THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY EARLL, JUNE 16, 2011

REFERRED TO COMMUNITY, ECONOMIC AND RECREATIONAL DEVELOPMENT, JUNE 16, 2011  

AN ACT

Amending Title 12 (Commerce and Trade) of the Pennsylvania

Consolidated Statutes, repealing provisions relating to

opportunity grants; adding provisions providing for the

establishment, administration and implementation of the

Pennsylvania First Program; and making related repeals.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Chapter 21 of Title 12 of the Pennsylvania

Consolidated Statutes is repealed:

[CHAPTER 21

OPPORTUNITY GRANTS

Sec.

2101.  Scope.

2102.  Definitions.

2103.  Establishment.

2104.  Application.

2105.  Review.

2106.  Approval.

2107.  Penalty.

2108.  Limitations.

2109.  Guidelines.

§ 2101.  Scope.

This chapter relates to the Opportunity Grant Program.

§ 2102.  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 applies for a grant in accordance

with this chapter.

"Developer."  A person that has as a purpose the promotion or

construction of economic development projects and that is

engaged in the development of real estate for use by more than

one person.

"Eligible recipient."  Any of the following persons:

(1)  A municipality.

(2)  An entity created under the act of August 23, 1967

(P.L.251, No.102), known as the Economic Development

Financing Law.

(3)  An entity certified as an industrial development

agency under the act of May 17, 1956 (1955 P.L.1609, No.537),

known as the Pennsylvania Industrial Development Authority

Act.

(4)  An entity created under 53 Pa.C.S. Ch. 56 (relating

to municipal authorities) or under the former act of May 2,

1945 (P.L.382, No.164), known as the Municipality Authorities

Act of 1945.

(5)  An entity created under the act of May 24, 1945

(P.L.991, No.385), known as the Urban Redevelopment Law.

(6)  A developer.

(7)  A person that is engaged in any of the following

activities:

(i)  The production or processing of farm

commodities.

(ii)  Manufacturing.

(iii)  Research and development.

(iv)  Export services.

(v)  Any other activity which offers a significant

economic impact on the Commonwealth, as determined by the

department.

"Eligible use."  Any of the following activities:

(1)  Job training.

(2)  The acquisition of interest in land, buildings or

rights-of-way.

(3)  The construction or rehabilitation of buildings.

(4)  The construction or rehabilitation of

infrastructure.

(5)  The purchase or upgrading of machinery and

equipment.

(6)  Working capital.

(7)  Site preparation, including demolition and

clearance.

(8)  Environmental assessments.

(9)  Remediation of hazardous material.

(10)  Architectural and engineering fees up to 10% of the

award.

"Job-creating economic development."  Includes the expansion

or preservation of existing industry.

"Program."  The Opportunity Grant Program established in

section 2103 (relating to establishment.)

"Project."  An activity conducted in this Commonwealth.

"Recipient."  A person who receives a grant under this

chapter.

§ 2103.  Establishment.

There is established within the department a program to be

known as the Opportunity Grant Program. The program shall be

administered by the department to provide grants to eligible

persons for certain projects which encourage job-creating

economic development within this Commonwealth.

§ 2104.  Application.

A person may submit an application to the department

requesting a grant for a project. The application shall be on

the form required by the department and shall include or

demonstrate all of the following:

(1)  The name and address of the applicant.

(2)  A statement that the applicant is an eligible

recipient under the program.

(3)  A statement of the amount of grant sought.

(4)  A statement of the project, including a detailed

statement of the cost of the project.

(5)  A statement identifying the economic impact of the

project to the region and the estimated impact on State and

local revenues.

(6)  A commitment of private matching funds of at least

$4 for every $1 of grant funds, and of the balance of funding

for the entire project cost, from a responsible source.

(7)  A commitment from the applicant to complete the

project.

(8)  Any other information required by the department.

§ 2105.  Review.

The department shall review the application to determine if

the applicant has met all of the criteria set forth in section

2104 (relating to application).

§ 2106.  Approval.

The following shall apply:

(1)  Upon being satisfied that all requirements have been

met, the department may approve the application and award a

grant.

(2)  Prior to providing grant funds to the applicant, the

department shall enter into a contract with the applicant.

The contract shall include provisions requiring the applicant

to use the grant to pay the costs of the project.

(3)  The department may impose any other terms and

conditions on the grants authorized by this chapter as the

department determines is in the best interests of the

Commonwealth, including a provision requiring collateral to

secure repayment of any penalty imposed under the program.

§ 2107.  Penalty.

(a)  Imposition.--Except as provided in subsection (b), the

department shall impose a penalty upon a recipient for any of

the following:

(1)  Failing to create the number of jobs specified in

the recipient's application.

(2)  Failing to inject the required amount of private

matching funds into the project.

(3)  Failing to operate at the project site for a minimum

period of five years.

(b)  Exception.--The department may waive the penalty

required by subsection (a) if the department determines that the

failure was due to circumstances outside the control of the

recipient.

(c)  Amount.--The amount of the penalty shall be equal to the

full amount of the grant received plus an additional amount of

up to 10% of the amount of the grant received. The penalty shall

be payable in one lump sum or in installments, with or without

interest, as the department deems appropriate.

§ 2108.  Limitations.

(1)  An applicant may not receive a grant under this

chapter for more than two consecutive fiscal years for the

same project.

(2)  A grant awarded under this chapter may not be used

to do any of the following:

(i)  Refinance or retire existing debt.

(ii)  Pay costs unrelated to a project location at a

site in this Commonwealth.

(3)  In no case shall the aggregate amount of grants paid

in any fiscal year under this chapter exceed the annual

appropriation to the department for the program.

(4)  A grant awarded under this chapter shall in no way

constitute an entitlement derived from the Commonwealth or a

claim on any other funds of the Commonwealth.

§ 2109.  Guidelines.

The department shall develop written guidelines for the

program. The guidelines shall do all of the following:

(1)  Limit grant size for any single project.

(2)  Clarify eligible uses of grants.

(3)  Clarify standards for eligibility.

(4)  Require geographic diversity of funded projects.]

Section 2.  Title 12 is amended by adding a chapter to read:

CHAPTER 22

PENNSYLVANIA FIRST PROGRAM

Sec.

2201.  Scope of chapter.

2202.  Purpose.

2203.  Definitions.

2204.  Establishment.

2205.  Application.

2206.  Review.

2207.  Approval.

2208.  Match.

2209.  Penalty.

2210.  Limitations.

2211.  Guidelines.

2212.  Annual reserve of appropriation required for small

businesses.

2213.  Transition provisions.

§ 2201.  Scope of chapter.

This chapter relates to the Pennsylvania First Program.

§ 2202.  Purpose.

The purposes of this chapter are to:

(1)  Consolidate existing funding programs within the

department into a comprehensive program.

(2)  Provide flexibility to respond rapidly and concisely

to the needs of companies locating or expanding in this

Commonwealth with competitive grants, guarantees and loans.

(3)  Provide for certain costs of job creation and

retention, job training, infrastructure and work force

development projects.

(4)  Increase investment in the Commonwealth and enable

the Commonwealth to compete more effectively in both the

local and global economies.

(5)  Create and retain jobs in this Commonwealth.

§ 2203.  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."  Any of the following entities that apply for

financial assistance in accordance with this chapter:

(1)  A for-profit entity.

(2)  A not-for-profit entity.

(3)  A municipality.

(4)  A municipal authority organized under the former act

of May 2, 1945 (P.L.382, No.164), known as the Municipality

Authorities Act of 1945, or 53 Pa.C.S. Ch. 56 (relating to

municipal authorities).

(5)  A redevelopment authority organized under the act of

May 24, 1945 (P.L.991, No.385), known as the Urban

Redevelopment Law.

(6)  An industrial and commercial development authority

as defined under the act of August 23, 1967 (P.L.251,

No.102), known as the Economic Development Financing Law.

(7)  A local development district as defined under the

act of December 7, 1994 (P.L.845, No.120), known as the Local

Development District Act.

(8)  An industrial development agency as defined under

the act of May 17, 1956 (1955 P.L.1609, No.537), known as the

Pennsylvania Industrial Development Authority Act.

"Eligible use."  Any of the following activities:

(1)  Job training for residents in this Commonwealth.

(2)  The acquisition of interest in land, buildings or

rights-of-way.

(3)  The construction or rehabilitation of buildings.

(4)  The construction or rehabilitation of

infrastructure.

(5)  The purchase, upgrade or installation of machinery

and equipment.

(6)  Working capital.

(7)  Site preparation, including demolition and

clearance.

(8)  Environmental assessments.

(9)  Remediation of hazardous material.

(10)  Architectural and engineering fees not to exceed

10% of the overall cost of a project.

"Financial assistance."  A grant, loan or loan guarantee

provided by State funds.

"Program."  The Pennsylvania First Program established in

this chapter.

"Project."  An activity conducted in this Commonwealth.

"Small business."  A business with not more than 100 full-

time employees.

§ 2204.  Establishment.

There is established within the department a program to be

known as the Pennsylvania First Program. The program shall be

administered by the department to provide financial assistance

to applicants for projects that encourage job creation, job

retention or job training through economic development within

this Commonwealth.

§ 2205.  Application.

An applicant may submit an application to the department

requesting financial assistance for a project. The application

shall be on the form required by the department and shall

include or demonstrate all of the following where applicable:

(1)  The name and address of the applicant.

(2)  A statement of the project, including a detailed

statement of the cost of the project.

(3)  A statement of the amount of financial assistance

sought in order to reimburse the applicant for certain costs

of the project.

(4)  A statement identifying the economic impact of the

project to the region.

(5)  A statement regarding the estimated impact on State

and local revenues.

(6)  A statement indicating the number of jobs to be

created or retained as a result of the project.

(7)  A commitment of matching funds in the amount

required by the department under section 2208 (relating to

match) and a commitment of the balance of funding for the

entire project cost, from a responsible source or sources.

(8)  A commitment from the applicant to complete the

project.

(9)  If the applicant is a for-profit or not-for-profit

entity, sufficient evidence that the applicant is financially

sound and able to fulfill the commitments made in its letter

of intent.

(10)  Any other information required by the department.

§ 2206.  Review.

(a)  General rule.--The department shall review the

application to determine if the applicant has met all of the

criteria set forth in section 2205 (relating to application).

(b)  Duty to monitor.--The department shall monitor the

applicant's compliance with the program.

(c)  Report required.--The department shall require any

person or company who is the recipient of financial assistance

under this chapter to submit an annual report beginning 12

months after the financial assistance is granted and every year

thereafter, so long as the recipient is receiving the financial

assistance or until all requirements of accepting the financial

assistance are satisfied.

(d)  Content of report.--The report shall include:

(1)  The amount of financial assistance received in the

previous year.

(2)  The total amount of financial assistance that has

been received by the recipient and the program under which

the financial assistance was approved.

(3)  Information relating to whether or not the

requirements of accepting the financial assistance are being

satisfied.

(4)  Number of employees of the recipient, including an

increase or reduction in the number of employees over the

previous year, broken down by full-time, part-time and

temporary jobs.

(5)  Whether the recipient is delinquent in the payment

of any State, county or local taxes, the type of tax and the

taxing authority to which the tax is owed.

(6)  Report any other information specifically required

by the financial assistance contracts.

(e)  Annual report to General Assembly.--The department shall

compile the information reported under subsection (c) annually

for each company receiving financial assistance and shall submit

a report of the compiled information to the General Assembly.

§ 2207.  Approval.

The department may approve the application and provide

financial assistance to the applicant provided that:

(1)  The department is satisfied that all requirements

for reimbursement have been met.

(2)  For projects which are proposed to create or retain

jobs in this Commonwealth, the department is satisfied that

the project will create or retain a significant number of

jobs to enhance the economic base of this Commonwealth.

(3)  Prior to providing financial assistance to the

applicant, the department shall enter into a contract with

the applicant. The contract shall include provisions

reflecting the applicant's obligations and requiring the

applicant to use the financial assistance received under this

chapter for eligible uses related to the project.

(4)  The department may impose other usual and customary

terms and conditions on the financial assistance authorized

by this chapter as the department determines is in the best

interests of the Commonwealth, including a provision

requiring collateral to secure repayment of any penalty

imposed under the program. The conditions shall be included

in the contract for financial assistance.

§ 2208.  Match.

The department shall assure that:

(1)  Financial assistance for each project shall be

leveraged by at a minimum $4 of non-State matching funds per

dollar of the total financial assistance approved.

(2)  Financial assistance provided, on an aggregate

basis, under this chapter shall be leveraged by $10 of non-

State matching funds per dollar of the financial assistance

to be measured at the end of each fiscal year.

§ 2209.  Penalty.

(a)  Imposition.--Except as provided in subsection (b), the

department shall impose a penalty upon a recipient for any of

the following:

(1)  Failing to create or retain the number of jobs in

this Commonwealth specified in the application.

(2)  Failing to provide the job training specified in the

application.

(3)  Failing to inject the required amount of matching

funds into the project.

(4)  Failing to operate at the project site for a minimum

period of five years.

(b)  Exception.--The department may waive the penalty

required by subsection (a) if the department determines that the

failure was due to circumstances outside the control of the

recipient.

(c)  Amount.--

(1)  For grants, the department may impose a penalty not

to exceed the full amount of the financial assistance

received. The penalty shall be payable in one lump sum or in

installments, with or without interest, as the department

deems appropriate.

(2)  For loans, the department may impose a penalty by

increasing the interest rate charged on the outstanding

principal of the loan at a rate not to exceed an additional

5% per annum.

(3)  For guarantees, the department may impose a penalty

not to exceed 10% of the guarantee.

§ 2210.  Limitations.

The following limitations apply:

(1)  An applicant may not receive financial assistance

under this chapter for more than two consecutive fiscal years

for the same project.

(2)  The total award to any one applicant in any fiscal

year may not exceed 20% of the funds appropriated to the

program for that fiscal year.

(3)  Financial assistance awarded under this chapter may

not be used to do any of the following:

(i)  Refinance or retire existing debt.

(ii)  Pay costs unrelated to a project location at a

site in this Commonwealth.

(iii)  Provide funds, directly or indirectly, for

payment distribution or as a loan to owners, partners or

shareholders of a small business, except as ordinary

compensation for services rendered.

(4)  Financial assistance awarded under this chapter

shall in no way constitute an entitlement derived from the

Commonwealth or a claim on any other funds of the

Commonwealth.

§ 2211.  Guidelines.

The department shall develop written guidelines for the

program. The guidelines shall do all of the following:

(1)  Limit the amount of financial assistance awarded for

any single project.

(2)  Clarify eligible uses of financial assistance,

provided that if the eligible use is for working capital

expenditures, not more than 10% of the total financial

assistance may be used for working capital expenditures.

(3)  Clarify standards for eligibility.

(4)  Require geographic diversity of funded projects.

(5)  Establish the charges imposed in connection with the

loan commitments made under this chapter.

(6)  Establish the maximum term and interest rate for

loans.

§ 2212.  Annual reserve of appropriation required for small

businesses.

The department shall establish at the beginning of each

fiscal year a reserve, which may not exceed 25% of the funds

appropriated to the department for the program, for financial

assistance to applicants that own or operate small businesses.

Any uncommitted funds in the reserve after March 1 of any fiscal

year may be made available to other qualified applicants.

§ 2213.  Transition provisions.

(a)  Approved applications.--Applications for financial

assistance under former Chapter 21 (relating to opportunity

grants), former Chapter 29 of the act of June 29, 1996 (P.L.434,

No.67), known as the Job Enhancement Act, and the former

provisions of the act of July 11, 1996 (P.L.677, No.116), known

as the Infrastructure Development Act, which have been approved

prior to the effective date of this chapter shall be processed

in accordance with the former provisions of Chapter 21, Chapter

29 and the Infrastructure Development Act, notwithstanding

section 2207 (relating to approval).

(b)  Pending applications.--Applications for financial

assistance under former Chapter 21, former Chapter 29 of the Job

Enhancement Act, and the former provisions of the Infrastructure

Development Act, which have been received by the department but

have not been approved prior to the effective date of this

chapter shall be evaluated and processed in accordance with this

chapter.

(c)  Monitoring.--All projects which were funded or approved

for funding prior to the effective date of this chapter shall be

monitored in accordance with the provisions of former Chapter

21, former Chapter 29 of the Job Enhancement Act and the former

provisions of the Infrastructure Development Act,

notwithstanding section 2207.

Section 3.  Repeals are as follows:

(1)  The General Assembly declares that the repeals under

paragraph (2) are necessary to effectuate the addition of 12

Pa.C.S. Ch. 22.

(2)  (i)  Chapter 29 of the act of June 29, 1996

(P.L.434, No.67), known as the Job Enhancement Act.

(ii)  The act of July 11, 1996 (P.L.677, No.116),

known as the Infrastructure Development Act.

Section 4.  This act shall take effect July 1, 2011, or

immediately, whichever is later.