THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY MASSER, EVERETT, FARRY, GINGRICH, F. KELLER, KILLION, MAJOR, MALONEY, MILLARD, PICKETT, QUINN, CULVER, TOBASH AND VULAKOVICH, DECEMBER 13, 2011

REFERRED TO COMMITTEE ON APPROPRIATIONS, DECEMBER 13, 2011  

AN ACT

Providing for a Small Business Flood Relief Program; making an

appropriation; and providing for termination of the program.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Short title.

This act shall be known and may be cited as the Small

Business Flood Relief Act of 2011.

Section 2.  Declaration of policy.

(1)  Hurricane Irene and Tropical Storm Lee and the

resulting flood emergency impacted many small businesses of

this Commonwealth, causing substantial economic and physical

damage.

(2)  Small businesses are an integral part of communities

and a vital component to Pennsylvania's economy.

(3)  Federal emergency declarations designated certain

areas as eligible for business disaster assistance.

(4)  Pursuant to section 17(b) of Article VIII of the

Constitution of Pennsylvania, the Commonwealth should provide

additional assistance to certain businesses to supplement

compensation received from private insurance and the Federal

Government.

Section 3.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Adjusted loss."  The difference between:

(1)  eligible loss; and

(2)  covered loss.

"Covered loss."  Any amount received by or due the recipient

from private insurance and Federal loans on account of an

eligible loss. The term does not include an insurance deductible

paid by the recipient.

"Department."  The Department of Community and Economic

Development of the Commonwealth.

"Eligible loss."  Damage caused as a result of Hurricane

Irene and Tropical Storm Lee to a small business and certified

by the Pennsylvania Emergency Management Agency.

"Program."  The Small Business Flood Relief Program

established under section 6.

"Small business."  A person that is engaged in a for-profit

enterprise and that employs 100 or fewer individuals.

"Working capital."  Capital used by a small business for

operations, excluding fixed assets and machinery and equipment.

Section 4.  Powers and duties of department.

The department shall adopt guidelines to administer the

program.

Section 5.  Restricted account.

A restricted account is established in the State Treasury to

be known as the Small Business Flood Relief Account. The account

shall be for the purpose of making loans that shall be provided

to small businesses eligible for assistance under the program

authorized under section 6 and be funded by the appropriation

contained in section 7 from which loans to small businesses

shall be provided by the department to eligible small

businesses.

Section 6.  Small Business Flood Relief Program.

(a)  Establishment.--There is established the Small Business

Flood Relief Program.

(b)  Eligibility.--To be eligible for a loan, a small

business must meet all of the following:

(1)  Be located in a county that has been declared a

Federal disaster area as a result of Hurricane Irene or

Tropical Storm Lee.

(2)  Suffer an eligible loss.

(3)  Meet the definition of small business in section 3.

(4)  Be registered and in good standing with the

Department of Revenue.

(c)  Procedure.--

(1)  A small business shall apply for a loan under this

section on a form furnished by the department, setting forth

the facts establishing eligibility. An application under this

paragraph is subject to 18 Pa.C.S. § 4904 (relating to

unsworn falsification to authorities).

(2)  The department shall investigate the application to

determine eligibility.

(3)  Within 30 days of receipt of the application, the

department shall make an eligibility and loan determination.

(d)  Loans.--

(1)  The minimum loan amount to be awarded is $10,000 and

the maximum loan amount to be awarded under this program is

$100,000.

(2)  Loan proceeds may be used for working capital,

inventory, equipment purchase and real property improvements,

if owned by the borrower, but cannot be used for refinancing

existing debt or outstanding debt payments. Equipment and

real property must be located within this Commonwealth.

(3)  Loan proceeds must be drawn within 60 days of the

loan approval date. Failure to draw funds within the required

time period will result in revocation of the loan.

(4)  Loan applications will be reviewed and loans

approved on a first-come, first-served basis until available

funds are exhausted.

(e)  Loan terms.--

(1)  A loan for working capital or inventory shall be

made at an interest rate not to exceed 3% for the term of the

loan. The repayment period shall not exceed five years.

(2)  A loan for equipment purchase or real property

improvement shall be made at an interest rate not to exceed

1% for the term of the loan. The repayment period shall not

exceed 10 years.

Section 7.  Appropriation.

The sum of $15,000,000, or as much as may be necessary, is

appropriated to the department to carry out the purpose of this

act.

Section 8.  Termination.

The program and account established under sections 5 and 6

shall terminate on June 30, 2012, and any money remaining in the

account shall be transferred to the General Fund.

Section 9.  Effective date.

This act shall take effect immediately.