THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY TURZAI, ADOLPH, SAYLOR, MAJOR, STEVENSON, REED, VEREB, AUMENT, BAKER, BARRAR, BEAR, BENNINGHOFF, BLOOM, BOBACK, BROOKS, R. BROWN, CLYMER, COX, CREIGHTON, CUTLER, DAY, DELOZIER, DENLINGER, DUNBAR, ELLIS, EMRICK, EVANKOVICH, J. EVANS, EVERETT, FARRY, FLECK, GABLER, GEIST, GILLEN, GILLESPIE, GINGRICH, GRELL, GROVE, HACKETT, HAHN, HARHART, HARRIS, HELM, HENNESSEY, HESS, HUTCHINSON, KAMPF, KAUFFMAN, F. KELLER, M. K. KELLER, KILLION, KNOWLES, KRIEGER, LAWRENCE, MALONEY, MARSHALL, MARSICO, MASSER, METCALFE, MICOZZIE, MILLARD, MILLER, MILNE, MOUL, MURT, MUSTIO, OBERLANDER, O'NEILL, PEIFER, PERRY, PETRI, PICKETT, PYLE, QUIGLEY, QUINN, RAPP, REESE, ROAE, ROCK, ROSS, SACCONE, SCAVELLO, CULVER, SCHRODER, SIMMONS, SONNEY, STEPHENS, STERN, SWANGER, TALLMAN, TAYLOR, TOBASH, TOEPEL, TOOHIL, VULAKOVICH AND WATSON, FEBRUARY 7, 2012

REFERRED TO COMMITTEE ON FINANCE, FEBRUARY 7, 2012  

AN ACT

Amending the act of February 9, 1999 (P.L.1, No.1), entitled "An

act providing for borrowing for capital facilities;

conferring powers and duties on various administrative

agencies and officers; making appropriations; and making

repeals," in capital facilities, further providing for

definitions, for legislative procedures and for

appropriations and limitations on projects; providing for

review of proposals; and further providing for funding and

administration of projects.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The definitions of "capital project" and

"redevelopment assistance capital project" in section 302 of the

act of February 9, 1999 (P.L.1, No.1), known as the Capital

Facilities Debt Enabling Act, amended July 4, 2004 (P.L.516,

No.67) and December 22, 2005 (P.L.454, No.87), are amended and

the section is amended by adding definitions to read:

Section 302.  Definitions.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

* * *

"Applicant."  A person that is seeking funding for a

redevelopment assistance capital project that has been listed in

a capital project itemization bill and that is one of the

following:

(1)  A redevelopment authority.

(2)  An industrial development authority.

(3)  A general purpose unit of local government.

(4)  A local development district that has an agreement

with a general purpose unit of local government under which

the unit assumes ultimate responsibility for debt incurred to

obtain the non-State financial participation.

(5)  A public authority established pursuant to the laws

of this Commonwealth.

(6)  An industrial development agency:

(i)  which has been certified as an industrial

development agency by the Pennsylvania Industrial

Development Authority Board under the act of May 17, 1956

(1955 P.L.1609, No.537), known as the Pennsylvania

Industrial Development Authority Act; and

(ii)  which is itself or which is acting through a

wholly owned subsidiary that is exempt from Federal

taxation under section 501(c)(3) of the Internal Revenue

Code of 1986 (Public Law 99-514, 26 U.S.C. § 501(c)(3)).

"Capital project."  A community college, flood control,

highway, public improvement, redevelopment assistance capital or

transportation assistance project which is financed by debt or

by other funds and which meets all of the following:

(1)  Is an undertaking to construct, repair, renovate,

improve, equip, furnish or acquire any:

(i)  building, structure, facility, infrastructure or

physical public betterment or improvement;

(ii)  land or rights in land; or

(iii)  furnishings, machinery, apparatus or equipment

for a building, structure, facility or physical public

betterment or improvement.

(2)  Is designated in a [capital budget] capital project

itemization bill as a capital project.

(3)  Has an estimated useful life in excess of five

years.

(4)  Has an estimated financial cost in excess of

$100,000. This paragraph does not apply to original equipment

or furnishings for previously authorized public improvement

projects.

[Capital projects are categorized as flood control projects,

highway projects, public improvement projects, redevelopment

assistance capital projects and transportation assistance

projects.]

* * *

"Legislative session."  A two-year period beginning December

1 of an even-numbered year and ending November 30 of an odd-

numbered year.

* * *

"Office."  The Governor's Office of the Budget.

* * *

"Redevelopment assistance capital project."  The design and

construction of [facilities] a project which [meet] meets all of 

the following:

(1)  [Are facilities, other than] Is a project, including

infrastructure associated with the project. A project does

not include highways, bridges, waste disposal facilities,

sewage facilities or water facilities. This paragraph

includes:

(i)  [Water] Storm water, water or sewer

infrastructure, or tunnels, bridges or roads, when

[included as part of a business or industrial park

facility] associated with a project that is part of an

economic development project.

(ii)  Hospital facilities and capital improvements

for hospital facilities.

(2)  [Are economic development projects which] Is a 

project which will generate substantial increases in or

maintain current levels of employment, tax revenues or other

measures of economic activity. This paragraph includes

projects with cultural, historical or civic significance.

(3)  [Are facilities which have] Is a project that has a

regional or multijurisdictional impact.

(4)  [Are] Is eligible for tax-exempt bond funding under

existing Federal law and regulations.

(5)  [Have a] Has at least a 50% non-State financial 

participation documented at the time of application,

including a portion of any funds reserved for future physical

maintenance and operation of the [facilities] project:

(i)  at least half of which is secured funding;

(ii)  toward which the only noncash non-State

financial participation permitted is land or fixed assets

which have a substantial useful life and are directly

related to the project;

(iii)  toward which State funds from other programs

may not be used; and

(iv)  toward which funds from Federal sources may be

used.

(6)  [Have] Has a total project cost of at least

$1,000,000.

(7)  [Applicants shall be one of the following:

(i)  A redevelopment authority.

(ii)  An industrial development authority.

(iii)  A general purpose unit of local government.

(iv)  A local development district which has an

agreement with a general purpose unit of local government

under which the unit assumes ultimate responsibility for

debt incurred to obtain the 50% non-State participation

required by paragraph (5).

(v)  Any public authority established pursuant to the

laws of this Commonwealth.

(vi)  An industrial development agency which has been

certified as an industrial development agency by the

Pennsylvania Industrial Development Authority Board

pursuant to the act of May 17, 1956 (1955 P.L.1609,

No.537), known as the Pennsylvania Industrial Development

Authority Act, and which is itself or which is acting

through a wholly owned subsidiary which is exempt from

Federal taxation under section 501(c)(3) of the Internal

Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et

seq.).

The term also includes a fire truck and firefighting equipment

to the extent that the request for assistance does not exceed

$50,000.] (Reserved).

* * *

"Secretary."  The Secretary of the Budget.

* * *

Section 2.  Section 303 of the act, amended December 22, 2005

(P.L.454, No.87), is amended to read:

Section 303.  Procedures for capital [budget] project

itemization bill and debt-authorizing legislation.

(a)  Legislative process.--A capital budget prepared in

accordance with this chapter shall be submitted for each fiscal

year by the Governor to the General Assembly and shall be

considered in the form of a bill as provided in Article III of

the Constitution of Pennsylvania.

(b)  Itemization bill.--

[(1)  Except as set forth in paragraph (2), the capital

budget bill must specifically itemize, by brief identifying

description and estimated financial cost, the capital

projects to be financed from the proceeds of obligations of

the Commonwealth.

(2)  Paragraph (1) does not apply if the itemization is:

(i)  contained in or approved by prior legislation

referred to in the capital budget bill; or

(ii)  included in one or more supplemental capital

budget bills.

(3)  Projects must be listed in separate categories as

well as according to the fund to be charged with the

repayment of the obligations to be incurred.

(4)  The capital budget bill must state the maximum

amount of such obligations which may be incurred in the

ensuing fiscal year to provide funds for and towards the

financial costs of each category of capital projects, which

shall be by the issue of general obligations of the

Commonwealth.]

(1)  At least once each legislative session, the Governor

shall submit a capital project itemization bill to the

General Assembly specifically itemizing the capital projects

to be financed from the proceeds of obligations of the

Commonwealth. No redevelopment assistance capital project may

receive funds unless the project is itemized in a capital

project itemization bill enacted within ten years of the date

the project is approved under section 318 or the project has

been approved by the secretary on or before December 31,

2011. Each capital project must be listed under its category

and include all of the following:

(i)  A specific description of the capital project,

including the municipality in which the capital project

is located.

(ii)  Estimated financial cost of the capital

project.

(iii)  The fund to be charged with the repayment of

the obligation to be incurred.

(2)  Beginning January 1, 2012, a redevelopment

assistance capital project which has been itemized but has

not been approved by the secretary on or before December 31,

2011, may not receive funding unless the redevelopment

assistance capital project is listed in a capital project

itemization bill enacted after January 1, 2012.

[(c)  Timing.--Each year the Governor shall submit a capital

budget bill for the ensuing fiscal year.]

(d)  [Additional bills] Debt authorization bill.--At the time

the Governor submits the [capital budget or a supplement]

General Appropriation Bill for a fiscal year, the Governor

shall, to the extent the debt to be incurred is not within the

limits of legislation then in force authorizing the incurring of

debt, submit [additional bills for each category of capital

projects,] a capital budget bill authorizing the [incurring of

debt] maximum amount of general obligation debt to be incurred

in the ensuing fiscal year to provide funds for and towards the

payment of the financial costs of capital projects in [such]

each category of capital projects which have been specifically

itemized in a [capital budget for the same or any prior year]

capital project itemization bill .

(e)  Categories.--Each [debt-authorizing bill] capital budget

bill must do all of the following:

(1)  State the category of capital projects to be

financed by the debt so authorized but need not enumerate the

capital projects to be financed.

(2)  Authorize the incurring of debt in not less than the

amount of the financial cost of all capital projects in such

category not covered by a previous debt authorization,

including any overall allowance for contingencies.

(3)  State the estimated useful lives of the capital

projects to be financed in such detail as may be requisite if

capital projects of varying useful lives are to be combined

for financing purposes.

(4)  State the maximum term of the debt to be incurred.

Section 3.  Section 317 of the act, amended July 7, 2010

(P.L.335, No.48), is amended to read:

Section 317.  Appropriation for and limitation on redevelopment

assistance capital projects.

(a)  Appropriation.--The amount necessary to pay principal of

and interest on all obligations issued to provide funds for

redevelopment assistance capital projects shall be appropriated

from the General Fund and shall be transferred to the Capital

Debt Fund upon authorization by the Governor.

(b)  Limitation.--The maximum amount of redevelopment

assistance capital projects undertaken by the Commonwealth for

which obligations are outstanding shall not exceed, in

aggregate, [$4,050,000,000.] $3,500,000,000. Beginning July 1,

2012, and each July 1 thereafter until July 1, 2020, the sum of

the maximum amount of outstanding obligations for redevelopment

assistance capital projects shall be decreased by $50,000,000.

Beginning July 1, 2020, and each July 1 thereafter until the sum

of outstanding obligations for redevelopment assistance capital

does not exceed $1,500,000,000, the sum of the maximum amount of

outstanding obligations for redevelopment assistance capital

projects shall be decreased by $150,000,000.

(c)  Housing units.--An amount not to exceed $25,000,000 of

the amount under subsection (b) may be used for the construction

of housing units.

Section 4.  Section 318 of the act, amended July 4, 2004

(P.L.516, No.67), is amended to read:

Section 318.  [Funding and administration] Administration of

redevelopment assistance capital projects.

(a)  [Officers.--The Secretary of the Budget shall review and

shall approve or disapprove applications for redevelopment

assistance capital projects.] (Reserved).

(a.1)  Application.--An applicant shall submit an application

to the office consistent with the timeline established by the

office requesting a grant for a redevelopment assistance capital

project. The proposal must be on the form required by the office

and must include or demonstrate all of the following:

(1)  The applicant's name and address.

(2)  The location of the project.

(3)  An estimate of the cost of the project, prepared by

an engineer or other qualified professional.

(4)  A statement of the amount of the project grant

sought, including a statement as to the financial necessity

for the project grant.

(5)  A statement that the applicant held at least one

public informational meeting regarding the redevelopment

assistance capital project. The meeting must be held within a

ten-mile radius of the project site and proper notice must be

given in accordance with 65 Pa.C.S. Ch. 7 (relating to open

meetings). Expenses for the public informational meeting

shall be paid by the applicant.

(6)  Any other information required by the office.

(a.2)  Review and approval.--The office shall review the

application to determine if all the requirements have been met.

Upon being satisfied that all requirements have been met, the

secretary may approve the application, and, if approved, the

office shall notify:

(1)  The applicant.

(2)  The President pro tempore of the Senate.

(3)  The Majority Leader of the Senate.

(4)  The Minority Leader of the Senate.

(5)  The chairman and minority chairman of the

Appropriations Committee of the Senate.

(6)  The Speaker of the House of Representatives.

(7)  The Majority Leader of the House of Representatives.

(8)  The Minority Leader of the House of Representatives.

(9)  The chairman and minority chairman of the

Appropriations Committee of the House of Representatives.

(10)  The State Senator and the State Representative of

the district where the redevelopment assistance capital

project is located.

(a.3)  Acceptance and grant agreement.--Within 30 days of

receiving notification of approval under subsection (a.2), an

applicant shall notify the office if the applicant accepts the

grant. If the applicant notifies the office that it intends to

accept the grant, the office shall forward to the applicant a

grant agreement to be executed by the applicant. The grant

agreement and any attachments thereto shall include the

following:

(1)  The name and address of who will administer the

grant.

(2)  A statement and proof of local funding.

(3)  An itemized statement of cost associated with the

project.

(4)  A contract obligating the applicant to use the grant

for the project.

(5)  A request for any other information the office may

require.

(a.4)  Execution.--The applicant shall return the information

requested and the executed contract within the timelines

established by the office. If the applicant fails to return the

executed contract within the timelines established by the office

or 180 days of notification under subsection (a.2), whichever is

less, no contract may be executed by the office for the grant.

(b)  Time period.--State funding for approved redevelopment

assistance capital projects shall be paid over not less than a

36-month period unless the [Secretary of the Budget] secretary 

authorizes a shorter period.

(c)  Costs.-- Land acquisition is a permissible State-funded

expenditure if the acquisition cost is supported by an appraisal

done by a certified appraiser.

(e)  Verification.--Redevelopment assistance capital project

cost estimates must be verified by the [Office of the Budget]

office or its designated agent before final approval is given to

a project application. Cost estimates include total project

cost, projected use for State and non-State funds and a year-by-

year schedule of costs for the entire project construction

phase.

(f)  Bids.-- Notwithstanding any other provision of law, the

solicitation of a minimum of three written bids for all

contracted construction work on redevelopment assistance capital 

projects shall be the sole requirement for the composition,

solicitation, opening and award of bids on such projects.

Notwithstanding the foregoing, the construction work shall be

performed subject to the act of March 3, 1978 (P.L.6, No.3),

known as the Steel Products Procurement Act.

(g)  Review and audit.--Redevelopment assistance capital 

projects shall be reviewed at regular intervals by the [Office

of the Budget] office or its designated agent during the funding

phase to ensure financial and program compliance. A final

closeout audit shall be performed by the [Office of the Budget]

office or its designated agent for all projects.

(h)  Fee.--To pay for administrative expenses related to

redevelopment assistance capital projects funded by Commonwealth

general obligation bonds, the [Office of the Budget] office may

charge a fee against proceeds from bonds and notes which were

sold to finance construction or acquisition costs of projects.

(i)  Grant administration.--In the event any applicant does

not administer the grant, the applicant shall enter into a

cooperation agreement with the entity administering the grant,

which agreement shall be subject to the approval of the [Office

of the Budget] office.

(j)  Moratorium.--No redevelopment assistance capital project

may be approved in the period between the date of a general

election at which a Governor is elected and the third Tuesday of

January next following the election.

(k)  Guidelines.--Within 60 days of the effective date of

this subsection, the office shall establish guidelines

concerning the administration of and approval process for

redevelopment assistance capital projects. The guidelines shall,

at a minimum, establish application timelines, application

content and the review, evaluation and award criteria and

process. In establishing the evaluating criteria, the office may

give preference to an applicant with a project that has at least

a 75% non-State financial participation. The guidelines must be

posted on the Internet website of the office.

Section 5.  The amendment of the definition of "redevelopment

assistance capital project" in section 302 of the act shall

apply to capital projects that have not been approved by the

Secretary of the Budget on or before December 31, 2011.

Section 6.  This act shall take effect immediately.