Pennsylvania Act 2008-125 — PUBLIC AUTHORITIES AND QUASI-PUBLIC CORPORATIONS (64 PA.C.S.) - FIRST INDUSTRIES PROGRAM

Act text

PUBLIC AUTHORITIES AND QUASI-PUBLIC CORPORATIONS (64 PA.C.S.) - FIRST
                            INDUSTRIES PROGRAM
                 Act of Oct. 9, 2008, P.L. 1517, No. 125              Cl. 64
                             Session of 2008
                               No. 2008-125

     SB 768

                                  AN ACT

     Amending Title 64 (Public Authorities and Quasi-Public
        Corporations) of the Pennsylvania Consolidated Statutes,
        further providing for the definitions of "commercial lending
        activities" and "commercial lending institutions" and for the
        First Industries Program.

        The General Assembly of the Commonwealth of Pennsylvania
     hereby enacts as follows:
     Section 1.  The definitions of "commercial lending activities"
     and "commercial lending institutions" in section 1504 of Title
     64 of the Pennsylvania Consolidated Statutes are amended to
     read:
      § 1504.  Definitions.
        The following words and phrases when used in this chapter
     shall have the meaning given to them in this section unless the
     context clearly indicates otherwise:
        * * *
        "Commercial lending activities."  The making of loans and the
     provision of deposit services to business entities, except that
     a farm credit system institution under the Farm Credit Act of
     1971 (Public Law 92-181, 85 Stat. 583) need not offer deposit
     services to qualify as a provider of commercial lending
     activities under this chapter.
        "Commercial lending institutions."  A federally chartered or
     state-chartered bank, savings bank [or], savings and loan
     association or farm credit system institution under the Farm
     Credit Act of 1971 (Public Law 92-181, 85 Stat. 583) which has a
     satisfactory rating from its primary regulator and which is
     engaged in commercial lending activities. The institution must
     operate at least one full-service branch for deposit gathering
     and lending located within this Commonwealth or be a farm credit
     system institution under the Farm Credit Act of 1971.
        * * *
        Section 2.  Section 1552(e)(2) and (3) of Title 64 are
     amended, subsection (e) is amended by adding paragraphs and the
     section is amended by adding subsections to read:
      § 1552.  First Industries Program.
        * * *
        (e)  Loan guarantees.--
            * * *
            (2)  The board shall review the application to determine
        all of the following:
                (i)  [That] (A)  Except as set forth in clause (B),
                that the project has been awarded a planning grant
                under this section or that at least $1,000,000 of
                private funds are being invested in the project.
                    (B)  Beginning on the effective date of this
                paragraph through June 30, 2011, that the project has
                been awarded a planning grant under this section or
                that at least $500,000 of private funds are being
                invested in the project.
                (ii)  That the value of the proposed collateral is
            sufficient to cover the full amount of the loan.
                (iii)  That the applicant complied with all other
            criteria established by the board.
            (3)  Upon being satisfied that all requirements have been
        met, the board may approve the guarantee, and, if approved,
        the authority shall execute a guarantee agreement in favor of
        the commercial lending institution or community development
        financial institution stating the terms and amounts of the
        guarantee. [The] Except as provided in paragraph (3.1), the
        guarantee may not exceed 50% of the outstanding principal
        amount of the loan or $2,500,000 at any point in time,
        whichever is less. In addition to any other terms and
        conditions required by the board, the guarantee agreement
        shall provide for all of the following:
                (i)  The procedure for the submission by the
            commercial lending institution or community development
            financial institution of a claim for payment. This
            procedure shall require that the commercial lending
            institution or community development financial
            institution demonstrate that it has exhausted all
            available remedies against the borrower, other guarantors
            and collateral before seeking payment under the
            agreement.
                (ii)  A requirement that a percentage of any moneys
            recovered subsequent to the payment of a claim by the
            authority be remitted to the authority.
                (iii)  Periodic reporting requirements by the
            commercial lending institution or community development
            financial institution regarding itself and regarding the
            loans which have been awarded guarantees under this
            section.
            (3.1)  Beginning on the effective date of this paragraph
        through June 30, 2011, a guarantee of 51% to 90% of the
        principal amount of the loan to assist with the financing of
        a project related to agriculture may be awarded by the board.
        The guarantee shall be subject to a one-time fee of 2% of the
        amount of the loan multiplied by the percentage of the
        guarantee.
            (3.2)  The amount of a guarantee under this subsection,
        if any, shall be set at the discretion of the board based
        upon its determination of the potential financial risk to the
        Commonwealth.
            * * *
        (e.1)  Limitation.--A Farm Credit Institution under the Farm
     Credit Act of 1971 (Public Law 92-181, 85 Stat. 583) shall only
     be permitted to participate in the First Industries Program
     established under this section and may not participate in any
     other loan guarantee program established under this chapter.
        (e.2)  Sunset.--After June 30, 2011, no Farm Credit
     Institution under the Farm Credit Act of 1971 shall be eligible
     for any loan guarantees under this chapter.
         * * *
        Section 3.  The Department of Community and Economic
     Development shall provide annually, as determined beginning one
     year from the effective date of this act, to the Majority Leader
     of the Senate, the Minority Leader of the Senate, the Majority
     Leader of the House of Representatives and the Minority Leader
     of the House of Representatives, a written report stating the
     impact and number of loans originated, purchased, held and
     assigned by the farm credit lender or other commercial lender
     during the corresponding most recent one-year period. The report
     shall be posted on the department's Internet website.
        Section 4.  This act shall take effect in 60 days.

     APPROVED--The 9th day of October, A. D. 2008.

     EDWARD G. RENDELL