SENATE AMENDED
PRIOR PRINTER'S NOS. 3366, 3649 PRINTER'S NO. 3983
No. 2398 Session of 2002
INTRODUCED BY BUNT, DALEY, BASTIAN, FORCIER, ARMSTRONG,
M. BAKER, BROWNE, CAPPELLI, COY, DeWEESE, EGOLF, FAIRCHILD,
FEESE, FICHTER, GEORGE, GODSHALL, GORDNER, HENNESSEY, HERMAN,
LAUGHLIN, MANN, MARSICO, McCALL, McGILL, McILHATTAN,
PHILLIPS, PICKETT, RUBLEY, SAYLOR, SOLOBAY, STABACK, STERN,
TIGUE, WALKO, WATSON, ZUG, HERSHEY, HESS, SATHER, ALLEN,
E. Z. TAYLOR, CREIGHTON, ROBERTS, HARHAI, STEELMAN,
R. MILLER, MAJOR, SHANER, MAITLAND, B. SMITH, LUCYK, GRUCELA,
ROSS, THOMAS, SEMMEL, YOUNGBLOOD, FREEMAN, BENNINGHOFF,
PALLONE, TRICH AND CLYMER, MARCH 7, 2002
SENATOR THOMPSON, APPROPRIATIONS, IN SENATE, RE-REPORTED AS
AMENDED, JUNE 10, 2002
AN ACT
1 Amending the act of June 29, 1996 (P.L.434, No.67), entitled, as
2 amended, "An act to enhance job creation and economic
3 development by providing for an annual financing strategy,
4 for opportunity grants, for job creation tax credits, for
5 small business assistance, for the Small Business Advocacy
6 Council, for a family savings program, for industrial
7 development assistance, for community development bank grants
8 and loans and for tax-exempt bond allocation; conferring
9 powers and duties on various administrative agencies and
10 authorities; further providing for various funds; and making
11 repeals," further providing for small business definitions
12 and loan eligibility and terms.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. The definition of "small business enterprise" in
16 section 1301 of the act of June 29, 1996 (P.L.434, No.67), known
17 as the Job Enhancement Act, is amended and the section is
18 amended by adding definitions to read:
1 Section 1301. Definitions.
2 The following words and phrases when used in this chapter
3 shall have the meanings given to them in this section unless the
4 context clearly indicates otherwise:
5 * * *
6 "Agricultural producer." A person or entity involved in the
7 management and use of a normal agricultural operation for the
8 production of a farm commodity.
9 * * *
10 "Natural disaster." As defined in 35 Pa.C.S. § 7102 <--
11 (relating to definitions).
12 "Normal agricultural operation." The activities, practices, <--
13 equipment and procedures which agricultural producers adopt, use
14 or engage in in the production and preparation for market of
15 farm commodities. The term includes new activities, practices,
16 equipment and procedures consistent with technological
17 development within the agricultural industry. AS DEFINED IN <--
18 SECTION 2 OF THE ACT OF JUNE 10, 1982 (P.L.454, NO.133),
19 ENTITLED "AN ACT PROTECTING AGRICULTURAL OPERATIONS FROM
20 NUISANCE SUITS AND ORDINANCES UNDER CERTAIN CIRCUMSTANCES."
21 * * *
22 "Small business [enterprises] enterprise." A for-profit
23 corporation, partnership [or], proprietorship, limited liability
24 company or other entity which meets the eligibility requirements
25 established by the department. The term shall include, but is
26 not limited to, a small business [enterprises] enterprise which:
27 (1) is located in a small business incubator
28 [facilities, small business enterprises which are] facility;
29 (2) is an agricultural [processors and small business
30 enterprises which manufacture] processor;
20020H2398B3983 - 2 -
1 (3) is an agricultural producer; or
2 (4) manufactures apparel products.
3 * * *
4 Section 2. Section 1303(a.2) and 1303(b) of the act, amended <--
5 November 17, 1998 (P.L.788, No.100), are IS amended to read: <--
6 Section 1303. Eligibility for and terms and conditions of
7 loans.
8 * * *
9 (a.2) Pollution prevention assistance loans.--The Pollution <--
10 Prevention Assistance Account created under section 1302(b.1)
11 shall provide revolving loans to small [businesses] business
12 enterprises.
13 (1) The loans shall be for the purpose of enabling the
14 small business enterprise to adopt or install pollution
15 prevention equipment or processes to:
16 (i) Reduce or reuse raw materials onsite.
17 (ii) Reduce the production of waste.
18 (iii) Reduce energy consumption.
19 (2) The Pollution Prevention Assistance Account shall
20 not invest on the basis of direct financial return and shall
21 not be held to the loan loss standards of commercial lenders.
22 Loans shall be for the purpose of reducing pollution through
23 source reduction technologies or processes.
24 (3) A loan under this subsection may not exceed the
25 lesser of:
26 (i) $50,000; or
27 (ii) 75% of eligible project costs.
28 (4) Loans under this subsection shall have an interest
29 rate of 2% per year and a maximum repayment term of seven
30 years.
20020H2398B3983 - 3 -
1 (5) An industrial resource center receiving funds under
2 the act of July 2, 1993 (P.L.439, No.64), known as the Ben
3 Franklin/IRC Partnership Act, may utilize the account to
4 provide assistance to a small business enterprise for which a
5 loan application has been made.
6 (6) Loans under this subsection shall be used to further
7 the goal of pollution prevention through the purchase and
8 installation of equipment to make operational changes and
9 modify production practices.
10 (b) Terms and conditions.--
11 (1) The department may make advances from the Small
12 Business First Fund, subject to the terms, conditions and
13 restrictions provided under this chapter, to area loan
14 organizations for the purpose of making loans to eligible
15 small business enterprises for capital development projects
16 which demonstrate a substantial likelihood of creating or
17 preserving employment opportunities[.] or, in the case of a
18 small business enterprise that is an agricultural producer,
19 loans which demonstrate a substantial likelihood of the
20 enhancement and growth of normal agricultural operations. All
21 loans, except loans provided to a small business enterprise
22 which is an agricultural producer, shall be limited to
23 projects that demonstrate the creation or preservation of one
24 job for every $25,000 received from the Small Business First
25 Fund.
26 (2) No loans shall be made which would do any of the
27 following:
28 (i) Cause, aid or assist in, directly, the
29 relocation of any business operations from one part of
30 this Commonwealth to another unless there is at least a
20020H2398B3983 - 4 -
1 25% net increase in employment.
2 (ii) Refinance any portion of the total project cost
3 or other existing loans or debt.
4 (iii) Finance projects located outside the
5 geographic boundaries of this Commonwealth.
6 (iv) Provide funds, directly or indirectly, for
7 payment, distribution or as loan owners, partners or
8 shareholders of the small business enterprise, except as
9 ordinary compensation for services rendered.
10 (v) Provide funds for speculation in any kind of
11 property, real or personal, tangible or intangible.
12 (3) All loans shall carry an interest rate and term and
13 shall be secured by lien positions on collateral at the
14 highest level of priority as may be determined by the area
15 loan organization with the approval of the department.
16 Section 3. Section 1310 of the act is amended to read: <--
17 Section 1310. [Transitional] Eligibility provisions.
18 The following eligibility requirements and eligible uses
19 shall apply to all requests for funding [received after this
20 chapter becomes effective and before submission of the first
21 annual financing strategy]:
22 (1) A small business enterprise with 100 full-time
23 employees or less that proposes to undertake a capital
24 development.
25 (2) (i) The maximum loan amount for land, buildings and
26 machinery and equipment is $200,000 or 50% of the total
27 eligible project costs, whichever is less. The maximum
28 loan amount for working capital is $100,000 or 50% of the
29 total eligible project costs, whichever is less.
30 (ii) Loans used for real estate shall have a
20020H2398B3983 - 5 -
1 repayment period of up to ten years. Loans used for
2 machinery and equipment shall have a repayment period of
3 up to seven years. Loans used for working capital shall
4 have a repayment period of up to three years. In projects
5 where two or more uses of funds are planned, the loan
6 terms may be blended.
7 (iii) Interest rates shall [be fixed at 5%.] not
8 exceed 5%, except as provided in clause (iv).
9 (iv) Loans made to a small business enterprise that
10 is an agricultural producer shall be made at an interest
11 rate of not less than 2% for the term of the loan if a
12 declaration under 35 Pa.C.S. § 7301(c) (relating to
13 general authority of Governor) is in effect for a natural
14 disaster. A small business enterprise that is an
15 agricultural producer must be physically located in the
16 area of the natural disaster and must make loan
17 application within nine months of a declaration specified
18 in this subparagraph.
19 [(iv)] (v) All loans must be adequately secured.
20 (3) (i) Applications for assistance under the Capital
21 Loan Fund Act which have been approved prior to the
22 effective date of this chapter will be processed in
23 accordance with the act of July 2, 1984 (P.L.545,
24 No.109), known as the Capital Loan Fund Act. Applications
25 for assistance which have been received but which have
26 not been approved prior to the effective date of this
27 chapter will be evaluated and processed in accordance
28 with this chapter.
29 (ii) Applications for assistance under section 7.13
30 of the act of January 8, 1960 (1959 P.L.2119, No.787),
20020H2398B3983 - 6 -
1 known as the Air Pollution Control Act, section 709 of
2 the act of July 6, 1989 (P.L.169, No.32), known as the
3 Storage Tank and Spill Prevention Act, and the Recycling
4 Incentive Development Account which have been approved
5 prior to the effective date of this chapter shall be
6 processed in accordance with those respective provisions.
7 Applications for assistance which have been received but
8 which have not been approved prior to the effective date
9 of this chapter shall be evaluated and processed in
10 accordance with this chapter.
11 Section 4. The act is amended by adding a section to read:
12 Section 5106.2. Reporting to General Assembly.
13 In addition to the annual financing strategy submitted to the
14 General Assembly, in accordance with section 301, the department
15 shall report to the General Assembly in January and June for
16 each of their programs on the number and type of requests for
17 department financing during the current fiscal year, the number,
18 amount and description of approvals and the available financing
19 still remaining.
20 Section 5 3. This act shall take effect immediately. <--
C4L12VDL/20020H2398B3983 - 7 -