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Pollution prevention assistance loans - 12 Pa. Cons. Stat. § 2309

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     § 2309.  Pollution prevention assistance loans.
        (a)  Application.--A small business may submit an application
     and any application fee to a pollution prevention assistance
     agency requesting a loan for a pollution prevention
     infrastructure. The application shall be on the form required by
     the department and shall include or demonstrate all of the
     following:
            (1)  The name and address of the applicant.
            (2)  A statement of the amount of loan assistance sought.
            (3)  A statement of the pollution prevention
        infrastructure, including a detailed statement of the cost of
        the infrastructure.
            (4)  A financial commitment from a responsible source for
        the cost of the pollution prevention infrastructure in excess
        of the amount requested.
            (5)  Any other information required by the department.
        (b)  Pollution prevention assistance agency review.--
            (1)  Upon receipt of a completed application, a pollution
        prevention assistance agency shall investigate and determine
        all of the following:
                (i)  If the applicant is a small business.
                (ii)  If the project is for pollution prevention
            infrastructure.
                (iii)  If the applicant complied with all other
            criteria established by the department.
            (2)  Upon being satisfied that all requirements have been
        met, the pollution prevention assistance agency shall
        recommend the applicant to the department and forward the
        application with all supporting documentation to the
        department for its review and approval.
        (c)  Department review.--
            (1)  Upon receipt of a recommendation and a completed
        application, the department shall investigate and determine
        all of the following:
                (i)  If the pollution prevention infrastructure
            demonstrates a substantial likelihood of preventing or
            reducing pollution. The Department of Environmental
            Protection shall assist the department in reviewing the
            applications and provide technical assistance.
                (ii)  The ability of the applicant to meet and
            satisfy the debt service as it becomes due and payable.
            In reviewing repayment obligations, loans shall not be
            approved on the basis of direct financial return on
            investment and shall not be held to the loan loss
            standards of private commercial lenders. Loans shall be
            reviewed for the purpose of reducing pollution through
            source reduction technologies or processes.
                (iii)  The existence and sufficiency of collateral
            for the loan.
                (iv)  Relevant criminal and credit history and
            ratings of the applicant as determined from outside
            credit reporting services and other sources.
            (2)  If the department is satisfied that all requirements
        have been met, the department may approve the loan request. A
        loan approved under this subsection may not exceed the lesser
        of:
                (i)  $100,000; or
                (ii)  75% of infrastructure costs.
            (3)  The department shall notify the pollution prevention
        assistance agency and applicant of its decision.
        (d)  Approvals.--For applications which are approved, the
     department shall draw an advance equal to the principal amount
     of the loan from the Pollution Prevention Assistance Account.
     Prior to providing loan funds to the applicant, the department
     shall require the applicant to execute a note and to enter into
     a loan agreement. In addition to the requirements of subsection
     (e), the loan agreement shall include a provision requiring the
     recipient to use the loan proceeds to pay the costs of the
     pollution prevention infrastructure. The department may impose
     other terms and conditions on the recipient if the department
     determines they are in the best interests of this Commonwealth,
     including a provision requiring collateral for any penalty
     imposed under subsection (g).
        (e)  Loan terms.--A loan agreement entered into in accordance
     with subsection (d) shall do all of the following:
            (1)  State the collateral securing the loan. All loans
        shall be secured by lien positions on collateral at the
        highest level of priority as may be determined by the
        department.
            (2)  State the repayment period which may not exceed 10
        years.
            (3)  State that the interest rate is 2%.
            (4)  State that any loan fee is not to exceed 5% of the
        loan amount.
        (f)  Loan administration.--A loan made under this section
     shall be administered in accordance with departmental policies
     and procedures.
        (g)  Penalty.--
            (1)  Except as provided in paragraph (2), the department
        shall impose a penalty upon a recipient if the recipient
        fails to carry out the pollution prevention infrastructure
        project as specified in its approved application.
            (2)  The department may waive the penalty required by
        paragraph (1) if the department determines that the failure
        was due to circumstances outside the control of the
        recipient.
            (3)  The amount of any penalty imposed under paragraph
        (1) shall be equal to an increase in the interest rate to 2%
        greater than the current prime interest rate for the
        remainder of the loan.
        (h)  Defaults.--The department may take title by foreclosure
     to a pollution prevention infrastructure which it financed if
     acquisition is necessary to protect a loan made under this
     section. The department shall pay all costs arising out of the
     foreclosure and acquisition from money held in the Pollution
     Prevention Assistance Account. The department may, in order to
     minimize financial losses and sustain employment, lease the
     pollution prevention infrastructure. The department may withdraw
     money from the Pollution Prevention Assistance Account to
     purchase first mortgages and to make payments on first mortgages
     on any pollution prevention infrastructure which it financed if
     the purchase or payment is necessary to protect a loan made
     under this section. The department may sell, transfer, convey
     and assign the first mortgages and shall deposit any money
     derived from the sale of any first mortgages in the Pollution
     Prevention Assistance Account.

        Cross References.  Section 2309 is referred to in section
     2304 of this title.

Last modified: November 27, 2007