2906 - Application and administration.
§ 2906. Application and administration. (a) Procedures.--Application and administration procedures for fund loans shall be established by the secretary. (b) Receipt.--The secretary shall receive applications from eligible business enterprises for machinery and equipment loans. Applications shall be made to the secretary in the form and manner as the department may require. (c) Investigation.--Upon receipt of the application, the secretary shall investigate and review the application and either approve or disapprove the loan application by proper action of the department. The decision of the secretary 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 secretary shall require. (d) Notification.--The secretary 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 secretary 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 secretary shall require in conformity in all respects to the loan as approved by the secretary. (e) Policy requirements and report.--All loans shall be administered and monitored by the department in accordance with the policies and procedures prescribed by the secretary. On or before September 1 of each year, the secretary shall prepare a report that includes the following: (1) Each outstanding loan. (2) The date of approval. (3) The original principal balance. (4) The current principal balance. (5) The interest rate. (6) The purpose for which the loan was made. (7) An enumeration of any problems or issues which have arisen with regard to each loan. (8) A statement regarding the progress of the business enterprise in creating and retaining its requisite number of employment opportunities. (9) Such other information and documentation as the secretary shall require. (f) Penalty for noncompliance.--In the event that a loan recipient shall not comply with its approved application by failing to create or preserve the number of employment opportunities specified in its approved application, the secretary 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 secretary because the failure is due to circumstances outside the control of the loan recipient. The penalty shall be payable in installments that the secretary deems appropriate. 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.