THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY COHEN, LEVDANSKY, BELFANTI, CALTAGIRONE, STURLA, BRENNAN, CREIGHTON, FABRIZIO, GEORGE, GOODMAN, GROVE, GRUCELA, HARKINS, HORNAMAN, JOSEPHS, KIRKLAND, KORTZ, LONGIETTI, McILVAINE SMITH, MILLER, MUNDY, MURT, MYERS, M. O'BRIEN, PASHINSKI, PAYTON, READSHAW, SABATINA, SANTONI, SIPTROTH, WAGNER, WALKO, WHITE AND YOUNGBLOOD, MARCH 9, 2009

REFERRED TO COMMITTEE ON COMMERCE, MARCH 9, 2009  

AN ACT

Requiring companies that receive economic development subsidies

to ensure that subsidies result in improved standards of

living for working families.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Short title.

This act shall be known and may be cited as the Economic

Development and Corporate Accountability Act.

Section 2.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Corporate parent."  Any person, association, corporation,

joint venture, partnership or other entity, that owns or

controls 50% or more of a recipient corporation.

"Date of subsidy."  The date that a granting body provides

the initial monetary value of a development subsidy to a

recipient corporation. If the subsidy is for the installation of

new equipment, such date shall be the date the corporation puts

the equipment into service. If the subsidy is for improvements

to property, such date shall be the date the improvements are

finished, or the date the corporation occupies the property,

whichever is earlier.

"Department."  The Department of Revenue of the Commonwealth.

"Development subsidy."  Any expenditure of public funds with

a value of at least $25,000, for the purpose of stimulating

economic development within this Commonwealth, including, but

not limited to, bonds, grants, loans, loan guarantees,

enterprise zones, empowerment zones, tax increment financing,

grants, fee waivers, land price subsidies, matching funds, tax

abatements, tax exemptions and tax credits.

"Full-time job."  A job in which an individual is employed by

a recipient corporation for at least 35 hours per week.

"Granting body."  Any agency, board, office, public benefit

corporation or authority of the State or local government unit

that provides a development subsidy.

"Local government unit."  An agency, board, commission,

office, public benefit corporation or public authority of a

political subdivision of the State.

"Part-time job."  A job in which an individual is employed by

a recipient corporation fewer than 35 hours per week.

"Project site."  The site of a project for which any

development subsidy is provided.

"Property-taxing entity."  Any entity which levies taxes upon

real or personal property.

"Recipient corporation."  Any person, association,

corporation, joint venture, partnership or other entity that

receives a development subsidy.

"Small business."  A corporation whose corporate parent, and

all subsidiaries thereof, employed fewer than 20 full-time

employees or had total gross receipts of less than $1,000,000

during the previous calendar year.

"State."  An agency, board, commission, office, public

benefit corporation or public benefit authority of the State.

"Subsidy value."  The face value of any and all development

subsidies provided to a recipient corporation.

"Temporary job."  A job in which an individual is hired for a

season or for a limited period of time.

Section 3.  Unified Economic Development Budget.

(a)  Annual report.--The department shall submit an annual

Unified Economic Development Budget to the General Assembly no

later than three months after the end of the Commonwealth's

fiscal year. The report shall present all types of expenditures

for economic development during the prior fiscal year,

including, but not limited to:

(1)  The amount of uncollected State tax revenues that

result from every corporate tax credit, abatement, exemption

and reduction provided by the State or a local government

unit, including, but not limited to, gross receipts, income,

sales, use, raw materials, excise, property, utility and

inventory taxes.

(2)  The name of each corporate taxpayer which claimed

any tax credit, abatement, exemption or reduction with a

value of $5,000 or more, together with the dollar amount

received by each such corporation.

(3)  Any tax credit, abatement, exemption or reduction

received by a corporation of less than $5,000 each shall not

be itemized. The department shall report an aggregate dollar

amount of such expenditures and the number of companies so

aggregated for each tax expenditure.

(4)  All State-appropriated expenditures for economic

development, including line-item budgets for every State-

funded entity concerned with economic development.

Section 4.  Unified reporting of property tax reductions and

abatements.

(a)  Annual report.--Each property-taxing entity shall

annually submit a report to the department regarding any real

property in the entity's jurisdiction that has received a

property tax abatement or reduction during the fiscal year. The

report shall contain information including, but not limited to,

the name of the property owner, the address of the property, the

start and end dates of the property tax reduction or abatement,

the schedule of the tax reduction, each tax abatement, reduction

and exemption for the property and the amount of property tax

revenue not paid to the taxing entity as a result of the

reduction or abatement.

(b)  Other reports.--Each property-taxing entity shall also

submit a report to the department that sets forth the total

property tax revenue not paid to such entity during the fiscal

year as a result of all property tax reductions and abatements

in the entity's jurisdiction.

(c)  Forms.--The reports required under subsections (a) and

(b) shall be prepared on forms approved by the department and

shall be submitted to the department by the property-taxing

entity no later than three months after the end of the fiscal

year.

(d)  Department report.--The department shall annually

compile and publish all of the data contained in the reports

required under subsections (a) and (b) in both written and

electronic form, including publication on the department's

Internet website.

(e)  Failure to submit reports.--If a property-taxing entity

fails to submit required reports to the department within the

prescribed time, the department shall notify the State

Treasurer, whereupon the State Treasurer shall withhold further

payments of any development subsidy to the delinquent entity

until the entity files its reports with the department.

Section 5.  Application for economic development subsidies.

(a)  Application.--A development subsidy applicant shall

complete an application for the subsidy on a form prepared by

the Department of Community and Economic Development. The

information required on the application shall include the

following:

(1)  An application tracking number provided by the

granting agency for the project.

(2)  The name, street and mailing address and telephone

number of the chief officer of the granting body provided by

the granting agency.

(3)  The name, street and mailing address and telephone

number of the chief officer of the applicant's corporate

parent.

(4)  The name, street and mailing address and telephone

number of the chief officer of the applicant.

(5)  The street address of the project site.

(6)  The three-digit North American Industry

Classification System number of the project site.

(7)  The total number of individuals employed by the

applicant at the project site on the date of the application,

broken down by full-time, part-time and temporary positions.

(8)  The total number of individuals employed in the

Commonwealth by the applicant's corporate parent, and all

subsidiaries thereof, as of December 31 of the prior fiscal

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

positions.

(9)  The development subsidy or subsidies being applied

for with the granting body and the value of such subsidy or

subsidies.

(10)  The number of new jobs to be created by the

applicant at the project site, broken down by full-time,

part-time and temporary positions.

(11)  The average hourly wage to be paid to all current

and new employees at the project site, broken down by full-

time, part-time and temporary positions, and further broken

down by wage groups as follows: $8 or less an hour, $8.01 to

$9 an hour, $9.01 to $10 an hour, $10.01 to $11 an hour,

$11.01 to $12 an hour, $12.01 to $13 an hour, $13.01 to $14

an hour, $14.01 to $15 an hour, $15.01 to $16 an hour and

$16.01 or more an hour.

(12)  For project sites located in a metropolitan

statistical area, as defined by the Federal Office of

Management and Budget, the average hourly wage paid to

nonmanagement employees in the State for the industries

involved at the project, as established by the United States

Bureau of Labor Statistics.

(13)  For project sites located outside of metropolitan

statistical areas, the average weekly wage paid to

nonmanagerial employees in the county for industries involved

at the project, as established by the United States

Department of Commerce.

(14)  The type and amount of health care coverage to be

provided by the applicant within 90 days of commencement of

employment at the project site, including any costs to be

borne by the employees.

(15)  A list of all development subsidies that the

applicant requests and the name of any other granting body

from which such subsidies are sought.

(16)  A statement as to whether the development subsidy

may reduce employment at any other site controlled by the

applicant or its corporate parent, inside or outside this

Commonwealth, resulting from automation, merger, acquisition,

corporate restructuring or other business activity.

(17)  A statement as to whether or not the project

involves the relocation of work from another address and, if

so, the number of full-time, part-time and temporary

positions to be relocated and the address from which they are

to be relocated.

(18)  A certification by the chief officer of the

applicant as to the accuracy of the application.

(b)  Approval.--If the granting body shall approve the

application, it shall send a copy to the Department of Community

and Economic Development within 15 days of such approval. If the

application is not approved, the granting body shall retain the

application in its records.

Section 6.  Annual reports.

(a)  Progress report.--Each granting body shall file a

progress report with the Department of Community and Economic

Development for each project for which a development subsidy has

been granted, no later than February 1 of each year. The report

shall include the following information:

(1)  The application tracking number.

(2)  The name, street and mailing addresses, telephone

number and chief officer of the granting body.

(3)  The name, street and mailing addresses, telephone

number and chief officer of the recipient corporation.

(4)  A summary of the number of jobs required, created

and lost, broken down by full-time, part-time and temporary

positions, and by wage groups as defined in section 5(11).

(5)  The type and amount of health care coverage provided

to the employees at the project site, including any costs

borne by the employees.

(6)  The comparison of the total employment in this

Commonwealth by the recipient's corporate parent on the date

of the application and the date of the report, broken down by

full-time, part-time and temporary positions.

(7)  A statement as to whether the use of the development

subsidy during the previous fiscal year reduced employment at

any other site controlled by the recipient corporation or its

corporate parent, inside or outside this Commonwealth as a

result of automation, merger, acquisition, corporate

restructuring or other business activity.

(8)  A signed certification by the chief officer of the

recipient corporation as to the accuracy of the progress

report.

(b)  Subsequent progress reports.--On all subsequent annual

progress reports, the granting body shall indicate whether the

recipient corporation is still in compliance with its job

creation, wage and benefit goals, and whether the corporate

parent is still in compliance with its State employment

requirement. Granting bodies and recipient corporations shall

file annual progress reports for the duration of the subsidy or

not less than five years, whichever period is greater.

Section 7.  Two-year report.

(a)  Filing.--No later than 15 days after the second

anniversary of the date of subsidy, the granting body shall file

a two-year progress report with the Department of Community and

Economic Development and include the same information as

required under section 6. The recipient corporation shall

certify as to the accuracy of such report.

(b)  Job creation, etc.--The granting body shall state in the

two-year report whether the recipient corporation has achieved

its job creation, wage and benefit goals, and whether the

corporate parent has maintained 90% of its employment in this

Commonwealth.

(c)  Compilation.--The Department of Community and Economic

Development shall compile and publish all data from the progress

reports in both written and electronic form, including

publication on the department's Internet website.

(d)  Access.--The granting body and the Department of

Community and Economic Development shall have access at all

reasonable times to the project site and the records of the

recipient corporation in order to monitor the project and to

prepare progress reports.

(e)  Fine.--A recipient corporation that fails to provide the

granting body with the information or access required under this

section shall be subject to a fine of not less than $500 per day

to commence within ten working days after the February 1

deadline and of not less than $1,000 per day to commence 20 days

after such deadline.

Section 8.  Subsidy limit and job quality standards.

(a)  Limitation.--A granting body shall not award a

development subsidy if the cost per job is greater than $35,000.

Such cost shall be determined by dividing the amount of the

subsidy by the number of full-time jobs required under the

application approved by the granting body.

(b)  Wage requirement.--A granting body shall not grant a

subsidy to an applicant unless the wages paid to employees at

the project site are equal to or exceed 85% of the average wage

as established under section 5(11), provided, however, that for

small businesses, the average wage must equal or exceed 75% of

wages established thereunder. The computation of wages under

this section shall only apply to a recipient corporation that

provides the health care coverage as approved in its application

by the granting body.

Section 9.  Recapture.

(a)  Requirements.--A recipient corporation shall fulfill its

job creation, wage, health care and other benefit requirements

for the project site within two years of the date of subsidy.

Such recipient shall maintain its wage and benefit goals as long

as the subsidy is in effect or five years, whichever is longer.

(b)  Employment.--The corporate parent of a recipient

corporation must maintain at least 90% of its employment in the

State as long as the development subsidy is in effect or not

less than five years, whichever is longer.

(c)  Requirements.--If the requirements under subsection (a)

or (b) are not fulfilled, the granting body shall recapture the

development subsidy from the recipient corporation as follows:

(1)  Upon a failure by the recipient corporation to

create the required number of jobs, or to pay the required

wages or benefits, the amount recaptured shall be based on

the pro rata amount by which the unfulfilled jobs, wages or

benefits bear to the total amount of the development subsidy.

(2)  Upon a failure of the corporate parent to maintain

90% of its employment in the State the rate of recapture

shall equal twice the percentage by which such employment is

less than 90%.

(d)  Notice.--The granting body shall provide notice and

explanation to the recipient corporation of its intent to

recapture the development subsidy and state the amount to be

recaptured. The recipient corporation shall remit to the

governing body such amount within 60 calendar days of the date

of notice.

(e)  Default.--If a recipient corporation defaults on a

development subsidy in three consecutive calendar years, the

granting body shall declare the subsidy null and void and shall

so notify the Department of Community and Economic Development

and the recipient corporation. The recipient corporation shall

pay back to the granting body all remaining value of the

development subsidy it has not previously repaid within 180

calendar days of the date of the notice of such default.

Section 10.  Private enforcement action.

If a granting body fails to enforce any provision of this

section, any individual who paid personal income taxes to the

State in the calendar year prior to the year in dispute, or any

organization representing such taxpayers, shall be entitled to

bring a civil action in State court to compel enforcement under

this act. The court shall award reasonable attorney fees and

costs to such prevailing taxpayer or organization.

Section 11.  Public record disclosure.

All records required to be prepared or maintained under this

section including, but not limited to, applications, progress

reports, recapture notices, and any other records or proceedings

relating thereto, shall be subject to disclosure under

applicable law.

Section 12.  No reduction in wages.

Nothing in this act shall be construed to require or

authorize a recipient corporation to reduce wages established by

any collective bargaining agreement or Federal or State

prevailing wage laws.

Section 13.  Severability.

The provisions of this act are severable. If any provision of

this act or its application to any person or circumstance is

held invalid, the invalidity shall not affect other provisions

or applications of this act which can be given effect without

the invalid provision or application.

Section 14.  Effective date.

This act shall take effect December 1, 2009, or immediately,

whichever is later.