PRINTER'S NO. 3642
No. 2666 Session of 1996
INTRODUCED BY LESCOVITZ, HASAY, GORDNER, M. N. WRIGHT, KENNEY,
MUNDY, ROBERTS, STABACK, HABAY, ZUG AND DENT, JUNE 3, 1996
REFERRED TO COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT,
JUNE 3, 1996
AN ACT
1 Providing for an infrastructure development program, for grants
2 and loans for infrastructure improvements in relation to
3 private developer investment, for duties of the Department of
4 Commerce, for eligibility requirements and application
5 procedures; and making repeals.
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
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 "Agricultural processing." Processes involving either of the
16 following:
17 (1) The manufacture, development or preparation for sale
18 of one or more farm commodities which adds value to those
19 commodities.
1 (2) The conversion of a farm product into a marketable
2 form, including, but not limited to, livestock by
3 slaughtering, fruits and vegetables by canning and freezing
4 and forest products by secondary processing.
5 "Applicant." The term includes the following:
6 (1) A municipality.
7 (2) A municipal authority organized under the act of May
8 2, 1945 (P.L.382, No.164), known as the Municipality
9 Authorities Act of 1945.
10 (3) A redevelopment authority organized under the act of
11 May 24, 1945 (P.L.991, No.385), known as the Urban
12 Redevelopment Law.
13 (4) An industrial development agency as defined under
14 the act of May 17, 1956 (1955 P.L.1609, No.537), known as the
15 Pennsylvania Industrial Development Authority Act.
16 (5) An industrial and commercial development authority
17 as defined under the act of August 23, 1967 (P.L.251,
18 No.102), known as the Economic Development Financing Law.
19 (6) A local development district as defined under the
20 act of December 7, 1994 (P.L.845, No.120), known as the Local
21 Development District Act.
22 "Department." The Department of Commerce of the
23 Commonwealth.
24 "Export service enterprise." A person, partnership,
25 corporation or other for-profit business entity engaged in
26 activities which increase the Commonwealth's share of domestic
27 and international commerce. An export service enterprise shall
28 be found to increase the Commonwealth's share of domestic and
29 international commerce if more than half of its sales or
30 services are rendered to customers outside of this Commonwealth.
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1 "Facility." The land, buildings or depreciable assets into
2 which a private company or private developer makes a new private
3 investment and which is complemented by infrastructure
4 improvements funded under this act.
5 "Former industrial site." A manufacturing or industrial
6 facility which is not in operation or production and which has
7 been dormant for at least six months prior to the date of
8 application.
9 "Green fields." Land which has never been developed for uses
10 other than agriculture, forestry or recreation.
11 "Industrial operation." The term includes industrial
12 processing and warehouse and terminal operations.
13 "Infrastructure improvements." The term includes the
14 following:
15 (1) The construction or rehabilitation of the following:
16 (i) Drainage systems.
17 (ii) Energy facilities which generate and distribute
18 power.
19 (iii) Sewer systems, including, but not limited to,
20 the construction or repair of sewage collection lines and
21 sewage treatment facilities.
22 (iv) Transportation facilities directly affecting
23 the site of the proposed private investment, including:
24 (A) Roads providing access to the site.
25 (B) Parking facilities.
26 (C) Sidewalks.
27 (D) Bridges.
28 (E) Rails, including, but not limited to, the
29 construction or rehabilitation of rail switches and
30 signals, rail crossings and intermodal facilities.
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1 (F) Ports, including, but not limited to,
2 docking facilities, bulkheads and intermodal
3 facilities, but not warehouses.
4 (G) Waterways, including, but not limited to,
5 channel realignment, dredging and the construction or
6 rehabilitation of locks.
7 (H) Airports, including, but not limited to, the
8 construction or rehabilitation of runways, but not
9 airport buildings.
10 (I) Pipelines transporting natural gas, but not
11 vehicles associated with the operation of the
12 pipelines.
13 (J) Facilities for the transmission of
14 information, including, but not limited to, fiber-
15 optic telecommunication lines.
16 (v) Water supply facilities, including, but not
17 limited to, water lines and water storage, treatment and
18 distribution facilities.
19 (2) The acquisition of land, rights-of-way and easements
20 necessary to construct eligible infrastructure improvements.
21 (3) At former industrial sites:
22 (i) The acquisition of land and buildings by private
23 developers.
24 (ii) The construction of new multi-tenant industrial
25 or manufacturing buildings by developers.
26 (iii) The conversion of existing industrial or
27 manufacturing buildings into multi-tenant buildings by
28 private developers.
29 (4) The demolition of buildings.
30 (5) The clearing and preparation of land.
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1 (6) The cleanup of hazardous waste materials.
2 (7) The engineering, design and inspection costs
3 associated with other eligible infrastructure improvements.
4 "Manufacturing operation." The giving of new shapes, new
5 qualities or new combinations to matter by the application of
6 skill and labor.
7 "Private company." A for-profit enterprise engaged in
8 manufacturing, industrial, research and development or
9 agricultural processing; or is an export service enterprise.
10 "Private developer." Any person, partnership, corporation or
11 other for-profit business entity, or any nonprofit corporation
12 whose purpose is the promotion or construction of industrial
13 development projects, that is engaged in the development of real
14 estate, for use by more than one private company, and that is
15 determined by the department to be financially responsible to
16 assume all obligations proposed to be undertaken, including, but
17 not limited to, acquisition, development, construction, leasing,
18 sale, operation and financing.
19 "Private match." An investment, other than with funds made
20 available under this act, by the private company or private
21 developer in a facility or in infrastructure improvements at the
22 site or serving the site of the facility.
23 "Publicly owned infrastructure improvements." Infrastructure
24 improvements which are owned by the applicant or by an entity
25 eligible to be an applicant at the time the grant is made or
26 which will be owned by the applicant or by an entity eligible to
27 be an applicant upon the completion of the infrastructure
28 improvements funded under this act. The term shall not include
29 infrastructure improvements which are accessible only to one
30 user.
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1 "Research and development enterprise." A person,
2 partnership, corporation or other for-profit business entity
3 engaged in the discovery of new and the refinement of known
4 substances, processes, products, theories and ideas.
5 "Secretary." The Secretary of Commerce of the Commonwealth.
6 "Targeted community." A geographical area designated by the
7 Department of Commerce as deserving of special consideration
8 because of one or more adverse economic factors. This term shall
9 include enterprise zones established under the act of July 9,
10 1986 (P.L.1216, No.108), known as the Enterprise Zone Municipal
11 Tax Exemption Reimbursement Act, distressed communities as
12 defined under the act of July 10, 1987 (P.L.246, No.47), known
13 as the Municipalities Financial Recovery Act, and an area
14 designated by the Federal Government as an empowerment zone or
15 enterprise community.
16 Section 3. Infrastructure Development Program.
17 There is hereby established within the Department of Commerce
18 a program, to be known as the Infrastructure Development
19 Program, for the purpose of making grants, grant-to-loans and
20 loans for specific infrastructure improvements necessary to
21 complement investment in a facility by a private company or
22 private developer.
23 Section 4. Eligibility requirements.
24 (a) General rule.--To be eligible for assistance under this
25 act, a private company or private developer must meet the
26 conditions set forth in this section, to the satisfaction of the
27 department.
28 (b) Job creation.--The private company must create, or the
29 private developer must cause to be created, within five years
30 from the date of the completion of the project:
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1 (1) A minimum of ten full-time equivalent jobs.
2 (2) At least one full-time equivalent job for every
3 $25,000 either loaned or granted for the infrastructure
4 improvements.
5 (c) Private investment.--The private company or private
6 developer must contribute to the project $2 of private match for
7 every $1 of assistance provided under this act.
8 (d) Project need.--The private company or private developer
9 must demonstrate that the infrastructure improvements are
10 necessary for the efficient and cost-effective operation of the
11 private company or the successful marketing of the facility by a
12 private developer and that the project would not be possible
13 without the injection of funds provided under this act for
14 infrastructure improvements.
15 (e) Adequate security.--The applicant, private company or
16 private developer must provide adequate security to cover the
17 cost of the grant-to-loan or loan, as determined by the
18 department.
19 (f) Financial soundness.--The private company or private
20 developer must be financially sound and able to fulfill the
21 commitments made in its letter of intent.
22 (g) Time frame.--The private company or private developer
23 must demonstrate that the project will be completed within the
24 time frame established by program guidelines.
25 (h) Consistency with ordinances.--The private company or
26 private developer must demonstrate that the project is
27 consistent with local zoning and subdivision ordinances and
28 regional economic development plans where such ordinances and
29 plans exist.
30 (i) Other requirements.--Such other eligibility requirements
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1 as may be determined by the department.
2 Section 5. Application procedure.
3 (a) Letter of intent.--An application for a grant, grant-to-
4 loan or loan shall be initiated by a private company or private
5 developer through a letter of intent to locate, expand, build,
6 or renovate a facility. The letter of intent shall be submitted
7 to an applicant whose service area includes, at least in part,
8 the site of the facility.
9 (b) Application.--Upon receipt of the letter of intent, an
10 applicant may submit the letter of intent along with a request
11 for an application to the department. Upon receipt of this
12 information and a preliminary indication of project eligibility,
13 the department shall provide an applicant with the application
14 materials.
15 (c) Evaluation.--Upon receipt of a complete application, the
16 department shall review the application based on the following
17 criteria:
18 (1) The number of full-time equivalent jobs that will be
19 created and retained and the amount of additional State and
20 local tax revenue that will be directly generated by the
21 private company's or private developer's new or expanded
22 investment.
23 (2) In the case of a grant-to-loan or loan, the ability
24 of the applicant, private company or private developer to
25 repay the interest and principal.
26 (3) The increase in the Commonwealth's share of domestic
27 and international commerce.
28 (4) For former industrial sites, the creation of
29 opportunities to develop new facilities or expand existing
30 facilities for private companies by eliminating, reducing or
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1 otherwise alleviating blight at the site.
2 Section 6. Types of assistance.
3 (a) Grants.--The department may award grants to an applicant
4 only for publicly owned infrastructure improvements.
5 (b) Grant-to-loans.--The department may award grants to an
6 applicant, which the applicant in turn shall loan to a private
7 company or private developer, upon terms and conditions approved
8 by the department, for infrastructure improvements on privately
9 owned property located in targeted communities. Loan and
10 interest repayments may be retained by applicants who service
11 targeted communities and who demonstrate, to the satisfaction of
12 the department, their capability to successfully administer a
13 revolving loan fund. Such applicants, upon the written approval
14 of the department, may use the funds received to make loans for
15 new or different projects eligible under any department business
16 or infrastructure financing program within the applicant's
17 jurisdiction. This subsection shall not take effect until the
18 criteria for targeted communities has been included in the
19 annual financing strategy submitted to the General Assembly.
20 (c) Loans.--The department may approve loans for an
21 applicant, private company or private developer for privately
22 owned infrastructure improvements on property not located in
23 targeted communities. Interest rates for loans will be
24 determined by the Commonwealth.
25 Section 7. Limitations.
26 No grant, grant-to-loan or loan shall be made which would
27 cause, aid or assist in, directly or indirectly, the relocation
28 of any business operations from one part of the Commonwealth to
29 another, unless there is at least a 25% net increase in
30 employment.
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1 Section 8. Penalties.
2 (a) General rule.--Private companies or private developers
3 who fail to create the number of jobs specified in a funded
4 application or who fail to inject the required amount of private
5 investment into the projects shall be liable for a penalty of up
6 to the full amount of the grant, grant-to-loan or loan awarded
7 by the department, unless the penalty is waived by the secretary
8 because the failure is due to circumstances outside the control
9 of the private company or private developer. The penalty shall
10 be payable in one lump sum or in installments, with or without
11 interest, as the secretary deems appropriate.
12 (b) Repayment.--The secretary may, in the case of grant-to-
13 loans or loans, elect:
14 (1) to demand repayment of the entire outstanding
15 principal balance of the grant-to-loan or loan;
16 (2) to permit repayment of the loan in accelerated
17 installments with an interest rate accruing on the unpaid
18 balance of those installments at a rate not to exceed the
19 prime interest rate plus 2% per annum; or
20 (3) not to accelerate any repayment of principal, but
21 increases the interest rate charged on the outstanding
22 principal of the grant-to-loan or loan at a rate not to
23 exceed the prime interest rate plus 2% per annum.
24 Section 9. Collection of information.
25 The department shall collect from an applicant, and an
26 applicant, private company or private developer shall provide,
27 such information as is necessary to ensure that the department
28 is able to fulfill its obligations under this act. This
29 information shall include such things as: the number of jobs
30 created and the amount of private investment made at the project
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1 site.
2 Section 10. Powers of secretary and rules and regulations.
3 The department shall set forth in the annual financing
4 strategy submitted to the General Assembly those policies,
5 procedures and guidelines necessary to carry out this act.
6 Section 11. Restrictions on funding.
7 (a) Counties.--No more than 20% of funds available under the
8 Infrastructure Development Program in any fiscal year shall be
9 loaned or granted for projects in any county.
10 (b) Certain green field projects.--No more than 10% of the
11 funds available under the Infrastructure Development Program in
12 any fiscal year shall be loaned or granted to applicants for
13 green field projects not involving private companies.
14 (c) Dollar amount.--No individual grant, grant-to-loan or
15 loan shall exceed $1,250,000.
16 (d) Former industrial sites.--A minimum of 20% of the funds
17 available under the Infrastructure Development Program in any
18 fiscal year shall be approved for a grant, grant-to-loan or loan
19 for projects located on a former industrial site.
20 Section 12. Transition provisions.
21 (a) Approved applications.--Applications for assistance
22 under the act of May 6, 1968 (P.L.117, No.61), known as the Site
23 Development Act, the act of July 2, 1984 (P.L.520, No.105),
24 known as the Business Infrastructure Development Act and the act
25 of July 10, 1989 (P.L.313, No.52), known as the Industrial
26 Communities Action Program Act, which have been approved prior
27 to the effective date of this act shall be processed in
28 accordance with the provisions of the Site Development Act, the
29 Business Infrastructure Development Act and the Industrial
30 Communities Action Program Act, respectively, notwithstanding
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1 section 13.
2 (b) Pending applications.--Applications for infrastructure
3 development assistance which have been received by the
4 department but have not been approved prior to the effective
5 date of this act shall be evaluated and processed in accordance
6 with this act.
7 Section 13. Repeals.
8 The following acts and parts of acts are repealed:
9 Act of May 6, 1968 (P.L.117, No.61), known as the Site
10 Development Act.
11 Act of July 2, 1984 (P.L.520, No.105), known as the Business
12 Infrastructure Development Act.
13 Act of July 10, 1989 (P.L.313, No.52), known as the
14 Industrial Communities Action Program Act.
15 Section 14. Effective date.
16 This act shall take effect July 1, 1996, or immediately,
17 whichever is later.
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