PRINTER'S NO. 348
THE GENERAL ASSEMBLY OF PENNSYLVANIA
INTRODUCED BY FONTANA, WASHINGTON, KASUNIC, TARTAGLIONE, YUDICHAK, FERLO, FARNESE, SOLOBAY, WILLIAMS, HUGHES, BREWSTER, KITCHEN, COSTA, BLAKE AND BOSCOLA, FEBRUARY 5, 2013
REFERRED TO COMMUNITY, ECONOMIC AND RECREATIONAL DEVELOPMENT, FEBRUARY 5, 2013
1Amending Title 64 (Public Authorities and Quasi-Public
2Corporations) of the Pennsylvania Consolidated Statutes,
3providing for the definition of "small business"; and further
4providing for indebtedness and for Second Stage Loan Program.
9§ 1504. Definitions.
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16* * *
1§ 1543. Indebtedness.
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6* * *
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13(a) Establishment.--There is established a program to be
14known as the [Second Stage Loan] Small Business Investment
15Guarantee Program. The program shall provide loan guarantees to
16commercial lending institutions or economic development
17organizations that make loans to [life sciences, advanced
18technology or manufacturing businesses] small businesses located
19in Pennsylvania that are not engaged in commercial, services,
20retail or agriculture production activities, except that a
21guarantee may be approved for a small business engaged in the
22activities if it is located in an underserved area of a
24(b) Application for enrollment.--A commercial lending
25institution or an economic development organization may apply
26for enrollment in the program authorized by this section. The
27application shall be on the form prescribed by the board and
28shall include or demonstrate all of the following:
7(3) A statement describing the commercial lending
8activities engaged in by the commercial lending institution
9or economic development organization and how the institution
10intends to expand those activities as a result of its
11participation in the program authorized by this section.
12(3.1) A statement describing any lending activities
13associated with the economic development functions of the
14economic development organization and how the economic
15development organization intends to expand or supplement
16those lending activities through participation in the program
17authorized under this section.
18(4) Any other information required by the board.
19(c) Enrollment approval.--Upon being satisfied that all
20requirements have been met, the board may enroll the commercial
21lending institution or economic development organization in the
22program authorized by this section, and, if enrolled, the
23authority shall execute a master loan guarantee agreement in
24favor of the commercial lending institution or economic
25development organization. In addition to any other terms and
26conditions required by the board, the master loan guarantee
27agreement shall provide for the following:
1the commercial lending institution or economic development
2organization demonstrate that it has exhausted all available
3remedies against the borrower, other guarantors and
4collateral for the loan before seeking payment under the
6(2) A requirement that a percentage of any moneys
7recovered by the commercial lending institution or economic
8development organization subsequent to any payment made under
9the master loan guarantee agreement by the authority be
10remitted to the authority.
11(3) Periodic reporting requirements by the commercial
12lending institution or economic development organization
13regarding itself and regarding the [loans for which] loan
14guarantee certificates that have been issued under this
16(d) Application for loan guarantee.--A commercial lending
17institution or economic development organization enrolled in the
18program authorized by this section may submit an application to
19the authority for [the guarantee of a proposed loan] a loan
20guarantee. The application shall be on the form prescribed by
21the board and shall include or demonstrate all of the following:
22(1) The name and address of the borrower, the type of
23small business the borrower conducts, the location and age of
24the small business and the names and addresses of the
25principals of the borrower.
1(4) A statement describing the purpose of the loan, the
2requested amount of the loan, a copy of the commercial
3lending institution's or economic development organization's
4commitment letter and applicable credit underwriting that
5supports the repayment of the loan, as well as the collateral
6and other [guarantees] documents offered by the borrower to
7support the loan.
11(5) Any other information required by the board.
12(e) Application review.--
26(v) That the borrower's small business is located
27within the commercial lending institution's service area
28or within the economic development organization's
29jurisdiction and within this Commonwealth.
30(v.1) That the project is unlikely to proceed
1without a loan guarantee.
5(2) Upon being satisfied that all requirements have been
6met, the board may approve the loan guarantee, and, if
7approved, the authority shall issue a loan guarantee
8certificate [for the loan] to the commercial lending
9institution or economic development organization stating the
10terms and amount of the loan guarantee.
11(3) [The board may establish a subcommittee composed of
12one or more members of the board and staff of the department
13to review and approve applications for guarantees under this
19[(1) During the first two years of the term of a loan
20for which a guarantee certificate has been issued, the
21guarantee may not exceed 50% of the outstanding principal
22amount of the loan. From the end of year two through either
23the end of year seven or the end of the term of the loan,
24whichever occurs first, the guarantee may not exceed 25% of
25the outstanding principal amount of the loan. The guarantee
26will terminate at the end of seven years.]
30(2) At no time may a loan guarantee exceed $1,000,000
1for any one loan.
11"Distressed community." Any of the following:
12(1) An area which is designated a subzone, expansion
13subzone or improvement subzone under the act of October 6,
141998 (P.L.705, No.92), known as the Keystone Opportunity
15Zone, Keystone Opportunity Expansion Zone and Keystone
16Opportunity Improvement Zone Act.
19"Economic development organization." A community development
20financial institution, an industrial development agency or a
21local development district that is certified by the authority as
22possessing the qualifications necessary to evaluate and approve
23applications to the authority for financial assistance.
24Section 3. This act shall take effect in 60 days.