PRINTER'S NO. 3030
No. 2334 Session of 1982
INTRODUCED BY DORR, L. E. SMITH, SEVENTY, F. E. TAYLOR,
SERAFINI, CAPPABIANCA, BELARDI, BURD, McVERRY, PISTELLA,
HEISER, ZWIKL, REBER, SNYDER, GEIST, BOYES, FLECK, TADDONIO,
POTT, SIEMINSKI, DAIKELER, MACKOWSKI, GRUPPO, BOWSER, FARGO,
CLYMER, GREENWOOD, MERRY, STEVENS, SAURMAN, WASS,
E. Z. TAYLOR, HAYES, NOYE, CORDISCO AND DeVERTER, MARCH 3,
1982
REFERRED TO COMMITTEE ON BUSINESS AND COMMERCE, MARCH 3, 1982
AN ACT
1 Amending the act of December 1, 1959 (P.L.1647, No.606),
2 entitled "An act to provide for the incorporation of Business
3 Development Credit Corporations to assist, promote,
4 encourage, develop and advance the business prosperity and
5 economic welfare of the Commonwealth; defining the powers,
6 restrictions, limitations, purposes and functions of such
7 corporations; conferring powers on certain corporations and
8 financial institutions in connection therewith, and
9 conferring certain powers on the Department of Banking,"
10 empowering business development credit corporations to loan
11 money for venture capital.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. Section 2, act of December 1, 1959 (P.L.1647,
15 No.606), known as the "Business Development Credit Corporation
16 Law," is amended by adding a definition to read:
17 Section 2. Definitions.--The following words, as used in
18 this act, shall have the meanings herein assigned to them,
19 unless the context clearly indicates otherwise:
20 * * *
1 (6) "Venture capital" means that amount of money which may
2 be made available by a corporation to a qualified applicant for
3 the purposes of initiating and continuing commercial production,
4 marketing or application of a prototypical product or idea for
5 general public usage.
6 Section 2. Section 3 of the act, amended August 14, 1963
7 (P.L.830, No.404), is amended to read:
8 Section 3. Purposes.--
9 The purposes of a corporation formed hereunder shall be to
10 assist, promote, encourage and, through the cooperative efforts
11 of its shareholders and the institutions which from time to time
12 shall become parties to lending agreements therewith, develop
13 and advance the business prosperity and economic welfare of this
14 Commonwealth; to encourage and assist in the location of new
15 business and industry in this Commonwealth, and to rehabilitate
16 existing business and industry, to stimulate and assist in the
17 expansion of all kinds of business activity including new and
18 unproven business activities by means of providing venture
19 capital, which will tend to promote the business development and
20 maintain the economic stability of the Commonwealth, provide
21 maximum opportunities for employment, encourage thrift and
22 improve the standard of living of the citizens of the
23 Commonwealth; to cooperate and act in conjunction with other
24 organizations, public or private, the objects of which are the
25 promotion and advancement of industrial, commercial,
26 agricultural and recreational development in the Commonwealth;
27 to furnish money and credit to approved and deserving applicants
28 for the promotion, development and conduct of all kinds of
29 business activity in the Commonwealth, thereby establishing a
30 source of capital and credit not otherwise readily available
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1 therefor.
2 Section 3. Clauses (2) and (6) of section 4 of the act,
3 amended August 14, 1963 (P.L.830, No.404), are amended and a
4 clause is added to read:
5 Section 4. General Powers.--
6 Corporations formed hereunder shall have all of the powers,
7 rights, privileges and immunities conferred on business
8 corporations by the act of May 5, 1933 (P.L.364 No.106), as
9 amended, known as the "Business Corporation Law," and in
10 addition thereto and subject to the restrictions and limitations
11 hereinafter set forth, shall have the following general powers:
12 * * *
13 (2) To lend money to and to guarantee, endorse or act as
14 surety on the bonds, notes, contracts or other obligations of,
15 or otherwise assist financially including but not limited to
16 business arrangements providing venture capital, any person,
17 firm, corporation, joint stock company or association, and to
18 establish and regulate the terms and conditions with respect to
19 any such loans or financial assistance and the charges for
20 interest and service connected therewith. No loan or financial
21 assistance shall be made available unless the loan or financial
22 assistance applied for is not otherwise available to the
23 applicant from financial institutions on reasonable terms, it
24 being the intent hereof that customary sources of credit be
25 utilized whenever possible.
26 * * *
27 (6) To accept grants, loans, subsidies and other aids from
28 and to enter into agreements or other transactions with any
29 Federal agency, and to participate with such Federal agency and
30 with other corporations formed under this act in making loans
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1 and rendering financial assistance including venture capital
2 assistance to any person, firm, corporation, joint stock company
3 or association.
4 * * *
5 (8) To accept grants, loans and other aids from and to enter
6 into agreements or other transactions with the Pennsylvania
7 Product Development Corporation.
8 Section 4. The act is amended by adding a section to read:
9 Section 7.1. Applications for Venture Capital Assistance and
10 Approval.--(a) Prior to granting any venture capital funds to
11 provide financial aid to an applicant, the development credit
12 corporation shall receive an application which shall contain,
13 without being limited to, the following information:
14 (1) A detailed description of the industrial or commercial
15 project including plans and other documents necessary to firmly
16 establish the type and character of the project.
17 (2) A detailed description of the project developer which
18 shall include but not be limited to organization, ownership,
19 financial history, financial projections and related activities.
20 (3) A general description of the type, classes and number of
21 employees employed or to be employed in the operation of the
22 project.
23 (4) Cost or estimates of cost of establishing the project.
24 (5) A statement of cash funds which are available for and
25 are to be applied to the establishment of the project.
26 (6) Evidence of the arrangement made by the developer for
27 financing the costs of the project.
28 (7) A statement or report of any local industrial
29 development authority or community development corporation which
30 has expressed an interest in the project together with an
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1 indication of the extent to which such local agency is willing
2 to participate in financing the project.
3 (b) When it has been determined by the development credit
4 corporation that financial aid to a particular developer in
5 connection with a commercial or industrial project will
6 accomplish the public purpose of this act, the development
7 credit corporation may provide such financial aid under business
8 terms, including but not limited to terms which require royalty
9 payments to the development credit corporation, which it deems
10 in the best interests of the development credit corporation.
11 Section 5. This act shall take effect in 60 days.
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