PRINTER'S NO. 2068
No. 1701 Session of 1989
INTRODUCED BY TRICH, DALEY, KAISER, COLAIZZO, LESCOVITZ,
ROBINSON, ITKIN, GIGLIOTTI, TANGRETTI, FREEMAN, MURPHY,
KUKOVICH, WAMBACH, BELARDI, SCRIMENTI, VEON, COLAFELLA AND
LAUGHLIN, JUNE 14, 1989
REFERRED TO COMMITTEE ON APPROPRIATIONS, JUNE 14, 1989
AN ACT
1 Establishing an industrial communities action program for making
2 grants to industrial communities to complement private
3 investment at industrial sites; and prescribing requirements
4 of and conditions for grants.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Short title.
8 This act shall be known and may be cited as the Industrial
9 Communities Action Program Act.
10 Section 2. Legislative findings and policy.
11 (a) Findings.--The general Assembly finds and declares as
12 follows:
13 (1) There exists in communities throughout this
14 Commonwealth industrial sites that have become blighted
15 because of depressed economic conditions resulting in:
16 (i) Plant closings and shutdowns.
17 (ii) Industries abandoning plans to expand or
18 relocate.
1 (iii) Facilities standing idle for several months or
2 years and subsequently becoming unusable through waste
3 and neglect.
4 (iv) Out-of-date and antiquated facilities being
5 passed over as unattractive industrial sites.
6 (2) Blighted industrial sites decrease motivation for
7 private investment in industry as a whole within and near
8 such sites.
9 (3) The condition of blighted industrial sites is such
10 that rehabilitation or development by private enterprise
11 under existing law is economically prohibitive without
12 additional alternatives being provided to encourage the
13 stimulation of investment.
14 (4) The Commonwealth's present mechanism for stimulating
15 development of industrial sites in severely blighted areas in
16 insufficient to alleviate these conditions.
17 (5) Commonwealth financing incentives in the form of
18 loans and grants are necessary for the rehabilitation and
19 development of blighted industrial sites.
20 (6) The failure to rehabilitate and develop blighted
21 industrial sites:
22 (i) Threatens public health and safety.
23 (ii) Contributes to unemployment and
24 underemployment.
25 (iii) Depreciates property values.
26 (iv) Reduces tax revenues.
27 (v) Is generally harmful to the social and economic
28 well-being of the communities in which such sites exit.
29 (7) Increasing the number of rehabilitation and
30 development projects in blighted areas by providing capital
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1 to stimulate private investment at industrial sites will
2 reduce or eliminate blight and act as a catalyst for further
3 private investment.
4 (b) Policy.--It is hereby declared to be the policy of the
5 Commonwealth of Pennsylvania to promote the welfare, safety,
6 morals, right to gainful employment, business opportunities and
7 general welfare of the inhabitants of this Commonwealth and to
8 promote the public purpose of alleviating unemployment and
9 underemployment by providing financing incentives for the
10 rehabilitation and development of industrial sites in blighted
11 areas. These purposes are hereby declared to be public uses for
12 which public money may be spent.
13 Section 3. Definitions.
14 The following words and phrases when used in this act shall
15 have the meanings given to them in this section unless the
16 context clearly indicates otherwise:
17 "Community." A city, borough, incorporated town, township or
18 home rule municipality other than a county.
19 "Department." The Department of Commerce of the
20 Commonwealth.
21 "Investor/developer." Any person, partnership, corporation
22 or other business entity that is engaged in the development, for
23 use by occupants, of one or more projects and that is determined
24 by the department to be financially responsible to assume all
25 obligations in the acquisition, development, construction,
26 leasing, sale, operation and financing, in whole or part, of a
27 project.
28 "Local sponsor." The term includes the following:
29 (1) A municipality.
30 (2) An industrial and commercial development authority
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1 organized pursuant to, or industrial development company as
2 certified by the department under the act of August 23, 1967
3 (P.L.251, No.102), known as the Industrial and Commercial
4 Development Authority Law.
5 (3) An industrial development company certified under
6 the act of May 17, 1956 (1955 P.L.1609, No.537), known as the
7 Pennsylvania Industrial Development Authority Act,
8 (4) A council of government organization or any
9 multimunicipal agency organization created under the act of
10 July 12, 1972 (P.L.762, No.180), referred to as the
11 Intergovernmental Cooperation Law,
12 (5) A municipal authority organized under the act of May
13 2, 1945 (P.L.382, No.164), known as the Municipality
14 Authorities Act of 1945,
15 (6) A redevelopment authority organized under the act of
16 May 24, 1945 (P.L.991, No.385), known as the Urban
17 Redevelopment Law,
18 (7) A local development district of the Appalachian
19 Regional Commission.
20 "Municipality." Any county, city, borough, incorporated
21 town, township or home rule municipality.
22 "Program." The Industrial Communities Action Program
23 established by this act.
24 "Project." Any of the following activities:
25 (1) The acquisition of land and buildings.
26 (2) The demolition of buildings.
27 (3) The clearing and preparation of land.
28 (4) the construction of new industrial or manufacturing
29 facilities.
30 (5) The renovation of existing industrial or
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1 manufacturing facilities.
2 "Secretary." The Secretary of Commerce of the Commonwealth.
3 Section 4. Establishment of program.
4 There is hereby established, under the direction of the
5 department, a program to be known as the Industrial Communities
6 Action Program for the purpose of making grants to local
7 sponsors in order to complement private investment by
8 investor/developers at blighted industrial sites, to reuse
9 dormant manufacturing and industrial facilities, and to create
10 jobs.
11 Section 5. Project eligibility.
12 (a) Eligibility.--A local sponsor shall be eligible for a
13 grant under the program for a project that meets all the
14 following conditions:
15 (1) The project will create multitenant facilities for
16 manufacturing, industrial, research and development, or other
17 industries that produce goods, as determined by the
18 department.
19 (2) The project will be carried out under the direction
20 and control of a responsible investor/developer, as
21 determined by the department.
22 (3) The project shall demonstrate the potential to
23 create, within five years after the completion of the
24 project, one employment opportunity for each $50,000 granted
25 under the program.
26 (4) The investor/developer shall contribute equity to
27 the project in an amount equal to at least 5% of the total
28 eligible project cost.
29 (b) Maximum grant amount.--The maximum amount of grant funds
30 awarded for any project shall not exceed 60% of the total
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1 eligible project cost, and in no case shall the maximum amount
2 of any one grant exceed $2,500,000. In addition, the total
3 amount of grant funds awarded in any one fiscal year must be
4 matched by private investment in an aggregate total equal to or
5 greater than three times the amount of grant funds awarded.
6 (c) Private match.--In addition to the equity required under
7 subsection (a), private match for the balance of project
8 financing shall be identified to the satisfaction of the
9 department. Private match may include other forms of private and
10 public financing, but in no case may funds derived directly from
11 Commonwealth sources be considered as private match. for the
12 purposes of this act, funds received by local sponsors from the
13 Commonwealth for pass-through to private companies or private
14 developers shall be considered Commonwealth funds.
15 Section 6. Application procedures.
16 (a) Establishment of procedures.--Application and
17 administration procedures shall be established by the secretary.
18 (b) Application submission.--The secretary shall receive
19 applications from local sponsors. Applications shall be
20 submitted to the secretary in the form and manner as the
21 department may require, and shall be accompanied by such
22 additional documentation as the department may require.
23 (c) Application review.--Upon receipt of the application,
24 the secretary shall investigate and review the application and
25 either approve or disapprove the grant by proper action of the
26 department. The decision of the secretary shall be based upon
27 criteria which shall include, but not be limited to, any of the
28 following:
29 (1) The ability of the investor/developer to repay the
30 loan.
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1 (2) The amount of private leverage in the project.
2 (3) The economic condition of the community.
3 (4) The severity of blight at the industrial site.
4 (5) The potential for job creation.
5 (d) Action on application.--The secretary shall notify the
6 local sponsor of final approval or disapproval of the
7 application within a reasonable period of time following receipt
8 of the completed application and all accompanying documentation
9 required by the department.
10 Section 7. Conditions for award of grants.
11 (a) Loans to investor/developers.--All grants awarded to a
12 local sponsor for a project shall be lent by the local sponsor
13 to the investor/developer at an interest rate and term to be
14 determined by the department. All loans shall be evidenced by a
15 note executed by the investor/developer and shall be secured, at
16 a minimum, by a lien on the industrial site at the highest
17 available level of priority without jeopardizing private
18 financing for the project.
19 (b) Repayment.--
20 (1) Repayment of loan principal and payment of accrued
21 interest thereon shall be made to the department. However, if
22 the local sponsor submits a plan, approved by the department,
23 for carrying out future projects for public uses consistent
24 with the requirements of the program and if the local sponsor
25 has made a significant contribution to the original project,
26 as determined by the department, then repayment of loan
27 principal and payment of accrued interest thereon shall be
28 divided between the local sponsor and the department, with
29 60% thereof repaid to the local sponsor and 40% thereof
30 repaid to the department.
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1 (2) All repayment of loan principal and payment of
2 accrued interest to the department shall be deposited in
3 accordance with the terms of section 3(b) of the act of July
4 2, 1984 (P.L.512, No.104), known as the Pennsylvania Economic
5 Revitalization Act.
6 Section 8. Additional powers and duties of department.
7 (a) Rules and forms.--The department may promulgate such
8 guidelines, rules, regulations, statements of policy and forms
9 as may be necessary to implement and carry out the provisions of
10 this act.
11 (b) Professional services.--The department may obtain, by
12 contract, the temporary services of professional financial and
13 real estate analysts as it deems necessary in order to provide
14 adequate review of applications submitted for funding under the
15 program. Payment for such services may come from the
16 appropriation made for the program, provided that payment for
17 all such services does not exceed $100,000 in any fiscal year.
18 (c) Annual reports.--On or before September 30 of each year,
19 the secretary shall provide a report to the Chief Clerk of the
20 House of Representatives and to the Secretary of the Senate. The
21 report shall describe all relevant activities of the department
22 pursuant to this act and shall include the following:
23 (1) A list of local sponsors receiving grants from the
24 department and the amounts and terms of this assistance.
25 (2) The source and amount of private investment for each
26 project.
27 (3) Loan amounts repaid to the local sponsor or to the
28 department.
29 (4) Loans outstanding and balances due, including
30 delinquent payments.
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1 (5) Jobs created at projects financed under the program.
2 (6) Other relevant information, as determined by the
3 secretary.
4 Section 9. Conflict of interest.
5 No officer or employee of the Commonwealth or of the local
6 sponsor shall, either directly or indirectly, have an adverse
7 interest, as defined by the act of July 19, 1957 (P.L.1017,
8 No.451), known as the State Adverse Interest Act, in a project
9 financed with funds made available through the program.
10 Section 10. Effective date.
11 This act shall take effect immediately.
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