Regular Session 2021-2022 House Bill 1487 P.N. 1621

PRINTER'S NO. 1621

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1487

Session of

2021

INTRODUCED BY POLINCHOCK, TOMLINSON, SCHROEDER, THOMAS, LABS,

STAATS, FARRY, BOBACK, R. BROWN, SCHLEGEL CULVER, T. DAVIS,

DRISCOLL, HILL-EVANS, JAMES, LEWIS DELROSSO, LONGIETTI,

MILLARD, MIZGORSKI, NEILSON, RADER, ROWE, SCHMITT AND

STRUZZI, MAY 26, 2021

REFERRED TO COMMITTEE ON COMMERCE, MAY 26, 2021

AN ACT

Amending the act of April 9, 1929 (P.L.343, No.176), entitled

"An act relating to the finances of the State government;

providing for cancer control, prevention and research, for

ambulatory surgical center data collection, for the Joint

Underwriting Association, for entertainment business

financial management firms, for private dam financial

assurance and for reinstatement of item vetoes; providing for

the settlement, assessment, collection, and lien of taxes,

bonus, and all other accounts due the Commonwealth, the

collection and recovery of fees and other money or property

due or belonging to the Commonwealth, or any agency thereof,

including escheated property and the proceeds of its sale,

the custody and disbursement or other disposition of funds

and securities belonging to or in the possession of the

Commonwealth, and the settlement of claims against the

Commonwealth, the resettlement of accounts and appeals to the

courts, refunds of moneys erroneously paid to the

Commonwealth, auditing the accounts of the Commonwealth and

all agencies thereof, of all public officers collecting

moneys payable to the Commonwealth, or any agency thereof,

and all receipts of appropriations from the Commonwealth,

authorizing the Commonwealth to issue tax anticipation notes

to defray current expenses, implementing the provisions of

section 7(a) of Article VIII of the Constitution of

Pennsylvania authorizing and restricting the incurring of

certain debt and imposing penalties; affecting every

department, board, commission, and officer of the State

government, every political subdivision of the State, and

certain officers of such subdivisions, every person,

association, and corporation required to pay, assess, or

collect taxes, or to make returns or reports under the laws

imposing taxes for State purposes, or to pay license fees or

other moneys to the Commonwealth, or any agency thereof,

every State depository and every debtor or creditor of the

Commonwealth," in emergency COVID-19 response, further

providing for Hospitality Industry Recovery Program; and

making an appropriation.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 134-C of the act of April 9, 1929

(P.L.343, No.176), known as The Fiscal Code, added February 5,

2021 (P.L.1, No.1), is amended to read:

Section 134-C. Hospitality Industry Recovery Program.

(a) County block grants.--From money appropriated to the

department for COVID Relief - County Block Grant - Hospitality

Industry Recovery Program, each county shall receive an amount

equal to the population proportion amount as determined by

paragraph (2). The following shall apply:

(1) The department shall distribute funding to counties

under this subsection on or before [February 28,] August 1,

2021.

(2) For purposes of this subsection, the population

proportion amount shall be determined as follows:

(i) divide:

(A) the population estimate of the county; by

(B) the sum of the population estimates of all

counties; and

(ii) multiply the quotient under subparagraph (i) by

the total amount appropriated for COVID Relief - County

Block Grant - Hospitality Industry Recovery Program.

(3) For purposes of this subsection, a county's

population shall be equal to the published estimate by the

United States Census Bureau Population Estimates Program for

calendar year 2019.

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(b) County Block Grant - Hospitality Industry Recovery

Program.--The County Block Grant - Hospitality Industry Recovery

Program is established within the department. The following

shall apply to the program:

(1) No later than [March 1,] August 1, 2021, each county

that receives a block grant under this section shall contract

with one or more CEDO or CDFI designated to serve that county

to award grants under this subsection.

(2) Subject to the prohibition under subparagraph (ii),

grants may be awarded to eligible applicants for the purpose

of alleviating revenue losses and paying eligible operating

expenses. The following shall apply to grants awarded under

this subsection:

(i) A grant awarded to an eligible applicant under

this subsection may not exceed $50,000.

(ii) A grant may not be awarded to pay for the same

eligible operating expenses for which an eligible

applicant receives or received payment, reimbursement or

loan forgiveness from the following sources:

(A) The CARES Act or Consolidated Appropriations

Act, 2021 money that is not required to be repaid to

the Federal Government.

(B) The act of May 29, 2020 (P.L. , No.2A),

known as the COVID-19 Emergency Supplement to the

General Appropriation Act of 2019.

is not required to be repaid to the Federal

Government.

(3) The receipt of a loan or grant issued under the

authority of the Federal Government or the Commonwealth shall

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not disqualify an applicant from eligibility for a grant

under this section.

(4) Priority in the awarding of grants shall be given to

eligible applicants that:

(i) have not received a loan or grant issued under

the authority of the Commonwealth or the Commonwealth's

political subdivisions or by the Federal Government under

the CARES Act [or], the Consolidated Appropriations Act,

2021 or the American Rescue Plan Act;

(ii) were subject to closure by the proclamation of

disaster emergency issued by the Governor on March 6,

2020, published at 50 Pa.B. 1644 (March 21, 2020), and

any renewal of the state of disaster emergency; or

(iii) can demonstrate a reduction in revenue which

meets one of the following:

(A) A reduction in gross receipts of 50% or more

for the period beginning after March 31, 2020, and

ending before December 31, 2020, in comparison to the

period beginning after March 31, 2019, and ending

before December 31, 2019.

(B) If the eligible applicant was not in

operation during the entire comparison period under

clause (A), but was in operation on February 15,

2020, a monthly average reduction in gross receipts

of 50% or more for the period beginning after March

31, 2020, and ending before December 31, 2020, in

comparison to the period beginning after January 1,

2020, and ending before April 1, 2020.

(5) The following shall apply to applications:

(i) Applications for grants under this section shall

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be in a form determined by a county with input from a

CEDO or CDFI processing the applications on behalf of a

county and shall contain documentation as required by the

county. Applications shall be available electronically.

(ii) By March 15, 2021, each CEDO or CDFI shall

receive and consider applications on a rolling basis

until funding for grants received by the county under

subsection (a) in which the CEDO or CDFI is designated to

perform services has been exhausted, or [June] November

15, 2021, whichever occurs first.

(6) The following shall apply to reviewing applications:

(i) By [July] December 15, 2021, each CEDO or CDFI

shall approve or disapprove applications for grants under

the program.

(ii) Upon approving an application under

subparagraph (i), a CEDO or CDFI shall enter into a grant

agreement with the eligible applicant in order to award

the grant.

(iii) The grant agreement required under

subparagraph (ii) shall explain the terms and conditions

of the grant, including each applicable law, statute and

reporting requirement.

(iv) The grant agreement under subparagraph (ii) may

be electronically signed and returned to the CEDO or CDFI

that approved the application.

(7) An eligible applicant or authorized representative

of the eligible applicant making application to the program

must certify in good faith to each of the following:

(i) The eligible applicant was in operation on

February 15, 2020, and, if required, paid income taxes to

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the Federal and State Government, as reported on

individual or business tax returns.

(ii) The eligible applicant remains in operation and

does not intend to permanently cease operations within

one year of the date of application.

(iii) COVID-19 has had an adverse economic impact on

the eligible applicant which makes the grant request

necessary to support the ongoing operations of the

eligible applicant.

(iv) The grant will be used to pay for COVID-19-

related economic impacts.

(v) During the period beginning on January 1, 2021,

and ending on June 30, 2021, the applicant has not and

will not receive another grant under this program.

(vi) An eligible applicant or authorized

representative of the eligible applicant must certify

that the information provided in an application to the

program and the information provided in all supporting

documents and forms is true and accurate in all material

respects. An eligible applicant or an authorized

representative of the eligible applicant that knowingly

makes a false statement to obtain a grant under the

program is punishable under penalty of perjury and fines

pursuant to 18 Pa.C.S. § 4904 (relating to unsworn

falsification to authorities).

(8) The following shall apply to the awarding of grants

under this subsection:

(i) A CEDO or CDFI contracted to award grants may

award grants in increments of $5,000, not to exceed the

limitation under paragraph (2)(i).

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(ii) A fully executed grant agreement as required

under paragraph (6) is required prior to disbursement of

grant funds.

(iii) The aggregate amount of all grants awarded may

not exceed the amount of money received by the county

under subsection (a) in which the CEDO or CDFI is

designated to perform services for the County Block Grant

- Hospitality Industry Recovery Program.

(9) A CEDO or CDFI may charge a fee not to exceed $500

per completed and reviewed grant application. Fees charged

under this paragraph shall be deducted from the total amount

of money distributed to the county under subsection (a) in

which the CEDO or CDFI is designated to perform services for

the County Block Grant - Hospitality Industry Recovery

Program and may not reduce the amount of the grant awarded to

an eligible applicant.

(10) Each grant awarded under this subsection shall be

paid to eligible applicants by [July] December 31, 2021.

(11) A county providing grants under this subsection

shall compile a report, which shall include the following:

(i) A list of each grant awarded under the program.

(ii) The name and address of each grant recipient.

(iii) The amount of the grant and a description of

the financial impact to the grantee for which the grant

was awarded.

(iv) The name of the CEDO or CDFI that processed the

grant.

(12) A report required under paragraph (11) shall be

submitted to the department by [August 31, 2021] January 31,

2022. The department shall prepare a consolidated report with

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information from all counties and shall submit the report to

the chairperson and minority chairperson of the

Appropriations Committee of the Senate and the chairperson

and minority chairperson of the Appropriations Committee of

the House of Representatives by [September 30, 2021] February

28, 2022. The report shall also be posted and maintained on

the county's and department's publicly accessible Internet

website.

(13) A county awarding grants and a CEDO or CDFI

processing grants on behalf of a county under this subsection

shall provide documentation to the Department of the Auditor

General or the department, upon request, for purposes of an

audit review.

(14) The department is prohibited from placing any

additional stipulations on counties that are in addition to

this section.

grant under subsection (a) that does not expend its entire

distribution on the program by [August 15, 2021] January 15,

2022, shall return any unused funds to the State Treasurer for

deposit into the [Workers' Compensation Security] General Fund.

(d) (Reserved).

(e) Definitions.--The following words and phrases when used

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

subsection unless the context clearly indicates otherwise:

"American Rescue Plan Act." The American Rescue Plan Act of

2021 (Public Law 117-2, 135 Stat. 4).

"CDFI." A community development financial institution that

is certified by the United States Department of the Treasury, is

headquartered in this Commonwealth, is part of the 17-member

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Pennsylvania CDFI network and primarily provides business loans

to low-to-moderate income individuals and business owners.

"Certified economic development organization" or "CEDO." An

economic development organization that has been certified by the

Pennsylvania Industrial Development Authority or an economic

development organization that serves more than one county and is

accredited by the International Economic Development Council.

"Consolidated Appropriations Act, 2021." The Consolidated

Appropriations Act, 2021 (Public Law 116-260, 134 Stat. 1182).

"Department." The Department of Community and Economic

Development of the Commonwealth.

"Economic development organization." A local development

district, an industrial development agency, industrial resource

center, redevelopment authority, community development financial

institution or any other nonprofit economic development

organization that is certified to participate in the

Pennsylvania Industrial Development Authority loan program.

"Eligible applicant." A for-profit entity that meets each of

the following:

(1) Is not publicly traded.

(2) Experienced a reduction in revenue in calendar year

2020, measured as follows:

(i) the applicant had gross receipts during the

first, second, third or fourth quarter in calendar year

2020 that demonstrate at least a 25% reduction from the

applicant's gross receipts during the same quarter in

calendar year 2019;

(ii) if the applicant was not in business during the

first or second quarter of calendar year 2019, but was in

business during the third and fourth quarters of calendar

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year 2019, the applicant had gross receipts during the

first, second, third or fourth quarter of calendar year

2020 that demonstrate at least a 25% reduction from the

applicant's gross receipts during the third or fourth

quarter of calendar year 2019;

(iii) if the applicant was not in business during

the first, second or third quarter of calendar year 2019,

but was in business during the fourth quarter of calendar

year 2019, the applicant had gross receipts during the

first, second, third or fourth quarter of calendar year

2020 that demonstrate at least a 25% reduction from the

fourth quarter of calendar year 2019;

(iv) if the applicant was not in business during

calendar year 2019, but was in operation on February 15,

2020, the applicant had gross receipts during the second,

third or fourth quarter of calendar year 2020 that

demonstrate at least a 25% reduction from the gross

receipts of the entity during the first quarter of

calendar year 2020; or

(v) an applicant that was in operation in all four

quarters of calendar year 2019 is deemed to have

experienced the revenue reduction in subparagraph (i) if

the applicant experienced a reduction in annual receipts

of at least 25% in 2020 compared to 2019 and the

applicant provides copies of its annual Federal tax forms

substantiating the revenue decline.

(vi) If an applicant changed ownership or control in

calendar year 2020, the applicant may measure its

reduction in revenue in calendar year 2020 under

subparagraphs (i), (ii), (iii), (iv) or (v) using the

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gross receipts of the entity for 2019.

(3) Meets each of the following conditions as of

February 15, 2020:

(i) [Operates a place of business within this

Commonwealth having a NAICS designation within the

Accommodation subsector (721) or Food Services and

Drinking Places subsector (722) and where accommodations,

food or drink is served to or provided for the public,

with or without charge.] Provides meals, beverages,

recreation, overnight accommodations or entertainment to

individuals.

(ii) Has fewer than 300 full-time equivalent

employees. For purposes of determining the number of

full-time equivalent employees under this subparagraph,

the calculation shall include each employee of the

eligible applicant notwithstanding whether the eligible

applicant has employees at multiple locations.

(iii) Has a maximum tangible net worth of not more

than $15,000,000 computed in accordance with generally

accepted accounting principles.

"Eligible operating expense." An operating expense,

including a payroll and nonpayroll expense, that is both

ordinary and necessary. An ordinary expense is one that is

common and accepted in an eligible applicant's industry. A

necessary expense is one that is helpful and appropriate for an

eligible applicant's trade or business. For purposes of

determining an eligible operating expense, the following

limitations shall apply:

(1) The operating expense must have been incurred

between March 1, 2020, and June 15, 2021, or prior to

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submission of an application under subsection (b), whichever

occurs first.

(2) For a mortgage obligation, the mortgage must have

been in force before February 15, 2020.

(3) For rent, under lease agreements, the lease

agreement must have been in force before February 15, 2020.

(4) For utility costs, service must have begun before

February 15, 2020.

(5) If an existing mortgage obligation or lease

agreement in force before February 15, 2020, is refinanced or

restructured after February 15, 2020, the mortgage obligation

or lease agreement is deemed to have been in force before

February 15, 2020.

"Full-time equivalent employee." The quotient obtained by

dividing the total number of hours for which employees were

compensated for employment over the preceding 12-month period by

2,080.

"Gross receipts." Revenue in whatever form received or

accrued, in accordance with the entity's accounting method, from

whatever source, including from the sales of products or

services, interest, dividends, rents, royalties, fees or

commissions, reduced by returns and allowances. The term does

not include the following:

(1) taxes collected for and remitted to a taxing

authority if included in gross or total income, such as sales

or other taxes collected from customers and excluding taxes

levied on the concern or its employees;

(2) proceeds from transactions between a concern and its

domestic or foreign affiliates; and

(3) amounts collected for another by a travel agent,

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real estate agent, advertising agent or conference management

service provider.

["NAICS." A classification within the North American

Industry Classification System developed for use by Federal

statistical agencies for the collection, analysis and

publication of statistical data related to the United States

economy.]

"Program." The County Block Grant - Hospitality Industry

Recovery Program established under subsection (b).

Section 2. The sum of $500,000,000 of Federal funds is

appropriated to the Department of Community and Economic

Development for the purpose of administering this act.

Section 3. This act shall take effect immediately.

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