Pennsylvania Act 1990-196 — CAPITAL LOAN FUN ACT - AMEND

Act text

CAPITAL LOAN FUN ACT - AMEND
                 Act of Dec. 19, 1990, P.L. 824, No. 196              Cl. 12
                             Session of 1990
                               No. 1990-196

                                  AN ACT

     SB 1261

     Amending the act of July 2, 1984 (P.L.545, No.109), entitled "An
        act establishing a loan program for capital development
        projects; providing for the use of funds made available under
        the Appalachian Regional Development Act of 1965 and the
        Public Works and Economic Development Act of 1965; providing
        for loans, loan guarantees and other programs for capital
        development projects of small businesses; creating the
        Capital Loan Fund; providing standards for and requirements
        of the program; and making appropriations," adding a
        definition and further defining "small business enterprise";
        and further providing for terms, conditions, applications and
        administration.

        The General Assembly of the Commonwealth of Pennsylvania
     hereby enacts as follows:

        Section 1.  The definition of "small business enterprise" in
     section 2 of the act of July 2, 1984 (P.L.545, No.109), known as
     the Capital Loan Fund Act, amended July 9, 1986 (P.L.1226,
     No.111), is amended and the section is amended by adding a
     definition to read:
      Section 2.  Definitions.
        The following words and phrases when used in this act shall
     have the meanings given to them in this section unless the
     context clearly indicates otherwise:
        * * *
        "Export-related services."  A service provided by a
     Pennsylvania business enterprise that derives 51% or more of
     gross receipts from expenditures made by out-of-state companies
     or individuals.
        * * *
        "Small business enterprise."  A for-profit corporation,
     partnership or proprietorship which is small enough to be aided
     by assistance provided under this act, including small business
     enterprises located in small business incubator facilities. For
     the purpose of export assistance loans, the term is restricted
     to a for-profit corporation, partnership or proprietorship
     which, together with its parents, affiliates and subsidiaries,
     employs in the aggregate less than 500 full-time employees.
        * * *
        Section 2.  Sections 4(e)(6), 5(c)(2)(iv), (3)(ii) and (6)
     and 6(a) of the act, amended or added July 9, 1986 (P.L.1226,
     No.111), are amended to read:
      Section 4.  Eligibility for loans; terms and conditions.
        * * *
        (e)  Export assistance loans.--
            * * *
            (6)  Export assistance loan recipients are not
        disqualified from receiving Class I, II or III or apparel
        loans because of eligibility to apply for an export
        assistance loan: Provided, however, That, exclusive of any
        loan guarantees granted under section 6, the loans approved
        shall not exceed in the aggregate 50% of the total project
        cost or $200,000, whichever is less.
        * * *
      Section 5.  Application and administration.
        * * *
        (c)  Class III and export assistance loans.--
            * * *
            (2)  Upon receipt of the application, the area loan
        organization shall investigate and review the application and
        either approve or disapprove the loan application by proper
        action of the governing body of the organization. The
        decision action of the organization shall be based, in whole
        or in part, upon the following criteria:
                * * *
                (iv)  Number of net new employment opportunities
            created by the proposed project. This criterion shall not
            apply to export assistance loans.
            * * *
            (3)  Upon approval of the loan application by the area
        loan organization, the organization shall forward the
        application and all supporting documentation which the
        secretary shall require, including a copy of the proper
        resolution of the governing body, to the secretary for review
        and final approval or disapproval. The secretary shall review
        each application and supporting documentation to ensure the
        following:
                * * *
                (ii)  Creation of a satisfactory number of new net
            employment opportunities within the Commonwealth. This
            criterion shall not apply to export assistance loans.
                * * *
            (6)  In the event that a small business enterprise shall
        fail to comply with and create the number of new employment
        opportunities specified in its approved application, the
        secretary shall impose a penalty equal to an increase in the
        interest to 2% greater than the current prime interest rate
        for the remainder of the loan unless the penalty is waived by
        the secretary because the failure is due to circumstances
        outside of the control of the small business enterprise. This
        penalty shall not apply to [companies receiving only] export
        assistance loans. The penalty shall be payable in
        installments which the secretary deems appropriate. Immediate
        notice of penalties and waivers of penalties (with reasons
        therefor) shall be submitted by the secretary to the Chief
        Clerk of the House of Representatives and the Secretary of
        the Senate.
        * * *
      Section 6.  Loan guarantees; other programs.
        (a)  Guarantees; endorsements and sureties.--The secretary
     may make advances or provide other means of guaranteed payment
     from the Capital Loan Fund to area loan organizations for the
     purpose of guaranteeing, endorsing or acting as surety on the
     bonds, notes, contracts, mortgages or other obligations of small
     business enterprises on such terms and conditions and according
     to such policies and procedures as the secretary may prescribe.
     Such guarantees, endorsements or sureties may be provided only
     for those small business enterprises and manufacturers of
     apparel products and in connection with those capital
     development projects which conform in all respects to the
     provisions of section 4(c) or (d), or for export development
     projects which conform in all respects to the provisions of
     section 4(e) except that loan guarantees may be made in an
     amount not exceeding the lesser of 90% of the total project cost
     or $500,000. Further, area loan organizations and the secretary
     shall, in reviewing applications for guarantees, endorsements or
     sureties, base their respective decisions regarding approval or
     disapproval upon the findings and determinations required under
     section 5(c).
        * * *
        Section 3.  This act shall take effect in 60 days.

     APPROVED--The 19th day of December, A. D. 1990.

     ROBERT P. CASEY