PRINTER'S NO. 3409
No. 2434 Session of 1986
INTRODUCED BY DISTLER, HAYES, D. R. WRIGHT, BOWSER, BLAUM,
BOYES, MERRY, ROBBINS, STEWART, WASS, SERAFINI, BURD,
BIRMELIN, GRUITZA, STEVENS, HASAY, HERMAN, CIMINI, BUSH,
MOEHLMANN, FARGO, CAPPABIANCA, DOMBROWSKI, ARGALL, DeVERTER,
LESCOVITZ, SAURMAN, ANGSTADT, NAHILL, JOHNSON, JACKSON,
SCHULER, LIVENGOOD, LETTERMAN, RAYMOND, HERSHEY, HONAMAN,
SWEET, MARKOSEK, D. W. SNYDER, GANNON, MICOZZIE, BUNT,
McCLATCHY, LASHINGER, PETRARCA, BELARDI, COLE, VEON, McCALL,
CAWLEY, TIGUE, LLOYD, WOGAN, POTT, PERZEL, DALEY, HUTCHINSON,
STEIGHNER, F. TAYLOR, ARTY, J. TAYLOR, E. Z. TAYLOR, LUCYK,
VROON, STABACK, SEMMEL, FISCHER, STAIRS, SIRIANNI, COLAFELLA,
FOSTER, B. SMITH, BLACK, JAROLIN, CARLSON, SWIFT, COSLETT,
L. E. SMITH, MACKOWSKI, DIETZ, GEIST, LANGTRY, KUKOVICH,
BROUJOS, CHADWICK, GODSHALL, PITTS, BALDWIN, FOX, GLADECK,
TELEK, VAN HORNE, PICCOLA, MOWERY, G. SNYDER, R. C. WRIGHT,
GRUPPO, J. L. WRIGHT, CLYMER, PUNT, GREENWOOD, BOOK,
PHILLIPS, HAGARTY AND CLARK, APRIL 30, 1986
REFERRED TO COMMITTEE ON BUSINESS AND COMMERCE, APRIL 30, 1986
AN ACT
1 Establishing a program within the Department of Commerce to
2 provide technical and financial assistance to manufacturers
3 to enable them to remain technologically competitive in their
4 fields; providing funds for technology assessments and
5 professional services, and loans for technological
6 improvements; conducting technology information outreach; and
7 making an appropriation.
8 The General Assembly of the Commonwealth of Pennsylvania
9 hereby enacts as follows:
10 Section 1. Short title.
11 This act shall be known and may be cited as the Technology
12 Assessment Program Act.
13 Section 2. Declaration of policy.
1 It is hereby determined and declared that:
2 (1) Existing businesses are the primary source of
3 present employment in this Commonwealth and will also be a
4 major source of employment in the future.
5 (2) In order for businesses to remain in this
6 Commonwealth and grow, they must be competitive with other
7 companies in their industry.
8 (3) Existing businesses can often use new manufacturing
9 technologies to improve their ability to compete with foreign
10 companies and companies in other states.
11 (4) Resources and expertise to identify technological
12 improvements that will enhance competitiveness are not
13 readily available to many companies, particularly smaller
14 manufacturing firms.
15 (5) Businesses seeking improvements in their
16 competitiveness through the use of newer technologies may
17 need assistance in financing the improvements.
18 Section 3. Definitions.
19 The following words and phrases when used in this act shall
20 have the meanings given to them in this section unless the
21 context clearly indicates otherwise:
22 "Department." The Department of Commerce of the
23 Commonwealth.
24 "Local administrative agency." An organization which enters
25 into a written agreement with the department to administer
26 financing assistance pursuant to this act, including a
27 municipality, a county, a local development district of the
28 Appalachian Regional Commission, an industrial development
29 corporation organized and existing under the act of May 17, 1956
30 (1955 P.L.1609, No.537), known as the Pennsylvania Industrial
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1 Development Authority Act, or any other nonprofit economic
2 development organization designated by the secretary.
3 "Manufacturing firm." An enterprise engaged in giving new
4 shapes, new qualities or new combinations to matter by the
5 application of skill and labor.
6 "Professional services." Detailed technical and management
7 services, provided by consultants, that assist a manufacturing
8 firm in implementing technology assessments.
9 "Secretary." The Secretary of Commerce of the Commonwealth.
10 "Technology assessment." An onsite analysis of the level of
11 advanced manufacturing processes used by a firm in comparison to
12 that used by other firms, both domestic and foreign, in the
13 industry. Areas examined within a firm may include, but are not
14 limited to, office and administration, engineering, data
15 processing, sales and marketing, accounting, production planning
16 and inventory control, manufacturing, warehousing, shipping and
17 receiving.
18 "Technology assessment sponsor." An organization that enters
19 into a written agreement with the department to administer
20 technical assistance pursuant to this act, including an academic
21 institution, a local development district of the Appalachian
22 Regional Commission, an association of manufacturers, and any
23 other private for-profit or nonprofit organization or group of
24 such organizations.
25 Section 4. Purpose.
26 It is the purpose of this act to provide assistance to
27 Pennsylvania manufacturers to remain technologically competitive
28 and, in turn, retain or increase their share of the market by
29 lowering costs through the introduction and use of more
30 efficient production techniques or newer technologies. Advanced
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1 manufacturing technologies are often available to Pennsylvania
2 firms but may not be adopted for a variety of reasons, including
3 lack of information, complexity, near-term corporate planning
4 horizon, and limited availability of affordable financing.
5 Section 5. Technology Assessment Program establishment.
6 There is hereby established, under the direction of the
7 department, a program to be known as the Technology Assessment
8 Program.
9 Section 6. Technology assessments grants.
10 (a) Use of technology assessment sponsors.--The department
11 is authorized to make grants and enter into contracts with
12 technology assessment sponsors to perform technology assessments
13 and provide professional services requested by individual
14 manufacturing firms in this Commonwealth. The department shall
15 issue one or more Requests for Proposals (RFP) to contract with
16 technology assessment sponsors to provide technology assessments
17 and professional services. The applications shall be responsive
18 to the RFP and contain, at a minimum:
19 (1) The name of the organization which will conduct the
20 technology assessments and provide professional services and
21 a description of the prior experience of the organization and
22 its employees and consultants in conducting technology
23 assessments, its familiarity with the manufacturing fields to
24 be examined and a disclosure of any potential material
25 conflict of interest with machinery and equipment suppliers
26 that might be recommended as an outcome of technology
27 assessments.
28 (2) The types of firms and locations of the facilities
29 that will be provided technology assessments.
30 (b) Eligibility.--For-profit manufacturing firms located in
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1 this Commonwealth may request technology assessment sponsors to
2 conduct technology assessments and provide professional
3 services. The department may establish priorities for sponsors
4 to use in providing such services.
5 (c) Uses.--Technology assessment sponsors may provide the
6 following services:
7 (1) Conduct technology assessments and prepare
8 technology implementation plans for individual firms. At a
9 minimum, this technology assessment should:
10 (i) Analyze the current level of technology used in
11 the firm.
12 (ii) Compare the level of technology used by the
13 firm with that used by its domestic and foreign
14 competitors.
15 (iii) Make recommendations on the alternative types
16 of advanced technologies that could be used in the firm's
17 facilities.
18 (iv) Develop with the firm a long-range plan for the
19 appropriate incorporation of advanced technology into the
20 firm, including identification of specific equipment
21 needs.
22 (2) Provide professional services to implement the
23 technology assessment, including:
24 (i) Assisting the firm to conduct feasibility
25 studies for the implementation of advanced technology
26 into the firm.
27 (ii) Assisting the firm to secure financing to
28 acquire and install new systems.
29 Section 7. Technology improvement financing.
30 (a) Authorization to advance funds.--The department is
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1 authorized to advance funds to local administrative agencies for
2 the purpose of providing loans to industrial and manufacturing
3 enterprises, as defined in section 3 of the act of May 17, 1956
4 (1955 P.L.1609, No.537), known as the Pennsylvania Industrial
5 Development Authority Act, for improving the technology level of
6 such enterprises.
7 (b) Uses.--
8 (1) Eligible project costs shall be limited to the
9 purchase, upgrading and installation of machinery and
10 equipment.
11 (2) Loans may be made in an amount not exceed 50% of the
12 eligible project costs, or $500,000, whichever is less,
13 provided that no loans shall be made which exceed $15,000 for
14 each job created or retained by the project.
15 (3) Local administrative agencies may establish and
16 charge reasonable fees for processing loans, with the
17 approval of the secretary.
18 (4) All loans shall be secured by lien positions on
19 collateral at the highest level of priority which can
20 accommodate the borrower's ability to raise sufficient debt
21 and equity capital and be made for such a period and shall
22 bear such interest rate as may be determined by the
23 secretary.
24 (5) A technology assessment as provided in section 6, or
25 an equivalent document demonstrating a substantial prospect
26 for job retention or future job growth, is required to
27 receive a loan. General adherence to the plan resulting from
28 the technology assessment is required to receive funding.
29 (6) No loans shall be made which would do any of the
30 following:
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1 (i) Cause, aid or assist in, directly or indirectly,
2 the relocation of any business operations from one part
3 of this Commonwealth to another, unless there is at least
4 a 25% increase in net employment.
5 (ii) Supplant funding that is otherwise available
6 expeditiously from private sector sources on commercially
7 reasonable terms.
8 (iii) Be for the purpose of refinancing any portion
9 of the total project cost or other existing loans or
10 debt.
11 (iv) Be for the purpose of financing projects
12 located outside the geographic boundaries of this
13 Commonwealth.
14 (v) Be for the purpose of paying off an existing
15 creditor.
16 (vi) Provide funds, directly or indirectly, for
17 payment, distribution or as a loan to owners, partners or
18 shareholders of the small business enterprise, except as
19 ordinary compensation for services rendered.
20 (vii) Be for the purpose of repaying a debt owned to
21 a small business investment company.
22 (viii) Provide funds for speculation in any kind of
23 property, real or personal, tangible or intangible.
24 Section 8. Criteria for evaluating loan applications.
25 The local administrative agencies and the department shall
26 evaluate applications for technology improvement financing based
27 on the following criteria:
28 (1) Number of jobs retained or created in relation to
29 the size of the loan.
30 (2) Ability of the applicant to repay the loan and the
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1 likelihood of retaining or creating jobs.
2 (3) Evidence of other private financial commitments.
3 (4) The extent to which a firm employs a significant
4 number of employees or represents a significant portion of
5 employment in the community.
6 (5) Relevant criminal and credit history and ratings of
7 the applicant as determined from outside credit reporting
8 services and other sources.
9 (6) The extent to which the investment significantly
10 improves the level of technology utilized in the applicant
11 firm.
12 (7) The extent to which assistance requested will
13 improve the competitiveness of manufacturing processes of the
14 firm.
15 (8) Evidence that private financing is not available at
16 rates or terms sufficient to make the project viable.
17 (9) Any additional criteria specified by the department.
18 Section 9. Technology information outreach.
19 (a) Information .--The department shall inform Pennsylvania
20 manufacturing firms about the Technology Assessment Program in
21 the manner deemed most appropriate. The department shall also
22 develop a program to inform manufacturing firms of the benefits
23 of incorporating advanced technology processes into production
24 and management systems, and encourage firms to adopt technology
25 enhancement investments to improve their competitive position.
26 (b) Funding.--Up to $50,000 of the funds appropriated for
27 the Technology Assessment Program may be used for contracts to
28 implement this section.
29 Section 10. Additional powers and duties of department.
30 The department may prescribe application forms, promulgate
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1 and publish program manuals and procedures, request information
2 and promulgate such rules, regulations, statements of policy and
3 guidelines as may be necessary to carry out the provisions of
4 this act.
5 Section 11. Effective date.
6 This act shall take effect immediately.
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