1Amending Titles 12 (Commerce and Trade) and 64 (Public
2Authorities and Quasi-Public Corporations) of the
3Pennsylvania Consolidated Statutes, further providing for 
4revolving loan program accounts; repealing First Industries 
5Program and Second Stage Loan Program; providing for
6Pennsylvania Business Development Authority; imposing duties
7on the Department of Community and Economic Development;
8providing for First Industries Program, for Second Stage Loan
9Program and for transfer from Commonwealth Financing 
10Authority to Pennsylvania Business Development Authority for 
11First Industries Program and Second Stage Program; and making
12related repeals.

13The General Assembly of the Commonwealth of Pennsylvania
14hereby enacts as follows:

15Section 1. Chapters 23 and 29 of Title 12 of the 
16Pennsylvania Consolidated Statutes are repealed:

17[CHAPTER 23

18SMALL BUSINESS FIRST

19Sec.

12301. Scope.

22302. Definitions.

32303. Establishment.

42304. Fund and accounts.

52305. Department responsibilities.

62306. Capital development loans.

72307. EDA loans.

82308. Loans in distressed communities.

92309. Pollution prevention assistance loans.

102310. Export financing loans.

112311. Reporting and inspection.

122312. Limitations.

13§ 2301. Scope.

14This chapter relates to the Small Business First Program.

15§ 2302. Definitions.

16The following words and phrases when used in this chapter
17shall have the meanings given to them in this section unless the
18context clearly indicates otherwise:

19"Agricultural processor." A person that adds value by
20subjecting one or more farm commodities to a process of
21manufacture, development or preparation for sale or a person
22that converts a farm product into a marketable form.

23"Agricultural producer." A person involved in the management
24and use of a normal agricultural operation for the production of
25a farm commodity.

26"Apparel products." Products manufactured, woven, cut, sewn
27or otherwise similarly processed by mechanical or human effort
28from fabrics, leather or cloth and made for use as clothing,
29shoes or other attire.

30"Applicant." A person that applies for a loan in accordance

1with this chapter.

2"Area loan organization." A local development district, an
3industrial development agency organized and existing under the
4act of May 17, 1956 (1955 P.L.1609, No.537), known as the
5Pennsylvania Industrial Development Authority Act, or any other
6nonprofit economic development organization certified by the
7department as possessing the qualifications necessary to
8evaluate and administer loans made under this chapter.

9"Capital development project." Land, buildings, equipment
10and machinery and working capital which is acquired,
11constructed, renovated or used by a small business in accordance
12with any of the following:

13(1) As part of a for-profit project or venture not of a
14mercantile or service-related nature, except for hospitality
15industry projects.

16(2) As part of an effort to:

17(i) bring a small business into compliance with
18Federal or State environmental laws or regulations;

19(ii) complete an approved remediation project; or

20(iii) permit a small business to adopt generally
21acceptable pollution prevention practices.

22(3) As part of an effort to provide assistance to a
23small business that is a recycler of municipal or commercial
24waste or that is a manufacturer using recycled municipal or
25commercial waste materials.

26(4) As part of an effort to assist a small business with
27defense conversion activities.

28(5) As part of a for-profit project or venture to
29manufacture products to be exported out of the United States
30by a small business which is not of a mercantile or service-

1related nature, except for export-related services and
2international export-related mercantile ventures or advanced
3technology and computer-related services and mercantile
4ventures and which will increase this Commonwealth's national
5or international market shares.

6(6) As part of a for-profit project or venture that
7meets the requirements of section 2308 (relating to loans in
8distressed communities)

9(7) As part of an effort to assist in the start-up or
10expansion of a for-profit or not-for-profit child day-care
11center subject to licensure by the Commonwealth.

12"Child day-care center." Any premises in which child day
13care is provided simultaneously for seven or more children who
14are not related to the provider.

15"Community development institution." Any of the following:

16(1) An area loan organization for a distressed
17community.

18(2) A community development financial institution
19located in a distressed community and approved by the
20department.

21"Distressed community." A community which has any of the
22following:

23(1) A census tract or other specifically defined
24geographic area in which there is any of the following:

25(i) A median income below 80% of the median income
26for the United States or this Commonwealth.

27(ii) Twenty percent or more of the population is
28below the poverty level by family size published by the
29Bureau of the Census.

30(iii) An unemployment rate 50% higher than the

1national average.

2(2) An area which is designated a subzone, expansion
3subzone or improvement subzone under the act of October 6, 
41998 (P.L.705, No.92), known as the Keystone Opportunity Zone
5and Keystone Opportunity Expansion Zone Act.

6(3) Any other geographic area designated by the
7department as distressed. The designation shall be published
8in the Pennsylvania Bulletin.

9"EDA loan." A loan made under this chapter utilizing funds
10made available to the department under the Public Works and
11Economic Development Act of 1965 (Public Law 89-136, 42 U.S.C. § 
123121 et seq.).

13"Ex-Im Bank." The Export-Import Bank of the United States.

14"Export activity." An activity undertaken by a person within
15this Commonwealth related to exports.

16"Export business." A person that is engaged in a for-profit
17enterprise involving export activities and that employs 250 or
18fewer individuals.

19"Exports." Goods or services to be sold or performed outside
20the United States.

21"Farm commodity." Any Pennsylvania-grown agricultural,
22horticultural, aquacultural, vegetable, fruit and floricultural
23product of the soil, livestock and meats, wools, hides, furs,
24poultry, eggs, dairy products, nuts, mushrooms, honey products
25and forest products.

26"Fund." The Small Business First Fund continued under
27section 2304 (relating to fund and accounts).

28"Hazardous substance." Any element, compound or material
29which is any of the following:

30(1) Regulated as a hazardous air pollutant under section

16.6 of the act of January 8, 1960 (1959 P.L.2119, No.787),
2known as the Air Pollution Control Act.

3(2) Defined as a hazardous waste under section 103 of
4the act of July 7, 1980 (P.L.380, No.97), known as the Solid
5Waste Management Act.

6(3) Regulated under the act of December 7, 1990 
7(P.L.639, No.165), known as the Hazardous Material Emergency
8Planning and Response Act.

9"Hospitality industry project." A for-profit project or
10venture which involves a small business that operates a hotel,
11motel or other lodging facility and that employs at least five
12full-time equivalent employees at the time an application is
13submitted to the department for financing. The term includes a
14for-profit project or venture which involves a small business
15that operates a restaurant or food service operation open to the
16public, that has been in continuous operation for at least five
17years and that employs at least five full-time equivalent
18employees at the time an application is submitted.

19"Insurance policy." An export credit insurance policy for
20small businesses offered by the Export-Import Bank of the United
21States.

22"Natural disaster." As defined in 35 Pa.C.S. § 7102
23(relating to definitions).

24"Normal agricultural operation." As defined in section 2 of
25the act of June 10, 1982 (P.L.454, No.133), entitled "An act
26protecting agricultural operations from nuisance suits and
27ordinances under certain circumstances."

28"Pollution prevention." The reduction or elimination of
29pollution at its source. The term does not include any of the
30following:

1(1) A substitution of one hazardous or toxic substance
2for another which will cause an increased risk to the
3environment or to human health.

4(2) A cross-media transfer.

5(3) A delisting of a hazardous waste or toxic chemical.

6"Pollution prevention assistance agency." Any of the
7following:

8(1) An area loan organization.

9(2) An industrial resource center created pursuant to
10the act of June 22, 2001 (P.L.400, No.31), known as the
11Industrial Resources Center Partnership Act.

12"Pollution prevention infrastructure." A capital development
13project which permits a small business to adopt or install
14pollution prevention equipment or processes to:

15(1) Reduce or reuse raw materials onsite.

16(2) Reduce the production of waste.

17(3) Reduce energy consumption.

18"Program." The Small Business First Program established
19under section 2303 (relating to establishment).

20"Reuse." Use of a product or component in its original form
21more than once.

22"Small business." A person that is engaged in a for-profit
23enterprise and that employs 100 or fewer individuals. The term
24includes the following:

25(1) An enterprise located in a small business incubator
26facility.

27(2) An agricultural processor.

28(3) An agricultural producer.

29(4) An enterprise which manufactures apparel products.

30(5) An enterprise which is a for-profit or not-for-

1profit child day-care center subject to licensure by the
2Commonwealth.

3"Working capital." Capital used by a small business for
4operations, excluding fixed assets and production machinery and
5equipment.

6§ 2303. Establishment.

7There is established within the department a program to be
8known as the Small Business First Program. The program shall be
9administered by the department and provide loans to eligible
10persons for certain projects which encourage job-creating and
11job-preserving economic development within this Commonwealth.

12§ 2304. Fund and accounts.

13(a) Fund.--The Small Business First Fund, created under
14section 1302(a) of the act of June 29, 1996 (P.L.434, No.67),
15known as the Job Enhancement Act, is continued. The Treasury
16Department shall credit the following to the fund:

17(1) Appropriations made by the General Assembly to the
18department for the program.

19(2) Federal funds made available under the Public Works
20and Economic Development Act of 1965 (Public Law 89-136, 42 
21U.S.C. § 3121 et seq.) or any other Federal statute,
22regulation or program for the program.

23(3) Payments from recipients of loans made from the
24fund.

25(4) Payments from recipients of loans made under the
26former act of July 2, 1984 (P.L.545, No.109), known as the
27Capital Loan Fund Act.

28(5) Interest income derived from investment of the money
29in the fund.

30(6) Any other deposits, payments or contributions from

1any other source made available to the department for the
2program.

3(b) Pollution prevention assistance.--The Pollution
4Prevention Assistance Account, created under the act of June 29, 
51996 (P.L.434, No.67), known as the Job Enhancement Act, is
6continued. The Treasury Department shall credit the following to
7this account:

8(1) Appropriations made by the General Assembly to the
9department for pollution prevention assistance.

10(2) Payments from recipients of loans made from the
11Pollution Prevention Assistance Account.

12(3) Transfers from the Hazardous Sites Cleanup Fund as
13established in section 602.3 of the act of March 4, 1971 
14(P.L.6, No.2), known as the Tax Reform Code of 1971.

15(4) Interest income derived from investment of the money
16in the Pollution Prevention Assistance Account.

17(5) Any other deposits, payments or contributions from
18any other source made available to the department for
19pollution prevention assistance.

20(c) Use of fund.--

21(1) Money in the fund may be used as follows:

22(i) By the department to make loans in accordance
23with this chapter and for administrative costs of the
24department in administering the program.

25(ii) By area loan organizations for administrative
26costs associated with the program which are approved by
27the department.

28(2) Money from the fund derived from appropriations
29specified for export financing assistance may be deposited by
30the department in banks or trust companies in special

1accounts. The special accounts must be continuously secured
2by a pledge of direct obligations of the United States or of
3the Commonwealth having an aggregate market value, exclusive
4of accrued interest, at least equal to the balance on deposit
5in the account. The securities shall be deposited with the
6department to be held by a trustee or agent satisfactory to
7the department. Banks and trust companies are authorized to
8give security under this paragraph. Money in these special
9accounts shall be paid out on order of the department.

10(d) Use of Pollution Prevention Assistance Account.--Money
11in the Pollution Prevention Assistance Account may be used by
12the department to provide loans to small businesses for the
13adoption or installation of pollution-prevention or energy-
14efficient equipment or processes in accordance with section 2309
15(relating to pollution prevention assistance loans).

16§ 2305. Department responsibilities.

17(a) General rule.--The department shall do all of the
18following:

19(1) Administer the program.

20(2) Establish written guidelines as necessary. Any
21guidelines established shall be included in the report
22required by Chapter 3 (relating to economic development
23financing strategy).

24(3) Deposit payments made by recipients in the fund or
25the Pollution Prevention Assistance Account, as appropriate.

26(4) Approve standards for area loan organization
27application fees.

28(5) Approve community development financial
29institutions.

30(b) Program.--In administering the program, the department

1may do any of the following:

2(1) Provide grants or other financial assistance to area
3loan organizations for any of the following purposes:

4(i) To establish loan reserve funds.

5(ii) To reimburse loan losses to commercial banks
6and other financial institutions as a means of
7encouraging the expansion and financing of small
8businesses.

9(2) Apply to the Ex-Im Bank for delegated authority
10lender status under the Ex-Im Bank's Working Capital Guaranty
11Program.

12(3) Utilize the outstanding portfolio of loans made
13under this chapter to raise additional funds by selling,
14securing, hypothecating or otherwise using such loan proceeds
15as a financing vehicle if the funds raised are used by the
16department for either of the following purposes:

17(i) To make new and additional loans under this
18chapter.

19(ii) To pay costs associated with financing.

20§ 2306. Capital development loans.

21(a) Application.--A small business may submit an application
22and any applicable application fee to its area loan organization
23requesting a loan for certain costs of a capital development
24project. The application shall be on the form required by the
25department and shall include or demonstrate all of the
26following:

27(1) The name and address of the applicant.

28(2) A statement of the amount of loan assistance sought.

29(3) A statement of the capital development project,
30including a detailed statement of the cost of the project.

1(4) A financial commitment from a responsible source for
2any cost of the capital development project in excess of the
3amount requested.

4(5) Any other information required by the department.

5(b) Area loan organization review.--

6(1) Upon receipt of a completed application, an area
7loan organization shall investigate and determine all of the
8following:

9(i) If the applicant is a small business.

10(ii) If the project is a capital development
11project.

12(iii) If, when the applicant is a small business,
13the capital development project demonstrates a
14substantial likelihood of creating or preserving
15employment activities in this Commonwealth or if, when
16the applicant is an agricultural producer, the project
17demonstrates a substantial likelihood of enhancing and
18growing normal agriculture operations.

19(iv) The ability of the applicant to meet and
20satisfy the debt service as it becomes due and payable.

21(v) The existence and sufficiency of collateral for
22the loan.

23(vi) Relevant criminal and credit history and
24ratings of the applicant as determined from outside
25credit reporting services and other sources.

26(vii) The number of employment opportunities to be
27created or preserved by the proposed capital development
28project.

29(viii) If the applicant complied with all other
30criteria established by the department.

1(2) Upon being satisfied that all requirements have been
2met, the area loan organizations shall recommend the
3applicant to the department and forward the application with
4all supporting documentation to the department for its review
5and approval.

6(c) Department review.--

7(1) Within 30 days of receiving a recommendation and a
8completed application, the department shall review the
9application. If the department is satisfied that all
10requirements have been met, the department may approve the
11loan request in accordance with the following:

12(i) A loan for land, buildings and machinery and
13equipment may not exceed $200,000 or 50% of the total
14capital development project costs, whichever is less. For
15the purposes of this subparagraph, capital development
16project costs incurred during the 12-month period prior
17to the date of submission of the application to the
18department shall be considered part of the total capital
19development project costs.

20(ii) A loan for working capital may not exceed
21$100,000 or 50% of the total capital development project
22costs, whichever is less.

23(iii) Except for loans to agricultural producers, a
24loan must create or preserve one job for every $25,000
25loaned.

26(2) The department shall notify the area loan
27organization and applicant of its decision.

28(d) Approvals.--For applications which are approved, the
29department shall draw an advance equal to the principal amount
30of the loan from the fund. The advance shall be forwarded to the

1area loan organization and, upon receipt by the area loan
2organization, shall become an obligation of the area loan
3organization. Prior to providing loan funds to the applicant,
4the area loan organization shall require the applicant to
5execute a note and to enter into a loan agreement. In addition
6to the requirements of subsection (e), the loan agreement shall
7include a provision requiring the recipient to use the loan
8proceeds to pay the costs of the capital development project.
9The department may require the area loan organization to impose
10other terms and conditions on the recipient if the department
11determines that they are in the best interests of this
12Commonwealth, including a provision requiring collateral for any
13penalty imposed under subsection (g).

14(e) Loan terms.--A loan agreement entered into in accordance
15with subsection (c) shall do all of the following:

16(1) State the collateral securing the loan. All loans
17shall be secured by lien positions on collateral at the
18highest level of priority as may be determined by the area
19loan organization with the approval of the department.

20(2) State the repayment period in accordance with the
21following:

22(i) A loan for real property shall have a repayment
23period of up to 15 years.

24(ii) A loan for machinery and equipment shall have a
25repayment period of up to ten years.

26(iii) A loan for working capital shall have a
27repayment period of up to three years.

28(iv) If, in a capital development project, there are
29two or more uses planned, the loan terms may be blended.

30(3) State the interest rate in accordance with the

1following:

2(i) Except as provided in subparagraph (ii), loans
3shall be made at an interest rate not to exceed 5% for
4the term of the loan.

5(ii) A loan to a small business which is an
6agricultural producer shall be made at an interest rate
7of not less than 2% for the term of the loan if all of
8the following apply:

9(A) A declaration under 35 Pa.C.S. § 7301(c)
10(relating to general authority of Governor) is in
11effect for at least ten days prior to the date of
12application.

13(B) The application is made within nine months
14of termination of the declaration.

15(C) The agricultural producer is in the area
16which has been declared to be a natural disaster
17area.

18(f) Loan administration.--A loan made under this section
19shall be administered in accordance with departmental policies
20and procedures by the area loan organization which made the
21loan. Each area loan organization shall submit an annual report
22on the form required by the department and which includes or
23demonstrates all of the following:

24(1) Each outstanding loan.

25(2) The date approved.

26(3) The original principal amount.

27(4) The current principal balance.

28(5) The interest rate.

29(6) The purpose for which the loan was made.

30(7) An enumeration of any problems or issues which have

1arisen with regard to each loan.

2(8) A statement regarding the progress of the small
3business in creating or preserving its requisite number of
4employment opportunities.

5(9) Any other information or documentation required by
6the department.

7(g) Penalty.--

8(1) Except as provided in paragraph (2), the department
9shall impose a penalty upon a recipient if the recipient
10fails to create or preserve the number of employment
11opportunities specified in its approved application.

12(2) The department may waive the penalty required by
13paragraph (1) if the department determines that the failure
14was due to circumstances outside the control of the
15recipient.

16(3) The amount of the penalty imposed under paragraph
17(1) shall be equal to an increase in the interest rate to 2%
18greater than the current prime interest rate for the
19remainder of the loan.

20(h) Defaults.--The department may by foreclosure take title
21to a capital development project which it financed if
22acquisition is necessary to protect a loan made under this
23section. The department shall pay all costs arising out of the
24foreclosure and acquisition from moneys held in the fund. The
25department may, in order to minimize financial losses and
26sustain employment, lease the capital development project. The
27department may withdraw moneys from the fund to purchase first
28mortgages and to make payments on first mortgages on any capital
29development project which it financed where purchase or payment
30is necessary to protect a loan made under this section. The

1department may sell, transfer, convey and assign the first
2mortgages and shall deposit any moneys derived from the sale of
3any first mortgages in the fund.

4§ 2307. EDA loans.

5(a) Application and administration procedures.--The
6department shall establish application and administration
7procedures to be used for EDA loans. The procedures shall be
8established by guidelines and shall conform in all respects to
9those procedures required or established by the Economic
10Development Administration for use of Federal funds under the
11Public Works and Economic Development Act of 1965 (Public Law
1289-136, 42 U.S.C. § 3121 et seq.).

13(b) Eligibility for EDA loans.--The department shall
14establish eligibility requirements to be used for EDA loans. The
15requirements shall be established by guidelines and shall
16conform in all respects to those procedures required or
17established by the Economic Development Administration for use
18of Federal funds under the Public Works and Economic Development
19Act of 1965.

20§ 2308. Loans in distressed communities.

21(a) Application.--A small business located in a distressed
22community may submit an application and any applicable
23application fee to a community development institution
24requesting a loan for certain costs of a capital development
25project. The application shall be on the form required by the
26department and shall include or demonstrate all of the
27following:

28(1) The name and address of the applicant.

29(2) A statement that the small business is engaged in
30business-to-public service or in the mercantile, commercial

1or point-of-sale retail business sectors.

2(3) A statement of the amount of loan assistance sought.

3(4) A statement of the capital development project,
4including a detailed statement of the cost of the project.

5(5) A financial commitment from a responsible source for
6the cost of the capital development project in excess of the
7amount requested.

8(6) Any other information required by the department.

9(b) Community development institution review.--

10(1) Upon receipt of a completed application, a community
11development institution shall investigate and determine all
12of the following:

13(i) If the applicant is a small business which is
14engaged in business-to-public service or in the
15mercantile, commercial or point-of-sale retail business
16sectors in accordance with conditions or criteria
17established by the department.

18(ii) If the project is a capital development
19project.

20(iii) If the applicant has demonstrated a direct
21impact on the community in which the capital development
22project is or will be located, on residents of that
23community or on the local and/or regional economy. The
24department shall establish criteria that will assist in
25making this demonstration.

26(iv) Number of employment opportunities to be
27created or preserved by the proposed capital development
28project.

29(v) If the applicant complied with all other
30criteria established by the department.

1(2) Upon being satisfied that all requirements have been
2met, the community development institution shall recommend
3the applicant to the department and forward the application
4with all supporting documentation to the department for its
5review and approval.

6(c) Department review.--

7(1) Upon receipt of a recommendation and a completed
8application, the department shall investigate and determine
9all of the following:

10(i) The ability of the applicant to meet and satisfy
11the debt service as it becomes due and payable. In
12reviewing repayment obligations, loans shall not be
13approved on the basis of direct financial return on
14investment and shall not be held to the loan loss
15standards of private commercial lenders. Loans shall be
16reviewed for the purpose of establishing a strong
17economic base and promoting entrepreneurial activity
18within the distressed community.

19(ii) The existence and sufficiency of collateral for
20the loan.

21(iii) Relevant criminal and credit history and
22ratings of the applicant as determined from outside
23credit reporting services and other sources.

24(2) If the department is satisfied that all requirements
25have been met, the department may approve the loan request in
26an amount not to exceed $200,000 or 50% of the total capital
27development project costs, whichever is less. For the purpose
28of this paragraph, capital development project costs, except
29the costs related to working capital, incurred during the 12-
30month period prior to the date of submission of the

1application to the department shall be considered part of the
2total capital development project costs.

3(3) The department shall notify the community
4development institution and applicant of its decision.

5(d) Approvals.--For applications which are approved, the
6department shall draw an advance equal to the principal amount
7of the loan from the fund and, prior to providing loan funds to
8the applicant, the department shall require the applicant to
9execute a note and to enter into a loan agreement. In addition
10to the requirements of subsection (e), the loan agreement shall
11include a provision requiring the recipient to use the loan
12proceeds to pay the costs of the capital development project.
13The department may impose other terms and conditions on the
14recipient if the department determines they are in the best
15interests of this Commonwealth, including a provision requiring
16collateral for any penalty imposed under subsection (g).

17(e) Loan terms.--A loan agreement entered into in accordance
18with subsection (d) shall do all of the following:

19(1) State any collateral securing the loan. The
20department may use its best judgment to identify and secure
21collateral.

22(2) State the repayment period which may be flexible.

23(3) State the interest rate which may not be less than
242% nor more than 5% for the term of the loan.

25(4) State that the recipient agrees to maintain, at a
26minimum, the number of jobs in existence as of the date of
27loan application.

28(f) Loan administration.--A loan made under this section
29shall be administered in accordance with departmental policies
30and procedures.

1(g) Penalty.--

2(1) Except as provided in paragraph (2), the department
3shall impose a penalty upon a recipient if the recipient
4fails to preserve the number of employment opportunities
5specified in its approved application.

6(2) The department may waive the penalty required by
7paragraph (1) if the department determines that the failure
8was due to circumstances outside the control of the
9recipient.

10(3) The amount of any penalty imposed under paragraph
11(1) shall be equal to an increase in the interest rate to 2%
12greater than the current prime interest rate for the
13remainder of the loan.

14(h) Defaults.--The department may take title by foreclosure
15to a capital development project which it financed where
16acquisition is necessary to protect a loan made under this
17section. The department shall pay all costs arising out of the
18foreclosure and acquisition from money held in the fund. The
19department may, in order to minimize financial losses and
20sustain employment, lease the capital development project. The
21department may withdraw money from the fund to purchase first
22mortgages and to make payments on first mortgages on any capital
23development project which it financed if purchase or payment is
24necessary to protect a loan made under this section. The
25department may sell, transfer, convey and assign the first
26mortgages and shall deposit in the fund money derived from the
27sale of any first mortgages.

28§ 2309. Pollution prevention assistance loans.

29(a) Application.--A small business may submit an application
30and any application fee to a pollution prevention assistance

1agency requesting a loan for a pollution prevention
2infrastructure. The application shall be on the form required by
3the department and shall include or demonstrate all of the
4following:

5(1) The name and address of the applicant.

6(2) A statement of the amount of loan assistance sought.

7(3) A statement of the pollution prevention
8infrastructure, including a detailed statement of the cost of
9the infrastructure.

10(4) A financial commitment from a responsible source for
11the cost of the pollution prevention infrastructure in excess
12of the amount requested.

13(5) Any other information required by the department.

14(b) Pollution prevention assistance agency review.--

15(1) Upon receipt of a completed application, a pollution
16prevention assistance agency shall investigate and determine
17all of the following:

18(i) If the applicant is a small business.

19(ii) If the project is for pollution prevention
20infrastructure.

21(iii) If the applicant complied with all other
22criteria established by the department.

23(2) Upon being satisfied that all requirements have been
24met, the pollution prevention assistance agency shall
25recommend the applicant to the department and forward the
26application with all supporting documentation to the
27department for its review and approval.

28(c) Department review.--

29(1) Upon receipt of a recommendation and a completed
30application, the department shall investigate and determine

1all of the following:

2(i) If the pollution prevention infrastructure
3demonstrates a substantial likelihood of preventing or
4reducing pollution. The Department of Environmental
5Protection shall assist the department in reviewing the
6applications and provide technical assistance.

7(ii) The ability of the applicant to meet and
8satisfy the debt service as it becomes due and payable.
9In reviewing repayment obligations, loans shall not be
10approved on the basis of direct financial return on
11investment and shall not be held to the loan loss
12standards of private commercial lenders. Loans shall be
13reviewed for the purpose of reducing pollution through
14source reduction technologies or processes.

15(iii) The existence and sufficiency of collateral
16for the loan.

17(iv) Relevant criminal and credit history and
18ratings of the applicant as determined from outside
19credit reporting services and other sources.

20(2) If the department is satisfied that all requirements
21have been met, the department may approve the loan request. A
22loan approved under this subsection may not exceed the lesser
23of:

24(i) $100,000; or

25(ii) 75% of infrastructure costs.

26(3) The department shall notify the pollution prevention
27assistance agency and applicant of its decision.

28(d) Approvals.--For applications which are approved, the
29department shall draw an advance equal to the principal amount
30of the loan from the Pollution Prevention Assistance Account.

1Prior to providing loan funds to the applicant, the department
2shall require the applicant to execute a note and to enter into
3a loan agreement. In addition to the requirements of subsection
4(e), the loan agreement shall include a provision requiring the
5recipient to use the loan proceeds to pay the costs of the
6pollution prevention infrastructure. The department may impose
7other terms and conditions on the recipient if the department
8determines they are in the best interests of this Commonwealth,
9including a provision requiring collateral for any penalty
10imposed under subsection (g).

11(e) Loan terms.--A loan agreement entered into in accordance
12with subsection (d) shall do all of the following:

13(1) State the collateral securing the loan. All loans
14shall be secured by lien positions on collateral at the
15highest level of priority as may be determined by the
16department.

17(2) State the repayment period which may not exceed 10
18years.

19(3) State that the interest rate is 2%.

20(4) State that any loan fee is not to exceed 5% of the
21loan amount.

22(f) Loan administration.--A loan made under this section
23shall be administered in accordance with departmental policies
24and procedures.

25(g) Penalty.--

26(1) Except as provided in paragraph (2), the department
27shall impose a penalty upon a recipient if the recipient
28fails to carry out the pollution prevention infrastructure
29project as specified in its approved application.

30(2) The department may waive the penalty required by

1paragraph (1) if the department determines that the failure
2was due to circumstances outside the control of the
3recipient.

4(3) The amount of any penalty imposed under paragraph
5(1) shall be equal to an increase in the interest rate to 2%
6greater than the current prime interest rate for the
7remainder of the loan.

8(h) Defaults.--The department may take title by foreclosure
9to a pollution prevention infrastructure which it financed if
10acquisition is necessary to protect a loan made under this
11section. The department shall pay all costs arising out of the
12foreclosure and acquisition from money held in the Pollution
13Prevention Assistance Account. The department may, in order to
14minimize financial losses and sustain employment, lease the
15pollution prevention infrastructure. The department may withdraw
16money from the Pollution Prevention Assistance Account to
17purchase first mortgages and to make payments on first mortgages
18on any pollution prevention infrastructure which it financed if
19the purchase or payment is necessary to protect a loan made
20under this section. The department may sell, transfer, convey
21and assign the first mortgages and shall deposit any money
22derived from the sale of any first mortgages in the Pollution
23Prevention Assistance Account.

24§ 2310. Export financing loans.

25(a) Application.--A person may submit an application and any
26applicable application fee to the department or its area loan
27organization requesting a loan for certain costs of a capital
28development project which will be used in export activities. The
29application must be on the form required by the department and
30must include or demonstrate all of the following:

1(1) The name and address of the applicant.

2(2) A statement of the amount of loan assistance sought.

3(3) A statement of the capital development project,
4including a detailed statement of the cost of the project.

5(4) A financial commitment from a responsible source for
6any cost of the capital development project in excess of the
7amount requested.

8(5) A statement that the loan, if approved, would not
9supplant funding from private sector sources on commercially
10reasonable terms.

11(6) Any other information required by the department.

12(b) Review.--Upon receipt of a completed application, the
13department shall investigate and determine all of the following:

14(1) If the applicant is an export business.

15(2) If the project is a capital development project.

16(3) The ability of the applicant to meet and satisfy the
17debt service as it becomes due and payable.

18(4) The existence and sufficiency of collateral for the
19loan.

20(5) Relevant criminal and credit history and ratings of
21the applicant as determined from outside credit reporting
22services and other sources.

23(6) Number of employment opportunities to be created or
24preserved by the proposed capital development project.

25(7) If the applicant complied with all other criteria
26established by the department.

27(c) Approvals.--If the department is satisfied that all
28requirements have been met, the department may approve the loan
29request. A loan approved under this section may not exceed
30$350,000. The department shall notify the applicant and, if

1applicable, the area loan organization of its decision. The
2department shall reserve an amount equal to the principal amount
3of the loan within the fund or the special account authorized by
4section 2304(c)(2) (relating to fund and accounts). Prior to
5providing funds to the applicant, the department shall require
6the applicant to execute a note and enter into a loan agreement.
7In addition to the requirements of subsection (d), the loan
8agreement shall include a provision requiring the recipient to
9use the loan proceeds to pay the costs of the capital
10development project. The department may impose other terms and
11conditions on the recipient if the department determines they
12are in the best interests of this Commonwealth, including any of
13the following:

14(1) A provision requiring collateral for any penalty
15imposed under subsection (f).

16(2) A provision requiring the person to be eligible for
17an insurance policy.

18(3) A provision requiring the loan to be guaranteed by
19the Working Capital Guaranty Program offered by the Ex-Im
20Bank.

21(4) A provision requiring an export credit sales
22contract insured by an insurance policy.

23(d) Loan terms.--A loan agreement entered into in accordance
24with subsection (c) shall do all of the following:

25(1) State the collateral securing the loan. All loans
26shall be secured by lien positions on collateral at the
27highest level of priority as may be determined by the
28department.

29(2) State the repayment period as determined by the
30department.

1(3) State the interest rate as determined by the
2department.

3(e) Loan administration.--A loan made under this section
4shall be administered in accordance with departmental policies
5and procedures.

6(f) Penalty.--

7(1) Except as provided in paragraph (2), the department
8shall impose a penalty upon a recipient if the recipient
9fails to carry out the export activities specified in its
10approved application.

11(2) The department may waive the penalty required by
12paragraph (1) if the department determines that the failure
13was due to circumstances outside the control of the
14recipient.

15(3) The amount of the penalty imposed under paragraph
16(1) shall be equal to an increase in the interest rate to 2%
17greater than the current prime interest rate for the
18remainder of the loan.

19(g) Defaults.--The department may, by foreclosure, take
20title to a capital development project which it financed if
21acquisition is necessary to protect a loan made under this
22section. The department shall pay all costs arising out of the
23foreclosure and acquisition from money held in the fund or a
24special account authorized by section 2304(c)(2). The department
25may, in order to minimize financial losses and sustain
26employment, lease the capital development project. The
27department may withdraw money from the fund or a special account
28authorized by section 2304(c)(2) to purchase first mortgages and
29to make payments on first mortgages on any capital development
30project which it financed if purchase or payment is necessary to

1protect a loan made under this section. The department may sell,
2transfer, convey and assign the first mortgages and shall
3deposit any money derived from the sale of any first mortgages
4in the fund or a special account authorized by section 2304(c)
5(2).

6§ 2311. Reporting and inspection.

7(a) Inspection.--An applicant or a recipient shall, upon
8request, permit authorized employees of the department or its
9agent to inspect the plant, books and records of the applicant
10or recipient.

11(b) Updating.--An applicant or a recipient shall provide
12updated information to the department and its agents if
13conditions change or to the extent that the information
14originally given becomes inaccurate or misleading.

15(c) Periodic reports.--A recipient shall provide the
16department and its agents with such periodic financial reports
17as the department may require until the loan is repaid in full.

18(d) Financial and performance audits.--An agent of the
19department shall annually submit to the department, at the
20agent's expense, an independent financial audit. If the audit
21reveals misconduct of a material nature on the part of the
22agent, the department shall take appropriate action.

23§ 2312. Limitations.

24No loans shall be recommended or approved if the proceeds of
25the loan could do any of the following:

26(1) Cause, aid or assist directly in the relocation of
27any business operations from one part of this Commonwealth to
28another unless there is at least a 25% net increase in
29employment.

30(2) Refinance any portion of the total cost of a capital

1development project, pollution prevention infrastructure or
2other existing loans or debt.

3(3) Finance a capital development project or pollution
4prevention infrastructure located outside the geographic
5boundaries of this Commonwealth.

6(4) Provide funds, directly or directly, for payment
7distribution or as loan owners, partners or shareholders of a
8small business, except as ordinary compensation for services
9rendered.

10(5) Provide funds for speculation in real or personal
11property, whether tangible or intangible.

12CHAPTER 29

13MACHINERY AND EQUIPMENT LOANS

14

15Sec.

162901. Scope.

172902. Definitions.

182903. Establishment.

192904. Machinery and Equipment Loan Fund.

202905. Eligibility for loans; terms and conditions.

212906. Application and administration.

222907. Powers of secretary.

232908. Reporting and inspection.

242909. Nondiscrimination.

252910. Conflict of interest.

262911. Reports to General Assembly.

272912. Guidelines.

28§ 2901. Scope.

29This chapter relates to the Machinery and Equipment Loan
30Program.

1§ 2902. Definitions.

2The following words and phrases when used in this chapter
3shall have the meanings given to them in this section unless the
4context clearly indicates otherwise:

5"Business enterprise." A for-profit corporation, partnership
6or proprietorship. The term includes a medical facility.

7"Farm commodity." Any Pennsylvania-grown agricultural,
8horticultural, aquacultural, vegetable, fruit and floricultural
9product of the soil, livestock and meats, wools, hides, furs,
10poultry, eggs, dairy products, nuts, mushrooms, honey products
11and forest products.

12"Fund." The Machinery and Equipment Loan Fund created and
13established by this chapter.

14"Medical facility." An entity licensed as a hospital under
15the act of June 13, 1967 (P.L.31, No.21), known as the Public
16Welfare Code, or the act of July 19, 1979 (P.L.130, No.48),
17known as the Health Care Facilities Act.

18"Normal agricultural operation." The term shall have the
19same meaning as given to it in section 2 of the act of June 10, 
201982 (P.L.454, No.133), entitled "An act protecting agricultural
21operations from nuisance suits and ordinances under certain
22circumstances."

23"Production agriculture." The management and use of a normal
24agricultural operation for the production of a farm commodity.

25§ 2903. Establishment.

26There is established within the department a program to be
27known as the Machinery and Equipment Loan Program. The program
28shall be administered by the department and provide loans to
29business enterprises for machinery and equipment.

30§ 2904. Machinery and Equipment Loan Fund.

1(a) Creation.--There is created a special account in the
2Treasury Department, to be known as the Machinery and Equipment
3Loan Fund, to which shall be credited all program appropriations
4made by the General Assembly, all proceeds from loan repayments
5and any and all other deposits, payments or contributions from
6any other source made available to the fund. The fund shall
7operate as a revolving fund whereby all appropriations, payments
8and interest made thereto may be applied and reapplied to the
9purposes of this chapter.

10(b) Credits to fund.--All appropriations, deposits and
11contributions made to the fund shall be immediately credited in
12full to the fund, and earnings on the moneys held in the fund
13shall also be credited to the fund for the purposes of this
14chapter.

15§ 2905. Eligibility for loans; terms and conditions.

16(a) Loans; general rules.--The secretary may make advances
17from the fund, subject to the terms, conditions and restrictions
18provided under this chapter, for the purpose of making loans to
19business enterprises involved in industrial processes, mining,
20manufacturing, production agriculture, information technology,
21biotechnology, service as a medical facility or other industrial
22or technology sectors, as defined by the department, to acquire
23and install new machinery and equipment or upgrade existing
24machinery and equipment, including the acquisition, application
25and utilization of computer hardware and software.

26(1) All loans shall be subject to all of the following
27conditions:

28(i) Be made to eligible business enterprises under
29the provisions of this chapter.

30(ii) Have a maximum loan ceiling of $5,000,000 or

150% of the cost of the project, whichever is less.

2(iii) Be limited to the purchase and installation of
3new equipment and machinery or the upgrade of existing
4machinery and equipment. This subparagraph includes the
5acquisition, application and utilization of computer
6hardware and software.

7(iv) Be limited to projects that demonstrate the
8creation or retention of one job for every $25,000
9received from the fund. This subparagraph does not apply
10to loans made to business enterprises involved in
11production agriculture or to loans made to medical
12facilities.

13(v) Have an interest rate which shall be established
14by the secretary.

15(vi) Have a term of not in excess of ten years.

16(2) For loans to medical facilities, loan funds may be
17used only to finance the acquisition, installation and
18utilization of machinery and equipment, including computer
19hardware and software components, to be used in the
20prescribing and dispensing of medication for medical facility
21patients.

22(b) Restrictions.--No loans shall be made that do any of the
23following:

24(1) Cause, aid or assist in, directly or indirectly, the
25relocation of any business enterprise from one part of this
26Commonwealth to another unless there is at least a 25%
27increase in net employment.

28(2) Supplant funding that is otherwise available
29expeditiously from private sector sources on commercially
30reasonable terms.

1(3) Be for the purpose of refinancing any portion of the
2total project cost or other existing loans or debt.

3(4) Be for the purpose of financing projects located
4outside the geographic boundaries of this Commonwealth.

5(5) Be for the purpose of paying off a creditor that is
6inadequately secured and is in a position to sustain a loss.

7(6) Be for the purpose of repaying a debt owed to a
8small business investment company.

9(7) Provide funds for speculation in any kind of
10property, real or personal, tangible or intangible.

11(c) Security.--All loans shall be secured by no less than a
12second lien position on the equipment purchased and other
13sufficient collateral as determined by the secretary.

14§ 2906. Application and administration.

15(a) Procedures.--Application and administration procedures
16for fund loans shall be established by the secretary.

17(b) Receipt.--The secretary shall receive applications from
18eligible business enterprises for machinery and equipment loans.
19Applications shall be made to the secretary in the form and
20manner as the department may require.

21(c) Investigation.--Upon receipt of the application, the
22secretary shall investigate and review the application and
23either approve or disapprove the loan application by proper
24action of the department. The decision of the secretary shall be
25based, in whole or in part, upon the following criteria:

26(1) Ability of the applicant to meet and satisfy all
27debt service as it becomes due and payable.

28(2) Sufficiency of available collateral, including
29satisfactory lien positions on real and personal property.

30(3) Eligibility of the applicant as a business

1enterprise involved in industrial processes, manufacturing,
2mining, production agriculture, information technology,
3biotechnology, services as a medical facility or other
4industrial or technology sectors as defined by the secretary.

5(4) Sufficient evidence that funds shall be used only to
6acquire and install new equipment and machinery or upgrade
7existing equipment and machinery, including the acquisition,
8application and utilization of computer hardware and
9software.

10(5) Capital needs of the applicant.

11(6) Conformity of the project to the provisions of this
12chapter.

13(7) Relevant criminal and credit history and ratings of
14applicant as determined from outside credit reporting
15services and other sources.

16(8) Number of net employment opportunities created and
17retained by the proposed project. This paragraph does not
18apply to business enterprises involved in production
19agriculture or medical facilities.

20(9) Supporting evidence that the loan project will
21increase the firm's competitiveness and value added within
22its respective industry.

23(10) Explanation of how the loan will aid the
24Commonwealth in its efforts to assist business enterprises to
25increase their productivity and improve the future
26competitive position of this Commonwealth's industries.

27(11) Compliance with the loan amount limitations
28provided for machinery and equipment loans.

29(12) Payment to date of all tax obligations due and
30owing to the Commonwealth or any political subdivision

1thereof.

2(13) Conformity of all aspects of the loan transaction
3with the substantive and procedural provisions of this
4chapter and regulations promulgated hereunder.

5(14) Such information and documentation as the secretary
6shall require.

7(d) Notification.--The secretary shall notify the applicant
8of final approval or disapproval of the loan application within
9a reasonable period of time following the receipt of the
10application. In the case of approval of a loan application, the
11secretary shall arrange to draw the loan amount from the fund
12and advance the sum to the recipient. The advance shall be made
13available in the form of a loan transaction, which loan shall be
14evidenced by a note executed by the recipient and secured in a
15manner as the secretary shall require in conformity in all
16respects to the loan as approved by the secretary.

17(e) Policy requirements and report.--All loans shall be
18administered and monitored by the department in accordance with
19the policies and procedures prescribed by the secretary. On or
20before September 1 of each year, the secretary shall prepare a
21report that includes the following:

22(1) Each outstanding loan.

23(2) The date of approval.

24(3) The original principal balance.

25(4) The current principal balance.

26(5) The interest rate.

27(6) The purpose for which the loan was made.

28(7) An enumeration of any problems or issues which have
29arisen with regard to each loan.

30(8) A statement regarding the progress of the business

1enterprise in creating and retaining its requisite number of
2employment opportunities.

3(9) Such other information and documentation as the
4secretary shall require.

5(f) Penalty for noncompliance.--In the event that a loan
6recipient shall not comply with its approved application by
7failing to create or preserve the number of employment
8opportunities specified in its approved application, the
9secretary shall impose a penalty equal to an increase in the
10interest rate to 2% greater than the current prime interest rate
11for the remainder of the loan unless the penalty is waived by
12the secretary because the failure is due to circumstances
13outside the control of the loan recipient. The penalty shall be
14payable in installments that the secretary deems appropriate.

15§ 2907. Powers of secretary.

16The secretary shall have and may exercise all powers and
17authority necessary to the proper administration and
18implementation of this chapter and shall have the authority to
19adopt policies, procedures and guidelines and promulgate rules
20and regulations necessary to effectuate the provisions of this
21chapter.

22§ 2908. Reporting and inspection.

23(a) Inspection.--Each business enterprise which applies for
24or receives assistance under this chapter, upon reasonable
25request of the department, shall permit duly authorized
26employees of the department to inspect the plant, books and
27records of the business enterprise.

28(b) Updating.--Each business enterprise shall update the
29information given to the department in its application if
30conditions change or to the extent that the information given

1originally becomes inaccurate or misleading.

2(c) Periodic reports.--Each recipient of assistance under
3this chapter shall provide the department with periodic
4financial reports as the secretary may require until such time
5as the loan is paid off.

6§ 2909. Nondiscrimination.

7No loan shall be made to a business enterprise unless the
8business enterprise certifies to the department, in a form
9satisfactory to the department, that it shall not discriminate
10against any employee or any applicant for employment because of
11race, religion, color, national origin, sex or age. The business
12enterprise shall also certify to the department that it is not
13currently under citation for pollution violations and that in
14the future it will meet all applicable antipollution standards.

15§ 2910. Conflict of interest.

16No employee of the department shall, either directly or
17indirectly, be a party to or have any financial interest in any
18contract or agreement arising pursuant to this chapter.

19§ 2911. Reports to General Assembly.

20(a) Annual reports.--On or before September 1 of each year,
21the secretary shall provide a report to the Secretary of the
22Senate and to the Chief Clerk of the House of Representatives.
23The report shall describe all relevant activities of the
24department pursuant to this chapter and shall include the
25following:

26(1) List of business enterprises receiving loans from
27the fund and the amounts and terms of this assistance.

28(2) Loan amounts repaid. Information under this
29paragraph may be reported in the aggregate.

30(3) Loans outstanding, balances due and any penalties

1imposed. Information under this paragraph may be reported in
2the aggregate.

3(4) Jobs created by businesses receiving funds in
4previous years. Information under this paragraph may be
5reported in the aggregate.

6(5) Other relevant information as determined by the
7secretary.

8(b) Availability of departmental reports.--Reports prepared
9by the secretary under section 2906(e) (relating to application
10and administration) shall be made available upon request to
11members of the General Assembly.

12§ 2912. Guidelines.

13The department shall develop written guidelines for the
14implementation of this chapter.]

15Section 2. Section 1542(b) of Title 64 is amended to read:

16§ 1542. Revolving loan program accounts.

17* * *

18[(b) The First Industries Program account.--The authority
19shall establish an account for the program established in
20section 1552 (relating to First Industries Program). Proceeds of
21bonds issued to fund the First Industries Program, any moneys
22received as loan repayments or in repayment or recovery of loan
23guarantees under the program, or moneys otherwise made available
24to the program, shall be deposited in the account and made
25available for additional planning grants or loans or used for
26additional loan guarantees as provided in section 1552, subject
27to the provisions of any pledge to or agreement made by the
28authority with obligees of the authority.]

29Section 3. Sections 1552 and 1553 of Title 64 are repealed:

30[§ 1552. First Industries Program.

1(a) Establishment.--There is established a program to be
2known as the First Industries Program. The program shall provide
3financial assistance for projects related to tourism and
4agriculture located within this Commonwealth. The board shall
5allocate funds made available to the program among the different
6methods of financing authorized in this section.

7(b) Applications for planning grants.--An applicant may
8submit an application to the authority requesting a planning
9grant in an amount not to exceed $250,000 for the costs of
10predevelopment activities and feasibility studies for a project
11related to tourism or agriculture. The application shall be on
12the form required by the board and shall include or demonstrate
13all of the following:

14(1) The applicant's name and address.

15(2) The location of the project.

16(3) A description of the project.

17(4) An estimate of the cost of the predevelopment
18activities and feasibility studies and the goal to be
19achieved by carrying out the proposed activities or studies.

20(5) A statement of the amount of the planning grant
21sought.

22(6) Any other information required by the board.

23(c) Review and approval of planning grant applications.--

24(1) The board shall review the application to determine
25that the project demonstrates one or more of the following:

26(i) The project will have a demonstrable impact on
27the economy or well-being of the neighborhood, community
28or region where the project will be located.

29(ii) The project will promote research and
30development efforts leading to increased

1commercialization or utilization of farm commodities.

2(iii) The project will result in environmentally
3friendly or energy efficient operations related to
4agriculture, including projects authorized by the act of
5December 12, 1994 (P.L.888, No.128), known as the
6Agricultural By-Product Management Technology Act.

7(iv) The project will result in more cost-effective
8and efficient marketing of regional assets related to
9tourism or agriculture.

10(v) The project will result in a substantial
11increase in revenues for the Commonwealth or the host
12municipality.

13(vi) The project proposes to utilize Commonwealth-
14owned natural resources for public/private development of
15tourism.

16(2) Upon being satisfied that the requirements of
17paragraph (1) have been met, the board may approve the
18application, and, if approved, the authority shall award a
19planning grant.

20(3) Copies of all reports and studies prepared with
21planning grant funds shall be filed with the authority and
22shall be made available to any person upon request.

23(d) Loans to applicants.--If the department approves an
24application for a loan under the programs established in 12
25Pa.C.S. Ch. 23 (relating to small business first) or 29
26(relating to machinery and equipment loans), the department may
27request that the authority finance the loan. Upon being
28satisfied that the project is related to agriculture or tourism,
29the board may approve the request, and, if approved, the
30authority shall award a loan. Loans made under this subsection

1shall be administered by the department. Payments received shall
2be forwarded to the authority and credited to the account
3established in accordance with section 1542(b) (relating to
4revolving loan program accounts).

5(e) Loan guarantees.--

6(1) An applicant may request a guarantee for a loan to
7be made by a commercial lending institution or community
8development financial institution to assist with the
9financing of a project related to tourism or agriculture. The
10applicant may be the commercial lending institution or
11community development financial institution applying on
12behalf of a borrower. The application must be on the form
13required by the board and must include or demonstrate all of
14the following:

15(i) The applicant's name and address. If the
16applicant is a commercial lending institution or
17community development financial institution, the
18borrower's name and address.

19(ii) A description of the project.

20(iii) A statement describing the anticipated
21economic impact to the Commonwealth and the host
22municipality as a result of the project.

23(iv) A description of the proposed project
24financing, including terms, conditions and the collateral
25or security required for the loan for which the guarantee
26is being requested.

27(v) A copy of the applicant's last two years of
28financial statements prepared or reported on by an
29independent certified public accountant. If the applicant
30is a commercial lending institution or a community

1development financial institution, a copy of the
2borrower's last two years of financial statements
3prepared or reported on by an independent certified
4public accountant.

5(vi) The amount of the loan guarantee that is being
6requested.

7(vii) The total project cost and the identification
8of all sources of capital for the project.

9(viii) Any other information required by the board.

10(2) The board shall review the application to determine
11all of the following:

12(i) (A) Except as set forth in clause (B), that the
13project has been awarded a planning grant under this
14section or that at least $1,000,000 of private funds
15are being invested in the project.

16(B) Beginning on the effective date of this
17paragraph through July 15, 2015, that the project has
18been awarded a planning grant under this section or
19that at least $500,000 of private funds are being
20invested in the project.

21(ii) That the value of the proposed collateral is
22sufficient to cover the full amount of the loan.

23(iii) That the applicant complied with all other
24criteria established by the board.

25(3) Upon being satisfied that all requirements have been
26met, the board may approve the guarantee, and, if approved,
27the authority shall execute a guarantee agreement in favor of
28the commercial lending institution or community development
29financial institution stating the terms and amounts of the
30guarantee. Except as provided in paragraph (3.1), the

1guarantee may not exceed 50% of the outstanding principal
2amount of the loan or $2,500,000 at any point in time,
3whichever is less. In addition to any other terms and
4conditions required by the board, the guarantee agreement
5shall provide for all of the following:

6(i) The procedure for the submission by the
7commercial lending institution or community development
8financial institution of a claim for payment. This
9procedure shall require that the commercial lending
10institution or community development financial
11institution demonstrate that it has exhausted all
12available remedies against the borrower, other guarantors
13and collateral before seeking payment under the
14agreement.

15(ii) A requirement that a percentage of any moneys
16recovered subsequent to the payment of a claim by the
17authority be remitted to the authority.

18(iii) Periodic reporting requirements by the
19commercial lending institution or community development
20financial institution regarding itself and regarding the
21loans which have been awarded guarantees under this
22section.

23(3.1) Beginning on the effective date of this paragraph
24through July 15, 2015, a guarantee of 51% to 90% of the
25principal amount of the loan to assist with the financing of
26a project related to agriculture may be awarded by the board.
27The guarantee shall be subject to a one-time fee of 2% of the
28amount of the loan multiplied by the percentage of the
29guarantee.

30(3.2) The amount of a guarantee under this subsection,

1if any, shall be set at the discretion of the board based
2upon its determination of the potential financial risk to the
3Commonwealth.

4(4) The board may establish a subcommittee composed of
5one or more board members and department staff to supervise
6the progress of projects for which loan guarantees have been
7awarded under this section.

8(e.1) Limitation.--A Farm Credit Institution under the Farm
9Credit Act of 1971 (Public Law 92-181, 85 Stat. 583) shall only
10be permitted to participate in the First Industries Program
11established under this section and may not participate in any
12other loan guarantee program established under this chapter.

13(e.2) Sunset.--After July 15, 2015, no Farm Credit
14Institution under the Farm Credit Act of 1971 shall be eligible
15for any loan guarantees under this chapter.

16(f) Limitations.--

17(1) No more than $10,000,000 of the funds available for
18the program authorized by this section may be used for
19planning grants awarded under subsection (c).

20(2) At least two-thirds of the funds available for the
21program authorized by this section shall be used for
22financing of projects related to agriculture.

23§ 1553. Second Stage Loan Program.

24(a) Establishment.--There is established a program to be
25known as the Second Stage Loan Program. The program shall
26provide loan guarantees to commercial lending institutions that
27make loans to life sciences, advanced technology or
28manufacturing businesses.

29(b) Application for enrollment.--A commercial lending
30institution may apply for enrollment in the program authorized

1by this section. The application shall be on the form prescribed
2by the board and shall include or demonstrate all of the
3following:

4(1) The name and address of the commercial lending
5institution and the name and title of the individual who will
6serve as the point of contact for the commercial lending
7institution.

8(2) A statement defining the service area of the
9commercial lending institution.

10(3) A statement describing the commercial lending
11activities engaged in by the commercial lending institution
12and how the institution intends to expand those activities as
13a result of its participation in the program authorized by
14this section.

15(4) Any other information required by the board.

16(c) Enrollment approval.--Upon being satisfied that all
17requirements have been met, the board may enroll the commercial
18lending institution in the program authorized by this section,
19and, if enrolled, the authority shall execute a master guarantee
20agreement in favor of the commercial lending institution. In
21addition to any other terms and conditions required by the
22board, the master guarantee agreement shall provide for the
23following:

24(1) The procedure for the submission of a claim for
25payment by the commercial lending institution. This procedure
26shall require that the commercial lending institution
27demonstrate that it has exhausted all available remedies
28against the borrower, other guarantors and collateral for the
29loan before seeking payment under the agreement.

30(2) A requirement that a percentage of any moneys

1recovered by the commercial lending institution subsequent to
2any payment made under the master guarantee agreement by the
3authority be remitted to the authority.

4(3) Periodic reporting requirements by the commercial
5lending institution regarding itself and regarding the loans
6for which guarantee certificates have been issued under this
7section.

8(d) Application for guarantee.--A commercial lending
9institution enrolled in the program authorized by this section
10may submit an application to the authority for the guarantee of
11a proposed loan. The application shall be on the form prescribed
12by the board and shall include or demonstrate all of the
13following:

14(1) The name and address of the borrower, the type of
15business the borrower conducts, the location and age of the
16business and the names and addresses of the principals of the
17borrower.

18(2) The number of projected new or retained employees of
19the borrower as a result of the loan.

20(3) A copy of the borrower's last two years of financial
21statements prepared or reported on by an independent
22certified public accountant.

23(4) A statement describing the purpose of the loan, the
24requested amount of the loan, a copy of the commercial
25lending institution's commitment letter and applicable credit
26underwriting that supports the repayment of the loan, as well
27as the collateral and other guarantees offered by the
28borrower to support the loan.

29(5) Any other information required by the board.

30(e) Application review.--

1(1) The board shall review the application to determine
2all of the following:

3(i) That the borrower owns and operates a life
4sciences, advanced technology or manufacturing business.

5(ii) That the borrower's business has been in
6existence for at least two years but no more than seven
7years at the time of application.

8(iii) That the borrower is financially responsible
9and has the ability to repay the loan.

10(iv) That the use of loan proceeds by the borrower
11will result in jobs being created or retained within this
12Commonwealth.

13(v) That the borrower's business is located within
14the commercial lending institution's service area and
15within this Commonwealth.

16(vi) That the borrower and the commercial lending
17institution have met all other requirements established
18by the board.

19(2) Upon being satisfied that all requirements have been
20met, the board may approve the guarantee, and, if approved,
21the authority shall issue a guarantee certificate for the
22loan to the commercial lending institution stating the terms
23and amount of the guarantee.

24(3) The board may establish a subcommittee composed of
25one or more members of the board and staff of the department
26to review and approve applications for guarantees under this
27section.

28(f) Limitations.--

29(1) During the first two years of the term of a loan for
30which a guarantee certificate has been issued, the guarantee

1may not exceed 50% of the outstanding principal amount of the
2loan. From the end of year two through either the end of year
3seven or the end of the term of the loan, whichever occurs
4first, the guarantee may not exceed 25% of the outstanding
5principal amount of the loan. The guarantee will terminate at
6the end of seven years.

7(2) At no time may a guarantee exceed $1,000,000 for any
8one loan.]

9Section 4. Title 64 is amended by adding a chapter to read:

10CHAPTER 17

11PENNSYLVANIA BUSINESS DEVELOPMENT AUTHORITY

12Subchapter

13A. General Provisions

14B. Structure and Powers

15C. Bonds

16D. Accounts

17E. Programs

18F. Miscellaneous Provisions

19SUBCHAPTER A

20GENERAL PROVISIONS

21Sec.

221701. Scope of chapter.

231702. Construction.

241703. Findings and declaration of policy.

251704. Definitions.

26§ 1701. Scope of chapter.

27This chapter relates to the Pennsylvania Business Development
28Authority.

29§ 1702. Construction.

30(a) General rule.--This chapter shall be prudently construed
 

1in order to effect the legislative and public purposes as set 
2forth in this subchapter.

3(b) Rights of obligees.--The provisions of this chapter 
4providing for security, rights and remedies of obligees of the 
5authority shall be prudently construed to achieve the public 
6policy set forth in this subchapter.

7(c) Limitation.--If a provision of this chapter is judged to
8be invalid by a court of competent jurisdiction, the order or
9judgment shall be confined in its operation to the controversy
10in which it was rendered and shall not affect or invalidate a
11remaining provision of this chapter.

12§ 1703. Findings and declaration of policy.

13The General Assembly finds and declares as follows:

14(1) Many existing businesses in this Commonwealth could 
15expand and become more competitive if provided with 
16additional sources of financing for modernization, expansion 
17and other capital needs. This, in turn, could increase 
18employment levels, which would help to develop a stable and 
19healthy economy and revitalize communities, thereby improving 
20the health, safety and general welfare of the citizens of 
21this Commonwealth.

22(2) A minimum level of unemployment and a maximum level 
23of business opportunity can best be attained through the 
24promotion, stimulation and revitalization of industrial, 
25manufacturing, commercial, technological, agricultural and 
26tourism activities in this Commonwealth. Through such 
27efforts, the Commonwealth's competitiveness in the global and 
28United States economies may be enhanced.

29(3) The Commonwealth has developed a great number of 
30programs with the objective of furthering economic
 

1development within its borders. There have also been a 
2correspondingly great number of boards and authorities to 
3administer the various programs. While many of these economic 
4development programs have been successful, others have fallen 
5short.

6(4) The economic health of our communities will improve 
7and efficiency and transparency will increase by eliminating 
8programs that have not worked for this Commonwealth, 
9consolidating the management of the successful programs that 
10remain and adding new programs as needed.

11(5) The Pennsylvania Business Development Authority 
12shall disburse the money for and administer the economic 
13development programs encompassed in this chapter. It shall do 
14so with the prudence, proficiency and transparency that the 
15citizens of this Commonwealth expect, and will have as 
16resources the expertise and administrative assistance of the 
17Department of Community and Economic Development, as well as 
18the other State agencies. Resources will be more accessible 
19to businesses in this Commonwealth, citizens will be able to 
20see where their tax dollars are being invested and the 
21overall health of this Commonwealth's economy will improve, 
22beginning in individual communities and spreading throughout 
23this Commonwealth.

24§ 1704. Definitions.

25The following words and phrases when used in this chapter
26shall have the meanings given to them in this section unless the
27context clearly indicates otherwise:

28"Agricultural processor." An entity that adds value by
29subjecting one or more farm commodities to a process of
30manufacture, development or preparation for sale or a person

1that converts a farm product into a marketable form.

2"Agricultural producer." A person or entity involved in the
3management and use of an agricultural operation for the
4production of a farm commodity.

5"Agriculture." Any of the following:

6(1) the management and use of an agricultural operation
7for the production of a farm commodity;

8(2) the sale of farm commodities at wholesale;

9(3) the sale of farm commodities at retail by urban and
10rural supermarkets in underserved areas or farmers' markets;

11(4) energy-related activities impacting production
12agriculture; or

13(5) activities which implement best industry practices
14related to agricultural waste products, agriculture by-
15products or fertilizer.

16"Applicant." An eligible business or economic development
17organization that requests financial assistance from the
18authority.

19"Authority." The Pennsylvania Business Development Authority
20established in section 1711 (relating to authority).

21"Board." The board of the Pennsylvania Business Development
22Authority established in section 1712 (relating to board).

23"Bonds." Except where otherwise provided, bonds, notes,
24instruments, refunding notes and bonds and other evidences of
25indebtedness or obligations which the Pennsylvania Business
26Development Authority is authorized to issue or assume under
27this chapter.

28"Business." A corporation, partnership, sole proprietorship,
29limited liability company, business trust or other commercial
30entity.

1"Capital development project." The acquisition, development,
2construction, renovation or use of land, buildings, equipment
3and machinery and working capital by a business as part of:

4(1) A for-profit venture not of a mercantile or service-
5related nature, except for hospitality industry projects.

6(2) An effort to:

7(i) comply with Federal or State environmental laws
8or regulations;

9(ii) complete an approved remediation project; or

10(iii) adopt generally acceptable pollution
11prevention practices.

12(3) An effort to recycle municipal or commercial waste,
13or to use recycled municipal or commercial waste materials in
14manufacturing.

15(4) A for-profit project or venture to manufacture
16products to be exported out of the United States, which will
17increase this Commonwealth's market share.

18"Commercial lending activities." The making of loans and the
19provision of deposit services to business entities, except that
20a farm credit system institution under the Farm Credit Act of
211971 (Public Law 92-181, 85 Stat. 583) need not offer deposit
22services to qualify as a provider of commercial lending
23activities under this chapter.

24"Commercial lending institution." A federally chartered or 
25State-chartered bank, savings bank, savings and loan association 
26or farm credit system institution under the Farm Credit Act of 
271971 (Public Law 92-181, 85 Stat. 583) which has a satisfactory 
28rating from its primary regulator and which is engaged in 
29commercial lending activities. The institution must operate at 
30least one full-service branch for deposit gathering and lending
 

1located within this Commonwealth or be a farm credit system 
2institution under the Farm Credit Act of 1971.

3"Commonwealth agency." An agency, authority or other
4instrumentality of the Commonwealth.

5"Community development financial institution." A community
6development financial institution certified in accordance with
7the Community Development Banking and Financial Institutions Act
8of 1994 (Public Law 103-325, 108 Stat. 2163).

9"Comprehensive county plan" or "comprehensive municipal
10plan." The comprehensive plan adopted under applicable law by a
11county, municipality, city of the first class or city of the
12second class.

13"Cost of the project" or "cost." Any of the following:

14(1) Costs and expenses of acquisition of interests in
15land, infrastructure, buildings, structures, equipment,
16furnishings, fixtures and other tangible or intangible
17property.

18(2) Costs and expenses of construction, reconstruction,
19erection, equipping, expansion, extension, improvement,
20installation, rehabilitation, renovation or repair of the
21buildings, structures and equipment.

22(3) Costs and expenses of demolishing, removing or
23relocating buildings or structures on lands acquired or to be
24acquired and the expense of acquiring land to which buildings
25or structures may be moved or relocated.

26(4) Costs and expenses of preparing land for
27development.

28(5) Costs and expenses incidental to determining the
29feasibility or practicality of the project, including
30engineering, legal and accounting and financial services, as

1well as any necessary studies or surveys.

2(6) Working capital or other capital needs related to
3the project.

4"Department." Except where otherwise provided, the
5Department of Community and Economic Development of the
6Commonwealth.

7"Distressed community." Any of the following:

8(1) An area which is designated a subzone, expansion 
9subzone or improvement subzone under the act of October 6, 
101998 (P.L.705, No.92), known as the Keystone Opportunity 
11Zone, Keystone Opportunity Expansion Zone and Keystone 
12Opportunity Improvement Zone Act.

13(2) Any other area designated as distressed according to 
14standards adopted by the Pennsylvania Business Development 
15Authority.

16"Economic development organization." A community development
17financial institution, an industrial development agency or a
18local development district that is certified by the authority as
19possessing the qualifications necessary to prepare, evaluate and
20approve applications to the authority for financial assistance.

21"Ex-Im Bank." The Export-Import Bank of the United States.

22"Exports." Goods or services to be sold or performed outside
23the United States.

24"Export business." Any for-profit corporation, limited
25liability company, partnership, proprietorship or other business
26entity involving export activities and employing 250 or fewer
27individuals.

28"Farm commodity." Any agricultural, horticultural,
29aquacultural, vegetable, fruit and floricultural product of the
30soil, livestock and meats, wools, hides, furs, poultry, eggs,

1dairy products, nuts, mushrooms, honey products and forest
2products.

3"Federal agency." The United States of America, the
4President of the United States, the Congress of the United
5States and any department, corporation, agency or
6instrumentality designated or established by the United States
7of America.

8"Financial assistance." Loans, guarantees, lines of credit,
9letters of credit and other financial arrangements which the
10Pennsylvania Business Development Authority is authorized to
11undertake under Subchapter E (relating to programs).

12"Governing body." The body or board authorized by law to
13enact ordinances or adopt resolutions for a political
14subdivision.

15"Hazardous substance." Any element, compound or material
16which is:

17(1) Regulated as a hazardous air pollutant under section
186.6 of the act of January 8, 1960 (1959 P.L.2119, No.787),
19known as the Air Pollution Control Act.

20(2) A hazardous waste, as defined under section 103 of
21the act of July 7, 1980 (P.L.380, No.97), known as the Solid
22Waste Management Act.

23(3) Regulated under the act of December 7, 1990
24(P.L.639, No.165), known as the Hazardous Material Emergency
25Planning and Response Act.

26"Hospitality industry project." A for-profit project or
27venture which involves a business that operates a hotel, motel
28or other lodging facility, or a restaurant or other food service
29operation that is open to the public.

30"Industrial development agency." A nonprofit organization

1which has as its purpose the promotion, encouragement,
2construction, development and expansion of new or existing
3industrial development projects.

4"Industrial development project." A project involving the
5acquisition or improvement of real property within this
6Commonwealth to be occupied and operated by any of the
7following:

8(1) An industrial enterprise.

9(2) A manufacturing enterprise.

10(3) A research and development enterprise.

11(4) An agricultural producer.

12(5) An agricultural processor.

13"Industrial enterprise." An enterprise other than a
14mercantile, commercial or retail enterprise which has created or
15will create substantial employment opportunities. The term may
16include warehouses, distribution and terminal facilities and
17office buildings utilized as national or regional headquarters
18or computer or clerical operations centers.

19"Industrial park project." A project sponsored by an
20economic development organization for the purpose of creating
21sites for the establishment of two or more industrial
22development projects.

23"Local development district." Multicounty economic and
24community development organizations established under the act of
25December 7, 1994 (P.L.845, No.120), known as the Local
26Development District Act, to provide regional planning and
27development services to improve the economy and quality of life
28in their respective regions through a variety of activities,
29including, but not limited to, the fostering of public and
30private partnerships and providing assistance to businesses.

1"Manufacturing enterprise." An enterprise which is engaged
2in the giving of new shapes, new qualities or new combinations
3to matter by the application of skill and labor.

4"Multiple-tenancy building project." A project sponsored by 
5an economic development organization involving the acquisition 
6or construction of any land, site, structure or facility for 
7occupancy by two or more industrial enterprises, manufacturing 
8enterprises, research and development enterprises, agricultural 
9producers or agricultural processors, as those terms are defined 
10in this chapter.

11"Municipal authority." A public authority created under 53
12Pa.C.S. Ch. 56 (relating to municipal authorities) or under the
13former act of May 2, 1945 (P.L.382, No.164), known as the
14Municipality Authorities Act of 1945.

15"Municipality." Any city, borough, town or township of the
16Commonwealth, each of which political subdivisions are separate
17incorporated municipalities of the Commonwealth for the purposes
18of this chapter.

19"Natural disaster." As defined in 35 Pa.C.S. § 7102
20(relating to definitions).

21"Normal agricultural operation." As defined in the act of
22June 10, 1982 (P.L.454, No.133), referred to as the Right-to-
23Farm Law.

24"Obligee of the authority." Any of the following:

25(1) A holder or owner of bonds of the Pennsylvania
26Business Development Authority, the Pennsylvania Industrial
27Development Authority or the Pennsylvania Minority Business
28Development Authority.

29(2) A trustee or other fiduciary for any holder or owner
30of bonds of the Pennsylvania Business Development Authority

1or its predecessors.

2(3) A provider of a letter of credit, policy of
3municipal bond insurance or other credit enhancement or
4liquidity facility for bonds of the Pennsylvania Business
5Development Authority or its predecessors.

6(4) A lessor or installment seller demising property to
7the Pennsylvania Business Development Authority or its
8predecessors in connection with a project.

9(5) A provider of an interest rate management agreement
10or other agreement or arrangement authorized under section
111714 (relating to powers).

12"Pennsylvania-related company." A business entity which has
13significant operations in this Commonwealth or which will, as a
14condition of any agreement under this chapter, locate
15significant business operations in this Commonwealth.

16"Philadelphia metropolitan statistical area." The
17Philadelphia, Pennsylvania, metropolitan division of the
18Philadelphia-Camden-Wilmington, Pennsylvania-New Jersey,
19Delaware-Maryland metropolitan statistical area as announced on
20June 6, 2003, by the United States Office of Management and
21Budget under standards for defining metropolitan and
22micropolitan statistical areas by the Office of Management and
23Budget for the 2000 decennial census of the United States Bureau
24of the Census as published in the Federal Register, Vol. 65, No.
25249, on December 27, 2000, comprising the Pennsylvania counties
26of Philadelphia, Delaware, Bucks, Montgomery and Chester.

27"Pollution control technology project." The acquisition,
28construction or installation of pollution control technology and
29equipment that enables an electric generating unit or
30cogeneration unit to meet any of the following requirements:

1(1) Mercury emission reductions.

2(2) The regulations adopted by the United States
3Environmental Protection Agency known as the Clean Air
4Mercury Rule codified at 40 CFR Pts. 60 (relating to
5standards of performance for new stationary sources), 72
6(relating to permits regulation) and 75 (relating to
7continuous emission monitoring).

8(3) Nitrogen oxides and sulfur dioxide emission
9reduction under 25 Pa. Code Chs. 121 (relating to interstate
10pollution transport reduction) and 145 (relating to general
11provisions).

12(4) The Clean Air Interstate Rule in 40 CFR Pt. 96
13(relating to NOX budget trading program and CAIR NOX and SO2
14trading programs for state implementation plans).

15"Predecessors." The Pennsylvania Industrial Development
16Authority or the Pennsylvania Minority Business Development
17Authority.

18"Private developer." A person or entity engaged in the
19development of real estate and determined by the Pennsylvania 
20Business Development Authority to be financially responsible to
21assume all obligations proposed to be undertaken.

22"Production agriculture." The management and use of a normal
23agricultural operation for the production of a farm commodity.

24"Project user." A person, political subdivision, municipal
25authority, Commonwealth agency or other entity that owns, leases
26or uses all or any part of a project.

27"Redevelopment authority." An entity created under the act
28of May 24, 1945 (P.L.991, No.385), known as the Urban
29Redevelopment Law.

30"Research and development enterprise." An enterprise for the

1discovery of new and the refinement of known substances,
2processes, products, theories and ideas. The term does not
3include enterprise activities directed primarily to the
4accumulation or analysis of commercial, financial or mercantile
5data.

6"Server." A device on a computer network that manages
7network resources, including devices to manage network traffic,
8store files or process database queries.

9"Server virtualization technology." The practice of hosting
10a software operating system within a virtual machine.

11"Site preparation project." The construction of water and
12sewer lines, storm water systems, excavation, construction of
13access roads, parking facilities, pipelines, transformers and
14utility transmission lines and traffic control devices.

15"Small business." An enterprise that employs fewer than 100
16persons, in the aggregate, on an annual basis.

17"Supermarket." A retail store operated on a self-service
18basis, primarily selling groceries, fresh produce, meat, bakery
19and dairy products. The term does not include a convenience
20store.

21"Tourism." Any activity that promotes or encourages
22individuals or a group of individuals to travel to a location
23within this Commonwealth to engage in an activity or service for
24pleasure that is unavailable at home.

25"Virtual machine." A self-contained software operating
26environment that operates within a host operating system server
27and simulates a hardware device, such as a computer or a server.

28"Working capital." Capital used by a business for
29operations, excluding fixed assets and production machinery and
30equipment.

1SUBCHAPTER B

2STRUCTURE AND POWERS

3Sec.

41711. Authority.

51712. Board.

61713. Duties.

71714. Powers.

81715. Operation, service and maintenance of a project or 
9property.

10§ 1711. Authority.

11(a) Establishment.--There is established an authority to be
12known as the Pennsylvania Business Development Authority. The
13authority shall be an instrumentality of the Commonwealth and a
14body corporate and politic, with corporate succession.

15(b) Governance.--The authority shall be governed by the
16board. The powers of the authority shall be exercised by the
17board.

18(c) Indebtedness.--The authority may incur indebtedness, 
19including through the issuance of bonds. The term of 
20indebtedness shall not exceed 30 years. Net proceeds from the 
21sale of obligations incurred under this chapter shall be 
22allocated for programs under Subchapter E (relating to programs) 
23and for the payment of all reasonable costs and expenses related 
24to the issuance.

25(d) Expenses.--Expenses of the authority shall be paid from
26assets or income of the authority. Except as provided in this
27chapter or by other law, the Commonwealth shall not be
28responsible for funding the expenses of the authority.

29(e) Fiscal year.--The fiscal year of the authority shall be
30the same as the fiscal year of the Commonwealth.

1(f) Existence and dissolution.--

2(1) The authority shall exist until terminated by law.

3(2) The authority may be dissolved by law if all
4outstanding liabilities of the authority, including bonds and
5other contractual obligations, have been fully paid, retired,
6satisfied or discharged or provision has been made for
7payment of all outstanding liabilities of the authority,
8including bonds and other contractual obligations. Upon the
9dissolution of the authority, all funds, assets and other
10property of the authority shall vest in the Commonwealth.

11(g) Procurement.--The authority shall be considered as an
12executive agency for the purposes of 62 Pa.C.S. Pt. I (relating
13to Commonwealth Procurement Code), except that the authority
14shall have the authority to procure its own services. When
15acting as its own purchasing agency for the procurement of
16services, the authority shall use the procedures provided under
1762 Pa.C.S. Pt. I.

18(h) Commonwealth Attorneys Act.--The authority shall be
19considered an executive agency for the purposes of the act of
20October 15, 1980 (P.L.950, No.164), known as the Commonwealth
21Attorneys Act.

22(i) Relationship with department.--

23(1) The department shall provide administrative services
24and staff, including staff legal counsel, to the authority
25and the board. The authority shall reimburse the department
26for the costs of such services and staff.

27(2) The authority may enter into agreements with the
28department setting forth their respective rights and
29obligations in carrying out their respective duties under
30this chapter, as well as rates of reimbursement, as

1applicable, for providing services under this subsection.

2(j) Applicability.--The following acts shall apply to the
3authority and the board:

4(1) The act of July 19, 1957 (P.L.1017, No.451), known
5as the State Adverse Interest Act.

6(2) The act of February 14, 2008 (P.L.6, No.3), known as
7the Right-to-Know Law.

8(3) The provisions of 65 Pa.C.S. Chs. 7 (relating to
9open meetings) and 11 (relating to ethics standards and
10financial disclosure).

11§ 1712. Board.

12(a) Members.--

13(1) The authority shall be governed by a board
14consisting of 15 members.

15(2) The following public officials shall serve as
16members of the board:

17(i) The Secretary of Community and Economic
18Development.

19(ii) The Secretary of Agriculture.

20(iii) The Secretary of Banking.

21(iv) The Secretary of the Budget.

22(3) Eleven individuals from the private sector shall 
23serve as members of the board. Members appointed under this 
24paragraph shall not be members or staff of the General 
25Assembly and shall not be otherwise employed by the 
26Commonwealth. Seven members from the private sector shall be 
27appointed by the Governor and one member shall be appointed 
28by each of the following:

29(i) The President pro tempore of the Senate.

30(ii) The Minority Leader of the Senate.

1(iii) The Speaker of the House of Representatives.

2(iv) The Minority Leader of the House of
3Representatives.

4(b) Delegation of authority.--Public officials who are
5members of the board pursuant to subsection (a)(2) may designate
6a member of their staff to serve in their absence.

7(c) Terms.--

8(1) Public officials shall serve for the duration of
9their tenure in office.

10(2) Members appointed under subsection (a)(3) shall
11serve for terms of four years, subject to the pleasure of the
12appointing authority, except that board members appointed
13under subsection (a)(3)(i), (ii), (iii) and (iv) shall serve
14for initial terms of two years.

15(3) Members appointed to fill a vacancy created
16otherwise than by expiration of a term shall be appointed for
17the unexpired term of the preceding member.

18(d) Organization.--

19(1) The Governor shall appoint one member of the board
20to act as chairperson.

21(2) The members shall select from among themselves and
22staff of the department such other officers of the board as
23they shall determine.

24(e) Board action.--

25(1) The board shall meet at the call of the chairperson.

26(2) Eight members of the board shall constitute a
27quorum. When a quorum is present, a majority of those present
28shall be necessary to take any action on behalf of the
29authority.

30(f) Compensation.--Members of the board shall be entitled to

1no compensation for their services, but shall be entitled to
2reimbursement for all necessary and reasonable expenses incurred
3in connection with the performance of their duties as members of
4the board.

5(g) Fiduciary relationship.--The members of the board and
6the professional personnel of the board shall stand in a
7fiduciary relationship with the Commonwealth and the authority
8as to the moneys in the accounts of the authority and
9investments of the authority.

10(h) Standard of care.--The members of the board, in
11performance of their duties under this chapter, shall exercise
12the standard of care required by 20 Pa.C.S. Ch. 73 (relating to
13municipalities investments).

14(i) Liability.--Members of the board shall not be liable
15personally on any obligations of the authority, including bonds
16of the authority.

17(j) Definition.--As used in this section, the term "member" 
18means an individual who serves on the board under subsection (a)
19as a public official or an individual from the private sector.

20§ 1713. Duties.

21(a) General rule.--The authority shall:

22(1) Administer the programs described in Subchapter E
23(relating to programs).

24(2) Fund the programs described in Subchapter E using
25the resources available under this chapter.

26(3) Adopt bylaws.

27(4) Adopt and publish guidelines for each program listed
28in Subchapter E as proposed by the department and for the
29certification of economic development organizations.
30Guidelines shall include applicable policies and procedures,

1criteria, application requirements and any other necessary
2and relevant information.

3(5) Certify on an annual basis those economic
4development organizations that possess the qualifications
5necessary to evaluate and approve applications to the
6authority for financial assistance.

7(b) Reports and publications.--

8(1) Within 90 days of the effective date of this
9chapter, the authority shall submit for publication in the
10Pennsylvania Bulletin and on the Internet website of the
11department notification of the programs to be administered
12under this chapter. The notification shall include the name
13and brief description of each program, the name of a contact
14person and the anticipated time that funding, applications
15and official guidelines will become available.

16(2) The authority shall submit for publication in the
17Pennsylvania Bulletin the program guidelines adopted under
18subsections (c) and (d) and shall maintain the guidelines on
19the department's Internet website.

20(3) The authority shall, each year by the first day of
21March, publish and deliver to the Governor and the General
22Assembly a memorandum which shall outline the authority's
23goals and planned investments for the coming fiscal year.

24(4) The authority shall annually post and maintain on
25the Internet website of the department an annual report,
26which at a minimum shall include:

27(i) A list of all applications approved during the
28previous fiscal year.

29(ii) The name and business address of each
30recipient.

1(iii) The amount and terms of the assistance.

2(iv) A brief description of the project for which
3the assistance was awarded. The description shall include
4the commitment for the number of jobs created and
5retained and the total capital investment for the
6project.

7(c) Audit.--

8(1) The authority shall have the accounts and books of
9the authority audited annually by an independent certified
10public accounting firm.

11(2) The authority shall, by December 31 of each year,
12file a copy of the audit required by paragraph (1) with the
13Secretary of the Senate, the Chief Clerk of the House of
14Representatives and the Office of the Budget.

15(d) Cooperation.--The authority shall cooperate with the
16Office of Inspector General in the performance of its duties,
17including, but not limited to, the investigation of fraud,
18waste, misconduct or abuse in the programs, operations or
19contracting of the authority.

20§ 1714. Powers.

21The authority may:

22(1) Borrow money, issue and assume bonds, obtain lines
23and letters of credit, provide loan guarantees and incur
24debt.

25(2) Sue and be sued, implead and be impleaded,
26interplead, complain and defend in any court.

27(3) Establish new economic development programs and the
28corresponding accounts necessary or desirable for its
29corporate purposes.

30(4) Transfer funds among its accounts as necessary and

1desirable to effectuate the purposes of the programs set
2forth in Subchapter E (relating to programs).

3(5) Retain accountants, auditors and financial experts
4to render services and engage the services of other advisors,
5consultants and agents as necessary.

6(6) Acquire, accept, purchase, receive, collect, hold,
7convey and invest funds and property, whether tangible or
8intangible, from all sources, directly or by assignment,
9pledge or otherwise.

10(7) Invest money of the authority not required for
11immediate use, including proceeds from the sale of bonds, as
12the board determines, subject to any agreement with
13bondholders stated in the authorizing resolution providing
14for the issuance of bonds.

15(8) Contract and execute all instruments, including
16financing agreements, letter of credit agreements, liquidity
17agreements, guarantees, sureties, mortgages, loans, standby
18loan commitments and contracts of insurance which are
19necessary or appropriate for carrying on the business of the
20authority.

21(9) Impose and collect charges in connection with loan
22commitments and servicing, including reimbursement of costs
23of financing.

24(9.1) Impose interest rate penalties on borrowers who
25fail to fulfill commitments regarding job creation or
26retention, private investment and site location.

27(10) Pledge the credit of the authority and provide
28security and liquidity to obligees of the authority as the
29authority deems necessary or appropriate.

30(11) Use or pledge an account for a special purpose,

1including debt service reserves and other reserves, as may be
2necessary or desirable to carry out its powers and duties.

3(12) With the advice of a financial management firm
4selected by the board, negotiate and enter into interest rate
5cap agreements, interest rate management agreements, collar
6agreements, corridor agreements, ceiling agreements, floor
7agreements, forward agreements, float agreements and other
8similar arrangements which, in the judgment of the authority,
9will assist the authority in managing the interest costs of
10the authority.

11(13) Provide interest revenue-sharing on a quarterly 
12basis to the originating economic development organization on 
13loans sponsored by the economic development organization to 
14offset administrative expenses and the cost of fulfilling 
15certification obligations.

16(14) Use moneys, excluding the proceeds of bonds, to pay
17the administrative expenses of the authority and of the
18department incurred under this chapter.

19(15) Employ an executive director.

20(16) Employ legal counsel and provide a reimbursement 
21agreement for legal services by legal counsel for the 
22Department of Community and Economic Development.

23(17) Adopt, use and alter a corporate seal.

24(18) Pay or satisfy obligations of the authority.

25(19) Negotiate modifications or alterations to financing
26agreements, mortgages or security interests.

27(20) Foreclose on a mortgage or security interest in
28default.

29(21) Commence any action necessary to protect or enforce
30any right conferred upon the authority by law, mortgage,

1security agreement, contract or other agreement.

2(22) Bid for or purchase property that was the subject
3of a mortgage or security interest at a foreclosure or other
4sale and acquire and take possession of that property.

5(23) Sell, mortgage, pledge, encumber, transfer, convey
6and dispose of any property, whether tangible or intangible.

7(24) Acquire and sell loans, mortgages and security
8interests at public or private sale.

9(25) Provide financial assistance to applicants and
10project users.

11(26) Agree to and comply with conditions attached to
12Federal or Commonwealth assistance not inconsistent with the
13provisions of this chapter.

14(27) Make rules regarding the operation of properties
15and facilities of the authority subject to agreements with
16obligees of the authority.

17(28) Develop, adopt and implement binding policies or
18guidelines assuring that all persons are accorded equal
19opportunity in employment and contracting associated with the
20programs established under Subchapter E. This paragraph
21includes the authority's contractors, subcontractors,
22assignees, lessees, agents, vendors and suppliers.

23(29) Exercise rights provided by law for the benefit or
24protection of the authority or obligees of the authority.

25(30) Procure insurance against any loss in connection
26with its programs, property and other assets.

27(31) Promulgate regulations and adopt guidelines and
28statements of policy containing restrictions as it may deem
29necessary and appropriate to effectuate the public purposes
30of this chapter.

1(32) Enter into agreements with applicants and project
2users providing, among other things, for any of the
3following:

4(i) Financial assistance.

5(ii) Loan, rental or purchase price payments or
6other payments, sufficient to amortize the principal,
7interest and premium, if any, of bonds and contractual
8obligations of the authority incurred to provide funds to
9pay the costs of the projects being financed.

10(iii) The applicants or project users to pay or
11cause to be paid all other costs of acquiring,
12constructing, maintaining and operating the projects
13being financed.

14(iv) Financial assistance to an economic development
15organization to fund a revolving loan fund created by the
16economic development organization for projects that are
17eligible for financing by the authority.

18(v) Conveyance with or without consideration of any
19part or all of a project being financed to the project
20user or applicant on or before payment of all bonds and
21contractual obligations of the authority incurred with
22respect to the project.

23(vi) Other matters as are customary or as are deemed
24necessary and appropriate by the authority.

25(33) Undertake any action appropriate or necessary to
26effectuate the purposes of this chapter, or to exercise the
27powers set forth in this section, including any act
28reasonably implied from those powers.

29Before a new policy or a change of policy takes effect, the
30board shall first approve it by a vote.

1§ 1715. Operation, service and maintenance of a project or
2property.

3The authority shall not approve an application or finance a
4project if it would be required to operate, service or maintain
5the project. The authority may operate, service or maintain a
6property in foreclosure or default.

7SUBCHAPTER C

8BONDS

9Sec.

101721. Bond issuance.

111722. Commonwealth and local taxation.

121723. Federal taxation.

131724. Validity of bonds, limitation on actions.

141725. Provisions of bonds and trust agreements and issuance of
15bonds.

161726. Validity of pledge.

171727. Commonwealth pledges.

181728. Bonds to be legal investments.

191729. Rights and remedies of obligees.

20§ 1721. Bond issuance.

21(a) Authorization.--The authority may issue limited
22obligation revenue bonds and other types of limited obligation
23revenue financing. Bonds of the authority shall be authorized by
24a resolution of the board, subject to subsection (c).

25(b) Taxability.--The authority may issue both tax-exempt
26bonds and taxable bonds to fund the authority's programs.

27(c) Bond requirements.--Bonds issued by the authority shall:

28(1) Be of a series.

29(2) Bear a date or dates.

30(3) Be in denominations.

1(4) Be signed by, or bear the facsimile signature of the
2officer designated by the board.

3(5) Carry registration, exchangeability and
4interchangeability privileges.

5(6) Be payable in any medium of payment and at any place
6or places.

7(7) Mature on a date or dates not to exceed 30 years
8from the original issue date.

9(8) Be subject to terms of redemption, if any.

10(d) Issuance.--Bonds issued by the authority may:

11(1) Be authenticated by an authenticating agent, fiscal
12agent or trustee.

13(2) Be in any form, either coupon or fully registered
14without coupons, or in certificated or book-entry-only form.

15(3) Bear or accrue interest at any rate or rates,
16whether fixed or variable.

17(4) Be issued and delivered notwithstanding the fact
18that the officer whose signature appears on a coupon may no
19longer be an authenticating officer at the time of actual
20delivery.

21(e) No debt or liability of the Commonwealth.--

22(1) A bond issued by the authority shall not be a debt
23or liability of the Commonwealth and shall not create any
24indebtedness, liability or obligation on the part of the
25Commonwealth.

26(2) A bond shall be payable solely from revenues of the
27authority or accounts pledged or otherwise available for
28their repayment.

29(3) A bond shall contain on its face statements that:

30(i) The authority is obligated to pay the principal

1of or interest on the bond only from revenues, receipts
2or funds pledged or available for its payment as
3authorized in this chapter.

4(ii) Neither the Commonwealth nor any political
5subdivision is obligated to pay the principal or
6interest.

7(iii) Neither the faith and credit nor the taxing
8power of the Commonwealth or any political subdivision is
9pledged to the payment of the principal of or interest on
10the bonds.

11(f) Sale.--Bonds may be sold at a public, invited or private
12sale at a price determined by the authority.

13(g) Interim receipts.--Pending the preparation of the
14definitive bonds, interim receipts may be issued to the
15purchaser or purchasers of the bonds and shall contain the terms
16and conditions established by the authority.

17(h) Negotiable instruments.--Bonds of the authority shall
18have the qualities of negotiable instruments under 13 Pa.C.S.
19(relating to commercial code).

20(i) Use.--The authority may, as it deems necessary and
21desirable, use the proceeds of bonds to:

22(1) provide financial assistance;

23(2) purchase loans, mortgages, security interests or
24loan participations;

25(3) pay incidental expenses in connection with activity
26under paragraphs (1) and (2), including administrative costs
27of the authority and the department;

28(4) pay expenses of authorizing and issuing the bonds;

29(5) pay principal, redemption or purchase price and
30interest on bonds; or

1(6) fund reserves.

2(j) Refunding.--Subject to the provisions of this chapter,
3terms of bonds and any contracts entered into pursuant to this
4chapter, the authority may refund any outstanding debt of the
5authority whether the debt represents principal or interest, in
6whole or in part, at any time. For the purposes of this
7subsection, the term "refund" means the issuance and sale of
8obligations the proceeds of which are used or are to be used for
9the payment or redemption of outstanding obligations upon or
10prior to maturity.

11§ 1722. Commonwealth and local taxation.

12(a) Authority.--Because the authority, as a public
13instrumentality of the Commonwealth, will be performing
14essential governmental functions in effectuating the purposes of
15this chapter, the authority shall not be subject to State or
16local taxation or assessment upon any property acquired or used
17or permitted to be used by the authority for its purposes.

18(b) Bonds.--Bonds issued by the authority, the transfer and
19the income from the bonds, including any profit made on the sale
20of such bonds, shall be free from State and local taxation
21within this Commonwealth. The exclusion under this subsection
22shall not extend to gift, estate, succession or inheritance
23taxes, or any other taxes not levied or assessed directly on the
24bonds, their transfer, the income from the bonds or the
25realization of profits on their sale.

26§ 1723. Federal taxation.

27(a) Allocation.--If the bonds issued by the authority for a
28project are tax-exempt bonds for which Federal law requires an
29allocation, the department may issue an allocation upon receipt
30of a written request by the authority. An allocation must be

1issued by the department prior to the approval of the resolution
2authorizing the issuance of the bonds by the authority.

3(b) Approval.--If gubernatorial approval is required by
4Federal or State law, the Governor may approve the issuance of
5bonds upon receipt of written request for approval from the
6authority. The written request must contain all of the
7following, to the extent required by Federal law:

8(1) A statement that the authority has conducted a
9public hearing, with appropriate public notice, concerning
10the purposes for which the bonds are to be issued.

11(2) A description of the project or projects to be
12financed.

13(3) A description of the method of financing the project
14or projects.

15(4) A summary of the comments made and questions posed
16at the public hearing.

17§ 1724. Validity of bonds, limitation on actions.

18(a) Presumption.--Bonds reciting in substance that they have
19been issued by the authority to accomplish the public purposes
20of this chapter shall be conclusively deemed in any suit, action
21or proceeding involving the validity or enforceability of the
22bonds or their security to have been issued for the public
23purposes of this chapter.

24(b) Estoppel.--After issuance, bonds shall be conclusively
25presumed to be fully authorized and issued under the laws of
26this Commonwealth, and any person shall be estopped from
27questioning their validity, sale, execution or delivery by the
28authority.

29§ 1725. Provisions of bonds and trust agreements and issuance 
30of bonds.

1(a) Provisions.--A resolution authorizing the issuance of 
2bonds or any trust agreement approved in or by a resolution 
3authorizing the issuance of bonds may contain provisions which 
4do any of the following:

5(1) Secure the bonds.

6(2) Establish a covenant as to any of the following:

7(i) Additional bonds to be issued and terms,
8conditions and limitations on such bonds.

9(ii) Rank or priority of bonds with respect to liens
10or security interests.

11(iii) Limitations on the authority's right to sell,
12pledge or otherwise dispose of bonds or notes of
13governmental units, loan agreements or other property.

14(iv) Custody, application, investment and
15disposition of proceeds of bonds.

16(v) Incurring of other debts or obligations by the
17authority.

18(vi) Payment of principal of or interest on bonds.

19(vii) Sources and methods of payment.

20(viii) Redemption, purchase and tender of bonds by
21the authority or the bondholders and the privilege of
22exchange of the bonds for other bonds.

23(ix) Use, investment and disposition of the money
24held in special funds, accounts or reserves.

25(x) Use of any or all of the authority's real or
26personal property.

27(xi) Warrant of title to the authority's real or
28personal property.

29(xii) Pledging or granting a security interest in
30all or any part of the authority's revenues or any part

1of its property to which its right or title exists or
2which may later come into existence.

3(3) Establish a covenant against any of the following:

4(i) Permitting or suffering any lien on all or any
5part of its revenues or property.

6(ii) Extending the time for the payment of bonds or
7interest.

8(4) Provide for any of the following:

9(i) Replacement of lost, stolen, destroyed or
10mutilated bonds.

11(ii) Maintenance of the authority's real and
12personal property.

13(iii) Replacement of the authority's real and
14personal property.

15(iv) Insurance to be carried on the authority's real
16and personal property and the use and disposition of the
17insurance proceeds.

18(v) Rights, liabilities, powers and duties arising
19upon the breach of any covenant, condition or obligation.

20(vi) Letters of credit, bond insurance and other
21facilities for credit enhancement and liquidity.

22(5) Prescribe:

23(i) Procedures, if any, by which the terms of any
24contract with bondholders may be amended or abrogated.

25(ii) The percentage of the principal amount of bonds
26the holders of which must consent to the amendment or
27abrogation of any contract.

28(iii) The manner in which the consent under
29subparagraph (ii) may be given.

30(iv) Events of default.

1(v) Terms and conditions upon which any or all of
2the bonds become or may be declared due and payable
3before stated maturity following an event of default.

4(vi) Terms and conditions upon which the declaration
5of default and its consequence may be waived.

6(6) Create or authorize the creation of special funds or
7accounts to be held in trust or otherwise for the benefit of
8bondholders or of reserves for debt service or other
9purposes.

10(7) Vest in a trustee any property, rights, powers and
11duties in trust for the benefit of bondholders.

12(8) Limit the rights, powers and duties of a trustee,
13and the right of bondholders to appoint a trustee.

14(9) Establish the terms and conditions upon which a
15trustee or the bondholders may enforce a covenant or rights
16securing or relating to the bonds.

17(10) Exercise all or any part or combination of the
18powers granted in this chapter.

19(11) Do or refrain from doing any other act and thing
20necessary, convenient or desirable in order to better secure
21the bonds of the authority or, in the absolute discretion of
22the authority, as will tend to make bonds of the authority
23more marketable. This paragraph applies notwithstanding that
24the covenant, act or thing may not be specifically enumerated
25in this chapter as long as the covenant, act or thing is in
26accordance with the intent of this chapter.

27(12) Pay the costs or expenses incident to any of the
28foregoing.

29(b) Issuance of bonds.--Bonds may be issued under one or
30more separate resolutions or trust agreements. A series of bonds

1may be separately secured from another series of bonds under the
2resolutions or trust agreements.

3§ 1726. Validity of pledge.

4A pledge of or grant of a security interest in revenues or
5instruments made by the authority shall be valid and binding
6from the time when the pledge is made or, where applicable, when
7the authority enters into a written agreement to request the
8applicable appropriation from the department. The revenues,
9receipts, money, funds or other property or instruments pledged
10and later received by the authority shall immediately be subject
11to the lien of the pledge or security interest without any
12physical delivery of the property pledged or further act. The
13lien of the pledge or security interest shall be valid and
14binding as against all parties having claims of any kind in
15tort, contract or otherwise against the authority irrespective
16of whether the parties have notice of the lien, pledge or
17security interest. No instrument by which a pledge or security
18interest is created, evidenced or noticed need be recorded or
19filed to perfect the pledge or security interest except in the
20records of the authority.

21§ 1727. Commonwealth pledges.

22(a) Bondholders.--The Commonwealth pledges to and agrees
23with each obligee of the authority that the Commonwealth will
24not limit or alter the rights and powers vested in the authority
25or otherwise created by this chapter in any manner inconsistent
26with the obligations of the authority to its obligees until all
27bonds at any time issued, together with the interest on the
28bonds, are fully paid and discharged.

29(b) Lessees.--The Commonwealth pledges and agrees with any
30person that, as owner of property which is leased or subleased

1to or from the authority, it will not limit or alter the rights
2and powers vested in the authority or otherwise created by this
3chapter in any manner which impairs the obligations of the
4authority until all the obligations of the authority under the
5lease or sublease are fully met and discharged.

6§ 1728. Bonds to be legal investments.

7(a) Investments.--Bonds issued pursuant to this chapter
8shall constitute securities in which any person or entity may
9properly and legally invest funds, including capital, deposits
10or other funds in their control or belonging to them.

11(b) Deposits.--Bonds issued by the authority are securities
12which may properly and legally be deposited with and received by
13a government agency for any purpose for which the deposit of
14bonds or other obligations of the Commonwealth are authorized by
15law.

16§ 1729. Rights and remedies of obligees.

17The rights and remedies conferred upon or granted to obligees
18of the authority pursuant to this chapter shall be in addition
19to and not in limitation of rights and remedies lawfully granted
20to obligees of the authority by the resolution providing for the
21issuance of bonds or by any trust agreement or other agreement
22under which the bonds may be issued or secured.

23SUBCHAPTER D

24ACCOUNTS

25Sec.

261731. Establishment of accounts.

271732. Deposits.

281733. Use.

291734. Account restrictions.

30§ 1731. Establishment of accounts.

1In addition to other accounts that may be established by the
2authority from time to time, there are established the following
3accounts:

4(1) The Small Business First Account.

5(2) The Community Economic Development Account.

6(3) The Export Financing Account.

7(4) The Pennsylvania Industrial Development Account.

8(5) The Machinery and Equipment Loan Account.

9(6) The Disadvantaged Business Development Account.

10(7) The First Industries Account.

11(8) The Second Stage Loan Guarantee Account.

12§ 1732. Deposits.

13Loan repayments, recaptured funds and bond proceeds from the
14programs described in Subchapter E (relating to programs), as
15well as appropriations, including, without limitation, those
16appropriations made prior to the effective date of this act for
17the same programs or similar programs to those described in
18Subchapter E and any other available funds which are or may
19become available, not pledged to be deposited or used elsewhere,
20shall be deposited in the respective program accounts. Separate
21subaccounts may be established in each program account for
22purposes of pledging funds in the subaccounts to secure specific
23bonds and other obligations of the authority.

24§ 1733. Use.

25Funds deposited in each of the program accounts shall be made
26available for additional loans, guarantees and other financing
27tools as provided by the respective programs.

28§ 1734. Account restrictions.

29(a) Pennsylvania Industrial Development Account.--

30(1) The Pennsylvania Industrial Development Account,
 

1established in section 1731 (relating to establishment of 
2accounts), shall be a revolving fund, whereby all 
3appropriations and payments made into the account, including 
4repayment of loans or funds from mortgages and any other 
5agreements made and entered into by the authority under the 
6program, shall be applied and reapplied to the purposes of 
7the Pennsylvania Industrial Development Program.

8(2) If at any time the authority determines that funds
9held in the Pennsylvania Industrial Development Account
10exceed the amount required to carry out the purposes of the
11program, the authority shall take such action as may be
12required to transfer the excess funds to the General Fund of
13the State Treasury, subject to the provisions of section
141771.1 (relating to transfer from Pennsylvania Industrial
15Development Authority to Pennsylvania Business Development
16Authority).

17(b) Export Financing Account.--Funds in the Export Financing
18Account must be continuously secured by a pledge of direct
19obligations of the United States or of the Commonwealth having
20an aggregate market value, exclusive of accrued interest, at
21least equal to the balance on deposit in the account. The
22securities shall be deposited with the authority to be held by a
23trustee or agent satisfactory to the authority. Bank and trust
24companies are authorized to give security under this subsection.

25SUBCHAPTER E

26PROGRAMS

27Sec.

281750. Programs generally.

291751. Small Business First Program.

301752. Community Economic Development Program.

11753. Export Financing Program.

21754. Pennsylvania Industrial Development Program.

31755. Machinery and Equipment Loan Program.

41756. Disadvantaged Business Development Program.

51757. First Industries Program.

61758. Second Stage Loan Guarantee Program.

7§ 1750. Programs generally.

8(a) Establishment of programs.--In addition to the programs
9described in this subchapter, the authority may from time to
10time establish new programs that further economic development
11within this Commonwealth.

12(b) Application process.--Applications for financial
13assistance under this chapter must be prepared with the
14assistance of a certified economic development organization that
15shall approve the application before it is submitted to the
16authority and shall comply with subsection (c) and with any
17additional requirement of the applicable program or programs.
18Applications shall be in the form required by the authority and
19shall bear the applicant's name and address together with a
20description of the type and amount of financial assistance
21requested. Upon review of an application, the authority shall
22notify the applicant of its decision or request additional
23information or certifications prior to making its decision.

24(c) Application requirements.--Applications shall include
25the following information, where applicable:

26(1) A description of the applicant's business or, if the
27applicant is not the borrower, the borrower's business,
28including:

29(i) The type of business conducted.

30(ii) The location and age of the business.

1(iii) A list of all offices of the applicant located
2in this Commonwealth.

3(iv) The names and addresses of the principals.

4(v) The number of current employees and an estimate
5of future employment.

6(2) A description of the project, including:

7(i) The location.

8(ii) The total estimated project cost, prepared by
9an engineer or other qualified professional, where
10appropriate, and the identification of all sources of
11capital for the project.

12(iii) A legal description of all real property held
13or to be acquired for the establishment of the project.

14(iv) A general description and statement of value of
15any real or personal property of the applicant and, if
16applicable, the buyer or tenant of the project, to be
17applied to the establishment of the project.

18(3) A statement that the project is consistent with any
19existing comprehensive county plan where the project is
20located.

21(4) A firm commitment from the intended project user to
22use the project upon completion.

23(5) A brief description of the anticipated economic
24impact to this Commonwealth and the host municipality as a
25result of the project.

26(6) Any plans and other documents as may be required to
27show the type, structure and general character of the
28project.

29(7) Financial statements of the applicant, proposed 
30guarantors and any other party whose credit is significant to
 

1the approval of the financial assistance. The authority may 
2by guideline specify the period to be covered by the 
3financial statements and whether they must be compiled, 
4reviewed or prepared by a certified public accountant.

5(8) Any information required by the program or programs
6under which financial assistance may be provided.

7(9) Any other information required by the authority.

8(d) Review and approval.--

9(1) In reviewing applications, the authority shall
10consider the following, where applicable:

11(i) Whether the value of the proposed collateral and
12the financial resources offered by the applicant are
13sufficient to repay the loan.

14(ii) Whether the project will enable future
15employment opportunities in or have a net positive
16economic impact on the surrounding community.

17(iii) Whether the statement of the estimated cost of
18the project is reasonable.

19(iv) Whether the sources of financial commitments
20for funds in excess of the amount requested under this
21chapter are reliable.

22(v) Whether the applicant has complied with terms
23required by the applicable program or programs listed
24under the corresponding sections of this chapter.

25(vi) Whether the applicant has a history of
26investment in Pennsylvania-related companies.

27(vii) Whether the applicant has demonstrated strong
28relationships with organizations in this Commonwealth
29which foster economic development.

30(viii) Whether the applicant has a strong

1performance record.

2(ix) Whether the applicant has demonstrated an
3ability to meet and satisfy debt service, if applicable,
4as it becomes due and payable.

5(x) Any other information deemed relevant by the
6authority.

7(2) Subject to any applicable limitations under this
8chapter, the amount, duration, interest rate, security
9required and any other terms of the loan shall be set at the
10discretion of the authority based upon its determination of
11the potential financial risk to the Commonwealth.

12(3) No financial assistance shall be approved if the
13proceeds would be used to:

14(i) refinance any portion of the total cost of a
15capital development project, pollution prevention
16infrastructure or other existing loans or debt;

17(ii) finance a project located outside the
18geographic boundaries of this Commonwealth;

19(iii) relocate a business to another part of this
20Commonwealth, unless approved in advance by the authority
21which shall consider the negative economic impact on the
22community that the business is leaving; or

23(iv) provide funds, directly or indirectly, for
24payment distribution or as a loan to owners, partners or
25shareholders of a small business, except as ordinary
26compensation for services rendered.

27(4) (i) The terms of all agreements for financial
28assistance awarded under this chapter shall include any
29material terms, requirements or other conditions provided
30for agreements entered into under this chapter. The

1authority may impose other terms and conditions if it
2determines they are in the best interests of this
3Commonwealth, including a provision requiring collateral
4for any penalty which may be imposed.

5(ii) Upon approving an application for a loan, the
6authority shall draw an advance equal to the principal
7amount of the loan from the appropriate account or
8accounts; and prior to providing loan funds to the
9applicant, the authority shall require the applicant to
10execute a note and to enter into a loan agreement and any
11other agreement as the authority shall require.

12(e) Reporting and inspection.--An applicant for or a
13recipient of financial assistance made under this chapter shall,
14upon request:

15(1) Permit the authority to inspect its premises, books
16and records.

17(2) Provide updated information to the authority if
18conditions change to the extent that the information
19originally given becomes inaccurate or misleading.

20(3) Provide the authority with any periodic financial
21reports and audits that the authority may require.

22§ 1751. Small Business First Program.

23(a) General rule.--The Small Business First Program shall
24provide low-interest loans and lines of credit to small
25businesses for capital development projects that will stimulate
26the expansion and assist in the viability of small businesses,
27thereby creating new jobs and retaining existing jobs in this
28Commonwealth.

29(b) Application.--In addition to the requirements listed in
30section 1750(b) (relating to programs generally), the

1application shall include the following:

2(1) A description of the capital development project,
3including the following:

4(i) The number of employment opportunities to be
5created or preserved by the proposed capital development
6project.

7(ii) If the applicant is an agricultural producer, a
8demonstration that there is a substantial likelihood that
9the project will enhance the agricultural operation.

10(2) A financial commitment from a responsible source for
11any cost of the project in excess of the amount requested.

12(3) A demonstration of the ability of the applicant to
13meet and satisfy the debt service as it becomes due and
14payable.

15(4) The existence and sufficiency of collateral for the
16loan.

17(c) Conditions and restrictions.--A loan made under this
18section may:

19(1) Finance the development, construction, renovation or
20acquisition of land, buildings, machinery or equipment,
21licenses for wholesalers and distributors to sell alcoholic
22beverages or may be used for working capital.

23(2) Not exceed 50% of the total capital development
24project costs. For the purposes of this paragraph, capital
25development project costs incurred during the 12-month period
26prior to the date of submission of the application to the
27authority shall be considered part of the total capital
28development project costs.

29(d) Loan terms.--The following terms shall apply:

30(1) A loan for real property shall have a repayment

1period of up to 15 years.

2(2) A loan for machinery and equipment shall have a
3repayment period of up to ten years.

4(3) A loan or line of credit for working capital shall
5have a repayment period of up to three years.

6(4) If, in a capital development project, two or more
7uses are planned, the loan terms may be combined.

8(5) The interest rate shall be determined by the
9authority.

10(6) The authority shall determine the job retention or
11job creation requirements of each project financed in whole
12or in part through a loan made under this section.

13(7) All loans shall be secured by lien positions on
14collateral at the highest level of priority, as determined by
15the authority.

16(e) Penalty for noncompliance.--In the event that a loan 
17recipient fails to create or preserve the number of employment 
18opportunities specified in the approved application, the 
19authority may impose a penalty equal to an increase of up to 5% 
20above the existing loan interest rate for the remainder of the 
21loan, unless it determines that the failure is due to 
22circumstances outside the control of the loan recipient.

23§ 1752. Community Economic Development Program.

24(a) General rule.--The Community Economic Development
25Program shall provide loans for small businesses located in
26distressed communities which are involved in the business-to-
27public service, mercantile, commercial or point-of-sale retail
28sectors in order to enhance the economic well-being of the
29community by employing residents of the community and by
30providing products or services to that community.

1(b) Conditions and restrictions.--The following shall apply:

2(1) A loan for land, buildings, machinery, equipment or
3working capital may not exceed 50% of the total capital
4development project costs. For the purposes of this
5paragraph, capital development project costs incurred during
6the 12-month period prior to the date of submission of the
7application to the authority shall be considered part of the
8total capital development project costs.

9(2) Each capital development project shall meet the job
10retention or job creation requirements established by the
11authority.

12(3) The maximum loan amount available under this program
13will be set by the authority.

14(4) No loans shall be approved if the proceeds of the
15loan would be used to provide funds for speculation in real
16or personal property, whether tangible or intangible.

17(c) Loan terms.--The following terms shall apply:

18(1) A loan for real property shall have a repayment
19period of up to 15 years.

20(2) A loan for machinery and equipment shall have a
21repayment period of up to ten years.

22(3) A loan or line of credit for working capital shall
23have a repayment period of up to three years.

24(4) All loans shall be secured by lien positions on
25collateral at the highest level of priority, as determined by
26the authority.

27(d) Application.--In addition to the requirements listed in
28section 1750(b) (relating to programs generally), the
29application shall include the following:

30(1) A financial commitment from a responsible source for

1the cost of the capital development project in excess of the
2amount requested.

3(2) A demonstration that the capital development project
4will have a direct impact on the community in which the
5capital development project is or will be located, on
6residents of that community or on the local and regional
7economy. The authority shall establish criteria that will
8assist in making this demonstration.

9(3) A projection of the number of employment
10opportunities to be created or preserved by the proposed
11capital development project.

12(e) Penalty for noncompliance.--In the event that a loan 
13recipient fails to create or preserve the number of employment 
14opportunities specified in the approved application, the 
15authority may impose a penalty equal to an increase of up to 5% 
16above the existing rate for the remainder of the loan, unless it 
17determines that the failure is due to circumstances outside the 
18control of the loan recipient.

19§ 1753. Export Financing Program.

20(a) General rule.--The Export Financing Program shall
21provide loans and lines of credit to export businesses for
22working capital and accounts receivable financing, in order to
23increase the level of foreign exports and the number of
24Pennsylvania companies exporting goods and services.

25(b) Application.--In addition to the requirements listed in
26section 1750(b) (relating to programs generally), the
27application shall include the following:

28(1) The number of employment opportunities to be created
29or preserved by the proposed capital development project.

30(2) A financial commitment from a responsible source for

1any cost of the capital development project in excess of the
2amount requested.

3(3) A statement that the loan, if approved, would not
4supplant funding from private sector sources on commercially
5reasonable terms.

6(4) A demonstration that the applicant will be able to
7meet and satisfy the debt service as it becomes due and
8payable.

9(5) The existence and sufficiency of collateral for the
10loan.

11(c) Conditions and restrictions.--

12(1) The maximum loan amount, repayment period and
13interest rate available under this program will be set by the
14authority.

15(2) The authority may, in its discretion, require any of
16the following:

17(i) That the applicant be eligible for an export
18credit insurance policy for small businesses offered by
19the Ex-Im Bank.

20(ii) That the export credit sales contract be
21insured by an export credit insurance policy offered by
22the Ex-Im Bank.

23(iii) That the loan be guaranteed by the working
24capital guaranty program offered by the Ex-Im Bank.

25(3) No loan shall be approved if the proceeds of the
26loan would be used to provide funds for speculation in real
27or personal property, whether tangible or intangible.

28(4) All loans shall be secured by lien positions on
29collateral at the highest level of priority, as may be
30determined by the authority.

1(d) Penalty for noncompliance.--In the event that a loan 
2recipient fails to create or preserve the number of employment 
3opportunities specified in the approved application, the 
4authority may impose a penalty equal to an increase of up to 5% 
5above the existing loan interest rate for the remainder of the 
6loan, unless it determines that the failure is due to 
7circumstances outside the control of the loan recipient.

8§ 1754. Pennsylvania Industrial Development Program.

9(a) General rule.--The Pennsylvania Industrial Development
10Program shall provide loans for industrial development projects,
11industrial parks and multiple-tenancy building projects, in
12order to increase employment levels and the overall economic
13health of this Commonwealth.

14(b) Loans for industrial development projects.--The
15authority may contract to loan an amount not to exceed 50% of
16the cost of establishing the industrial development project,
17subject, however, to the following conditions:

18(1) Prior to the making of any loan under this
19paragraph, the authority shall determine that:

20(i) The borrower is responsible to assume all 
21obligations imposed by the authority in connection with 
22the project, financial or otherwise, and to undertake the 
23operation of the project.

24(ii) The borrower has obtained from other 
25independent and responsible sources a firm commitment for 
26any funds which, in addition to the loan made pursuant to 
27this paragraph and any other property or assets held by 
28the borrower, shall be necessary for the completion and 
29operation of the project.

30(2) The authority shall determine the interest rate and

1repayment period of any loan made under this section.

2(3) A loan made under this section shall be evidenced by 
3note of the borrower, and secured by a mortgage on the 
4project for which such loan was made, subordinate only to the 
5mortgage securing the first lien obligation issued to secure 
6the commitment of funds provided to pay the cost of the 
7project from the aforesaid independent and responsible 
8sources, and used in the financing of the project.

9(4) The authority may require such additional security
10it may deem necessary.

11(c) Loans for industrial parks.--The authority may contract
12to loan an amount not to exceed 90% of the cost of establishing
13an industrial park project, subject to the following conditions:

14(1) (Reserved).

15(2) The authority shall determine the interest rate and
16repayment period of any loan made under this subsection.

17(3) A loan made under this section shall be evidenced by 
18note of the borrower and secured by a first mortgage on the 
19industrial park or by participation in a first mortgage. If, 
20however, a Federal agency is participating in the financing 
21of the industrial park, the authority may take as security 
22for its loan a mortgage on the industrial park which is 
23second only to the mortgage given to the Federal agency.

24(4) If a loan made under this section is secured by
25participation in a first mortgage on the industrial park, a
26portion of the loan, not to exceed 10% of the cost of the
27project, may be secured by a second mortgage on the
28industrial park which is second only to the participating
29first mortgage.

30(d) Loans for multiple-tenancy building projects.--The
 

1authority may contract to loan an amount not to exceed 75% of 
2the cost of establishing the multiple-tenancy building project, 
3subject, however, to the following conditions:

4(1) (Reserved).

5(2) The authority shall determine the interest rate and
6repayment period of any loan made under this section.

7(3) A loan made under this section shall be evidenced by 
8note of the borrower and secured by a first mortgage or 
9participation in a first mortgage on the multiple-tenancy 
10building project.

11(4) The authority may contract to loan an amount not to 
12exceed 75% of the cost of the project if the loan is secured 
13by a first mortgage or participation in a first mortgage on 
14the project; otherwise, the authority may contract to loan an 
15amount not to exceed 40% of the cost of the project.

16(5) If a loan made under this section is secured by a
17participation in a first mortgage on the project, the
18authority may permit a portion of its loan, not to exceed 10%
19of the cost of the project, to be secured by a second
20mortgage on the project which is second only to the
21participating first mortgage.

22(e) Application.--In addition to the requirements listed in
23section 1750(b) (relating to programs generally), the
24application shall include the following:

25(1) A general description of the type, classes and
26number of employees employed or to be employed in the
27operation of the project.

28(2) The cost or estimate of the cost of establishing the
29project. As used in this section, "cost" shall include
30financing charges, including interest incurred prior to and

1during construction, but shall not include the cost of any
2machinery, equipment or fixtures necessary for the project or
3the installation or maintenance of any such machinery,
4equipment or fixtures.

5(3) Evidence of the arrangement made by the borrower for 
6the financing of all costs of the project over and above the 
7participation of the authority.

8(4) Evidence that the establishment of the project will
9not cause the removal of an industrial enterprise,
10manufacturing enterprise, research and development
11enterprise, agricultural producer or agricultural processor
12from one area of this Commonwealth to another area of this
13Commonwealth, as determined by the authority.

14(f) Employment projection audits.--The authority shall
15implement a procedure to determine whether the employment
16projections set out in the loan application are achieved.

17§ 1755. Machinery and Equipment Loan Program.

18(a) General rule.--The Machinery and Equipment Loan Program
19shall provide loans to businesses involved in industrial
20processes, manufacturing, mining, production agriculture,
21information technology or biotechnology for the purchase,
22installation or upgrade of equipment and machinery, including
23computer hardware and software.

24(b) Application.--In addition to the requirements listed in
25section 1750(b) (relating to programs generally), the
26application shall include the following:

27(1) A demonstration that the applicant is able to meet
28and satisfy all debt service as it becomes due and payable.

29(2) Evidence of available and sufficient collateral,
30including satisfactory lien positions on real and personal

1property.

2(3) Sufficient evidence that funds shall be used only to
3acquire and install new equipment and machinery or upgrade
4existing equipment and machinery, including the acquisition,
5application and utilization of computer hardware and
6software.

7(4) The number of net employment opportunities to be
8created by the proposed project unless the business is
9involved in production agriculture.

10(5) Evidence that the loan project will increase the
11business's competitiveness within its respective industry.

12(c) Loan terms and limitations.--The following shall apply:

13(1) No loan shall exceed 50% of the cost of the project.

14(2) Loan terms shall not exceed ten years in duration.

15(3) Proceeds of loans made under this section may not be
16used for speculation in any kind of property, real or
17personal, tangible or intangible.

18(4) Loans shall be made only for projects that
19demonstrate a significant likelihood of resulting in job
20creation or retention, as established by the authority. This
21paragraph does not apply to loans made to business
22enterprises involved in production agriculture.

23(d) Security.--All loans shall be secured by no less than a
24second lien position on the equipment purchased and other
25sufficient collateral as determined by the authority.

26(e) Penalty for noncompliance.--In the event that a loan 
27recipient fails to create or preserve the number of employment 
28opportunities specified in the approved application, the 
29authority may impose a penalty equal to an increase of up to 5% 
30above the existing rate for the remainder of the loan, unless it
 

1determines that the failure is due to circumstances outside the 
2control of the loan recipient.

3§ 1756. Disadvantaged Business Development Program.

4(a) General rule.--The Disadvantaged Business Development
5Program shall provide financial assistance to businesses owned
6by socially and economically disadvantaged persons.

7(b) Application.--In addition to the requirements listed in
8section 1750(b) (relating to programs generally), the
9application shall include the following:

10(1) A statement that the applicant is a United States
11citizen, resident of this Commonwealth and member of a group
12or groups which have suffered disadvantages arising from
13chronic racial, ethnic or economic circumstances.

14(2) An explanation as to how the applicant's ability to 
15compete in the free enterprise system has been impaired due 
16to diminished capital and credit opportunities, as compared 
17to others in the same or a similar line of business who are 
18not socially and economically disadvantaged.

19(c) Loan terms and conditions.--The authority shall have the
20power to lend money to and to guarantee, endorse or act as
21surety on the bonds, notes, contracts or other obligations of,
22or otherwise financially assist a business owned by a person who
23meets the criteria in subsection (a), and to establish and
24regulate the terms, security and conditions with respect to any
25such loans or financial assistance and the charges for interest
26and service connected therewith.

27§ 1757. First Industries Program.

28(a) General purpose.--The First Industries Program shall
29provide financial assistance for projects related to tourism and
30agriculture located within this Commonwealth.

1(b) Loans.--The First Industries Program shall provide loans
2to businesses involved in tourism and agriculture that would
3otherwise satisfy the requirements for a loan under section 1751
4(relating to Small Business First Program), 1752 (relating to
5Community Economic Development Program) or 1755 (relating to
6Machinery and Equipment Loan Fund Program).

7(c) Loan guarantees.--An applicant may request a guarantee
8for a loan to be made by a commercial lending institution or
9community development financial institution to assist with the
10financing of a project related to tourism or agriculture.

11(d) Application.--In addition to the requirements listed in
12section 1750(b) (relating to programs generally), the
13application shall include the following:

14(1) A description of the proposed project financing,
15including terms, conditions and the collateral or security
16required for the loan for which the guarantee is being
17requested.

18(2) A copy of the borrower's last two years of financial
19statements.

20(e) Terms and limitations.--

21(1) The maximum guarantee amount and percentage made
22under this section shall be determined by the authority.

23(2) No less than $500,000 of private funds must be
24invested in the project.

25(3) In addition to any other terms and conditions
26required by the authority, the guarantee agreement shall
27provide for the following:

28(i) The procedure for the submission by the
29commercial lending institution or community development
30financial institution of a claim for payment. This

1procedure shall require that the commercial lending
2institution or community development financial
3institution demonstrate that it has exhausted all
4available remedies against the borrower, other guarantors
5and collateral before seeking payment under the
6agreement.

7(ii) A requirement that a percentage of any moneys
8recovered subsequent to the payment of a claim by the
9authority be remitted to the authority.

10(iii) Periodic reporting requirements by the
11commercial lending institution or community development
12financial institution regarding itself and the loans that
13have been awarded guarantees under this section.

14§ 1758. Second Stage Loan Guarantee Program.

15(a) General purpose.--The Second Stage Loan Guarantee
16Program shall provide loan guarantees to commercial lending
17institutions that make loans to life sciences, advanced
18technology or manufacturing businesses located in this
19Commonwealth.

20(b) Application for enrollment.--A commercial lending
21institution may apply for enrollment in the program authorized
22by this section. The application shall be in the form required
23by the authority and, in addition to the requirements listed in
24section 1750(b) (relating to programs generally), shall include
25the following:

26(1) The name and address of the commercial lending
27institution and the name and title of the individual who will
28serve as the point of contact for the commercial lending
29institution.

30(2) A statement defining the service area of the

1commercial lending institution.

2(3) A statement describing the commercial lending
3activities engaged in by the commercial lending institution
4and how the institution intends to expand those activities as
5a result of its participation in the program authorized by
6this section.

7(c) Enrollment approval.--Upon approval of an application
8for enrollment, the authority shall execute a master guarantee
9agreement in favor of the commercial lending institution. In
10addition to any other terms and conditions required by the
11authority, the master guarantee agreement shall provide for the
12following:

13(1) The procedure for the submission of a claim for
14payment by the commercial lending institution. The procedure
15shall require that the commercial lending institution
16demonstrate that it has exhausted all available remedies
17against the borrower, other guarantors and collateral for the
18loan before seeking payment under the agreement.

19(2) A requirement that a percentage of any moneys
20recovered by the commercial lending institution subsequent to
21any payment made under the master guarantee agreement by the
22authority be remitted to the authority.

23(3) Periodic reporting requirements by the commercial
24lending institution regarding itself and regarding the loans
25for which guarantee certificates have been issued under this
26section.

27(d) Application for guarantee.--A commercial lending
28institution enrolled in the program authorized by this section
29may submit an application to the authority for the guarantee of
30a proposed loan. The application shall be in the form required

1by the authority and, in addition to the requirements listed in
2section 1750(b), shall include the following:

3(1) A demonstration that the use of loan proceeds by the
4borrower will result in jobs being created or retained within
5this Commonwealth, and an estimate as to the number of
6projected new or retained employees as a result of the loan.

7(2) A statement that the borrower's business is located
8within the commercial lending institution's service area and
9within this Commonwealth.

10(3) A copy of the borrower's last two years of financial
11statements prepared or reported on by an independent
12certified public accountant.

13(4) A statement describing the purpose of the loan, the
14requested amount of the loan, a copy of the commercial
15lending institution's commitment letter and applicable credit
16underwriting that supports the repayment of the loan, as well
17as the collateral and other guarantees offered by the
18borrower to support the loan.

19(5) Certification that the borrower's business has been
20in existence for at least two years at the time of
21application.

22(6) Demonstration that the borrower is financially
23responsible and has the ability to repay the loan.

24(e) Limitations.--

25(1) The maximum guarantee amount and percentage shall be
26determined by the authority and shall terminate at the end of
27seven years.

28(2) At no time may a guarantee exceed $1,000,000 for any
29one loan.

30SUBCHAPTER F

1MISCELLANEOUS PROVISIONS

2Sec.

31771. Definitions.

41771.1 Transfer from Pennsylvania Industrial Development
5Authority to Pennsylvania Business Development
6Authority.

71772. Transfer from Commonwealth Financing Authority to 
8Pennsylvania Business Development Authority for First 
9Industries Program and Second Stage Program.

101773. Transfer from Pennsylvania Minority Business Development
11Authority to Pennsylvania Business Development
12Authority.

131774. Successorship and transfer of assets and liabilities.

14§ 1771. Definitions.

15The following words and phrases when used in this subchapter
16shall have the meanings given to them in this section unless the
17context clearly indicates otherwise:

18"Account." The Pennsylvania Industrial Development Account
19and any similar account established by a successor to the
20Pennsylvania Business Development Authority that assumes the
21obligations under the Pennsylvania Industrial Development
22Authority bond indenture.

23"Debt." Notes, instruments and other evidences of
24indebtedness or obligations which were issued prior to the
25effective date of this section for the same programs or similar
26programs to those described under Subchapter E (relating to
27programs) and under the following:

28(1) The act of May 17, 1956 (1955 P.L.1609, No.537),
29known as the Pennsylvania Industrial Development Authority
30Act.

1(2) The act of July 22, 1974 (P.L.598, No.206), known as
2the Pennsylvania Minority Business Development Authority Act.

3(3) 12 Pa.C.S. Chs. 23 (relating to small business
4first) and 29 (relating to machinery and equipment loans).

5"Debt instrument." Any trust instrument or indenture or
6other financial instrument pursuant to which debt was issued,
7incurred or secured.

8"Program." The Pennsylvania Industrial Development Program. 
9The term shall include any similar program established by a
10successor to the Pennsylvania Business Development Authority
11that assumes the obligations under the Pennsylvania Industrial
12Development Authority bond indenture.

13"Prior programs." Except for programs transferred under
14sections 1771.1 (relating to transfer from Pennsylvania
15Industrial Development Authority to Pennsylvania Business
16Development Authority) and 1773 (relating to transfer from
17Pennsylvania Minority Business Development Authority to
18Pennsylvania Business Development Authority), the same programs
19or similar programs to those described under Subchapter E
20(relating to programs) and created under the following acts
21which are repealed, in whole or in part, pursuant to this 
22chapter:

23(1) The act of May 17, 1956 (1955 P.L.1609, No.537),
24known as the Pennsylvania Industrial Development Authority
25Act.

26(2) The act of July 22, 1974 (P.L.598, No.206), known as
27the Pennsylvania Minority Business Development Authority Act.

28(3) 12 Pa.C.S. Chs. 23 (relating to small business 
29first) and 29 (relating to machinery and equipment loans).

30(4) Sections 1552 (relating to First Industries Program)

1and 1553 (relating to Second Stage Loan Program).

2§ 1771.1. Transfer from Pennsylvania Industrial Development
3Authority to Pennsylvania Business Development
4Authority.

5(a) (Reserved).

6(b) Designation of Pennsylvania Business Development
7Authority as successor to Pennsylvania Industrial Development
8Authority.--The Pennsylvania Business Development Authority, as
9a public instrumentality of the Commonwealth, shall be and is
10designated as successor to Pennsylvania Industrial Development
11Authority. The separate existence of the Pennsylvania Industrial
12Development Authority shall cease.

13(c) Transfer of assets and liabilities of Pennsylvania
14Industrial Development Authority.--The following shall occur:

15(1) The following shall be taken and deemed to be
16transferred to and vested in the Pennsylvania Business
17Development Authority, subject to any pledge in favor of the
18holders of bonds:

19(i) All of the real, personal and mixed property and
20all interests in the property of the Pennsylvania
21Industrial Development Authority, including loans to
22industrial development agencies and property acquired as
23a result of foreclosures or in lieu of foreclosures of
24mortgages securing the loans.

25(ii) Any debts or amount due to the Pennsylvania
26Industrial Development Authority.

27(iii) The Pennsylvania Industrial Development
28Authority's right, title and interest in and to revenues
29pledged to secure bonds, the interests of the
30Pennsylvania Industrial Development Authority under trust

1instruments securing its bonds, including the right to
2issue obligations pursuant to and secured by the
3instruments, sinking funds on deposit and all funds
4deposited under trust instruments, leaseholds and rights
5and deposits under the trust instruments.

6(iv) Rights under interest rate exchange agreements
7and other financial instruments.

8(v) Appropriations.

9(vi) All other rights and assets of the Pennsylvania
10Industrial Development Authority of any nature.

11(2) (i) The Pennsylvania Business Development Authority
12shall succeed to, assume and become liable for all
13liabilities and obligations of the Pennsylvania
14Industrial Development Authority, including the bonds and
15the Pennsylvania Industrial Development Authority bond
16indenture, obligations under interest rate exchange
17agreements and other financial instruments, contracts for
18purchase of goods or services and other liabilities of
19any nature.

20(ii) The liabilities and obligations under subparagraph
21(i) shall be subject to the same limitations as were
22applicable to the Pennsylvania Industrial Development
23Authority prior to the transfer of assets and liabilities,
24including limitations as to payment source, pledges,
25assignments, liens, charges, terms and conditions.

26(iii) The transfer of assets and liabilities to the
27Pennsylvania Business Development Authority as successor are
28assumed by the Pennsylvania Business Development Authority
29and shall not impair the rights or the security of holders of
30bonds or other creditors, persons dealing with Pennsylvania

1Industrial Development Authority, liens upon the property of
2Pennsylvania Industrial Development Authority or persons
3holding claims against Pennsylvania Industrial Development
4Authority.

5(iv) Any claim existing or action or proceeding pending
6by or against the Pennsylvania Industrial Development
7Authority shall be prosecuted to judgment as if the transfer
8had not taken place or the Pennsylvania Business Development
9Authority may be proceeded against or substituted in its
10place.

11(d) Rights and powers.--

12(1) Nothing under this chapter shall alter or limit the
13rights and powers vested in the Pennsylvania Business
14Development Authority as successor to the Pennsylvania
15Industrial Development Authority or otherwise created under
16the act of May 17, 1956 (1955 P.L.1609, No.537), known as the
17Pennsylvania Industrial Development Authority Act, in any
18manner inconsistent with the obligations of the Pennsylvania
19Industrial Development Authority and, after the effective
20date of this section, the Pennsylvania Business Development
21Authority, to obligees of the Pennsylvania Industrial
22Development Authority until all bonds issued by the
23Pennsylvania Industrial Development Authority, together with
24the interest on the bonds, are fully paid and discharged.

25(2) Nothing under this chapter shall authorize personal
26recourse for any claim based on bonds or trust instruments
27securing the bonds or trust instruments, against any member,
28officer or employee of the Pennsylvania Industrial
29Development Authority, either directly or through the
30Pennsylvania Industrial Development Authority or the

1Pennsylvania Business Development Authority under any
2constitutional provision, statute or rule of law or by the
3enforcement of any assessment or penalty or otherwise.

4(e) Pennsylvania Industrial Development Account and
5Program.--

6(1) The provisions of this chapter relating to the
7account and the program shall apply to the assets and
8revenues of the Pennsylvania Industrial Development Authority
9transferring to the Pennsylvania Business Development
10Authority as successor in addition to the assets and revenues
11arising from the continuing program subsequent to the
12transfer.

13(2) The pledge made by the trust instruments securing
14the Pennsylvania Industrial Development Authority bonds shall
15apply to revenues of the Pennsylvania Business Development
16Authority from the program and to assets held in the account.
17No withdrawals from the account may be made except in
18compliance with the trust instruments securing the
19Pennsylvania Industrial Development Authority bonds.

20(f) Definition.--As used in this section, the term "bond"
21means any bond, note or other financial obligation of the
22Pennsylvania Industrial Development Authority, including
23interest rate exchange agreements or other financial instruments
24related to bonds.

25§ 1772. Transfer from Commonwealth Financing Authority to the 
26Pennsylvania Business Development Authority for the 
27First Industries Program and Second Stage Loan 
28Program.

29On the effective date of this chapter, the trust accounts
30established by the Commonwealth Financing Authority under

1sections 1541 (relating to trust accounts) and 1542(b) (relating
2to revolving loan program accounts) for the First Industries
3Program and the Second Stage Loan Program shall be transferred
4to and vested in the authority without further act or deed.

5§ 1773. Transfer from Pennsylvania Minority Business
6Development Authority to Pennsylvania Business
7Development Authority.

8(a) (Reserved).

9(b) Designation of Pennsylvania Business Development
10Authority as successor to the Pennsylvania Minority Business
11Development Authority.--The Pennsylvania Business Development
12Authority, as a public instrumentality of the Commonwealth,
13shall be and is designated as successor to the Pennsylvania
14Minority Business Development Authority. The separate existence
15of the Pennsylvania Minority Business Development Authority
16shall cease.

17(c) Transfer of assets and liabilities of the Pennsylvania
18Minority Business Development Authority.--The following shall
19occur:

20(1) The following shall be taken and deemed to be
21transferred to and vested in the Pennsylvania Business
22Development Authority, subject to any pledge in favor of the
23holders of bonds:

24(i) All of the real, personal and mixed property and
25all interests in the property of the Pennsylvania
26Minority Business Development Authority, including loans
27and other debts owing to the Pennsylvania Minority
28Business Development Authority and amounts due to the
29Pennsylvania Minority Business Development Authority
30under the loans and debts.

1(ii) The right, title and interest of the
2Pennsylvania Minority Business Development Authority
3under bond indentures, including all revenues pledged as
4security for the right, title and interest and the right
5to issue obligations pursuant to and secured by the bond
6indentures, sinking funds on deposit and all funds
7deposited under bond indentures, leaseholds and rights
8and deposits under bond indentures.

9(iii) Appropriations.

10(iv) All other rights and assets of the Pennsylvania
11Minority Business Development Authority.

12(2) (i) The Pennsylvania Business Development Authority
13shall succeed to, assume and become liable for all
14liabilities and obligations of the Pennsylvania Minority
15Business Development Authority, including the bonds, bond
16indentures, contracts for purchase of goods or services
17and other liabilities.

18(ii) The liabilities and obligations under
19subparagraph (i) shall be subject to the same limitations
20as were applicable to the Pennsylvania Minority Business
21Development Authority prior to the transfer of assets and
22liabilities, including limitations as to payment source,
23pledges, assignments, liens, charges, terms and
24conditions.

25(iii) The transfer of assets and liabilities to the
26Pennsylvania Business Development Authority as successor
27are assumed by the Pennsylvania Business Development
28Authority and shall not impair the rights or the security
29of holders of bonds or other creditors of the
30Pennsylvania Minority Business Development Authority,

1persons dealing with the Pennsylvania Minority Business
2Development Authority, liens upon the property of the
3Pennsylvania Minority Business Development Authority or
4persons holding claims against the Pennsylvania Minority
5Business Development Authority.

6(iv) Any claim existing or action or proceeding
7pending by or against the Pennsylvania Minority Business
8Development Authority shall be prosecuted to judgment as
9if the transfer had not taken place or the Pennsylvania
10Business Development Authority may be proceeded against
11or substituted in its place.

12(d) Rights and powers.--

13(1) Nothing under this chapter shall alter or limit the
14rights and powers vested in the Pennsylvania Business
15Development Authority as successor to the Pennsylvania
16Minority Business Development Authority or otherwise created
17by the act of July 22, 1974 (P.L.598, No.206), known as the 
18Pennsylvania Minority Business Development Authority Act,
19and, after the effective date of this section, the
20Pennsylvania Business Development Authority, to obligees of
21the Pennsylvania Minority Business Development Authority
22until all bonds issued by the Pennsylvania Minority Business
23Development Authority, together with the interest on the
24bonds, are fully paid and discharged.

25(2) Nothing under this chapter shall authorize personal
26recourse for any claim based on any obligation of the
27Pennsylvania Minority Business Development Authority,
28including its bonds or bond indentures, against any member,
29officer or employee of the Pennsylvania Minority Business
30Development Authority either directly or through the

1Pennsylvania Minority Business Development Authority or the
2Pennsylvania Business Development Authority under any
3constitutional provision, statute or rule of law or by the
4enforcement of any assessment or penalty or otherwise.

5(e) Definition.--As used in this section, the term "bond" 
6means bonds, notes and other evidences of indebtedness or 
7obligations which the Pennsylvania Minority Business Development 
8Authority issued under the act of July 22, 1974 (P.L.598, 
9No.206), known as the Pennsylvania Minority Business Development 
10Authority Act.

11§ 1774. Successorship and transfer of assets and liabilities.

12(a) (Reserved).

13(b) Transfer of assets and liabilities of prior programs.--
14The following shall occur:

15(1) The following shall be taken and deemed to be
16transferred to and vested in the Pennsylvania Business
17Development Authority, subject to any pledge in favor of the
18holders of debt:

19(i) All of the real, personal and mixed property and
20all interests in the property of the prior programs,
21including loans and other debts owing to the prior
22programs and amounts due to the prior programs under the
23loans and other debts.

24(ii) The right, title and interest of the prior
25programs under debt instruments, including all revenues
26pledged as security for the right, title and interest and
27the right to issue obligations pursuant to and secured by
28the debt instruments, sinking funds on deposit and all
29funds deposited under debt instruments, leaseholds and
30rights and deposits under the debt instruments.

1(iii) Appropriations made with respect to the prior
2programs.

3(iv) All other rights and assets of the prior
4programs.

5(2) (i) The Pennsylvania Business Development Authority
6shall succeed to, assume and become liable for all
7liabilities and obligations of the prior programs,
8including the debt, debt instruments, contracts for
9purchase of goods or services, and other liabilities.

10(ii) The liabilities and obligations under
11subparagraph (i) shall be subject to the same limitations
12as were applicable to the prior programs prior to the
13transfer of assets and liabilities, including limitations
14as to payment source, pledges, assignments, liens,
15charges, terms and conditions.

16(iii) The transfer of assets and liabilities to the
17Pennsylvania Business Development Authority as successor
18shall not impair the rights or the security of holders of
19debt or other creditors of the prior programs, persons
20dealing with the prior programs, liens upon the property
21of the prior programs or persons holding claims against
22the prior programs, all of which are assumed by the
23Pennsylvania Business Development Authority.

24(iv) Any claim existing or action or proceeding
25pending by or against the prior programs shall be
26prosecuted to judgment as if the transfer had not taken
27place or the Pennsylvania Business Development Authority
28may be proceeded against or substituted in its place.

29(c) Rights and powers.--

30(1) Nothing under this chapter shall alter or limit the

1rights and powers vested in the Pennsylvania Business
2Development Authority as successor to the prior programs or
3otherwise created by the acts under which the prior programs
4were initiated in any manner inconsistent with the
5obligations of the prior programs and, after the effective
6date of this section, the Pennsylvania Business Development
7Authority, to obligees of the prior programs until all debt
8at any time issued by the prior programs, together with the
9interest on the debt, are fully paid and discharged.

10(2) Nothing under this chapter shall authorize personal
11recourse for any claim based on any obligation of the prior
12programs, including without limitation its debt or debt
13instruments, against any member, officer or employee of the
14prior programs whether directly or through the prior programs
15or the Pennsylvania Business Development Authority under any
16constitutional provision, statute or rule of law or by the
17enforcement of any assessment or penalty or otherwise.

18Section 5. Any money that has been allocated or appropriated
19and has been expended prior to the effective date of this
20section for the same programs or similar programs to those
21described under 64 Pa.C.S. Ch. 17 Subch. E shall be deducted
22from the corresponding allocation or appropriation under 64
23Pa.C.S. Ch. 17.

24Section 6. Repeals are as follows:

25(1) The General Assembly declares that the repeal under
26paragraph (2) is necessary to effectuate the addition of the
27following provisions of 64 Pa.C.S.:

28(i) Ch. 17 Subch. C.

29(ii) Section 1731(4).

30(iii) Section 1734(a).

1(iv) Section 1754.

2(v) Section 1771.1.

3(2) The act of May 17, 1956 (1955 P.L.1609, No.537),
4known as the Pennsylvania Industrial Development Authority
5Act, is repealed.

6(3) The General Assembly declares that the repeal under
7paragraph (4) is necessary to effectuate the addition of the
8following provisions of 64 Pa.C.S.:

9(i) Ch. 17 Subch C.

10(ii) Section 1731(6).

11(iii) Section 1756.

12(iv) Section 1773.

13(4) The act of July 22, 1974 (P.L.598, No.206), known as
14the Pennsylvania Minority Business Development Authority Act,
15is repealed.

16Section 7. This act continues repealed provisions of the
17Pennsylvania Consolidated Statutes as follows:

18(1) The addition of 64 Pa.C.S. §§ 1731(1) and 1751 is a
19continuation of 12 Pa.C.S. Ch. 23. Except as otherwise
20provided in 64 Pa.C.S. § 1731(1) or 1751, all activities
21initiated under 12 Pa.C.S. Ch. 23 shall continue and remain
22in full force and effect and may be completed under 64
23Pa.C.S. §§ 1731(1) and 1751. Orders, regulations, rules and
24decisions which were made under the 12 Pa.C.S. Ch. 23 and
25which are in effect on the effective date of section 1 {12
26Pa.C.S. Ch. 23} of this act shall remain in full force and
27effect until revoked, vacated or modified under 64 Pa.C.S. §
281731(1) or 1751. Contracts, obligations and collective
29bargaining agreements entered into under 12 Pa.C.S. Ch. 23
30are not affected nor impaired by the repeal of 12 Pa.C.S. Ch.

123.

2(2) The addition of 64 Pa.C.S. §§ 1731(5) and 1755 is a
3continuation of 12 Pa.C.S. Ch. 29. Except as otherwise
4provided in 64 Pa.C.S. § 1731(5) or 1755, all activities
5initiated under 12 Pa.C.S. Ch. 29 shall continue and remain
6in full force and effect and may be completed under 64
7Pa.C.S. §§ 1731(5) and 1755. Orders, regulations, rules and
8decisions which were made under the 12 Pa.C.S. Ch. 29 and
9which are in effect on the effective date of section 1 {12
10Pa.C.S. Ch. 29} of this act shall remain in full force and
11effect until revoked, vacated or modified under 64 Pa.C.S. §
121731(5) or 1755. Contracts, obligations and collective
13bargaining agreements entered into under 12 Pa.C.S. Ch. 29
14are not affected nor impaired by the repeal of 12 Pa.C.S. Ch.
1529.

16(3) The addition of 64 Pa.C.S. §§ 1731(7), 1757 and 1772
17is a continuation of 64 Pa.C.S. §§ 1542(b) and 1552. Except
18as otherwise provided in 64 Pa.C.S. § 1731(7), 1757 or 1772,
19all activities initiated under 64 Pa.C.S. §§ 1542(b) and 1552
20shall continue and remain in full force and effect and may be
21completed under 64 Pa.C.S. §§ 1731(7), 1757 and 1772. Orders,
22regulations, rules and decisions which were made under 64
23Pa.C.S. §§ 1542(b) and 1552 and which are in effect on the
24effective date of sections 2 and 3 {64 Pa.C.S. §§ 1542(b) and
251552} of this act shall remain in full force and effect until
26revoked, vacated or modified under 64 Pa.C.S. § 1731(7), 1757
27or 1772. Contracts, obligations and collective bargaining
28agreements entered into under 64 Pa.C.S. §§ 1542(b) and 1552
29are not affected nor impaired by the repeal of 64 Pa.C.S. §§
301542(b) and 1552.

1(4) The addition of 64 Pa.C.S. §§ 1731(8), 1758 and 1772
2is a continuation of 64 Pa.C.S. § 1553. Except as otherwise
3provided in 64 Pa.C.S. § 1731(8), 1758 or 1772, all
4activities initiated under 64 Pa.C.S. § 1553 shall continue
5and remain in full force and effect and may be completed
6under 64 Pa.C.S. §§ 1731(8), 1758 and 1772. Orders,
7regulations, rules and decisions which were made under 64
8Pa.C.S. § 1553 and which are in effect on the effective date
9of section 3 {64 Pa.C.S. § 1553} of this act shall remain in
10full force and effect until revoked, vacated or modified
11under 64 Pa.C.S. § 1731(7), 1757 or 1772. Contracts,
12obligations and collective bargaining agreements entered into
13under 64 Pa.C.S. § 1553 are not affected nor impaired by the
14repeal of 64 Pa.C.S. § 1553.

15Section 8. The addition of 64 Pa.C.S. Ch. 17 Subch. C is a
16continuation of the act of May 17, 1956 (1955 P.L.1609, No.537),
17known as the Pennsylvania Industrial Development Authority Act
18and the act of July 22, 1974 (P.L.598, No.206), known as the
19Pennsylvania Minority Business Development Authority Act. The
20following apply:

21(1) Except as otherwise provided in 64 Pa.C.S. Ch. 17
22Subch. C, all activities related to bonds initiated under the
23Pennsylvania Industrial Development Authority Act or the
24Pennsylvania Minority Business Development Authority Act
25shall continue and remain in full force and effect and may be
26completed under 64 Pa.C.S. Ch. 17 Subch. C. Orders,
27regulations, rules and decisions which were related to bonds,
28which were made under the Pennsylvania Industrial Development
29Authority Act or the Pennsylvania Minority Business
30Development Authority Act and which are in effect on the

1effective date of section 7 of this act shall remain in full
2force and effect until revoked, vacated or modified under 64
3Pa.C.S. Ch. 17 Subch. C. Contracts, obligations and
4collective bargaining agreements which are related to bonds
5and which were entered into under the the Pennsylvania
6Industrial Development Authority Act or the Pennsylvania
7Minority Business Development Authority Act are not affected
8nor impaired by the repeal of the the Pennsylvania Industrial
9Development Authority Act or the Pennsylvania Minority
10Business Development Authority Act.

11(2) Any difference in language between 64 Pa.C.S. Ch. 17
12Subch C and the Pennsylvania Industrial Development Authority
13Act or the Pennsylvania Minority Business Development
14Authority Act is intended only to conform to the style of the
15Pennsylvania Consolidated Statutes and is not intended to
16change or affect the legislative intent, judicial
17construction or administration and implementation of the
18Pennsylvania Industrial Development Authority Act or the
19Pennsylvania Minority Business Development Authority Act.

20Section 9. The addition of 64 Pa.C.S. §§ 1731(4), 1734(a),
211754 and 1771.1 is a continuation of the act of May 17, 1956
22(1955 P.L.1609, No.537), known as the Pennsylvania Industrial
23Development Authority Act. The following apply:

24(1) Except as otherwise provided in 64 Pa.C.S. §
251731(4), 1734(a), 1754 or 1771.1, all activities initiated
26under the Pennsylvania Industrial Development Authority Act
27shall continue and remain in full force and effect and may be
28completed under 64 Pa.C.S. § 1731(4), 1734(a), 1754 or
291771.1. Orders, regulations, rules and decisions which were
30made under the Pennsylvania Industrial Development Authority

1Act and which are in effect on the effective date of section
27(2) of this act shall remain in full force and effect until
3revoked, vacated or modified under 64 Pa.C.S. § 1731(4),
41734(a), 1754 or 1771.1. Contracts, obligations and
5collective bargaining agreements entered into under the
6Pennsylvania Industrial Development Authority Act are not
7affected nor impaired by the repeal of the Pennsylvania
8Industrial Development Authority Act.

9(2) Any difference in language between 64 Pa.C.S. §
101731(4), 1734(a), 1754 or 1771.1 and the Pennsylvania
11Industrial Development Authority Act is intended only to
12conform to the style of the Pennsylvania Consolidated
13Statutes and is not intended to change or affect the
14legislative intent, judicial construction or administration
15and implementation of the Pennsylvania Industrial Development
16Authority Act.

17Section 10. The addition of 64 Pa.C.S. §§ 1731(6), 1756 and
181773 is a continuation of the act of July 22, 1974 (P.L.598,
19No.206), known as the Pennsylvania Minority Business Development
20Authority Act. The following apply:

21(1) Except as otherwise provided in 64 Pa.C.S. §
221731(6), 1756 or 1773, all activities initiated under the
23Pennsylvania Minority Business Development Authority Act
24shall continue and remain in full force and effect and may be
25completed under 64 Pa.C.S. §§ 1731(6), 1756 and 1773. Orders,
26regulations, rules and decisions which were made under the
27the Pennsylvania Minority Business Development Authority Act
28and which are in effect on the effective date of section
297(4) of this act shall remain in full force and effect until
30revoked, vacated or modified under 64 Pa.C.S. §§ 1731(6),

11756 and 1773. Contracts, obligations and collective
2bargaining agreements entered into under the Pennsylvania
3Minority Business Development Authority Act are not affected
4nor impaired by the repeal of the Pennsylvania Minority
5Business Development Authority Act.

6(2) Any difference in language between 64 Pa.C.S. §§
71731(6), 1756 and 1773 and the Pennsylvania Minority Business
8Development Authority Act is intended only to conform to the
9style of the Pennsylvania Consolidated Statutes and is not
10intended to change or affect the legislative intent, judicial
11construction or administration and implementation of the
12Pennsylvania Minority Business Development Authority Act.

13Section 11. This act shall take effect in 60 days.