PRIOR PRINTER'S NO. 2112 PRINTER'S NO. 2173
No. 1433 Session of 1984
INTRODUCED BY JUBELIRER, ZEMPRELLI, SHAFFER, SINGEL, STAPLETON,
STAUFFER, STOUT, STREET, WILLIAMS, WILT, MOORE, MUSTO,
O'CONNELL, O'PAKE, REIBMAN, RHOADES, ROCKS, ROMANELLI, ROSS,
SCANLON, SHUMAKER, HOPPER, HOWARD, KRATZER, LEWIS, LINCOLN,
LLOYD, LOEPER, LYNCH, MELLOW, ANDREZESKI, BODACK, CORMAN,
FISHER, HANKINS, HELFRICK, HESS AND HAGER, JUNE 15, 1984
AS AMENDED ON THIRD CONSIDERATION, JUNE 25, 1984
AN ACT
1 Establishing a business infrastructure development program for
2 making grants and loans for infrastructure necessary to
3 complement industrial or commercial investment by private
4 companies; prescribing requirements of and conditions for
5 grants and loans; and making an appropriation.
6 The General Assembly of the Commonwealth of Pennsylvania
7 hereby enacts as follows:
8 Section 1. Short title.
9 This act shall be known and may be cited as the Business
10 Infrastructure Development Act.
11 Section 2. Definitions.
12 The following words and phrases when used in this act shall
13 have the meanings given to them in this section unless the
14 context clearly indicates otherwise:
15 "Department." The Department of Commerce.
16 "Infrastructure improvements." The construction,
17 rehabilitation or repair of drainage systems; energy facilities
1 (power generation and distribution); fire safety facilities
2 (excluding vehicles); sewer systems (pipe, treatment);
3 transportation directly affecting the site of the proposed
4 private investment, including roads, sidewalks, bridges, rail,
5 port, river, airport or pipeline (excluding vehicles); waste
6 disposal; and water supply (storage, treatment and
7 distribution).
8 "Local sponsor." Any municipality, any industrial and
9 commercial authority organized pursuant to, or industrial
10 development company as certified by the department pursuant to
11 the act of August 23, 1967 (P.L.251, No.102), known as the
12 Industrial and Commercial Development Authority Law; any council
13 of government organization or any multimunicipal agency
14 organization created pursuant to the act of July 12, 1972
15 (P.L.762, No.180), referred to as the Intergovernmental
16 Cooperation Law; any municipal authority organization pursuant
17 to the act of May 2, 1945 (P.L.382, No.164), known as the
18 Municipality Authorities Act of 1945; any redevelopment
19 authority organized pursuant to the act of May 24, 1945
20 (P.L.991, No.385), known as the Urban Redevelopment Law; and any
21 local development district of the Appalachian Regional
22 Commission.
23 "Municipality." Any county, city, borough, incorporated
24 town, township or home rule municipality.
25 "Private company." Any agricultural, industrial,
26 manufacturing or research and development enterprise or
27 enterprises, as defined in section 3 of the act of May 17, 1956
28 (1955 P.L.1609, No.537), known as the Pennsylvania Industrial
29 Development Authority Act.
30 "Private match." Any new PRIVATE investment by the private <--
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1 company in land, buildings and depreciable fixed assets and
2 infrastructure improvements at the project site of the
3 infrastructure improvements funded under this act.
4 "Publicly owned property." Property which is accessible to
5 the general public and is not under the control of a private
6 firm.
7 "Secretary." The Secretary of Commerce.
8 "Small community." A municipality eligible to participate in <--
9 the Small Communities Block Grant Program WITH A POPULATION OF <--
10 50,000 OR LESS.
11 Section 3. Establishment of program.
12 There is hereby established, under the direction of the
13 department, a program to be known as the Business Infrastructure
14 Development Program for the purpose of making grants or loans to
15 local sponsors in order to install specific infrastructure
16 improvements necessary to complement industrial investment by
17 private companies which increase Pennsylvania's share of
18 domestic and international commerce AND create net new jobs. <--
19 Section 4. Grant and loan procedure.
20 (a) Private company commitments.--An application for a grant
21 or loan shall be initiated by a private company which shall
22 submit a letter of intent or signed contractual agreement to
23 locate, expand or build a facility to a local sponsor whose
24 jurisdiction includes, at least in part, the site of the
25 facility. The letter of intent shall include:
26 (1) A commitment that the proposed facility will create
27 a minimum of ten net new full-time equivalent jobs, will
28 create at least a 4% increase in full-time equivalent jobs in
29 the case of expansion of an enterprise already located at the
30 site, or at least a 10% 25% increase in full-time equivalent <--
19840S1433B2173 - 3 -
1 jobs pursuant to section 7(h) and will create at least one
2 net new full-time equivalent job for every $15,000 either
3 loaned or granted for the project.
4 (2) A statement of intention to operate the facility for
5 a minimum of five years.
6 (3) A statement that the specific infrastructure
7 improvements are necessary for the efficient and cost-
8 effective operation of the proposed business or industry,
9 together with supporting financial and engineering
10 documentation.
11 (4) A notarized statement of willingness to grant the
12 local sponsor a lien on the facility for which the
13 infrastructure is being provided, up to the amount of the
14 cost of the loan, including principal and interest DUE AND <--
15 OWING TO THE DATE OF FORECLOSURE AND ANY PENALTY IMPOSED BY
16 THE SECRETARY, required to provide the infrastructure, which
17 lien may be foreclosed in the event that the private company
18 fails to operate in the facility for at least five years.
19 (b) Application to the department.--Upon receipt of the
20 request for assistance from a private company, the local sponsor
21 may apply to the department for a loan or grant. The application
22 from the local sponsor shall include, but not be limited to:
23 (1) A statement of the purpose of the proposed loan or
24 grant, including a list of eligible items and the cost of
25 each.
26 (2) A statement showing the sources of funding for the
27 entire project, including the private company's investment in
28 the project and any public and other private sources of
29 funding.
30 (3) A contractual agreement or signed letter of intent
19840S1433B2173 - 4 -
1 from a private firm, as specified in this section.
2 (4) Evidence that there will be a private match in the
3 following amounts:
4 (i) At least $2 for every $1 of State assistance, if
5 the assistance requested is $500,000 or less.
6 (ii) At least $3 for every $1 of State assistance,
7 if the assistance requested is greater than $500,000 but
8 not greater than $1,000,000.
9 (iii) At least $4 for every $1 of State assistance
10 if the assistance requested is greater than $1,000,000
11 but not greater than $1,500,000.
12 (5) Demonstration that the private firm is financially
13 sound and is likely to fulfill the commitments made in its
14 letter of intent.
15 (6) A proposed timetable for the provision of the
16 infrastracture improvements.
17 (7) Evidence that the project will be expeditiously
18 carried out and completed as planned.
19 (8) A demonstration that insufficient local capital
20 improvement funds at reasonable rates and terms are available
21 within the necessary time to provide the needed
22 infrastructure improvement on public property. This includes
23 local funds available through issuance of bonds or other
24 means, State funds available through existing programs and
25 available Federal program funds such as community development
26 block grant funds, urban development action grant funds and
27 economic development administration funds.
28 (9) A demonstration that insufficient private funds are
29 available at reasonable rates and terms within the necessary
30 time to fund infrastructure improvements on property owned by
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1 the private company.
2 (10) Evidence of consistency with local and areawide
3 economic development plans where such exist.
4 (c) Grant and loan evaluation.--The department shall
5 consider grant and loan applications based on the following
6 criteria:
7 (1) The number of net new full-time equivalent jobs that
8 will be provided and the amount of additional State and local
9 tax revenue that will be directly generated by the private
10 company's new or expanded industrial or commercial
11 investment.
12 (2) The degree of economic distress in the jurisdiction
13 of the local sponsor and, when appropriate, the surrounding
14 area, as measured by rates of unemployment, income levels and
15 other criteria as the department shall establish by rules or
16 guidelines.
17 (3) The ability to repay the interest and principal, in
18 the case of a loan.
19 (4) The increase in the manufacturing base of the
20 Commonwealth.
21 Section 5. Loan repayment.
22 The department shall establish such guidelines, rules and
23 regulations for the repayment of funds loaned pursuant to this
24 act as may be necessary. These provisions shall include, but not
25 be limited to, the following:
26 (1) Funds may be lent for a maximum of ten years or the
27 estimated useful life of the property, as established by the
28 United States Department of Treasury, whichever is greater.
29 (2) The rate of interest charged by the department for
30 infrastructure not on publicly owned property shall be no
19840S1433B2173 - 6 -
1 less than the average interest rate on the bonds sold
2 pursuant to the act of February 24, 1984 (P.L.99, No.19) <--
3 entitled "An act authorizing the indebtedness, with the
4 approval of the electors, of $190,000,000 to promote economic
5 redevelopment throughout Pennsylvania through job producing
6 programs; grants and loans for industrial and small business
7 development; acquisition of equipment for vocational programs
8 in secondary schools, community colleges and engineering
9 degree-granting schools; agricultural development; and the
10 acquisition, rehabilitation or development of facilities for
11 community services and public recreation purposes," and
12 approved by referendum on April 10, 1984. 1984 <--
13 (P.L. , NO. ), KNOWN AS THE PENNSYLVANIA ECONOMIC
14 REVITALIZATION ACT.
15 (3) For all infrastructure improvements funded through
16 this act which occur on publicly owned property, repayment of
17 funds loaned will involve only the principal amount loaned
18 and no interest will be charged against the funds made
19 available.
20 (4) NO LOAN SHALL EXCEED $1,500,000. <--
21 Section 6. Grants.
22 Grants for infrastructure on publicly owned property
23 necessary to complete eligible projects, consistent with the
24 criteria set forth in this act, shall be permitted only in
25 enterprise development areas ENTERPRISE DEVELOPMENT AREAS <--
26 designated as such by the Secretary of the Department of
27 Community Affairs, or in those municipalities which are
28 experiencing three or more of the following problems:
29 (1) Twenty percent or more of the population with
30 incomes below the poverty level as reported in the latest
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1 decennial census.
2 (2) Fifteen percent or more of the labor force is
3 unemployed as reported in the census of 1980 or as reported
4 in a survey done by the municipality.
5 (3) Five percent or more loss of population between 1970
6 and 1980 as reported by the Census Bureau BUREAU OF THE <--
7 CENSUS OF THE UNITED STATES DEPARTMENT OF COMMERCE.
8 (4) Significant business vacancy rate within the area,
9 either in gross footage or acreage or in the number of
10 business or industrial buildings.
11 (5) Significant reduction in employment since 1977.
12 Section 7. Special provisions.
13 (a) Limit on grants and loans to particular
14 municipalities.--No more than 10% of funds appropriated pursuant
15 to this act shall be loaned or granted to local sponsors in a
16 particular municipality.
17 (b) Limit on grants for infrastructure on publicly owned
18 property.--In no case shall more than 10% of the funds
19 appropriated in any State fiscal year pursuant to this act be
20 utilized as specified in section 6, nor shall any municipality
21 receive more than one grant in any single fiscal year.
22 (c) Minimum allocation to small communities.--A minimum of
23 25% of the grants and loans issued pursuant to this act shall be
24 allocated to small communities.
25 (d) Evidence of matching funds ELIGIBILITY.--No loan or <--
26 grant shall be made without substantiation of the provisions of
27 section 5 4. <--
28 (e) Liens.--Funds loaned will be secured by lien positions
29 on collateral at the highest level of priority the department
30 determines feasible to accommodate the project, consistent with
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1 section 4(a)(4).
2 (f) Penalty.--Private companies which fail to create the
3 number of jobs specified in an approved application shall be
4 liable for a penalty equal to an increase in the interest
5 charged to 2% greater than the current prime interest rate for
6 the remainder of the loan, unless the penalty is waived by the
7 secretary because the failure is due to circumstances outside
8 the control of the private company. The penalty shall be payable
9 in installments which the secretary deems appropriate. Immediate
10 notice of penalties and waivers of penalties, including the
11 penalties in section 4(a)(4), with the reasons thereof, shall be
12 submitted by the secretary to the Chief Clerk of the House of
13 Representatives and to the Secretary of the Senate, along with
14 the secretary's decision on the imposition of penalties and the
15 reasons for this decision.
16 (g) Withholding of liquid fuel tax allocation.--
17 Municipalities receiving interest free loans which fail to meet
18 their repayment obligations shall have all or part of their
19 liquid fuel tax allocation withheld or other penalties, as the
20 department may prescribe. The secretary shall immediately give
21 the name of the municipality and the reasons for, and amount of,
22 the penalty to both the Chief Clerk of the House of
23 Representatives and the Secretary of the Senate.
24 (h) Relocation; job increase.--This act is expressly not
25 intended to encourage the relocation of a company from one
26 jurisdiction within the Commonwealth to another. Any request by
27 a local sponsor for assistance to be provided a firm which
28 currently operates a similar business in the Commonwealth must
29 be accompanied by a demonstration that the total net increase in
30 full-time equivalent jobs, using the current number of jobs in
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1 all similar businesses operated by the private company in the
2 Commonwealth as a base, shall be at least 10%. This requirement
3 shall not apply to private companies relocating from small
4 business incubators.
5 (I) GRANT LIMIT.--No grant shall exceed $500,000. <--
6 Section 8. Additional powers and duties of the department.
7 (a) Rules and forms.--The department may prescribe such
8 application forms and promulgate such guidelines, rules and
9 regulations as may be necessary to carry out the provisions of
10 this act with respect to loan and grant conditions and criteria
11 for evaluation of the economic benefit of proposed loans and
12 grants and for determining and evaluating compliance with all
13 the criteria established in this act. Guidelines and changes to
14 guidelines shall be provided to the Chief Clerk of the House of
15 Representatives and the Secretary of the Senate when they become
16 effective.
17 (b) Reporting.--On or before the March 1 following the
18 adoption of this act and in each succeeding year in which loans
19 are outstanding, the department shall provide a report to the
20 Chief Clerk of the House of Representatives and the Secretary of
21 the Senate for the preceding calendar year. The report shall
22 contain, at a minimum, the following information:
23 (1) A list of the approved projects including local
24 sponsor, name of private company, cost of project, amount of
25 private investment, projected number of new jobs, location of
26 project, date of submission of the application by the local
27 sponsor, type of project and estimated completion date of
28 project.
29 (2) A list of applications not approved.
30 (3) A list of pending applications.
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1 (4) A list of projects where job projections are not
2 being met or the project is not being completed and the
3 penalty being applied or the reason a penalty is not being
4 applied.
5 (5) Estimates of State and local tax revenue increases
6 caused directly by project.
7 (6) A list of projects approved or completed in years
8 prior to the preceding year.
9 (7) In addition to the data reporting required above,
10 the department shall accumulate from the sponsors of approved
11 projects the following data on an annual and cumulative
12 basis:
13 (i) The number of jobs actually created by these
14 projects.
15 (ii) Estimated increased tax revenue caused by the
16 projects.
17 (8) Guidelines issued for this program.
18 (9) An overall statement of the progress of the program
19 during the preceding year, along with recommendations for
20 improvements.
21 SECTION 9. NONDISCRIMINATION. <--
22 NO GRANT, LOAN OR LOAN GUARANTEE SHALL BE MADE TO A RECIPIENT
23 UNDER THIS ACT UNLESS THE RECIPIENT CERTIFIES TO THE DEPARTMENT,
24 IN A FORM SATISFACTORY TO THE DEPARTMENT, THAT IT SHALL NOT
25 DISCRIMINATE AGAINST ANY EMPLOYEE OR AGAINST ANY APPLICANT FOR
26 EMPLOYMENT BECAUSE OF RACE, RELIGION, COLOR, NATIONAL ORIGIN,
27 SEX OR AGE.
28 Section 9 10. Appropriation. <--
29 The sum of $16,000,000, or as much thereof as may be
30 necessary, is hereby appropriated from the Pennsylvania Economic
19840S1433B2173 - 11 -
1 Revitalization Fund to the department for the fiscal year July
2 1, 1984 to June 30, 1985, for grants and loans as specified in
3 this act.
4 Section 10 11. Termination. <--
5 No funds may be expended ASSISTANCE SHALL BE APPROVED <--
6 pursuant to this act after June 30, 1987.
7 Section 11 12. Effective date. <--
8 This act shall take effect immediately.
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