HOUSE AMENDED
PRIOR PRINTER'S NOS. 961, 2105, 2187, PRINTER'S NO. 2431
2263
No. 768 Session of 2007
INTRODUCED BY ORIE, FERLO, CORMAN, BOSCOLA, PUNT, FOLMER, EARLL,
LOGAN, MADIGAN AND BROWNE, MAY 3, 2007
AS REPORTED FROM COMMITTEE ON AGRICULTURE AND RURAL AFFAIRS,
HOUSE OF REPRESENTATIVES, AS AMENDED, SEPTEMBER 23, 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
1 provision of deposit services to business entities, except that
2 a farm credit system institution under the Farm Credit Act of
3 1971 (Public Law 92-181, 85 Stat. 583) need not offer deposit
4 services to qualify as a provider of commercial lending
5 activities under this chapter.
6 "Commercial lending institutions." A federally chartered or
7 state-chartered bank, savings bank [or], savings and loan
8 association or farm credit system institution under the Farm
9 Credit Act of 1971 (Public Law 92-181, 85 Stat. 583) which has a
10 satisfactory rating from its primary regulator and which is
11 engaged in commercial lending activities. The institution must
12 operate at least one full-service branch for deposit gathering
13 and lending located within this Commonwealth or be a farm credit
14 system institution under the Farm Credit Act of 1971.
15 * * *
16 Section 2. Section 1552(e)(2) and (3) of Title 64 are
17 amended, subsection (e) is amended by adding a paragraph <--
18 PARAGRAPHS and the section is amended by adding subsections to <--
19 read:
20 § 1552. First Industries Program.
21 * * *
22 (e) Loan guarantees.--
23 * * *
24 (2) The board shall review the application to determine
25 all of the following:
26 (i) [That] (A) EXCEPT AS SET FORTH IN CLAUSE (B), <--
27 THAT the project has been awarded a planning grant
28 under this section or that at least [$1,000,000] <--
29 $250,000 of private funds are being invested in the
30 project.
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1 (B) BEGINNING ON THE EFFECTIVE DATE OF THIS <--
2 PARAGRAPH THROUGH JUNE 30, 2011, THAT THE PROJECT HAS
3 BEEN AWARDED A PLANNING GRANT UNDER THIS SECTION OR
4 THAT AT LEAST $500,000 OF PRIVATE FUNDS ARE BEING
5 INVESTED IN THE PROJECT.
6 (ii) That the value of the proposed collateral is
7 sufficient to cover the full amount of the loan.
8 (iii) That the applicant complied with all other
9 criteria established by the board.
10 (3) Upon being satisfied that all requirements have been
11 met, the board may approve the guarantee, and, if approved,
12 the authority shall execute a guarantee agreement in favor of
13 the commercial lending institution or community development
14 financial institution stating the terms and amounts of the
15 guarantee. [The] Except as provided in subsection (e)(3.1) <--
16 PARAGRAPH (3.1), the guarantee may not exceed 50% of the <--
17 outstanding principal amount of the loan or $2,500,000 at any
18 point in time, whichever is less. In addition to any other
19 terms and conditions required by the board, the guarantee
20 agreement shall provide for all of the following:
21 (i) The procedure for the submission by the
22 commercial lending institution or community development
23 financial institution of a claim for payment. This
24 procedure shall require that the commercial lending
25 institution or community development financial
26 institution demonstrate that it has exhausted all
27 available remedies against the borrower, other guarantors
28 and collateral before seeking payment under the
29 agreement.
30 (ii) A requirement that a percentage of any moneys
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1 recovered subsequent to the payment of a claim by the
2 authority be remitted to the authority.
3 (iii) Periodic reporting requirements by the
4 commercial lending institution or community development
5 financial institution regarding itself and regarding the
6 loans which have been awarded guarantees under this
7 section.
8 (3.1) The guarantee may not exceed BEGINNING ON THE <--
9 EFFECTIVE DATE OF THIS PARAGRAPH THROUGH JUNE 30, 2011, A
10 GUARANTEE OF 51% TO 90% of the outstanding principal amount <--
11 of the loan to assist with the financing of a project related
12 to agriculture MAY BE AWARDED BY THE BOARD. THE GUARANTEE <--
13 SHALL BE SUBJECT TO A ONE-TIME FEE OF 2% OF THE AMOUNT OF THE
14 LOAN MULTIPLIED BY THE PERCENTAGE OF THE GUARANTEE.
15 (3.2) The amount of a guarantee under this subsection,
16 if any, shall be set at the discretion of the board based
17 upon its determination of the potential financial risk to the
18 Commonwealth.
19 * * *
20 (e.1) Limitation.--A Farm Credit Institution under the Farm
21 Credit Act of 1971 (Public law 92-181, 85 Stat. 583) shall only
22 be permitted to participate in the First Industries Program
23 established under this section and may not participate in any
24 other LOAN GUARANTEE program established under this title <--
25 CHAPTER. <--
26 (e.2) Sunset.--After June 30, 2011, no Farm Credit
27 Institution under the Farm Credit Act of 1971 shall be eligible
28 for any loan guarantees under this title CHAPTER. <--
29 * * * <--
30 Section 3. The Department of Community and Economic
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1 Development shall provide annually, as determined beginning one
2 year from the effective date of this act, to the Majority Leader
3 of the Senate, the Minority Leader of the Senate, the Majority
4 Leader of the House of Representatives and the Minority Leader
5 of the House of Representatives, a written report stating the
6 impact and number of loans originated, purchased, held and
7 assigned by the farm credit lender or other commercial lender
8 during the corresponding most recent one-year period. The report
9 shall be posted on the department's Internet website.
10 Section 4. This act shall take effect in 60 days.
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