
micropolitan statistical areas by the Office of Management and
Budget for the 2000 decennial census of the United States Bureau
of the Census as published in the Federal Register, Vol. 65, No.
249, on December 27, 2000, comprising the Pennsylvania counties
of Philadelphia, Delaware, Bucks, Montgomery and Chester.
"Pollution control technology project." The acquisition,
construction or installation of pollution control technology and
equipment that enables an electric generating unit or
cogeneration unit to meet any of the following requirements:
(1) Mercury emission reductions.
(2) The regulations adopted by the United States
Environmental Protection Agency known as the Clean Air
Mercury Rule codified at 40 CFR Pts. 60 (relating to
standards of performance for new stationary sources), 72
(relating to permits regulation) and 75 (relating to
continuous emission monitoring).
(3) Nitrogen oxides and sulfur dioxide emission
reduction under 25 Pa. Code Chs. 121 (relating to interstate
pollution transport reduction) and 145 (relating to general
provisions).
(4) The Clean Air Interstate Rule in 40 CFR Pt. 96
(relating to NOX budget trading program and CAIR NOX and SO2
trading programs for state implementation plans).
"Predecessors." The Pennsylvania Industrial Development
Authority or the Pennsylvania Minority Business Development
Authority.
"Private developer." A person or entity engaged in the
20110SB1257PN2048 - 61 -
development of real estate and determined by the Liberty
Financing Authority to be financially responsible to assume all
obligations proposed to be undertaken.
"Production agriculture." The management and use of a normal
agricultural operation for the production of a farm commodity.
"Project user." A person, political subdivision, municipal
authority, Commonwealth agency or other entity that owns, leases
or uses all or any part of a project.
"Redevelopment authority." An entity created under the act
of May 24, 1945 (P.L.991, No.385), known as the Urban
Redevelopment Law.
"Research and development enterprise." An enterprise for the
discovery of new and the refinement of known substances,
processes, products, theories and ideas. The term does not
include enterprise activities directed primarily to the
accumulation or analysis of commercial, financial or mercantile
data.
"Server." A device on a computer network that manages
network resources, including devices to manage network traffic,
store files or process database queries.
"Server virtualization technology." The practice of hosting
a software operating system within a virtual machine.
"Site preparation project." The construction of water and
sewer lines, storm water systems, excavation, construction of
access roads, parking facilities, pipelines, transformers and
utility transmission lines and traffic control devices.
"Small business." A for-profit An enterprise that employs <--
fewer than 100 persons, in the aggregate, on an annual basis.
"Supermarket." A retail store operated on a self-service
basis, primarily selling groceries, fresh produce, meat, bakery
20110SB1257PN2048 - 62 -
and dairy products. The term does not include a convenience
store.
"Tourism." Any activity which promotes or encourages <--
individuals to travel to a location within this Commonwealth for
pleasure.
"Tourism." Any activity that promotes or encourages <--
individuals or a group of individuals to travel to a location
within this Commonwealth to engage in an activity or service for
pleasure that is unavailable at home.
"Virtual machine." A self-contained software operating
environment that operates within a host operating system server <--
and simulates a hardware device, such as a computer or a server.
"Working capital." Capital used by a small business for <--
operations, excluding fixed assets and production machinery and
equipment.
SUBCHAPTER B
STRUCTURE AND POWERS
Sec.
1711. Authority.
1712. Board.
1713. Duties.
1714. Powers.
1715. Limitation Operation, service and maintenance of a <--
project or property.
§ 1711. Authority.
(a) Establishment.--There is established an authority to be
known as the Liberty Financing Authority. The authority shall be
an instrumentality of the Commonwealth and a body corporate and
politic, with corporate succession.
(b) Governance.--The authority shall be governed by the
20110SB1257PN2048 - 63 -
board. The powers of the authority shall be exercised by the
board.
(c) Indebtedness.--The authority may incur indebtedness,
including through the issuance of bonds, in an amount which <--
shall not exceed the aggregate amount of indebtedness assumed by
the authority from its predecessors, indebtedness of prior
programs assumed by the authority and unused bond authorizations
of its predecessors. Indebtedness in the form of refinancings of
existing indebtedness of the authority or its predecessors shall
not be counted against such limitation on the authority's
indebtedness. The term of indebtedness shall not exceed 20 30 <--
years. Net proceeds from the sale of obligations incurred under
this chapter shall be allocated for programs under Subchapter E
(relating to programs) and for the payment of all reasonable
costs and expenses related to the issuance.
(d) Expenses.--Expenses of the authority shall be paid from
assets or income of the authority. Except as provided in this
chapter or by other law, the Commonwealth shall not be
responsible for funding the expenses of the authority.
(e) Fiscal year.--The fiscal year of the authority shall be
the same as the fiscal year of the Commonwealth.
(f) Existence and dissolution.--
(1) The authority shall exist until terminated by law.
(2) The authority may be dissolved by law if all
outstanding liabilities of the authority, including bonds and
other contractual obligations, have been fully paid, retired,
satisfied or discharged or provision has been made for
payment of all outstanding liabilities of the authority,
including bonds and other contractual obligations. Upon the
dissolution of the authority, all funds, assets and other
20110SB1257PN2048 - 64 -
property of the authority shall vest in the Commonwealth.
(g) Procurement.--The authority shall be considered as an
executive agency for the purposes of 62 Pa.C.S. Pt. I (relating
to Commonwealth Procurement Code), except that the authority
shall have the authority to procure its own services. When
acting as its own purchasing agency for the procurement of
services, the authority shall use the procedures provided under
62 Pa.C.S. Pt. I.
(h) Commonwealth Attorneys Act.--The authority shall be
considered an executive agency for the purposes of the act of
October 15, 1980 (P.L.950, No.164), known as the Commonwealth
Attorneys Act.
(i) Relationship with department.--
(1) The department shall provide administrative services
and staff, including staff legal counsel, to the authority
and the board. The authority shall reimburse the department
for the costs of such services and staff.
(2) The authority may enter into agreements with the
department setting forth their respective rights and
obligations in carrying out their respective duties under
this chapter, as well as rates of reimbursement, as
applicable, for providing services under this subsection.
(j) Applicability.--The following acts shall apply to the
authority and the board:
(1) The act of July 19, 1957 (P.L.1017, No.451), known
as the State Adverse Interest Act.
(2) The act of February 14, 2008 (P.L.6, No.3), known as
the Right-to-Know Law.
(3) The provisions of 65 Pa.C.S. Chs. 7 (relating to
open meetings) and 11 (relating to ethics standards and
20110SB1257PN2048 - 65 -
financial disclosure).
§ 1712. Board.
(a) Members.--
(1) The authority shall be governed by a board
consisting of 15 members.
(2) The following public officials shall serve as
members of the board:
(i) The Secretary of Community and Economic
Development.
(ii) The Secretary of Agriculture.
(iii) The Secretary of Banking.
(iv) The Secretary of the Budget.
(3) Eleven individuals from the private sector shall
serve as members of the board. Members appointed under this
paragraph shall not be members or staff of the General
Assembly and shall not be otherwise employed by the
Commonwealth. Three Seven members from the private sector <--
shall be appointed by the Governor and two members one member <--
shall be appointed by each of the following:
(i) The President pro tempore of the Senate.
(ii) The Minority Leader of the Senate.
(iii) The Speaker of the House of Representatives.
(iv) The Minority Leader of the House of
Representatives.
(b) Delegation of authority.--Public officials who are
members of the board pursuant to subsection (a)(2) may designate
a member of their staff to serve in their absence.
(c) Terms.--
(1) Public officials shall serve for the duration of
their tenure in office.
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(2) Members appointed under subsection (a)(3) shall
serve for terms of four years, subject to the pleasure of the
appointing authority, except that board members appointed
under subsection (a)(3)(i), (ii), (iii) and (iv) shall serve
for initial terms of two years.
(3) Members appointed to fill a vacancy created
otherwise than by expiration of a term shall be appointed for
the unexpired term of the preceding member.
(d) Organization.--
(1) The Governor shall appoint one member of the board
to act as chairperson.
(2) The members shall select from among themselves such
other officers of the board as they shall determine. <--
(e) Board action.--
(1) The board shall meet at the call of the chairperson.
(2) Eight members of the board shall constitute a
quorum. When a quorum is present, a majority of those present
shall be necessary to take any action on behalf of the
authority.
(f) Compensation.--Members of the board shall be entitled to
no compensation for their services, but shall be entitled to
reimbursement for all necessary and reasonable expenses incurred
in connection with the performance of their duties as members of
the board.
(g) Fiduciary relationship.--The members of the board and
the professional personnel of the board shall stand in a
fiduciary relationship with the Commonwealth and the authority
as to the moneys in the accounts of the authority and
investments of the authority.
(h) Standard of care.--The members of the board, in
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performance of their duties under this chapter, shall exercise
the standard of care required by 20 Pa.C.S. Ch. 73 (relating to
municipalities investments).
(i) Liability.--Members of the board shall not be liable
personally on any obligations of the authority, including bonds
of the authority. The authority shall provide liability <--
insurance for the members of the board.
(j) Definition.--As used in this section, the term "member" <--
means an individual who serves on the board under subsection (a)
as a public official or an individual from the private sector.
§ 1713. Duties.
(a) General rule.--The authority shall:
(1) Administer the programs described in Subchapter E
(relating to programs).
(2) Fund the programs described in Subchapter E using
the resources available under this chapter.
(3) Adopt bylaws. and guidelines for each program listed <--
in Subchapter E as proposed by the department. Guidelines
shall include applicable policies and procedures, program
criteria, application requirements and any other necessary
and relevant information.
(4) Adopt and publish guidelines for each program listed <--
in Subchapter E as proposed by the department and for the
certification of economic development organizations.
Guidelines shall include applicable policies and procedures,
program criteria, application requirements and any other
necessary and relevant information.
(5) Certify on an annual basis those economic
development organizations that possess the qualifications
necessary to evaluate and approve applications to the
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authority for financial assistance.
(b) Reports and publications.--
(1) Within 90 days of the effective date of this
chapter, the authority shall submit for publication in the
Pennsylvania Bulletin and on the Internet website of the
department notification of the programs to be administered
under this chapter. The notification shall include the name
and brief description of each program, the name of a contact
person and the anticipated time that funding, applications
and official guidelines will become available.
(2) The authority shall submit for publication in the
Pennsylvania Bulletin the program guidelines adopted under
subsections (c) and (d) and shall maintain the guidelines on
the department's Internet website.
(3) The authority shall, each year by the first day of
March, publish and deliver to the Governor and the General
Assembly a memorandum which shall outline the authority's
goals and planned investments for the coming fiscal year.
(4) The authority shall annually post and maintain on
the Internet website of the department an annual report,
which at a minimum shall include:
(i) A list of all grants, loans, reimbursements or
rebates approved during the previous fiscal year.
(ii) The name and business address of each
recipient, including the name of a contact person for the <--
recipient.
(iii) The amount and terms of the grant or loan.
(iv) A brief description of the project for which
the grant or loan was awarded. The description shall
include the commitment for the number of jobs created and
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retained and the total capital investment for the
project.
(c) Audit.--
(1) The authority shall have the accounts and books of
the authority audited annually by an independent certified
public accounting firm.
(2) The authority shall, by December 31 of each year,
file a copy of the audit required by paragraph (1) with the
Secretary of the Senate, the Chief Clerk of the House of
Representatives and the Office of the Budget.
(d) Cooperation.--The authority shall cooperate with the
Office of Inspector General in the performance of its duties,
including, but not limited to, the investigation of fraud,
waste, misconduct or abuse in the programs, operations or
contracting of the authority.
§ 1714. Powers.
The authority may:
(1) Borrow money, issue and assume bonds, obtain lines
and letters of credit, provide loan guarantees and incur
debt.
(2) Sue and be sued, implead and be impleaded,
interplead, complain and defend in any court.
(3) Establish accounts necessary or desirable for its
corporate purposes.
(4) Transfer funds as necessary and desirable to
effectuate the purposes of the programs set forth in
Subchapter E (relating to programs).
(5) Retain accountants, auditors and financial experts
to render services and engage the services of other advisors,
consultants and agents as necessary.
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(6) Acquire, accept, purchase, receive, collect, hold,
convey and invest funds and property, whether tangible or
intangible, from all sources, directly or by assignment,
pledge or otherwise.
(7) Invest money of the authority not required for
immediate use, including proceeds from the sale of bonds, as
the board determines, subject to any agreement with
bondholders stated in the authorizing resolution providing
for the issuance of bonds.
(8) Contract and execute all instruments, including
financing agreements, letter of credit agreements, liquidity
agreements, guarantees, sureties, mortgages, loans, standby
loan commitments and contracts of insurance which are
necessary or appropriate for carrying on the business of the
authority.
(9) Impose and collect charges in connection with loan
commitments and servicing, including reimbursement of costs
of financing.
(9.1) Impose interest rate penalties on borrowers who <--
fail to fulfill commitments regarding job creation or
retention, private investment and site location.
(10) Pledge the credit of the authority and provide
security and liquidity to obligees of the authority as the
authority deems necessary or appropriate.
(11) Use or pledge an account for a special purpose,
including debt service reserves and other reserves, as may be
necessary or desirable to carry out its powers and duties.
(12) With the advice of a financial management firm
selected by the board, negotiate and enter into interest rate
cap agreements, interest rate management agreements, collar
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agreements, corridor agreements, ceiling agreements, floor
agreements, forward agreements, float agreements and other
similar arrangements which, in the judgment of the authority,
will assist the authority in managing the interest costs of
the authority.
(13) Certify industrial development agencies in <--
accordance with guidelines adopted and published by the
authority. (Reserved). <--
(13.1) Provide interest revenue-sharing on a quarterly
basis to the originating economic development organization on
loans sponsored by the economic development organization to
offset administrative expenses and the cost of fulfilling
certification obligations.
(14) Use moneys, excluding the proceeds of bonds, to pay
the administrative expenses of the authority and of the
department incurred under this chapter.
(15) Employ an executive director.
(16) Employ legal counsel or and provide a reimbursement <--
agreement for legal services by legal counsel for the
Department of Community and Economic Development.
(17) Adopt, use and alter a corporate seal.
(18) Pay or satisfy obligations of the authority.
(19) Negotiate modifications or alterations to financing
agreements, mortgages or security interests.
(20) Foreclose on a mortgage or security interest in
default.
(21) Commence any action necessary to protect or enforce
any right conferred upon the authority by law, mortgage,
security agreement, contract or other agreement.
(22) Bid for or purchase property that was the subject
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of a mortgage or security interest at a foreclosure or other
sale and acquire and take possession of that property.
(23) Sell, mortgage, pledge, encumber, transfer, convey
and dispose of any property, whether tangible or intangible.
(24) Acquire and sell loans, mortgages and security
interests at public or private sale.
(25) Provide financial assistance to applicants and
project users.
(26) Agree to and comply with conditions attached to
Federal or Commonwealth assistance not inconsistent with the
provisions of this chapter.
(27) Make rules regarding the operation of properties
and facilities of the authority subject to agreements with
obligees of the authority.
(28) Develop, adopt and implement binding policies or
guidelines assuring that all persons are accorded equal
opportunity in employment and contracting associated with the
programs established under Subchapter E. This paragraph
includes the authority's contractors, subcontractors,
assignees, lessees, agents, vendors and suppliers.
(29) Exercise rights provided by law for the benefit or
protection of the authority or obligees of the authority.
(30) Procure insurance against any loss in connection
with its programs, property and other assets.
(31) Promulgate regulations and adopt guidelines and
statements of policy containing restrictions as it may deem
necessary and appropriate to effectuate the public purposes
of this chapter.
(32) Enter into agreements with applicants and project
users providing, among other things, for any of the
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following:
(i) Financial assistance.
(ii) Loan, rental or purchase price payments or
other payments, sufficient to amortize the principal,
interest and premium, if any, of bonds and contractual
obligations of the authority incurred to provide funds to
pay the costs of the projects being financed.
(iii) The applicants or project users to pay or
cause to be paid all other costs of acquiring,
constructing, maintaining and operating the projects
being financed.
(iv) Conveyance with or without consideration of any
part or all of a project being financed to the project
user or applicant on or before payment of all bonds and
contractual obligations of the authority incurred with
respect to the project.
(v) Other matters as are customary or as are deemed
necessary and appropriate by the authority.
(33) Undertake any action appropriate or necessary to
effectuate the purposes of this chapter, or to exercise the
powers set forth in this section, including any act
reasonably implied from those powers.
(34) Transfer funds to the Commonwealth Financing <--
Authority established under Chapter 15 (relating to
Commonwealth Financing Authority) with the approval of a
super-majority of the board of the Commonwealth Financing
Authority. The authority may approve a transfer to the
Commonwealth Financing Authority by acting under section
1712(e) (relating to board).
§ 1715. Limitation.
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Except upon foreclosure or default under a loan made under this
chapter, the authority shall not approve an application or
finance a project if it would be required to operate, service or
maintain the project. Before a new policy or a change of policy <--
takes effect, the board shall first approve it by a vote.
§ 1715. Operation, service and maintenance of a project or
property.
The authority shall not approve an application or finance a
project if it would be required to operate, service or maintain
the project. The authority may operate, service or maintain a
property in foreclosure or default.
SUBCHAPTER C
BONDS
Sec.
1721. Bond issuance.
1722. Commonwealth and local taxation.
1723. Federal taxation.
1724. Validity of bonds, limitation on actions.
1725. Provisions of bonds, trust agreements and trust <--
agreements and issuance of bonds.
1726. Validity of pledge.
1727. Commonwealth pledges.
1728. Bonds to be legal investments.
1729. Rights and remedies of obligees.
§ 1721. Bond issuance.
(a) Authorization.--The authority may issue limited
obligation revenue bonds and other types of limited obligation
revenue financing. Bonds of the authority shall be authorized by
a resolution of the board, subject to subsection (c).
(b) Taxability.--The authority may issue both tax-exempt
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bonds and taxable bonds to fund the authority's programs.
(c) Bond requirements.--Bonds issued by the authority shall:
(1) Be of a series.
(2) Bear a date or dates.
(3) Be in denominations.
(4) Be signed by, or bear the facsimile signature of the
officer designated by the board.
(5) Carry registration, exchangeability and
interchangeability privileges.
(6) Be payable in any medium of payment and at any place
or places.
(7) Mature on a date or dates not to exceed 30 years
from the original issue date.
(8) Be subject to terms of redemption, if any.
(d) Issuance.--Bonds issued by the authority may:
(1) Be authenticated by an authenticating agent, fiscal
agent or trustee.
(2) Be in any form, either coupon or fully registered
without coupons, or in certificated or book-entry-only form.
(3) Bear or accrue interest at any rate or rates,
whether fixed or variable.
(4) Be issued and delivered notwithstanding the fact
that the officer whose signature appears on a coupon may no
longer be an authenticating officer at the time of actual
delivery.
(e) No debt or liability of the Commonwealth.--
(1) A bond issued by the authority shall not be a debt
or liability of the Commonwealth and shall not create any
indebtedness, liability or obligation on the part of the
Commonwealth.
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(2) A bond shall be payable solely from revenues of the
authority or accounts pledged or otherwise available for
their repayment.
(3) A bond shall contain on its face statements that:
(i) The authority is obligated to pay the principal
of or interest on the bond only from revenues, receipts
or funds pledged or available for its payment as
authorized in this chapter.
(ii) Neither the Commonwealth nor any political
subdivision is obligated to pay the principal or
interest.
(iii) Neither the faith and credit nor the taxing
power of the Commonwealth or any political subdivision is
pledged to the payment of the principal of or interest on
the bonds.
(f) Sale.--Bonds may be sold at a public, invited or private
sale at a price determined by the authority.
(g) Interim receipts.--Pending the preparation of the
definitive bonds, interim receipts may be issued to the
purchaser or purchasers of the bonds and shall contain the terms
and conditions established by the authority.
(h) Negotiable instruments.--Bonds of the authority shall
have the qualities of negotiable instruments under 13 Pa.C.S.
(relating to commercial code).
(i) Use.--The authority may, as it deems necessary and
desirable, use the proceeds of bonds to:
(1) make loans, grants, guarantees and rebates;
(2) purchase loans, mortgages, security interests or
loan participations;
(3) pay incidental expenses in connection with activity
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under paragraphs (1) and (2), including administrative costs
of the authority and the department;
(4) pay expenses of authorizing and issuing the bonds;
(5) pay principal, redemption or purchase price and
interest on bonds; or
(6) fund reserves.
(j) Refunding.--Subject to the provisions of this chapter,
terms of bonds and any contracts entered into pursuant to this
chapter, the authority may refund any outstanding debt of the
authority whether the debt represents principal or interest, in
whole or in part, at any time. For the purposes of this
subsection, the term "refund" means the issuance and sale of
obligations the proceeds of which are used or are to be used for
the payment or redemption of outstanding obligations upon or
prior to maturity.
§ 1722. Commonwealth and local taxation.
(a) Authority.--Because the authority, as a public
instrumentality of the Commonwealth, will be performing
essential governmental functions in effectuating the purposes of
this chapter, the authority shall not be subject to State or <--
local taxation or assessment upon any property acquired or used
or permitted to be used by the authority for its purposes.
(b) Bonds.--Bonds issued by the authority, the transfer and
the income from the bonds, including any profit made on the sale
of such bonds, shall be free from State and local taxation
within this Commonwealth. The exclusion under this subsection
shall not extend to gift, estate, succession or inheritance
taxes, or any other taxes not levied or assessed directly on the
bonds, their transfer, the income from the bonds or the
realization of profits on their sale.
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§ 1723. Federal taxation.
(a) Allocation.--If the bonds issued by the authority for a
project are tax-exempt bonds for which Federal law requires an
allocation, the department may issue an allocation upon receipt
of a written request by the authority. An allocation must be
issued by the department prior to the approval of the resolution
authorizing the issuance of the bonds by the authority.
(b) Approval.--If gubernatorial approval is required by
Federal or State law, the Governor may approve the issuance of
bonds upon receipt of written request for approval from the
authority. The written request must contain all of the
following, to the extent required by Federal law:
(1) A statement that the authority has conducted a
public hearing, with appropriate public notice, concerning
the purposes for which the bonds are to be issued.
(2) A description of the project or projects to be
financed.
(3) A description of the method of financing the project
or projects.
(4) A summary of the comments made and questions posed
at the public hearing.
§ 1724. Validity of bonds, limitation on actions.
(a) Presumption.--Bonds reciting in substance that they have
been issued by the authority to accomplish the public purposes
of this chapter shall be conclusively deemed in any suit, action
or proceeding involving the validity or enforceability of the
bonds or their security to have been issued for the public
purposes of this chapter.
(b) Estoppel.--After issuance, bonds shall be conclusively
presumed to be fully authorized and issued under the laws of
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this Commonwealth, and any person shall be estopped from
questioning their validity, sale, execution or delivery by the
authority.
§ 1725. Provisions of bonds, trust agreements and trust <--
agreements and issuance of bonds.
A (a) Provisions.--A resolution authorizing the issuance of <--
bonds or any trust agreement approved in or by a resolution
authorizing the issuance of bonds may contain provisions which
do any of the following:
(1) Secure the bonds.
(2) Establish a covenant as to any of the following:
(i) Additional bonds to be issued and terms,
conditions and limitations on such bonds.
(ii) Rank or priority of bonds with respect to liens
or security interests.
(iii) Limitations on the authority's right to sell,
pledge or otherwise dispose of bonds or notes of
governmental units, loan agreements or other property.
(iv) Custody, application, investment and
disposition of proceeds of bonds.
(v) Incurring of other debts or obligations by the
authority.
(vi) Payment of principal of or interest on bonds.
(vii) Sources and methods of payment.
(viii) Redemption, purchase and tender of bonds by
the authority or the bondholders and the privilege of
exchange of the bonds for other bonds.
(ix) Use, investment and disposition of the money
held in special funds, accounts or reserves.
(x) Use of any or all of the authority's real or
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personal property.
(xi) Warrant of title to the authority's real or
personal property.
(xii) Pledging or granting a security interest in
all or any part of the authority's revenues or any part
of its property to which its right or title exists or
which may later come into existence.
(3) Establish a covenant against any of the following:
(i) Permitting or suffering any lien on all or any
part of its revenues or property.
(ii) Extending the time for the payment of bonds or
interest.
(4) Provide for any of the following:
(i) Replacement of lost, stolen, destroyed or
mutilated bonds.
(ii) Maintenance of the authority's real and
personal property.
(iii) Replacement of the authority's real and
personal property.
(iv) Insurance to be carried on the authority's real
and personal property and the use and disposition of the
insurance proceeds.
(v) Rights, liabilities, powers and duties arising
upon the breach of any covenant, condition or obligation.
(vi) Letters of credit, bond insurance and other
facilities for credit enhancement and liquidity.
(5) Prescribe:
(i) Procedures, if any, by which the terms of any
contract with bondholders may be amended or abrogated.
(ii) The percentage of the principal amount of bonds
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the holders of which must consent to the amendment or
abrogation of any contract.
(iii) The manner in which the consent under
subparagraph (ii) may be given.
(iv) Events of default.
(v) Terms and conditions upon which any or all of
the bonds become or may be declared due and payable
before stated maturity following an event of default.
(vi) Terms and conditions upon which the declaration
of default and its consequence may be waived.
(6) Create or authorize the creation of special funds or
accounts to be held in trust or otherwise for the benefit of
bondholders or of reserves for debt service or other
purposes.
(7) Vest in a trustee any property, rights, powers and
duties in trust for the benefit of bondholders.
(8) Limit the rights, powers and duties of a trustee,
and the right of bondholders to appoint a trustee.
(9) Establish the terms and conditions upon which a
trustee or the bondholders may enforce a covenant or rights
securing or relating to the bonds.
(10) Exercise all or any part or combination of the
powers granted in this chapter.
(11) Do or refrain from doing any other act and thing
necessary, convenient or desirable in order to better secure
the bonds of the authority or, in the absolute discretion of
the authority, as will tend to make bonds of the authority
more marketable. This paragraph applies notwithstanding that
the covenant, act or thing may not be specifically enumerated
in this chapter as long as the covenant, act or thing is in
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accordance with the intent of this chapter.
(12) Pay the costs or expenses incident to any of the
foregoing.
(b) Issuance of bonds.--Bonds may be issued under one or <--
more separate resolutions or trust agreements. A series of bonds
may be separately secured from another series of bonds under the
resolutions or trust agreements.
§ 1726. Validity of pledge.
A pledge of or grant of a security interest in revenues or
instruments made by the authority shall be valid and binding
from the time when the pledge is made or, where applicable, when
the authority enters into a written agreement to request the
applicable appropriation from the department. The revenues,
receipts, money, funds or other property or instruments pledged
and later received by the authority shall immediately be subject
to the lien of the pledge or security interest without any
physical delivery of the property pledged or further act. The
lien of the pledge or security interest shall be valid and
binding as against all parties having claims of any kind in
tort, contract or otherwise against the authority irrespective
of whether the parties have notice of the lien, pledge or
security interest. No instrument by which a pledge or security
interest is created, evidenced or noticed need be recorded or
filed to perfect the pledge or security interest except in the
records of the authority.
§ 1727. Commonwealth pledges.
(a) Bondholders.--The Commonwealth pledges to and agrees
with each obligee of the authority that the Commonwealth will
not limit or alter the rights and powers vested in the authority
or otherwise created by this chapter in any manner inconsistent
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with the obligations of the authority to its obligees until all
bonds at any time issued, together with the interest on the
bonds, are fully paid and discharged.
(b) Lessees.--The Commonwealth pledges and agrees with any
person that, as owner of property which is leased or subleased
to or from the authority, it will not limit or alter the rights
and powers vested in the authority or otherwise created by this
chapter in any manner which impairs the obligations of the
authority until all the obligations of the authority under the
lease or sublease are fully met and discharged.
§ 1728. Bonds to be legal investments.
(a) Investments.--Bonds issued pursuant to this chapter
shall constitute securities in which any person or entity may
properly and legally invest funds, including capital, deposits
or other funds in their control or belonging to them.
(b) Deposits.--Bonds issued by the authority are securities
which may properly and legally be deposited with and received by
a government agency for any purpose for which the deposit of
bonds or other obligations of the Commonwealth are authorized by
law.
§ 1729. Rights and remedies of obligees.
The rights and remedies conferred upon or granted to obligees
of the authority pursuant to this chapter shall be in addition
to and not in limitation of rights and remedies lawfully granted
to obligees of the authority by the resolution providing for the
issuance of bonds or by any trust agreement or other agreement
under which the bonds may be issued or secured.
SUBCHAPTER D
ACCOUNTS
Sec.
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1731. Establishment of accounts.
1732. Deposits.
1733. Use.
1734. Account restrictions.
§ 1731. Establishment of accounts.
There are established the following accounts:
(1) The Small Business First Account.
(2) The Community Economic Development Account.
(3) The Export Financing Account.
(4) The Pennsylvania Industrial Development Account.
(5) The Machinery and Equipment Loan Account.
(6) The Disadvantaged Business Development Account.
(7) The First Industries Account. <--
(8) The Second Stage Loan Guarantee Account.
§ 1732. Deposits.
Loan repayments, recaptured funds and bond proceeds from the
programs described in Subchapter E (relating to programs), as
well as appropriations, including, without limitation, those
appropriations made prior to the effective date of this act for
the same programs or similar programs to those described in
Subchapter E (relating to programs) and any other available <--
funds which are or may become available, not pledged to be
deposited or used elsewhere, shall be deposited in the
respective program accounts. Separate subaccounts may be <--
established in each program account for purposes of pledging
funds in the subaccounts to secure specific bonds and other
obligations of the authority.
§ 1733. Use.
Funds deposited in each of the program accounts shall be made
available for additional planning grants, project grants, loans,
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rebates and other financing tools as provided by the respective
programs.
§ 1734. Account restrictions.
(a) Pennsylvania Industrial Development Account.--
(1) The Pennsylvania Industrial Development Account,
established in section 1731 (relating to establishment of
accounts), shall be a revolving fund, whereby all
appropriations and payments made into the account, including
repayment of loans made to industrial development agencies or <--
funds from mortgages and any other agreements made and
entered into by the authority under the program, shall be
applied and reapplied to the purposes of the Pennsylvania
Industrial Development Program.
(2) If at any time the authority determines that funds
held in the Pennsylvania Industrial Development Account
exceed the amount required to carry out the purposes of the
program, the authority shall take such action as may be
required to transfer the excess funds to the General Fund of
the State Treasury, subject to the provisions of section
1771.1 (relating to transfer from Pennsylvania Industrial
Development Authority to Liberty Financing Authority).
(b) Export Financing Account.--Funds in the Export Financing
Account must be continuously secured by a pledge of direct
obligations of the United States or of the Commonwealth having
an aggregate market value, exclusive of accrued interest, at
least equal to the balance on deposit in the account. The
securities shall be deposited with the authority to be held by a
trustee or agent satisfactory to the authority. Bank and trust
companies are authorized to give security under this subsection.
SUBCHAPTER E
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PROGRAMS
Sec.
1750. Programs generally.
1751. Small Business First Program.
1752. Community Economic Development Program.
1753. Export Financing Program.
1754. Pennsylvania Industrial Development Program.
1755. Machinery and Equipment Loan Program.
1756. Disadvantaged Business Development Program.
1757. First Industries Program. <--
1758. Second Stage Loan Guarantee Program.
§ 1750. Programs generally.
(a) Application process.--Applications for financial
assistance under this chapter must be prepared with the <--
assistance of a certified economic development organization that
shall approve the application before it is submitted to the
authority and shall comply with subsection (b) and with any
additional requirement of the applicable program or programs.
Applications shall be in the form required by the authority and
shall bear the applicant's name and address together with a
description of the type and amount of financial assistance
requested. Upon review of an application, the authority shall
notify the applicant of its decision or request additional
information or certifications prior to making its decision.
(b) Application requirements.--Applications shall include
the following information, where applicable:
(1) A description of the applicant's business or, if the
applicant is not the borrower, the borrower's business,
including:
(i) The type of business conducted.
20110SB1257PN2048 - 87 -
(ii) The location and age of the business.
(iii) A list of all offices of the applicant located
in this Commonwealth.
(iv) The names and addresses of the principals.
(v) The number of current employees and an estimate
of future employment.
(2) A description of the project, including:
(i) The location.
(ii) The total estimated project cost, prepared by
an engineer or other qualified professional, where
appropriate, and the identification of all sources of
capital for the project.
(iii) A legal description of all real property held
or to be acquired for the establishment of the project.
(iv) A general description and statement of value of
any real or personal property of the applicant and, if
applicable, the buyer or tenant of the project, to be
applied to the establishment of the project.
(3) A statement that the project is consistent with any
existing comprehensive county plan where the project is
located.
(4) A statement that notification of the project has <--
been sent to the governing bodies of the county or counties
and of the municipality or municipalities in which the
project is located (Reserved). <--
(5) A firm commitment from the intended project user to
use the project upon completion.
(6) Proof that the applicant has secured any required <--
planning and permit approvals for the project (Reserved). <--
(7) A brief description of the anticipated economic
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impact to this Commonwealth and the host municipality as a
result of the project.
(8) Any such plans and other documents as may be <--
required to show the type, structure and general character of
the project.
(9) Any information required by the program or programs
under which financial assistance may be provided.
(10) (Reserved).
(11) Any other information required by the authority.
(c) Review and approval.--
(1) In reviewing applications, the authority shall
consider the following, where applicable:
(i) Whether the value of the proposed collateral and
the financial resources offered by the applicant are
sufficient to repay the loan.
(ii) Whether the project will enable future
employment opportunities in or have a net positive
economic impact on the surrounding community.
(iii) Whether the statement of the estimated cost of
the project is reasonable.
(iv) Whether the sources of financial commitments
for funds in excess of the amount requested under this
chapter are reliable.
(v) Whether the applicant has complied with any <--
terms required by the applicable program or programs
listed under the corresponding sections of this chapter.
(vi) Whether the applicant has a history of
investment in Pennsylvania-related companies.
(vii) Whether the applicant has demonstrated strong
relationships with organizations in this Commonwealth
20110SB1257PN2048 - 89 -
which foster economic development.
(viii) Whether the applicant has a strong
performance record.
(ix) Whether the applicant has demonstrated an
ability to meet and satisfy debt service, if applicable,
as it becomes due and payable.
(x) Any other information deemed relevant by the
authority.
(2) Subject to any applicable limitations under this
chapter, the amount, duration, interest rate, security
required and any other terms of the loan shall be set at the
discretion of the authority based upon its determination of
the potential financial risk to the Commonwealth.
(3) No loan, loan guarantee or grant shall be approved <--
if the proceeds would be used to:
(i) refinance any portion of the total cost of a
capital development project, pollution prevention
infrastructure or other existing loans or debt;
(ii) finance a project located outside the
geographic boundaries of this Commonwealth;
(iii) relocate a business to another part of this
Commonwealth, unless approved in advance by the authority
which shall consider the negative economic impact on the
community that the business is leaving; or
(iv) provide funds, directly or indirectly, for
payment distribution or as a loan to owners, partners or
shareholders of a small business, except as ordinary
compensation for services rendered.
(4) (i) The terms of all agreements for financial
assistance awarded under this chapter shall include any
20110SB1257PN2048 - 90 -
material terms, requirements or other conditions provided
for agreements entered into under this chapter. The
authority may impose other terms and conditions if it
determines they are in the best interests of this
Commonwealth, including a provision requiring collateral
for any penalty which may be imposed.
(ii) Upon approving an application for a loan, the
authority shall draw an advance equal to the principal
amount of the loan from the appropriate account or
accounts; and prior to providing loan funds to the
applicant, the authority shall require the applicant to
execute a note and to enter into a loan agreement and any
other agreement as the authority shall require.
(d) Reporting and inspection.--An applicant for or a
recipient of a loan, loan guarantee or grant made under this
chapter shall, upon request:
(1) Permit the authority to inspect its premises, books
and records.
(2) Provide updated information to the authority if
conditions change to the extent that the information
originally given becomes inaccurate or misleading.
(3) Provide the authority with any periodic financial
reports and audits that the authority may require.
(e) Penalties.-- <--
(1) If a grant provides for improvements on a site of a
private facility that has or will be receiving additional
economic development assistance or job creation tax credits
from the Commonwealth, the contract shall include a provision
that ensures that if the facility is closed or the facility
or business is sold within five years after the approval of
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the application, the Commonwealth shall request reimbursement
of the grant and shall place a lien for that amount on the
real property of that facility to remain on the real property
until the Commonwealth receives reimbursement.
(2) The authority or department, as applicable, may, by
foreclosure, take title to a capital development project,
purchase first mortgages and make payments on first mortgages
on a capital development or lease a capital development if
necessary to protect a loan made under this chapter. The
authority or department may sell, transfer, convey and assign
the first mortgages and shall deposit any money derived from
the sale of any first mortgages in the applicable program
account.
§ 1751. Small Business First Program.
(a) General rule.--The Small Business First Program shall
provide low-interest loans and lines of credit to small
businesses for capital development projects that will stimulate
the expansion and assist in the viability of small businesses,
thereby creating new jobs and retaining existing jobs in this
Commonwealth.
(b) Application.--In addition to the requirements listed in
section 1750(b) (relating to programs generally), the
application shall include the following:
(1) A description of the capital development project,
including the following:
(i) The number of employment opportunities to be
created or preserved by the proposed capital development
project.
(ii) If the applicant is an agricultural producer, a
demonstration that there is a substantial likelihood that
20110SB1257PN2048 - 92 -
the project will enhance the agricultural operation.
(2) A financial commitment from a responsible source for
any cost of the project in excess of the amount requested.
(3) A demonstration of the ability of the applicant to
meet and satisfy the debt service as it becomes due and
payable.
(4) The existence and sufficiency of collateral for the
loan.
(c) Conditions and restrictions.--A loan made under this
section may:
(1) Finance the development, construction, renovation or
acquisition of land, buildings, machinery or equipment or may
be used for working capital.
(2) Not exceed 50% of the total capital development
project costs. For the purposes of this paragraph, capital
development project costs incurred during the 12-month period
prior to the date of submission of the application to the
authority shall be considered part of the total capital
development project costs.
(d) Loan terms.--The following terms shall apply:
(1) A loan for real property shall have a repayment
period of up to 15 years.
(2) A loan for machinery and equipment shall have a
repayment period of up to ten years.
(3) A loan or line of credit for working capital shall
have a repayment period of up to three years.
(4) If, in a capital development project, two or more
uses are planned, the loan terms may be combined.
(5) The interest rate shall be determined by the
authority.
20110SB1257PN2048 - 93 -
(6) The authority shall determine the job retention or
job creation requirements of each project financed in whole
or in part through a loan made under this section.
(7) All loans shall be secured by lien positions on
collateral at the highest level of priority, as determined by
the authority.
(e) Penalty for noncompliance.--In the event that a loan
recipient fails to create or preserve the number of employment
opportunities specified in the approved application, the
authority shall may impose a penalty equal to an increase of up <--
to 5% above the existing loan interest rate for the remainder of
the loan, unless it determines that the failure is due to
circumstances outside the control of the loan recipient.
§ 1752. Community Economic Development Program.
(a) General rule.--The Community Economic Development
Program shall provide loans for small businesses located in
distressed communities which are involved in the business-to-
public service, mercantile, commercial or point-of-sale retail
sectors in order to enhance the economic well-being of the
community by employing residents of the community and by
providing products or services to that community.
(b) Conditions and restrictions.--The following shall apply:
(1) A loan for land, buildings, machinery, equipment or
working capital may not exceed 50% of the total capital
development project costs. For the purposes of this
paragraph, capital development project costs incurred during
the 12-month period prior to the date of submission of the
application to the authority shall be considered part of the
total capital development project costs.
(2) Each capital development project shall meet the job
20110SB1257PN2048 - 94 -
retention or job creation requirements established by the
authority.
(3) The maximum loan amount available under this program
will be set by the authority.
(4) No loans shall be approved if the proceeds of the
loan would be used to provide funds for speculation in real
or personal property, whether tangible or intangible.
(c) Loan terms.--The following terms shall apply:
(1) A loan for real property shall have a repayment
period of up to 15 years.
(2) A loan for machinery and equipment shall have a
repayment period of up to ten years.
(3) A loan or line of credit for working capital shall
have a repayment period of up to three years.
(4) All loans shall be secured by lien positions on
collateral at the highest level of priority, as determined by
the authority.
(d) Application.--In addition to the requirements listed in
section 1750(b) (relating to programs generally), the
application shall include the following:
(1) A financial commitment from a responsible source for
the cost of the capital development project in excess of the
amount requested.
(2) A demonstration that the capital development project
will have a direct impact on the community in which the
capital development project is or will be located, on
residents of that community or on the local and regional
economy. The authority shall establish criteria that will
assist in making this demonstration.
(3) A projection of the number of employment
20110SB1257PN2048 - 95 -
opportunities to be created or preserved by the proposed
capital development project.
(e) Penalty for noncompliance.--In the event that a loan
recipient fails to create or preserve the number of employment
opportunities specified in the approved application, the
authority shall may impose a penalty equal to an increase of up <--
to 5% above the existing rate for the remainder of the loan,
unless it determines that the failure is due to circumstances
outside the control of the loan recipient.
§ 1753. Export Financing Program.
(a) General rule.--The Export Financing Program shall
provide loans and lines of credit to export businesses for
working capital and accounts receivable financing, in order to
increase the level of foreign exports and the number of
Pennsylvania companies exporting goods and services.
(b) Application.--In addition to the requirements listed in
section 1750(b) (relating to programs generally), the
application shall include the following:
(1) The number of employment opportunities to be created
or preserved by the proposed capital development project.
(2) A financial commitment from a responsible source for
any cost of the capital development project in excess of the
amount requested.
(3) A statement that the loan, if approved, would not
supplant funding from private sector sources on commercially
reasonable terms.
(4) A demonstration that the applicant will be able to
meet and satisfy the debt service as it becomes due and
payable.
(5) The existence and sufficiency of collateral for the
20110SB1257PN2048 - 96 -
loan.
(c) Conditions and restrictions.--
(1) The maximum loan amount, repayment period and
interest rate available under this program will be set by the
authority.
(2) The authority may, in its discretion, require any of
the following:
(i) That the applicant be eligible for an export
credit insurance policy for small businesses offered by
the Ex-Im Bank.
(ii) That the export credit sales contract be
insured by an export credit insurance policy offered by
the Ex-Im Bank.
(iii) That the loan be guaranteed by the working
capital guaranty program offered by the Ex-Im Bank.
(3) No loan shall be approved if the proceeds of the
loan would be used to provide funds for speculation in real
or personal property, whether tangible or intangible.
(4) All loans shall be secured by lien positions on
collateral at the highest level of priority, as may be
determined by the authority.
(d) Penalty for noncompliance.--In the event that a loan
recipient fails to create or preserve the number of employment
opportunities specified in the approved application, the
authority shall may impose a penalty equal to an increase of up <--
to 5% above the existing loan interest rate for the remainder of
the loan, unless it determines that the failure is due to
circumstances outside the control of the loan recipient.
§ 1754. Pennsylvania Industrial Development Program.
(a) General rule.--The Pennsylvania Industrial Development
20110SB1257PN2048 - 97 -
Program shall provide loans to industrial development agencies <--
for industrial development projects, industrial parks and
multiple-tenancy building projects sponsored by industrial <--
development agencies in order to increase employment levels and
the overall economic health of this Commonwealth.
(b) Loans for industrial development projects.--The
authority may contract to loan to an industrial development <--
agency an amount not to exceed 50% of the cost of establishing
the industrial development project, subject, however, to the
following conditions:
(1) Prior to the making of any loan under this
paragraph, the authority shall determine that:
(i) The project will be owned by, sold or leased to <--
an owner, buyer or tenant which borrower is responsible <--
to assume all obligations imposed by the authority in
connection with the project, financial or otherwise, and
to undertake the operation of the project.
(ii) There will be sufficient income from any sales <--
or lease agreement between the industrial development
agency and a buyer or tenant of the project to ensure the
repayment of the loan made pursuant to this paragraph
(Reserved). <--
(iii) The industrial development agency or the <--
owner, buyer or tenant borrower has obtained from other <--
independent and responsible sources a firm commitment for
any funds which, in addition to the loan made pursuant to
this paragraph and any other property or assets held by
the industrial development agency, owner, buyer or tenant <--
borrower, shall be necessary for the completion and <--
operation of the project.
20110SB1257PN2048 - 98 -
(2) The industrial development agency or the owner, <--
buyer or tenant of the project must provide at least 10% of
the cost of establishing the project through its own equity
or through financing secured by a subordinate lien on the
project (Reserved). <--
(3) The authority shall determine the interest rate and
repayment period of any loan made under this section.
(4) A loan made under this section shall be evidenced by
note of the industrial development agency borrower, and <--
secured by a mortgage on the project for which such loan was
made, second subordinate only to the mortgage securing the <--
first lien obligation issued to secure the commitment of
funds provided to pay the cost of the project from the
aforesaid independent and responsible sources, and used in
the financing of the project.
(5) The authority may require such additional security
it may deem necessary.
(c) Loans for industrial parks.--The authority may contract
to loan to an industrial development agency an amount not to <--
exceed 60% of the cost of establishing an industrial park
project, subject to the following conditions:
(1) The industrial development agency must provide at <--
least 10% of the cost of establishing the industrial park
project through its own equity or financing secured by a
subordinate lien on the project (Reserved). <--
(2) The authority shall determine the interest rate and
repayment period of any loan made under this subsection.
(3) A loan made under this section shall be evidenced by
note of the industrial development agency borrower and <--
secured by a first mortgage on the industrial park or by
20110SB1257PN2048 - 99 -
participation in a first mortgage. If, however, a Federal
agency is participating in the financing of the industrial
park, the authority may take as security for its loan a
mortgage on the industrial park which is second only to the
mortgage given to the Federal agency.
(4) If a loan made under this section is secured by
participation in a first mortgage on the industrial park, a
portion of the loan, not to exceed 10% of the cost of the
project, may be secured by a second mortgage on the
industrial park which is second only to the participating
first mortgage.
(d) Loans for multiple-tenancy building projects.--The
authority may contract to loan to an industrial development <--
agency an amount not to exceed 40% 50% of the cost of <--
establishing the multiple-tenancy building project, subject,
however, to the following conditions:
(1) The industrial development agency must provide at <--
least 10% of the cost of establishing the project through its
own equity or financing secured by a subordinate lien on the
project (Reserved). <--
(2) The authority shall determine the interest rate and
repayment period of any loan made under this section.
(3) A loan made under this section shall be evidenced by
note of the industrial development agency borrower and <--
secured by a first mortgage or participation in a first <--
mortgage on the multiple-tenancy building project.
(4) The authority may contract to loan an amount not to
exceed 40% 50% of the cost of the project if the loan is <--
secured by a first mortgage or participation in a first
mortgage on the project; otherwise, the authority may
20110SB1257PN2048 - 100 -
contract to loan an amount not to exceed 30% 40% of the cost <--
of the project.
(5) If a loan made under this section is secured by a
participation in a first mortgage on the project, the
authority may permit a portion of its loan, not to exceed 10%
of the cost of the project, to be secured by a second
mortgage on the project which is second only to the
participating first mortgage.
(e) Application.--In addition to the requirements listed in
section 1750(b) (relating to programs generally), the
application shall include the following:
(1) A general description of the type, classes and
number of employees employed or to be employed in the
operation of the project.
(2) The cost or estimate of the cost of establishing the
project. As used in this section, "cost" shall include
financing charges, including interest incurred prior to and
during construction, but shall not include the cost of any
machinery, equipment or fixtures necessary for the project or
the installation or maintenance of any such machinery,
equipment or fixtures.
(3) Financial statements of the industrial development <--
agency, the proposed buyer or tenant of the project, as
applicable, parent companies and proposed guarantors, if any,
borrower, proposed guarantors and any other party whose <--
credit is significant to the approval of the loan for the
latest three years of operations, prepared by an independent
certified public accountant.
(4) Evidence of the arrangement made by the industrial <--
development agency and the buyer or tenant of the project, as
20110SB1257PN2048 - 101 -
applicable, borrower for the financing of all costs of the <--
project over and above the participation of the authority.
(5) Evidence that the establishment of the project will
not cause the removal of an industrial enterprise,
manufacturing enterprise, research and development
enterprise, agricultural producer or agricultural processor
from one area of the Commonwealth to another area of the
Commonwealth, as determined by the authority.
(f) Employment projection audits.--The authority shall
implement a procedure to determine whether the employment
projections set out in the loan application are achieved.
§ 1755. Machinery and Equipment Loan Program.
(a) General rule.--The Machinery and Equipment Loan Program
shall provide loans to businesses involved in industrial
processes, manufacturing, mining, production agriculture,
information technology or biotechnology for the purchase,
installation or upgrade of equipment and machinery, including
computer hardware and software.
(b) Application.--In addition to the requirements listed in
section 1750(b) (relating to programs generally), the
application shall include the following:
(1) A demonstration that the applicant is able to meet
and satisfy all debt service as it becomes due and payable.
(2) Evidence of available and sufficient collateral,
including satisfactory lien positions on real and personal
property.
(3) Sufficient evidence that funds shall be used only to
acquire and install new equipment and machinery or upgrade
existing equipment and machinery, including the acquisition,
application and utilization of computer hardware and
20110SB1257PN2048 - 102 -
software.
(4) The number of net employment opportunities to be
created by the proposed project unless the business is
involved in production agriculture.
(5) Evidence that the loan project will increase the
business's competitiveness within its respective industry.
(c) Loan terms and limitations.--The following shall apply:
(1) No loan shall exceed $5,000,000 or 50% of the cost <--
of the project, whichever is less. <--
(2) Loan terms shall not exceed ten years in duration.
(3) Proceeds of loans made under this section may not be
used for speculation in any kind of property, real or
personal, tangible or intangible.
(4) Loans shall be made only for projects that
demonstrate a significant likelihood of resulting in job
creation or retention, as established by the authority. This
paragraph does not apply to loans made to business
enterprises involved in production agriculture.
(d) Security.--All loans shall be secured by no less than a
second lien position on the equipment purchased and other
sufficient collateral as determined by the authority.
(e) Penalty for noncompliance.--In the event that a loan
recipient fails to create or preserve the number of employment
opportunities specified in the approved application, the
authority shall may impose a penalty equal to an increase of up <--
to 5% above the existing rate for the remainder of the loan,
unless it determines that the failure is due to circumstances
outside the control of the loan recipient.
§ 1756. Disadvantaged Business Development Program.
(a) General rule.--The Disadvantaged Business Development
20110SB1257PN2048 - 103 -
Program shall provide financial assistance to businesses owned
by socially and economically disadvantaged persons.
(b) Application.--In addition to the requirements listed in
section 1750(b) (relating to programs generally), the
application shall include the following:
(1) A statement that the applicant is a United States
citizen, resident of this Commonwealth and member of a group
or groups which have suffered disadvantages arising from
chronic racial, ethnic or economic circumstances.
(2) An explanation as to how the applicant's ability to
compete in the free enterprise system has been impaired due
to diminished capital and credit opportunities, as compared
to others in the same or a similar line of business, and who <--
are not socially and economically disadvantaged.
(c) Loan terms and conditions.--The authority shall have the
power to lend money to and to guarantee, endorse or act as
surety on the bonds, notes, contracts or other obligations of,
or otherwise financially assist a business owned by a person who
meets the criteria in subsection (a), and to establish and
regulate the terms, security and conditions with respect to any
such loans or financial assistance and the charges for interest
and service connected therewith.
§ 1757. First Industries Program. <--
(a) General purpose.--The First Industries Program shall
provide financial assistance for projects related to tourism and
agriculture located within this Commonwealth.
(b) Loans.--The First Industries Program shall provide loans
to businesses involved in tourism and agriculture that would
otherwise satisfy the requirements for a loan under section 1751
(relating to Small Business First Program), 1752 (relating to
20110SB1257PN2048 - 104 -
Community Economic Development Program) or 1755 (relating to
Machinery and Equipment Loan Fund Program).
(c) Loan guarantees.--An applicant may request a guarantee
for a loan to be made by a commercial lending institution or
community development financial institution to assist with the
financing of a project related to tourism or agriculture.
(d) Application.--In addition to the requirements listed in
section 1750(b) (relating to programs generally), the
application shall include the following:
(1) A description of the proposed project financing,
including terms, conditions and the collateral or security
required for the loan for which the guarantee is being
requested.
(2) A copy of the borrower's last two years of financial
statements prepared or reported on by an independent
certified public accountant.
(e) Terms and limitations.--
(1) A guarantee made under this section may not exceed
50% of the outstanding principal amount of the loan or
$2,500,000 at any point in time, whichever is less.
(2) No less than $500,000 of private funds must be
invested in the project.
(3) In addition to any other terms and conditions
required by the authority, the guarantee agreement shall
provide for the following:
(i) The procedure for the submission by the
commercial lending institution or community development
financial institution of a claim for payment. This
procedure shall require that the commercial lending
institution or community development financial
20110SB1257PN2048 - 105 -
institution demonstrate that it has exhausted all
available remedies against the borrower, other guarantors
and collateral before seeking payment under the
agreement.
(ii) A requirement that a percentage of any moneys
recovered subsequent to the payment of a claim by the
authority be remitted to the authority.
(iii) Periodic reporting requirements by the
commercial lending institution or community development
financial institution regarding itself and the loans that
have been awarded guarantees under this section.
§ 1758. Second Stage Loan Guarantee Program.
(a) General purpose.--The Second Stage Loan Guarantee
Program shall provide loan guarantees to commercial lending
institutions that make loans to life sciences, advanced
technology or manufacturing businesses located in this
Commonwealth.
(b) Application for enrollment.--A commercial lending
institution may apply for enrollment in the program authorized
by this section. The application shall be in the form required
by the authority and, in addition to the requirements listed in
section 1750(b) (relating to programs generally), shall include
the following:
(1) The name and address of the commercial lending
institution and the name and title of the individual who will
serve as the point of contact for the commercial lending
institution.
(2) A statement defining the service area of the
commercial lending institution.
(3) A statement describing the commercial lending
20110SB1257PN2048 - 106 -
activities engaged in by the commercial lending institution
and how the institution intends to expand those activities as
a result of its participation in the program authorized by
this section.
(c) Enrollment approval.--Upon approval of an application
for enrollment, the authority shall execute a master guarantee
agreement in favor of the commercial lending institution. In
addition to any other terms and conditions required by the
authority, the master guarantee agreement shall provide for the
following:
(1) The procedure for the submission of a claim for
payment by the commercial lending institution. The procedure
shall require that the commercial lending institution
demonstrate that it has exhausted all available remedies
against the borrower, other guarantors and collateral for the
loan before seeking payment under the agreement.
(2) A requirement that a percentage of any moneys
recovered by the commercial lending institution subsequent to
any payment made under the master guarantee agreement by the
authority be remitted to the authority.
(3) Periodic reporting requirements by the commercial
lending institution regarding itself and regarding the loans
for which guarantee certificates have been issued under this
section.
(d) Application for guarantee.--A commercial lending
institution enrolled in the program authorized by this section
may submit an application to the authority for the guarantee of
a proposed loan. The application shall be in the form required
by the authority and, in addition to the requirements listed in
section 1750(b), shall include the following:
20110SB1257PN2048 - 107 -
(1) A demonstration that the use of loan proceeds by the
borrower will result in jobs being created or retained within
this Commonwealth, and an estimate as to the number of
projected new or retained employees as a result of the loan.
(2) A statement that the borrower's business is located
within the commercial lending institution's service area and
within this Commonwealth.
(3) A copy of the borrower's last two years of financial
statements prepared or reported on by an independent
certified public accountant.
(4) A statement describing the purpose of the loan, the
requested amount of the loan, a copy of the commercial
lending institution's commitment letter and applicable credit
underwriting that supports the repayment of the loan, as well
as the collateral and other guarantees offered by the
borrower to support the loan.
(5) Certification that the borrower's business has been
in existence for at least two years at the time of
application.
(6) Demonstration that the borrower is financially
responsible and has the ability to repay the loan.
(e) Limitations.--
(1) The guarantee may not exceed 50% of the outstanding
principal amount of the loan, and shall terminate at the end
of seven years.
(2) At no time may a guarantee exceed $1,000,000 for any
one loan.
SUBCHAPTER F
MISCELLANEOUS PROVISIONS
Sec.
20110SB1257PN2048 - 108 -
1771. Definitions.
1771.1 Transfer from Pennsylvania Industrial Development
Authority to Liberty Financing Authority.
1772. (Reserved) Transfer from Commonwealth Financing Authority <--
to Liberty Financing Authority for First Industries
Program and Second Stage Program.
1773. Transfer from Pennsylvania Minority Business Development
Authority to Liberty Financing Authority.
1774. Successorship and transfer of assets and liabilities.
§ 1771. Definitions.
The following words and phrases when used in this subchapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Account." The Pennsylvania Industrial Development Account.
The term shall include any similar account established by a
successor to the Liberty Financing Authority that assumes the
obligations under the Pennsylvania Industrial Development
Authority bond indenture.
"Debt." Notes, instruments and other evidences of
indebtedness or obligations which were issued prior to the
effective date of this section for the same programs or similar
programs to those described under Subchapter E (relating to
programs) and under the following:
(1) The act of May 17, 1956 (1955 P.L.1609, No.537),
known as the Pennsylvania Industrial Development Authority
Act.
(2) The act of July 22, 1974 (P.L.598, No.206), known as
the Pennsylvania Minority Business Development Authority Act.
(3) 12 Pa.C.S. Chs. 23 (relating to small business
first) and 29 (relating to machinery and equipment loans).
20110SB1257PN2048 - 109 -
"Debt instrument." Any trust instrument or indenture or
other financial instrument pursuant to which debt was issued,
incurred or secured.
"Program." The Pennsylvania Industrial Development Program.
The term shall include any similar program established by a
successor to the Liberty Financing Authority that assumes the
obligations under the Pennsylvania Industrial Development
Authority bond indenture.
"Prior programs." Except for programs transferred under
sections 1771.1 (relating to transfer from Pennsylvania
Industrial Development Authority to Liberty Financing Authority)
and 1773 (relating to transfer from Pennsylvania Minority
Business Development Authority to Liberty Financing Authority),
the same programs or similar programs to those described under
Subchapter E (relating to programs) and created under the
following acts which are repealed, in whole or in part, pursuant
to this chapter:
(1) The act of May 17, 1956 (1955 P.L.1609, No.537),
known as the Pennsylvania Industrial Development Authority
Act.
(2) The act of July 22, 1974 (P.L.598, No.206), known as
the Pennsylvania Minority Business Development Authority Act.
(3) 12 Pa.C.S. Chs. 23 (relating to small business
first) and 29 (relating to machinery and equipment loans).
(4) Sections 1552 (relating to First Industries Program) <--
and 1553 (relating to Second Stage Loan Program).
§ 1771.1. Transfer from Pennsylvania Industrial Development
Authority to Liberty Financing Authority.
(a) (Reserved).
(b) Designation of Liberty Financing Authority as successor
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to Pennsylvania Industrial Development Authority.--The Liberty
Financing Authority, as a public instrumentality of the
Commonwealth, shall be and is designated as successor to
Pennsylvania Industrial Development Authority. The separate
existence of the Pennsylvania Industrial Development Authority
shall cease.
(c) Transfer of assets and liabilities of Pennsylvania
Industrial Development Authority.--The following shall occur:
(1) The following shall be taken and deemed to be
transferred to and vested in the Liberty Financing Authority,
subject to any pledge in favor of the holders of bonds:
(i) All of the real, personal and mixed property and
all interests in the property of the Pennsylvania
Industrial Development Authority, including loans to
industrial development agencies and property acquired as
a result of foreclosures or in lieu of foreclosures of
mortgages securing the loans.
(ii) Any debts or amount due to the Pennsylvania
Industrial Development Authority.
(iii) The Pennsylvania Industrial Development
Authority's right, title and interest in and to revenues
pledged to secure bonds, the interests of the
Pennsylvania Industrial Development Authority under trust
instruments securing its bonds, including the right to
issue obligations pursuant to and secured by the
instruments, sinking funds on deposit and all funds
deposited under trust instruments, leaseholds and rights
and deposits under the trust instruments.
(iv) Rights under interest rate exchange agreements
and other financial instruments.
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(v) Appropriations.
(vi) All other rights and assets of the Pennsylvania
Industrial Development Authority of any nature.
(2) (i) The Liberty Financing Authority shall succeed
to, assume and become liable for all liabilities and
obligations of the Pennsylvania Industrial Development
Authority, including the bonds and the Pennsylvania
Industrial Development Authority bond indenture,
obligations under interest rate exchange agreements and
other financial instruments, contracts for purchase of
goods or services and other liabilities of any nature.
(ii) The liabilities and obligations under subparagraph
(i) shall be subject to the same limitations as were
applicable to the Pennsylvania Industrial Development
Authority prior to the transfer of assets and liabilities,
including limitations as to payment source, pledges,
assignments, liens, charges, terms and conditions.
(iii) The transfer of assets and liabilities to the
Liberty Financing Authority as successor are assumed by the
Liberty Financing Authority and shall not impair the rights
or the security of holders of bonds or other creditors,
persons dealing with Pennsylvania Industrial Development
Authority, liens upon the property of Pennsylvania Industrial
Development Authority or persons holding claims against
Pennsylvania Industrial Development Authority.
(iv) Any claim existing or action or proceeding pending
by or against the Pennsylvania Industrial Development
Authority shall be prosecuted to judgment as if the transfer
had not taken place or the Liberty Financing Authority may be
proceeded against or substituted in its place.
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(d) Rights and powers.--
(1) Nothing under this chapter shall alter or limit the
rights and powers vested in the Liberty Financing Authority
as successor to the Pennsylvania Industrial Development
Authority or otherwise created under the act of May 17, 1956
(1955 P.L.1609, No.537), known as the Pennsylvania Industrial
Development Authority Act, in any manner inconsistent with
the obligations of the Pennsylvania Industrial Development
Authority and, after the effective date of this section, the
Liberty Financing Authority, to obligees of the Pennsylvania
Industrial Development Authority until all bonds issued by
the Pennsylvania Industrial Development Authority, together
with the interest on the bonds, are fully paid and
discharged.
(2) Nothing under this chapter shall authorize personal
recourse for any claim based on bonds or trust instruments
securing the bonds or trust instruments, against any member,
officer or employee of the Pennsylvania Industrial
Development Authority, either directly or through the
Pennsylvania Industrial Development Authority or the Liberty
Financing Authority under any constitutional provision,
statute or rule of law or by the enforcement of any
assessment or penalty or otherwise.
(e) Pennsylvania Industrial Development Account and
Program.--
(1) The provisions of this chapter relating to the
account and the program shall apply to the assets and
revenues of the Pennsylvania Industrial Development Authority
transferring to the Liberty Financing Authority as successor
in addition to the assets and revenues arising from the
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continuing program subsequent to the transfer.
(2) The pledge made by the trust instruments securing
the Pennsylvania Industrial Development Authority bonds shall
apply to revenues of the Liberty Financing Authority from the
program and to assets held in the account. No withdrawals
from the account may be made except in compliance with the
trust instruments securing the Pennsylvania Industrial
Development Authority bonds.
(f) Definition.--As used in this section, the term "bond"
means any bond, note or other financial obligation of the
Pennsylvania Industrial Development Authority, including
interest rate exchange agreements or other financial instruments
related to bonds.
§ 1772. (Reserved). Transfer from Commonwealth Financing <--
Authority to the Liberty Financing Authority for the
First Industries Program and Second Stage Loan
Program.
On the effective date of this chapter, the trust accounts
established by the Commonwealth Financing Authority under
sections 1541 (relating to trust accounts) and 1542(b) (relating
to revolving loan program accounts) for the First Industries
Program and the Second Stage Loan Program shall be transferred
to and vested in the authority without further act or deed.
§ 1773. Transfer from Pennsylvania Minority Business
Development Authority to Liberty Financing Authority.
(a) (Reserved).
(b) Designation of Liberty Financing Authority as successor
to the Pennsylvania Minority Business Development Authority.--
The Liberty Financing Authority, as a public instrumentality of
the Commonwealth, shall be and is designated as successor to the
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Pennsylvania Minority Business Development Authority. The
separate existence of the Pennsylvania Minority Business
Development Authority shall cease.
(c) Transfer of assets and liabilities of the Pennsylvania
Minority Business Development Authority.--The following shall
occur:
(1) The following shall be taken and deemed to be
transferred to and vested in the Liberty Financing Authority,
subject to any pledge in favor of the holders of bonds:
(i) All of the real, personal and mixed property and
all interests in the property of the Pennsylvania
Minority Business Development Authority, including loans
and other debts owing to the Pennsylvania Minority
Business Development Authority and amounts due to the
Pennsylvania Minority Business Development Authority
under the loans and debts.
(ii) The right, title and interest of the
Pennsylvania Minority Business Development Authority
under bond indentures, including all revenues pledged as
security for the right, title and interest and the right
to issue obligations pursuant to and secured by the bond
indentures, sinking funds on deposit and all funds
deposited under bond indentures, leaseholds and rights
and deposits under bond indentures.
(iii) Appropriations.
(iv) All other rights and assets of the Pennsylvania
Minority Business Development Authority.
(2) (i) The Liberty Financing Authority shall succeed
to, assume and become liable for all liabilities and
obligations of the Pennsylvania Minority Business
20110SB1257PN2048 - 115 -
Development Authority, including the bonds, bond
indentures, contracts for purchase of goods or services
and other liabilities.
(ii) The liabilities and obligations under
subparagraph (i) shall be subject to the same limitations
as were applicable to the Pennsylvania Minority Business
Development Authority prior to the transfer of assets and
liabilities, including limitations as to payment source,
pledges, assignments, liens, charges, terms and
conditions.
(iii) The transfer of assets and liabilities to the
Liberty Financing Authority as successor are assumed by
the Liberty Financing Authority and shall not impair the
rights or the security of holders of bonds or other
creditors of the Pennsylvania Minority Business
Development Authority, persons dealing with the
Pennsylvania Minority Business Development Authority,
liens upon the property of the Pennsylvania Minority
Business Development Authority or persons holding claims
against the Pennsylvania Minority Business Development
Authority.
(iv) Any claim existing or action or proceeding
pending by or against the Pennsylvania Minority Business
Development Authority shall be prosecuted to judgment as
if the transfer had not taken place or the Liberty
Financing Authority may be proceeded against or
substituted in its place.
(d) Rights and powers.--
(1) Nothing under this chapter shall alter or limit the
rights and powers vested in the Liberty Financing Authority
20110SB1257PN2048 - 116 -
as successor to the Pennsylvania Minority Business
Development Authority or otherwise created by the act of July
22, 1974 (P.L.598, No.206), known as the Pennsylvania
Minority Business Development Authority Act, and, after the
effective date of this section, the Liberty Financing
Authority, to obligees of the Pennsylvania Minority Business
Development Authority until all bonds issued by the
Pennsylvania Minority Business Development Authority,
together with the interest on the bonds, are fully paid and
discharged.
(2) Nothing under this chapter shall authorize personal
recourse for any claim based on any obligation of the
Pennsylvania Minority Business Development Authority,
including its bonds or bond indentures, against any member,
officer or employee of the Pennsylvania Minority Business
Development Authority either directly or through the
Pennsylvania Minority Business Development Authority or the
Liberty Financing Authority under any constitutional
provision, statute or rule of law or by the enforcement of
any assessment or penalty or otherwise.
(e) Definition.--As used in this section, the term "bond"
means bonds, notes and other evidences of indebtedness or
obligations which the Pennsylvania Minority Business Development
Authority issued under the act of July 22, 1974 (P.L.598,
No.206), known as the Pennsylvania Minority Business Development
Authority Act.
§ 1774. Successorship and transfer of assets and liabilities.
(a) (Reserved).
(b) Transfer of assets and liabilities of prior programs.--
The following shall occur:
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(1) The following shall be taken and deemed to be
transferred to and vested in the Liberty Financing Authority,
subject to any pledge in favor of the holders of debt:
(i) All of the real, personal and mixed property and
all interests in the property of the prior programs,
including loans and other debts owing to the prior
programs and amounts due to the prior programs under the
loans and other debts.
(ii) The right, title and interest of the prior
programs under debt instruments, including all revenues
pledged as security for the right, title and interest and
the right to issue obligations pursuant to and secured by
the debt instruments, sinking funds on deposit and all
funds deposited under debt instruments, leaseholds and
rights and deposits under the debt instruments.
(iii) Appropriations made with respect to the prior
programs.
(iv) All other rights and assets of the prior
programs.
(2) (i) The Liberty Financing Authority shall succeed
to, assume and become liable for all liabilities and
obligations of the prior programs, including the debt,
debt instruments, contracts for purchase of goods or
services, and other liabilities.
(ii) The liabilities and obligations under
subparagraph (i) shall be subject to the same limitations
as were applicable to the prior programs prior to the
transfer of assets and liabilities, including limitations
as to payment source, pledges, assignments, liens,
charges, terms and conditions.
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(iii) The transfer of assets and liabilities to the
Liberty Financing Authority as successor shall not impair
the rights or the security of holders of debt or other
creditors of the prior programs, persons dealing with the
prior programs, liens upon the property of the prior
programs or persons holding claims against the prior
programs, all of which are assumed by the Liberty
Financing Authority.
(iv) Any claim existing or action or proceeding
pending by or against the prior programs shall be
prosecuted to judgment as if the transfer had not taken
place or the Liberty Financing Authority may be proceeded
against or substituted in its place.
(c) Rights and powers.--
(1) Nothing under this chapter shall alter or limit the
rights and powers vested in the Liberty Financing Authority
as successor to the prior programs or otherwise created by
the acts under which the prior programs were initiated in any
manner inconsistent with the obligations of the prior
programs and, after the effective date of this section, the
Liberty Financing Authority, to obligees of the prior
programs until all debt at any time issued by the prior
programs, together with the interest on the debt, are fully
paid and discharged.
(2) Nothing under this chapter shall authorize personal
recourse for any claim based on any obligation of the prior
programs, including without limitation its debt or debt <--
instruments, against any member, officer or employee of the
prior programs whether directly or through the prior programs
or the Liberty Financing Authority under any constitutional
20110SB1257PN2048 - 119 -
provision, statute or rule of law or by the enforcement of
any assessment or penalty or otherwise.
Section 4 6. Any money that has been allocated or <--
appropriated and has been expended prior to the effective date
of this section for the same programs or similar programs to
those described under 64 Pa.C.S. Ch. 17 Subch. E shall be
deducted from the corresponding allocation or appropriation
under 64 Pa.C.S. Ch. 17.
Section 5 7. Repeals are as follows: <--
(1) The General Assembly declares that the repeal under
paragraph (2) is necessary to effectuate the addition of the
following provisions of 64 Pa.C.S.:
(i) Ch. 17 Subch. C.
(ii) Section 1731(4).
(iii) Section 1734(a).
(iv) Section 1754.
(v) Section 1771.1.
(2) The act of May 17, 1956 (1955 P.L.1609, No.537),
known as the Pennsylvania Industrial Development Authority
Act, is repealed.
(3) The General Assembly declares that the repeal under
paragraph (4) is necessary to effectuate the addition of the
following provisions of 64 Pa.C.S.:
(i) Ch. 17 Subch C.
(ii) Section 1731(6).
(iii) Section 1756.
(iv) Section 1773.
(4) The act of July 22, 1974 (P.L.598, No.206), known as
the Pennsylvania Minority Business Development Authority Act,
is repealed.
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Section 6 8. This act continues repealed provisions of the <--
Pennsylvania Consolidated Statutes as follows:
(1) The addition of 64 Pa.C.S. §§ 1731(1) and 1751 is a
continuation of 12 Pa.C.S. Ch. 23. Except as otherwise
provided in 64 Pa.C.S. § 1731(1) or 1751, all activities
initiated under 12 Pa.C.S. Ch. 23 shall continue and remain
in full force and effect and may be completed under 64
Pa.C.S. §§ 1731(1) and 1751. Orders, regulations, rules and
decisions which were made under the 12 Pa.C.S. Ch. 23 and
which are in effect on the effective date of section 2 1 {12 <--
Pa.C.S. Ch. 23} of this act shall remain in full force and
effect until revoked, vacated or modified under 64 Pa.C.S. §
1731(1) or 1751. Contracts, obligations and collective
bargaining agreements entered into under 12 Pa.C.S. Ch. 23
are not affected nor impaired by the repeal of 12 Pa.C.S. Ch.
23.
(2) The addition of 64 Pa.C.S. §§ 1731(5) and 1755 is a
continuation of 12 Pa.C.S. Ch. 29. Except as otherwise
provided in 64 Pa.C.S. § 1731(5) or 1755, all activities
initiated under 12 Pa.C.S. Ch. 29 shall continue and remain
in full force and effect and may be completed under 64
Pa.C.S. §§ 1731(5) and 1755. Orders, regulations, rules and
decisions which were made under the 12 Pa.C.S. Ch. 29 and
which are in effect on the effective date of section 3 1 {12 <--
Pa.C.S. Ch. 29} of this act shall remain in full force and
effect until revoked, vacated or modified under 64 Pa.C.S. §
1731(5) or 1755. Contracts, obligations and collective
bargaining agreements entered into under 12 Pa.C.S. Ch. 29
are not affected nor impaired by the repeal of 12 Pa.C.S. Ch.
29.
20110SB1257PN2048 - 121 -
(3) The addition of 64 Pa.C.S. §§ 1731(7), 1757 and 1772 <--
is a continuation of 64 Pa.C.S. §§ 1542(b) and 1552. Except
as otherwise provided in 64 Pa.C.S. § 1731(7), 1757 or 1772,
all activities initiated under 64 Pa.C.S. §§ 1542(b) and 1552
shall continue and remain in full force and effect and may be
completed under 64 Pa.C.S. §§ 1731(7), 1757 and 1772. Orders,
regulations, rules and decisions which were made under 64
Pa.C.S. §§ 1542(b) and 1552 and which are in effect on the
effective date of sections 2 and 3 {64 Pa.C.S. §§ 1542(b) and
1552} of this act shall remain in full force and effect until
revoked, vacated or modified under 64 Pa.C.S. § 1731(7), 1757
or 1772. Contracts, obligations and collective bargaining
agreements entered into under 64 Pa.C.S. §§ 1542(b) and 1552
are not affected nor impaired by the repeal of 64 Pa.C.S. §§
1542(b) and 1552.
(4) The addition of 64 Pa.C.S. §§ 1731(8), 1758 and 1772
is a continuation of 64 Pa.C.S. § 1553. Except as otherwise
provided in 64 Pa.C.S. § 1731(8), 1758 or 1772, all
activities initiated under 64 Pa.C.S. § 1553 shall continue
and remain in full force and effect and may be completed
under 64 Pa.C.S. §§ 1731(8), 1758 and 1772. Orders,
regulations, rules and decisions which were made under 64
Pa.C.S. § 1553 and which are in effect on the effective date
of section 4 {64 Pa.C.S. § 1553} of this act shall remain in
full force and effect until revoked, vacated or modified
under 64 Pa.C.S. § 1731(7), 1757 or 1772. Contracts,
obligations and collective bargaining agreements entered into
under 64 Pa.C.S. § 1553 are not affected nor impaired by the
repeal of 64 Pa.C.S. § 1553.
Section 7 9. The addition of 64 Pa.C.S. Ch. 17 Subch. C is a <--
20110SB1257PN2048 - 122 -
continuation of the act of May 17, 1956 (1955 P.L.1609, No.537),
known as the Pennsylvania Industrial Development Authority Act
and the act of July 22, 1974 (P.L.598, No.206), known as the
Pennsylvania Minority Business Development Authority Act. The
following apply:
(1) Except as otherwise provided in 64 Pa.C.S. Ch. 17
Subch. C, all activities related to bonds initiated under the
Pennsylvania Industrial Development Authority Act or the
Pennsylvania Minority Business Development Authority Act
shall continue and remain in full force and effect and may be
completed under 64 Pa.C.S. Ch. 17 Subch. C. Orders,
regulations, rules and decisions which were related to bonds,
which were made under the Pennsylvania Industrial Development
Authority Act or the Pennsylvania Minority Business
Development Authority Act and which are in effect on the
effective date of section 6 8 of this act shall remain in <--
full force and effect until revoked, vacated or modified
under 64 Pa.C.S. Ch. 17 Subch. C. Contracts, obligations and
collective bargaining agreements which are related to bonds
and which were entered into under the the Pennsylvania
Industrial Development Authority Act or the Pennsylvania
Minority Business Development Authority Act are not affected
nor impaired by the repeal of the the Pennsylvania Industrial
Development Authority Act or the Pennsylvania Minority
Business Development Authority Act.
(2) Any difference in language between 64 Pa.C.S. Ch. 17
Subch C and the Pennsylvania Industrial Development Authority
Act or the Pennsylvania Minority Business Development
Authority Act is intended only to conform to the style of the
Pennsylvania Consolidated Statutes and is not intended to
20110SB1257PN2048 - 123 -
change or affect the legislative intent, judicial
construction or administration and implementation of the
Pennsylvania Industrial Development Authority Act or the
Pennsylvania Minority Business Development Authority Act.
Section 8 10. The addition of 64 Pa.C.S. §§ 1731(4), <--
1734(a), 1754 and 1771.1 is a continuation of the act of May 17,
1956 (1955 P.L.1609, No.537), known as the Pennsylvania
Industrial Development Authority Act. The following apply:
(1) Except as otherwise provided in 64 Pa.C.S. §
1731(4), 1734(a), 1754 or 1771.1, all activities initiated
under the Pennsylvania Industrial Development Authority Act
shall continue and remain in full force and effect and may be
completed under 64 Pa.C.S. § 1731(4), 1734(a), 1754 or
1771.1. Orders, regulations, rules and decisions which were
made under the Pennsylvania Industrial Development Authority
Act and which are in effect on the effective date of section
6(2) 8(2) of this act shall remain in full force and effect <--
until revoked, vacated or modified under 64 Pa.C.S. §
1731(4), 1734(a), 1754 or 1771.1. Contracts, obligations and
collective bargaining agreements entered into under the
Pennsylvania Industrial Development Authority Act are not
affected nor impaired by the repeal of the Pennsylvania
Industrial Development Authority Act.
(2) Any difference in language between 64 Pa.C.S. §
1731(4), 1734(a), 1754 or 1771.1 and the Pennsylvania
Industrial Development Authority Act is intended only to
conform to the style of the Pennsylvania Consolidated
Statutes and is not intended to change or affect the
legislative intent, judicial construction or administration
and implementation of the Pennsylvania Industrial Development
20110SB1257PN2048 - 124 -
Authority Act.
Section 9 11. The addition of 64 Pa.C.S. §§ 1731(6), 1756 <--
and 1773 is a continuation of the act of July 22, 1974 (P.L.598,
No.206), known as the Pennsylvania Minority Business Development
Authority Act. The following apply:
(1) Except as otherwise provided in 64 Pa.C.S. §
1731(6), 1756 or 1773, all activities initiated under the
Pennsylvania Minority Business Development Authority Act
shall continue and remain in full force and effect and may be
completed under 64 Pa.C.S. §§ 1731(6), 1756 and 1773. Orders,
regulations, rules and decisions which were made under the
the Pennsylvania Minority Business Development Authority Act
and which are in effect on the effective date of section 6(4) <--
8(4) of this act shall remain in full force and effect until <--
revoked, vacated or modified under 64 Pa.C.S. §§ 1731(6),
1756 and 1773. Contracts, obligations and collective
bargaining agreements entered into under the Pennsylvania
Minority Business Development Authority Act are not affected
nor impaired by the repeal of the Pennsylvania Minority
Business Development Authority Act.
(2) Any difference in language between 64 Pa.C.S. §§
1731(6), 1756 and 1773 and the Pennsylvania Minority Business
Development Authority Act is intended only to conform to the
style of the Pennsylvania Consolidated Statutes and is not
intended to change or affect the legislative intent, judicial
construction or administration and implementation of the
Pennsylvania Minority Business Development Authority Act.
Section 10 12. This act shall take effect in 60 days. <--
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