PRINTER'S NO. 1110
No. 944 Session of 2007
INTRODUCED BY FRANKEL, BELFANTI, CARROLL, CURRY, DePASQUALE, DeWEESE, EVERETT, FABRIZIO, FREEMAN, GEORGE, GIBBONS, GOODMAN, HENNESSEY, JAMES, JOSEPHS, LEVDANSKY, MANN, MARKOSEK, McILHATTAN, MYERS, NICKOL, M. O'BRIEN, PETRI, REICHLEY, RUBLEY, McILVAINE SMITH, SOLOBAY, STABACK, WALKO, YOUNGBLOOD, YUDICHAK, BEYER AND THOMAS, MARCH 29, 2007
REFERRED TO COMMITTEE ON COMMERCE, MARCH 29, 2007
AN ACT 1 Amending the act of May 17, 1956 (1955 P.L.1609, No.537), 2 entitled "An act to promote the welfare of the people of the 3 Commonwealth by the reduction of unemployment in certain 4 areas of the Commonwealth determined to be critical economic 5 areas; providing for the establishment of industrial 6 development projects in such areas; creating The Pennsylvania 7 Industrial Development Authority as a body corporate and 8 politic with power to allocate funds for and make secured 9 loans to industrial development agencies for the payment of a 10 part of the cost of industrial development projects in 11 critical economic areas; authorizing the Authority to enter 12 into agreements with the Government of the United States or 13 any Federal agency or industrial development agency; 14 empowering the Authority to take title to, sell, convey and 15 lease industrial development projects where necessary to 16 protect loans made by the Pennsylvania Industrial Development 17 Authority on industrial development projects; providing that 18 no debt of the Commonwealth, its municipalities or political 19 subdivisions shall be incurred in the exercise of any powers 20 granted by this act; and providing for the examination of the 21 accounts and affairs of the Authority; and making an 22 appropriation," including biotechnology enterprises and small 23 business incubators within the scope of the act; and further 24 regulating loans to industrial development agencies. 25 The General Assembly of the Commonwealth of Pennsylvania 26 hereby enacts as follows: 27 Section 1. The last paragraph of section 2 of the act of May
1 17, 1956 (1955 P.L.1609, No.537), known as the Pennsylvania 2 Industrial Development Authority Act, amended July 10, 1963 3 (P.L.221, No.125), is amended to read: 4 Section 2. Findings and Declaration of Policy.--It is hereby 5 determined and declared as a matter of legislative finding-- 6 * * * 7 Therefore, it is hereby declared to be the policy of the 8 Commonwealth of Pennsylvania to promote the health, safety, 9 morals, right to gainful employment, business opportunities and 10 general welfare of the inhabitants thereof by the creation of a 11 body corporate and politic to be known as "The Pennsylvania 12 Industrial Development Authority" which shall exist and operate 13 for the public purpose of alleviating unemployment with its 14 resulting spread of indigency and economic stagnation by the 15 promotion and development of industrial and manufacturing 16 enterprises [and], research and development facilities, 17 biotechnology enterprises and small business incubators in those 18 areas of the Commonwealth in which conditions of critical 19 unemployment currently or may from time to time exist. Such 20 purposes are hereby declared to be public purposes for which 21 public money may be spent. 22 Section 2. Section 3(i) of the act, amended June 16, 1972 23 (P.L.475, No.153), is amended and the section is amended by 24 adding clauses to read: 25 Section 3. Definitions.--The following terms, whenever used 26 or referred to in this act, shall have the following meanings, 27 except in those instances where the context clearly indicates 28 otherwise: 29 * * * 30 (i) The term "industrial development project" shall mean any 20070H0944B1110 - 2 -
1 land, site, structure, facility or undertaking comprising or 2 being connected with or being a part of (i) an industrial 3 enterprise, (ii) a manufacturing enterprise, (iii) a research 4 and development enterprise, [or] (iv) an agricultural 5 enterprise, (v) a biotechnology enterprise, or (vi) a small 6 business incubator established or to be established by an 7 industrial development agency in a critical economic area. 8 * * * 9 (v) The term "biotechnology enterprise" shall mean an 10 enterprise which is engaged in the research, development, 11 production or provision of biotechnology for the purpose of 12 developing or providing products, processes or technologies for 13 specific commercial or public purposes, including, but not 14 limited to, medical, pharmaceutical, nutritional and other 15 health-related purposes, agricultural purposes and environmental 16 purposes, or engaged in providing services or products necessary 17 for such research, development, product or provision of service, 18 and which enterprise requires substantial capital by virtue of 19 its technological needs and creates or will create substantial 20 employment opportunities by its nature and technological needs. 21 (w) The term "small business incubator" shall mean a 22 facility in which small units of space may be leased by a tenant 23 and in which management maintains or provides access to business 24 development services for use by tenants. 25 Section 3. Section 5(b) of the act, amended July 10, 1963 26 (P.L.221, No.125), is amended to read: 27 Section 5. Powers of the Authority; General.--The Authority, 28 as a public corporation and governmental instrumentality 29 exercising public powers of the Commonwealth, is hereby granted 30 and shall have and may exercise all powers necessary or 20070H0944B1110 - 3 -
1 appropriate to carry out and effectuate the purposes of this 2 act, including the following powers, in addition to others 3 herein granted: 4 * * * 5 (b) To co-operate with industrial development agencies in 6 their efforts to promote the expansion of industrial, 7 manufacturing [and], research and development, biotechnology and 8 small business incubator activity in critical economic areas; 9 * * * 10 Section 4. Section 6(a) of the act, amended July 13, 1988 11 (P.L.534, No.95), is amended to read: 12 Section 6. Powers of the Authority; Loans to Industrial 13 Development Agencies.--When it has been determined by the 14 Authority upon application of an industrial development agency 15 and hearing thereon in the manner hereinafter provided, that the 16 establishment of a particular industrial development project of 17 such industrial development agency in a critical economic area 18 has accomplished or will accomplish the public purposes of this 19 act, the Authority may contract to loan such industrial 20 development agency an amount not in excess of the percentage of 21 the cost of such industrial development project, as established 22 or to be established as hereinafter set forth, subject, however, 23 to the following conditions: 24 (a) Industrial development projects to be established: 25 (1) If the industrial development project is exclusively a 26 research and development facility other than research and 27 development of pollution control technology, the Authority may, 28 in each class of critical economic area, contract to loan the 29 industrial development agency (45%) of the cost of such 30 industrial development project if it has determined that the 20070H0944B1110 - 4 -
1 industrial development agency holds funds or property in an 2 amount or value equal to not less than (5%) of the cost of 3 establishing the industrial development project, which funds or 4 property are available for and shall be applied to the 5 establishment of such project. If the industrial development 6 project is exclusively a research and development facility for 7 technology concerning pollution control, the Authority may 8 contract to loan the industrial development agency in critical 9 economic area A an amount not in excess of (55%) and in a 10 critical economic area B or a critical economic area C an amount 11 not in excess of (50%) of the cost of the industrial development 12 project: Provided, however, That in each such instance, the 13 Authority has determined that the industrial development agency 14 holds funds or property in an amount or value equal to not less 15 than (5%) of the cost of establishing the industrial development 16 project, which funds or property are available for and shall be 17 applied to the establishment of such project. 18 (2) If the industrial development project is any other type 19 of industrial development project than exclusively a research 20 and development facility, the Authority may, in critical 21 economic area A contract to loan the industrial development 22 agency an amount not in excess of (40%) of the cost of such 23 industrial development project if it has determined that the 24 industrial development agency holds funds or property in an 25 amount or value equal to not less than (10%) of the cost of 26 establishing the industrial development project, which funds or 27 property are available for and shall be applied to establishment 28 of such project. 29 (2.1) Where a contract to loan to an industrial development 30 agency is to be made under provisions of this subsection (a), 20070H0944B1110 - 5 -
1 the following shall apply: that, in critical economic areas A, B 2 or C where an average of (8%) or more of the labor force has 3 been unemployed for the preceding calendar year, the Authority 4 may contract to loan the industrial development agency an amount 5 not in excess of (50%) of the cost of an industrial development 6 project and an amount not in excess of (60%) of the cost of an 7 industrial development project wherein the responsible buyer or 8 tenant is a small business on the date of the application; and 9 where an average of (10%) or more of the labor force has been 10 unemployed for the preceding calendar year, the Authority may 11 contract to loan the industrial development agency an amount not 12 in excess of (60%) of the cost of an industrial development 13 project and an amount not in excess of (70%) of the cost of an 14 industrial development project wherein the responsible buyer or 15 tenant is a small business on the date of application; further, 16 provided that in each such instance the industrial development 17 agency project percentage shall be removed. Where a contract to 18 loan to an industrial development agency is to be made under the 19 provisions of this subsection (a), the following shall apply: 20 that, in critical economic areas A, B or C where an average of 21 (4%) or more of the labor force has been unemployed for the 22 preceding calendar year, the Authority may contract to loan the 23 industrial development agency an amount not in excess of (40%) 24 of the cost of an industrial development project wherein the 25 responsible buyer or tenant is a small business and where an 26 average of (6%) or more of the labor force has been unemployed 27 for the preceding calendar year, the Authority may contract to 28 loan the industrial development agency an amount not in excess 29 of (50%) of the cost of an industrial development project 30 wherein the responsible buyer or tenant is a small business and 20070H0944B1110 - 6 -
1 in such latter instance the industrial development agency 2 project percentage shall be removed. 3 (3) If the industrial development project is any other type 4 of industrial development project than exclusively a research 5 and development facility, the Authority may, in critical 6 economic areas B and C, contract to loan the industrial 7 development agency an amount not in excess of (30%) of the cost 8 of such industrial development project if it has determined that 9 the industrial development agency holds funds or property in an 10 amount or value equal to not less than (20%) of the cost of 11 establishing the industrial development project, which funds or 12 property are available for or shall be applied to the 13 establishment of such project. 14 (4) Prior to the making of any loan under this subsection 15 (a), the Authority shall have determined that the industrial 16 development agency has obtained from other independent and 17 responsible sources, such as banks and insurance companies or 18 otherwise, a firm commitment for all other funds, over and above 19 the loan of the Authority and such funds or property as the 20 industrial development agency may hold, necessary for payment of 21 all of the cost of establishing the industrial development 22 project, and that the sum of all these funds, together with the 23 machinery and equipment to be provided by the responsible tenant 24 or responsible buyer, is adequate for the completion and 25 operation of the industrial development project. 26 (5) If the industrial development project is a biotechnology 27 enterprise or if it is a small business incubator, the Authority 28 may contract to loan the industrial development agency an amount 29 not in excess of (40%) of the cost of such industrial 30 development project if it has determined that the industrial 20070H0944B1110 - 7 -
1 development agency holds funds or property in an amount or value 2 equal to not less than (5%) of the cost of establishing the 3 industrial development project, which funds or property are 4 available for and shall be applied to establishment of such 5 project. 6 (6) If the industrial development project is a biotechnology 7 project and otherwise would not qualify based upon existing and 8 projected revenues, the Authority may contract to loan the 9 industrial development agency an amount not in excess of (40%) 10 of the cost of such industrial development project if it has 11 determined that the biotechnology enterprise has at least one 12 million dollars ($1,000,000) in unencumbered assets and if it 13 has determined that the industrial development agency holds 14 funds or property in an amount or value equal to not less than 15 (5%) of the cost of establishing the industrial development 16 project, which funds or property are available for and shall be 17 applied to establishment of such project. 18 * * * 19 Section 5. Section 7(a) of the act, amended July 10, 1963 20 (P.L.221, No.125), is amended to read: 21 Section 7. Loan Application Requirements.--Prior to the 22 loaning of any funds to an industrial development agency for an 23 industrial development project in a critical economic area, the 24 Authority shall receive from such industrial development agency 25 a loan application in form adopted by the Authority which shall 26 contain, without being limited to, the following provisions: 27 (a) A general description of the industrial development 28 project and a general description of the industrial or 29 manufacturing enterprise [or], research and development 30 facility, biotechnology enterprise or small business incubator 20070H0944B1110 - 8 -
1 for which the industrial development project has been or is to 2 be established; 3 * * * 4 Section 6. This act shall take effect in 60 days. B26L64RLE/20070H0944B1110 - 9 -