SENATE AMENDED PRIOR PRINTER'S NOS. 3366, 3649 PRINTER'S NO. 3983
No. 2398 Session of 2002
INTRODUCED BY BUNT, DALEY, BASTIAN, FORCIER, ARMSTRONG, M. BAKER, BROWNE, CAPPELLI, COY, DeWEESE, EGOLF, FAIRCHILD, FEESE, FICHTER, GEORGE, GODSHALL, GORDNER, HENNESSEY, HERMAN, LAUGHLIN, MANN, MARSICO, McCALL, McGILL, McILHATTAN, PHILLIPS, PICKETT, RUBLEY, SAYLOR, SOLOBAY, STABACK, STERN, TIGUE, WALKO, WATSON, ZUG, HERSHEY, HESS, SATHER, ALLEN, E. Z. TAYLOR, CREIGHTON, ROBERTS, HARHAI, STEELMAN, R. MILLER, MAJOR, SHANER, MAITLAND, B. SMITH, LUCYK, GRUCELA, ROSS, THOMAS, SEMMEL, YOUNGBLOOD, FREEMAN, BENNINGHOFF, PALLONE, TRICH AND CLYMER, MARCH 7, 2002
SENATOR THOMPSON, APPROPRIATIONS, IN SENATE, RE-REPORTED AS AMENDED, JUNE 10, 2002
AN ACT 1 Amending the act of June 29, 1996 (P.L.434, No.67), entitled, as 2 amended, "An act to enhance job creation and economic 3 development by providing for an annual financing strategy, 4 for opportunity grants, for job creation tax credits, for 5 small business assistance, for the Small Business Advocacy 6 Council, for a family savings program, for industrial 7 development assistance, for community development bank grants 8 and loans and for tax-exempt bond allocation; conferring 9 powers and duties on various administrative agencies and 10 authorities; further providing for various funds; and making 11 repeals," further providing for small business definitions 12 and loan eligibility and terms. 13 The General Assembly of the Commonwealth of Pennsylvania 14 hereby enacts as follows: 15 Section 1. The definition of "small business enterprise" in 16 section 1301 of the act of June 29, 1996 (P.L.434, No.67), known 17 as the Job Enhancement Act, is amended and the section is 18 amended by adding definitions to read:
1 Section 1301. Definitions. 2 The following words and phrases when used in this chapter 3 shall have the meanings given to them in this section unless the 4 context clearly indicates otherwise: 5 * * * 6 "Agricultural producer." A person or entity involved in the 7 management and use of a normal agricultural operation for the 8 production of a farm commodity. 9 * * * 10 "Natural disaster." As defined in 35 Pa.C.S. § 7102 <-- 11 (relating to definitions). 12 "Normal agricultural operation." The activities, practices, <-- 13 equipment and procedures which agricultural producers adopt, use 14 or engage in in the production and preparation for market of 15 farm commodities. The term includes new activities, practices, 16 equipment and procedures consistent with technological 17 development within the agricultural industry. AS DEFINED IN <-- 18 SECTION 2 OF THE ACT OF JUNE 10, 1982 (P.L.454, NO.133), 19 ENTITLED "AN ACT PROTECTING AGRICULTURAL OPERATIONS FROM 20 NUISANCE SUITS AND ORDINANCES UNDER CERTAIN CIRCUMSTANCES." 21 * * * 22 "Small business [enterprises] enterprise." A for-profit 23 corporation, partnership [or], proprietorship, limited liability 24 company or other entity which meets the eligibility requirements 25 established by the department. The term shall include, but is 26 not limited to, a small business [enterprises] enterprise which: 27 (1) is located in a small business incubator 28 [facilities, small business enterprises which are] facility; 29 (2) is an agricultural [processors and small business 30 enterprises which manufacture] processor; 20020H2398B3983 - 2 -
1 (3) is an agricultural producer; or 2 (4) manufactures apparel products. 3 * * * 4 Section 2. Section 1303(a.2) and 1303(b) of the act, amended <-- 5 November 17, 1998 (P.L.788, No.100), are IS amended to read: <-- 6 Section 1303. Eligibility for and terms and conditions of 7 loans. 8 * * * 9 (a.2) Pollution prevention assistance loans.--The Pollution <-- 10 Prevention Assistance Account created under section 1302(b.1) 11 shall provide revolving loans to small [businesses] business 12 enterprises. 13 (1) The loans shall be for the purpose of enabling the 14 small business enterprise to adopt or install pollution 15 prevention equipment or processes to: 16 (i) Reduce or reuse raw materials onsite. 17 (ii) Reduce the production of waste. 18 (iii) Reduce energy consumption. 19 (2) The Pollution Prevention Assistance Account shall 20 not invest on the basis of direct financial return and shall 21 not be held to the loan loss standards of commercial lenders. 22 Loans shall be for the purpose of reducing pollution through 23 source reduction technologies or processes. 24 (3) A loan under this subsection may not exceed the 25 lesser of: 26 (i) $50,000; or 27 (ii) 75% of eligible project costs. 28 (4) Loans under this subsection shall have an interest 29 rate of 2% per year and a maximum repayment term of seven 30 years. 20020H2398B3983 - 3 -
1 (5) An industrial resource center receiving funds under 2 the act of July 2, 1993 (P.L.439, No.64), known as the Ben 3 Franklin/IRC Partnership Act, may utilize the account to 4 provide assistance to a small business enterprise for which a 5 loan application has been made. 6 (6) Loans under this subsection shall be used to further 7 the goal of pollution prevention through the purchase and 8 installation of equipment to make operational changes and 9 modify production practices. 10 (b) Terms and conditions.-- 11 (1) The department may make advances from the Small 12 Business First Fund, subject to the terms, conditions and 13 restrictions provided under this chapter, to area loan 14 organizations for the purpose of making loans to eligible 15 small business enterprises for capital development projects 16 which demonstrate a substantial likelihood of creating or 17 preserving employment opportunities[.] or, in the case of a 18 small business enterprise that is an agricultural producer, 19 loans which demonstrate a substantial likelihood of the 20 enhancement and growth of normal agricultural operations. All 21 loans, except loans provided to a small business enterprise 22 which is an agricultural producer, shall be limited to 23 projects that demonstrate the creation or preservation of one 24 job for every $25,000 received from the Small Business First 25 Fund. 26 (2) No loans shall be made which would do any of the 27 following: 28 (i) Cause, aid or assist in, directly, the 29 relocation of any business operations from one part of 30 this Commonwealth to another unless there is at least a 20020H2398B3983 - 4 -
1 25% net increase in employment. 2 (ii) Refinance any portion of the total project cost 3 or other existing loans or debt. 4 (iii) Finance projects located outside the 5 geographic boundaries of this Commonwealth. 6 (iv) Provide funds, directly or indirectly, for 7 payment, distribution or as loan owners, partners or 8 shareholders of the small business enterprise, except as 9 ordinary compensation for services rendered. 10 (v) Provide funds for speculation in any kind of 11 property, real or personal, tangible or intangible. 12 (3) All loans shall carry an interest rate and term and 13 shall be secured by lien positions on collateral at the 14 highest level of priority as may be determined by the area 15 loan organization with the approval of the department. 16 Section 3. Section 1310 of the act is amended to read: <-- 17 Section 1310. [Transitional] Eligibility provisions. 18 The following eligibility requirements and eligible uses 19 shall apply to all requests for funding [received after this 20 chapter becomes effective and before submission of the first 21 annual financing strategy]: 22 (1) A small business enterprise with 100 full-time 23 employees or less that proposes to undertake a capital 24 development. 25 (2) (i) The maximum loan amount for land, buildings and 26 machinery and equipment is $200,000 or 50% of the total 27 eligible project costs, whichever is less. The maximum 28 loan amount for working capital is $100,000 or 50% of the 29 total eligible project costs, whichever is less. 30 (ii) Loans used for real estate shall have a 20020H2398B3983 - 5 -
1 repayment period of up to ten years. Loans used for 2 machinery and equipment shall have a repayment period of 3 up to seven years. Loans used for working capital shall 4 have a repayment period of up to three years. In projects 5 where two or more uses of funds are planned, the loan 6 terms may be blended. 7 (iii) Interest rates shall [be fixed at 5%.] not 8 exceed 5%, except as provided in clause (iv). 9 (iv) Loans made to a small business enterprise that 10 is an agricultural producer shall be made at an interest 11 rate of not less than 2% for the term of the loan if a 12 declaration under 35 Pa.C.S. § 7301(c) (relating to 13 general authority of Governor) is in effect for a natural 14 disaster. A small business enterprise that is an 15 agricultural producer must be physically located in the 16 area of the natural disaster and must make loan 17 application within nine months of a declaration specified 18 in this subparagraph. 19 [(iv)] (v) All loans must be adequately secured. 20 (3) (i) Applications for assistance under the Capital 21 Loan Fund Act which have been approved prior to the 22 effective date of this chapter will be processed in 23 accordance with the act of July 2, 1984 (P.L.545, 24 No.109), known as the Capital Loan Fund Act. Applications 25 for assistance which have been received but which have 26 not been approved prior to the effective date of this 27 chapter will be evaluated and processed in accordance 28 with this chapter. 29 (ii) Applications for assistance under section 7.13 30 of the act of January 8, 1960 (1959 P.L.2119, No.787), 20020H2398B3983 - 6 -
1 known as the Air Pollution Control Act, section 709 of 2 the act of July 6, 1989 (P.L.169, No.32), known as the 3 Storage Tank and Spill Prevention Act, and the Recycling 4 Incentive Development Account which have been approved 5 prior to the effective date of this chapter shall be 6 processed in accordance with those respective provisions. 7 Applications for assistance which have been received but 8 which have not been approved prior to the effective date 9 of this chapter shall be evaluated and processed in 10 accordance with this chapter. 11 Section 4. The act is amended by adding a section to read: 12 Section 5106.2. Reporting to General Assembly. 13 In addition to the annual financing strategy submitted to the 14 General Assembly, in accordance with section 301, the department 15 shall report to the General Assembly in January and June for 16 each of their programs on the number and type of requests for 17 department financing during the current fiscal year, the number, 18 amount and description of approvals and the available financing 19 still remaining. 20 Section 5 3. This act shall take effect immediately. <-- C4L12VDL/20020H2398B3983 - 7 -