12 Pa.C.S. Ch. 23

12 Pa.C.S. Ch. 23
in effect

12 Pa.C.S. § 2302 Definitions.

The following words and phrases when used in this chapter shall have the meanings given to them in this section unless the context clearly indicates otherwise: "Agent." The term includes the Department of Community and Economic Development. "Agricultural processor." A person that adds value by subjecting one or more farm commodities to a process of manufacture, development or preparation for sale or a person that converts a farm product into a marketable form. "Agricultural producer." A person involved in the management and use of a normal agricultural operation for the production of a farm commodity. "Apparel products." Products manufactured, woven, cut, sewn or otherwise similarly processed by mechanical or human effort from fabrics, leather or cloth and made for use as clothing, shoes or other attire. "Applicant." A person that applies for a loan in accordance with this chapter. "Area loan organization." (Deleted by amendment). "Authority." The Pennsylvania Industrial Development Authority organized and existing under the act of May 17, 1956 (1955 P.L.1609, No.537), known as the Pennsylvania Industrial Development Authority Act. "Board." The board of directors of the authority. "Capital development project." Land, buildings, equipment and machinery and working capital which is acquired, constructed, renovated or used by a small business in accordance with any of the following: (1) As part of a for-profit project or venture not of a mercantile or service-related nature, except for hospitality industry projects. (2) As part of an effort to: (i) bring a small business into compliance with Federal or State environmental laws or regulations; (ii) complete an approved remediation project; or (iii) permit a small business to adopt generally acceptable pollution prevention practices. (3) As part of an effort to provide assistance to a small business that is a recycler of municipal or commercial waste or that is a manufacturer using recycled municipal or commercial waste materials. (4) As part of an effort to assist a small business with defense conversion activities. (5) As part of a for-profit project or venture to manufacture products to be exported out of the United States by a small business which is not of a mercantile or service-related nature, except for export-related services and international export-related mercantile ventures or advanced technology and computer-related services and mercantile ventures and which will increase this Commonwealth's national or international market shares. (6) As part of a for-profit project or venture that meets the requirements of section 2308 (relating to loans in distressed communities) (7) As part of an effort to assist in the start-up or expansion of a for-profit or not-for-profit child day-care center subject to licensure by the Commonwealth. "Certified economic development organization." An entity certified by the authority under 64 Pa.C.S. § 1123 (relating to certification of economic development organizations). "Child day-care center." Any premises in which child day care is provided simultaneously for seven or more children who are not related to the provider. "Community development institution." (Deleted by amendment). "Distressed community." A community which has any of the following: (1) A census tract or other specifically defined geographic area in which there is any of the following: (i) A median income below 80% of the median income for the United States or this Commonwealth. (ii) Twenty percent or more of the population is below the poverty level by family size published by the Bureau of the Census. (iii) An unemployment rate 50% higher than the national average. (2) An area which is designated a subzone, expansion subzone or improvement subzone under the act of October 6, 1998 (P.L.705, No.92), known as the Keystone Opportunity Zone and Keystone Opportunity Expansion Zone Act. (3) Any other geographic area designated by the authority as distressed. The designation shall be published in the Pennsylvania Bulletin. "EDA loan." A loan made under this chapter utilizing funds made available to the department or the authority under the Public Works and Economic Development Act of 1965 (Public Law 89-136, 42 U.S.C. § 3121 et seq.). "Ex-Im Bank." The Export-Import Bank of the United States. "Export activity." An activity undertaken by a person within this Commonwealth related to exports. "Export business." A person that is engaged in a for-profit enterprise involving export activities and that employs 250 or fewer individuals. "Exports." Goods or services to be sold or performed outside the United States. "Farm commodity." Any Pennsylvania-grown agricultural, horticultural, aquacultural, vegetable, fruit and floricultural product of the soil, livestock and meats, wools, hides, furs, poultry, eggs, dairy products, nuts, mushrooms, honey products and forest products. "Fund." The Small Business First Fund continued under section 2304 (relating to fund and accounts). "Hazardous substance." Any element, compound or material which is any of the following: (1) Regulated as a hazardous air pollutant under section 6.6 of the act of January 8, 1960 (1959 P.L.2119, No.787), known as the Air Pollution Control Act. (2) Defined as a hazardous waste under section 103 of the act of July 7, 1980 (P.L.380, No.97), known as the Solid Waste Management Act. (3) Regulated under the act of December 7, 1990 (P.L.639, No.165), known as the Hazardous Material Emergency Planning and Response Act. "Hospitality industry project." A for-profit project or venture which involves a small business that operates a hotel, motel or other lodging facility and that employs at least five full-time equivalent employees at the time an application is submitted to the authority for financing. The term includes a for-profit project or venture which involves a small business that operates a restaurant or food service operation open to the public, that has been in continuous operation for at least five years and that employs at least five full-time equivalent employees at the time an application is submitted. "Insurance policy." An export credit insurance policy for small businesses offered by the Export-Import Bank of the United States. "Natural disaster." As defined in 35 Pa.C.S. § 7102 (relating to definitions). "Normal agricultural operation." As defined in section 2 of the act of June 10, 1982 (P.L.454, No.133), entitled "An act protecting agricultural operations from nuisance suits and ordinances under certain circumstances." "Pollution prevention." The reduction or elimination of pollution at its source. The term does not include any of the following: (1) A substitution of one hazardous or toxic substance for another which will cause an increased risk to the environment or to human health. (2) A cross-media transfer. (3) A delisting of a hazardous waste or toxic chemical. "Pollution prevention assistance agency." (Deleted by amendment). "Pollution prevention infrastructure." A capital development project which permits a small business to adopt or install pollution prevention equipment or processes to: (1) Reduce or reuse raw materials onsite. (2) Reduce the production of waste. (3) Reduce energy consumption. "Program." The Small Business First Program established under section 2303 (relating to establishment). "Reuse." Use of a product or component in its original form more than once. "Small business." A person that is engaged in a for-profit enterprise and that employs 100 or fewer individuals. The term includes the following: (1) An enterprise located in a small business incubator facility. (2) An agricultural processor. (3) An agricultural producer. (4) An enterprise which manufactures apparel products. (5) An enterprise which is a for-profit or not-for-profit child day-care center subject to licensure by the Commonwealth. "Working capital." Capital used by a small business for operations, excluding fixed assets and production machinery and equipment. (Oct. 22, 2014, P.L.2569, No.161, eff. Nov. 1, 2014; June 22, 2017, P.L.202, No.7, eff. imd.) 2017 Amendment. Act 7 added the def. of "agent." 2014 Amendment. Act 161 amended the defs. of "distressed community," "EDA loan" and "hospitality industry project," added the defs. of "authority," "board" and "certified economic development organization" and deleted the defs. of "area loan organization," "community development institution" and "pollution prevention assistance agency." References in Text. The name of the Keystone Opportunity Zone and Keystone Opportunity Expansion Zone Act was changed to the Keystone Opportunity Zone, Keystone Opportunity Expansion Zone and Keystone Opportunity Improvement Zone Act.

12 Pa.C.S. § 2303 Establishment.

There is established a program to be known as the Small Business First Program. The program shall be administered by the authority and provide loans to eligible persons for certain projects which encourage job-creating and job-preserving economic development within this Commonwealth. (Oct. 22, 2014, P.L.2569, No.161, eff. Nov. 1, 2014) Cross References. Section 2303 is referred to in section 2302 of this title.

12 Pa.C.S. § 2304 Fund and accounts.

(a) Fund.--The Small Business First Fund, created under section 1302(a) of the act of June 29, 1996 (P.L.434, No.67), known as the Job Enhancement Act, is continued. The Treasury Department shall credit the following to the fund: (1) Appropriations made by the General Assembly to the department or authority for the program. (2) Federal funds made available under the Public Works and Economic Development Act of 1965 (Public Law 89-136, 42 U.S.C. § 3121 et seq.) or any other Federal statute, regulation or program for the program. (3) Payments from recipients of loans made from the fund. (4) Payments from recipients of loans made under the former act of July 2, 1984 (P.L.545, No.109), known as the Capital Loan Fund Act. (5) Interest income derived from investment of the money in the fund. (6) Any other deposits, payments or contributions from any other source made available to the department or authority for the program. (b) Pollution prevention assistance.--The Pollution Prevention Assistance Account, created under the act of June 29, 1996 (P.L.434, No.67), known as the Job Enhancement Act, is continued. The Treasury Department shall credit the following to this account: (1) Appropriations made by the General Assembly to the department or authority for pollution prevention assistance. (2) Payments from recipients of loans made from the Pollution Prevention Assistance Account. (3) Transfers from the Hazardous Sites Cleanup Fund as established in section 602.3 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971. (4) Interest income derived from investment of the money in the Pollution Prevention Assistance Account. (5) Any other deposits, payments or contributions from any other source made available to the department or authority for pollution prevention assistance. (c) Use of fund.-- (1) Money in the fund may be used as follows: (i) By the authority to make loans in accordance with this chapter and for administrative costs of the authority in administering the program. (ii) By certified economic development organizations for administrative costs associated with the program which are approved by the authority. (2) Money from the fund derived from appropriations specified for export financing assistance may be deposited by the authority in banks or trust companies in special accounts. The special accounts must be continuously secured by a pledge of direct obligations of the United States or of the Commonwealth having an aggregate market value, exclusive of accrued interest, at least equal to the balance on deposit in the account. The securities shall be deposited with the authority to be held by a trustee or agent satisfactory to the authority. Banks and trust companies are authorized to give security under this paragraph. Money in these special accounts shall be paid out on order of the authority. (d) Use of Pollution Prevention Assistance Account.--Money in the Pollution Prevention Assistance Account may be used by the authority to provide loans to small businesses for the adoption or installation of pollution-prevention or energy-efficient equipment or processes in accordance with section 2309 (relating to pollution prevention assistance loans). (Oct. 22, 2014, P.L.2569, No.161, eff. Nov. 1, 2014) Amendment. Act 161 amended subsecs. (a)(1) and (6), (b)(1) and (5), (c) and (d). References in Text. Section 602.3 of the act of March 4, 1971, (P.L.6, No.2), known as the Tax Reform Code of 1971, referred to in subsec. (b)(3), was repealed by the act of December 18, 2007 (P.L.486, No.77). The subject matter is now contained in Act 77. Cross References. Section 2304 is referred to in sections 2302, 2310 of this title; section 1102 of Title 64 (Public Authorities and Quasi-Public Corporations).

12 Pa.C.S. § 2305 Authority responsibilities.

(a) General rule.--The authority shall do all of the following: (1) Administer the program. (2) Establish written guidelines as necessary. Any guidelines established shall be included in the report required by Chapter 3 (relating to economic development financing strategy). (3) Deposit payments made by recipients in the fund or the Pollution Prevention Assistance Account, as appropriate. (4) Approve standards for certified economic development organization application fees. (5) (Deleted by amendment). (6) Except as provided under section 2306(c)(iii) (relating to capital development loans), determine the job retention or job creation requirements for each project financed in whole or in part through a loan or line of credit made under this chapter. (b) Program.--In administering the program, the authority may do any of the following: (1) Provide grants or other financial assistance to certified economic development organizations for any of the following purposes: (i) To establish loan reserve funds. (ii) To reimburse loan losses to commercial banks and other financial institutions as a means of encouraging the expansion and financing of small businesses. (2) Apply to the Ex-Im Bank for delegated authority lender status under the Ex-Im Bank's Working Capital Guaranty Program. (3) Utilize the outstanding portfolio of loans and lines of credit made under this chapter to raise additional funds by selling, securing, hypothecating or otherwise using such loan proceeds as a financing vehicle if the funds raised are used by the authority for either of the following purposes: (i) To make new and additional loans under this chapter. (ii) To pay costs associated with financing. (c) Additional powers.--In addition to the powers authorized under this chapter and 64 Pa.C.S. Ch. 11 (relating to Pennsylvania Industrial Development Authority), the board may administer the program by exercising the powers granted to it under the act of May 17, 1956 (1955 P.L.1609, No.537), known as the Pennsylvania Industrial Development Authority Act. (Oct. 22, 2014, P.L.2569, No.161, eff. Nov. 1, 2014) Amendment. Act 161 amended the section heading and subsecs. (a) intro. par. and (4), (b) intro. par., (1) and (3), added subsecs. (a)(6) and (c) and deleted subsec. (a)(5).

12 Pa.C.S. § 2306 Capital development loans.

(a) Application.--A small business may submit an application and any applicable application fee to a certified economic development organization requesting a loan or line of credit for certain costs of a capital development project under 64 Pa.C.S. § 1121 (relating to common application process). The application shall be on the form required by the authority and shall include or demonstrate all of the following, in addition to the contents required under 64 Pa.C.S. § 1121(b): (1) The name and address of the applicant. (2) A statement of the type and amount of assistance sought. (3) A statement of the capital development project, including a detailed statement of the cost of the project. (4) A financial commitment from a responsible source for any cost of the capital development project in excess of the amount requested. (5) Any other information required by the authority. (b) Certified economic development organization review.-- (1) Upon receipt of a completed application, a certified economic development organization shall investigate and determine all of the following: (i) If the applicant is a small business. (ii) If the project is a capital development project. (iii) If, when the applicant is a small business, the capital development project demonstrates a substantial likelihood of creating or preserving employment activities in this Commonwealth or if, when the applicant is an agricultural producer, the project demonstrates a substantial likelihood of enhancing and growing normal agriculture operations. (iv) The ability of the applicant to meet and satisfy the debt service as it becomes due and payable. (v) The existence and sufficiency of collateral for the loan. (vi) Relevant criminal and credit history and ratings of the applicant as determined from outside credit reporting services and other sources. (vii) The number of employment opportunities to be created or preserved by the proposed capital development project. (viii) If the applicant complied with all other criteria established by the authority. (2) Upon being satisfied that all requirements have been met, the certified economic development organizations shall recommend the applicant to the authority and forward the application with all supporting documentation to the authority for its review and approval. (c) Authority review.-- (1) Within 30 days of receiving a recommendation and a completed application, the authority shall review the application. If the authority is satisfied that all requirements have been met, the authority may approve the loan request in accordance with the following: (i) A loan for land, buildings and machinery and equipment may not exceed $400,000 or 50% of the total capital development project costs, whichever is less. For the purposes of this subparagraph, capital development project costs incurred during the 12-month period prior to the date of submission of the application to the authority shall be considered part of the total capital development project costs. (ii) A loan or line of credit for working capital may not exceed $100,000. (iii) Except for loans to agricultural producers, a loan must create or preserve one job for every $25,000 loaned. The authority may, by submitting notice to the Legislative Reference Bureau for publication in the Pennsylvania Bulletin, periodically update the amount under this subparagraph, based on changes in unemployment statistics, inflation, the authority's cash flow and the need to keep this Commonwealth and the businesses of this Commonwealth competitive. (2) The authority shall notify the certified economic development organization and applicant of its decision. (d) Approvals.--For applications which are approved, the authority shall draw an advance equal to the principal amount of the loan from the fund. The advance shall be forwarded to the certified economic development organization and, upon receipt by the certified economic development organization, shall become an obligation of the certified economic development organization. Prior to providing loan funds to the applicant, the certified economic development organization shall require the applicant to execute a note and to enter into a loan agreement. In addition to the requirements of subsection (e), the loan agreement shall include a provision requiring the recipient to use the loan proceeds to pay the costs of the capital development project. The authority may require the certified economic development organization to impose other terms and conditions on the recipient if the authority determines that they are in the best interests of this Commonwealth, including a provision requiring collateral for any penalty imposed under subsection (g). (e) Loan terms.--A loan agreement entered into in accordance with subsection (c) shall do all of the following: (1) State the collateral securing the loan. All loans shall be secured by lien positions on collateral at the highest level of priority as may be determined by the certified economic development organization with the approval of the authority. (2) State the repayment period in accordance with the following: (i) A loan for real property shall have a repayment period of up to 15 years. (ii) A loan for machinery and equipment shall have a repayment period of up to ten years. (iii) A loan or line of credit for working capital shall have a repayment period of up to three years. A line of credit may be renewed for an additional three-year period at the discretion of the authority. (iv) If, in a capital development project, there are two or more uses planned, the loan terms may be blended. (3) State the interest rate in accordance with the following: (i) Except as provided in subparagraph (ii), loans shall be made at an interest rate not to exceed 5% for the term of the loan. (ii) A loan to a small business which is an agricultural producer shall be made at an interest rate of not less than 2% for the term of the loan if all of the following apply: (A) A declaration under 35 Pa.C.S. § 7301(c) (relating to general authority of Governor) is in effect for at least ten days prior to the date of application. (B) The application is made within nine months of termination of the declaration. (C) The agricultural producer is in the area which has been declared to be a natural disaster area. (f) Loan administration.--A loan made under this section shall be administered in accordance with authority policies and procedures by the certified economic development organization which made the loan. Each certified economic development organization shall submit an annual report on the form required by the authority and which includes or demonstrates all of the following: (1) Each outstanding loan. (2) The date approved. (3) The original principal amount. (4) The current principal balance. (5) The interest rate. (6) The purpose for which the loan was made. (7) An enumeration of any problems or issues which have arisen with regard to each loan. (8) A statement regarding the progress of the small business in creating or preserving its requisite number of employment opportunities. (9) Any other information or documentation required by the authority. (g) Penalty.-- (1) Except as provided in paragraph (2), the authority shall impose a penalty upon a recipient if the recipient fails to create or preserve the number of employment opportunities specified in its approved application. (2) The authority may waive the penalty required by paragraph (1) if the authority determines that the failure was due to circumstances outside the control of the recipient. (3) The amount of the penalty imposed under paragraph (1) shall be equal to an increase in the interest rate to 2% greater than the current prime interest rate for the remainder of the loan. (h) Defaults.--The authority may by foreclosure take title to a capital development project which it financed if acquisition is necessary to protect a loan made under this section. The authority shall pay all costs arising out of the foreclosure and acquisition from moneys held in the fund. The authority may, in order to minimize financial losses and sustain employment, lease the capital development project. The authority may withdraw moneys from the fund to purchase first mortgages and to make payments on first mortgages on any capital development project which it financed where purchase or payment is necessary to protect a loan made under this section. The authority may sell, transfer, convey and assign the first mortgages and shall deposit any moneys derived from the sale of any first mortgages in the fund. (Oct. 22, 2014, P.L.2569, No.161, eff. Nov. 1, 2014) Amendment. Act 161 amended subsecs. (a), (b) heading, (1) intro. par. and (viii) and (2), (c), (d), (e)(1) and (2)(iii), (f) intro. par. and (9), (g)(1) and (2) and (h). Cross References. Section 2306 is referred to in sections 2305, 2310.1 of this title.

12 Pa.C.S. § 2307 EDA loans.

(a) Application and administration procedures.--The authority shall establish application and administration procedures to be used for EDA loans. The procedures shall be established by guidelines and shall conform in all respects to those procedures required or established by the Economic Development Administration for use of Federal funds under the Public Works and Economic Development Act of 1965 (Public Law 89-136, 42 U.S.C. § 3121 et seq.) and, if applicable, 64 Pa.C.S. § 1121 (relating to common application process). (b) Eligibility for EDA loans.--The authority shall establish eligibility requirements to be used for EDA loans. The requirements shall be established by guidelines and shall conform in all respects to those procedures required or established by the Economic Development Administration for use of Federal funds under the Public Works and Economic Development Act of 1965. (Oct. 22, 2014, P.L.2569, No.161, eff. Nov. 1, 2014) Cross References. Section 2307 is referred to in section 2310.1 of this title.

12 Pa.C.S. § 2308 Loans in distressed communities.

(a) Application.--A small business located in a distressed community may submit an application and any applicable application fee to a certified economic development organization requesting a loan or line of credit for certain costs of a capital development project under 64 Pa.C.S. § 1121(a) (relating to common application process). The application shall be on the form required by the authority and shall include or demonstrate all of the following, in addition to the contents required under 64 Pa.C.S. § 1121(b): (1) The name and address of the applicant. (2) A statement that the small business is engaged in business-to-public service or in the mercantile, commercial or point-of-sale retail business sectors. (3) A statement of the type and amount of assistance sought. (4) A statement of the capital development project, including a detailed statement of the cost of the project. (5) A financial commitment from a responsible source for the cost of the capital development project in excess of the amount requested. (6) Any other information required by the authority. (b) Certified economic development organization review.-- (1) Upon receipt of a completed application, a certified economic development organization shall investigate and determine all of the following: (i) If the applicant is a small business which is engaged in business-to-public service or in the mercantile, commercial or point-of-sale retail business sectors in accordance with conditions or criteria established by the authority. (ii) If the project is a capital development project. (iii) If the applicant has demonstrated a direct impact on the community in which the capital development project is or will be located, on residents of that community or on the local and/or regional economy. The authority shall establish criteria that will assist in making this demonstration. (iv) Number of employment opportunities to be created or preserved by the proposed capital development project. (v) If the applicant complied with all other criteria established by the authority. (2) Upon being satisfied that all requirements have been met, the certified economic development organization shall recommend the applicant to the authority and forward the application with all supporting documentation to the authority for its review and approval. (c) Authority review.-- (1) Upon receipt of a recommendation and a completed application, the authority shall investigate and determine all of the following: (i) The ability of the applicant to meet and satisfy the debt service as it becomes due and payable. In reviewing repayment obligations, loans shall not be approved on the basis of direct financial return on investment and shall not be held to the loan loss standards of private commercial lenders. Loans shall be reviewed for the purpose of establishing a strong economic base and promoting entrepreneurial activity within the distressed community. (ii) The existence and sufficiency of collateral for the loan. (iii) Relevant criminal and credit history and ratings of the applicant as determined from outside credit reporting services and other sources. (2) If the authority is satisfied that all requirements have been met, the authority may approve the loan or line of credit request in an amount not to exceed $200,000 or 50% of the total capital development project costs, whichever is less. For the purpose of this paragraph, capital development project costs, except the costs related to working capital, incurred during the 12-month period prior to the date of submission of the application to the authority shall be considered part of the total capital development project costs. (3) The authority shall notify the certified economic development organization and applicant of its decision. (d) Approvals.--For applications which are approved, the authority shall draw an advance equal to the principal amount of the loan from the fund and, prior to providing loan funds to the applicant, the authority shall require the applicant to execute a note and to enter into a loan agreement. In addition to the requirements of subsection (e), the loan agreement shall include a provision requiring the recipient to use the loan proceeds to pay the costs of the capital development project. The authority may impose other terms and conditions on the recipient if the authority determines they are in the best interests of this Commonwealth, including a provision requiring collateral for any penalty imposed under subsection (g). (e) Loan terms.--A loan agreement entered into in accordance with subsection (d) shall do all of the following: (1) State any collateral securing the loan. The authority may use its best judgment to identify and secure collateral. (2) State the repayment period which may be flexible, except that a line of credit may not have a term of more than three years. A line of credit may be renewed for an additional three-year period at the discretion of the authority. (3) State the interest rate which may not be less than 2% nor more than 5% for the term of the loan. (4) State that the recipient agrees to maintain, at a minimum, the number of jobs in existence as of the date of loan application. (f) Loan administration.--A loan made under this section shall be administered in accordance with authority policies and procedures. (g) Penalty.-- (1) Except as provided in paragraph (2), the authority shall impose a penalty upon a recipient if the recipient fails to preserve the number of employment opportunities specified in its approved application. (2) The authority may waive the penalty required by paragraph (1) if the authority determines that the failure was due to circumstances outside the control of the recipient. (3) The amount of any penalty imposed under paragraph (1) shall be equal to an increase in the interest rate to 2% greater than the current prime interest rate for the remainder of the loan. (h) Defaults.--The authority may take title by foreclosure to a capital development project which it financed where acquisition is necessary to protect a loan made under this section. The authority shall pay all costs arising out of the foreclosure and acquisition from money held in the fund. The authority may, in order to minimize financial losses and sustain employment, lease the capital development project. The authority may withdraw money from the fund to purchase first mortgages and to make payments on first mortgages on any capital development project which it financed if purchase or payment is necessary to protect a loan made under this section. The authority may sell, transfer, convey and assign the first mortgages and shall deposit in the fund money derived from the sale of any first mortgages. (Oct. 22, 2014, P.L.2569, No.161, eff. Nov. 1, 2014) Amendment. Act 161 amended subsecs. (a), (b) heading, (1) intro. par., (i), (iii) and (v) and (2), (c) heading, (1) intro. par., (2) and (3), (d), (e)(1) and (2), (f), (g)(1) and (2) and (h). Cross References. Section 2308 is referred to in sections 2302, 2310 of this title. § 2309. Pollution prevention assistance loans. (a) Application.--A small business may submit an application and any application fee to a certified economic development organization requesting a loan for a pollution prevention infrastructure under 64 Pa.C.S. § 1121(a) (relating to common application process). The application shall be on the form required by the authority and shall include or demonstrate all of the following, in addition to the contents required under 64 Pa.C.S. § 1121(b): (1) The name and address of the applicant. (2) A statement of the amount of loan assistance sought. (3) A statement of the pollution prevention infrastructure, including a detailed statement of the cost of the infrastructure. (4) A financial commitment from a responsible source for the cost of the pollution prevention infrastructure in excess of the amount requested. (5) Any other information required by the authority. (b) Certified economic development organization review.-- (1) Upon receipt of a completed application, a certified economic development organization shall investigate and determine all of the following: (i) If the applicant is a small business. (ii) If the project is for pollution prevention infrastructure. (iii) If the applicant complied with all other criteria established by the authority. (2) Upon being satisfied that all requirements have been met, the certified economic development organization shall recommend the applicant to the department and forward the application with all supporting documentation to the authority for its review and approval. (c) Authority review.-- (1) Upon receipt of a recommendation and a completed application, the authority shall investigate and determine all of the following: (i) If the pollution prevention infrastructure demonstrates a substantial likelihood of preventing or reducing pollution. The Department of Environmental Protection shall assist the authority in reviewing the applications and provide technical assistance. (ii) The ability of the applicant to meet and satisfy the debt service as it becomes due and payable. In reviewing repayment obligations, loans shall not be approved on the basis of direct financial return on investment and shall not be held to the loan loss standards of private commercial lenders. Loans shall be reviewed for the purpose of reducing pollution through source reduction technologies or processes. (iii) The existence and sufficiency of collateral for the loan. (iv) Relevant criminal and credit history and ratings of the applicant as determined from outside credit reporting services and other sources. (2) If the authority is satisfied that all requirements have been met, the authority may approve the loan request. A loan approved under this subsection may not exceed the lesser of: (i) $100,000; or (ii) 75% of infrastructure costs. (3) The authority shall notify the certified economic development organization and applicant of its decision. (d) Approvals.--For applications which are approved, the authority shall draw an advance equal to the principal amount of the loan from the Pollution Prevention Assistance Account. Prior to providing loan funds to the applicant, the authority shall require the applicant to execute a note and to enter into a loan agreement. In addition to the requirements of subsection (e), the loan agreement shall include a provision requiring the recipient to use the loan proceeds to pay the costs of the pollution prevention infrastructure. The authority may impose other terms and conditions on the recipient if the authority determines they are in the best interests of this Commonwealth, including a provision requiring collateral for any penalty imposed under subsection (g). (e) Loan terms.--A loan agreement entered into in accordance with subsection (d) shall do all of the following: (1) State the collateral securing the loan. All loans shall be secured by lien positions on collateral at the highest level of priority as may be determined by the authority. (2) State the repayment period which may not exceed 10 years. (3) State that the interest rate is 2%. (4) State that any loan fee is not to exceed 5% of the loan amount. (f) Loan administration.--A loan made under this section shall be administered in accordance with authority policies and procedures. (g) Penalty.-- (1) Except as provided in paragraph (2), the authority shall impose a penalty upon a recipient if the recipient fails to carry out the pollution prevention infrastructure project as specified in its approved application. (2) The authority may waive the penalty required by paragraph (1) if the authority determines that the failure was due to circumstances outside the control of the recipient. (3) The amount of any penalty imposed under paragraph (1) shall be equal to an increase in the interest rate to 2% greater than the current prime interest rate for the remainder of the loan. (h) Defaults.--The authority may take title by foreclosure to a pollution prevention infrastructure which it financed if acquisition is necessary to protect a loan made under this section. The authority shall pay all costs arising out of the foreclosure and acquisition from money held in the Pollution Prevention Assistance Account. The authority may, in order to minimize financial losses and sustain employment, lease the pollution prevention infrastructure. The authority may withdraw money from the Pollution Prevention Assistance Account to purchase first mortgages and to make payments on first mortgages on any pollution prevention infrastructure which it financed if the purchase or payment is necessary to protect a loan made under this section. The authority may sell, transfer, convey and assign the first mortgages and shall deposit any money derived from the sale of any first mortgages in the Pollution Prevention Assistance Account. (Oct. 22, 2014, P.L.2569, No.161, eff. Nov. 1, 2014) Amendment. Act 161 amended subsecs. (a), (b), (c) heading, (1) intro. par. and (i), (2) intro. par. and (3), (d), (e)(1), (f), (g)(1) and (2) and (h). Cross References. Section 2309 is referred to in sections 2304, 2310.1 of this title.

12 Pa.C.S. § 2309

(a) Application.--A small business may submit an application and any application fee to a certified economic development organization requesting a loan for a pollution prevention infrastructure under 64 Pa.C.S. § 1121(a) (relating to common application process). The application shall be on the form required by the authority and shall include or demonstrate all of the following, in addition to the contents required under 64 Pa.C.S. § 1121(b): (1) The name and address of the applicant. (2) A statement of the amount of loan assistance sought. (3) A statement of the pollution prevention infrastructure, including a detailed statement of the cost of the infrastructure. (4) A financial commitment from a responsible source for the cost of the pollution prevention infrastructure in excess of the amount requested. (5) Any other information required by the authority. (b) Certified economic development organization review.-- (1) Upon receipt of a completed application, a certified economic development organization shall investigate and determine all of the following: (i) If the applicant is a small business. (ii) If the project is for pollution prevention infrastructure. (iii) If the applicant complied with all other criteria established by the authority. (2) Upon being satisfied that all requirements have been met, the certified economic development organization shall recommend the applicant to the department and forward the application with all supporting documentation to the authority for its review and approval. (c) Authority review.-- (1) Upon receipt of a recommendation and a completed application, the authority shall investigate and determine all of the following: (i) If the pollution prevention infrastructure demonstrates a substantial likelihood of preventing or reducing pollution. The Department of Environmental Protection shall assist the authority in reviewing the applications and provide technical assistance. (ii) The ability of the applicant to meet and satisfy the debt service as it becomes due and payable. In reviewing repayment obligations, loans shall not be approved on the basis of direct financial return on investment and shall not be held to the loan loss standards of private commercial lenders. Loans shall be reviewed for the purpose of reducing pollution through source reduction technologies or processes. (iii) The existence and sufficiency of collateral for the loan. (iv) Relevant criminal and credit history and ratings of the applicant as determined from outside credit reporting services and other sources. (2) If the authority is satisfied that all requirements have been met, the authority may approve the loan request. A loan approved under this subsection may not exceed the lesser of: (i) $100,000; or (ii) 75% of infrastructure costs. (3) The authority shall notify the certified economic development organization and applicant of its decision. (d) Approvals.--For applications which are approved, the authority shall draw an advance equal to the principal amount of the loan from the Pollution Prevention Assistance Account. Prior to providing loan funds to the applicant, the authority shall require the applicant to execute a note and to enter into a loan agreement. In addition to the requirements of subsection (e), the loan agreement shall include a provision requiring the recipient to use the loan proceeds to pay the costs of the pollution prevention infrastructure. The authority may impose other terms and conditions on the recipient if the authority determines they are in the best interests of this Commonwealth, including a provision requiring collateral for any penalty imposed under subsection (g). (e) Loan terms.--A loan agreement entered into in accordance with subsection (d) shall do all of the following: (1) State the collateral securing the loan. All loans shall be secured by lien positions on collateral at the highest level of priority as may be determined by the authority. (2) State the repayment period which may not exceed 10 years. (3) State that the interest rate is 2%. (4) State that any loan fee is not to exceed 5% of the loan amount. (f) Loan administration.--A loan made under this section shall be administered in accordance with authority policies and procedures. (g) Penalty.-- (1) Except as provided in paragraph (2), the authority shall impose a penalty upon a recipient if the recipient fails to carry out the pollution prevention infrastructure project as specified in its approved application. (2) The authority may waive the penalty required by paragraph (1) if the authority determines that the failure was due to circumstances outside the control of the recipient. (3) The amount of any penalty imposed under paragraph (1) shall be equal to an increase in the interest rate to 2% greater than the current prime interest rate for the remainder of the loan. (h) Defaults.--The authority may take title by foreclosure to a pollution prevention infrastructure which it financed if acquisition is necessary to protect a loan made under this section. The authority shall pay all costs arising out of the foreclosure and acquisition from money held in the Pollution Prevention Assistance Account. The authority may, in order to minimize financial losses and sustain employment, lease the pollution prevention infrastructure. The authority may withdraw money from the Pollution Prevention Assistance Account to purchase first mortgages and to make payments on first mortgages on any pollution prevention infrastructure which it financed if the purchase or payment is necessary to protect a loan made under this section. The authority may sell, transfer, convey and assign the first mortgages and shall deposit any money derived from the sale of any first mortgages in the Pollution Prevention Assistance Account. (Oct. 22, 2014, P.L.2569, No.161, eff. Nov. 1, 2014) 2014 Amendment. Act 161 amended subsecs. (a), (b), (c) heading, (1) intro. par. and (i), (2) intro. par. and (3), (d), (e)(1), (f), (g)(1) and (2) and (h). Cross References. Section 2309 is referred to in sections 2304, 2310.1 of this title.

12 Pa.C.S. § 2310 Export financing loans.

(a) Application.--A person may submit an application and any applicable application fee to a certified economic development organization requesting a loan for certain costs of a capital development project which will be used in export activities under 64 Pa.C.S. § 1121(a) (relating to common application process). The application must be on the form required by the authority and must include or demonstrate all of the following, in addition to the contents required under 64 Pa.C.S. § 1121(b): (1) The name and address of the applicant. (2) A statement of the amount of loan assistance sought. (3) A statement of the capital development project, including a detailed statement of the cost of the project. (4) A financial commitment from a responsible source for any cost of the capital development project in excess of the amount requested. (5) A statement that the loan, if approved, would not supplant funding from private sector sources on commercially reasonable terms. (6) Any other information required by the authority. (b) Review.--Upon receipt of a completed application, the authority shall investigate and determine all of the following: (1) If the applicant is an export business. (2) If the project is a capital development project. (3) The ability of the applicant to meet and satisfy the debt service as it becomes due and payable. (4) The existence and sufficiency of collateral for the loan. (5) Relevant criminal and credit history and ratings of the applicant as determined from outside credit reporting services and other sources. (6) Number of employment opportunities to be created or preserved by the proposed capital development project. (7) If the applicant complied with all other criteria established by the authority. (c) Approvals.--If the authority is satisfied that all requirements have been met, the authority may approve the loan request. A loan approved under this section may not exceed $350,000. The authority shall notify the applicant and, if applicable, the certified economic development organization of its decision. The authority shall reserve an amount equal to the principal amount of the loan within the fund or the special account authorized by section 2304(c)(2) (relating to fund and accounts). Prior to providing funds to the applicant, the authority shall require the applicant to execute a note and enter into a loan agreement. In addition to the requirements of subsection (d), the loan agreement shall include a provision requiring the recipient to use the loan proceeds to pay the costs of the capital development project. The authority may impose other terms and conditions on the recipient if the authority determines they are in the best interests of this Commonwealth, including any of the following: (1) A provision requiring collateral for any penalty imposed under subsection (f). (2) A provision requiring the person to be eligible for an insurance policy. (3) A provision requiring the loan to be guaranteed by the Working Capital Guaranty Program offered by the Ex-Im Bank. (4) A provision requiring an export credit sales contract insured by an insurance policy. (d) Loan terms.--A loan agreement entered into in accordance with subsection (c) shall do all of the following: (1) State the collateral securing the loan. All loans shall be secured by lien positions on collateral at the highest level of priority as may be determined by the authority. (2) State the repayment period as determined by the authority. (3) State the interest rate as determined by the authority. (e) Loan administration.--A loan made under this section shall be administered in accordance with authority policies and procedures. (f) Penalty.-- (1) Except as provided in paragraph (2), the authority shall impose a penalty upon a recipient if the recipient fails to carry out the export activities specified in its approved application. (2) The authority may waive the penalty required by paragraph (1) if the authority determines that the failure was due to circumstances outside the control of the recipient. (3) The amount of the penalty imposed under paragraph (1) shall be equal to an increase in the interest rate to 2% greater than the current prime interest rate for the remainder of the loan. (g) Defaults.--The authority may, by foreclosure, take title to a capital development project which it financed if acquisition is necessary to protect a loan made under this section. The authority shall pay all costs arising out of the foreclosure and acquisition from money held in the fund or a special account authorized by section 2304(c)(2). The authority may, in order to minimize financial losses and sustain employment, lease the capital development project. The authority may withdraw money from the fund or a special account authorized by section 2304(c)(2) to purchase first mortgages and to make payments on first mortgages on any capital development project which it financed if purchase or payment is necessary to protect a loan made under this section. The authority may sell, transfer, convey and assign the first mortgages and shall deposit any money derived from the sale of any first mortgages in the fund or a special account authorized by section 2304(c)(2). (Oct. 22, 2014, P.L.2569, No.161, eff. Nov. 1, 2014) Amendment. Act 161 amended subsecs. (a), (b) intro. par. and (7), (c) intro. par., (d), (e), (f)(1) and (2) and (g). Cross References. Section 2310 is referred to in section 2310.1 of this title.

12 Pa.C.S. § 2310.1 Delegation.

For loans authorized under section 2306 (relating to capital development loans), 2307 (relating to EDA loans), 2308 (relating to loans in distressed communities), 2309 (relating to pollution prevention assistance loans) or 2310 (relating to export financing loans), the board may delegate the review and approval of applications totaling less than $200,000 to the authorized staff of the authority by adopting a resolution authorizing the delegation, subject to any conditions established by the board. The resolution must do all of the following: (1) Enumerate the qualifications and training required for authority staff to be authorized to review and approve applications. (2) Set loan guidelines and underwriting standards for the authorized staff to follow during the review and approval of applications. (3) Require authorized staff to provide a monthly report to the board of all actions to a pending or approved application taken during the reporting period. (Oct. 22, 2014, P.L.2569, No.161, eff. Nov. 1, 2014) Amendment. Act 161 added section 2310.1.

12 Pa.C.S. § 2311 Reporting and inspection.

(a) Inspection.--An applicant or a recipient shall, upon request, permit authorized employees of the authority or its agent to inspect the plant, books and records of the applicant or recipient. (b) Updating.--An applicant or a recipient shall provide updated information to the authority and its agents if conditions change or to the extent that the information originally given becomes inaccurate or misleading. (c) Periodic reports.--A recipient shall provide the authority and its agents with such periodic financial reports as the authority may require until the loan is repaid in full. (d) Financial and performance audits.--An agent of the authority shall annually submit to the authority, at the agent's expense, an independent financial audit. If the audit reveals misconduct of a material nature on the part of the agent, the authority shall take appropriate action. (Oct. 22, 2014, P.L.2569, No.161, eff. Nov. 1, 2014)

12 Pa.C.S. § 2312 Limitations.

No loans shall be recommended or approved if the proceeds of the loan could do any of the following: (1) Cause, aid or assist directly in the relocation of any business operations from one part of this Commonwealth to another unless there is at least a 25% net increase in employment. (2) Refinance any portion of the total cost of a capital development project, pollution prevention infrastructure or other existing loans or debt. (3) Finance a capital development project or pollution prevention infrastructure located outside the geographic boundaries of this Commonwealth. (4) Provide funds, directly or directly, for payment distribution or as loan owners, partners or shareholders of a small business, except as ordinary compensation for services rendered. (5) Provide funds for speculation in real or personal property, whether tangible or intangible.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=12Fetched: 10/16/2026

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