THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY HUGHES, YUDICHAK, FONTANA, ERICKSON, FARNESE, SOLOBAY, SCHWANK, WASHINGTON AND FERLO, FEBRUARY 3, 2012

REFERRED TO ENVIRONMENTAL RESOURCES AND ENERGY, FEBRUARY 3, 2012  

AN ACT

Amending the act of July 9, 2008 (P.L.908, No.63), entitled "An

act providing for the allocation of money in the Pennsylvania

Gaming Economic Development and Tourism Fund and for funding

of water or sewer projects, storm water projects, flood

control projects and high hazard unsafe dam projects,"

further providing for fund distribution and for Commonwealth

Financing Authority; establishing a flood control and

prevention loan program; providing for prohibited activities;

further providing for annual reports; and making related

repeals.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Sections 301, 501(a), (b), (c) and (d) and 502 of

the act of July 9, 2008 (P.L.908, No.63), known as the H2O PA

Act, are amended to read:

Section 301.  Fund distribution.

Notwithstanding the provisions of 4 Pa.C.S. § 1407(b)

(relating to Pennsylvania Gaming Economic Development and

Tourism Fund), all money in the Pennsylvania Gaming Economic

Development and Tourism Fund not previously allocated to

projects under the act of July 25, 2007 (P.L.342, No.53), known

as the Pennsylvania Gaming Economic Development and Tourism Fund

Capital Budget Itemization Act of 2007, and the Commonwealth's

right, title and interest in Pennsylvania Gaming Economic

Development and Tourism Fund receipts not encumbered by the

Pennsylvania Gaming Economic Development and Tourism Fund

Capital Budget Itemization Act of 2007 are hereby transferred

annually to the authority. The State Treasurer is authorized and

directed to enter into any agreements with the authority and

establish accounts and funds, that shall not be in the State

Treasury, as the authority may direct as being necessary or

appropriate to effect the transfer of Pennsylvania Gaming

Economic Development and Tourism Fund receipts to the authority.

For a ten-year period beginning with the initial deposits under

4 Pa.C.S. § 1407(c), no grants shall be distributed for any

project located in a city or county of the first or second

class, except for flood control and prevention projects under

section 502.1. Following the allocation of all proceeds from

obligations issued under section 501(a), all money other than

money required for debt service shall be available for

distribution under this act. No money shall be authorized or

distributed for any project within a city or county of the first

or second class, other than those projects described in the

Pennsylvania Gaming Economic Development and Tourism Fund

Capital Budget Itemization Act of 2007, until such time as an

amount equal to $750,000,000 has been authorized and distributed

from the fund for projects outside of a city or county of the

first or second class, except for flood control and prevention

projects under section 502.1.

Section 501.  Commonwealth Financing Authority.

(a)  General rule.--

(1)  The authority shall incur indebtedness in an amount

of up to $800,000,000 in accordance with 64 Pa.C.S. Ch. 15

(relating to Commonwealth Financing Authority). The term of

indebtedness shall not exceed 30 years. Net proceeds from the

sale of obligations incurred under this section shall be

allocated by the board for [projects] the purposes set forth

under section 502 and for the payment of all reasonable costs

and expenses related to the issuance.

(2)  Bonds issued under this chapter shall not be a debt,

liability or obligation of the Commonwealth. The provisions

limiting liability imposed under 64 Pa.C.S. § 1521(d)

(relating to bonds issuance) shall apply to the indebtedness

under this act.

(b)  Payments.--Beginning in fiscal year 2009-2010, money

allocated to the authority annually under section 301 shall be

used by the authority for payment of the debt service related to

the issuance of obligations under subsection (a).

(c)  Grants and loans.--Proceeds from obligations issued

under subsection (a) and money [remaining in the fund following]

transferred to the authority from the Pennsylvania Gaming

Economic Development and Tourism Fund under section 301 and not

used for the payment of debt service shall be used for [single-

year]:

(1)  Single-year or multiyear grants to eligible

applicants for projects under this chapter following review

under section 502. Grants shall be awarded to eligible

applicants for projects of $500,000 or more. A grant under

this act shall not exceed a total of $20,000,000 for any

project. Grants from proceeds from debt and from money

remaining in the fund shall be awarded over a period not to

exceed six years.

(2)  Loans to individuals in accordance with section

502.1.

(d)  Making of grants and loans.--Grants and loans shall be

made as follows:

(1)  [A minimum of $100,000,000] The amount of

$75,000,000 shall be awarded in the form of grants to flood

control projects.

(2)  [A minimum of $35,000,000] The amount of $50,000,000 

shall be awarded in the form of grants to high hazard unsafe

dam projects. No more than $20,000,000 may go to an eligible

applicant that is the Commonwealth or an independent agency.

(3)  The amount of $10,000,000 shall be awarded in the

form of grants or loans under section 502.1.

* * *

Section 502.  Distribution of funds.

(a)  General rule.--[The] Except as provided under subsection

(a.1), the board shall distribute funds available under section

501(c) by awarding grants to eligible applicants for the

following projects:

(1)  Water or sewer projects owned by an eligible

applicant.

(2)  Flood control projects owned by an eligible

applicant.

(3)  High hazard unsafe dam repair or rehabilitation

projects for dams owned by an eligible applicant.

(a.1)  Allocation.--In accordance with section 501(d)(3), the

board shall allocate $10,000,000 of the funds available under

section 501(c)(3) to the flood control and prevention loan

program established under section 502.1.

(b)  Review.--The authority shall consult with the

appropriate agency under section 503 and award grants authorized

under subsection (a) in accordance with priorities under section

503 and guidelines adopted under section 501(h).

Section 2.  The act is amended by adding sections to read:

Section 502.1.  Flood control and prevention loan program.

(a)  Establishment.--There is established a flood control and

prevention loan program which shall be administered by the

authority. The program shall act as a revolving loan program and

provide low-interest loans to persons for flood control and

prevention projects.

(b)  Applications.--An eligible property owner may submit an

application to the authority requesting a loan. Applications

shall be available electronically. The application shall be on

the form required by the authority and shall include or

demonstrate all of the following:

(1)  The applicant's name and address.

(2)  A description of the flood control and prevention

project and an estimate of the cost of the project, including

an itemized list of project costs.

(3)  The amount of the loan sought.

(4)  A statement authorizing the authority to conduct a

credit history check.

(5)  Any other information required by the authority.

(c)  Review of project financing applications.--The authority

shall review the application to determine if:

(1)  The project is eligible for financing under this

program.

(2)  The applicant is eligible to receive a loan under

this program.

(3)  The value of the proposed collateral and the

financial resources of the applicant are sufficient to repay

the loan.

(4)  The statement of the estimated project cost is

accurate and reasonable.

(5)  The applicant complied with all other criteria

established by the authority.

(d)  Approval of loan applications.--Once the application is

deemed complete, the board may approve the application. The

board shall have complete discretion in determining whether a

proposed flood control and prevention project is eligible for a

loan.

(e)  Security.--All loans awarded under the program shall be

secured by a lien on the property for which the loan was

approved and other sufficient collateral as determined by the

authority.

(f)  Limitations.--Limitations shall be as follows:

(1)  An applicant may not apply for a loan in an amount

less than $500 nor more than $10,000.

(2)  Terms of the loan shall be set by the board, except

that the board may not require a loan to be repaid in full

within six months of the loan closing date.

(3)  The interest rate shall be a below-market, fixed

interest rate, as determined by the authority which may not

exceed 3%.

(4)  The loan repayment period may not exceed ten years

with no prepayment penalty.

(5)  Any money received by the authority as loan

repayments, or money otherwise made available for the

program, shall be deposited in the account and made available

for additional loans.

(g)  Grants for low-income applicants.--The authority may, in

its discretion, award a grant to a low-income applicant in lieu

of a loan. The provisions of subsections (c)(1), (2), (4) and

(5) and (f)(1) shall apply to any grant application considered

under this subsection. The total amount of grants awarded under

this subsection may not exceed $1,000,000.

(h)  Guidelines.--The authority shall establish guidelines

governing the program and publish the guidelines on the

Department of Community and Economic Development's Internet

website.

(i)  Notification.--Notification shall be as follows:

(1)  Within 60 days of the effective date of this

section, the authority shall submit for publication

notification of the establishment of the program under this

section and a brief description of the program in the

Pennsylvania Bulletin and on the Internet website of the

Department of Community and Economic Development. The

authority shall provide written notification of the

establishment of the program to all of the following:

(i)  The County Commissioners Association of

Pennsylvania.

(ii)  The Pennsylvania State Association of Township

Commissioners.

(iii)  The Pennsylvania State Association of Township

Supervisors.

(iv)  The Pennsylvania State Association of Boroughs.

(v)  The Pennsylvania League of Cities and

Municipalities.

(2)  The notification under paragraph (1) shall include

the name of a contact person and the anticipated time that

applications and other information will become available.

(j)  Definitions.--As used in this section, the following

words and phrases shall have the meanings given to them in this

subsection unless the context clearly indicates otherwise:

"Applicant."  A person that submits an application for a

flood control and prevention project loan under this section.

"Eligible property."  Owner-occupied dwelling units,

residential rental units and small business properties located

in an area designated as a flood zone by the governing body of

the municipality where the property is located or in an area

that has previously experienced episodes of flooding that

resulted in water and other damage to the property.

"Flood control and prevention project."  The purchase or

installation of any of the following to alleviate or mitigate

the impacts of flooding of an eligible property:

(1)  Water resistant or pressure doors and windows.

(2)  Water resistant materials for interior walls and

floors.

(3)  Floodskirts and barriers for attachment to doors and

windows.

(4)  Any materials used to construct barriers to prevent

floodwaters from entering the property, including retaining

walls, terracing, rain gardens and enhanced drainage systems.

(5)  Any materials used in wet flood proofing or dry

flood proofing techniques.

(6)  Any other similar product or material approved by

the authority.

"Flood prevention project loan."  A low-interest rate loan

awarded under this section.

"Low-income applicant."  An owner of an owner-occupied

dwelling unit whose total household income, as determined by the

most current Federal tax returns of all adult household members,

that does not exceed 200% of the Federal poverty level.

"Small business."  A person that is engaged in a for-profit

enterprise and that employs 50 or fewer individuals.

Section 505.  Prohibited activities.

(a)  Limitation on giving compensation.--A person or its

affiliated entity may not compensate or incur an obligation to

compensate a person to engage in lobbying for compensation

contingent in whole or in part upon the approval, award, receipt

or denial of a grant or loan under this act.

(b)  Limitation on receiving compensation.--A person or its

affiliated entity may not engage in or agree to engage in

lobbying for compensation contingent in whole or in part upon

the approval, award, receipt or denial of a grant or loan under

this act.

(c)  Inapplicability.--This section shall not apply to an

eligible applicant that compensates a person to prepare or

assist in the preparation of a grant application and related

materials for submission to the authority under this act if the

following requirements are met:

(1)  The person is not identified in the submitted

application.

(2)  The person has no direct contact with the authority,

unless the person is responding to requests for additional

information or clarification.

(3)  The person is paid a fixed fee for the preparation

or assistance or a percentage of the amount of any grant

approved, awarded or received not to exceed five tenths

percent.

(d)  Violation.--A violation of this section shall constitute

an intentional violation of 65 Pa.C.S. § 13A09 (relating to

penalties).

Section 3.  Section 701 of the act is amended to read:

Section 701.  Annual reports.

(a)  Authority report.--The authority shall provide an annual

report, which at a minimum shall include:

(1)  A list of all grants and loans approved during the

previous fiscal year.

(2)  The name and address of each recipient, including

the name of a contact person of the recipient.

(3)  The amount of the grant or loan and a detailed

description of the project or flood control and prevention

project for which the grant was awarded.

(b)  Department report.--The department, in collaboration

with PENNVEST, shall provide an annual report, which at a

minimum shall include:

(1)  [An] Except for the flood control and prevention

loan program established under section 502.1, an analysis of

how each program authorized under this act is improving the

health and safety of the citizens of this Commonwealth.

(2)  A summary and analysis of other Commonwealth

programs dedicated to water or sewer projects, flood control

projects and high hazard unsafe dams and how those programs

are improving the health and safety of the citizens of this

Commonwealth.

(c)  Submission of reports.--The reports required under

subsections (a) and (b) shall be submitted to the Majority

Leader of the Senate, the Minority Leader of the Senate, the

Majority Leader of the House of Representatives and the Minority

Leader of the House of Representatives by October 1, 2009, and

October 1 of each year thereafter. The reports shall also be

posted and maintained on the official Internet website of the

authority and the department.

Section 4.  Repeals are as follows:

(1)  The General Assembly declares that the repeal under

paragraph (2) is necessary to effectuate the amendment of

section 501(d) of the act.

(2)  Section 1774-A of the act of April 9, 1929 (P.L.343,

No.176), known as The Fiscal Code, is repealed.

(3)  The General Assembly declares that the repeal under

paragraph (4) is necessary to effectuate the addition of

section 505 of the act.

(4)  Section 1776-A of the act of April 9, 1929 (P.L.343,

No.176), known as The Fiscal Code, is repealed.

Section 5.  This act shall take effect in 60 days.