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 the
6Pennsylvania Business Development Authority; imposing duties
7on the Department of Community and Economic Development;
8repealing the Small Business First Program, the Machinery and
9Equipment Loan Program, the First Industries Program and the
10Second Stage Loan Program; and providing for First Industries
11Program, for Second Stage Loan Guarantee Program and for
12transfer from Commonwealth Financing Authority to 
13Pennsylvania Business Development Authority for First 
14Industries Program and Second Stage Loan Guarantee Program.

15The General Assembly of the Commonwealth of Pennsylvania
16hereby enacts as follows:

17Section 1. Chapters 23 and 29 of Title 12 of the
18Pennsylvania Consolidated Statutes are repealed:

19[CHAPTER 23

20SMALL BUSINESS FIRST

21Sec.

222301. Scope.

12302. Definitions.

22303. Establishment.

32304. Fund and accounts.

42305. Department responsibilities.

52306. Capital development loans.

62307. EDA loans.

72308. Loans in distressed communities.

82309. Pollution prevention assistance loans.

92310. Export financing loans.

102311. Reporting and inspection.

112312. Limitations.

12§ 2301. Scope.

13This chapter relates to the Small Business First Program.

14§ 2302. Definitions.

15The following words and phrases when used in this chapter
16shall have the meanings given to them in this section unless the
17context clearly indicates otherwise:

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

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

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

29"Applicant." A person that applies for a loan in accordance
30with this chapter.

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

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

12(1) As part of a for-profit project or venture not of a
13mercantile or service-related nature, except for hospitality
14industry projects.

15(2) As part of an effort to:

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

18(ii) complete an approved remediation project; or

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

21(3) As part of an effort to provide assistance to a
22small business that is a recycler of municipal or commercial
23waste or that is a manufacturer using recycled municipal or
24commercial waste materials.

25(4) As part of an effort to assist a small business with
26defense conversion activities.

27(5) As part of a for-profit project or venture to
28manufacture products to be exported out of the United States
29by a small business which is not of a mercantile or service-
30related nature, except for export-related services and

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

5(6) As part of a for-profit project or venture that
6meets the requirements of section 2308 (relating to loans in
7distressed communities)

8(7) As part of an effort to assist in the start-up or
9expansion of a for-profit or not-for-profit child day-care
10center subject to licensure by the Commonwealth.

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

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

15(1) An area loan organization for a distressed
16community.

17(2) A community development financial institution
18located in a distressed community and approved by the
19department.

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

22(1) A census tract or other specifically defined
23geographic area in which there is any of the following:

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

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

29(iii) An unemployment rate 50% higher than the
30national average.

1(2) An area which is designated a subzone, expansion
2subzone or improvement subzone under the act of October 6, 
31998 (P.L.705, No.92), known as the Keystone Opportunity Zone
4and Keystone Opportunity Expansion Zone Act.

5(3) Any other geographic area designated by the
6department as distressed. The designation shall be published
7in the Pennsylvania Bulletin.

8"EDA loan." A loan made under this chapter utilizing funds
9made available to the department under the Public Works and
10Economic Development Act of 1965 (Public Law 89-136, 42 U.S.C. § 
113121 et seq.).

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

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

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

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

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

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

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

29(1) Regulated as a hazardous air pollutant under section
306.6 of the act of January 8, 1960 (1959 P.L.2119, No.787),

1known as the Air Pollution Control Act.

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

5(3) Regulated under the act of December 7, 1990 
6(P.L.639, No.165), known as the Hazardous Material Emergency
7Planning and Response Act.

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

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

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

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

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

30(1) A substitution of one hazardous or toxic substance

1for another which will cause an increased risk to the
2environment or to human health.

3(2) A cross-media transfer.

4(3) A delisting of a hazardous waste or toxic chemical.

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

7(1) An area loan organization.

8(2) An industrial resource center created pursuant to
9the act of June 22, 2001 (P.L.400, No.31), known as the
10Industrial Resources Center Partnership Act.

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

14(1) Reduce or reuse raw materials onsite.

15(2) Reduce the production of waste.

16(3) Reduce energy consumption.

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

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

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

24(1) An enterprise located in a small business incubator
25facility.

26(2) An agricultural processor.

27(3) An agricultural producer.

28(4) An enterprise which manufactures apparel products.

29(5) An enterprise which is a for-profit or not-for-
30profit child day-care center subject to licensure by the

1Commonwealth.

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

5§ 2303. Establishment.

6There is established within the department a program to be
7known as the Small Business First Program. The program shall be
8administered by the department and provide loans to eligible
9persons for certain projects which encourage job-creating and
10job-preserving economic development within this Commonwealth.

11§ 2304. Fund and accounts.

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

16(1) Appropriations made by the General Assembly to the
17department for the program.

18(2) Federal funds made available under the Public Works
19and Economic Development Act of 1965 (Public Law 89-136, 42 
20U.S.C. § 3121 et seq.) or any other Federal statute,
21regulation or program for the program.

22(3) Payments from recipients of loans made from the
23fund.

24(4) Payments from recipients of loans made under the
25former act of July 2, 1984 (P.L.545, No.109), known as the
26Capital Loan Fund Act.

27(5) Interest income derived from investment of the money
28in the fund.

29(6) Any other deposits, payments or contributions from
30any other source made available to the department for the

1program.

2(b) Pollution prevention assistance.--The Pollution
3Prevention Assistance Account, created under the act of June 29, 
41996 (P.L.434, No.67), known as the Job Enhancement Act, is
5continued. The Treasury Department shall credit the following to
6this account:

7(1) Appropriations made by the General Assembly to the
8department for pollution prevention assistance.

9(2) Payments from recipients of loans made from the
10Pollution Prevention Assistance Account.

11(3) Transfers from the Hazardous Sites Cleanup Fund as
12established in section 602.3 of the act of March 4, 1971 
13(P.L.6, No.2), known as the Tax Reform Code of 1971.

14(4) Interest income derived from investment of the money
15in the Pollution Prevention Assistance Account.

16(5) Any other deposits, payments or contributions from
17any other source made available to the department for
18pollution prevention assistance.

19(c) Use of fund.--

20(1) Money in the fund may be used as follows:

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

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

27(2) Money from the fund derived from appropriations
28specified for export financing assistance may be deposited by
29the department in banks or trust companies in special
30accounts. The special accounts must be continuously secured

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

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

15§ 2305. Department responsibilities.

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

18(1) Administer the program.

19(2) Establish written guidelines as necessary. Any
20guidelines established shall be included in the report
21required by Chapter 3 (relating to economic development
22financing strategy).

23(3) Deposit payments made by recipients in the fund or
24the Pollution Prevention Assistance Account, as appropriate.

25(4) Approve standards for area loan organization
26application fees.

27(5) Approve community development financial
28institutions.

29(b) Program.--In administering the program, the department
30may do any of the following:

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

3(i) To establish loan reserve funds.

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

8(2) Apply to the Ex-Im Bank for delegated authority
9lender status under the Ex-Im Bank's Working Capital Guaranty
10Program.

11(3) Utilize the outstanding portfolio of loans made
12under this chapter to raise additional funds by selling,
13securing, hypothecating or otherwise using such loan proceeds
14as a financing vehicle if the funds raised are used by the
15department for either of the following purposes:

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

18(ii) To pay costs associated with financing.

19§ 2306. Capital development loans.

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

26(1) The name and address of the applicant.

27(2) A statement of the amount of loan assistance sought.

28(3) A statement of the capital development project,
29including a detailed statement of the cost of the project.

30(4) A financial commitment from a responsible source for

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

3(5) Any other information required by the department.

4(b) Area loan organization review.--

5(1) Upon receipt of a completed application, an area
6loan organization shall investigate and determine all of the
7following:

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

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

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

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

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

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

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

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

30(2) Upon being satisfied that all requirements have been

1met, the area loan organizations shall recommend the
2applicant to the department and forward the application with
3all supporting documentation to the department for its review
4and approval.

5(c) Department review.--

6(1) Within 30 days of receiving a recommendation and a
7completed application, the department shall review the
8application. If the department is satisfied that all
9requirements have been met, the department may approve the
10loan request in accordance with the following:

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

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

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

25(2) The department shall notify the area loan
26organization and applicant of its decision.

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

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

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

15(1) State the collateral securing the loan. All loans
16shall be secured by lien positions on collateral at the
17highest level of priority as may be determined by the area
18loan organization with the approval of the department.

19(2) State the repayment period in accordance with the
20following:

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

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

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

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

29(3) State the interest rate in accordance with the
30following:

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

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

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

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

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

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

23(1) Each outstanding loan.

24(2) The date approved.

25(3) The original principal amount.

26(4) The current principal balance.

27(5) The interest rate.

28(6) The purpose for which the loan was made.

29(7) An enumeration of any problems or issues which have
30arisen with regard to each loan.

1(8) A statement regarding the progress of the small
2business in creating or preserving its requisite number of
3employment opportunities.

4(9) Any other information or documentation required by
5the department.

6(g) Penalty.--

7(1) Except as provided in paragraph (2), the department
8shall impose a penalty upon a recipient if the recipient
9fails to create or preserve the number of employment
10opportunities specified in its approved 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(h) Defaults.--The department may by foreclosure take title
20to 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 moneys held in the fund. The
24department may, in order to minimize financial losses and
25sustain employment, lease the capital development project. The
26department may withdraw moneys from the fund to purchase first
27mortgages and to make payments on first mortgages on any capital
28development project which it financed where purchase or payment
29is necessary to protect a loan made under this section. The
30department may sell, transfer, convey and assign the first

1mortgages and shall deposit any moneys derived from the sale of
2any first mortgages in the fund.

3§ 2307. EDA loans.

4(a) Application and administration procedures.--The
5department shall establish application and administration
6procedures to be used for EDA loans. The procedures shall be
7established by guidelines and shall conform in all respects to
8those procedures required or established by the Economic
9Development Administration for use of Federal funds under the
10Public Works and Economic Development Act of 1965 (Public Law
1189-136, 42 U.S.C. § 3121 et seq.).

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

19§ 2308. Loans in distressed communities.

20(a) Application.--A small business located in a distressed
21community may submit an application and any applicable
22application fee to a community development institution
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 that the small business is engaged in
29business-to-public service or in the mercantile, commercial
30or point-of-sale retail business sectors.

1(3) A statement of the amount of loan assistance sought.

2(4) A statement of the capital development project,
3including a detailed statement of the cost of the project.

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

7(6) Any other information required by the department.

8(b) Community development institution review.--

9(1) Upon receipt of a completed application, a community
10development institution shall investigate and determine all
11of the following:

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

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

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

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

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

30(2) Upon being satisfied that all requirements have been

1met, the community development institution shall recommend
2the applicant to the department and forward the application
3with all supporting documentation to the department for its
4review and approval.

5(c) Department review.--

6(1) Upon receipt of a recommendation and a completed
7application, the department shall investigate and determine
8all of the following:

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

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

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

23(2) If the department is satisfied that all requirements
24have been met, the department may approve the loan request in
25an amount not to exceed $200,000 or 50% of the total capital
26development project costs, whichever is less. For the purpose
27of this paragraph, capital development project costs, except
28the costs related to working capital, incurred during the 12-
29month period prior to the date of submission of the
30application to the department shall be considered part of the

1total capital development project costs.

2(3) The department shall notify the community
3development institution and applicant of its decision.

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

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

18(1) State any collateral securing the loan. The
19department may use its best judgment to identify and secure
20collateral.

21(2) State the repayment period which may be flexible.

22(3) State the interest rate which may not be less than
232% nor more than 5% for the term of the loan.

24(4) State that the recipient agrees to maintain, at a
25minimum, the number of jobs in existence as of the date of
26loan application.

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

30(g) Penalty.--

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

5(2) The department may waive the penalty required by
6paragraph (1) if the department determines that the failure
7was due to circumstances outside the control of the
8recipient.

9(3) The amount of any penalty imposed under paragraph
10(1) shall be equal to an increase in the interest rate to 2%
11greater than the current prime interest rate for the
12remainder of the loan.

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

27§ 2309. Pollution prevention assistance loans.

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

1infrastructure. The application shall be on the form required by
2the department and shall include or demonstrate all of the
3following:

4(1) The name and address of the applicant.

5(2) A statement of the amount of loan assistance sought.

6(3) A statement of the pollution prevention
7infrastructure, including a detailed statement of the cost of
8the infrastructure.

9(4) A financial commitment from a responsible source for
10the cost of the pollution prevention infrastructure in excess
11of the amount requested.

12(5) Any other information required by the department.

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

14(1) Upon receipt of a completed application, a pollution
15prevention assistance agency shall investigate and determine
16all of the following:

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

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

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

22(2) Upon being satisfied that all requirements have been
23met, the pollution prevention assistance agency shall
24recommend the applicant to the department and forward the
25application with all supporting documentation to the
26department for its review and approval.

27(c) Department review.--

28(1) Upon receipt of a recommendation and a completed
29application, the department shall investigate and determine
30all of the following:

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

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

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

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

19(2) If the department is satisfied that all requirements
20have been met, the department may approve the loan request. A
21loan approved under this subsection may not exceed the lesser
22of:

23(i) $100,000; or

24(ii) 75% of infrastructure costs.

25(3) The department shall notify the pollution prevention
26assistance agency and applicant of its decision.

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

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

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

12(1) State the collateral securing the loan. All loans
13shall be secured by lien positions on collateral at the
14highest level of priority as may be determined by the
15department.

16(2) State the repayment period which may not exceed 10
17years.

18(3) State that the interest rate is 2%.

19(4) State that any loan fee is not to exceed 5% of the
20loan amount.

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

24(g) Penalty.--

25(1) Except as provided in paragraph (2), the department
26shall impose a penalty upon a recipient if the recipient
27fails to carry out the pollution prevention infrastructure
28project as specified in its approved application.

29(2) The department may waive the penalty required by
30paragraph (1) if the department determines that the failure

1was due to circumstances outside the control of the
2recipient.

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

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

23§ 2310. Export financing loans.

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

30(1) The name and address of the applicant.

1(2) A statement of the amount of loan assistance sought.

2(3) A statement of the capital development project,
3including a detailed statement of the cost of the project.

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

7(5) A statement that the loan, if approved, would not
8supplant funding from private sector sources on commercially
9reasonable terms.

10(6) Any other information required by the department.

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

13(1) If the applicant is an export business.

14(2) If the project is a capital development project.

15(3) The ability of the applicant to meet and satisfy the
16debt service as it becomes due and payable.

17(4) The existence and sufficiency of collateral for the
18loan.

19(5) Relevant criminal and credit history and ratings of
20the applicant as determined from outside credit reporting
21services and other sources.

22(6) Number of employment opportunities to be created or
23preserved by the proposed capital development project.

24(7) If the applicant complied with all other criteria
25established by the department.

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

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

13(1) A provision requiring collateral for any penalty
14imposed under subsection (f).

15(2) A provision requiring the person to be eligible for
16an insurance policy.

17(3) A provision requiring the loan to be guaranteed by
18the Working Capital Guaranty Program offered by the Ex-Im
19Bank.

20(4) A provision requiring an export credit sales
21contract insured by an insurance policy.

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

24(1) State the collateral securing the loan. All loans
25shall be secured by lien positions on collateral at the
26highest level of priority as may be determined by the
27department.

28(2) State the repayment period as determined by the
29department.

30(3) State the interest rate as determined by the

1department.

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

5(f) Penalty.--

6(1) Except as provided in paragraph (2), the department
7shall impose a penalty upon a recipient if the recipient
8fails to carry out the export activities specified in its
9approved application.

10(2) The department may waive the penalty required by
11paragraph (1) if the department determines that the failure
12was due to circumstances outside the control of the
13recipient.

14(3) The amount of the penalty imposed under paragraph
15(1) shall be equal to an increase in the interest rate to 2%
16greater than the current prime interest rate for the
17remainder of the loan.

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

1transfer, convey and assign the first mortgages and shall
2deposit any money derived from the sale of any first mortgages
3in the fund or a special account authorized by section 2304(c)
4(2).

5§ 2311. Reporting and inspection.

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

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

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

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

22§ 2312. Limitations.

23No loans shall be recommended or approved if the proceeds of
24the loan could do any of the following:

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

29(2) Refinance any portion of the total cost of a capital
30development project, pollution prevention infrastructure or

1other existing loans or debt.

2(3) Finance a capital development project or pollution
3prevention infrastructure located outside the geographic
4boundaries of this Commonwealth.

5(4) Provide funds, directly or directly, for payment
6distribution or as loan owners, partners or shareholders of a
7small business, except as ordinary compensation for services
8rendered.

9(5) Provide funds for speculation in real or personal
10property, whether tangible or intangible.

11CHAPTER 29

12MACHINERY AND EQUIPMENT LOANS

13

14Sec.

152901. Scope.

162902. Definitions.

172903. Establishment.

182904. Machinery and Equipment Loan Fund.

192905. Eligibility for loans; terms and conditions.

202906. Application and administration.

212907. Powers of secretary.

222908. Reporting and inspection.

232909. Nondiscrimination.

242910. Conflict of interest.

252911. Reports to General Assembly.

262912. Guidelines.

27§ 2901. Scope.

28This chapter relates to the Machinery and Equipment Loan
29Program.

30§ 2902. Definitions.

1The following words and phrases when used in this chapter
2shall have the meanings given to them in this section unless the
3context clearly indicates otherwise:

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

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

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

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

17"Normal agricultural operation." The term shall have the
18same meaning as given to it in section 2 of the act of June 10, 
191982 (P.L.454, No.133), entitled "An act protecting agricultural
20operations from nuisance suits and ordinances under certain
21circumstances."

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

24§ 2903. Establishment.

25There is established within the department a program to be
26known as the Machinery and Equipment Loan Program. The program
27shall be administered by the department and provide loans to
28business enterprises for machinery and equipment.

29§ 2904. Machinery and Equipment Loan Fund.

30(a) Creation.--There is created a special account in the

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

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

14§ 2905. Eligibility for loans; terms and conditions.

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

25(1) All loans shall be subject to all of the following
26conditions:

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

29(ii) Have a maximum loan ceiling of $5,000,000 or
3050% of the cost of the project, whichever is less.

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

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

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

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

15(2) For loans to medical facilities, loan funds may be
16used only to finance the acquisition, installation and
17utilization of machinery and equipment, including computer
18hardware and software components, to be used in the
19prescribing and dispensing of medication for medical facility
20patients.

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

23(1) Cause, aid or assist in, directly or indirectly, the
24relocation of any business enterprise from one part of this
25Commonwealth to another unless there is at least a 25%
26increase in net employment.

27(2) Supplant funding that is otherwise available
28expeditiously from private sector sources on commercially
29reasonable terms.

30(3) Be for the purpose of refinancing any portion of the

1total project cost or other existing loans or debt.

2(4) Be for the purpose of financing projects located
3outside the geographic boundaries of this Commonwealth.

4(5) Be for the purpose of paying off a creditor that is
5inadequately secured and is in a position to sustain a loss.

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

8(7) Provide funds for speculation in any kind of
9property, real or personal, tangible or intangible.

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

13§ 2906. Application and administration.

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

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

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

25(1) Ability of the applicant to meet and satisfy all
26debt service as it becomes due and payable.

27(2) Sufficiency of available collateral, including
28satisfactory lien positions on real and personal property.

29(3) Eligibility of the applicant as a business
30enterprise involved in industrial processes, manufacturing,

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

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

9(5) Capital needs of the applicant.

10(6) Conformity of the project to the provisions of this
11chapter.

12(7) Relevant criminal and credit history and ratings of
13applicant as determined from outside credit reporting
14services and other sources.

15(8) Number of net employment opportunities created and
16retained by the proposed project. This paragraph does not
17apply to business enterprises involved in production
18agriculture or medical facilities.

19(9) Supporting evidence that the loan project will
20increase the firm's competitiveness and value added within
21its respective industry.

22(10) Explanation of how the loan will aid the
23Commonwealth in its efforts to assist business enterprises to
24increase their productivity and improve the future
25competitive position of this Commonwealth's industries.

26(11) Compliance with the loan amount limitations
27provided for machinery and equipment loans.

28(12) Payment to date of all tax obligations due and
29owing to the Commonwealth or any political subdivision
30thereof.

1(13) Conformity of all aspects of the loan transaction
2with the substantive and procedural provisions of this
3chapter and regulations promulgated hereunder.

4(14) Such information and documentation as the secretary
5shall require.

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

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

21(1) Each outstanding loan.

22(2) The date of approval.

23(3) The original principal balance.

24(4) The current principal balance.

25(5) The interest rate.

26(6) The purpose for which the loan was made.

27(7) An enumeration of any problems or issues which have
28arisen with regard to each loan.

29(8) A statement regarding the progress of the business
30enterprise in creating and retaining its requisite number of

1employment opportunities.

2(9) Such other information and documentation as the
3secretary shall require.

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

14§ 2907. Powers of secretary.

15The secretary shall have and may exercise all powers and
16authority necessary to the proper administration and
17implementation of this chapter and shall have the authority to
18adopt policies, procedures and guidelines and promulgate rules
19and regulations necessary to effectuate the provisions of this
20chapter.

21§ 2908. Reporting and inspection.

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

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

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

5§ 2909. Nondiscrimination.

6No loan shall be made to a business enterprise unless the
7business enterprise certifies to the department, in a form
8satisfactory to the department, that it shall not discriminate
9against any employee or any applicant for employment because of
10race, religion, color, national origin, sex or age. The business
11enterprise shall also certify to the department that it is not
12currently under citation for pollution violations and that in
13the future it will meet all applicable antipollution standards.

14§ 2910. Conflict of interest.

15No employee of the department shall, either directly or
16indirectly, be a party to or have any financial interest in any
17contract or agreement arising pursuant to this chapter.

18§ 2911. Reports to General Assembly.

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

25(1) List of business enterprises receiving loans from
26the fund and the amounts and terms of this assistance.

27(2) Loan amounts repaid. Information under this
28paragraph may be reported in the aggregate.

29(3) Loans outstanding, balances due and any penalties
30imposed. Information under this paragraph may be reported in

1the aggregate.

2(4) Jobs created by businesses receiving funds in
3previous years. Information under this paragraph may be
4reported in the aggregate.

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

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

11§ 2912. Guidelines.

12The department shall develop written guidelines for the
13implementation of this chapter.]

14Section 2. Section 1542(b) of Title 64 is amended to read:

15§ 1542. Revolving loan program accounts.

16* * *

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

28Section 3. Section 1552 of Title 64 is repealed:

29[§ 1552. First Industries Program.

30(a) Establishment.--There is established a program to be

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

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

13(1) The applicant's name and address.

14(2) The location of the project.

15(3) A description of the project.

16(4) An estimate of the cost of the predevelopment
17activities and feasibility studies and the goal to be
18achieved by carrying out the proposed activities or studies.

19(5) A statement of the amount of the planning grant
20sought.

21(6) Any other information required by the board.

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

23(1) The board shall review the application to determine
24that the project demonstrates one or more of the following:

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

28(ii) The project will promote research and
29development efforts leading to increased
30commercialization or utilization of farm commodities.

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

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

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

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

15(2) Upon being satisfied that the requirements of
16paragraph (1) have been met, the board may approve the
17application, and, if approved, the authority shall award a
18planning grant.

19(3) Copies of all reports and studies prepared with
20planning grant funds shall be filed with the authority and
21shall be made available to any person upon request.

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

1be forwarded to the authority and credited to the account
2established in accordance with section 1542(b) (relating to
3revolving loan program accounts).

4(e) Loan guarantees.--

5(1) An applicant may request a guarantee for a loan to
6be made by a commercial lending institution or community
7development financial institution to assist with the
8financing of a project related to tourism or agriculture. The
9applicant may be the commercial lending institution or
10community development financial institution applying on
11behalf of a borrower. The application must be on the form
12required by the board and must include or demonstrate all of
13the following:

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

18(ii) A description of the project.

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

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

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

1borrower's last two years of financial statements
2prepared or reported on by an independent certified
3public accountant.

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

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

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

9(2) The board shall review the application to determine
10all of the following:

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

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

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

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

24(3) Upon being satisfied that all requirements have been
25met, the board may approve the guarantee, and, if approved,
26the authority shall execute a guarantee agreement in favor of
27the commercial lending institution or community development
28financial institution stating the terms and amounts of the
29guarantee. Except as provided in paragraph (3.1), the
30guarantee may not exceed 50% of the outstanding principal

1amount of the loan or $2,500,000 at any point in time,
2whichever is less. In addition to any other terms and
3conditions required by the board, the guarantee agreement
4shall provide for all of the following:

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

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

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

22(3.1) Beginning on the effective date of this paragraph
23through July 15, 2015, a guarantee of 51% to 90% of the
24principal amount of the loan to assist with the financing of
25a project related to agriculture may be awarded by the board.
26The guarantee shall be subject to a one-time fee of 2% of the
27amount of the loan multiplied by the percentage of the
28guarantee.

29(3.2) The amount of a guarantee under this subsection,
30if any, shall be set at the discretion of the board based

1upon its determination of the potential financial risk to the
2Commonwealth.

3(4) The board may establish a subcommittee composed of
4one or more board members and department staff to supervise
5the progress of projects for which loan guarantees have been
6awarded under this section.

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

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

15(f) Limitations.--

16(1) No more than $10,000,000 of the funds available for
17the program authorized by this section may be used for
18planning grants awarded under subsection (c).

19(2) At least two-thirds of the funds available for the
20program authorized by this section shall be used for
21financing of projects related to agriculture.]

22Section 3.1. Section 1553 of Title 64 is repealed:

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

12DEVELOPMENT AUTHORITY

13Subchapter

14A. General Provisions

15B. Structure and Powers

16C. Bonds

17D. Accounts

18E. Programs

19F. Miscellaneous Provisions

20SUBCHAPTER A

21GENERAL PROVISIONS

22Sec.

231701. Scope of chapter.

241702. Construction.

251703. Findings and declaration of policy.

261704. Definitions.

27§ 1701. Scope of chapter.

28This chapter relates to the Pennsylvania Business Development
29Authority.

30§ 1702. Construction.

1(a) General rule.--This chapter shall be prudently construed 
2in order to effect the legislative and public purposes as set 
3forth in this subchapter.

4(b) Rights of obligees.--The provisions of this chapter 
5providing for security, rights and remedies of obligees of the 
6authority shall be prudently construed to achieve the public 
7policy set forth in this subchapter.

8(c) Limitation.--If a provision of this chapter is judged to
9be invalid by a court of competent jurisdiction, the order or
10judgment shall be confined in its operation to the controversy
11in which it was rendered and shall not affect or invalidate a
12remaining provision of this chapter.

13§ 1703. Findings and declaration of policy.

14The General Assembly finds and declares as follows:

15(1) Many existing businesses in this Commonwealth could 
16expand and become more competitive if provided with 
17additional sources of financing for modernization, expansion 
18and other capital needs. This, in turn, could increase 
19employment levels, which would help to develop a stable and 
20healthy economy and revitalize communities, thereby improving 
21the health, safety and general welfare of the citizens of 
22this Commonwealth.

23(2) A minimum level of unemployment and a maximum level 
24of business opportunity can best be attained through the 
25promotion, stimulation and revitalization of industrial, 
26manufacturing, commercial, technological, agricultural and 
27tourism activities in this Commonwealth. Through such 
28efforts, the Commonwealth's competitiveness in the global and 
29United States economies may be enhanced.

30(3) The Commonwealth has developed a great number of
 

1programs with the objective of furthering economic 
2development within its borders. There have also been a 
3correspondingly great number of boards and authorities to 
4administer the various programs. While many of these economic 
5development programs have been successful, others have fallen 
6short.

7(4) The economic health of our communities will improve 
8and efficiency and transparency will increase by eliminating 
9programs that have not worked for this Commonwealth, 
10consolidating the management of the successful programs that 
11remain and adding new programs as needed.

12(5) The Pennsylvania Business Development Authority 
13shall disburse the money for and administer the economic 
14development programs encompassed in this chapter. It shall do 
15so with the prudence, proficiency and transparency that the 
16citizens of this Commonwealth expect, and will have as 
17resources the expertise and administrative assistance of the 
18Department of Community and Economic Development, as well as 
19the other State agencies. Resources will be more accessible 
20to businesses in this Commonwealth, citizens will be able to 
21see where their tax dollars are being invested and the 
22overall health of this Commonwealth's economy will improve, 
23beginning in individual communities and spreading throughout 
24this Commonwealth.

25§ 1704. Definitions.

26The following words and phrases when used in this chapter
27shall have the meanings given to them in this section unless the
28context clearly indicates otherwise:

29"Agricultural processor." An entity that adds value by
30subjecting one or more farm commodities to a process of

1manufacture, development or preparation for sale or a person
2that converts a farm product into a marketable form.

3"Agricultural producer." A person or entity involved in the
4management and use of an agricultural operation for the
5production of a farm commodity.

6"Agriculture." Any of the following:

7(1) the management and use of an agricultural operation
8for the production of a farm commodity;

9(2) the sale of farm commodities at wholesale;

10(3) the sale of farm commodities at retail by urban and
11rural supermarkets in underserved areas or farmers' markets;

12(4) energy-related activities impacting production
13agriculture; or

14(5) activities that implement best industry practices
15related to agricultural waste, agricultural waste products,
16agricultural by-products or fertilizer.

17"Applicant." An eligible business or economic development
18organization that requests financial assistance from the
19Pennsylvania Business Development Authority.

20"Authority." The Pennsylvania Business Development Authority
21established in section 1711 (relating to authority).

22"Board." The board of the Pennsylvania Business Development
23Authority established in section 1712 (relating to board).

24"Bonds." Except where otherwise provided, bonds, notes,
25instruments, refunding notes and bonds and other evidences of
26indebtedness or obligations which the Pennsylvania Business
27Development Authority is authorized to issue or assume under
28this chapter.

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

1entity.

2"Capital development project." The acquisition, development,
3construction, renovation or use of land, buildings, equipment
4and machinery and working capital by a business as part of:

5(1) A for-profit venture not of a mercantile or service-
6related nature, except for hospitality industry projects.

7(2) An effort to:

8(i) comply with Federal or State environmental laws
9or regulations;

10(ii) complete an approved remediation project; or

11(iii) adopt generally acceptable pollution
12prevention practices.

13(3) An effort to recycle municipal or commercial waste,
14or to use recycled municipal or commercial waste materials in
15manufacturing.

16(4) A for-profit project or venture to manufacture
17products to be exported out of the United States, which will
18increase this Commonwealth's market share.

19"Commercial lending activities." The making of loans and the
20provision of deposit services to business entities, except that
21a farm credit system institution under the Farm Credit Act of
221971 (Public Law 92-181, 85 Stat. 583) need not offer deposit
23services to qualify as a provider of commercial lending
24activities under this chapter.

25"Commercial lending institution." A federally chartered or 
26State-chartered bank, savings bank, savings and loan association 
27or farm credit system institution under the Farm Credit Act of 
281971 (Public Law 92-181, 85 Stat. 583) which has a satisfactory 
29rating from its primary regulator and which is engaged in 
30commercial lending activities. The institution must operate at
 

1least one full-service branch for deposit gathering and lending 
2located within this Commonwealth or be a farm credit system 
3institution under the Farm Credit Act of 1971.

4"Commonwealth agency." An agency, authority or other
5instrumentality of the Commonwealth.

6"Community development financial institution." A community
7development financial institution certified in accordance with
8the Community Development Banking and Financial Institutions Act
9of 1994 (Public Law 103-325, 108 Stat. 2163).

10"Comprehensive county plan" or "comprehensive municipal
11plan." The comprehensive plan adopted under applicable law by a
12county, municipality, city of the first class or city of the
13second class.

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

15(1) Costs and expenses of acquisition of interests in
16land, infrastructure, buildings, structures, equipment,
17furnishings, fixtures and other tangible or intangible
18property.

19(2) Costs and expenses of construction, reconstruction,
20erection, equipping, expansion, extension, improvement,
21installation, rehabilitation, renovation or repair of the
22buildings, structures and equipment.

23(3) Costs and expenses of demolishing, removing or
24relocating buildings or structures on lands acquired or to be
25acquired and the expense of acquiring land to which buildings
26or structures may be moved or relocated.

27(4) Costs and expenses of preparing land for
28development.

29(5) Costs and expenses incidental to determining the
30feasibility or practicality of the project, including

1engineering, legal and accounting and financial services, as
2well as any necessary studies or surveys.

3(6) Working capital or other capital needs related to
4the project.

5"Department." Except where otherwise provided, the
6Department of Community and Economic Development of the
7Commonwealth.

8"Distressed community." Any of the following:

9(1) An area which is designated a subzone, expansion 
10subzone or improvement subzone under the act of October 6, 
111998 (P.L.705, No.92), known as the Keystone Opportunity 
12Zone, Keystone Opportunity Expansion Zone and Keystone 
13Opportunity Improvement Zone Act.

14(2) Any other area designated as distressed according to 
15standards adopted by the Pennsylvania Business Development 
16Authority.

17"Economic development organization." A community development
18financial institution, an industrial development agency or a
19local development district that is certified by the authority as
20possessing the qualifications necessary to prepare, evaluate and
21approve applications to the authority for financial assistance.

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

23"Exports." Goods or services to be sold or performed outside
24the United States.

25"Export business." Any for-profit corporation, limited
26liability company, partnership, proprietorship or other business
27entity involving export activities and employing 250 or fewer
28individuals.

29"Farm commodity." Any agricultural, horticultural,
30aquacultural, vegetable, fruit and floricultural product of the

1soil, livestock and meats, wools, hides, furs, poultry, eggs,
2dairy products, nuts, mushrooms, honey products and forest
3products.

4"Federal agency." The United States of America, the
5President of the United States, the Congress of the United
6States and any department, corporation, agency or
7instrumentality designated or established by the United States
8of America.

9"Financial assistance." Loans, guarantees, lines of credit,
10letters of credit and other financial arrangements that the
11Pennsylvania Business Development Authority is authorized to
12undertake under Subchapter E (relating to programs).

13"Governing body." The body or board authorized by law to
14enact ordinances or adopt resolutions for a political
15subdivision.

16"Hazardous substance." Any element, compound or material
17which is:

18(1) Regulated as a hazardous air pollutant under section
196.6 of the act of January 8, 1960 (1959 P.L.2119, No.787),
20known as the Air Pollution Control Act.

21(2) A hazardous waste, as defined under section 103 of
22the act of July 7, 1980 (P.L.380, No.97), known as the Solid
23Waste Management Act.

24(3) Regulated under the act of December 7, 1990
25(P.L.639, No.165), known as the Hazardous Material Emergency
26Planning and Response Act.

27"Hospitality industry project." A for-profit project or
28venture which involves a business that operates a hotel, motel
29or other lodging facility, or a restaurant or other food service
30operation that is open to the public.

1"Industrial development agency." A nonprofit organization
2which has as its purpose the promotion, encouragement,
3construction, development and expansion of new or existing
4industrial development projects.

5"Industrial development project." A project involving the
6acquisition or improvement of real property within this
7Commonwealth to be occupied and operated by any of the
8following:

9(1) An industrial enterprise.

10(2) A manufacturing enterprise.

11(3) A research and development enterprise.

12(4) An agricultural producer.

13(5) An agricultural processor.

14"Industrial enterprise." An enterprise other than a
15mercantile, commercial or retail enterprise which has created or
16will create substantial employment opportunities. The term may
17include warehouses, distribution and terminal facilities and
18office buildings utilized as national or regional headquarters
19or computer or clerical operations centers.

20"Industrial park project." A project sponsored by an
21economic development organization for the purpose of creating
22sites for the establishment of two or more industrial
23development projects.

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

1private partnerships and providing assistance to businesses.

2"Manufacturing enterprise." An enterprise which is engaged
3in the giving of new shapes, new qualities or new combinations
4to matter by the application of skill and labor.

5"Multiple-tenancy building project." A project sponsored by 
6an economic development organization involving the acquisition 
7or construction of any land, site, structure or facility for 
8occupancy by two or more industrial enterprises, manufacturing 
9enterprises, research and development enterprises, agricultural 
10producers or agricultural processors, as those terms are defined 
11in this chapter.

12"Municipal authority." A public authority created under 53
13Pa.C.S. Ch. 56 (relating to municipal authorities) or under the
14former act of May 2, 1945 (P.L.382, No.164), known as the
15Municipality Authorities Act of 1945.

16"Municipality." Any city, borough, town or township of the
17Commonwealth, each of which political subdivisions are separate
18incorporated municipalities of the Commonwealth for the purposes
19of this chapter.

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

22"Normal agricultural operation." As defined in the act of
23June 10, 1982 (P.L.454, No.133), referred to as the Right-to-
24Farm Law.

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

26(1) A holder or owner of bonds of the Pennsylvania
27Business Development Authority, the Pennsylvania Industrial
28Development Authority or the Pennsylvania Minority Business
29Development Authority.

30(2) A trustee or other fiduciary for any holder or owner

1of bonds of the Pennsylvania Business Development Authority
2or its predecessors.

3(3) A provider of a letter of credit, policy of
4municipal bond insurance or other credit enhancement or
5liquidity facility for bonds of the Pennsylvania Business
6Development Authority or its predecessors.

7(4) A lessor or installment seller demising property to
8the Pennsylvania Business Development Authority or its
9predecessors in connection with a project.

10(5) A provider of an interest rate management agreement
11or other agreement or arrangement authorized under section
121714 (relating to powers).

13"Pennsylvania-related company." A business entity which has
14significant operations in this Commonwealth or which will, as a
15condition of any agreement under this chapter, locate
16significant business operations in this Commonwealth.

17"Philadelphia metropolitan statistical area." The
18Philadelphia, Pennsylvania, metropolitan division of the
19Philadelphia-Camden-Wilmington, Pennsylvania-New Jersey,
20Delaware-Maryland metropolitan statistical area as announced on
21June 6, 2003, by the United States Office of Management and
22Budget under standards for defining metropolitan and
23micropolitan statistical areas by the Office of Management and
24Budget for the 2000 decennial census of the United States Bureau
25of the Census as published in the Federal Register, Vol. 65, No.
26249, on December 27, 2000, comprising the Pennsylvania counties
27of Philadelphia, Delaware, Bucks, Montgomery and Chester.

28"Predecessors." The Pennsylvania Industrial Development
29Authority or the Pennsylvania Minority Business Development
30Authority.

1"Private developer." A person or entity engaged in the
2development of real estate and determined by the Pennsylvania
3Business Development Authority to be financially responsible to
4assume all obligations proposed to be undertaken.

5"Production agriculture." The management and use of a normal
6agricultural operation for the production of a farm commodity.

7"Project user." A person, political subdivision, municipal
8authority, Commonwealth agency or other entity that owns, leases
9or uses all or any part of a project.

10"Redevelopment authority." An entity created under the act
11of May 24, 1945 (P.L.991, No.385), known as the Urban
12Redevelopment Law.

13"Research and development enterprise." An enterprise for the
14discovery of new and the refinement of known substances,
15processes, products, theories and ideas. The term does not
16include enterprise activities directed primarily to the
17accumulation or analysis of commercial, financial or mercantile
18data.

19"Server." A device on a computer network that manages
20network resources, including devices to manage network traffic,
21store files or process database queries.

22"Server virtualization technology." The practice of hosting
23a software operating system within a virtual machine.

24"Site preparation project." The construction of water and
25sewer lines, storm water systems, excavation, construction of
26access roads, parking facilities, pipelines, transformers and
27utility transmission lines and traffic control devices.

28"Small business." An enterprise that employs fewer than 100 
29persons, in the aggregate, on an annual basis.

30"Supermarket." A retail store operated on a self-service

1basis, primarily selling groceries, fresh produce, meat, bakery
2and dairy products. The term does not include a convenience
3store.

4"Tourism." Any activity that promotes or encourages
5individuals or a group of individuals to travel to a location
6within this Commonwealth to engage in an activity or service for
7pleasure that is unavailable at home.

8"Virtual machine." A self-contained software operating
9environment that operates within a host operating system server
10and simulates a hardware device, such as a computer or a server.

11"Working capital." Capital used by a business for
12operations, excluding fixed assets and production machinery and
13equipment.

14SUBCHAPTER B

15STRUCTURE AND POWERS

16Sec.

171711. Authority.

181712. Board.

191713. Duties.

201714. Powers.

211715. Operation, service and maintenance of a project or 
22property.

23§ 1711. Authority.

24(a) Establishment.--There is established an authority to be
25known as the Pennsylvania Business Development Authority. The
26authority shall be an instrumentality of the Commonwealth and a
27body corporate and politic, with corporate succession.

28(b) Governance.--The authority shall be governed by the
29board. The powers of the authority shall be exercised by the
30board.

1(c) Indebtedness.--The authority may incur indebtedness, 
2including through the issuance of bonds. The term of 
3indebtedness shall not exceed 30 years. Net proceeds from the 
4sale of obligations incurred under this chapter shall be 
5allocated for programs under Subchapter E (relating to programs) 
6and for the payment of all reasonable costs and expenses related 
7to the issuance.

8(d) Expenses.--Expenses of the authority shall be paid from
9assets or income of the authority. Except as provided in this
10chapter or by other law, the Commonwealth shall not be
11responsible for funding the expenses of the authority.

12(e) Fiscal year.--The fiscal year of the authority shall be
13the same as the fiscal year of the Commonwealth.

14(f) Existence and dissolution.--

15(1) The authority shall exist until terminated by law.

16(2) The authority may be dissolved by law if all
17outstanding liabilities of the authority, including bonds and
18other contractual obligations, have been fully paid, retired,
19satisfied or discharged or provision has been made for
20payment of all outstanding liabilities of the authority,
21including bonds and other contractual obligations. Upon the
22dissolution of the authority, all funds, assets and other
23property of the authority shall vest in the Commonwealth.

24(g) Procurement.--The authority shall be considered as an
25executive agency for the purposes of 62 Pa.C.S. Pt. I (relating
26to Commonwealth Procurement Code), except that the authority
27shall have the authority to procure its own services. When
28acting as its own purchasing agency for the procurement of
29services, the authority shall use the procedures provided under
3062 Pa.C.S. Pt. I.

1(h) Commonwealth Attorneys Act.--The authority shall be
2considered an executive agency for the purposes of the act of
3October 15, 1980 (P.L.950, No.164), known as the Commonwealth
4Attorneys Act.

5(i) Relationship with department.--

6(1) The department shall provide administrative services
7and staff, including staff legal counsel, to the authority
8and the board. The authority shall reimburse the department
9for the costs of such services and staff.

10(2) The authority may enter into agreements with the
11department setting forth their respective rights and
12obligations in carrying out their respective duties under
13this chapter, as well as rates of reimbursement, as
14applicable, for providing services under this subsection.

15(j) Applicability.--The following acts shall apply to the
16authority and the board:

17(1) The act of July 19, 1957 (P.L.1017, No.451), known
18as the State Adverse Interest Act.

19(2) The act of February 14, 2008 (P.L.6, No.3), known as
20the Right-to-Know Law.

21(3) The provisions of 65 Pa.C.S. Chs. 7 (relating to
22open meetings) and 11 (relating to ethics standards and
23financial disclosure).

24§ 1712. Board.

25(a) Members.--

26(1) The authority shall be governed by a board
27consisting of 15 members.

28(2) The following public officials shall serve as
29members of the board:

30(i) The Secretary of Community and Economic

1Development.

2(ii) The Secretary of Agriculture.

3(iii) The Secretary of Banking.

4(iv) The Secretary of the Budget.

5(3) Eleven individuals from the private sector shall 
6serve as members of the board. Members appointed under this 
7paragraph shall not be members or staff of the General 
8Assembly and shall not be otherwise employed by the 
9Commonwealth. Seven members from the private sector shall be 
10appointed by the Governor and one member shall be appointed 
11by each of the following:

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

13(ii) The Minority Leader of the Senate.

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

15(iv) The Minority Leader of the House of
16Representatives.

17(b) Delegation of authority.--Public officials who are
18members of the board pursuant to subsection (a)(2) may designate
19a member of their staff to serve in their absence.

20(c) Terms.--

21(1) Public officials shall serve for the duration of
22their tenure in office.

23(2) Members appointed under subsection (a)(3) shall
24serve for terms of four years, subject to the pleasure of the
25appointing authority, except that board members appointed
26under subsection (a)(3)(i), (ii), (iii) and (iv) shall serve
27for initial terms of two years.

28(3) Members appointed to fill a vacancy created
29otherwise than by expiration of a term shall be appointed for
30the unexpired term of the preceding member.

1(d) Organization.--

2(1) The Governor shall appoint one member of the board
3to act as chairperson.

4(2) The members shall select from among themselves and
5staff of the department the other officers of the board as
6they shall determine.

7(e) Board action.--

8(1) The board shall meet at the call of the chairperson.

9(2) Eight members of the board shall constitute a
10quorum. When a quorum is present, a majority of those present
11shall be necessary to take any action on behalf of the
12authority.

13(f) Compensation.--Members of the board shall be entitled to
14no compensation for their services, but shall be entitled to
15reimbursement for all necessary and reasonable expenses incurred
16in connection with the performance of their duties as members of
17the board.

18(g) Fiduciary relationship.--The members of the board and
19the professional personnel of the board shall stand in a
20fiduciary relationship with the Commonwealth and the authority
21as to the moneys in the accounts of the authority and
22investments of the authority.

23(h) Standard of care.--The members of the board, in
24performance of their duties under this chapter, shall exercise
25the standard of care required by 20 Pa.C.S. Ch. 73 (relating to
26municipalities investments).

27(i) Liability.--Members of the board shall not be liable
28personally on any obligations of the authority, including bonds
29of the authority.

30(j) Definition.--As used in this section, the term "member"
 

1means an individual who serves on the board under subsection (a)
2as a public official or an individual from the private sector.

3§ 1713. Duties.

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

5(1) Administer the programs described in Subchapter E
6(relating to programs).

7(2) Fund the programs described in Subchapter E using
8the resources available under this chapter.

9(3) Adopt bylaws.

10(4) Adopt and publish guidelines for programs listed in
11Subchapter E as proposed by the department and for the
12certification of economic development organizations.
13Guidelines shall include applicable policies and procedures,
14criteria, application requirements and any other necessary
15and relevant information.

16(5) Certify on an annual basis those economic
17development organizations that possess the qualifications
18necessary to evaluate and approve applications to the
19authority for financial assistance.

20(b) Reports and publications.--

21(1) Within 90 days of the effective date of this
22chapter, the authority shall submit for publication in the
23Pennsylvania Bulletin and on the Internet website of the
24department notification of the programs to be administered
25under this chapter. The notification shall include the name
26and brief description of each program, the name of a contact
27person and the anticipated time that funding, applications
28and official guidelines will become available.

29(2) The authority shall submit for publication in the
30Pennsylvania Bulletin the program guidelines adopted under

1subsection (a)(4) and shall maintain the guidelines on the
2department's Internet website.

3(3) The authority shall, each year by the first day of
4March, publish and deliver to the Governor and the General
5Assembly a memorandum which shall outline the authority's
6goals and planned investments for the coming fiscal year.

7(4) The authority shall annually post and maintain on
8the Internet website of the department an annual report,
9which at a minimum shall include:

10(i) A list of the applicants and financial
11assistance approved during the previous fiscal year.

12(ii) The name and business address of each
13recipient.

14(iii) The amount and terms of the financial
15assistance.

16(iv) A brief description of the project for which
17the financial assistance was awarded. The description
18shall include the commitment for the number of jobs
19created and retained and the total capital investment for
20the project.

21(c) Audit.--

22(1) The authority shall have the accounts and books of
23the authority audited annually by an independent certified
24public accounting firm.

25(2) The authority shall, by December 31 of each year,
26file a copy of the audit required by paragraph (1) with the
27Secretary of the Senate, the Chief Clerk of the House of
28Representatives and the Office of the Budget.

29§ 1714. Powers.

30The authority may:

1(1) Borrow money, issue and assume bonds, obtain lines
2and letters of credit, provide loan guarantees and incur
3debt.

4(2) Sue and be sued, implead and be impleaded,
5interplead, complain and defend in any court.

6(3) Establish new economic development programs and the
7corresponding accounts necessary or desirable for its
8corporate purposes.

9(4) Transfer funds among its accounts as necessary and
10desirable to effectuate the purposes of the programs set
11forth in Subchapter E (relating to programs).

12(5) Retain accountants, auditors and financial experts
13to render services and engage the services of other advisors,
14consultants and agents as necessary.

15(6) Acquire, accept, purchase, receive, collect, hold,
16convey and invest funds and property, whether tangible or
17intangible, from all sources, directly or by assignment,
18pledge or otherwise.

19(7) Invest money of the authority not required for
20immediate use, including proceeds from the sale of bonds, as
21the board determines, subject to any agreement with
22bondholders stated in the authorizing resolution providing
23for the issuance of bonds.

24(8) Contract and execute all instruments, including
25financing agreements, letter of credit agreements, liquidity
26agreements, guarantees, sureties, mortgages, loans, standby
27loan commitments and contracts of insurance which are
28necessary or appropriate for carrying on the business of the
29authority.

30(9) Impose and collect charges in connection with loan

1commitments and servicing, including reimbursement of costs
2of financing.

3(10) Impose interest rate penalties on borrowers who
4fail to fulfill commitments regarding job creation or
5retention, private investment and site location.

6(11) Pledge the credit of the authority and provide
7security and liquidity to obligees of the authority as the
8authority deems necessary or appropriate.

9(12) Use or pledge an account for a special purpose,
10including debt service reserves and other reserves, as may be
11necessary or desirable to carry out its powers and duties.

12(13) With the advice of a financial management firm
13selected by the board, negotiate and enter into interest rate
14cap agreements, interest rate management agreements, collar
15agreements, corridor agreements, ceiling agreements, floor
16agreements, forward agreements, float agreements and other
17similar arrangements which, in the judgment of the authority,
18will assist the authority in managing the interest costs of
19the authority.

20(14) Provide interest revenue-sharing on a quarterly
21basis to the originating economic development organization on
22loans sponsored by the economic development organization to
23offset administrative expenses and the cost of fulfilling
24certification obligations.

25(15) Use moneys, excluding the proceeds of bonds, to pay
26the administrative expenses of the authority and of the
27department incurred under this chapter.

28(16) Employ an executive director.

29(17) Employ legal counsel and provide a reimbursement 
30agreement for legal services by legal counsel for the
 

1department.

2(18) Adopt, use and alter a corporate seal.

3(19) Pay or satisfy obligations of the authority.

4(20) Negotiate modifications or alterations to financing
5agreements, mortgages or security interests.

6(21) Foreclose on a mortgage or security interest in
7default.

8(22) Commence any action necessary to protect or enforce
9any right conferred upon the authority by law, mortgage,
10security agreement, contract or other agreement.

11(23) Bid for or purchase property that was the subject
12of a mortgage or security interest at a foreclosure or other
13sale and acquire and take possession of that property.

14(24) Sell, mortgage, pledge, encumber, transfer, convey
15and dispose of any property, whether tangible or intangible.

16(25) Acquire and sell loans, mortgages and security
17interests at public or private sale.

18(26) Provide financial assistance to applicants and
19project users.

20(27) Agree to and comply with conditions attached to
21Federal or Commonwealth assistance not inconsistent with the
22provisions of this chapter.

23(28) Make rules regarding the operation of properties
24and facilities of the authority subject to agreements with
25obligees of the authority.

26(29) Develop, adopt and implement binding policies or
27guidelines assuring that all persons are accorded equal
28opportunity in employment and contracting associated with the
29programs established under Subchapter E. This paragraph
30includes the authority's contractors, subcontractors,

1assignees, lessees, agents, vendors and suppliers.

2(30) Exercise rights provided by law for the benefit or
3protection of the authority or obligees of the authority.

4(31) Procure insurance against any loss in connection
5with its programs, property and other assets.

6(32) Promulgate regulations and adopt guidelines and
7statements of policy containing restrictions as it may deem
8necessary and appropriate to effectuate the public purposes
9of this chapter.

10(33) Enter into agreements with applicants and project
11users providing, among other things, for any of the
12following:

13(i) Financial assistance.

14(ii) Loan, rental or purchase price payments or
15other payments, sufficient to amortize the principal,
16interest and premium, if any, of bonds and contractual
17obligations of the authority incurred to provide funds to
18pay the costs of the projects being financed.

19(iii) The applicants or project users to pay or
20cause to be paid all other costs of acquiring,
21constructing, maintaining and operating the projects
22being financed.

23(iv) Financial assistance to an economic development
24organization to fund the revolving loan fund established
25by the economic development organization for projects
26eligible for financing by the authority.

27(v) Conveyance with or without consideration of any
28part or all of a project being financed to the project
29user or applicant on or before payment of all bonds and
30contractual obligations of the authority incurred with

1respect to the project.

2(vi) Other matters as are customary or as are deemed
3necessary and appropriate by the authority.

4(34) Undertake any action appropriate or necessary to
5effectuate the purposes of this chapter, or to exercise the
6powers set forth in this section, including any act
7reasonably implied from those powers.

8Before a new policy or a change of policy takes effect, the
9board shall first approve it by a vote.

10§ 1715. Operation, service and maintenance of a project or
11property.

12The authority shall not approve an application or finance a
13project if it would be required to operate, service or maintain
14the project. The authority may operate, service or maintain a
15property in foreclosure or default.

16SUBCHAPTER C

17BONDS

18Sec.

191721. Bond issuance.

201722. Commonwealth and local taxation.

211723. Federal taxation.

221724. Validity of bonds, limitation on actions.

231725. Provisions of bonds and trust agreements and issuance of
24bonds.

251726. Validity of pledge.

261727. Commonwealth pledges.

271728. Bonds to be legal investments.

281729. Rights and remedies of obligees.

29§ 1721. Bond issuance.

30(a) Authorization.--The authority may issue limited

1obligation revenue bonds and other types of limited obligation
2revenue financing. Bonds of the authority shall be authorized by
3a resolution of the board, subject to subsection (c).

4(b) Taxability.--The authority may issue both tax-exempt
5bonds and taxable bonds to fund the authority's programs.

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

7(1) Be of a series.

8(2) Bear a date or dates.

9(3) Be in denominations.

10(4) Be signed by, or bear the facsimile signature of the
11officer designated by the board.

12(5) Carry registration, exchangeability and
13interchangeability privileges.

14(6) Be payable in any medium of payment and at any place
15or places.

16(7) Mature on a date or dates not to exceed 30 years
17from the original issue date.

18(8) Be subject to terms of redemption, if any.

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

20(1) Be authenticated by an authenticating agent, fiscal
21agent or trustee.

22(2) Be in any form, either coupon or fully registered
23without coupons, or in certificated or book-entry-only form.

24(3) Bear or accrue interest at any rate or rates,
25whether fixed or variable.

26(4) Be issued and delivered notwithstanding the fact
27that the officer whose signature appears on a coupon may no
28longer be an authenticating officer at the time of actual
29delivery.

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

1(1) A bond issued by the authority shall not be a debt
2or liability of the Commonwealth and shall not create any
3indebtedness, liability or obligation on the part of the
4Commonwealth.

5(2) A bond shall be payable solely from revenues of the
6authority or accounts pledged or otherwise available for
7their repayment.

8(3) A bond shall contain on its face statements that:

9(i) The authority is obligated to pay the principal
10of or interest on the bond only from revenues, receipts
11or funds pledged or available for its payment as
12authorized in this chapter.

13(ii) Neither the Commonwealth nor any political
14subdivision is obligated to pay the principal or
15interest.

16(iii) Neither the faith and credit nor the taxing
17power of the Commonwealth or any political subdivision is
18pledged to the payment of the principal of or interest on
19the bonds.

20(f) Sale.--Bonds may be sold at a public, invited or private
21sale at a price determined by the authority.

22(g) Interim receipts.--Pending the preparation of the
23definitive bonds, interim receipts may be issued to the
24purchaser or purchasers of the bonds and shall contain the terms
25and conditions established by the authority.

26(h) Negotiable instruments.--Bonds of the authority shall
27have the qualities of negotiable instruments under 13 Pa.C.S.
28(relating to commercial code).

29(i) Use.--The authority may, as it deems necessary and
30desirable, use the proceeds of bonds to:

1(1) provide financial assistance;

2(2) purchase loans, mortgages, security interests or
3loan participations;

4(3) pay incidental expenses in connection with activity
5under paragraphs (1) and (2), including administrative costs
6of the authority and the department;

7(4) pay expenses of authorizing and issuing the bonds;

8(5) pay principal, redemption or purchase price and
9interest on bonds; or

10(6) fund reserves.

11(j) Refunding.--Subject to the provisions of this chapter,
12terms of bonds and any contracts entered into pursuant to this
13chapter, the authority may refund any outstanding debt of the
14authority whether the debt represents principal or interest, in
15whole or in part, at any time. For the purposes of this
16subsection, the term "refund" means the issuance and sale of
17obligations the proceeds of which are used or are to be used for
18the payment or redemption of outstanding obligations upon or
19prior to maturity.

20§ 1722. Commonwealth and local taxation.

21(a) Authority.--Because the authority, as a public
22instrumentality of the Commonwealth, will be performing
23essential governmental functions in effectuating the purposes of
24this chapter, the authority shall not be subject to State or
25local taxation or assessment upon any property acquired or used
26or permitted to be used by the authority for its purposes.

27(b) Bonds.--Bonds issued by the authority, the transfer and
28the income from the bonds, including any profit made on the sale
29of such bonds, shall be free from State and local taxation
30within this Commonwealth. The exclusion under this subsection

1shall not extend to gift, estate, succession or inheritance
2taxes, or any other taxes not levied or assessed directly on the
3bonds, their transfer, the income from the bonds or the
4realization of profits on their sale.

5§ 1723. Federal taxation.

6(a) Allocation.--If the bonds issued by the authority for a
7project are tax-exempt bonds for which Federal law requires an
8allocation, the department may issue an allocation upon receipt
9of a written request by the authority. An allocation must be
10issued by the department prior to the approval of the resolution
11authorizing the issuance of the bonds by the authority.

12(b) Approval.--If gubernatorial approval is required by
13Federal or State law, the Governor may approve the issuance of
14bonds upon receipt of written request for approval from the
15authority. The written request must contain all of the
16following, to the extent required by Federal law:

17(1) A statement that the authority has conducted a
18public hearing, with appropriate public notice, concerning
19the purposes for which the bonds are to be issued.

20(2) A description of the project or projects to be
21financed.

22(3) A description of the method of financing the project
23or projects.

24(4) A summary of the comments made and questions posed
25at the public hearing.

26§ 1724. Validity of bonds, limitation on actions.

27(a) Presumption.--Bonds reciting in substance that they have
28been issued by the authority to accomplish the public purposes
29of this chapter shall be conclusively deemed in any suit, action
30or proceeding involving the validity or enforceability of the

1bonds or their security to have been issued for the public
2purposes of this chapter.

3(b) Estoppel.--After issuance, bonds shall be conclusively
4presumed to be fully authorized and issued under the laws of
5this Commonwealth, and any person shall be estopped from
6questioning their validity, sale, execution or delivery by the
7authority.

8§ 1725. Provisions of bonds and trust agreements and issuance 
9of bonds.

10(a) Provisions.--A resolution authorizing the issuance of 
11bonds or any trust agreement approved in or by a resolution 
12authorizing the issuance of bonds may contain provisions which 
13do any of the following:

14(1) Secure the bonds.

15(2) Establish a covenant as to any of the following:

16(i) Additional bonds to be issued and terms,
17conditions and limitations on such bonds.

18(ii) Rank or priority of bonds with respect to liens
19or security interests.

20(iii) Limitations on the authority's right to sell,
21pledge or otherwise dispose of bonds or notes of
22governmental units, loan agreements or other property.

23(iv) Custody, application, investment and
24disposition of proceeds of bonds.

25(v) Incurring of other debts or obligations by the
26authority.

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

28(vii) Sources and methods of payment.

29(viii) Redemption, purchase and tender of bonds by
30the authority or the bondholders and the privilege of

1exchange of the bonds for other bonds.

2(ix) Use, investment and disposition of the money
3held in special funds, accounts or reserves.

4(x) Use of any or all of the authority's real or
5personal property.

6(xi) Warrant of title to the authority's real or
7personal property.

8(xii) Pledging or granting a security interest in
9all or any part of the authority's revenues or any part
10of its property to which its right or title exists or
11which may later come into existence.

12(3) Establish a covenant against any of the following:

13(i) Permitting or suffering any lien on all or any
14part of its revenues or property.

15(ii) Extending the time for the payment of bonds or
16interest.

17(4) Provide for any of the following:

18(i) Replacement of lost, stolen, destroyed or
19mutilated bonds.

20(ii) Maintenance of the authority's real and
21personal property.

22(iii) Replacement of the authority's real and
23personal property.

24(iv) Insurance to be carried on the authority's real
25and personal property and the use and disposition of the
26insurance proceeds.

27(v) Rights, liabilities, powers and duties arising
28upon the breach of any covenant, condition or obligation.

29(vi) Letters of credit, bond insurance and other
30facilities for credit enhancement and liquidity.

1(5) Prescribe:

2(i) Procedures, if any, by which the terms of any
3contract with bondholders may be amended or abrogated.

4(ii) The percentage of the principal amount of bonds
5the holders of which must consent to the amendment or
6abrogation of any contract.

7(iii) The manner in which the consent under
8subparagraph (ii) may be given.

9(iv) Events of default.

10(v) Terms and conditions upon which any or all of
11the bonds become or may be declared due and payable
12before stated maturity following an event of default.

13(vi) Terms and conditions upon which the declaration
14of default and its consequence may be waived.

15(6) Create or authorize the creation of special funds or
16accounts to be held in trust or otherwise for the benefit of
17bondholders or of reserves for debt service or other
18purposes.

19(7) Vest in a trustee any property, rights, powers and
20duties in trust for the benefit of bondholders.

21(8) Limit the rights, powers and duties of a trustee,
22and the right of bondholders to appoint a trustee.

23(9) Establish the terms and conditions upon which a
24trustee or the bondholders may enforce a covenant or rights
25securing or relating to the bonds.

26(10) Exercise all or any part or combination of the
27powers granted in this chapter.

28(11) Do or refrain from doing any other act and thing
29necessary, convenient or desirable in order to better secure
30the bonds of the authority or, in the absolute discretion of

1the authority, as will tend to make bonds of the authority
2more marketable. This paragraph applies notwithstanding that
3the covenant, act or thing may not be specifically enumerated
4in this chapter as long as the covenant, act or thing is in
5accordance with the intent of this chapter.

6(12) Pay the costs or expenses incident to any of the
7foregoing.

8(b) Issuance of bonds.--Bonds may be issued under one or
9more separate resolutions or trust agreements. A series of bonds
10may be separately secured from another series of bonds under the
11resolutions or trust agreements.

12§ 1726. Validity of pledge.

13A pledge of or grant of a security interest in revenues or
14instruments made by the authority shall be valid and binding
15from the time when the pledge is made or, where applicable, when
16the authority enters into a written agreement to request the
17applicable appropriation from the department. The revenues,
18receipts, money, funds or other property or instruments pledged
19and later received by the authority shall immediately be subject
20to the lien of the pledge or security interest without any
21physical delivery of the property pledged or further act. The
22lien of the pledge or security interest shall be valid and
23binding as against all parties having claims of any kind in
24tort, contract or otherwise against the authority irrespective
25of whether the parties have notice of the lien, pledge or
26security interest. No instrument by which a pledge or security
27interest is created, evidenced or noticed need be recorded or
28filed to perfect the pledge or security interest except in the
29records of the authority.

30§ 1727. Commonwealth pledges.

1(a) Bondholders.--The Commonwealth pledges to and agrees
2with each obligee of the authority that the Commonwealth will
3not limit or alter the rights and powers vested in the authority
4or otherwise created by this chapter in any manner inconsistent
5with the obligations of the authority to its obligees until all
6bonds at any time issued, together with the interest on the
7bonds, are fully paid and discharged.

8(b) Lessees.--The Commonwealth pledges and agrees with any
9person that, as owner of property which is leased or subleased
10to or from the authority, it will not limit or alter the rights
11and powers vested in the authority or otherwise created by this
12chapter in any manner which impairs the obligations of the
13authority until all the obligations of the authority under the
14lease or sublease are fully met and discharged.

15§ 1728. Bonds to be legal investments.

16(a) Investments.--Bonds issued pursuant to this chapter
17shall constitute securities in which any person or entity may
18properly and legally invest funds, including capital, deposits
19or other funds in their control or belonging to them.

20(b) Deposits.--Bonds issued by the authority are securities
21which may properly and legally be deposited with and received by
22a government agency for any purpose for which the deposit of
23bonds or other obligations of the Commonwealth are authorized by
24law.

25§ 1729. Rights and remedies of obligees.

26The rights and remedies conferred upon or granted to obligees
27of the authority pursuant to this chapter shall be in addition
28to and not in limitation of rights and remedies lawfully granted
29to obligees of the authority by the resolution providing for the
30issuance of bonds or by any trust agreement or other agreement

1under which the bonds may be issued or secured.

2SUBCHAPTER D

3ACCOUNTS

4Sec.

51731. Establishment of accounts.

61732. Deposits.

71733. Use.

81734. Account restrictions.

9§ 1731. Establishment of accounts.

10In addition to other accounts that may be established by the
11authority from time to time, there are established the following
12accounts:

13(1) The Small Business First Account.

14(2) The Community Economic Development Account.

15(3) The Export Financing Account.

16(4) The Pennsylvania Industrial Development Account.

17(5) The Machinery and Equipment Loan Account.

18(6) The Disadvantaged Business Development Account.

19(7) The First Industries Account.

20(8) The Second Stage Loan Guarantee Account.

21§ 1732. Deposits.

22Loan repayments, recaptured funds and bond proceeds from the
23programs described in Subchapter E (relating to programs), as
24well as appropriations, including, without limitation, those
25appropriations made prior to the effective date of this act for
26the same programs or similar programs to those described in
27Subchapter E and any other available funds which are or may
28become available, not pledged to be deposited or used elsewhere,
29shall be deposited in the respective program accounts. Separate
30subaccounts may be established in each program account for

1purposes of pledging funds in the subaccounts to secure specific
2bonds and other obligations of the authority.

3§ 1733. Use.

4Funds deposited in each of the program accounts shall be made
5available for additional loans, guarantees and other financial
6assistance as provided by the respective programs.

7§ 1734. Account restrictions.

8(a) Pennsylvania Industrial Development Account.--

9(1) The Pennsylvania Industrial Development Account,
10established in section 1731 (relating to establishment of
11accounts), shall be a revolving fund, whereby all
12appropriations and payments made into the account, including
13repayment of loans or funds from mortgages and any other
14agreements made and entered into by the authority under the
15program, shall be applied and reapplied to the purposes of
16the Pennsylvania Industrial Development Program.

17(2) If at any time the authority determines that funds
18held in the Pennsylvania Industrial Development Account
19exceed the amount required to carry out the purposes of the
20program, the authority shall take such action as may be
21required to transfer the excess funds to the General Fund of
22the State Treasury, subject to the provisions of section
231771.1 (relating to transfer from Pennsylvania Industrial
24Development Authority to Pennsylvania Business Development
25Authority).

26(b) Export Financing Account.--Funds in the Export Financing
27Account must be continuously secured by a pledge of direct
28obligations of the United States or of the Commonwealth having
29an aggregate market value, exclusive of accrued interest, at
30least equal to the balance on deposit in the account. The

1securities shall be deposited with the authority to be held by a
2trustee or agent satisfactory to the authority. Bank and trust
3companies are authorized to give security under this subsection.

4SUBCHAPTER E

5PROGRAMS

6Sec.

71750. Programs generally.

81751. Small Business First Program.

91752. Community Economic Development Program.

101753. Export Financing Program.

111754. Pennsylvania Industrial Development Program.

121755. Machinery and Equipment Loan Program.

131756. Disadvantaged Business Development Program.

141757. First Industries Program.

151758. Second Stage Loan Guarantee Program.

16§ 1750. Programs generally.

17(a) Establishment of programs.--In addition to the programs
18described in this subchapter, the authority may from time to
19time establish new programs that further economic development
20within this Commonwealth.

21(b) Application process.--Applications for financial
22assistance under this chapter must be prepared with the
23assistance of a certified economic development organization that
24shall approve the application before it is submitted to the
25authority and shall comply with subsection (c) and with any
26additional requirement of the applicable program or programs.
27Applications shall be in the form required by the authority and
28shall bear the applicant's name and address together with a
29description of the type and amount of financial assistance
30requested. Upon review of an application, the authority shall

1notify the applicant of its decision or request additional
2information or certifications prior to making its decision.

3(c) Application requirements.--Applications shall include
4the following information, where applicable:

5(1) A description of the applicant's business or, if the
6applicant is not the borrower, the borrower's business,
7including:

8(i) The type of business conducted.

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

10(iii) A list of all offices of the applicant located
11in this Commonwealth.

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

13(v) The number of current employees and an estimate
14of future employment.

15(2) A description of the project, including:

16(i) The location.

17(ii) The total estimated project cost, prepared by
18an engineer or other qualified professional, where
19appropriate, and the identification of all sources of
20capital for the project.

21(iii) A legal description of all real property held
22or to be acquired for the establishment of the project.

23(iv) A general description and statement of value of
24any real or personal property of the applicant and, if
25applicable, the buyer or tenant of the project, to be
26applied to the establishment of the project.

27(3) A statement that the project is consistent with any
28existing comprehensive county plan where the project is
29located.

30(4) A firm commitment from the intended project user to

1use the project upon completion.

2(5) A brief description of the anticipated economic
3impact to this Commonwealth and the host municipality as a
4result of the project.

5(6) Any plans and other documents as may be required to
6show the type, structure and general character of the
7project.

8(7) Financial statements of the applicant, proposed
9guarantors and any other party whose credit is significant to
10the approval of the financial assistance. The authority may,
11by guidelines that shall be submitted for publication in the
12Pennsylvania Bulletin, specify the period to be covered by
13the financial statements and whether the statements must be
14compiled, reviewed or prepared by a certified public
15accountant.

16(8) Any information required by the program or programs
17under which financial assistance may be provided.

18(9) Any other information required by the authority.

19(d) Review and approval.--

20(1) In reviewing applications, the authority shall
21consider the following, where applicable:

22(i) Whether the value of the proposed collateral and
23the financial resources offered by the applicant are
24sufficient to repay the loan.

25(ii) Whether the project will enable future
26employment opportunities in or have a net positive
27economic impact on the surrounding community.

28(iii) Whether the statement of the estimated cost of
29the project is reasonable.

30(iv) Whether the sources of financial commitments

1for funds in excess of the amount requested under this
2chapter are reliable.

3(v) Whether the applicant has complied with terms
4required by the applicable program or programs listed
5under the corresponding sections of this chapter.

6(vi) Whether the applicant has a history of
7investment in Pennsylvania-related companies.

8(vii) Whether the applicant has demonstrated strong
9relationships with organizations in this Commonwealth
10which foster economic development.

11(viii) Whether the applicant has a strong
12performance record.

13(ix) Whether the applicant has demonstrated an
14ability to meet and satisfy debt service, if applicable,
15as it becomes due and payable.

16(x) Any other information deemed relevant by the
17authority.

18(2) Subject to any applicable limitations under this
19chapter, the amount, duration, interest rate, security
20required and any other terms of the loan shall be set at the
21discretion of the authority based upon its determination of
22the potential financial risk to the Commonwealth.

23(3) No financial assistance shall be approved if the
24proceeds would be used to:

25(i) refinance any portion of the total cost of a
26capital development project, pollution prevention
27infrastructure or other existing loans or debt;

28(ii) finance a project located outside the
29geographic boundaries of this Commonwealth;

30(iii) relocate a business to another part of this

1Commonwealth, unless approved in advance by the authority
2which shall consider the negative economic impact on the
3community that the business is leaving; or

4(iv) provide funds, directly or indirectly, for
5payment distribution or as a loan to owners, partners or
6shareholders of a small business, except as ordinary
7compensation for services rendered.

8(4) (i) The terms of all agreements for financial
9assistance awarded under this chapter shall include any
10material terms, requirements or other conditions provided
11for agreements entered into under this chapter. The
12authority may impose other terms and conditions if it
13determines they are in the best interests of this
14Commonwealth, including a provision requiring collateral
15for any penalty which may be imposed.

16(ii) Upon approving an application for a loan, the
17authority shall draw an advance equal to the principal
18amount of the loan from the appropriate account or
19accounts; and prior to providing loan funds to the
20applicant, the authority shall require the applicant to
21execute a note and to enter into a loan agreement and any
22other agreement as the authority shall require.

23(e) Reporting and inspection.--An applicant for or a
24recipient of a loan, loan guarantee or grant made under this
25chapter shall, upon request:

26(1) Permit the authority to inspect its premises, books
27and records.

28(2) Provide updated information to the authority if
29conditions change to the extent that the information
30originally given becomes inaccurate or misleading.

1(3) Provide the authority with any periodic financial
2reports and audits that the authority may require.

3§ 1751. Small Business First Program.

4(a) General rule.--The Small Business First Program shall
5provide low-interest loans and lines of credit to small
6businesses for capital development projects that will stimulate
7the expansion and assist in the viability of small businesses,
8thereby creating new jobs and retaining existing jobs in this
9Commonwealth.

10(b) Application.--In addition to the requirements listed in
11section 1750(c) (relating to programs generally), the
12application shall include the following:

13(1) A description of the capital development project,
14including the following:

15(i) The number of employment opportunities to be
16created or preserved by the proposed capital development
17project.

18(ii) If the applicant is an agricultural producer, a
19demonstration that there is a substantial likelihood that
20the project will enhance the agricultural operation.

21(2) A financial commitment from a responsible source for
22any cost of the project in excess of the amount requested.

23(3) A demonstration of the ability of the applicant to
24meet and satisfy the debt service as it becomes due and
25payable.

26(4) The existence and sufficiency of collateral for the
27loan.

28(c) Conditions and restrictions.--A loan made under this
29section may:

30(1) Finance the development, construction, renovation or

1acquisition of land, buildings, machinery or equipment,
2licenses for wholesalers and distributors to sell alcoholic
3beverages or may be used for working capital.

4(2) Not exceed 50% of the total capital development
5project costs. For the purposes of this paragraph, capital
6development project costs incurred during the 12-month period
7prior to the date of submission of the application to the
8authority shall be considered part of the total capital
9development project costs.

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

11(1) A loan for real property shall have a repayment
12period of up to 15 years.

13(2) A loan for machinery and equipment shall have a
14repayment period of up to ten years.

15(3) A loan or line of credit for working capital shall
16have a repayment period of up to three years.

17(4) If, in a capital development project, two or more
18uses are planned, the loan terms may be combined.

19(5) The interest rate shall be determined by the
20authority.

21(6) The authority shall determine the job retention or
22job creation requirements of each project financed in whole
23or in part through a loan made under this section.

24(7) All loans shall be secured by lien positions on
25collateral at the highest level of priority, as determined by
26the authority.

27(e) Penalty for noncompliance.--In the event that a loan 
28recipient fails to create or preserve the number of employment 
29opportunities specified in the approved application, the 
30authority may impose a penalty equal to an increase of up to 5%
 

1above the existing loan interest rate for the remainder of the 
2loan, unless it determines that the failure is due to 
3circumstances outside the control of the loan recipient.

4§ 1752. Community Economic Development Program.

5(a) General rule.--The Community Economic Development
6Program shall provide loans for small businesses located in
7distressed communities which are involved in the business-to-
8public service, mercantile, commercial or point-of-sale retail
9sectors in order to enhance the economic well-being of the
10community by employing residents of the community and by
11providing products or services to that community.

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

13(1) A loan for land, buildings, machinery, equipment or
14working capital may not exceed 50% of the total capital
15development project costs. For the purposes of this
16paragraph, capital development project costs incurred during
17the 12-month period prior to the date of submission of the
18application to the authority shall be considered part of the
19total capital development project costs.

20(2) Each capital development project shall meet the job
21retention or job creation requirements established by the
22authority.

23(3) The maximum loan amount available under this program
24will be set by the authority.

25(4) No loans 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(c) Loan terms.--The following terms shall apply:

29(1) A loan for real property shall have a repayment
30period of up to 15 years.

1(2) A loan for machinery and equipment shall have a
2repayment period of up to ten years.

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

5(4) All loans shall be secured by lien positions on
6collateral at the highest level of priority, as determined by
7the authority.

8(d) Application.--In addition to the requirements listed in
9section 1750(c) (relating to programs generally), the
10application shall include the following:

11(1) A financial commitment from a responsible source for
12the cost of the capital development project in excess of the
13amount requested.

14(2) A demonstration that the capital development project
15will have a direct impact on the community in which the
16capital development project is or will be located, on
17residents of that community or on the local and regional
18economy. The authority shall establish criteria that will
19assist in making this demonstration.

20(3) A projection of the number of employment
21opportunities to be created or preserved by the proposed
22capital development project.

23(e) Penalty for noncompliance.--In the event that a loan 
24recipient fails to create or preserve the number of employment 
25opportunities specified in the approved application, the 
26authority may impose a penalty equal to an increase of up to 5% 
27above the existing rate for the remainder of the loan, unless it 
28determines that the failure is due to circumstances outside the 
29control of the loan recipient.

30§ 1753. Export Financing Program.

1(a) General rule.--The Export Financing Program shall
2provide loans and lines of credit to export businesses for
3working capital and accounts receivable financing, in order to
4increase the level of foreign exports and the number of
5Pennsylvania companies exporting goods and services.

6(b) Application.--In addition to the requirements listed in
7section 1750(c) (relating to programs generally), the
8application shall include the following:

9(1) The number of employment opportunities to be created
10or preserved by the proposed capital development project.

11(2) A financial commitment from a responsible source for
12any cost of the capital development project in excess of the
13amount requested.

14(3) A statement that the loan, if approved, would not
15supplant funding from private sector sources on commercially
16reasonable terms.

17(4) A demonstration that the applicant will be able to
18meet and satisfy the debt service as it becomes due and
19payable.

20(5) The existence and sufficiency of collateral for the
21loan.

22(c) Conditions and restrictions.--

23(1) The maximum loan amount, repayment period and
24interest rate available under this program will be set by the
25authority.

26(2) The authority may, in its discretion, require any of
27the following:

28(i) That the applicant be eligible for an export
29credit insurance policy for small businesses offered by
30the Ex-Im Bank.

1(ii) That the export credit sales contract be
2insured by an export credit insurance policy offered by
3the Ex-Im Bank.

4(iii) That the loan be guaranteed by the working
5capital guaranty program offered by the Ex-Im Bank.

6(3) No loan shall be approved if the proceeds of the
7loan would be used to provide funds for speculation in real
8or personal property, whether tangible or intangible.

9(4) All loans shall be secured by lien positions on
10collateral at the highest level of priority, as may be
11determined by the authority.

12(d) 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 loan interest rate for the remainder of the 
17loan, unless it determines that the failure is due to 
18circumstances outside the control of the loan recipient.

19§ 1754. Pennsylvania Industrial Development Program.

20(a) General rule.--The Pennsylvania Industrial Development
21Program shall provide loans for industrial development projects,
22industrial parks and multiple-tenancy building projects in order
23to increase employment levels and the overall economic health of
24this Commonwealth.

25(b) Loans for industrial development projects.--The
26authority may contract to loan an amount not to exceed 50% of
27the cost of establishing the industrial development project,
28subject, however, to the following conditions:

29(1) Prior to the making of any loan under this
30paragraph, the authority shall determine that:

1(i) The borrower is responsible to assume all 
2obligations imposed by the authority in connection with 
3the project, financial or otherwise, and to undertake the 
4operation of the project.

5(ii) The borrower has obtained from other 
6independent and responsible sources a firm commitment for 
7any funds which, in addition to the loan made pursuant to 
8this paragraph and any other property or assets held by 
9the borrower, shall be necessary for the completion and 
10operation of the project.

11(2) The authority shall determine the interest rate and
12repayment period of any loan made under this section.

13(3) A loan made under this section shall be evidenced by 
14note of the borrower, and secured by a mortgage on the 
15project for which such loan was made, subordinate only to the 
16mortgage securing the first lien obligation issued to secure 
17the commitment of funds provided to pay the cost of the 
18project from the aforesaid independent and responsible 
19sources, and used in the financing of the project.

20(4) The authority may require such additional security
21it may deem necessary.

22(c) Loans for industrial parks.--The authority may contract
23to loan an amount not to exceed 90% of the cost of establishing
24an industrial park project, subject to the following conditions:

25(1) The authority shall determine the interest rate and
26repayment period of any loan made under this subsection.

27(2) A loan made under this section shall be evidenced by 
28note of the borrower and secured by a first mortgage on the 
29industrial park or by participation in a first mortgage. If, 
30however, a Federal agency is participating in the financing
 

1of the industrial park, the authority may take as security 
2for its loan a mortgage on the industrial park which is 
3second only to the mortgage given to the Federal agency.

4(3) If a loan made under this section is secured by
5participation in a first mortgage on the industrial park, a
6portion of the loan, not to exceed 10% of the cost of the
7project, may be secured by a second mortgage on the
8industrial park which is second only to the participating
9first mortgage.

10(d) Loans for multiple-tenancy building projects.--The 
11authority may contract to loan an amount not to exceed 75% of 
12the cost of establishing the multiple-tenancy building project, 
13subject, however, to the following conditions:

14(1) The authority shall determine the interest rate and
15repayment period of any loan made under this section.

16(2) A loan made under this section shall be evidenced by 
17note of the borrower and secured by a first mortgage or 
18participation in a first mortgage on the multiple-tenancy 
19building project.

20(3) The authority may contract to loan an amount not to 
21exceed 75% of the cost of the project if the loan is secured 
22by a first mortgage or participation in a first mortgage on 
23the project; otherwise, the authority may contract to loan an 
24amount not to exceed 40% of the cost of the project.

25(4) If a loan made under this section is secured by a
26participation in a first mortgage on the project, the
27authority may permit a portion of its loan, not to exceed 10%
28of the cost of the project, to be secured by a second
29mortgage on the project which is second only to the
30participating first mortgage.

1(e) Application.--In addition to the requirements listed in
2section 1750(c) (relating to programs generally), the
3application shall include the following:

4(1) A general description of the type, classes and
5number of employees employed or to be employed in the
6operation of the project.

7(2) The cost or estimate of the cost of establishing the
8project. As used in this section, "cost" shall include
9financing charges, including interest incurred prior to and
10during construction, but shall not include the cost of any
11machinery, equipment or fixtures necessary for the project or
12the installation or maintenance of any such machinery,
13equipment or fixtures.

14(3) Evidence of the arrangement made by the borrower for 
15the financing of all costs of the project over and above the 
16participation of the authority.

17(4) Evidence that the establishment of the project will
18not cause the removal of an industrial enterprise,
19manufacturing enterprise, research and development
20enterprise, agricultural producer or agricultural processor
21from one area of the Commonwealth to another area of the
22Commonwealth, as determined by the authority.

23(f) Employment projection audits.--The authority shall
24implement a procedure to determine whether the employment
25projections set out in the loan application are achieved.

26§ 1755. Machinery and Equipment Loan Program.

27(a) General rule.--The Machinery and Equipment Loan Program
28shall provide loans to businesses involved in industrial
29processes, manufacturing, mining, production agriculture,
30information technology or biotechnology for the purchase,

1installation or upgrade of equipment and machinery, including
2computer hardware and software.

3(b) Application.--In addition to the requirements listed in
4section 1750(c) (relating to programs generally), the
5application shall include the following:

6(1) A demonstration that the applicant is able to meet
7and satisfy all debt service as it becomes due and payable.

8(2) Evidence of available and sufficient collateral,
9including satisfactory lien positions on real and personal
10property.

11(3) Sufficient evidence that funds shall be used only to
12acquire and install new equipment and machinery or upgrade
13existing equipment and machinery, including the acquisition,
14application and utilization of computer hardware and
15software.

16(4) The number of net employment opportunities to be
17created by the proposed project unless the business is
18involved in production agriculture.

19(5) Evidence that the loan project will increase the
20business's competitiveness within its respective industry.

21(c) Loan terms and limitations.--The following shall apply:

22(1) No loan shall exceed 50% of the cost of the project.

23(2) Loan terms shall not exceed ten years in duration.

24(3) Proceeds of loans made under this section may not be
25used for speculation in any kind of property, real or
26personal, tangible or intangible.

27(4) Loans shall be made only for projects that
28demonstrate a significant likelihood of resulting in job
29creation or retention, as established by the authority. This
30paragraph does not apply to loans made to business

1enterprises involved in production agriculture.

2(d) Security.--All loans shall be secured by no less than a
3second lien position on the equipment purchased and other
4sufficient collateral as determined by the authority.

5(e) Penalty for noncompliance.--In the event that a loan 
6recipient fails to create or preserve the number of employment 
7opportunities specified in the approved application, the 
8authority may impose a penalty equal to an increase of up to 5% 
9above the existing rate for the remainder of the loan, unless it 
10determines that the failure is due to circumstances outside the 
11control of the loan recipient.

12§ 1756. Disadvantaged Business Development Program.

13(a) General rule.--The Disadvantaged Business Development
14Program shall provide financial assistance to businesses owned
15by socially and economically disadvantaged persons.

16(b) Application.--In addition to the requirements listed in
17section 1750(c) (relating to programs generally), the
18application shall include the following:

19(1) A statement that the applicant is a United States
20citizen, resident of this Commonwealth and member of a group
21or groups which have suffered disadvantages arising from
22chronic racial, ethnic or economic circumstances.

23(2) An explanation as to how the applicant's ability to 
24compete in the free enterprise system has been impaired due 
25to diminished capital and credit opportunities, as compared 
26to others in the same or a similar line of business who are 
27not socially and economically disadvantaged.

28(c) Loan terms and conditions.--The authority shall have the
29power to lend money to and to guarantee, endorse or act as
30surety on the bonds, notes, contracts or other obligations of,

1or otherwise financially assist a business owned by a person who
2meets the criteria in subsection (a), and to establish and
3regulate the terms, security and conditions with respect to any
4such loans or financial assistance and the charges for interest
5and service connected therewith.

6§ 1757. First Industries Program.

7(a) General purpose.--The First Industries Program shall
8provide financial assistance for projects related to tourism and
9agriculture located within this Commonwealth.

10(b) Loans.--The First Industries Program shall provide loans
11to businesses involved in tourism and agriculture that would
12otherwise satisfy the requirements for a loan under section 1751
13(relating to Small Business First Program), 1752 (relating to
14Community Economic Development Program) or 1755 (relating to
15Machinery and Equipment Loan Program).

16(c) Loan guarantees.--An applicant may request a guarantee
17for a loan to be made by a commercial lending institution or
18community development financial institution to assist with the
19financing of a project related to tourism or agriculture. The
20following apply:

21(1) In addition to the requirements listed in section
221750(c) (relating to programs generally), the application
23shall include the following:

24(i) A description of the proposed project financing,
25including terms, conditions and the collateral or
26security required for the loan for which the guarantee is
27being requested.

28(ii) A copy of the borrower's last two years of
29financial statements.

30(2) The maximum guaranteed amount and percentage made

1under this section shall be determined by the authority.

2(3) No less than $500,000 of private funds must be
3invested in the project.

4(4) In addition to any other terms and conditions
5required by the authority, the guarantee agreement shall
6provide for the following:

7(i) The procedure for the submission by the
8commercial lending institution or community development
9financial institution of a claim for payment. This
10procedure shall require that the commercial lending
11institution or community development financial
12institution demonstrate that it has exhausted all
13available remedies against the borrower, other guarantors
14and collateral before seeking payment under the
15agreement.

16(ii) A requirement that a percentage of any moneys
17recovered subsequent to the payment of a claim by the
18authority be remitted to the authority.

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

23§ 1758. Second Stage Loan Guarantee Program.

24(a) General purpose.--The Second Stage Loan Guarantee
25Program shall provide loan guarantees to commercial lending
26institutions that make loans to life sciences, advanced
27technology or manufacturing businesses located in this
28Commonwealth.

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

1by this section. The application shall be in the form required
2by the authority and, in addition to the requirements listed in
3section 1750(c) (relating to programs generally), shall include
4the following:

5(1) The name and address of the commercial lending
6institution and the name and title of the individual who will
7serve as the point of contact for the commercial lending
8institution.

9(2) A statement defining the service area of the
10commercial lending institution.

11(3) A statement describing the commercial lending
12activities engaged in by the commercial lending institution
13and how the institution intends to expand those activities as
14a result of its participation in the program authorized by
15this section.

16(c) Enrollment approval.--Upon approval of an application
17for enrollment, the authority shall execute a master guarantee
18agreement in favor of the commercial lending institution. In
19addition to any other terms and conditions required by the
20authority, the master guarantee agreement shall provide for the
21following:

22(1) The procedure for the submission of a claim for
23payment by the commercial lending institution. The procedure
24shall require that the commercial lending institution
25demonstrate that it has exhausted all available remedies
26against the borrower, other guarantors and collateral for the
27loan before seeking payment under the agreement.

28(2) A requirement that a percentage of any moneys
29recovered by the commercial lending institution subsequent to
30any payment made under the master guarantee agreement by the

1authority be remitted to the authority.

2(3) Periodic reporting requirements by the commercial
3lending institution regarding itself and regarding the loans
4for which guarantee certificates have been issued under this
5section.

6(d) Application for guarantee.--A commercial lending
7institution enrolled in the program authorized by this section
8may submit an application to the authority for the guarantee of
9a proposed loan. The application shall be in the form required
10by the authority and, in addition to the requirements listed in
11section 1750(c), shall include the following:

12(1) A demonstration that the use of loan proceeds by the
13borrower will result in jobs being created or retained within
14this Commonwealth, and an estimate as to the number of
15projected new or retained employees as a result of the loan.

16(2) A statement that the borrower's business is located
17within the commercial lending institution's service area and
18within this Commonwealth.

19(3) A copy of the borrower's last two years of financial
20statements prepared or reported on by an independent
21certified public accountant.

22(4) A statement describing the purpose of the loan, the
23requested amount of the loan, a copy of the commercial
24lending institution's commitment letter and applicable credit
25underwriting that supports the repayment of the loan, as well
26as the collateral and other guarantees offered by the
27borrower to support the loan.

28(5) Certification that the borrower's business has been
29in existence for at least two years at the time of
30application.

1(6) Demonstration that the borrower is financially
2responsible and has the ability to repay the loan.

3(e) Limitations.--

4(1) The maximum guarantee amount and percentage must be
5determined by the authority and shall terminate at the end of
6seven years.

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

9SUBCHAPTER F

10MISCELLANEOUS PROVISIONS

11Sec.

121771. Definitions.

131771.1. Transfer from Pennsylvania Industrial Development
14Authority to Pennsylvania Business Development
15Authority.

161772. Transfer from Commonwealth Financing Authority to 
17Pennsylvania Business Development Authority for First 
18Industries Program and Second Stage Loan Guarantee 
19Program.

201773. Transfer from Pennsylvania Minority Business Development
21Authority to Pennsylvania Business Development
22Authority.

231774. Successorship and transfer of assets and liabilities.

24§ 1771. Definitions.

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

28"Account." The Pennsylvania Industrial Development Account.
29The term shall include any similar account established by a
30successor to the Pennsylvania Business Development Authority

1that assumes the obligations under the Pennsylvania Industrial
2Development Authority bond indenture.

3"Debt." Notes, instruments and other evidences of
4indebtedness or obligations which were issued prior to the
5effective date of this section for the same programs or similar
6programs to those described under Subchapter E (relating to
7programs) and under the following:

8(1) The act of May 17, 1956 (1955 P.L.1609, No.537),
9known as the Pennsylvania Industrial Development Authority
10Act.

11(2) The act of July 22, 1974 (P.L.598, No.206), known as
12the Pennsylvania Minority Business Development Authority Act.

13(3) 12 Pa.C.S. Chs. 23 (relating to small business
14first) and 29 (relating to machinery and equipment loans).

15"Debt instrument." Any trust instrument or indenture or
16other financial instrument pursuant to which debt was issued,
17incurred or secured.

18"Prior programs." Except for the programs transferred under
19sections 1771.1 (relating to transfer from Pennsylvania
20Industrial Development Authority to Pennsylvania Business
21Development Authority) and 1773 (relating to transfer from
22Pennsylvania Minority Business Development Authority to
23Pennsylvania Business Development Authority), the same programs
24or programs similar to those described under Subchapter E
25(relating to programs) and established under the following:

26(1) The former act of May 17, 1956 (1955 P.L.1609,
27No.537), known as the Pennsylvania Industrial Development
28Authority Act.

29(2) The former act of July 22, 1974 (P.L.598, No.206),
30known as the Pennsylvania Minority Business Development

1Authority Act.

2(3) 12 Pa.C.S. former Chs. 23 (relating to small
3business first) and 29 (relating to machinery and equipment
4loans).

5(4) Former sections 1552 (relating to First Industries
6Program) and 1553 (relating to Second Stage Loan Program).

7"Program." The Pennsylvania Industrial Development Program. 
8The term shall include any similar program established by a
9successor to the Pennsylvania Business Development Authority
10that assumes the obligations under the Pennsylvania Industrial
11Development Authority bond indenture.

12§ 1771.1. Transfer from Pennsylvania Industrial Development
13Authority to Pennsylvania Business Development
14Authority.

15(a) Designation of Pennsylvania Business Development
16Authority as successor to Pennsylvania Industrial Development
17Authority.--The Pennsylvania Business Development Authority, as
18a public instrumentality of the Commonwealth, shall be and is
19designated as successor to Pennsylvania Industrial Development
20Authority. The separate existence of the Pennsylvania Industrial
21Development Authority shall cease.

22(b) Transfer of assets and liabilities of Pennsylvania
23Industrial Development Authority.--The following shall occur:

24(1) The following shall be taken and deemed to be
25transferred to and vested in the Pennsylvania Business
26Development Authority, subject to any pledge in favor of the
27holders of bonds:

28(i) All of the real, personal and mixed property and
29all interests in the property of the Pennsylvania
30Industrial Development Authority, including loans to

1industrial development agencies and property acquired as
2a result of foreclosures or in lieu of foreclosures of
3mortgages securing the loans.

4(ii) Any debts or amount due to the Pennsylvania
5Industrial Development Authority.

6(iii) The Pennsylvania Industrial Development
7Authority's right, title and interest in and to revenues
8pledged to secure bonds, the interests of the
9Pennsylvania Industrial Development Authority under trust
10instruments securing its bonds, including the right to
11issue obligations pursuant to and secured by the
12instruments, sinking funds on deposit and all funds
13deposited under trust instruments, leaseholds and rights
14and deposits under the trust instruments.

15(iv) Rights under interest rate exchange agreements
16and other financial instruments.

17(v) Appropriations.

18(vi) All other rights and assets of the Pennsylvania
19Industrial Development Authority of any nature.

20(2) (i) The Pennsylvania Business Development Authority
21shall succeed to, assume and become liable for all
22liabilities and obligations of the Pennsylvania
23Industrial Development Authority, including the bonds and
24the Pennsylvania Industrial Development Authority bond
25indenture, obligations under interest rate exchange
26agreements and other financial instruments, contracts for
27purchase of goods or services and other liabilities of
28any nature.

29(ii) The liabilities and obligations under subparagraph
30(i) shall be subject to the same limitations as were

1applicable to the Pennsylvania Industrial Development
2Authority prior to the transfer of assets and liabilities,
3including limitations as to payment source, pledges,
4assignments, liens, charges, terms and conditions.

5(iii) The transfer of assets and liabilities to the
6Pennsylvania Business Development Authority as successor are
7assumed by the Pennsylvania Business Development Authority
8and shall not impair the rights or the security of holders of
9bonds or other creditors, persons dealing with Pennsylvania
10Industrial Development Authority, liens upon the property of
11Pennsylvania Industrial Development Authority or persons
12holding claims against Pennsylvania Industrial Development
13Authority.

14(iv) Any claim existing or action or proceeding pending
15by or against the Pennsylvania Industrial Development
16Authority shall be prosecuted to judgment as if the transfer
17had not taken place or the Pennsylvania Business Development
18Authority may be proceeded against or substituted in its
19place.

20(c) Rights and powers.--

21(1) Nothing under this chapter shall alter or limit the
22rights and powers vested in the Pennsylvania Business
23Development Authority as successor to the Pennsylvania
24Industrial Development Authority or otherwise created under
25the act of May 17, 1956 (1955 P.L.1609, No.537), known as the
26Pennsylvania Industrial Development Authority Act, in any
27manner inconsistent with the obligations of the Pennsylvania
28Industrial Development Authority and, after the effective
29date of this section, the Pennsylvania Business Development
30Authority, to obligees of the Pennsylvania Industrial

1Development Authority until all bonds issued by the
2Pennsylvania Industrial Development Authority, together with
3the interest on the bonds, are fully paid and discharged.

4(2) Nothing under this chapter shall authorize personal
5recourse for any claim based on bonds or trust instruments
6securing the bonds or trust instruments, against any member,
7officer or employee of the Pennsylvania Industrial
8Development Authority, either directly or through the
9Pennsylvania Industrial Development Authority or the
10Pennsylvania Business Development Authority under any
11constitutional provision, statute or rule of law or by the
12enforcement of any assessment or penalty or otherwise.

13(d) Pennsylvania Industrial Development Account and
14Program.--

15(1) The provisions of this chapter relating to the
16account and the program shall apply to the assets and
17revenues of the Pennsylvania Industrial Development Authority
18transferring to the Pennsylvania Business Development
19Authority as successor in addition to the assets and revenues
20arising from the continuing program subsequent to the
21transfer.

22(2) The pledge made by the trust instruments securing
23the Pennsylvania Industrial Development Authority bonds shall
24apply to revenues of the Pennsylvania Business Development
25Authority from the program and to assets held in the account.
26No withdrawals from the account may be made except in
27compliance with the trust instruments securing the
28Pennsylvania Industrial Development Authority bonds.

29(e) Definition.--As used in this section, the term "bond"
30means any bond, note or other financial obligation of the

1Pennsylvania Industrial Development Authority, including
2interest rate exchange agreements or other financial instruments
3related to bonds.

4§ 1772. Transfer from Commonwealth Financing Authority to the 
5Pennsylvania Business Development Authority for the 
6First Industries Program and Second Stage Loan 
7Guarantee Program.

8On the effective date of this chapter, the trust accounts
9established by the Commonwealth Financing Authority under
10sections 1541 (relating to trust accounts) and 1542(b) (relating
11to revolving loan program accounts) for the First Industries
12Program and the Second Stage Loan Guarantee Program shall be
13transferred to and vested in the authority without further act
14or deed.

15§ 1773. Transfer from Pennsylvania Minority Business
16Development Authority to Pennsylvania Business
17Development Authority.

18(a) Designation of Pennsylvania Business Development
19Authority as successor to the Pennsylvania Minority Business
20Development Authority.--The Pennsylvania Business Development
21Authority, as a public instrumentality of the Commonwealth,
22shall be and is designated as successor to the Pennsylvania
23Minority Business Development Authority. The separate existence
24of the Pennsylvania Minority Business Development Authority
25shall cease.

26(b) Transfer of assets and liabilities of the Pennsylvania
27Minority Business Development Authority.--The following shall
28occur:

29(1) The following shall be taken and deemed to be
30transferred to and vested in the Pennsylvania Business

1Development Authority, subject to any pledge in favor of the
2holders of bonds:

3(i) All of the real, personal and mixed property and
4all interests in the property of the Pennsylvania
5Minority Business Development Authority, including loans
6and other debts owing to the Pennsylvania Minority
7Business Development Authority and amounts due to the
8Pennsylvania Minority Business Development Authority
9under the loans and debts.

10(ii) The right, title and interest of the
11Pennsylvania Minority Business Development Authority
12under bond indentures, including all revenues pledged as
13security for the right, title and interest and the right
14to issue obligations pursuant to and secured by the bond
15indentures, sinking funds on deposit and all funds
16deposited under bond indentures, leaseholds and rights
17and deposits under bond indentures.

18(iii) Appropriations.

19(iv) All other rights and assets of the Pennsylvania
20Minority Business Development Authority.

21(2) (i) The Pennsylvania Business Development Authority
22shall succeed to, assume and become liable for all
23liabilities and obligations of the Pennsylvania Minority
24Business Development Authority, including the bonds, bond
25indentures, contracts for purchase of goods or services
26and other liabilities.

27(ii) The liabilities and obligations under
28subparagraph (i) shall be subject to the same limitations
29as were applicable to the Pennsylvania Minority Business
30Development Authority prior to the transfer of assets and

1liabilities, including limitations as to payment source,
2pledges, assignments, liens, charges, terms and
3conditions.

4(iii) The transfer of assets and liabilities to the
5Pennsylvania Business Development Authority as successor
6are assumed by the Pennsylvania Business Development
7Authority and shall not impair the rights or the security
8of holders of bonds or other creditors of the
9Pennsylvania Minority Business Development Authority,
10persons dealing with the Pennsylvania Minority Business
11Development Authority, liens upon the property of the
12Pennsylvania Minority Business Development Authority or
13persons holding claims against the Pennsylvania Minority
14Business Development Authority.

15(iv) Any claim existing or action or proceeding
16pending by or against the Pennsylvania Minority Business
17Development Authority shall be prosecuted to judgment as
18if the transfer had not taken place or the Pennsylvania
19Business Development Authority may be proceeded against
20or substituted in its place.

21(c) Rights and powers.--

22(1) Nothing under this chapter shall alter or limit the
23rights and powers vested in the Pennsylvania Business
24Development Authority as successor to the Pennsylvania
25Minority Business Development Authority or otherwise created
26by the act of July 22, 1974 (P.L.598, No.206), known as the 
27Pennsylvania Minority Business Development Authority Act,
28and, after the effective date of this section, the
29Pennsylvania Business Development Authority, to obligees of
30the Pennsylvania Minority Business Development Authority

1until all bonds issued by the Pennsylvania Minority Business
2Development Authority, together with the interest on the
3bonds, are fully paid and discharged.

4(2) Nothing under this chapter shall authorize personal
5recourse for any claim based on any obligation of the
6Pennsylvania Minority Business Development Authority,
7including its bonds or bond indentures, against any member,
8officer or employee of the Pennsylvania Minority Business
9Development Authority either directly or through the
10Pennsylvania Minority Business Development Authority or the
11Pennsylvania Business Development Authority under any
12constitutional provision, statute or rule of law or by the
13enforcement of any assessment or penalty or otherwise.

14(d) Definition.--As used in this section, the term "bond"
15means bonds, notes and other evidences of indebtedness or
16obligations which the Pennsylvania Minority Business Development
17Authority issued under the act of July 22, 1974 (P.L.598,
18No.206), known as the Pennsylvania Minority Business Development
19Authority Act.

20§ 1774. Successorship and transfer of assets and liabilities.

21(a) Transfer of assets and liabilities of prior programs.--
22The following shall occur:

23(1) The following shall be taken and deemed to be
24transferred to and vested in the Pennsylvania Business
25Development Authority, subject to any pledge in favor of the
26holders of debt:

27(i) All of the real, personal and mixed property and
28all interests in the property of the prior programs,
29including loans and other debts owing to the prior
30programs and amounts due to the prior programs under the

1loans and other debts.

2(ii) The right, title and interest of the prior
3programs under debt instruments, including all revenues
4pledged as security for the right, title and interest and
5the right to issue obligations pursuant to and secured by
6the debt instruments, sinking funds on deposit and all
7funds deposited under debt instruments, leaseholds and
8rights and deposits under the debt instruments.

9(iii) Appropriations made with respect to the prior
10programs.

11(iv) All other rights and assets of the prior
12programs.

13(2) (i) The Pennsylvania Business Development Authority
14shall succeed to, assume and become liable for all
15liabilities and obligations of the prior programs,
16including the debt, debt instruments, contracts for
17purchase of goods or services, and other liabilities.

18(ii) The liabilities and obligations under
19subparagraph (i) shall be subject to the same limitations
20as were applicable to the prior programs prior to the
21transfer of assets and liabilities, including limitations
22as to payment source, pledges, assignments, liens,
23charges, terms and conditions.

24(iii) The transfer of assets and liabilities to the
25Pennsylvania Business Development Authority as successor
26shall not impair the rights or the security of holders of
27debt or other creditors of the prior programs, persons
28dealing with the prior programs, liens upon the property
29of the prior programs or persons holding claims against
30the prior programs, all of which are assumed by the

1Pennsylvania Business Development Authority.

2(iv) Any claim existing or action or proceeding
3pending by or against the prior programs shall be
4prosecuted to judgment as if the transfer had not taken
5place or the Pennsylvania Business Development Authority
6may be proceeded against or substituted in its place.

7(b) Rights and powers.--

8(1) Nothing under this chapter shall alter or limit the
9rights and powers vested in the Pennsylvania Business
10Development Authority as successor to the prior programs or
11otherwise created by the acts under which the prior programs
12were initiated in any manner inconsistent with the
13obligations of the prior programs and, after the effective
14date of this section, the Pennsylvania Business Development
15Authority, to obligees of the prior programs until all debt
16at any time issued by the prior programs, together with the
17interest on the debt, are fully paid and discharged.

18(2) Nothing under this chapter shall authorize personal
19recourse for any claim based on any obligation of the prior
20programs, including without limitation its debt or debt
21instruments, against any member, officer or employee of the
22prior programs whether directly or through the prior programs
23or the Pennsylvania Business Development Authority under any
24constitutional provision, statute or rule of law or by the
25enforcement of any assessment or penalty or otherwise.

26Section 5. Any money that has been allocated or appropriated
27and has been expended prior to the effective date of this
28section for the same programs or similar programs to those
29described under 64 Pa.C.S. Ch. 17 Subch. E shall be deducted
30from the corresponding allocation or appropriation under 64

1Pa.C.S. Ch. 17.

2Section 6. Repeals are as follows:

3(1) The General Assembly declares that the repeal under
4paragraph (2) is necessary to effectuate the addition of the
5following provisions of 64 Pa.C.S.:

6(i) Ch. 17 Subch. C.

7(ii) Section 1731(4).

8(iii) Section 1734(a).

9(iv) Section 1754.

10(v) Section 1771.1.

11(2) The act of May 17, 1956 (1955 P.L.1609, No.537),
12known as the Pennsylvania Industrial Development Authority
13Act, is repealed.

14(3) The General Assembly declares that the repeal under
15paragraph (4) is necessary to effectuate the addition of the
16following provisions of 64 Pa.C.S.:

17(i) Ch. 17 Subch C.

18(ii) Section 1731(6).

19(iii) Section 1756.

20(iv) Section 1773.

21(4) The act of July 22, 1974 (P.L.598, No.206), known as
22the Pennsylvania Minority Business Development Authority Act,
23is repealed.

24Section 7. This act continues repealed provisions of the
25Pennsylvania Consolidated Statutes as follows:

26(1) The addition of 64 Pa.C.S. §§ 1731(1) and 1751 is a
27continuation of 12 Pa.C.S. Ch. 23. Except as otherwise
28provided in 64 Pa.C.S. § 1731(1) or 1751, all activities
29initiated under 12 Pa.C.S. Ch. 23 shall continue and remain
30in full force and effect and may be completed under 64

1Pa.C.S. §§ 1731(1) and 1751. Orders, regulations, rules and
2decisions which were made under 12 Pa.C.S. Ch. 23 and which
3are in effect on the effective date of section 1 {12 Pa.C.S.
4Ch. 23} of this act shall remain in full force and effect
5until revoked, vacated or modified under 64 Pa.C.S. § 1731(1)
6or 1751. Contracts, obligations and collective bargaining
7agreements entered into under 12 Pa.C.S. Ch. 23 are not
8affected nor impaired by the repeal of 12 Pa.C.S. Ch. 23.

9(2) The addition of 64 Pa.C.S. §§ 1731(5) and 1755 is a
10continuation of 12 Pa.C.S. Ch. 29. Except as otherwise
11provided in 64 Pa.C.S. § 1731(5) or 1755, all activities
12initiated under 12 Pa.C.S. Ch. 29 shall continue and remain
13in full force and effect and may be completed under 64
14Pa.C.S. §§ 1731(5) and 1755. Orders, regulations, rules and
15decisions which were made under the 12 Pa.C.S. Ch. 29 and
16which are in effect on the effective date of section 1 {12
17Pa.C.S. Ch. 29} of this act shall remain in full force and
18effect until revoked, vacated or modified under 64 Pa.C.S. §
191731(5) or 1755. Contracts, obligations and collective
20bargaining agreements entered into under 12 Pa.C.S. Ch. 29
21are not affected nor impaired by the repeal of 12 Pa.C.S. Ch.
2229.

23(3) The addition of 64 Pa.C.S. §§ 1731(7), 1757 and 1772
24is a continuation of 64 Pa.C.S. §§ 1542(b) and 1552. Except
25as otherwise provided in 64 Pa.C.S. § 1731(7), 1757 or 1772,
26all activities initiated under 64 Pa.C.S. §§ 1542(b) and 1552
27shall continue and remain in full force and effect and may be
28completed under 64 Pa.C.S. §§ 1731(7), 1757 and 1772. Orders,
29regulations, rules and decisions which were made under 64
30Pa.C.S. §§ 1542(b) and 1552 and which are in effect on the

1effective date of sections 2 and 3 {64 Pa.C.S. §§ 1542(b) and
21552} of this act shall remain in full force and effect until
3revoked, vacated or modified under 64 Pa.C.S. § 1731(7), 1757
4or 1772. Contracts, obligations and collective bargaining
5agreements entered into under 64 Pa.C.S. §§ 1542(b) and 1552
6are not affected nor impaired by the repeal of 64 Pa.C.S. §§
71542(b) and 1552.

8(4) The addition of 64 Pa.C.S. §§ 1731(8), 1758 and 1772
9is a continuation of 64 Pa.C.S. § 1553. Except as otherwise
10provided in 64 Pa.C.S. § 1731(8), 1758 or 1772, all
11activities initiated under 64 Pa.C.S. § 1553 shall continue
12and remain in full force and effect and may be completed
13under 64 Pa.C.S. §§ 1731(8), 1758 and 1772. Orders,
14regulations, rules and decisions which were made under 64
15Pa.C.S. § 1553 and which are in effect on the effective date
16of section 3.1 {64 Pa.C.S. § 1553} of this act shall remain
17in full force and effect until revoked, vacated or modified
18under 64 Pa.C.S. § 1731(7), 1757 or 1772. Contracts,
19obligations and collective bargaining agreements entered into
20under 64 Pa.C.S. § 1553 are not affected nor impaired by the
21repeal of 64 Pa.C.S. § 1553.

22Section 8. The addition of 64 Pa.C.S. Ch. 17 Subch. C is a
23continuation of the act of May 17, 1956 (1955 P.L.1609, No.537),
24known as the Pennsylvania Industrial Development Authority Act,
25and the act of July 22, 1974 (P.L.598, No.206), known as the
26Pennsylvania Minority Business Development Authority Act. The
27following apply:

28(1) Except as otherwise provided in 64 Pa.C.S. Ch. 17
29Subch. C, all activities related to bonds initiated under the
30Pennsylvania Industrial Development Authority Act or the

1Pennsylvania Minority Business Development Authority Act
2shall continue and remain in full force and effect and may be
3completed under 64 Pa.C.S. Ch. 17 Subch. C. Orders,
4regulations, rules and decisions which were related to bonds,
5which were made under the Pennsylvania Industrial Development
6Authority Act or the Pennsylvania Minority Business
7Development Authority Act and which are in effect on the
8effective date of section 7 of this act shall remain in full
9force and effect until revoked, vacated or modified under 64
10Pa.C.S. Ch. 17 Subch. C. Contracts, obligations and
11collective bargaining agreements which are related to bonds
12and which were entered into under the Pennsylvania Industrial
13Development Authority Act or the Pennsylvania Minority
14Business Development Authority Act are not affected nor
15impaired by the repeal of the Pennsylvania Industrial
16Development Authority Act or the Pennsylvania Minority
17Business Development Authority Act.

18(2) Any difference in language between 64 Pa.C.S. Ch. 17
19Subch. C and the Pennsylvania Industrial Development
20Authority Act or the Pennsylvania Minority Business
21Development Authority Act is intended only to conform to the
22style of the Pennsylvania Consolidated Statutes and is not
23intended to change or affect the legislative intent, judicial
24construction or administration and implementation of the
25Pennsylvania Industrial Development Authority Act or the
26Pennsylvania Minority Business Development Authority Act.

27Section 9. The addition of 64 Pa.C.S. §§ 1731(4), 1734(a),
281754 and 1771.1 is a continuation of the act of May 17, 1956
29(1955 P.L.1609, No.537), known as the Pennsylvania Industrial
30Development Authority Act. The following apply:

1(1) Except as otherwise provided in 64 Pa.C.S. §
21731(4), 1734(a), 1754 or 1771.1, all activities initiated
3under the Pennsylvania Industrial Development Authority Act
4shall continue and remain in full force and effect and may be
5completed under 64 Pa.C.S. § 1731(4), 1734(a), 1754 or
61771.1. Orders, regulations, rules and decisions which were
7made under the Pennsylvania Industrial Development Authority
8Act and which are in effect on the effective date of section
97(2) of this act shall remain in full force and effect until
10revoked, vacated or modified under 64 Pa.C.S. § 1731(4),
111734(a), 1754 or 1771.1. Contracts, obligations and
12collective bargaining agreements entered into under the
13Pennsylvania Industrial Development Authority Act are not
14affected nor impaired by the repeal of the Pennsylvania
15Industrial Development Authority Act.

16(2) Any difference in language between 64 Pa.C.S. §
171731(4), 1734(a), 1754 or 1771.1 and the Pennsylvania
18Industrial Development Authority Act is intended only to
19conform to the style of the Pennsylvania Consolidated
20Statutes and is not intended to change or affect the
21legislative intent, judicial construction or administration
22and implementation of the Pennsylvania Industrial Development
23Authority Act.

24Section 10. The addition of 64 Pa.C.S. §§ 1731(6), 1756 and
251773 is a continuation of the act of July 22, 1974 (P.L.598,
26No.206), known as the Pennsylvania Minority Business Development
27Authority Act. The following apply:

28(1) Except as otherwise provided in 64 Pa.C.S. §
291731(6), 1756 or 1773, all activities initiated under the
30Pennsylvania Minority Business Development Authority Act

1shall continue and remain in full force and effect and may be
2completed under 64 Pa.C.S. §§ 1731(6), 1756 and 1773. Orders,
3regulations, rules and decisions which were made under the
4Pennsylvania Minority Business Development Authority Act and
5which are in effect on the effective date of section 7(4) of
6this act shall remain in full force and effect until revoked,
7vacated or modified under 64 Pa.C.S. §§ 1731(6), 1756 and
81773. Contracts, obligations and collective bargaining
9agreements entered into under the Pennsylvania Minority
10Business Development Authority Act are not affected nor
11impaired by the repeal of the Pennsylvania Minority Business
12Development Authority Act.

13(2) Any difference in language between 64 Pa.C.S. §§
141731(6), 1756 and 1773 and the Pennsylvania Minority Business
15Development Authority Act is intended only to conform to the
16style of the Pennsylvania Consolidated Statutes and is not
17intended to change or affect the legislative intent, judicial
18construction or administration and implementation of the
19Pennsylvania Minority Business Development Authority Act.

20Section 11. This act shall take effect in 60 days.