PRIOR PRINTER'S NO. 3712 PRINTER'S NO. 3784
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 20080H2503B3784 - 2 -
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. 20080H2503B3784 - 3 -
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: 20080H2503B3784 - 4 -
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 20080H2503B3784 - 5 -
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. C14L12RLE/20080H2503B3784 - 6 -