(a) Establishment.--There is established a program to be known as the First Industries Program. The program shall provide financial assistance for projects related to tourism and agriculture located within this Commonwealth. The board shall allocate funds made available to the program among the different methods of financing authorized in this section.
(b) Applications for planning grants.--An applicant may submit an application to the authority requesting a planning grant in an amount not to exceed $250,000 for the costs of predevelopment activities and feasibility studies for a project related to tourism or agriculture. The application shall be on the form required by the board and shall include or demonstrate all of the following:
(1) The applicant's name and address.
(2) The location of the project.
(3) A description of the project.
(4) An estimate of the cost of the predevelopment activities and feasibility studies and the goal to be achieved by carrying out the proposed activities or studies.
(5) A statement of the amount of the planning grant sought.
(6) Any other information required by the board.
(c) Review and approval of planning grant applications.--
(1) The board shall review the application to determine that the project demonstrates one or more of the following:
(i) The project will have a demonstrable impact on the economy or well-being of the neighborhood, community or region where the project will be located.
(ii) The project will promote research and development efforts leading to increased commercialization or utilization of farm commodities.
(iii) The project will result in environmentally friendly or energy efficient operations related to agriculture, including projects authorized by the act of December 12, 1994 (P.L.888, No.128), known as the Agricultural By-Product Management Technology Act.
(iv) The project will result in more cost-effective and efficient marketing of regional assets related to tourism or agriculture.
(v) The project will result in a substantial increase in revenues for the Commonwealth or the host municipality.
(vi) The project proposes to utilize Commonwealth-owned natural resources for public/private development of tourism.
(2) Upon being satisfied that the requirements of paragraph (1) have been met, the board may approve the application, and, if approved, the authority shall award a planning grant.
(3) Copies of all reports and studies prepared with planning grant funds shall be filed with the authority and shall be made available to any person upon request.
(d) Loans to applicants.--If the department approves an application for a loan under the programs established in 12 Pa.C.S. Ch. 23 (relating to small business first) or 29 (relating to machinery and equipment loans), the department may request that the authority finance the loan. Upon being satisfied that the project is related to agriculture or tourism, the board may approve the request, and, if approved, the authority shall award a loan. Loans made under this subsection shall be administered by the department. Payments received shall be forwarded to the authority and credited to the account established in accordance with section 1542(b) (relating to revolving loan program accounts).
(e) Loan guarantees.--
(1) An applicant may request a guarantee for a loan to be made by a commercial lending institution or community development financial institution to assist with the financing of a project related to tourism or agriculture. The applicant may be the commercial lending institution or community development financial institution applying on behalf of a borrower. The application must be on the form required by the board and must include or demonstrate all of the following:
(i) The applicant's name and address. If the applicant is a commercial lending institution or community development financial institution, the borrower's name and address.
(ii) A description of the project.
(iii) A statement describing the anticipated economic impact to the Commonwealth and the host municipality as a result of the project.
(iv) A description of the proposed project financing, including terms, conditions and the collateral or security required for the loan for which the guarantee is being requested.
(v) A copy of the applicant's last two years of financial statements prepared or reported on by an independent certified public accountant. If the applicant is a commercial lending institution or a community development financial institution, a copy of the borrower's last two years of financial statements prepared or reported on by an independent certified public accountant.
(vi) The amount of the loan guarantee that is being requested.
(vii) The total project cost and the identification of all sources of capital for the project.
(viii) Any other information required by the board.
(2) The board shall review the application to determine all of the following:
(i) 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. 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) 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.
(4) The board may establish a subcommittee composed of one or more board members and department staff to supervise the progress of projects for which loan guarantees have been awarded under this section.
(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.--(Deleted by amendment).
(f) Limitations.--
(1) No more than $10,000,000 of the funds available for the program authorized by this section may be used for planning grants awarded under subsection (c).
(2) At least two-thirds of the funds available for the program authorized by this section shall be used for financing of projects related to agriculture.
(Nov. 30, 2004, P.L.1708, No.218, eff. imd.; Oct. 9, 2008, P.L.1517, No.125, eff. 60 days; June 30, 2011, P.L.193, No.27, eff. imd.; Dec. 17, 2015, P.L.457, No.81, eff. imd.)
2015 Amendment. Act 81 amended subsecs. (e)(2) and (3.1) and (e.2).
2008 Amendment. Act 125 amended subsec. (e)(2) and (3) and added subsecs. (e)(3.1) and (3.2), (e.1) and (e.2). See section 3 of Act 125 in the appendix to this title for special provisions relating to Department of Community and Economic Development reports.
2004 Amendment. Act 218 amended subsec. (e).
Cross References. Section 1552 is referred to in sections 1542, 1543 of this title.