PRIOR PRINTER'S NO. 543 PRINTERS NO. 1104
No. 519 Session of 1989
INTRODUCED BY SHAFFER, HOPPER, CORMAN, PETERSON, WENGER,
GREENWOOD, MUSTO, JUBELIRER, SHUMAKER, FATTAH, O'PAKE,
LOEPER, AFFLERBACH, HELFRICK, ANDREZESKI, REGOLI, SALVATORE,
ARMSTRONG, WILT, LEMMOND AND BAKER, FEBRUARY 13, 1989
SENATOR SHAFFER, COMMUNITY AND ECONOMIC DEVELOPMENT, AS AMENDED,
MAY 23, 1989
AN ACT
1 Amending the act of July 2, 1984 (P.L.545, No.109), entitled "An
2 act establishing a loan program for capital development
3 projects; providing for the use of funds made available under
4 the Appalachian Regional Development Act of 1965 and the
5 Public Works and Economic Development Act of 1965; providing
6 for loans, loan guarantees and other programs for capital
7 development projects of small businesses; creating the
8 Capital Loan Fund; providing standards for and requirements
9 of the program; and making appropriations," ADDING A <--
10 DEFINITION AND further defining "small business enterprise";
11 and further providing for loan eligibility, terms,
12 conditions, applications and administration.
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 2 and sections 4(e)(6), 5(c)(2)(iv), (3)(ii) and (6) and <--
17 6(a) of the act of July 2, 1984 (P.L.545, No.109), known as the
18 Capital Loan Fund Act, amended or added July 9, 1986 (P.L.1226, <--
19 No.111), are IS amended AND THE SECTION IS AMENDED BY ADDING A <--
20 DEFINITION to read:
21 Section 2. Definitions.
1 The following words and phrases when used in this act shall
2 have the meanings given to them in this section unless the
3 context clearly indicates otherwise:
4 * * * <--
5 "EXPORT-RELATED SERVICES." A SERVICE PROVIDED BY A
6 PENNSYLVANIA BUSINESS ENTERPRISE THAT DERIVES 51% OR MORE OF
7 GROSS RECEIPTS FROM EXPENDITURES MADE BY OUT-OF-STATE COMPANIES
8 OR INDIVIDUALS.
9 * * *
10 "Small business enterprise." A for-profit corporation,
11 partnership or proprietorship which is small enough to be aided
12 by assistance provided under this act, including small business
13 enterprises located in small business incubator facilities. For
14 the purpose of export assistance loans, the term is restricted
15 to a for-profit corporation, partnership or proprietorship
16 which, together with its parents, affiliates and subsidiaries,
17 employs in the aggregate less than 500 full-time employees.
18 * * *
19 SECTION 2. SECTION 4(C)(5) OF THE ACT, AMENDED JULY 9, 1987 <--
20 (P.L.209, NO.34), IS AMENDED TO READ:
21 SECTION 4. ELIGIBILITY FOR LOANS; TERMS AND CONDITIONS.
22 * * *
23 (C) CLASS III LOANS.--
24 * * *
25 (5) NO CLASS III LOANS OR OTHER CLASS III AID MAY BE
26 APPROVED AFTER JUNE 30, [1989] 1992.
27 * * *
28 SECTION 3. SECTIONS 4(E)(6), 5(C)(2)(IV), (3)(II) AND (6)
29 AND 6(A) OF THE ACT, AMENDED OR ADDED JULY 9, 1986 (P.L.1226,
30 NO.111), ARE AMENDED TO READ:
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1 Section 4. Eligibility for loans; terms and conditions.
2 * * *
3 (e) Export assistance loans.--
4 * * *
5 (6) Export assistance loan recipients are not
6 disqualified from receiving Class I, II or III or apparel
7 loans because of eligibility to apply for an export
8 assistance loan: Provided, however, That, except for loans
9 guaranteed under section 6, the loans approved shall not
10 exceed in the aggregate 50% of the total project cost or
11 $200,000, whichever is less.
12 Section 5. Application and administration.
13 * * *
14 (c) Class III and export assistance loans.--
15 * * *
16 (2) Upon receipt of the application, the area loan
17 organization shall investigate and review the application and
18 either approve or disapprove the loan application by proper
19 action of the governing body of the organization. The
20 decision action of the organization shall be based, in whole
21 or in part, upon the following criteria:
22 * * *
23 (iv) Number of net new employment opportunities
24 created by the proposed project. This criterion shall not
25 apply to export assistance loans.
26 * * *
27 (3) Upon approval of the loan application by the area
28 loan organization, the organization shall forward the
29 application and all supporting documentation which the
30 secretary shall require, including a copy of the proper
19890S0519B1104 - 3 -
1 resolution of the governing body, to the secretary for review
2 and final approval or disapproval. The secretary shall review
3 each application and supporting documentation to ensure the
4 following:
5 * * *
6 (ii) Creation of a satisfactory number of new net
7 employment opportunities within the Commonwealth. This
8 criterion shall not apply to export assistance loans.
9 * * *
10 (6) In the event that a small business enterprise shall
11 fail to comply with and create the number of new employment
12 opportunities specified in its approved application, the
13 secretary shall impose a penalty equal to an increase in the
14 interest to 2% greater than the current prime interest rate
15 for the remainder of the loan unless the penalty is waived by
16 the secretary because the failure is due to circumstances
17 outside of the control of the small business enterprise. This
18 penalty shall not apply to [companies receiving only] export
19 assistance loans. The penalty shall be payable in
20 installments which the secretary deems appropriate. Immediate
21 notice of penalties and waivers of penalties (with reasons
22 therefor) shall be submitted by the secretary to the Chief
23 Clerk of the House of Representatives and the Secretary of
24 the Senate.
25 * * *
26 Section 6. Loan guarantees; other programs.
27 (a) Guarantees; endorsements and sureties.--The secretary
28 may make advances or provide other means of guaranteed payment
29 from the Capital Loan Fund to area loan organizations for the
30 purpose of guaranteeing, endorsing or acting as surety on the
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1 bonds, notes, contracts, mortgages or other obligations of small
2 business enterprises on such terms and conditions and according
3 to such policies and procedures as the secretary may prescribe.
4 Such guarantees, endorsements or sureties may be provided only
5 for those small business enterprises and manufacturers of
6 apparel products and in connection with those capital
7 development projects which conform in all respects to the
8 provisions of section 4(c) or (d), or for export development
9 projects which conform in all respects to the provisions of
10 section 4(e) except that loan guarantees may be made in an
11 amount not exceeding the lesser of 90% of the total project cost
12 or $500,000. Further, area loan organizations and the secretary
13 shall, in reviewing applications for guarantees, endorsements or
14 sureties, base their respective decisions regarding approval or
15 disapproval upon the findings and determinations required under
16 section 5(c).
17 * * *
18 Section 2 4. This act shall take effect in 60 days. <--
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