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        PRIOR PRINTER'S NO. 3712                      PRINTER'S NO. 3784

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 2503 Session of 2008


        INTRODUCED BY GIBBONS, CALTAGIRONE, CAPPELLI, EACHUS, FRANKEL,
           GEORGE, HARKINS, McILHATTAN, SAINATO, SURRA, BIANCUCCI,
           YUDICHAK, KULA, SIPTROTH, J. WHITE AND MURT, MAY 7, 2008

        AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,
           MAY 14, 2008

                                     AN ACT

     1  Amending Title 12 (Commerce and Trade) of the Pennsylvania
     2     Consolidated Statutes, FURTHER PROVIDING FOR DEFINITIONS; AND  <--
     3     providing for loans from the Pennsylvania Industrial
     4     Development Authority.

     5     The General Assembly of the Commonwealth of Pennsylvania
     6  hereby enacts as follows:
     7     Section 1.  Sections 2902, 2903, 2904 and 2905(a) of Title 12
     8  of the Pennsylvania Consolidated Statutes are amended to read:
     9  § 2902.  Definitions.
    10     The following words and phrases when used in this chapter
    11  shall have the meanings given to them in this section unless the
    12  context clearly indicates otherwise:
    13     "Authority."  The Pennsylvania Industrial Development
    14  Authority established under the act of May 17, 1956 (1955
    15  P.L.1609, No.537), known as the Pennsylvania Industrial
    16  Development Authority Act.
    17     "Business enterprise."  A for-profit corporation, partnership
    18  or proprietorship. The term includes a medical facility.

     1     "Farm commodity."  Any Pennsylvania-grown agricultural,
     2  horticultural, aquacultural, vegetable, fruit and floricultural
     3  product of the soil, livestock and meats, wools, hides, furs,
     4  poultry, eggs, dairy products, nuts, mushrooms, honey products
     5  and forest products.
     6     "Fund."  The Machinery and Equipment Loan Fund created and
     7  established by this chapter.
     8     "Medical facility."  An entity licensed as a hospital under
     9  the act of June 13, 1967 (P.L.31, No.21), known as the Public
    10  Welfare Code, or the act of July 19, 1979 (P.L.130, No.48),
    11  known as the Health Care Facilities Act.
    12     "Normal agricultural operation."  The term shall have the
    13  same meaning as given to it in section 2 of the act of June 10,
    14  1982 (P.L.454, No.133), entitled "An act protecting agricultural
    15  operations from nuisance suits and ordinances under certain
    16  circumstances."
    17     "PIDA Act."  The act of May 17, 1956 (1955 P.L.1609, No.537),
    18  known as the Pennsylvania Industrial Development Authority Act.
    19     "Production agriculture."  The management and use of a normal
    20  agricultural operation for the production of a farm commodity.
    21  § 2903.  Establishment.
    22     There is established within the department a program to be
    23  known as the Machinery and Equipment Loan Program. [The] Except
    24  as otherwise provided in this chapter, the program shall be
    25  administered by the department and provide loans to business
    26  enterprises for machinery and equipment.
    27  § 2904.  Machinery and Equipment Loan Fund.
    28     (a)  Creation.--There is created a special account in the
    29  Treasury Department, to be known as the Machinery and Equipment
    30  Loan Fund, to which shall be credited all program appropriations
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     1  made by the General Assembly, all proceeds from loan repayments
     2  made through June 30, 2008, and any and all other deposits,
     3  payments or contributions from any other source made available
     4  to the fund. All proceeds from loan repayments LOAN REPAYMENTS    <--
     5  FROM LOANS made after June 30, 2008, shall be paid to the
     6  authority. The fund shall operate as a revolving fund whereby
     7  all appropriations, payments and interest made thereto may be
     8  applied and reapplied to the purposes of this chapter.
     9     (b)  Credits to fund.--All appropriations, deposits and
    10  contributions made to the fund shall be immediately credited in
    11  full to the fund, and earnings on the moneys held in the fund
    12  shall also be credited to the fund for the purposes of this
    13  chapter.
    14     (c)  Transfers to the authority.--At the beginning of each
    15  fiscal year commencing with the fiscal year beginning July 1,
    16  2008, a portion of the unencumbered moneys in the fund, as
    17  determined by the secretary, shall be transferred to the
    18  authority. The authority may use such funds for any purpose
    19  authorized under law.
    20  § 2905.  Eligibility for loans; terms and conditions.
    21     (a)  Loans; general rules.--The secretary may make advances
    22  from the fund, subject to the terms, conditions and restrictions
    23  provided under this chapter, for the purpose of making loans to
    24  business enterprises involved in industrial processes, mining,
    25  manufacturing, production agriculture, information technology,
    26  biotechnology, service as a medical facility or other industrial
    27  or technology sectors, as defined by the department, to acquire
    28  and install new machinery and equipment or upgrade existing
    29  machinery and equipment, including the acquisition, application
    30  and utilization of computer hardware and software.
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     1         (1)  All loans shall be subject to all of the following
     2     conditions:
     3             (i)  Be made to eligible business enterprises under
     4         the provisions of this chapter.
     5             (ii)  Have a maximum loan ceiling of $5,000,000 or
     6         50% of the cost of the project, whichever is less.
     7             (iii)  Be limited to the purchase and installation of
     8         new equipment and machinery or the upgrade of existing
     9         machinery and equipment. This subparagraph includes the
    10         acquisition, application and utilization of computer
    11         hardware and software.
    12             (iv)  Be limited to projects that demonstrate [the
    13         creation or retention of one job for every $25,000
    14         received from the fund] job creation or retention at a
    15         rate determined by the department. This subparagraph does
    16         not apply to loans made to business enterprises involved
    17         in production agriculture or to loans made to medical
    18         facilities.
    19             (v)  Have an interest rate which shall be established
    20         by the secretary.
    21             (vi)  Have a term of [not in excess of] ten years or
    22         less.
    23         (2)  For loans to medical facilities, loan funds may be
    24     used only to finance the acquisition, installation and
    25     utilization of machinery and equipment, including computer
    26     hardware and software components, to be used in the
    27     prescribing and dispensing of medication for medical facility
    28     patients.
    29     * * *
    30     Section 2.  Title 12 is amended by adding a section to read:
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     1  § 2913.  Loans from authority.
     2     Prior to the review and investigation of an application        <--
     3  submitted under section 2906 (relating to application and
     4  administration), the secretary may forward the application to
     5  the authority to be reviewed and investigated by the authority
     6  for a possible loan from the authority in lieu of a loan from
     7  the department under this chapter. In addition to the powers of
     8  the authority under the PIDA Act, the authority is hereby
     9  authorized to make loans meeting the eligibility and other
    10  requirements of this chapter. In such event, a recipient of any
    11  such loan shall be subject to the requirements of this chapter
    12  as though the secretary made the advances for the loan under
    13  section 2905(a) (relating to eligibility for loans; terms and
    14  conditions). Repayments of loans made by the authority with
    15  funds transferred to the authority under section 2904(c)
    16  (relating to Machinery and Equipment Loan Fund) shall be made
    17  directly to the authority.
    18     (A)  REVIEW OF APPLICATION.--PRIOR TO THE REVIEW AND           <--
    19  INVESTIGATION OF AN APPLICATION SUBMITTED UNDER SECTION 2906
    20  (RELATING TO APPLICATION AND ADMINISTRATION), THE SECRETARY MAY
    21  FORWARD THE APPLICATION TO THE AUTHORITY TO BE REVIEWED AND
    22  INVESTIGATED BY THE AUTHORITY FOR A POSSIBLE LOAN FROM THE
    23  AUTHORITY IN LIEU OF A LOAN FROM THE DEPARTMENT UNDER THIS
    24  CHAPTER.
    25     (B)  LOANS FROM AUTHORITY.--IN ADDITION TO THE POWERS OF THE
    26  AUTHORITY UNDER THE PIDA ACT, THE AUTHORITY IS AUTHORIZED TO
    27  MAKE LOANS MEETING THE ELIGIBILITY AND OTHER REQUIREMENTS OF
    28  THIS CHAPTER.
    29     (C)  MINIMUM LOAN AMOUNT.--
    30         (1)  EXCEPT AS SET FORTH IN PARAGRAPH (2), NO LESS THAN
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     1     25% OF THE AMOUNT LOANED BY THE AUTHORITY IN A SINGLE FISCAL
     2     YEAR MUST MEET THE REQUIREMENTS OF SECTION 2905 (RELATING TO
     3     ELIGIBILITY FOR LOANS; TERMS AND CONDITIONS).
     4         (2)  IF THE TOTAL OF APPLICATIONS UNDER THIS CHAPTER ARE
     5     ELIGIBLE FOR LESS THAN 25% OF THE AMOUNT LOANED BY THE
     6     AUTHORITY IN A SINGLE FISCAL YEAR, UNUSED FUNDS MAY BE LOANED
     7     BY THE AUTHORITY IN ACCORDANCE WITH THE PIDA ACT.
     8     (D)  REQUIREMENTS.--A RECIPIENT OF ANY LOAN MADE UNDER THIS
     9  SECTION SHALL BE SUBJECT TO THE REQUIREMENTS OF THIS CHAPTER AS
    10  THOUGH THE SECRETARY MADE THE ADVANCES FOR THE LOAN UNDER
    11  SECTION 2905(A).
    12     (E)  REPAYMENT.--REPAYMENTS OF LOANS MADE BY THE AUTHORITY
    13  WITH FUNDS TRANSFERRED TO THE AUTHORITY UNDER SECTION 2904(C)
    14  (RELATING TO MACHINERY AND EQUIPMENT LOAN FUND) SHALL BE MADE
    15  DIRECTLY TO THE AUTHORITY.
    16     Section 3.  This act shall take effect immediately.










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