HOUSE AMENDED
PRIOR PRINTER'S NOS. 2112, 2173 PRINTER'S NO. 2192
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 REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF
REPRESENTATIVES, AS AMENDED, JUNE 26, 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,
1 rehabilitation or repair of drainage systems; energy facilities
2 (power generation and distribution); fire safety facilities
3 (excluding vehicles); sewer systems (pipe, treatment);
4 transportation directly affecting the site of the proposed
5 private investment, including roads, sidewalks, bridges, rail,
6 port, river, airport or pipeline (excluding vehicles); waste
7 disposal; and water supply (storage, treatment and
8 distribution).
9 "Local sponsor." Any municipality, any industrial and
10 commercial authority organized pursuant to, or industrial
11 development company as certified by the department pursuant to
12 the act of August 23, 1967 (P.L.251, No.102), known as the
13 Industrial and Commercial Development Authority Law; any council
14 of government organization or any multimunicipal agency
15 organization created pursuant to the act of July 12, 1972
16 (P.L.762, No.180), referred to as the Intergovernmental
17 Cooperation Law; any municipal authority organization pursuant
18 to the act of May 2, 1945 (P.L.382, No.164), known as the
19 Municipality Authorities Act of 1945; any redevelopment
20 authority organized pursuant to the act of May 24, 1945
21 (P.L.991, No.385), known as the Urban Redevelopment Law; and any
22 local development district of the Appalachian Regional
23 Commission.
24 "Municipality." Any county, city, borough, incorporated
25 town, township or home rule municipality.
26 "Private company." Any agricultural, industrial,
27 manufacturing or research and development enterprise or
28 enterprises, as defined in section 3 of the act of May 17, 1956
29 (1955 P.L.1609, No.537), known as the Pennsylvania Industrial
30 Development Authority Act.
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1 "Private match." Any new private investment by the private
2 company in land, buildings and depreciable fixed assets and
3 infrastructure improvements at the project site of the
4 infrastructure improvements funded under this act.
5 "Publicly owned property." Property which is accessible to
6 the general public and is not under the control of a private
7 firm.
8 "Secretary." The Secretary of Commerce.
9 "Small community." A municipality 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 25% increase in full-time equivalent jobs
19840S1433B2192 - 3 -
1 pursuant to section 7(h) and will create at least one net new
2 full-time equivalent job for every $15,000 either loaned or
3 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
19840S1433B2192 - 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
19840S1433B2192 - 5 -
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
19840S1433B2192 - 6 -
1 less than the average interest rate on the bonds sold <--
2 pursuant to the act of 1984 (P.L. , No. ),
3 known as the Pennsylvania Economic Revitalization Act.
4 (3) For all infrastructure improvements funded through
5 this act which occur on publicly owned property, repayment of
6 funds loaned will involve only the principal amount loaned
7 and no interest will be charged against the funds made
8 available.
9 (4) No loan shall exceed $1,500,000.
10 Section 6. Grants.
11 Grants for infrastructure on publicly owned property
12 necessary to complete eligible projects, consistent with the
13 criteria set forth in this act, shall be permitted only in
14 Enterprise Development Areas designated as such by the Secretary
15 of the Department of Community Affairs, or in those
16 municipalities which are experiencing three or more of the
17 following problems:
18 (1) Twenty percent or more of the population with
19 incomes below the poverty level as reported in the latest
20 decennial census.
21 (2) Fifteen percent or more of the labor force is
22 unemployed as reported in the census of 1980 or as reported
23 in a survey done by the municipality.
24 (3) Five percent or more loss of population between 1970
25 and 1980 as reported by the Bureau of the Census of the
26 United States Department of Commerce.
27 (4) Significant business vacancy rate within the area,
28 either in gross footage or acreage or in the number of
29 business or industrial buildings.
30 (5) Significant reduction in employment since 1977.
19840S1433B2192 - 7 -
1 Section 7. Special provisions.
2 (a) Limit on grants and loans to particular
3 municipalities.--No more than 10% of funds appropriated pursuant
4 to this act shall be loaned or granted to local sponsors in a
5 particular municipality.
6 (b) Limit on grants for infrastructure on publicly owned
7 property.--In no case shall more than 10% of the funds
8 appropriated in any State fiscal year pursuant to this act be
9 utilized as specified in section 6, nor shall any municipality
10 receive more than one grant in any single fiscal year.
11 (c) Minimum allocation to small communities.--A minimum of
12 25% of the grants and loans issued pursuant to this act shall be
13 allocated to small communities.
14 (d) Evidence of eligibility.--No loan or grant shall be made
15 without substantiation of the provisions of section 4.
16 (e) Liens.--Funds loaned will be secured by lien positions
17 on collateral at the highest level of priority the department
18 determines feasible to accommodate the project, consistent with
19 section 4(a)(4).
20 (f) Penalty.--Private companies which fail to create the
21 number of jobs specified in an approved application shall be
22 liable for a penalty equal to an increase in the interest
23 charged to 2% greater than the current prime interest rate for
24 the remainder of the loan, unless the penalty is waived by the
25 secretary because the failure is due to circumstances outside
26 the control of the private company. The penalty shall be payable
27 in installments which the secretary deems appropriate. Immediate
28 notice of penalties and waivers of penalties, including the
29 penalties in section 4(a)(4), with the reasons thereof, shall be
30 submitted by the secretary to the Chief Clerk of the House of
19840S1433B2192 - 8 -
1 Representatives and to the Secretary of the Senate, along with
2 the secretary's decision on the imposition of penalties and the
3 reasons for this decision.
4 (g) Withholding of liquid fuel tax allocation.--
5 Municipalities receiving interest free loans which fail to meet
6 their repayment obligations shall have all or part of their
7 liquid fuel tax allocation withheld or other penalties, as the
8 department may prescribe. The secretary shall immediately give
9 the name of the municipality and the reasons for, and amount of,
10 the penalty to both the Chief Clerk of the House of
11 Representatives and the Secretary of the Senate.
12 (h) Relocation; job increase.--This act is expressly not
13 intended to encourage the relocation of a company from one
14 jurisdiction within the Commonwealth to another. Any request by
15 a local sponsor for assistance to be provided a firm which
16 currently operates a similar business in the Commonwealth must
17 be accompanied by a demonstration that the total net increase in
18 full-time equivalent jobs, using the current number of jobs in
19 all similar businesses operated by the private company in the
20 Commonwealth as a base, shall be at least 10%. This requirement
21 shall not apply to private companies relocating from small
22 business incubators.
23 (i) Grant limit.--No grant shall exceed $500,000. <--
24 Section 8. Additional powers and duties of the department.
25 (a) Rules and forms.--The department may prescribe such
26 application forms and promulgate such guidelines, rules and
27 regulations as may be necessary to carry out the provisions of
28 this act with respect to loan and grant conditions and criteria
29 for evaluation of the economic benefit of proposed loans and
30 grants and for determining and evaluating compliance with all
19840S1433B2192 - 9 -
1 the criteria established in this act. Guidelines and changes to
2 guidelines shall be provided to the Chief Clerk of the House of
3 Representatives and the Secretary of the Senate when they become
4 effective.
5 (b) Reporting.--On or before the March 1 following the
6 adoption of this act and in each succeeding year in which loans
7 are outstanding, the department shall provide a report to the
8 Chief Clerk of the House of Representatives and the Secretary of
9 the Senate for the preceding calendar year. The report shall
10 contain, at a minimum, the following information:
11 (1) A list of the approved projects including local
12 sponsor, name of private company, cost of project, amount of
13 private investment, projected number of new jobs, location of
14 project, date of submission of the application by the local
15 sponsor, type of project and estimated completion date of
16 project.
17 (2) A list of applications not approved.
18 (3) A list of pending applications.
19 (4) A list of projects where job projections are not
20 being met or the project is not being completed and the
21 penalty being applied or the reason a penalty is not being
22 applied.
23 (5) Estimates of State and local tax revenue increases
24 caused directly by project.
25 (6) A list of projects approved or completed in years
26 prior to the preceding year.
27 (7) In addition to the data reporting required above,
28 the department shall accumulate from the sponsors of approved
29 projects the following data on an annual and cumulative
30 basis:
19840S1433B2192 - 10 -
1 (i) The number of jobs actually created by these
2 projects.
3 (ii) Estimated increased tax revenue caused by the
4 projects.
5 (8) Guidelines issued for this program.
6 (9) An overall statement of the progress of the program
7 during the preceding year, along with recommendations for
8 improvements.
9 SECTION 9. GUIDELINES AND REGULATIONS. <--
10 (A) ONE-YEAR EXEMPTION FROM REVIEW.--IN ORDER TO FACILITATE
11 THE SPEEDY IMPLEMENTATION OF THIS PROGRAM, THE DEPARTMENT SHALL
12 HAVE THE POWER AND AUTHORITY TO PROMULGATE, ADOPT AND USE
13 GUIDELINES WHICH SHALL BE PUBLISHED IN THE PENNSYLVANIA
14 BULLETIN. THE GUIDELINES SHALL NOT BE SUBJECT TO REVIEW PURSUANT
15 TO SECTION 205 OF THE ACT OF JULY 31, 1968 (P.L.769, NO.240),
16 REFERRED TO AS THE COMMONWEALTH DOCUMENTS LAW, SECTIONS 204(B)
17 AND 301(10) OF THE ACT OF OCTOBER 15, 1980 (P.L.950, NO.164),
18 KNOWN AS THE COMMONWEALTH ATTORNEYS ACT, OR THE ACT OF JUNE 25,
19 1982 (P.L.633, NO.181), KNOWN AS THE REGULATORY REVIEW ACT, AND,
20 EXCEPT AS PROVIDED IN SUBSECTION (C), SHALL BE EFFECTIVE FOR A
21 PERIOD NOT TO EXCEED ONE YEAR FROM THE EFFECTIVE DATE OF THIS
22 ACT.
23 (B) EXPIRATION OF EXEMPTION.--EXCEPT AS PROVIDED IN
24 SUBSECTION (C), AFTER THE EXPIRATION OF THE ONE-YEAR PERIOD, ALL
25 GUIDELINES SHALL EXPIRE AND SHALL BE REPLACED BY REGULATIONS
26 WHICH SHALL HAVE BEEN PROMULGATED, ADOPTED AND PUBLISHED AS
27 PROVIDED BY LAW.
28 (C) EXCEPTION.--THE GENERAL ASSEMBLY MAY PROVIDE FOR AN
29 EXTENSION OF THE GUIDELINES ADOPTED PURSUANT TO SUBSECTION (A),
30 IF THE LEADERSHIP COMMITTEE CREATED PURSUANT TO SECTIONS 3 AND 4
19840S1433B2192 - 11 -
1 OF THE ACT OF DECEMBER 22, 1981 (P.L.508, NO.142), KNOWN AS THE
2 SUNSET ACT, EXTENDS THE GUIDELINES ADOPTED PURSUANT TO
3 SUBSECTION (A).
4 Section 9 10. Nondiscrimination. <--
5 No grant, loan or loan guarantee shall be made to a recipient
6 under this act unless the recipient certifies to the department,
7 in a form satisfactory to the department, that it shall not
8 discriminate against any employee or against any applicant for
9 employment because of race, religion, color, national origin,
10 sex or age.
11 Section 10 11. Appropriation. <--
12 The sum of $16,000,000, or as much thereof as may be
13 necessary, is hereby appropriated from the Pennsylvania Economic
14 Revitalization Fund to the department for the fiscal year July
15 1, 1984 to June 30, 1985, for grants and loans as specified in
16 this act.
17 Section 11 12. Termination. <--
18 No funds may be expended assistance shall be approved <--
19 pursuant to this act after June 30, 1987.
20 Section 12 13. Effective date. <--
21 This act shall take effect immediately.
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