HB 1049 — 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
 1   Amending Title 64 (Public Authorities and Quasi-Public
 2      Corporations) of the Pennsylvania Consolidated Statutes, in
 3      Commonwealth Financing Authority, further providing for
 4      Second Stage Loan Program.
 5      The General Assembly of the Commonwealth of Pennsylvania
 6   hereby enacts as follows:
 7      Section 1.    Section 1553(a), (b) introductory paragraph, (1),
 8   (2) and (3), (c), (d) introductory paragraph, (2) and (4), (e)
 9   (1)(ii), (v) and (vi) and (2) and (f)(1) of Title 64 of the
10   Pennsylvania Consolidated Statutes are amended, subsection (d)
11   is amended by adding paragraphs and the section is amended by
12   adding a subsection to read:
13   § 1553.   Second Stage Loan Program.
14      (a)    Establishment.--There is established a program to be
15   known as the Second Stage Loan Program. The program shall
16   provide loan guarantees to [commercial lending institutions]
17   eligible applicants that make loans to life sciences, advanced
18   technology or manufacturing businesses located within this
 1   Commonwealth.
 2      (b)   Application for enrollment.--[A commercial lending
 3   institution] An eligible applicant may apply for enrollment in
 4   the program authorized by this section. The application shall be
 5   on the form prescribed by the board and shall include or
 6   demonstrate all of the following:
 7            (1)   The name and address of the [commercial lending
 8      institution] eligible applicant and the name and title of the
 9      individual who will serve as the point of contact for the
10      [commercial lending institution] eligible applicant.
11            (2)   A statement defining the service area of the
12      [commercial lending institution] eligible applicant.
13            (3)   A statement describing the commercial lending
14      activities engaged in by the [commercial lending institution]
15      eligible applicant and how the [institution] eligible
16      applicant intends to expand those activities as a result of
17      its participation in the program authorized by this section.
18            * * *
19      (c)   Enrollment approval.--Upon being satisfied that all
20   requirements have been met, the board may enroll the [commercial
21   lending institution] eligible applicant in the program
22   authorized by this section, and, if enrolled, the authority
23   shall execute a master guarantee agreement in favor of the
24   [commercial lending institution] eligible applicant. In addition
25   to any other terms and conditions required by the board, the
26   master guarantee agreement shall provide for the following:
27            (1)   The procedure for the submission of a claim for
28      payment by the [commercial lending institution] eligible
29      applicant. This procedure shall require that the [commercial
30      lending institution] eligible applicant demonstrate that it

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 1      has exhausted all available remedies against the borrower,
 2      other guarantors and collateral for the loan before seeking
 3      payment under the agreement.
 4            (2)    A requirement that a percentage of any moneys
 5      recovered by the [commercial lending institution] eligible
 6      applicant subsequent to any payment made under the master
 7      guarantee agreement by the authority be remitted to the
 8      authority.
 9            (3)    Periodic reporting requirements by the [commercial
10      lending institution] eligible applicant regarding itself and
11      regarding the loans for which guarantee certificates have
12      been issued under this section.
13      (d)   Application for guarantee.--[A commercial lending
14   institution] An eligible applicant enrolled in the program
15   authorized by this section may submit an application to the
16   authority for the guarantee of a proposed loan. The application
17   shall be on the form prescribed by the board and shall include
18   or demonstrate all of the following:
19            * * *
20            [(2)    The number of projected new or retained employees
21      of the borrower as a result of the loan.]
22            (2.1)   A statement demonstrating that the use of the loan
23      proceeds by the borrower will result in jobs being created or
24      retained within this Commonwealth and an estimate of the
25      number of projected new or retained employees as a result of
26      the loan.
27            (2.2)   A statement demonstrating that the borrower's
28      business is located within the eligible applicant's service
29      area within this Commonwealth.
30            * * *

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 1          (4)   A statement describing the purpose of the loan, the
 2    requested amount of the loan, a copy of the [commercial
 3    lending institution's] eligible applicant's commitment letter
 4    and applicable credit underwriting that supports the
 5    repayment of the loan, as well as the collateral and other
 6    guarantees offered by the borrower to support the loan.
 7          * * *
 8    (e)   Application review.--
 9          (1)   The board shall review the application to determine
10    all of the following:
11                * * *
12                (ii)    That the borrower's business has been in
13          existence for at least two years [but no more than seven
14          years] at the time of application.
15                * * *
16                (v)    That the borrower's business is located within
17          the [commercial lending institution's] eligible
18          applicant's service area and within this Commonwealth.
19                (vi)    That the borrower and the [commercial lending
20          institution] eligible applicant have met all other
21          requirements established by the board.
22          (2)   Upon being satisfied that all requirements have been
23    met, the board may approve the guarantee, and, if approved,
24    the authority shall issue a guarantee certificate for the
25    loan to the [commercial lending institution] eligible
26    applicant stating the terms and amount of the guarantee.
27          * * *
28    (f)   Limitations.--
29          (1)   [During the first two years of the term of a loan
30    for which a guarantee certificate has been issued, the

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 1      guarantee may not exceed 50% of the outstanding principal
 2      amount of the loan. From the end of year two through either
 3      the end of year seven or the end of the term of the loan,
 4      whichever occurs first, the guarantee may not exceed 25% of
 5      the outstanding principal amount of the loan. The guarantee
 6      will] The authority shall determine the maximum guarantee
 7      based on a percentage of the outstanding principal amount of
 8      the loan. The guarantee shall terminate at the end of seven
 9      years.
10            * * *
11      (g)   Definitions.--As used in this section, the following
12   words and phrases shall have the meanings given to them in this
13   subsection unless the context clearly indicates otherwise:
14      "Certified economic development organization."    As defined in
15   section 1102 (relating to definitions).
16      "Eligible applicant."    A commercial lending institution,
17   community development financial institution or certified
18   economic development organization.
19      Section 2.    This act shall take effect in 60 days.




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