12 Pa.C.S. Ch. 29

in effect

12 Pa.C.S. § 2901 Scope.

This chapter relates to the Machinery and Equipment Loan Program. Effective Date. Section 6(1)(i) of Act 12 of 2004 provided that section 2901 shall take effect upon publication of the guidelines required by section 2912.

12 Pa.C.S. § 2902 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. "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. "Business enterprise." A for-profit corporation, partnership or proprietorship. The term includes a medical facility. "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 Machinery and Equipment Loan Fund created and established by this chapter. "Medical facility." An entity licensed as a hospital under the act of June 13, 1967 (P.L.31, No.21), known as the Public Welfare Code, or the act of July 19, 1979 (P.L.130, No.48), known as the Health Care Facilities Act. "Normal agricultural operation." The term shall have the same meaning as given to it 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." "Production agriculture." The management and use of a normal agricultural operation for the production of a farm commodity. "Program." The Machinery and Equipment Loan Program established under section 2903 (relating to establishment). (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." Amendment. Act 161 added the defs. of "authority," "board" and "program." Effective Date. Section 6(1)(i) of Act 12 of 2004 provided that section 2902 shall take effect upon publication of the guidelines required by section 2912. References in Text. The short title of the act of June 13, 1967, P.L.31, No.21, known as the Public Welfare Code, referred to in the definition of "medical facility," was amended by the act of December 28, 2015, P.L.500, No.92. The amended short title is now the Human Services Code.

12 Pa.C.S. § 2903 Establishment.

There is established a program to be known as the Machinery and Equipment Loan Program. The program shall be administered by the authority and provide loans to business enterprises for machinery and equipment. (Oct. 22, 2014, P.L.2569, No.161, eff. Nov. 1, 2014) Effective Date. Section 6(1)(i) of Act 12 of 2004 provided that section 2903 shall take effect upon publication of the guidelines required by section 2912. Cross References. Section 2903 is referred to in section 2902 of this title.

12 Pa.C.S. § 2904 Machinery and Equipment Loan Fund.

(a) Creation.--There is created a special account in the Treasury Department, to be known as the Machinery and Equipment Loan Fund, to which shall be credited all program appropriations made by the General Assembly, all proceeds from loan repayments and any and all other deposits, payments or contributions from any other source made available to the fund. The fund shall operate as a revolving fund whereby all appropriations, payments and interest made thereto may be applied and reapplied to the purposes of this chapter. (b) Credits to fund.--All appropriations, deposits and contributions made to the fund shall be immediately credited in full to the fund, and earnings on the moneys held in the fund shall also be credited to the fund for the purposes of this chapter. Effective Date. Section 6(1)(i) of Act 12 of 2004 provided that section 2904 shall take effect upon publication of the guidelines required by section 2912. Cross References. Section 2904 is referred to in sections 1102, 1544 of Title 64 (Public Authorities and Quasi-Public Corporations).

12 Pa.C.S. § 2905 Eligibility for loans; terms and conditions.

(a) Loans; general rules.--The authority may make advances from the fund, subject to the terms, conditions and restrictions provided under this chapter, for the purpose of making loans to business enterprises involved in industrial processes, mining, manufacturing, production agriculture, information technology, biotechnology, service as a medical facility or other industrial or technology sectors, as defined by the authority, to acquire and install new machinery and equipment or upgrade existing machinery and equipment, including the acquisition, application and utilization of computer hardware and software. (1) All loans shall be subject to all of the following conditions: (i) Be made to eligible business enterprises under the provisions of this chapter. (ii) Have a maximum loan ceiling of $5,000,000 or 50% of the cost of the project, whichever is less. (iii) Be limited to the purchase and installation of new equipment and machinery or the upgrade of existing machinery and equipment. This subparagraph includes the acquisition, application and utilization of computer hardware and software. (iv) Be limited to projects that demonstrate the creation or retention of one job for every $25,000 received from the fund. This subparagraph does not apply to loans made to business enterprises involved in production agriculture or to loans made to medical facilities. 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. (v) Have an interest rate which shall be established by the authority. (vi) Have a term of not in excess of ten years. (2) For loans to medical facilities, loan funds may be used only to finance the acquisition, installation and utilization of machinery and equipment, including computer hardware and software components, to be used in the prescribing and dispensing of medication for medical facility patients. (b) Restrictions.--No loans shall be made that do any of the following: (1) Cause, aid or assist in, directly or indirectly, the relocation of any business enterprise from one part of this Commonwealth to another unless there is at least a 25% increase in net employment. (2) Supplant funding that is otherwise available expeditiously from private sector sources on commercially reasonable terms. (3) Be for the purpose of refinancing any portion of the total project cost or other existing loans or debt. (4) Be for the purpose of financing projects located outside the geographic boundaries of this Commonwealth. (5) Be for the purpose of paying off a creditor that is inadequately secured and is in a position to sustain a loss. (6) Be for the purpose of repaying a debt owed to a small business investment company. (7) Provide funds for speculation in any kind of property, real or personal, tangible or intangible. (c) Security.--All loans shall be secured by no less than a second lien position on the equipment purchased and other sufficient collateral as determined by the authority. (Oct. 22, 2014, P.L.2569, No.161, eff. Nov. 1, 2014) Amendment. Act 161 amended subsecs. (a) intro. par. and (1)(iv) and (v) and (c). Effective Date. Section 6(1)(i) of Act 12 of 2004 provided that section 2905 shall take effect upon publication of the guidelines required by section 2912.

12 Pa.C.S. § 2906 Application and administration.

(a) Procedures.--Application and administration procedures for fund loans shall be established by the authority under 64 Pa.C.S. § 1121 (relating to common application process). (b) Receipt.--The authority shall receive applications from eligible business enterprises for machinery and equipment loans. Applications shall be made to the authority in the form and manner as the authority may require. (c) Investigation.--Upon receipt of the application, the authority shall investigate and review the application and either approve or disapprove the loan application by proper action of the authority. The decision of the authority shall be based, in whole or in part, upon the following criteria: (1) Ability of the applicant to meet and satisfy all debt service as it becomes due and payable. (2) Sufficiency of available collateral, including satisfactory lien positions on real and personal property. (3) Eligibility of the applicant as a business enterprise involved in industrial processes, manufacturing, mining, production agriculture, information technology, biotechnology, services as a medical facility or other industrial or technology sectors as defined by the secretary. (4) Sufficient evidence that funds shall be used only to acquire and install new equipment and machinery or upgrade existing equipment and machinery, including the acquisition, application and utilization of computer hardware and software. (5) Capital needs of the applicant. (6) Conformity of the project to the provisions of this chapter. (7) Relevant criminal and credit history and ratings of applicant as determined from outside credit reporting services and other sources. (8) Number of net employment opportunities created and retained by the proposed project. This paragraph does not apply to business enterprises involved in production agriculture or medical facilities. (9) Supporting evidence that the loan project will increase the firm's competitiveness and value added within its respective industry. (10) Explanation of how the loan will aid the Commonwealth in its efforts to assist business enterprises to increase their productivity and improve the future competitive position of this Commonwealth's industries. (11) Compliance with the loan amount limitations provided for machinery and equipment loans. (12) Payment to date of all tax obligations due and owing to the Commonwealth or any political subdivision thereof. (13) Conformity of all aspects of the loan transaction with the substantive and procedural provisions of this chapter and regulations promulgated hereunder. (14) Such information and documentation as the authority shall require. (d) Notification.--The authority shall notify the applicant of final approval or disapproval of the loan application within a reasonable period of time following the receipt of the application. In the case of approval of a loan application, the authority shall arrange to draw the loan amount from the fund and advance the sum to the recipient. The advance shall be made available in the form of a loan transaction, which loan shall be evidenced by a note executed by the recipient and secured in a manner as the authority shall require in conformity in all respects to the loan as approved by the authority. (e) Policy requirements.--All loans shall be administered and monitored by the authority in accordance with the policies and procedures prescribed by the authority. (f) Penalty for noncompliance.--In the event that a loan recipient does not comply with its approved application by failing to create or preserve the number of employment opportunities specified in its approved application, the authority shall impose a penalty equal to an increase in the interest rate to 2% greater than the current prime interest rate for the remainder of the loan unless the penalty is waived by the authority because the failure is due to circumstances outside the control of the loan recipient. The penalty shall be payable in installments that the authority deems appropriate. (Oct. 22, 2014, P.L.2569, No.161, eff. Nov. 1, 2014) Amendment. Act 161 amended subsecs. (a), (b), (c) intro. par. and (14), (d), (e) and (f). Effective Date. Section 6(1)(i) of Act 12 of 2004 provided that section 2906 shall take effect upon publication of the guidelines required by section 2912. Cross References. Section 2906 is referred to in section 2911 of this title.

12 Pa.C.S. § 2907 Powers of authority.

The authority shall have and may exercise all powers and authority necessary to the proper administration and implementation of this chapter and shall have the authority to adopt policies, procedures and guidelines and promulgate rules and regulations necessary to effectuate the provisions of this chapter. In addition to any 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) Effective Date. Section 6(1)(i) of Act 12 of 2004 provided that section 2907 shall take effect upon publication of the guidelines required by section 2912.

12 Pa.C.S. § 2908 Reporting and inspection.

(a) Inspection.--Each business enterprise which applies for or receives assistance under this chapter shall, upon request, permit authorized employees of the authority or its agent to inspect the plant, books and records of the business enterprise. (b) Updating.--Each business enterprise shall update the information given to the authority in its application if conditions change or to the extent that the information given originally becomes inaccurate or misleading. (c) Periodic reports.--Each recipient of assistance under this chapter shall provide the authority with periodic financial reports as the authority may require until such time as the loan is paid off. (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 amended subsec. (a). Effective Date. Section 6(1)(i) of Act 12 of 2004 provided that section 2908 shall take effect upon publication of the guidelines required by section 2912.

12 Pa.C.S. § 2909 Nondiscrimination (Deleted by amendment).

Amendment. Section 2909 was deleted by amendment October 22, 2014, P.L.2569, No.161, effective November 1, 2014.

12 Pa.C.S. § 2910 Conflict of interest (Deleted by amendment).

Amendment. Section 2910 was deleted by amendment October 22, 2014, P.L.2569, No.161, effective November 1, 2014.

12 Pa.C.S. § 2911 Reports to General Assembly.

(a) Annual reports.--On or before September 1 of each year, the authority shall provide a report to the Secretary of the Senate and to the Chief Clerk of the House of Representatives. The report shall describe all relevant activities of the authority pursuant to this chapter and shall include the following: (1) List of business enterprises receiving loans from the fund and the amounts and terms of this assistance. (2) Loan amounts repaid. Information under this paragraph may be reported in the aggregate. (3) Loans outstanding, balances due and any penalties imposed. Information under this paragraph may be reported in the aggregate. (4) Jobs created by businesses receiving funds in previous years. Information under this paragraph may be reported in the aggregate. (5) Other relevant information as determined by the authority. (b) Availability of departmental reports.--Reports prepared by the secretary under section 2906(e) (relating to application and administration) shall be made available upon request to members of the General Assembly. (Oct. 22, 2014, P.L.2569, No.161, eff. Nov. 1, 2014) Effective Date. Section 6(1)(i) of Act 12 of 2004 provided that section 2911 shall take effect upon publication of the guidelines required by section 2912.

12 Pa.C.S. § 2912 Guidelines.

The authority shall develop written guidelines for the implementation of this chapter. (Oct. 22, 2014, P.L.2569, No.161, eff. Nov. 1, 2014)

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