An Act amending Title 64 (Public Authorities and Quasi-Public Corporations) of the Pennsylvania Consolidated Statutes, in Commonwealth Financing Authority, further providing for Second Stage Loan Program.

PRINTER'S NO. 1139
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1049
Session of
2025
INTRODUCED BY SHUSTERMAN, HILL-EVANS, CURRY, GIRAL, SANCHEZ,
BRENNAN, CEPEDA-FREYTIZ, INGLIS, D. WILLIAMS AND CERRATO,
MARCH 25, 2025
REFERRED TO COMMITTEE ON APPROPRIATIONS, MARCH 25, 2025
AN ACT
Amending Title 64 (Public Authorities and Quasi-Public
Corporations) of the Pennsylvania Consolidated Statutes, in
Commonwealth Financing Authority, further providing for
Second Stage Loan Program.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 1553(a), (b) introductory paragraph, (1),
(2) and (3), (c), (d) introductory paragraph, (2) and (4), (e)
(1)(ii), (v) and (vi) and (2) and (f)(1) of Title 64 of the
Pennsylvania Consolidated Statutes are amended, subsection (d)
is amended by adding paragraphs and the section is amended by
adding a subsection to read:
§ 1553. Second Stage Loan Program.
(a) Establishment.--There is established a program to be
known as the Second Stage Loan Program. The program shall
provide loan guarantees to [commercial lending institutions]
eligible applicants that make loans to life sciences, advanced
technology or manufacturing businesses located within this
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Commonwealth.
(b) Application for enrollment.--[A commercial lending
institution] An eligible applicant may apply for enrollment in
the program authorized by this section. The application shall be
on the form prescribed by the board and shall include or
demonstrate all of the following:
(1) The name and address of the [commercial lending
institution] eligible applicant and the name and title of the
individual who will serve as the point of contact for the
[commercial lending institution] eligible applicant.
(2) A statement defining the service area of the
[commercial lending institution] eligible applicant.
(3) A statement describing the commercial lending
activities engaged in by the [commercial lending institution]
eligible applicant and how the [institution] eligible
applicant intends to expand those activities as a result of
its participation in the program authorized by this section.
* * *
(c) Enrollment approval.--Upon being satisfied that all
requirements have been met, the board may enroll the [commercial
lending institution] eligible applicant in the program
authorized by this section, and, if enrolled, the authority
shall execute a master guarantee agreement in favor of the
[commercial lending institution] eligible applicant. In addition
to any other terms and conditions required by the board, the
master guarantee agreement shall provide for the following:
(1) The procedure for the submission of a claim for
payment by the [commercial lending institution] eligible
applicant. This procedure shall require that the [commercial
lending institution] eligible applicant demonstrate that it
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has exhausted all available remedies against the borrower,
other guarantors and collateral for the loan before seeking
payment under the agreement.
(2) A requirement that a percentage of any moneys
recovered by the [commercial lending institution] eligible
applicant subsequent to any payment made under the master
guarantee agreement by the authority be remitted to the
authority.
(3) Periodic reporting requirements by the [commercial
lending institution] eligible applicant regarding itself and
regarding the loans for which guarantee certificates have
been issued under this section.
(d) Application for guarantee.--[A commercial lending
institution] An eligible applicant enrolled in the program
authorized by this section may submit an application to the
authority for the guarantee of a proposed loan. The application
shall be on the form prescribed by the board and shall include
or demonstrate all of the following:
* * *
[(2) The number of projected new or retained employees
of the borrower as a result of the loan.]
(2.1) A statement demonstrating that the use of the loan
proceeds by the borrower will result in jobs being created or
retained within this Commonwealth and an estimate of the
number of projected new or retained employees as a result of
the loan.
(2.2) A statement demonstrating that the borrower's
business is located within the eligible applicant's service
area within this Commonwealth.
* * *
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(4) A statement describing the purpose of the loan, the
requested amount of the loan, a copy of the [commercial
lending institution's] eligible applicant's commitment letter
and applicable credit underwriting that supports the
repayment of the loan, as well as the collateral and other
guarantees offered by the borrower to support the loan.
* * *
(e) Application review.--
(1) The board shall review the application to determine
all of the following:
* * *
(ii) That the borrower's business has been in
existence for at least two years [but no more than seven
years] at the time of application.
* * *
(v) That the borrower's business is located within
the [commercial lending institution's] eligible
applicant's service area and within this Commonwealth.
(vi) That the borrower and the [commercial lending
institution] eligible applicant have met all other
requirements established by the board.
(2) Upon being satisfied that all requirements have been
met, the board may approve the guarantee, and, if approved,
the authority shall issue a guarantee certificate for the
loan to the [commercial lending institution] eligible
applicant stating the terms and amount of the guarantee.
* * *
(f) Limitations.--
(1) [During the first two years of the term of a loan
for which a guarantee certificate has been issued, the
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guarantee may not exceed 50% of the outstanding principal
amount of the loan. From the end of year two through either
the end of year seven or the end of the term of the loan,
whichever occurs first, the guarantee may not exceed 25% of
the outstanding principal amount of the loan. The guarantee
will] The authority shall determine the maximum guarantee
based on a percentage of the outstanding principal amount of
the loan. The guarantee shall terminate at the end of seven
years.
* * *
(g) Definitions.--As used in this section, the following
words and phrases shall have the meanings given to them in this
subsection unless the context clearly indicates otherwise:
"Certified economic development organization." As defined in
section 1102 (relating to definitions).
"Eligible applicant." A commercial lending institution,
community development financial institution or certified
economic development organization.
Section 2. This act shall take effect in 60 days.
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