PRIOR PRINTER'S NOS. 2014, 2019, 2865 PRINTER'S NO. 3153
No. 1662 Session of 1979
INTRODUCED BY MESSRS. DORR, McCALL, L. E. SMITH, BENNETT,
DeVERTER, DOMBROWSKI, BURD, SERAFINI, HALVERSON AND DIETZ,
JULY 11, 1979
AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES,
MARCH 26, 1980
AN ACT
1 Establishing a State corporation to foster industrial and
2 commercial and technological development to develop
3 employment opportunities and making an appropriation.
4 TABLE OF CONTENTS
5 Section 1. Short title.
6 Section 2. Legislative purpose.
7 Section 3. Definitions.
8 Section 4. Corporation established.
9 Section 5. Operation of corporation.
10 Section 6. Powers and duties.
11 Section 7. Corporation president.
12 Section 8. Corporate purpose.
13 Section 9. Application for financial aid.
14 Section 10. Appropriation.
15 Section 11. Annual report.
16 Section 12. Nonintervention clause.
17 Section 13. Construction.
1 Section 14. Tax exempt.
2 Section 15. Effective date.
3 The General Assembly of the Commonwealth of Pennsylvania
4 hereby enacts as follows:
5 Section 1. Short title.
6 This act shall be known and may be cited as the "Pennsylvania
7 Employment Opportunities Improvement Act."
8 Section 2. Legislative purpose.
9 The General Assembly finds and declares that there exists in
10 Pennsylvania a significant need for industrial and commercial
11 development and activity in order to provide and increase
12 employment opportunities and tax revenues; that assistance and
13 encouragement of industrial and commercial development to
14 provide and increase such employment opportunities and revenues
15 is an important function of the State government that the
16 availability of financial assistance is an important inducement
17 to industrial and commercial enterprises to remain or locate in
18 this State; that there exists in the State a serious shortage of
19 venture capital to promote the development and exploitation of
20 invention and new products; that this shortage has resulted and
21 will result in a serious decrease in the development of new
22 business enterprise and job opportunities in Pennsylvania; and,
23 further, that providing State financial assistance for the
24 development of products, innovation and invention for industry
25 in this State will assist in the creation of new products and
26 industry in this State, resulting in increased employment and
27 public revenues; and, therefore, the necessity in the public
28 interest and for the public benefit and good for the provisions
29 of this act is hereby declared as a matter of legislative
30 determination.
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1 Section 3. Definitions.
2 The following words and phrases when used in this act shall
3 have, unless the context clearly indicates otherwise, the
4 meanings given to them in this section:
5 "Corporation." The Pennsylvania Product Development
6 Corporation as created under section 4.
7 "Financial aid." The infusion of risk capital to persons for
8 use in the development and exploitation of specific inventions
9 and products.
10 "Innovation." The process by which an invention or an idea
11 is translated into the economy for utilization.
12 "Invention." Any new products, new process or new technique
13 without regard to whether a patent has or could be granted.
14 "Person." Any individual, partnership, corporation or joint
15 venture carrying on business, or proposing to carry on business,
16 within the State.
17 "Product." Any product, device, technique or process, which
18 is or may be exploitable commercially; such term shall not refer
19 to pure research but shall be construed to apply to such
20 products, devices, techniques or processes which have advanced
21 beyond the theoretic stage and are readily capable of being, or
22 has been, reduced to practice.
23 "Venture." Without limitation, any contractual arrangement
24 with any person whereby the corporation obtains rights from or
25 in an invention or product or proceeds therefrom in exchange for
26 the granting of financial aid to such person.
27 Section 4. Corporation established.
28 (a) There is hereby created a nonprofit body corporate to be
29 known as the "Pennsylvania Product Development Corporation."
30 Such corporation is constituted a quasi-public instrumentality
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1 and the exercise by the corporation of the powers conferred in
2 this act shall be deemed and held to be the performance of an
3 essential public function.
4 (b) The corporation shall be governed by a board of seven
5 directors to be appointed by the Governor, at least four of whom
6 shall be knowledgeable and have favorable reputations for skill,
7 knowledge and experience, in the areas of the development of
8 technological invention. On or before May 1, 1980, the Governor
9 shall so appoint seven members of said board, two to serve for
10 two years, two for four years and three for six years from July
11 1, 1980. On or before May 1 of the even-numbered years
12 thereafter, the Governor shall so appoint directors to succeed
13 those whose terms expire for terms of six years from July 1 in
14 the year of their appointment and until their successors have
15 been appointed. A director shall be eligible for reappointment.
16 The Governor shall fill any vacancy for the unexpired term.
17 (c) The directors shall annually elect one of the number as
18 chairman and one as secretary. The board may elect such other
19 officers of the board as it deems proper. Members shall receive
20 no compensation for the performance of their duties hereunder
21 but shall be reimbursed for necessary expenses incurred in the
22 performance thereof.
23 (d) Each director of the corporation before entering upon
24 his duties shall take and subscribe the oath or affirmation
25 required by Article VI of the Constitution. A record of each
26 such oath of affirmation shall be filed in the office of the
27 Secretary of State.
28 (e) No director shall be personally liable for damage or
29 injury, not wanton or willful, caused in the performance of his
30 duties and within the scope of his employment.
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1 Section 5. Operation of corporation.
2 The corporation shall have perpetual succession and shall
3 adopt, amend and repeal bylaws and regulations for the conduct
4 of its affairs. The operations of the corporation shall be
5 designed to accomplish the legislative purposes set forth in
6 this act. Such succession shall continue until the existence of
7 the corporation is terminated by law, provided no such
8 termination shall affect any outstanding contractual obligation
9 of the corporation to assist any person and the State shall
10 succeed to the obligations of the corporation under such
11 contract. Upon termination of the corporation its rights and
12 properties shall pass to the State.
13 Section 6. Powers and duties.
14 The powers of the corporation shall be vested in and
15 exercised by the board of directors. Four members of the board
16 shall constitute a quorum and the affirmative vote of a majority
17 of the members present at a meeting of the board shall be
18 necessary and sufficient for any action taken by the board. No
19 vacancy in the membership of the board shall impair the right of
20 a quorum to exercise all the rights and perform all the duties
21 of the board. Any action taken by the board may be authorized by
22 resolution at any regular or special meeting and shall take
23 effect immediately unless otherwise provided in the resolution.
24 Notice of any meeting, whether special or regular, shall be
25 given by telephone or orally, not less than 48 hours prior to
26 the meeting. The board may delegate to one or more of its
27 members, or its officers, agents and employees such powers and
28 duties as it may deem proper.
29 Section 7. Corporation president.
30 The board shall appoint a president of the corporation who
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1 shall not be a member of the board and who shall serve at the
2 pleasure of the board and shall receive such compensation as
3 shall be determined by the board. The president shall be the
4 chief administrative and operational officer of the corporation
5 and shall direct and supervise administrative affairs and the
6 general management of the corporation. The president may be a
7 State employee performing these functions part time for the
8 first two years of operation of the corporation. The president
9 may employ such other employees as shall be designated by the
10 board of directors; shall attend all meetings of the board; keep
11 a record of all proceedings and maintain and be custodian of all
12 books, documents and papers filed with the corporation and of
13 the minute book of the corporation and of its official seal. He
14 may cause copies to be made of all minutes and other records and
15 documents of the corporation and may give certificates under the
16 official seal of the corporation to the effect that such copies
17 are true copies and all persons dealing with the corporation may
18 rely upon such certificates.
19 Section 8. Corporate purpose.
20 The purpose of the corporation shall be to stimulate and
21 encourage the development and commercialization of new products
22 within Pennsylvania by the infusion of financial aid for
23 invention and innovation in situations in which such financial
24 aid would not otherwise be reasonably available from commercial
25 sources and for this purpose the corporation shall have the
26 following powers:
27 (1) To have perpetual succession as a body corporate and
28 to adopt bylaws, policies and procedures for the regulation
29 of its affairs and conduct of its businesses as provided in
30 section 5.
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1 (2) To enter into venture agreements with persons doing
2 business in Pennsylvania, upon such terms and on such
3 conditions as are consistent with the purposes of this act,
4 for the advancement of financial aid to such persons for the
5 development of specific products, procedures and techniques,
6 to be developed and produced in this State and to condition
7 such agreements upon contractual assurances that the benefits
8 of increasing employment and tax revenues shall accrue to
9 this State and shall remain in it for a sufficient time
10 period to justify the State's involvement.
11 (3) To receive and accept loans, aid or contributions
12 from any source of money, property or labor or other things
13 of value, to be held, used and applied to carry out the
14 purposes of this act, subject to the conditions upon which
15 such grants and contributions may be made, including but not
16 limited to, gifts or grants from any department or agency of
17 the United States or the State.
18 (4) To acquire, lease, purchase, manage, hold and
19 dispose of real and personal property in the State of
20 Pennsylvania and lease, convey or deal in or enter into
21 contracts with respect to such property on any terms
22 necessary or incidental to the carrying out of these
23 purposes.
24 (5) To borrow money to the extent permitted under this
25 act.
26 (6) To hold patents, copyrights, trademarks or any other
27 evidences of protection of exclusivity as to any products as
28 defined herein, issued under the laws of the United States or
29 any state or any nation.
30 (7) To employ such assistants, agents and other
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1 employees, who shall be State employees in the unclassified
2 service and to engage consultants and appraisers as may be
3 necessary or desirable to carry out its purposes in
4 accordance with this act.
5 (8) To make and enter into all contracts and agreements
6 necessary or incidental to the performance of its duties and
7 the execution of its powers under this act.
8 (9) To sue and be sued, plead and be impleaded, adopt a
9 seal and alter the same at pleasure.
10 (10) To invest with the approval of the State Treasurer,
11 any funds not needed for immediate use or disbursement,
12 including any funds held in reserve, in obligations issued or
13 guaranteed by the United States of America or the
14 Commonwealth of Pennsylvania and in other obligations which
15 are legal investments for banks in this State.
16 (11) To procure insurance against any loss in connection
17 with its property and other assets in such amounts and from
18 such insurers as it deems desirable.
19 (12) To the extent permitted under its contract with
20 other persons, to consent to any termination, modification,
21 forgiveness or other change of any term of any contractual
22 right, payment, royalty, contract or agreement of any kind to
23 which the corporation is a party.
24 (13) To invest and reinvest the funds of the corporation
25 including the returns of prior investment in projects
26 furthering the purposes of this act.
27 (14) To make grants to business development credit
28 corporations for purposes of providing venture capital.
29 (15) To do all acts and things necessary and convenient
30 to carry out the purposes of this act.
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1 Section 9. Application for financial aid.
2 All applications for financial aid shall be forwarded,
3 together with an application fee prescribed by the corporation,
4 to the president of the corporation. The president, after
5 preparing necessary records for the corporation, shall forward
6 each application to the staff of the corporation, for an
7 investigation and report concerning any other factors deemed
8 relevant by the corporation. SUCH APPLICATION MAY ALSO BE <--
9 REFERRED TO BY ANY LOCAL INDUSTRIAL DEVELOPMENT AUTHORITY,
10 COMMUNITY DEVELOPMENT CORPORATION OR OTHER SIMILAR ORGANIZATION
11 WILLING TO ACCEPT THE RESPONSIBILITY, FOR AN INVESTIGATION AND
12 REPORT. Such investigation and report INVESTIGATIONS AND REPORTS <--
13 shall include, but shall not be limited to, such facts about the
14 company under consideration as its history, wage standards, job
15 opportunities, stability of employment, past and present
16 financial condition and structure, pro forma income statements,
17 present and future markets and prospects, integrity of
18 management as well as the feasibility of the proposed product
19 and invention to be granted financial aid, including the state
20 of development of such product as well as the likelihood of its
21 commercial feasibility. After receipt and consideration of the
22 above report and after such other action as is deemed
23 appropriate, the corporation shall approve or deny the
24 application. The applicant shall be promptly notified of such
25 action by the corporation. Such approval shall be conditioned
26 upon payment to the corporation, within such reasonable time
27 after notification of approval as may be specified by the
28 corporation, of a commitment fee prescribed by the corporation.
29 Section 10. Appropriation.
30 The sum of $1,000,000 is hereby specifically appropriated to
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1 the Pennsylvania Product Development Corporation for the
2 purposes established by this act.
3 Section 11. Annual report.
4 On September 1 of each year the corporation shall report on
5 its operations for the preceding fiscal year to the Governor.
6 Such report shall include a summary of the activities of the
7 corporation and a complete operating and financial statement.
8 The corporation shall be subject to examination by the
9 Department of the Auditor General. The accounts of the
10 corporation shall be subject to annual audits by the Department
11 of the Auditor General.
12 Section 12. Nonintervention clause.
13 The Commonwealth of Pennsylvania does hereby pledge to and
14 agree with any person with whom the corporation may enter into
15 contracts pursuant to the provisions of this act, that the
16 Commonwealth will not limit or alter the rights hereby vested in
17 the corporation until such contracts and the obligations
18 thereunder are fully met and performed on the part of the
19 corporation, provided nothing herein contained shall preclude
20 such limitation or alteration if adequate provision shall be
21 made by law for the protection of such persons entering into
22 contracts with the corporation.
23 Section 13. Construction.
24 The powers enumerated in this act shall be interpreted
25 broadly to effectuate the purposes thereof and shall not be
26 construed as a limitation of powers.
27 Section 14. Tax exempt.
28 The corporation shall be and is hereby declared tax exempt
29 from all franchise, corporate business and income taxes levied
30 by the State, provided nothing herein shall be construed to
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1 exempt from any such taxes, or from any taxes levied in
2 connection with the manufacture or sale of any products which
3 are the subject of any agreement made by the corporation, any
4 person entering into any agreement with the corporation.
5 Section 15. Effective date.
6 This act shall take effect in 60 days.
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