PRIOR PRINTER'S NOS. 961, 2105, 2187 PRINTER'S NO. 2263
No. 768 Session of 2007
INTRODUCED BY ORIE, FERLO, CORMAN, BOSCOLA, PUNT, FOLMER, EARLL, LOGAN, MADIGAN AND BROWNE, MAY 3, 2007
AS AMENDED ON THIRD CONSIDERATION, JUNE 26, 2008
AN ACT 1 Amending Title 64 (Public Authorities and Quasi-Public 2 Corporations) of the Pennsylvania Consolidated Statutes, 3 further providing for the definitions of "commercial lending 4 activities" and "commercial lending institutions" and for the 5 First Industries Program. 6 The General Assembly of the Commonwealth of Pennsylvania 7 hereby enacts as follows: 8 Section 1. The definitions of "commercial lending 9 activities" and "commercial lending institutions" in section 10 1504 of Title 64 of the Pennsylvania Consolidated Statutes are 11 amended to read: 12 § 1504. Definitions. 13 The following words and phrases when used in this chapter 14 shall have the meaning given to them in this section unless the 15 context clearly indicates otherwise: 16 * * * 17 "Commercial lending activities." The making of loans and the 18 provision of deposit services to business entities, except that 19 a farm credit system institution under the Farm Credit Act of
1 1971 (Public Law 92-181, 85 Stat. 583) need not offer deposit 2 services to qualify as a provider of commercial lending 3 activities under this chapter. 4 "Commercial lending institutions." A federally chartered or 5 state-chartered bank, savings bank [or], savings and loan 6 association or farm credit system institution under the Farm 7 Credit Act of 1971 (Public Law 92-181, 85 Stat. 583) which has a 8 satisfactory rating from its primary regulator and which is 9 engaged in commercial lending activities. The institution must 10 operate at least one full-service branch for deposit gathering 11 and lending located within this Commonwealth or be a farm credit 12 system institution under the Farm Credit Act of 1971. 13 * * * 14 Section 2. Section 1552(e)(2) and (3) of Title 64 are 15 amended, subsection (e) is amended by adding a paragraph and the 16 section is amended by adding subsections to read: 17 § 1552. First Industries Program. 18 * * * 19 (e) Loan guarantees.-- 20 * * * 21 (2) The board shall review the application to determine 22 all of the following: 23 (i) That the project has been awarded a planning 24 grant under this section or that at least [$1,000,000] 25 $250,000 of private funds are being invested in the 26 project. 27 (ii) That the value of the proposed collateral is 28 sufficient to cover the full amount of the loan. 29 (iii) That the applicant complied with all other 30 criteria established by the board. 20070S0768B2263 - 2 -
1 (3) Upon being satisfied that all requirements have been 2 met, the board may approve the guarantee, and, if approved, 3 the authority shall execute a guarantee agreement in favor of 4 the commercial lending institution or community development 5 financial institution stating the terms and amounts of the 6 guarantee. [The] Except as provided in subsection (e)(3.1), 7 the guarantee may not exceed 50% of the outstanding principal 8 amount of the loan or $2,500,000 at any point in time, 9 whichever is less. In addition to any other terms and 10 conditions required by the board, the guarantee agreement 11 shall provide for all of the following: 12 (i) The procedure for the submission by the 13 commercial lending institution or community development 14 financial institution of a claim for payment. This 15 procedure shall require that the commercial lending 16 institution or community development financial 17 institution demonstrate that it has exhausted all 18 available remedies against the borrower, other guarantors 19 and collateral before seeking payment under the 20 agreement. 21 (ii) A requirement that a percentage of any moneys 22 recovered subsequent to the payment of a claim by the 23 authority be remitted to the authority. 24 (iii) Periodic reporting requirements by the 25 commercial lending institution or community development 26 financial institution regarding itself and regarding the 27 loans which have been awarded guarantees under this 28 section. 29 (3.1) The guarantee may not exceed 90% of the 30 outstanding principal amount of the loan to assist with the 20070S0768B2263 - 3 -
1 financing of a project related to agriculture. 2 (3.2) THE AMOUNT OF A GUARANTEE UNDER THIS SUBSECTION, <-- 3 IF ANY, SHALL BE SET AT THE DISCRETION OF THE BOARD BASED 4 UPON ITS DETERMINATION OF THE POTENTIAL FINANCIAL RISK TO THE 5 COMMONWEALTH. 6 * * * 7 (e.1) Limitation.--A Farm Credit Institution under the Farm 8 Credit Act of 1971 (Public law 92-181, 85 Stat. 583) shall only 9 be permitted to participate in the First Industries Program 10 established under this section and may not participate in any 11 other program established under this title. 12 (e.2) Sunset.--After June 30, 2011, no Farm Credit 13 Institution under the Farm Credit Act of 1971 shall be eligible 14 for any loan guarantees under this title. 15 Section 3. The Department of Community and Economic 16 Development shall provide annually, as determined beginning one 17 year from the effective date of this act, to the Majority Leader 18 of the Senate, the Minority Leader of the Senate, the Majority 19 Leader of the House of Representatives and the Minority Leader 20 of the House of Representatives, a written report stating the 21 impact and number of loans originated, purchased, held and 22 assigned by the farm credit lender or other commercial lender 23 during the corresponding most recent one-year period. The report 24 shall be posted on the department's Internet website. 25 Section 4. This act shall take effect in 60 days. L28L64JS/20070S0768B2263 - 4 -