HOUSE AMENDED PRIOR PRINTER'S NOS. 606, 853, 963, PRINTER'S NO. 1515 1026, 1038, 1501
No. 10 Session of 2003
INTRODUCED BY BRIGHTBILL, JUBELIRER, PICCOLA, WENGER, THOMPSON, EARLL, ROBBINS, M. WHITE, KUKOVICH, WONDERLING, D. WHITE, PILEGGI, CONTI, MADIGAN, COSTA, DENT, LEMMOND, RHOADES, ARMSTRONG, RAFFERTY AND PUNT, MARCH 28, 2003
AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES, MARCH 31, 2004
AN ACT 1 Amending Titles 12 (Commerce and Trade) and 72 (Taxation and <-- 2 Fiscal Affairs) of the Pennsylvania Consolidated Statutes, 3 codifying portions of the Economic Development Financing Law 4 and further providing for contract requirements and for 5 Commonwealth obligations; codifying portions of the Job 6 Enhancement Act and further providing for contract 7 requirements, for guidelines, for administration and for 8 application and review requirements; codifying portions of 9 the Keystone Opportunity Zone and Keystone Opportunity 10 Expansion Zone Act and further providing for keystone 11 opportunity expansion subzones and for keystone opportunity 12 improvement zones; providing for the Project Review 13 Committee, for Keystone Innovation Zones, for the Economic 14 Enhancement Program, for the Economic Enhancement Financing 15 Program, for the Core Industries Infrastructure 16 Capitalization Program, for the Water and Wastewater 17 Infrastructure Capitalization Program, for the First 18 Industries Program, for the Secondary Growth Stage Financing 19 Program, for primary growth stage investment providing for 20 the Economic Enhancement Fund; codifying the Capital 21 Facilities Debt Enabling Act; further providing for 22 definitions, for procedures for capital budget and debt 23 authorizing legislation, for bonds, for appropriations for 24 and limitations on redevelopment assistance and site 25 development capital projects, and for funding and 26 administration of redevelopment assistance capital projects; 27 providing for funding and administration of site development 28 capital projects and for the Capital Project Oversight and 29 Review Committee; continuing debt authorization; making
1 repeals; requiring a referendum; and making appropriations. 2 AMENDING TITLE 12 (COMMERCE AND TRADE) OF THE PENNSYLVANIA <-- 3 CONSOLIDATED STATUTES, PROVIDING FOR THE INFRASTRUCTURE AND 4 FACILITIES IMPROVEMENT PROGRAM; AND MAKING A RELATED REPEAL. 5 The General Assembly of the Commonwealth of Pennsylvania 6 hereby enacts as follows: 7 Section 1. The General Assembly finds and declares as <-- 8 follows: 9 (1) An economic stimulus program which provides direct 10 immediate economic assistance to Pennsylvania businesses and 11 industries is needed to preserve and to create jobs within 12 this Commonwealth. 13 (2) By targeting grant and loan assistance to 14 Pennsylvania businesses and industries for job creation, 15 health care safety and industrial and commercial site 16 development, the Commonwealth will trigger the needed 17 redevelopment and economic growth of industrial and 18 commercial activities conducted within this Commonwealth. 19 (3) By targeting grant and loan assistance to 20 Pennsylvania communities for water and wastewater 21 infrastructure projects, the Commonwealth will trigger the 22 redevelopment of existing brownfield sites and improve the 23 environment and health of all residents of this Commonwealth. 24 (4) By expanding tax-based financing of economic 25 development projects, the Commonwealth will assist local 26 governments in retaining employers of and recruiting 27 employers to this Commonwealth. 28 (5) By targeting loan assistance to the tourism and 29 agriculture sectors of the Commonwealth's economy, the 30 Commonwealth will provide additional financial support to 31 those leading Commonwealth industries hard hit by world 20030S0010B1515 - 2 -
1 events and economic instability. 2 (6) By targeting capital investment and subsidized loan 3 assistance to emerging business, the Commonwealth will 4 stimulate the growth and increase the stability of small 5 businesses within this Commonwealth. 6 (7) By preparing the Commonwealth to face the Federal 7 Base Realignment and Closure (BRAC) process, the Commonwealth 8 will increase the number of existing jobs it retains during 9 the next round of Federal base realignment and closures. 10 Section 1.1. Title 12 of the Pennsylvania Consolidated 11 Statutes is amended by adding parts to read: 12 PART I 13 GENERAL PROVISIONS 14 Chapter 15 1. (Reserved) 16 3. Economic Development Financing Strategy 17 5. Small Business Council 18 7. Tax-Exempt Bond Allocation (Reserved) 19 CHAPTER 1 20 (RESERVED) 21 CHAPTER 3 22 ECONOMIC DEVELOPMENT FINANCING STRATEGY 23 Sec. 24 301. Scope. 25 302. Definitions. 26 303. Development. 27 304. Oversight. 28 § 301. Scope. 29 This chapter relates to the development of an annual economic 30 development financing strategy. 20030S0010B1515 - 3 -
1 § 302. Definitions. 2 The following words and phrases when used in this chapter 3 shall have the meanings given to them in this section unless the 4 context clearly indicates otherwise: 5 "Department." The Department of Community and Economic 6 Development of the Commonwealth. 7 "Economic development program." A program which is 8 administered by and which provides financial assistance for 9 economic development to persons or a program of a public entity 10 which provides financial assistance for economic development to 11 persons in coordination with the Department of Community and 12 Economic Development. The term includes all of the following: 13 (1) Any program created under Part III (relating to 14 economic development programs). 15 (2) Any program of an entity created under Part IV 16 (relating to economic development financing). 17 (3) The Pennsylvania Industrial Development Authority. 18 (4) The Pennsylvania Minority Business Development 19 Authority. 20 (5) The Infrastructure Development Program. 21 (6) The Industrial Sites Reuse Program. 22 (7) The tax credit programs established in Articles 23 XVII-B and XVIII-B of the act of March 4, 1971 (P.L.6, No.2), 24 known as the Tax Reform Code of 1971. 25 § 303. Development. 26 The department shall annually develop a report containing a 27 financing strategy for economic development within this 28 Commonwealth. In developing the report, the department shall 29 gather input and recommendations from businesses, community 30 leaders and organizations, legislators and private citizens. The 20030S0010B1515 - 4 -
1 report shall include all of the following: 2 (1) A financial audit or statement of operations for 3 each economic development program. 4 (2) A narrative description of accomplishments for each 5 economic development program during the preceding fiscal 6 year. 7 (3) A detailed description of the parameters of 8 operation for the economic development programs during the 9 upcoming fiscal year. The description shall include the terms 10 and conditions under which the economic development programs 11 shall be administered. 12 (4) A description of the performance measurements and 13 accountability factors to be applied and the performance 14 targets or goals to be met for each economic development 15 program. 16 (5) A description of long-range planning for the 17 economic development programs through the next five fiscal 18 years. 19 (6) A list of the loans, grants or credits approved by 20 the economic development programs during the fiscal year. The 21 list shall include a brief description of and details 22 regarding each loan, grant or credit approved. 23 (7) A review of pending projects. 24 § 304. Oversight. 25 Concurrent with the submission of the Governor's annual 26 budget message, the department shall submit the report required 27 by this chapter to all of the following: 28 (1) The Secretary of the Senate. 29 (2) The chairperson of the Appropriations Committee of 30 the Senate. 20030S0010B1515 - 5 -
1 (3) The Chief Clerk of the House of Representatives. 2 (4) The chairperson of the Appropriations Committee of 3 the House of Representatives. 4 CHAPTER 5 5 SMALL BUSINESS COUNCIL 6 Sec. 7 501. Scope. 8 502. Definitions. 9 503. Small Business Council. 10 504. Regulatory review. 11 § 501. Scope. 12 This chapter relates to the Small Business Council. 13 § 502. Definitions. 14 The following words and phrases when used in this chapter 15 shall have the meanings given to them in this section unless the 16 context clearly indicates otherwise: 17 "Council." The Small Business Council established under 18 section 503 (relating to Small Business Council). 19 "Department." The Department of Community and Economic 20 Development of the Commonwealth. 21 "Executive agency." The Governor and the departments, 22 boards, commissions, authorities and other officers and agencies 23 of the Commonwealth. The term does not include any court or 24 other officer or agency of the unified judicial system, the 25 General Assembly and its officers and agencies or any 26 independent agency or State-affiliated entity. 27 "Secretary." The Secretary of Community and Economic 28 Development of the Commonwealth. 29 "Small business." A person that employs fewer than 100 30 employees. 20030S0010B1515 - 6 -
1 § 503. Small Business Council. 2 (a) Establishment.--There is established within the 3 department an agency to be known as the Small Business Council. 4 The council shall do all of the following: 5 (1) Assist with the development of policies and 6 regulations which affect small businesses within this 7 Commonwealth. 8 (2) Provide advice relating to the nature of small 9 business practices and problems in this Commonwealth. 10 (3) Provide a review of existing and proposed policies 11 and regulations which are relevant to small business. 12 (b) Composition.--The council shall be composed of 13 13 members. The secretary shall serve ex officio. Twelve members 14 shall be appointed as follows: 15 (1) Four individuals appointed by the Governor. 16 (2) Two individuals appointed by the President pro 17 tempore of the Senate. 18 (3) Two individuals appointed by the Minority Leader of 19 the Senate. 20 (4) Two individuals appointed by the Speaker of the 21 House of Representatives. 22 (5) Two individuals appointed by the Minority Leader of 23 the House of Representatives. 24 (c) Qualifications.--In order to be eligible for appointment 25 to the council, an individual must: 26 (1) have a background in improving small businesses; and 27 (2) be one of the following: 28 (i) a present owner or operator of a small business 29 within this Commonwealth; 30 (ii) a member of the academic community who has 20030S0010B1515 - 7 -
1 expertise regarding small business practices; or 2 (iii) a professional who specializes in representing 3 small businesses. 4 (d) Term.--Each member of the council shall serve for a 5 period of two years. 6 (e) Organization.--The secretary shall serve as chairperson. 7 The members of the council shall elect from among themselves a 8 vice chairperson, secretary, treasurer and such other officers 9 as they may determine. 10 (f) Meetings.--The council shall meet at the call of the 11 chairperson but shall meet at least once each quarter. 12 (g) Quorum.--A majority of the board shall constitute a 13 quorum. A majority of the members present shall be necessary to 14 transact business on behalf of the council. 15 (h) Expenses.--A member shall not receive compensation or 16 remuneration, but shall be entitled to reimbursement for all 17 reasonable and necessary actual expenses. 18 (i) Administrative assistance.--The department shall do all 19 of the following: 20 (1) Provide administrative and technical support to the 21 council. 22 (2) Publish notice of council meetings in accordance 23 with 65 Pa.C.S. Ch.7 (relating to open meetings). 24 (3) Maintain a mailing list of persons who have 25 requested specific notification of meetings and activities of 26 the council. 27 (4) Designate a deputy secretary to attend council 28 meetings and to serve as the public's liaison of the council. 29 (j) Cooperation.--Upon the council's request, an executive 30 agency shall provide the council with officially promulgated 20030S0010B1515 - 8 -
1 regulatory and nonregulatory documents which regulate or would 2 regulate small businesses. 3 § 504. Regulatory review. 4 (a) Notification.--To the extent known to the secretary, the 5 department shall, on a semiannual basis, provide the council 6 with a list of regulations being proposed by all executive 7 agencies which may affect small businesses in this Commonwealth. 8 (b) Conference.--The department shall, upon request of the 9 council, arrange a meeting between the council and 10 representatives of an executive agency to discuss regulatory 11 proposals and policy initiatives of the executive agency which 12 might affect small businesses in this Commonwealth. 13 (c) Written comments.--The council shall provide the 14 department with written comments regarding the council's 15 position on the proposed regulations. The department shall 16 transmit the comments to the appropriate executive agencies. The 17 written comments shall include an impact statement and any other 18 information which the council deems necessary for the public to 19 make an informed opinion on the proposals. 20 (d) Exceptions.--The requirements under subsections (a) and 21 (b) shall not apply to the promulgation of the following 22 regulations relating to small businesses: 23 (1) Regulations required by court order. 24 (2) Regulations necessitated by a Federal or State 25 declaration of emergency. 26 (3) Interim regulations which are authorized by statute. 27 CHAPTER 7 28 TAX-EXEMPT BOND ALLOCATION 29 (RESERVED) 30 PART II 20030S0010B1515 - 9 -
1 ECONOMIC DEVELOPMENT ENTITIES 2 Chapter 3 11. Ben Franklin (Reserved) 4 13. Industrial Resource Centers (Reserved) 5 15. (Reserved) 6 17. (Reserved) 7 19. (Reserved) 8 CHAPTER 11 9 BEN FRANKLIN 10 (RESERVED) 11 CHAPTER 13 12 INDUSTRIAL RESOURCE CENTERS 13 (RESERVED) 14 CHAPTER 15 15 (RESERVED) 16 CHAPTER 17 17 (RESERVED) 18 CHAPTER 19 19 (RESERVED) 20 PART III 21 ECONOMIC DEVELOPMENT PROGRAMS 22 Chapter 23 21. Opportunity Grants 24 23. Small Business First 25 25. Industrial Development Assistance (Reserved) 26 27. Customized Job Training (Reserved) 27 29. Machinery and Equipment (Reserved) 28 31. Family Savings Account (Reserved) 29 33. Economic Enhancement 30 35. Keystone Economic Development Zones 20030S0010B1515 - 10 -
1 37. Keystone Innovation Zones 2 CHAPTER 21 3 OPPORTUNITY GRANTS 4 Sec. 5 2101. Scope. 6 2102. Definitions. 7 2103. Establishment. 8 2104. Application. 9 2105. Review. 10 2106. Approval. 11 2107. Penalty. 12 2108. Limitations. 13 2109. Guidelines. 14 § 2101. Scope. 15 This chapter relates to the Opportunity Grant Program. 16 § 2102. Definitions. 17 The following words and phrases when used in this chapter 18 shall have the meanings given to them in this section unless the 19 context clearly indicates otherwise: 20 "Applicant." A person that applies for a grant in accordance 21 with this chapter. 22 "Department." The Department of Community and Economic 23 Development of the Commonwealth. 24 "Developer." A person that has as a purpose the promotion or 25 construction of economic development projects and that is 26 engaged in the development of real estate for use by more than 27 one person. 28 "Eligible recipient." Any of the following persons: 29 (1) A municipality. 30 (2) An entity created under the act of August 23, 1967 20030S0010B1515 - 11 -
1 (P.L.251, No.102), known as the Economic Development 2 Financing Law. 3 (3) An entity certified as an industrial development 4 agency under the act of May 17, 1956 (1955 P.L.1609, No.537), 5 known as the Pennsylvania Industrial Development Authority 6 Act. 7 (4) An entity created under 53 Pa.C.S. Ch.56 (relating 8 to municipal authorities) or under the former act of May 2, 9 1945 (P.L.382, No.164), known as the Municipality Authorities 10 Act of 1945. 11 (5) An entity created under the act of May 24, 1945 12 (P.L.991, No.385), known as the Urban Redevelopment Law. 13 (6) A developer. 14 (7) A person that is engaged in any of the following 15 activities: 16 (i) The production or processing of farm 17 commodities. 18 (ii) Manufacturing. 19 (iii) Research and development. 20 (iv) Export services. 21 (v) Any other activity which offers a significant 22 economic impact on the Commonwealth, as determined by the 23 department. 24 "Eligible use." Any of the following activities: 25 (1) Job training. 26 (2) The acquisition of land, buildings or rights-of-way. 27 (3) The construction or rehabilitation of buildings. 28 (4) The construction or rehabilitation of 29 infrastructure. 30 (5) The purchase or upgrading of machinery and 20030S0010B1515 - 12 -
1 equipment. 2 (6) Working capital. 3 (7) Site preparation, including demolition and 4 clearance. 5 (8) Environmental assessments. 6 (9) Remediation of hazardous material. 7 (10) Architectural and engineering fees up to 10% of the 8 award. 9 "Job-creating economic development." Includes the expansion 10 or preservation of existing industry. 11 "Program." The Opportunity Grant Program established in 12 section 2103 (relating to establishment.) 13 "Project." An activity conducted in this Commonwealth. 14 "Recipient." A person who receives a grant under this 15 chapter. 16 § 2103. Establishment. 17 There is established within the department a program to be 18 known as the Opportunity Grant Program. The program shall be 19 administered by the department to provide grants to eligible 20 persons for certain projects which encourage job-creating 21 economic development within this Commonwealth. 22 § 2104. Application. 23 A person may submit an application to the department 24 requesting a grant for a project. The application shall be on 25 the form required by the department and shall include or 26 demonstrate all of the following: 27 (1) The name and address of the applicant. 28 (2) A statement that the applicant is an eligible 29 recipient under the program. 30 (3) A statement of the amount of grant sought. 20030S0010B1515 - 13 -
1 (4) A statement of the project, including a detailed 2 statement of the cost of the project. 3 (5) A statement identifying the economic impact of the 4 project to the region and the estimated impact on State and 5 local revenues. 6 (6) A firm financial commitment from a responsible 7 source for at least 80% of the cost of the project. 8 (7) A firm commitment from the applicant to complete the 9 project. 10 (8) Any other information required by the department. 11 § 2105. Review. 12 The department shall review the application to determine all 13 of the following: 14 (1) If the applicant is an eligible recipient under the 15 program. 16 (2) If the project is an eligible use of grant proceeds 17 under the program. 18 (3) If a financial commitment exists for at least 80% of 19 the cost of the project. 20 (4) If the financial commitment from the source is firm. 21 (5) If the source of the financial commitment is 22 responsible. 23 (6) If the applicant complied with all other criteria 24 established by the department. 25 § 2106. Approval. 26 The following shall apply: 27 (1) Upon being satisfied that all requirements have been 28 met, the department may approve the application and award a 29 grant. Grants shall be awarded in a manner which maximizes 30 geographic diversity. 20030S0010B1515 - 14 -
1 (2) Prior to providing grant funds to the applicant, the 2 department shall enter into a contract with the applicant. 3 The contract shall include provisions requiring the applicant 4 to do all of the following: 5 (i) Use the grant to pay the costs of the project. 6 (ii) Repay the grant from any proceeds resulting 7 from a sale or partial sale of the project by the 8 applicant in accordance with the following: 9 (A) If the project is sold less than two years 10 after receipt of the grant, the applicant shall repay 11 the Commonwealth 90% of the grant received. 12 (B) If the project is sold more than two years 13 but less than four years after receipt of the grant, 14 the applicant shall repay the Commonwealth 80% of the 15 grant received. 16 (C) If the project is sold more than four years 17 but less than six years after receipt of the grant, 18 the applicant shall repay the Commonwealth 70% of the 19 grant received. 20 (D) If the project is sold more than six years 21 but less than eight years after receipt of the grant, 22 the applicant shall repay the Commonwealth 60% of the 23 grant received. 24 (E) If the project is sold more than eight years 25 but less than ten years after receipt of the grant, 26 the applicant shall repay the Commonwealth 50% of the 27 grant received. 28 (3) The department may impose any other terms and 29 conditions on the grants authorized by this chapter as the 30 department determines is in the best interests of the 20030S0010B1515 - 15 -
1 Commonwealth, including a provision requiring collateral for 2 any penalty imposed under the program. 3 § 2107. Penalty. 4 (a) Imposition.--Except as provided in subsection (b), the 5 department shall impose a penalty upon a recipient for any of 6 the following: 7 (1) Failing to create the number of jobs specified in 8 the recipients application. 9 (2) Failing to inject the required amount of private 10 matching funds into the project. 11 (b) Exception.--The department may waive the penalty 12 required by subsection (a) if the department determines that the 13 failure was due to circumstances outside the control of the 14 recipient. 15 (c) Amount.--The amount of the penalty shall be equal to the 16 full amount of the grant received plus an additional amount of 17 up to 10% of the amount of the grant received. The penalty shall 18 be payable in one lump sum or in installments, with or without 19 interest, as the department deems appropriate. 20 § 2108. Limitations. 21 (1) An applicant may not receive a grant under this 22 chapter for more than two consecutive fiscal years for the 23 same project. 24 (2) A grant awarded under this chapter may not be used 25 to do any of the following: 26 (i) Refinance or retire existing debt. 27 (ii) Pay cost unrelated to a project location at a 28 site in this Commonwealth. 29 (3) In no case shall the aggregate amount of grants paid 30 in any fiscal year under this chapter exceed the annual 20030S0010B1515 - 16 -
1 appropriation to the department for the program. 2 (4) A grant awarded under this chapter shall in no way 3 constitute an entitlement derived from the Commonwealth or a 4 claim on any other funds of the Commonwealth. 5 § 2109. Guidelines. 6 (a) Development.--The department shall develop written 7 guidelines for the program. The guidelines shall do all of the 8 following: 9 (1) Limit grant size for any single project. 10 (2) Clarify eligible uses of grants. 11 (3) Clarify standards for eligibility. 12 (b) Use.--No projects may be approved until the written 13 guidelines have been completed and copies of the guidelines have 14 been submitted to the General Assembly. 15 CHAPTER 23 16 SMALL BUSINESS FIRST 17 Sec. 18 2301. Scope. 19 2302. Definitions. 20 2303. Establishment. 21 2304. Fund and accounts. 22 2305. Department responsibilities. 23 2306. Capital development loans. 24 2307. EDA loans. 25 2308. Loans in distressed communities. 26 2309. Pollution prevention assistance loans. 27 2310. Export financing loans. 28 2311. Reporting and inspection. 29 2312. Limitations. 30 § 2301. Scope. 20030S0010B1515 - 17 -
1 This chapter relates to the Small Business First Program. 2 § 2302. Definitions. 3 The following words and phrases when used in this chapter 4 shall have the meanings given to them in this section unless the 5 context clearly indicates otherwise: 6 "Agricultural producer." A person involved in the management 7 and use of a normal agricultural operation for the production of 8 a farm commodity. 9 "Apparel products." Products manufactured, woven, cut, sewn 10 or otherwise similarly processed by mechanical or human effort 11 from fabrics, leather or cloth and made for use as clothing, 12 shoes or other attire. 13 "Applicant." A person that applies for a loan in accordance 14 with this chapter. 15 "Area loan organization." A local development district, an 16 industrial development agency organized and existing under the 17 act of May 17, 1956 (1955 P.L.1609, No.537), known as the 18 Pennsylvania Industrial Development Authority Act, or any other 19 nonprofit economic development organization certified by the 20 Department of Community and Economic Development as possessing 21 the qualifications necessary to evaluate and administer loans 22 made under this chapter. 23 "Capital development project." Land, buildings, equipment 24 and machinery and working capital which is acquired, 25 constructed, renovated or used by a small business in accordance 26 with any of the following: 27 (1) As part of a for-profit project or venture not of a 28 mercantile or service-related nature, except for hospitality 29 industry projects. 30 (2) As part of an effort to: 20030S0010B1515 - 18 -
1 (i) bring a small business into compliance with 2 Federal or State environmental laws or regulations; 3 (ii) complete an approved remediation project; or 4 (iii) permit a small business to adopt generally 5 acceptable pollution prevention practices. 6 (3) As part of an effort to provide assistance to a 7 small business that is a recycler of municipal or commercial 8 waste or that is a manufacturer using recycled municipal or 9 commercial waste materials. 10 (4) As part of an effort to assist a small business with 11 defense conversion activities. 12 (5) As part of a for-profit project or venture to 13 manufacture products to be exported out of the United States 14 by a small business which is not of a mercantile or service- 15 related nature, except for export-related services and 16 international export-related mercantile ventures or advanced 17 technology and computer-related services and mercantile 18 ventures and which will increase this Commonwealth's national 19 or international market shares. 20 (6) As part of a for-profit project or venture that 21 meets the requirements of section 2308 (relating to loans in 22 distressed communities) 23 (7) As part of an effort to assist in the start-up or 24 expansion of a for-profit or not-for-profit child day-care 25 center subject to licensure by the Commonwealth. 26 "Child day-care center." Any premises in which child day 27 care is provided simultaneously for seven or more children who 28 are not related to the provider. 29 "Community development institution." Any of the following: 30 (1) An area loan organization for a distressed 20030S0010B1515 - 19 -
1 community. 2 (2) A community development financial institution 3 located in a distressed community and approved by the 4 Department of Community and Economic Development. 5 "Department." The Department of Community and Economic 6 Development of the Commonwealth. 7 "Distressed community." A community which has any of the 8 following: 9 (1) A census tract or other specifically defined 10 geographic area in which there is any of the following: 11 (i) A median income below 80% of the median income 12 for the United States or this Commonwealth. 13 (ii) Twenty percent or more of the population is 14 below the poverty level by family size published by the 15 Bureau of the Census. 16 (iii) An unemployment rate 50% higher than the 17 national average. 18 (2) An area which is designated a subzone, expansion 19 subzone, or improvement subzone under the act of October 6, 20 1998 (P.L.705, No.92), known as the Keystone Opportunity Zone 21 and Keystone Opportunity Expansion Zone Act. 22 (3) Any other geographic area designated by the 23 Department of Community and Economic Development as 24 distressed. The designation shall be published in the 25 Pennsylvania Bulletin. 26 "EDA loan." A loan made under this chapter utilizing funds 27 made available to the department under the Public Works and 28 Economic Development Act of 1965 (Public Law 89-136, 42 U.S.C. § 29 3121 et seq.). 30 "Ex-Im Bank." The Export-Import Bank of the United States. 20030S0010B1515 - 20 -
1 "Export activity." An activity undertaken by a person within 2 this Commonwealth related to exports. 3 "Export business." A person that is engaged in a for-profit 4 enterprise involving export activities and that employs 250 or 5 fewer individuals. 6 "Exports." Goods and services to be sold outside the United 7 States. 8 "Farm commodity." Any Pennsylvania-grown agricultural, 9 horticultural, aquacultural, vegetable, fruit and floricultural 10 product of the soil, livestock and meats, wools, hides, furs, 11 poultry, eggs, dairy products, nuts, mushrooms, honey products 12 and forest products. 13 "Fund." The Small Business First Fund continued under 14 section 2304 (relating to fund and accounts). 15 "Hazardous substance." Any element, compound or material 16 which is any of the following: 17 (1) Regulated as a hazardous air pollutant under section 18 6.6 of the act of January 8, 1960 (1959 P.L.2119, No.787), 19 known as the Air Pollution Control Act. 20 (2) Defined as a hazardous waste under section 103 of 21 the act of July 7, 1980 (P.L.380, No.97), known as the Solid 22 Waste Management Act. 23 (3) Regulated under the act of December 7, 1990 24 (P.L.639, No.165), known as the Hazardous Material Emergency 25 Planning and Response Act. 26 "Hospitality industry project." A for-profit project or 27 venture which involves a small business that operates a hotel, 28 motel or other lodging facility and that employs at least five 29 full-time equivalent employees at the time an application is 30 submitted to the Department of Community and Economic 20030S0010B1515 - 21 -
1 Development for financing. The term includes a for-profit 2 project or venture which involves a small business that operates 3 a restaurant or food service operation open to the public, that 4 has been in continuous operation for at least five years and 5 that employs at least five full-time equivalent employees at the 6 time an application is submitted. 7 "Insurance policy." An export credit insurance policy for 8 small businesses offered by the Export-Import Bank of the United 9 States. 10 "Natural disaster." As defined in 35 Pa.C.S. § 7102 11 (relating to definitions). 12 "Normal agricultural operation." As defined in section 2 of 13 the act of June 10, 1982 (P.L.454, No.133), entitled "An act 14 protecting agricultural operations from nuisance suits and 15 ordinances under certain circumstances. 16 "Pollution prevention." The reduction or elimination of 17 pollution at its source. The term does not include any of the 18 following: 19 (1) A substitution of one hazardous or toxic substance 20 for another which will cause an increased risk to the 21 environment or to human health. 22 (2) A cross-media transfer. 23 (3) A delisting of a hazardous waste or toxic chemical. 24 "Pollution prevention assistance agency." Any of the 25 following: 26 (1) An area loan organization. 27 (2) An industrial resource center created pursuant to 28 the act of June 22, 2001 (P.L.400, No.31), known as the 29 Industrial Resources Center Partnership Act. 30 "Pollution prevention infrastructure." A capital development 20030S0010B1515 - 22 -
1 project which permits a small business to adopt or install 2 pollution prevention equipment or processes to: 3 (1) Reduce or reuse raw materials onsite. 4 (2) Reduce the production of waste. 5 (3) Reduce energy consumption. 6 "Program." The Small Business First Program established 7 under section 2303 (relating to establishment). 8 "Reuse." Use of a product or component in its original form 9 more than once. 10 "Small business." A person that is engaged in a for-profit 11 enterprise and that employs 100 or fewer individuals. The term 12 includes the following: 13 (1) An enterprise located in a small business incubator 14 facility. 15 (2) An agricultural processor. 16 (3) An agricultural producer. 17 (4) An enterprise which manufactures apparel products. 18 (5) An enterprise which is a for-profit or not-for- 19 profit child day-care center subject to licensure by the 20 Commonwealth. 21 "Working capital." Capital used by a small business for 22 operations, excluding fixed assets and production machinery and 23 equipment. 24 § 2303. Establishment. 25 There is established within the department a program to be 26 known as the Small Business First Program. The program shall be 27 administered by the department and provide loans to eligible 28 persons for certain projects which encourage job creating and 29 job preserving economic development within this Commonwealth. 30 § 2304. Fund and accounts. 20030S0010B1515 - 23 -
1 (a) Fund.--The Small Business First Fund, created under 2 section 1302(a) of the act of June 29, 1996 (P.L.434, No.67), 3 known as the Job Enhancement Act, is continued. The Treasury 4 Department shall credit the following to the fund: 5 (1) Appropriations made by the General Assembly to the 6 department for the program. 7 (2) Federal funds made available under the Public Works 8 and Economic Development Act of 1965 (Public Law 89-136, 42 9 U.S.C. § 3121 et seq.), or any other Federal statute, 10 regulation or program for the program. 11 (3) Payments from recipients of loans made from the 12 fund. 13 (4) Payments from recipients of loans made under the 14 former act of July 2, 1984 (P.L.545, No.109), known as the 15 Capital Loan Fund Act. 16 (5) Interest income derived from investment of the money 17 in the fund. 18 (6) Any other deposits, payments or contributions from 19 any other source made available to the department for the 20 program. 21 (b) Pollution prevention assistance.--The Pollution 22 Prevention Assistance Account, created under the act of June 29, 23 1996 (P.L.434, No.67), known as the Job Enhancement Act, is 24 continued. The Treasury Department shall credit the following to 25 this account: 26 (1) Appropriations made by the General Assembly to the 27 department for pollution prevention assistance. 28 (2) Payments from recipients of loans made from the 29 Pollution Prevention Assistance Account. 30 (3) Transfers from the Hazardous Sites Cleanup Fund as 20030S0010B1515 - 24 -
1 established in section 602.3 of the act of March 4, 1971 2 (P.L.6, No.2), known as the Tax Reform Code of 1971. 3 (4) Interest income derived from investment of the money 4 in the Pollution Prevention Assistance Account. 5 (5) Any other deposits, payments or contributions from 6 any other source made available to the department for 7 pollution prevention assistance. 8 (c) Export financing.--There is created within the fund an 9 account to be known as the Export Financing Assistance Account. 10 The Treasury Department shall credit the following to this 11 account: 12 (1) Appropriations made by the General Assembly to the 13 department for export financing assistance. 14 (2) Payments from recipients of loans made from the 15 Export Financing Assistance Account. 16 (3) Interest income derived from investment of the money 17 in the Export Financing Assistance Account. 18 (4) Any other deposits, payments or contributions from 19 any other source made available to the department for export 20 financing assistance. 21 (d) Use of fund.--Money in the fund may be used as follows: 22 (1) By the department to make loans in accordance with 23 this chapter and for administrative costs of the department 24 in administering the program. 25 (2) By area loan organizations for administrative costs 26 associated with the program which are approved by the 27 department. 28 (e) Use of Pollution Prevention Assistance Account.--Money 29 in the Pollution Prevention Assistance Account may be used by 30 the department to provide loans to small businesses for the 20030S0010B1515 - 25 -
1 adoption or installation of pollution-prevention or energy- 2 efficient equipment or processes in accordance with section 2309 3 (relating to pollution prevention assistance loans). 4 (f) Use of Export Financing Assistance Account.--Money in 5 the Export Financing Assistance Account may be used by the 6 department to provide loans to export businesses for export 7 activities in accordance with section 2310 (relating to export 8 financing loans). 9 § 2305. Department responsibilities. 10 (a) General rule.--The department shall do all of the 11 following: 12 (1) Administer the program. 13 (2) Establish written guidelines as necessary. Any 14 guidelines established shall be included in the report 15 required by Chapter 3 (relating to economic development 16 financing strategy). 17 (3) Deposit payments made by recipients in the fund, the 18 Pollution Prevention Assistance Account or Export Financing 19 Assistance Account, as appropriate. 20 (4) Approve standards for area loan organization 21 application fees. 22 (5) Approve community development financial 23 institutions. 24 (b) Program.--In administering the program, the department 25 may do any of the following: 26 (1) Provide grants or other financial assistance to area 27 loan organizations for any of the following purposes: 28 (i) To establish loan reserve funds. 29 (ii) To reimburse loan losses to commercial banks 30 and other financial institutions as a means of 20030S0010B1515 - 26 -
1 encouraging the expansion and financing of small 2 businesses. 3 (2) Apply to the Ex-Im Bank for delegated authority 4 lender status under the Ex-Im Bank's Working Capital Guaranty 5 Program. 6 (3) Utilize the outstanding portfolio of loans made 7 under this chapter to raise additional funds by selling, 8 securing, hypothecating or otherwise using such loan proceeds 9 as a financing vehicle if the funds raised are used by the 10 department for either of the following purposes: 11 (i) To make new and additional loans under this 12 chapter. 13 (ii) To pay costs associated with financing. 14 § 2306. Capital development loans. 15 (a) Application.--A small business may submit an application 16 and any applicable application fee to its area loan organization 17 requesting a loan for certain costs of a capital development 18 project. The application shall be on the form required by the 19 department and shall include or demonstrate all of the 20 following: 21 (1) The name and address of the applicant. 22 (2) A statement of the amount of loan assistance sought. 23 (3) A statement of the capital development project 24 including a detailed statement of the cost of the project. 25 (4) A firm financial commitment from a responsible 26 source for any cost of the capital development project in 27 excess of the amount requested. 28 (5) Any other information required by the department. 29 (b) Area loan organization review.-- 30 (1) Upon receipt of a completed application, an area 20030S0010B1515 - 27 -
1 loan organization shall investigate and determine all of the 2 following: 3 (i) If the applicant is a small business. 4 (ii) If the project is a capital development 5 project. 6 (iii) If, when the applicant is a small business, 7 the capital development project demonstrates a 8 substantial likelihood of creating or preserving 9 employment activities in this Commonwealth or if, when 10 the applicant is an agriculture producer, the project 11 demonstrates a substantial likelihood of enhancing and 12 growing normal agriculture operations. 13 (iv) The ability of the applicant to meet and 14 satisfy the debt service as it becomes due and payable. 15 (v) The existence and sufficiency of collateral for 16 the loan. Collateral may include lien positions on 17 nonresidential real property and on personal property. 18 (vi) Relevant criminal and credit history and 19 ratings of the applicant as determined from outside 20 credit reporting services and other sources. 21 (vii) The number of employment opportunities to be 22 created or preserved by the proposed capital development 23 project. 24 (viii) If the applicant complied with all other 25 criteria established by the department. 26 (2) Upon being satisfied that all requirements have been 27 met, the area loan organizations shall recommend the 28 applicant to the department and forward the application with 29 all supporting documentation to the department for its review 30 and approval. 20030S0010B1515 - 28 -
1 (c) Department review.-- 2 (1) Within 30 days of receiving a recommendation and 3 application, the department shall review the application. If 4 the department is satisfied that all requirements have been 5 met, the department may approve the loan request in 6 accordance with the following: 7 (i) A loan for land, buildings and machinery and 8 equipment may not exceed $200,000 or 50% of the total 9 capital development project costs, whichever is less. 10 (ii) A loan for working capital may not exceed 11 $100,000 or 50% of the total capital development project 12 costs, whichever is less. 13 (iii) Except for loans to agriculture producers, a 14 loan must create or preserve one job for every $25,000 15 loaned. 16 (2) The department shall notify the area loan 17 organization and applicant of its decision. 18 (d) Approvals.--For applications which are approved, the 19 department shall draw an advance equal to the principal amount 20 of the loan from the fund. The advance shall be forwarded to the 21 area loan organization and, upon receipt by the area loan 22 organization, shall become an obligation of the area loan 23 organization. Prior to providing loan funds to the applicant, 24 the area loan organization shall require the applicant to 25 execute a note and to enter into a loan agreement. In addition 26 to the requirements of subsection (e), the loan agreement shall 27 include a provision requiring the recipient to use the loan 28 proceeds to pay the costs of the capital development project. 29 The department may require the area loan organization to impose 30 other terms and conditions on the recipient if the department 20030S0010B1515 - 29 -
1 determines that they are in the best interests of this 2 Commonwealth, including a provision requiring collateral for any 3 penalty imposed under subsection (g). 4 (e) Loan terms.--A loan agreement entered into in accordance 5 with subsection (c) shall do all of the following: 6 (1) State the collateral securing the loan. All loans 7 shall be secured by lien positions on collateral at the 8 highest level of priority as may be determined by the area 9 loan organization with the approval of the department. The 10 collateral may include nonresidential real estate purchased 11 as part of the capital development project. 12 (2) State the repayment period in accordance with the 13 following: 14 (i) A loan for real property shall have a repayment 15 period of up to 15 years. 16 (ii) A loan for machinery and equipment shall have a 17 repayment period of up to ten years. 18 (iii) A loan for working capital shall have a 19 repayment period of up to three years. 20 (iv) If, in a capital development project, there are 21 two or more uses planned, the loan terms may be blended. 22 (3) State the interest rate in accordance with the 23 following: 24 (i) Except a provided in subparagraph (ii), loans 25 shall be made at an interest rate not to exceed 5% for 26 the term of the loan. 27 (ii) A loan to a small business which is an 28 agricultural producer shall be made at an interest rate 29 of not less than 2% for the term of the loan if all of 30 the following apply: 20030S0010B1515 - 30 -
1 (A) A declaration under 35 Pa.C.S. § 7301(c) 2 (relating to general authority of Governor) is in 3 effect for at least ten days prior to the date of 4 application. 5 (B) The application is made within nine months 6 of termination of the declaration. 7 (C) The agricultural producer is in the area 8 which has been declared to be a natural disaster 9 area. 10 (f) Loan administration.--A loan made under this section 11 shall be administered in accordance with departmental policies 12 and procedures by the area loan organization which made the 13 loan. Each area loan organization shall submit an annual report 14 on the form required by the department and which includes or 15 demonstrates all of the following: 16 (1) Each outstanding loan. 17 (2) The date approved. 18 (3) The original principal amount. 19 (4) The current principal balance. 20 (5) The interest rate. 21 (6) The purpose for which the loan was made. 22 (7) An enumeration of any problems or issues which have 23 arisen with regard to each loan. 24 (8) A statement regarding the progress of the small 25 business in creating or preserving its requisite number of 26 employment opportunities. 27 (9) Any other information or documentation required by 28 the department. 29 (g) Penalty.-- 30 (1) Except as provided in paragraph (2), the department 20030S0010B1515 - 31 -
1 shall impose a penalty upon a recipient if the recipient 2 fails to create or preserve the number of employment 3 opportunities specified in its approved application. 4 (2) The department may waive the penalty required by 5 paragraph (1) if the department determines that the failure 6 was due to circumstances outside the control of the 7 recipient. 8 (3) The amount of the penalty imposed under paragraph 9 (1) shall be equal to an increase in the interest rate to 2% 10 greater than the current prime interest rate for the 11 remainder of the loan. 12 (h) Defaults.--The department may by foreclosure take title 13 to a capital development project which it financed if 14 acquisition is necessary to protect a loan made under this 15 section. The department shall pay all costs arising out of the 16 foreclosure and acquisition from moneys held in the fund. The 17 department may, in order to minimize financial losses and 18 sustain employment, lease the capital development project. The 19 department may withdraw moneys from the fund to purchase first 20 mortgages and to make payments on first mortgages on any capital 21 development project which it financed where purchase or payment 22 is necessary to protect a loan made under this section. The 23 department may sell, transfer, convey and assign the first 24 mortgages and shall deposit any moneys derived from the sale of 25 any first mortgages in the fund. 26 § 2307. EDA loans. 27 (a) Application and administration procedures.--The 28 department shall establish application and administration 29 procedures to be used for EDA loans. The procedures shall be 30 established by guidelines and shall conform in all respects to 20030S0010B1515 - 32 -
1 those procedures required or established by the Economic 2 Development Administration for use of Federal funds under the 3 Public Works and Economic Development Act of 1965 (Public Law 4 89-136, 42 U.S.C. § 3121 et seq.). 5 (b) Eligibility for EDA loans.--The department shall 6 establish eligibility requirements to be used for EDA loans. The 7 requirements shall be established by guidelines and shall 8 conform in all respects to those procedures required or 9 established by the Economic Development Administration for use 10 of Federal funds under the Public Works and Economic Development 11 Act of 1965. 12 § 2308. Loans in distressed communities. 13 (a) Application.--A small business located in a distressed 14 community may submit an application and any applicable 15 application fee to a community development institution 16 requesting a loan for certain costs of a capital development 17 project. The application shall be on the form required by the 18 department and shall include or demonstrate all of the 19 following: 20 (1) The name and address of the applicant. 21 (2) A statement that the small business is engaged in 22 business-to-public service or in the mercantile, commercial 23 or point-of-sale retail business sectors. 24 (3) A statement of the amount of loan assistance sought. 25 (4) A statement of the capital development project, 26 including a detailed statement of the cost of the project. 27 (5) A firm financial commitment from a responsible 28 source for the cost of the capital development project in 29 excess of the amount requested. 30 (6) Any other information required by the department. 20030S0010B1515 - 33 -
1 (b) Community development institution review.-- 2 (1) Upon receipt of a completed application, a community 3 development institution shall investigate and determine all 4 of the following: 5 (i) If the applicant is a small business which is 6 engaged business-to-public service or in the mercantile, 7 commercial or point-of-sale retail business sectors in 8 accordance with conditions or criteria established by the 9 department. 10 (ii) If the project is a capital development 11 project. 12 (iii) If the applicant has demonstrated a direct 13 impact on the community in which the capital development 14 project is or will be located, on residents of that 15 community or on the local and/or regional economy. The 16 department shall establish criteria that will assist in 17 making this demonstration. 18 (iv) The ability of the applicant to meet and 19 satisfy the debt service as it becomes due and payable. 20 In reviewing repayment obligations, loans shall not be 21 approved on the basis of direct financial return on 22 investment and shall not be held to the loan loss 23 standards of private commercial lenders. Loans shall 24 review for the purpose of establishing a strong economic 25 base and promoting entrepreneurial activity within the 26 distressed community. 27 (v) The existence and sufficiency of collateral for 28 the loan. Collateral may include lien positions on 29 nonresidential real property and on personal property. 30 (vi) Relevant criminal and credit history and 20030S0010B1515 - 34 -
1 ratings of the applicant as determined from outside 2 credit reporting services and other sources. 3 (vii) Number of employment opportunities to be 4 created or preserved by the proposed capital development 5 project. 6 (viii) If the applicant complied with all other 7 criteria established by the department. 8 (2) Upon being satisfied that all requirements have been 9 met, the community development institution shall recommend 10 the applicant to the department and forward the application 11 with all supporting documentation to the department for its 12 review and approval. 13 (c) Department review.-- 14 (1) Within 30 days of receiving a recommendation and 15 application, the department shall review the application. If 16 the department is satisfied that all requirements have been 17 met, the department may approve the loan request in 18 accordance with the following: 19 (i) A loan for land, buildings and machinery and 20 equipment may not exceed $200,000 or 50% of the total 21 capital development project costs, whichever is less. 22 (ii) A loan for working capital may not exceed 23 $100,000 or 50% of the total capital development project 24 costs, whichever is less. 25 (iii) Except for loans to agriculture producers, a 26 loan would create or preserve one job for every $25,000 27 loaned. 28 (2) The department shall notify the community 29 development institution and applicant of its decision. 30 (d) Approvals.--For applications which are approved, the 20030S0010B1515 - 35 -
1 department shall draw an advance equal to the principal amount 2 of the loan from the fund. The advance shall be forwarded to the 3 community development institution and, upon receipt by the 4 community development institution, become an obligation of the 5 community development institution. Prior to providing loan funds 6 to the applicant, the community development institution shall 7 require the applicant to execute a note and to enter into a loan 8 agreement. In addition to the requirements of subsection (e), 9 the loan agreement shall include a provision requiring the 10 recipient to use the loan proceeds to pay the costs of the 11 capital development project. The department may require the 12 community development institution to impose other terms and 13 conditions on the recipient if the department determines they 14 are in the best interests of this Commonwealth, including a 15 provision requiring collateral for any penalty imposed under 16 subsection (g). 17 (e) Loan terms.--A loan agreement entered into in accordance 18 with subsection (d) shall do all of the following: 19 (1) State any collateral securing the loan. The 20 department may use its best judgment to identify and secure 21 collateral. 22 (2) State the repayment period which may be flexible. 23 (3) State the interest rate which may not be less than 24 2% nor more than 5% for the term of the loan. 25 (4) State that the recipient agrees to maintain, at a 26 minimum, the number of jobs in existence as of the date of 27 loan application. 28 (f) Loan administration.--A loan made under this section 29 shall be administered in accordance with departmental policies 30 and procedures by the community development institution which 20030S0010B1515 - 36 -
1 made the loan. Each community development institution shall 2 submit an annual report on the form required by the department 3 which includes or demonstrates all of the following: 4 (1) Each outstanding loan. 5 (2) The date approved. 6 (3) The original principal amount. 7 (4) The current principal balance. 8 (5) The interest rate. 9 (6) The purpose for which the loan was made. 10 (7) An enumeration of any problems or issues which have 11 arisen with regard to each loan. 12 (8) A statement regarding the progress of the small 13 business in creating or preserving its requisite number of 14 employment opportunities. 15 (9) Any other information or documentation required by 16 the department. 17 (g) Penalty.-- 18 (1) Except as provided in paragraph (2), the department 19 shall impose a penalty upon a recipient if the recipient 20 fails to create or preserve the number of employment 21 opportunities specified in its approved application. 22 (2) The department may waive the penalty required by 23 paragraph (1) if the department determines that the failure 24 was due to circumstances outside the control of the 25 recipient. 26 (3) The amount of any penalty imposed under paragraph 27 (1) shall be equal to an increase in the interest rate to 2% 28 greater than the current prime interest rate for the 29 remainder of the loan. 30 (h) Defaults.--The department may take title by foreclosure 20030S0010B1515 - 37 -
1 to a capital development project which it financed where 2 acquisition is necessary to protect a loan made under this 3 section. The department shall pay all costs arising out of the 4 foreclosure and acquisition from money held in the fund. The 5 department may, in order to minimize financial losses and 6 sustain employment, lease the capital development project. The 7 department may withdraw money from the fund to purchase first 8 mortgages and to make payments on first mortgages on any capital 9 development project which it financed if purchase or payment is 10 necessary to protect a loan made under this section. The 11 department may sell, transfer, convey and assign the first 12 mortgages and shall deposit in the fund money derived from the 13 sale of any first mortgages. 14 § 2309. Pollution prevention assistance loans. 15 (a) Application.--A small business may submit an application 16 and any application fee to a pollution prevention assistance 17 agency requesting a loan for a pollution prevention 18 infrastructure. The application shall be on the form required by 19 the department and shall include or demonstrate all of the 20 following: 21 (1) The name and address of the applicant. 22 (2) A statement of the amount of loan assistance sought. 23 (3) A statement of the pollution prevention 24 infrastructure, including a detailed statement of the cost of 25 the infrastructure. 26 (4) A firm financial commitment from a responsible 27 source for the cost of the pollution prevention 28 infrastructure in excess of the amount requested. 29 (5) Any other information required by the department. 30 (b) Pollution prevention assistance agency review.-- 20030S0010B1515 - 38 -
1 (1) Upon receipt of a completed application, a pollution 2 prevention assistance agency shall investigate and determine 3 all of the following: 4 (i) If the applicant is a small business. 5 (ii) If the project is for pollution prevention 6 infrastructure. 7 (iii) If the pollution prevention infrastructure 8 demonstrates a substantial likelihood of preventing or 9 reducing pollution. 10 (iv) The ability of the applicant to meet and 11 satisfy the debt service as it becomes due and payable. 12 In reviewing repayment obligations, loans shall not be 13 approved on the basis of direct financial return on 14 investment and shall not be held to the loan loss 15 standards of private commercial lenders. Loans shall be 16 reviewed for the purpose of reducing pollution through 17 source reduction technologies or processes. 18 (v) The existence and sufficiency of collateral for 19 the loan. Collateral may include lien positions on 20 nonresidential real property and on personal property. 21 (vi) Relevant criminal and credit history and 22 ratings of the applicant as determined from outside 23 credit reporting services and other sources. 24 (vii) If the applicant complied with all other 25 criteria established by the department. 26 (2) Upon being satisfied that all requirements have been 27 met, the pollution prevention assistance agency shall 28 recommend the applicant to the department and forward the 29 application with all supporting documentation to the 30 department for its review and approval. 20030S0010B1515 - 39 -
1 (c) Department review.-- 2 (1) Within 30 days of receiving a recommendation and 3 application, the department shall review the application. The 4 Department of Environmental Protection shall assist the 5 department in reviewing the applications and provide 6 technical assistance. If the department is satisfied that all 7 requirements have been met, the department may approve the 8 loan request. A loan approved under this subsection may not 9 exceed the lesser of: 10 (i) $100,000; or 11 (ii) 75% of infrastructure costs. 12 (2) The department shall notify the pollution prevention 13 assistance agency and applicant of its decision. 14 (d) Approvals.--For applications which are approved, the 15 department shall draw an advance equal to the principal amount 16 of the loan from the Pollution Prevention Assistance Account. 17 The advance shall be forwarded to the pollution prevention 18 assistance agency and, upon receipt by the pollution prevention 19 assistance agency, become an obligation of the pollution 20 prevention assistance agency. Prior to providing loan funds to 21 the applicant, the pollution prevention assistance agency shall 22 require the applicant to execute a note and to enter into a loan 23 agreement. In addition to the requirements of subsection (e), 24 the loan agreement shall include a provision requiring the 25 recipient to use the loan proceeds to pay the costs of the 26 pollution prevention infrastructure. The department may require 27 the pollution prevention assistance agency to impose other terms 28 and conditions on the recipient if the department determines 29 they are in the best interests of this Commonwealth, including a 30 provision requiring collateral for any penalty imposed under 20030S0010B1515 - 40 -
1 subsection (g). 2 (e) Loan terms.--A loan agreement entered into in accordance 3 with subsection (d) shall do all of the following: 4 (1) State the collateral securing the loan. All loans 5 shall be secured by lien positions on collateral at the 6 highest level of priority as may be determined by the 7 pollution prevention assistance agency with the approval of 8 the department. The collateral may include nonresidential 9 real estate purchased as part of the pollution prevention 10 infrastructure. 11 (2) State the repayment period which may not exceed 10 12 years. 13 (3) State that the interest rate is 2%. 14 (4) State that any loan fee is not to exceed 5% of the 15 loan amount. 16 (f) Loan administration.--A loan made under this section 17 shall be administered in accordance with departmental policies 18 and procedures by the pollution prevention assistance agency 19 which made the loan. Each pollution prevention assistance agency 20 shall submit an annual report on the form required by the 21 department which includes or demonstrates all of the following: 22 (1) Each outstanding loan. 23 (2) The date approved. 24 (3) The original principal amount. 25 (4) The current principal balance. 26 (5) The interest rate. 27 (6) The purpose for which the loan was made. 28 (7) An enumeration of any problems or issues which have 29 arisen with regard to each loan. 30 (8) Any other information or documentation required by 20030S0010B1515 - 41 -
1 the department. 2 (g) Penalty.-- 3 (1) Except as provided in paragraph (2), the department 4 shall impose a penalty upon a recipient if the recipient 5 fails to prevent or reduce pollution as specified in its 6 approved application. 7 (2) The department may waive the penalty required by 8 paragraph (1) if the department determines that the failure 9 was due to circumstances outside the control of the 10 recipient. 11 (3) The amount of any penalty imposed under paragraph 12 (1) shall be equal to an increase in the interest rate to 2% 13 greater than the current prime interest rate for the 14 remainder of the loan. 15 (h) Defaults.--The department may take title by foreclosure 16 to a pollution prevention infrastructure which it financed if 17 acquisition is necessary to protect a loan made under this 18 section. The department shall pay all costs arising out of the 19 foreclosure and acquisition from money held in the Pollution 20 Prevention Assistance Account. The department may, in order to 21 minimize financial losses and sustain employment, lease the 22 pollution prevention infrastructure. The department may withdraw 23 money from the Pollution Prevention Assistance Account to 24 purchase first mortgages and to make payments on first mortgages 25 on any pollution prevention infrastructure which it financed if 26 the purchase or payment is necessary to protect a loan made 27 under this section. The department may sell, transfer, convey 28 and assign the first mortgages and shall deposit any money 29 derived from the sale of any first mortgages in the Pollution 30 Prevention Assistance Account. 20030S0010B1515 - 42 -
1 § 2310. Export financing loans. 2 (a) Application.--A person may submit an application and any 3 applicable application fee to the department or its area loan 4 organization requesting a loan for certain costs of a capital 5 development project which will be used in export activities. The 6 application must be on the form required by the department and 7 must include or demonstrate all of the following: 8 (1) The name and address of the applicant. 9 (2) A statement of the amount of loan assistance sought. 10 (3) A statement of the capital development project, 11 including a detailed statement of the cost of the project. 12 (4) A statement that the capital development project is 13 based upon an export contract which requires payment in 14 United States dollars. 15 (5) A firm financial commitment from a responsible 16 source for any cost of the capital development project in 17 excess of the amount requested. 18 (6) A statement that the loan, if approved, would not 19 supplant funding from private sector sources on commercially 20 reasonable terms. 21 (7) Any other information required by the department. 22 (b) Review.-- 23 (1) Upon receipt of a competed application, the 24 department or, if applicable, an area loan organization shall 25 investigate and determine all of the following: 26 (i) If the applicant is an export business. 27 (ii) If the project is a capital development 28 project. 29 (iii) If the capital development project 30 demonstrates a substantial likelihood of creating or 20030S0010B1515 - 43 -
1 preserving employment activities in this Commonwealth. 2 (iv) The ability of the applicant to meet and 3 satisfy the debt service as it becomes due and payable. 4 (v) The existence and sufficiency of collateral for 5 the loan. Collateral may include lien positions on 6 nonresidential real property and on personal property. 7 (vi) Relevant criminal and credit history and 8 ratings of the applicant as determined from outside 9 credit reporting services and other sources. 10 (vii) Number of employment opportunities to be 11 created or preserved by the proposed capital development 12 project. 13 (viii) If the applicant complied with all other 14 criteria established by the department. 15 (2) Upon being satisfied that all requirements have been 16 met, the department may approve the application in accordance 17 with subsection (c) or the area loan organization shall 18 recommend the applicant to the department and forward the 19 application with all supporting documentation to the 20 department for its review and approval. 21 (c) Department review.--The department shall review an 22 application within 30 days of receiving it. If the department is 23 satisfied that all requirements have been met, the department 24 may approve the loan request. A loan approved under this section 25 may not exceed $350,000. The department shall notify the 26 applicant and, if applicable, the area loan organization of its 27 decision. 28 (d) Approvals.-- 29 (1) For applications which were submitted directly to 30 the department and which are approved, the department shall 20030S0010B1515 - 44 -
1 draw an advance equal to the principal amount of the loan 2 from the Export Activities Assistance Account. Prior to 3 providing funds to the applicant, the department shall 4 require the applicant to execute a note and enter into a loan 5 agreement. In addition to the requirements of subsection (e), 6 the loan agreement shall include a provision requiring the 7 recipient to use the loan proceeds to pay the costs of the 8 capital development project. The department may impose other 9 terms and conditions on the recipient if the department 10 determines they are in the best interests of this 11 Commonwealth, including any of the following: 12 (i) A provision requiring collateral for any penalty 13 imposed under subsection (g). 14 (ii) A provision requiring the person to be eligible 15 for an insurance policy. 16 (iii) A provision requiring the loan to be 17 guaranteed by the Working Capital Guaranty Program 18 offered by the Ex-Im Bank. 19 (iv) A provision requiring an export credit sales 20 contract insured by an insurance policy. 21 (2) For applications which were submitted to the 22 department through an area loan organization and which are 23 approved, the department shall draw an advance equal to the 24 principal amount of the loan from the Export Activities 25 Assistance Account. The advance shall be forwarded to the 26 area loan organization and, upon receipt by the area loan 27 organization, become an obligation of the area loan 28 organization. Prior to providing loan funds to the applicant, 29 the area loan organization shall require the applicant to 30 execute a note and enter into a loan agreement. In addition 20030S0010B1515 - 45 -
1 to the requirements of subsection (e), the loan agreement 2 shall include a provision requiring the recipient to use the 3 loan proceeds to pay the costs of the capital development 4 project. The department may require the area loan 5 organization to impose other terms and conditions on the 6 recipient if the department determines they are in the best 7 interests of this Commonwealth, including any of the 8 following: 9 (i) A provision requiring collateral for any penalty 10 imposed under subsection (g). 11 (ii) A provision requiring the person to be eligible 12 for an insurance policy. 13 (iii) A provision requiring the loan to be 14 guaranteed by the Working Capital Guaranty Program 15 offered by the Ex-Im Bank. 16 (iv) A provision requiring an export credit sales 17 contract insured by an insurance policy. 18 (e) Loan terms.--A loan agreement entered into in accordance 19 with subsection (d) shall do all of the following: 20 (1) State the collateral securing the loan. All loans 21 shall be secured by lien positions on collateral at the 22 highest level of priority as may be determined by the area 23 loan organization with the approval of the department. The 24 collateral may include nonresidential real estate purchased 25 as part of a capital development project. 26 (2) State the repayment period as determined by the 27 department. 28 (3) State the interest rate as determined by the 29 department. 30 (f) Loan administration.--A loan made under this section 20030S0010B1515 - 46 -
1 shall be administered in accordance with departmental policies 2 and procedures. If a loan was made through an area loan 3 organization, the area loan organization shall submit an annual 4 report on the form required by the department which includes or 5 demonstrates all of the following: 6 (1) Each outstanding loan. 7 (2) The date approved. 8 (3) The original principal amount. 9 (4) The current principal balance. 10 (5) The interest rate. 11 (6) The purpose for which the loan was made. 12 (7) An enumeration of any problems or issues which have 13 arisen with regard to each loan. 14 (8) A statement regarding the progress of the person 15 creating or preserving its requisite number of employment 16 opportunities. 17 (9) Any other information or documentation required by 18 the department. 19 (g) Penalty.-- 20 (1) Except as provided in paragraph (2), the department 21 shall impose a penalty upon a recipient if the recipient 22 fails to create or preserve the number of employment 23 opportunities specified in its approved application. 24 (2) The department may waive the penalty required by 25 paragraph (1) if the department determines that the failure 26 was due to circumstances outside the control of the 27 recipient. 28 (3) The amount of the penalty imposed under paragraph 29 (1) shall be equal to an increase in the interest rate to 2% 30 greater than the current prime interest rate for the 20030S0010B1515 - 47 -
1 remainder of the loan. 2 (h) Defaults.--The department may, by foreclosure, take 3 title to a capital development project which it financed if 4 acquisition is necessary to protect a loan made under this 5 section. The department shall pay all costs arising out of the 6 foreclosure and acquisition from money held in the Export 7 Activities Assistance Account. The department may, in order to 8 minimize financial losses and sustain employment, lease the 9 capital development project. The department may withdraw money 10 from the Export Activities Assistance Account to purchase first 11 mortgages and to make payments on first mortgages on any capital 12 development project which it financed if purchase or payment is 13 necessary to protect a loan made under this section. The 14 department may sell, transfer, convey and assign the first 15 mortgages and shall deposit any money derived from the sale of 16 any first mortgages in the Export Activities Assistance Account. 17 § 2311. Reporting and inspection. 18 (a) Inspection.--An applicant or a recipient shall, upon 19 request, permit authorized employees of the department or its 20 agent to inspect the plant, books and records of the applicant 21 or recipient. 22 (b) Updating.--An applicant or a recipient shall provide 23 updated information to the department and its agents if 24 conditions change or to the extent that the information 25 originally given becomes inaccurate or misleading. 26 (c) Periodic reports.--A recipient shall provide the 27 department and its agents with such periodic financial reports 28 as the department may require until the loan is repaid in full. 29 (d) Financial and performance audits.--An agent of the 30 department shall annually submit to the department, at the 20030S0010B1515 - 48 -
1 agent's expense, an independent financial audit. If the audit 2 reveals misconduct of a material nature on the part of the 3 agent, the department shall take appropriate action. 4 § 2312. Limitations. 5 No loans shall be recommended or approved if the proceeds of 6 the loan could do any of the following: 7 (1) Cause, aid or assist directly in the relocation of 8 any business operations from one part of this Commonwealth to 9 another unless there is at least a 25% net increase in 10 employment. 11 (2) Refinance any portion of the total cost of a capital 12 development project, pollution prevention infrastructure or 13 other existing loans or debt. 14 (3) Finance a capital development project or pollution 15 prevention infrastructure located outside the geographic 16 boundaries of this Commonwealth. 17 (4) Provide funds, directly or directly, for payment 18 distribution or as loan owners, partners or shareholders of a 19 small business, except as ordinary compensation for services 20 rendered. 21 (5) Provide funds for speculation in real or personal 22 property, whether tangible or intangible. 23 CHAPTER 25 24 INDUSTRIAL DEVELOPMENT ASSISTANCE 25 (RESERVED) 26 CHAPTER 27 27 CUSTOMIZED JOB TRAINING 28 (RESERVED) 29 CHAPTER 29 30 MACHINERY AND EQUIPMENT 20030S0010B1515 - 49 -
1 (RESERVED) 2 CHAPTER 31 3 FAMILY SAVINGS ACCOUNT 4 (RESERVED) 5 CHAPTER 33 6 ECONOMIC ENHANCEMENT 7 Sec. 8 3301. Scope of chapter. 9 3302. Definitions. 10 3303. Establishment. 11 3304. Review Committee. 12 3305. Application. 13 3306. Review and approval. 14 3307. Designation. 15 § 3301. Scope of chapter. 16 This chapter relates to the Economic Enhancement Program. 17 § 3302. Definitions. 18 The following words and phrases when used in this chapter 19 shall have the meaning given to them in this section unless the 20 context clearly indicates otherwise: 21 "Authority." The Pennsylvania Economic Development Financing 22 Authority established in Chapter 43 (relating to Pennsylvania 23 Economic Development Financing Authority). 24 "Committee." The Review Committee established in section 25 3304 (relating to review committee). 26 "Department." The Department of Community and Economic 27 Development of the Commonwealth. 28 "Deteriorated property." A blighted, impoverished area 29 containing residential, industrial, commercial or other real 30 property which is abandoned, unsafe, vacant, undervalued, 20030S0010B1515 - 50 -
1 underutilized, overgrown, defective, condemned, demolished or 2 which contains economically undesirable land use. The term 3 includes all of the following: 4 (1) A tax increment district. 5 (2) Property adjacent to deteriorated property which is 6 significantly undervalued and underutilized due to the 7 proximity of the deteriorated property. 8 "Issuing authority." As that term is defined in the act of 9 July 11, 1990 (P.L.465, No.113), known as the Tax Increment 10 Financing Act. 11 "Tax incentive district." A contiguous geographic area 12 designated by the Department of Community and Economic 13 Development under section 3307 (relating to designation). 14 "Tax increment district." The term as it is defined in the 15 act of July 11, 1990 (P.L.465, No.113), known as the Tax 16 Increment Financing Act. 17 § 3303. Establishment. 18 There is hereby established within the department a program 19 to be known as the Economic Enhancement Program. The program 20 shall provide economic assistance to deteriorated property by 21 using certain tax revenues from property located in incentive 22 districts to increase economic development in incentive 23 districts. 24 § 3304. Review Committee. 25 (a) Establishment.--There is hereby established a committee 26 to be known as the Review Committee. The committee shall review 27 and recommend applications to the Governor. The committee shall 28 be composed of the following five members: 29 (1) The Governor or the Secretary of the Budget. 30 (2) The Majority Leader of the Senate, or a designee. 20030S0010B1515 - 51 -
1 (3) The Minority Leader of the Senate, or a designee. 2 (4) The Majority Leader of the House of Representatives, 3 or a designee. 4 (5) The Minority Leader of the House of Representatives, 5 or a designee. 6 (b) Operation.--The Governor or the Secretary of the Budget 7 shall serve as chairperson. The committee shall meet at the call 8 of the chairperson. Four members shall constitute a quorum, and 9 the consent of four members of the committee shall be required 10 to recommend an application. 11 § 3305. Application. 12 A person or an issuing authority may apply to the department 13 to have deteriorated property designated an incentive district. 14 The application shall be on a form provided by the department 15 and shall include all of the following: 16 (1) The name and address of the applicant. 17 (2) A legal description of the property which is to be 18 included in the incentive district. 19 (3) A statement that the property is deteriorated. 20 (4) A firm commitment of future economic development on 21 the property if the property were designated an incentive 22 district. 23 (5) Any other information required by the department. 24 § 3306. Review and approval. 25 (a) Review.--The department shall forward the application to 26 the committee when it is complete. The committee shall review 27 the application to determine all of the following: 28 (1) If the applicant is firmly committed to improving 29 the property upon designation. 30 (2) If the applicant complied with all other criteria 20030S0010B1515 - 52 -
1 established by the committee. 2 (b) Approval.--Upon being satisfied that all requirements 3 have been met, the committee may approve the application and 4 recommend that the property be designated an incentive district. 5 The recommendation shall specify the time period for which the 6 property may be designated, not to exceed 20 years. The 7 department shall immediately notify affected municipalities of 8 the recommendation. 9 § 3307. Designation. 10 Within 90 days of receiving notification in accordance with 11 section 3306 (relating to review and approval), a municipality 12 may request the department to designate the deteriorated 13 property as a tax incentive district. The request shall be on a 14 form provided by the department and shall include a copy of the 15 ordinance, resolution or other required action from the 16 governing body of the municipality approving the designation of 17 the property as a tax incentive district. All appropriate 18 ordinances and resolutions shall be binding and nonrevocable on 19 the municipality. If all municipalities within a recommended tax 20 incentive district submit timely completed requests, the 21 department shall approve the requests and designate the property 22 as a tax incentive district. Upon designation, persons owning 23 property located within a tax incentive district and issuing 24 authorities of tax increment districts located within a tax 25 incentive district shall be eligible to receive grants and loans 26 under the Economic Enhancement Financing Program administered by 27 the Pennsylvania Economic Development Financing Authority. 28 CHAPTER 35 29 KEYSTONE ECONOMIC DEVELOPMENT ZONES 30 Subchapter 20030S0010B1515 - 53 -
1 A. General Provisions 2 B. Keystone Opportunity Zones and Keystone Opportunity 3 Expansion Zones 4 C. State Taxes (Reserved) 5 D. Local Taxes (Reserved) 6 E. Administration of Tax Provisions(Reserved) 7 F. Procedures for Zones (Reserved) 8 G. Miscellaneous Provisions (Reserved) 9 SUBCHAPTER A 10 GENERAL PROVISIONS 11 Sec. 12 3501. Scope. 13 3502. Legislative findings (Reserved). 14 3503. Definitions. 15 § 3501. Scope. 16 This chapter relates to Keystone Opportunity Zones and 17 Keystone Opportunity Expansion Zones. 18 § 3502. Legislative findings. 19 (Reserved) 20 § 3503. Definitions. 21 The following words and phrases when used in this chapter 22 shall have the meanings given to them in this section unless the 23 context clearly indicates otherwise: 24 "Business." An association, partnership, corporation, sole 25 proprietorship, limited liability company or employer. 26 "Department." The Department of Community and Economic 27 Development of the Commonwealth. 28 "Deteriorated property." Any blighted, impoverished area 29 containing residential, industrial, commercial or other real 30 property which is abandoned, unsafe, vacant, undervalued, 20030S0010B1515 - 54 -
1 underutilized, overgrown, defective, condemned, demolished or 2 which contains economically undesirable land use. The term 3 includes property adjacent to deteriorated property which is 4 significantly undervalued and underutilized due to the proximity 5 of the deteriorated property. 6 "Domicile." The place where a person has a true and fixed 7 home and principal establishment for an indefinite time and to 8 which, whenever absent, that person intends to return. Domicile 9 continues until another place of domicile is established. 10 "Expansion subzone." A clearly defined geographic area 11 containing a minimum of 15 contiguous acres or a minimum of five 12 contiguous acres in a rural area. 13 "Improvement subzone." A clearly defined geographic area. 14 "Institution." 15 (1) Every bank operating as such and having capital 16 stock which is incorporated under any law of this 17 Commonwealth, under the law of the United States or under the 18 law of any other jurisdiction and is located within this 19 Commonwealth. 20 (2) Every operating company having capital stock located 21 within this Commonwealth having any of the powers of 22 companies entitled to the benefits of section 29 of the act 23 of April 29, 1874 (P.L.73, No.32), entitled "An act to 24 provide for the incorporation and regulation of certain 25 corporations," and any supplements thereto and under the act 26 of June 27, 1895 (P.L.399, No.286), entitled "An act 27 conferring upon certain fidelity, insurance, safety deposit, 28 trust and savings companies the powers and privileges of 29 companies incorporated under the provisions of section 30 twenty-nine of an act, entitled 'An act to provide for the 20030S0010B1515 - 55 -
1 incorporation and regulation of certain corporations,' 2 approved April twenty-ninth, Anno Domini one thousand eight 3 hundred and seventy-four, and of the supplements thereto." 4 (3) Every company organized and operating as a bank and 5 trust company or as a trust company having capital stock 6 located in this Commonwealth, whether the institution is 7 incorporated under any law of this Commonwealth, the law of 8 the United States or any law of any jurisdiction. The term 9 shall not include any of such companies, all of the shares of 10 capital stock of which, other than shares necessary to 11 qualify directors, are owned by a company which is liable to 12 pay to the Commonwealth a tax pursuant to Article VII of the 13 act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform 14 Code of 1971. 15 (4) A mutual thrift institution. 16 "Insurance company." Every insurance company, association or 17 exchange incorporated or organized by or under the laws of this 18 Commonwealth, the United States, territories, dependencies, 19 other states or foreign governments and engaged in transacting 20 insurance business of any kind or classification within this 21 Commonwealth, except title insurance companies subject to tax 22 under Article VIII or XVI of the act of March 4, 1971 (P.L.6, 23 No.2), known as the Tax Reform Code of 1971, as the case may be, 24 except purely mutual beneficial associations whose funds for the 25 benefit of members and families or heirs are made up entirely of 26 the weekly, monthly, quarterly, semiannual or annual 27 contributions to their members and the accumulated interest 28 thereon and corporations organized under the former act of June 29 21, 1937 (P.L.1948, No.378), known as the Nonprofit Hospital 30 Plan Act, and under the former act of June 27, 1939 (P.L.1125, 20030S0010B1515 - 56 -
1 No.399), known as the Nonprofit Medical, Osteopathic, Dental and 2 Podiatry Service Corporation Act. 3 "Keystone Act." The act of October 6, 1998 (P.L.705, No.92), 4 known as the Keystone Opportunity Zone and Keystone Opportunity 5 Expansion Zone Act. 6 "Keystone opportunity expansion zone." A defined geographic 7 area comprised of one or more political subdivisions or portions 8 of political subdivisions designated by the Department of 9 Community and Economic Development under Subch. B (relating to 10 keystone opportunity zones and keystone expansion zones). A 11 keystone opportunity expansion zone may be comprised of not more 12 than eight expansion subzones. 13 "Keystone opportunity zone." A defined geographic area 14 comprised of one or more political subdivisions or portions of 15 political subdivisions designated by the Department of Community 16 and Economic Development under Subch. B (relating to keystone 17 opportunity zones and keystone opportunity expansion zones). A 18 keystone opportunity zone may be comprised of not more than 12 19 subzones. 20 "Metropolitan statistical area." A core area containing a 21 city with a population of 50,000 or more or a Bureau of Census 22 defined urbanized area of 50,000 with a total metropolitan 23 population of at least 100,000. 24 "Mutual thrift institution." Every: 25 (1) savings bank without capital stock; 26 (2) building and loan association; 27 (3) savings and loan association; 28 (4) savings institution having capital stock; 29 whether the mutual thrift institution is incorporated under any 30 law of this Commonwealth or under the law of the United States, 20030S0010B1515 - 57 -
1 or is incorporated under the law of any other jurisdiction and 2 is located within this Commonwealth. 3 "Opportunity plan." A written plan that addresses the 4 criteria and meets the requirements in section 3514(a) (relating 5 to application). 6 "Person." An individual. 7 "Political subdivision." A county, city, borough, township, 8 town or school district with taxing jurisdiction in a defined 9 geographic area within this Commonwealth. 10 "Qualified business." A business authorized to do business 11 in this Commonwealth that is located or partially located within 12 a subzone or expansion subzone and is engaged in the active 13 conduct of a trade or business in accordance with the 14 requirements of section 3519 (relating to qualified businesses) 15 for the taxable year. An agent, broker or representative of a 16 business is not engaged in the active conduct of trade or 17 business for the business. 18 "Qualified political subdivision." A political subdivision 19 that has real property within its jurisdiction which has been 20 designated by the department as a subzone or expansion subzone. 21 "Resident." A person who is domiciled and resides in an area 22 that is designated a subzone or expansion subzone and who meets 23 the requirements of section 3518 (relating to residency). 24 "Subzone." A clearly defined geographic area containing a 25 minimum of 20 contiguous acres or a minimum of ten contiguous 26 acres in a rural area. 27 "Tax Reform Code of 1971." The act of March 4, 1971 (P.L.6, 28 No.2), known as the Tax Reform Code of 1971, and any subsequent 29 amendments thereto. 30 SUBCHAPTER B 20030S0010B1515 - 58 -
1 KEYSTONE OPPORTUNITY ZONES AND KEYSTONE 2 OPPORTUNITY EXPANSION ZONES 3 Sec. 4 3511. Keystone opportunity zones. 5 3512. Keystone opportunity expansion zones. 6 3513. Keystone opportunity improvement zones. 7 3514. Application. 8 3515. Review. 9 3516. Criteria for authorization of keystone opportunity 10 zone. 11 3517. Zone limitations. 12 3518. Residency. 13 3519. Qualified businesses. 14 3520. Forms. 15 3521. Decertification. 16 § 3511. Keystone opportunity zones. 17 (a) Establishment.--There is established within the 18 department a program providing for keystone opportunity zones. A 19 keystone opportunity zone shall be comprised of deteriorated 20 property and shall not exceed a total of 5,000 acres. 21 (b) Zone authorization.--The department shall authorize not 22 more than 12 keystone opportunity zones in this Commonwealth. 23 Persons and businesses within an authorized keystone opportunity 24 zone that are qualified under this chapter shall be entitled to 25 all tax exemptions, deductions, abatements or credits set forth 26 in Chapters 5 and 7 of the Keystone Act for a period not to 27 exceed 15 years beginning January 1, 1999, and ending on or 28 before December 31, 2013. 29 (c) Subzone designation.--The department may designate not 30 more than 12 subzones in each keystone opportunity zone. The 20030S0010B1515 - 59 -
1 total number of subzone acres in a keystone opportunity zone 2 shall not exceed 5,000 acres in the aggregate. 3 (d) Authorization for local tax exemption.--Every political 4 subdivision within which a proposed subzone is located, whether 5 in whole or in part, is authorized to provide tax exemptions, 6 deductions, abatements or credits to persons and businesses 7 qualified under this chapter. The political subdivision must 8 agree to provide exemptions, deductions, abatements or credits 9 from all local taxes set forth in Chapter 7 of the Keystone Act 10 in order to qualify to be designated a subzone. Except as 11 provided in section 3515(e) (relating to review), the 12 exemptions, deductions, abatements or credits must be effective 13 January 1, 1999, if designation of a subzone within the 14 political subdivision is granted by the department. The 15 exemptions, deductions, abatements or credits shall be binding 16 upon the political subdivision for the duration of the subzone 17 designation. 18 (e) Authorization to extend the duration of a keystone 19 opportunity zone or subzone.--A subzone of a keystone 20 opportunity zone may request to extend its designation as a 21 subzone for a period of three years. A subzone that is part of a 22 keystone opportunity zone that will expire on December 31, 2008, 23 may extend its designation as a subzone to December 31, 2010, or 24 to December 31, 2013. The request to extend a subzone 25 designation must be made on a subzone-by-subzone basis. A 26 qualified political subdivision having an approved subzone 27 within its jurisdiction and seeking to extend the subzone 28 designation must pass the required ordinances, resolutions or 29 other required action of the qualified political subdivision for 30 the exemptions, deductions, abatements or credits set forth in 20030S0010B1515 - 60 -
1 Chapter 7 of the Keystone Act for the period beginning after 2 December 31, 2008, or December 31, 2010, as the case may be, and 3 must submit copies of the ordinance, resolution or other action 4 to the department by June 30, 2001. The department may grant the 5 request to extend if all the proper binding ordinances, 6 resolutions or other governing documents are passed by all 7 qualified political subdivisions within the subzone extending 8 the necessary exemptions, deductions, abatements and credits to 9 the entire subzone to December 31, 2010, or December 31, 2013. 10 The department shall approve or deny the request for extension 11 of duration of a subzone by July 31, 2001, and shall provide 12 written notice, irrespective of whether approved or denied, to 13 each qualified political subdivision, resident and qualified 14 business affected. Upon approval of a request for extension of 15 duration of a subzone, the exemptions, deductions, abatements or 16 credits shall be binding upon the qualified political 17 subdivision as provided in subsection (d). 18 (f) Authorization to enhance existing subzones.--Unless as a 19 result of a request the limitation on size established in 20 subsection (a) would be exceeded, a subzone of a keystone 21 opportunity zone may request to enhance its size. The request to 22 enhance a subzone must be made on a subzone-by-subzone basis. A 23 qualified political subdivision having an approved subzone 24 within its jurisdiction which is seeking to enhance its size 25 must pass the required ordinances, resolutions or other required 26 action of the qualified political subdivision for the 27 exemptions, deductions, abatements or credits set forth in 28 Chapter 7 of the Keystone Act for the period beginning on the 29 date of designation and ending on the date the subzone expires 30 and must submit copies of the ordinance, resolution or other 20030S0010B1515 - 61 -
1 action to the department by June 1, 2003. 2 § 3512. Keystone opportunity expansion zones. 3 (a) Establishment.--There is established within the 4 department a program providing for keystone opportunity 5 expansion zones. A keystone opportunity expansion zone shall be 6 comprised of deteriorated property and shall not exceed a total 7 of 1,500 acres. 8 (b) Authorization.--The department shall authorize not more 9 than 12 keystone opportunity expansion zones in this 10 Commonwealth. Persons and businesses within an authorized 11 keystone opportunity expansion zone that are qualified under the 12 Keystone Act shall be entitled to all tax exemptions, 13 deductions, abatements or credits set forth in Chapters 5 and 7 14 of the Keystone Act for a period of ten or 13 years beginning 15 January 1, 2001, and ending on December 31, 2010, or December 16 31, 2013. 17 (c) Expansion subzone designation.--The department may 18 designate not more than eight expansion subzones in a keystone 19 opportunity expansion zone. The total number of expansion 20 subzone acres in a keystone opportunity expansion zone shall not 21 exceed 1,500 acres in the aggregate. 22 (d) Authorization for local tax exemption.--Every political 23 subdivision within which a proposed expansion subzone is 24 located, whether in whole or in part, is authorized to provide 25 tax exemptions, deductions, abatements or credits to persons and 26 businesses qualified under this chapter for a period ending 27 December 31, 2010, or December 31, 2013. The exemption period 28 must be uniform within each expansion subzone. The political 29 subdivision must agree to provide exemptions, deductions, 30 abatements or credits from all local taxes set forth in Chapter 20030S0010B1515 - 62 -
1 7 of the Keystone Act in order to qualify to be designated an 2 expansion subzone. The exemptions, deductions, abatements or 3 credits must be effective January 1, 2001, if designation of an 4 expansion subzone within the political subdivision is granted by 5 the department. The exemptions, deductions, abatements or 6 credits shall be binding upon the political subdivision for the 7 duration of the expansion subzone designation. 8 (e) Authorization to enhance existing expansion subzones.-- 9 Unless as a result of a request the limitation on size 10 established in subsection (a) would be exceeded, a keystone 11 opportunity expansion zone may request to enhance its size. The 12 request to enhance the expansion zone must be made on an 13 expansion-subzone-by-expansion-subzone basis. A qualified 14 political subdivision which is seeking an expansion subzone 15 within its jurisdiction must pass the required ordinance, 16 resolution or other required action of the qualified political 17 subdivision for the exemptions, deductions, abatements or 18 credits set forth in Chapter 7 of the Keystone Act for the 19 period beginning on January 1, 2004, and ending on December 31, 20 2010, or on December 31, 2013. Copies of the ordinance, 21 resolution or other action must be submitted to the department 22 by December 31, 2003. 23 § 3513. Keystone opportunity improvement zones. 24 (a) Establishment.--There is established within the 25 department a program for keystone opportunity improvement zones. 26 A keystone opportunity improvement zone shall be comprised of 27 improvement subzones consisting of deteriorated property 28 designated by the Governor. 29 (b) Proposal.--By January 1, 2003, and notwithstanding any 30 designation under sections 3511 (relating to keystone 20030S0010B1515 - 63 -
1 opportunity zones) and 3512 (relating to keystone opportunity 2 expansion zones), the Governor may, by executive order, 3 designate deteriorated property in this Commonwealth as a 4 proposed improvement subzone. The executive order shall specify 5 the period of time, not to exceed 15 years, for which the tax 6 exemptions, deductions, abatements or credits provided by 7 Chapters 5 and 7 of the Keystone Act may be granted. The 8 department shall immediately notify political subdivisions 9 located within the area designated. 10 (c) Application.--By June 1, 2004, a political subdivision 11 may apply to the department for approval of the designation of 12 the deteriorated property as an improvement subzone for the 13 period designated under subsection (b). The application must be 14 on a form provided by the department and must include a copy of 15 an ordinance, resolution or other required action from the 16 governing body of the political subdivision exempting or 17 providing the deductions, abatements or credits set forth in 18 Chapter 7 of the Keystone Act to qualified persons and qualified 19 businesses within the proposed improvement subzone. Except as 20 provided in section 3521 (relating to decertification), all 21 appropriate ordinances and resolutions must be effective for the 22 period specified in the executive order and must be binding and 23 nonrevocable on the political subdivision. 24 (d) Designation.--If all political subdivisions within a 25 proposed improvement subzone submit timely completed 26 applications, the department shall approve the applications and 27 designate the property as an improvement subzone. If a proposed 28 improvement subzone is an existing subzone or an existing 29 expansion subzone, failure of a political subdivision to submit 30 the application as required by this section shall not terminate 20030S0010B1515 - 64 -
1 the existing designation as either a subzone or an expansion 2 subzone. Qualified persons and qualified businesses within the 3 improvement subzone shall be entitled to the State exemptions, 4 deductions, abatements or credits set forth in Chapter 5 of the 5 Keystone Act and the local tax exemptions, deductions, 6 abatements or credits set forth in Chapter 7 of the Keystone Act 7 for the period for which the improvement subzone has been 8 designated. 9 § 3514. Application. 10 (a) Initial application.--One or more political 11 subdivisions, or a designee of one or more political 12 subdivisions, may apply to the department to designate 13 deteriorated property within the political subdivision or 14 portions thereof a subzone or expansion subzone. The application 15 must contain the following: 16 (1) The geographic area of the proposed keystone 17 opportunity zone or proposed keystone opportunity expansion 18 zone. The geographic area must be located within the 19 boundaries of the participating political subdivision and 20 must not contain more than 5,000 acres in the case of a 21 keystone opportunity zone or 1,500 acres in the case of a 22 keystone opportunity expansion zone. 23 (2) An opportunity plan that must include the following: 24 (i) A detailed map of the proposed keystone 25 opportunity zone or proposed keystone opportunity 26 expansion zone, including geographic boundaries, total 27 area and present use and conditions of the land and 28 structures of the proposed keystone opportunity zone or 29 proposed keystone opportunity expansion zone. 30 (ii) Evidence of support from and participation of 20030S0010B1515 - 65 -
1 local government, school districts and other educational 2 institutions, business groups, community organizations 3 and the public. 4 (iii) A proposal to increase economic opportunity, 5 reduce crime, improve education, facilitate 6 infrastructure improvement, reduce the local regulating 7 burden and identify potential jobs and job training 8 opportunities and which states whether or not the zone is 9 located in an area which has tax revenue dedicated to the 10 payment of debt. 11 (iv) A description of the current social, economic 12 and demographic characteristics of the proposed keystone 13 opportunity zone or proposed keystone opportunity 14 expansion zone and anticipated improvements in education, 15 health, human services, public safety and employment, 16 that will result from keystone opportunity zone or 17 keystone opportunity expansion zone designation. 18 (v) A description of anticipated activity in the 19 proposed keystone opportunity zone or proposed keystone 20 opportunity expansion zone, including, industrial use, 21 industrial site reuse, commercial or retail use and 22 residential use. 23 (vi) Evidence of potential private and public 24 investment in the proposed keystone opportunity zone or 25 proposed keystone opportunity expansion zone. 26 (vii) The role of the proposed keystone opportunity 27 zone or proposed keystone opportunity expansion zone in 28 regional economic and community development. 29 (viii) Plans to utilize existing resources for the 30 administration of the proposed keystone opportunity zone 20030S0010B1515 - 66 -
1 or proposed keystone opportunity expansion zone. 2 (ix) Any other information deemed appropriate by the 3 department. 4 (3) A report on youth at risk to include issues relating 5 to health, welfare and education. 6 (4) The duration of the proposed subzones or proposed 7 expansion subzones. The duration of a subzone may not exceed 8 15 years. The duration of an expansion subzone may not exceed 9 13 years. 10 (5) A formal, binding ordinance or resolution passed by 11 every political subdivision in which the proposed subzone or 12 proposed expansion subzone is located that specifically 13 provides for all local tax exemptions, deductions, abatements 14 or credits for persons and businesses set forth in the 15 Keystone Act. 16 (6) Evidence that the proposed keystone opportunity zone 17 or proposed keystone opportunity expansion zone meets the 18 required criteria under section 3516 (relating to criteria 19 for authorization of keystone opportunity zone). 20 (a.1) Enhancement application.--One or more political 21 subdivisions within an existing keystone opportunity zone or 22 keystone opportunity expansion zone, or a designee of one or 23 more political subdivisions within an existing keystone 24 opportunity zone or keystone opportunity expansion zone, may 25 apply to the department to designate deteriorated property 26 within the political subdivision or portions of the political 27 subdivision as enhancements to a subzone or an expansion 28 subzone. The application must satisfy the requirements of 29 subsection (a)(1), (2), (3), (5) and (6). 30 (b) Participation limitation.--A political subdivision may 20030S0010B1515 - 67 -
1 not be a part of more than one proposed keystone opportunity 2 zone or proposed keystone opportunity expansion zone. A proposed 3 expansion subzone may not overlap the boundaries of a subzone. 4 (c) Application limitation.--A political subdivision may 5 submit only one application to the department for authorization 6 as a keystone opportunity zone. A political subdivision may 7 submit only one application to the department for authorization 8 as a keystone opportunity expansion zone. A political 9 subdivision may submit only one application to the department 10 for designation of enhancements to existing keystone opportunity 11 zones and keystone opportunity expansion zones. If a political 12 subdivision seeks to enhance its existing keystone opportunity 13 zone under section 3511(f) (relating to keystone opportunity 14 zones) or a keystone opportunity expansion zone under section 15 3512(e) (relating to keystone opportunity expansion zones) and 16 the Governor has designated an improvement subzone located 17 within the political subdivision under section 3513(b) (relating 18 to keystone opportunity improvement zones), the political 19 subdivision must submit one application containing both the 20 request required by section 3511(f) or 3512(e) and the 21 application required by section 3513(c). 22 § 3515. Review. 23 (a) Action of department.--The department, in consultation 24 with the Department of Revenue, shall review all completed 25 applications submitted under this chapter. An application for 26 authorization as a keystone opportunity zone and designation of 27 subzones must be received by the department by September 30, 28 1998, in order to be considered by the department. An 29 application for authorization as a keystone opportunity 30 expansion zone and designation of expansion subzones must be 20030S0010B1515 - 68 -
1 received by the department by February 28, 2001, in order to be 2 considered by the department. An application for enhancement of 3 an existing keystone opportunity zone or of a keystone 4 opportunity expansion zone must be received by the department by 5 December 31, 2003. 6 (b) Process.--The department shall authorize up to 12 7 keystone opportunity zones from applications meeting the 8 criteria in section 3516 (relating to criteria for authorization 9 of keystone opportunity zone), based upon need and likelihood of 10 success. The department shall authorize up to 12 keystone 11 opportunity expansion zones from applications meeting the 12 criteria in section 3516, based upon need and likelihood of 13 success. Additionally, the department shall not alter the 14 geographic boundaries of a subzone or expansion subzone or the 15 duration of a subzone or expansion subzone described in an 16 application. The department shall designate additional 17 enhancements to existing keystone opportunity zones and keystone 18 opportunity expansion zones from applications meeting the 19 criteria in section 3516 based upon need and likelihood of 20 success. 21 (c) Authorizations.--The department shall authorize all 22 keystone opportunity zones by November 30, 1998. The department 23 shall authorize all keystone opportunity expansion zones by 24 March 30, 2001. The department shall designate all enhancements 25 to existing keystone opportunity zones and to keystone 26 opportunity expansion zones by January 31, 2004. 27 (d) Effective date of designation.--The designation of a 28 subzone under this chapter shall take effect on January 1, 1999. 29 The designation of an expansion subzone under this chapter shall 30 take effect on January 1, 2001. The designation of enhancements 20030S0010B1515 - 69 -
1 to existing keystone opportunity zones and to keystone 2 opportunity expansion zones under this chapter shall take effect 3 January 1, 2004. 4 (e) Extension.--The department may extend the deadline for 5 the receipt of applications for keystone opportunity zones until 6 December 31, 1998, if all 12 zones have not been authorized and 7 the extension is necessary to allow eligible political 8 subdivisions to apply. The department shall authorize additional 9 keystone opportunity zones under this subsection by February 28, 10 1999. The authorization shall take effect January 1, 1999; or, 11 if the authorization occurs after January 1, 1999, that 12 subsequent authorization shall for all purposes be retroactive 13 to January 1, 1999. The keystone opportunity zone authorization 14 shall end as provided in section 3511(b) (relating to keystone 15 opportunity zones). 16 § 3516. Criteria for authorization of keystone opportunity 17 zone. 18 (a) Specific criteria.--In order to qualify for 19 authorization under this chapter, the proposed keystone 20 opportunity zone or proposed keystone opportunity expansion zone 21 must meet at least two of the following criteria: 22 (1) At least 20% of the population is below the poverty 23 level. 24 (2) The unemployment rate is 1.25 times the Statewide 25 average. 26 (3) At least 20% of all real property within a five-mile 27 radius of the proposed keystone opportunity zone, proposed 28 keystone opportunity expansion zone, proposed subzone or 29 proposed expansion subzone in a nonurban area is deteriorated 30 or underutilized. 20030S0010B1515 - 70 -
1 (4) At least 20% of all real property within a one-mile 2 radius of the proposed keystone opportunity zone, proposed 3 keystone opportunity expansion zone, proposed subzone or 4 proposed expansion subzone in an urban area is deteriorated 5 or underutilized. 6 (5) At least 20% of all occupied housing within a two- 7 mile radius of the proposed keystone opportunity zone, 8 proposed keystone opportunity expansion zone, proposed 9 subzone or proposed expansion subzone in a nonurban area is 10 deteriorated. 11 (6) At least 20% of all occupied housing within a one- 12 mile radius of the proposed keystone opportunity zone, 13 proposed keystone opportunity expansion zone, proposed 14 subzone or proposed expansion subzone in an urban area is 15 deteriorated. 16 (7) In an urban area, the median family income is 80% or 17 less of the urban median family income for that metropolitan 18 statistical area. 19 (8) In an area other than an urban area, the median 20 family income is 80% or less of the Statewide nonurban median 21 family income. 22 (9) The population loss exceeds 10% in an area that 23 includes the proposed keystone opportunity zone or proposed 24 keystone opportunity expansion zone and its surrounding area 25 but is not larger than the county or counties in which the 26 proposed keystone opportunity zone or proposed keystone 27 opportunity expansion zone is located, based on census data 28 for the period between 1980 and 1990 or census estimates 29 since 1990 establishing a pattern of population loss. 30 (10) The political subdivision in which the proposed 20030S0010B1515 - 71 -
1 keystone opportunity zone or proposed keystone opportunity 2 expansion zone is located has experienced a sudden or severe 3 job loss. 4 (11) At least 33% of the real property in a proposed 5 keystone opportunity zone or proposed keystone opportunity 6 expansion zone in a nonurban area would otherwise remain 7 underdeveloped or nonperforming due to physical 8 characteristics of the real property. 9 (12) The area has substantial real property with 10 adequate infrastructure and energy to support new or expanded 11 development. 12 (b) Additional criteria.--In addition to the required 13 criteria under subsection (a), the department shall consider the 14 following criteria: 15 (1) Evidence of distress, including unemployment, 16 percentage of population below 80% of the State median 17 income, poverty rate, deteriorated property and adverse 18 economic and socioeconomic conditions, in the proposed 19 keystone opportunity zone or proposed keystone opportunity 20 expansion zone. 21 (2) The strength and viability of the proposed goals, 22 objectives and strategies, in the opportunity plan. 23 (3) Whether the opportunity plan is creative and 24 innovative in comparison to other applications. 25 (4) Local public and private commitment to the 26 development of the proposed keystone opportunity zone or 27 proposed keystone opportunity expansion zone and the 28 potential cooperation of surrounding communities. 29 (5) Existing resources available to the proposed 30 keystone opportunity zone or proposed keystone opportunity 20030S0010B1515 - 72 -
1 expansion zone. 2 (6) How keystone opportunity zone or keystone 3 opportunity expansion zone authorization or economic 4 redevelopment relates to other current economic and community 5 development projects and to regional initiatives or programs. 6 (7) How the local regulatory burden will be eased for 7 businesses operating in the proposed keystone opportunity 8 zone or proposed keystone opportunity expansion zone. 9 (8) Proposals to implement educational opportunities and 10 improvements. 11 (9) Crime statistics and proposals to implement local 12 crime reduction measures. 13 (10) Proposals to establish and link job creation and 14 job training. 15 (c) Tax exemption ordinances.--An area shall not be 16 authorized as a keystone opportunity zone or a keystone 17 opportunity expansion zone unless, as a part of the application, 18 each political subdivision in which the proposed subzone or 19 proposed expansion subzone is to be located adopts and provides 20 a copy of an ordinance, resolution or other required action from 21 the governing body of each political subdivision that exempts or 22 provides deductions, abatements or credits to qualified persons 23 and qualified businesses from local taxes upon designation of 24 the area as a subzone or expansion subzone. All appropriate 25 ordinances and resolutions must be effective by January 1, 1999, 26 if designation as a subzone is granted. All appropriate 27 ordinances and resolutions must be effective on January 1, 2001, 28 if designation as an expansion subzone is granted. All 29 appropriate ordinances and resolutions must be effective January 30 1, 2004, if designation of enhancements to an existing keystone 20030S0010B1515 - 73 -
1 opportunity zone or to a keystone opportunity expansion zone are 2 granted. Except as provided in section 3521 (relating to 3 decertification), the resolution, ordinance or other required 4 action shall be binding and nonrevocable on the qualified 5 political subdivisions for the duration of the opportunity plan. 6 (d) Urban areas.--The department shall promulgate guidelines 7 that include the definition of "urban area" for the purposes of 8 receiving applications for authorization as a keystone 9 opportunity zone or keystone opportunity expansion zone. 10 § 3517. Zone limitations. 11 The department shall not authorize more than 12 keystone 12 opportunity zones within this Commonwealth. No subzone shall 13 encompass an entire political subdivision. The department shall 14 not authorize more than 12 keystone opportunity expansion zones 15 within this Commonwealth. No expansion subzones shall encompass 16 an entire political subdivision. 17 § 3518. Residency. 18 In order to qualify each year for the tax exemptions, 19 deductions, abatements or credits under Chapters 5 and 7 of the 20 Keystone Act, a person must be domiciled and must reside in a 21 subzone or expansion subzone for a period of 184 consecutive 22 days during each taxable year, which may begin on the date of 23 designation by the department or on the date the person first 24 resides within the subzone or expansion subzone. 25 § 3519. Qualified businesses. 26 (a) Qualifications.--In order to qualify each year for the 27 tax exemptions, deductions, abatements or credits under Chapters 28 5 and 7 of the Keystone Act, a business must own or lease real 29 property in a subzone, improvement subzone or expansion subzone 30 from which the business actively conducts a trade, profession or 20030S0010B1515 - 74 -
1 business. The qualified business must receive certification from 2 the department that the business is located and is in the active 3 conduct of a trade, profession or business, within the subzone, 4 improvement subzone or expansion subzone. The business must 5 obtain annual renewal of the certification from the department 6 to continue to qualify under this section. 7 (b) Relocation.-- 8 (1) Any business that relocates from outside a subzone, 9 improvement subzone or expansion subzone into a subzone, 10 improvement subzone or expansion subzone shall not receive 11 any of the exemptions, deductions, abatements or credits set 12 forth in the Keystone Act unless that business either: 13 (i) increases full-time employment by at least 20% 14 in the first full year of operation within the subzone, 15 improvement subzone or expansion subzone; or 16 (ii) makes a capital investment in the property 17 located within a subzone, improvement subzone or 18 expansion subzone equivalent to 10% of the gross revenues 19 of that business in the immediately preceding calendar or 20 fiscal year. 21 (2) The department, in consultation with the Department 22 of Revenue, may waive or modify the requirements of this 23 subsection, as appropriate. 24 § 3520. Forms. 25 (a) Application forms.--Applications for authorization as a 26 keystone opportunity zone or keystone opportunity expansion zone 27 must be on forms prescribed by the department. 28 (b) Department assistance.--The department shall assist 29 political subdivisions in using the Internet as a tool for 30 encouraging new business development, including assisting 20030S0010B1515 - 75 -
1 political subdivisions in making available via the Internet 2 information, applications and other forms necessary under this 3 chapter or the Keystone Act. 4 § 3521. Decertification. 5 (a) Application.--One or more political subdivisions, or a 6 designee of one or more political subdivisions, may apply to the 7 department to decertify and remove the designation of 8 deteriorated property as part of a subzone, improvement subzone 9 or expansion subzone. The application must contain all of the 10 following: 11 (1) An identification of the property to be removed. 12 (2) A copy of an agreement which was supported by 13 consideration in which each entity which possesses an 14 interest in the real property to be removed, including any 15 holder of an option either to purchase the real estate or to 16 enter into a ground lease of the real estate or any other 17 leasehold interest in the real estate, waives the party's 18 right to any exemptions, deductions, abatements or credits 19 granted by the Keystone Act. 20 (3) A copy of a binding ordinance, resolution or other 21 governing document passed by the political subdivision 22 removing any exemptions, deductions, abatements or credits 23 set forth in Chapter 7 of the Keystone Act, effective upon 24 decertification by the department. 25 (b) Process.--The department may grant the request to 26 decertify and remove the property if completed applications have 27 been submitted by all qualified political subdivisions in which 28 the property is located. 29 CHAPTER 37 30 KEYSTONE INNOVATION ZONES 20030S0010B1515 - 76 -
1 Sec. 2 3701. Scope of chapter. 3 3702. Definitions. 4 3703. Keystone innovation zones. 5 3704. Assistance. 6 3705. Expansion subzone designation. 7 § 3701. Scope of chapter. 8 This chapter deals with keystone innovation zones. 9 § 3702. Definitions. 10 The following words and phrases when used in this chapter 11 shall have then meanings given to them in this section unless 12 the context clearly indicates otherwise: 13 "Department." The Department of Community and Economic 14 Development of the Commonwealth. 15 "Eligible property." Real property which is located within a 16 five-mile radius of an institution of higher education in a 17 rural setting and which is located within a one-mile radius of 18 an institution of higher education in an urban setting. 19 "Institution of higher education." A public or private 20 institution within this Commonwealth authorized by the 21 Department of Education to grant an associate degree or higher 22 academic degree. 23 "Keystone innovation zone." A clearly defined geographic 24 area comprised of eligible property designated by the Department 25 of Community and Economic Development. 26 "Qualified employer." An entity that meets all of the 27 following: 28 (1) Is located within a keystone innovation zone. 29 (2) Employs three or more individuals within the 30 keystone innovation zone. 20030S0010B1515 - 77 -
1 (3) Has been in operation seven years or less. 2 "Secretary." The Secretary of Community and Economic 3 Development of the Commonwealth. 4 § 3703. Keystone innovation zones. 5 (a) Establishment.--There is hereby established within the 6 department a program to be known as the keystone innovation 7 zones program. The program shall provide economic assistance in 8 areas surrounding institutions of higher education. 9 (b) Application.--On or before January 1, 2005, an 10 institution of higher education may submit to the department an 11 application to establish a keystone innovation zone. The 12 application shall be on a form provided by the department and 13 shall include all of the following: 14 (1) A list of which eligible properties are to be 15 included in the keystone innovation zone. 16 (2) The name and address of the keystone innovation 17 zone. 18 (3) The name and address of the coordinator or executive 19 director of the keystone innovation zone. 20 (4) Any other information required by the department. 21 (c) Review and designation.--The department shall review the 22 application. Upon being satisfied that the application is 23 complete and accurate, the department may approve the 24 application. If the department approves the application, the 25 secretary shall designate the property as a keystone innovation 26 zone. 27 § 3704. Assistance. 28 (a) Existing programs.--A qualified employer shall be given 29 priority consideration in applying for assistance under any of 30 the programs established by: 20030S0010B1515 - 78 -
1 (1) This part and Part IV (relating to economic 2 development financing). 3 (2) The act of May 17, 1956 (1955 P.L.1609, No.537), 4 known as the Pennsylvania Industrial Development Authority 5 Act. 6 (3) The act of August 23, 1967 (P.L.251, No.102), known 7 as the Economic Development Financing Law. 8 (4) The act of June 22, 2001 (P.L.569, No.38), known as 9 the Ben Franklin Technology Development Authority Act. 10 (5) The act of June 26, 2001 (P.L.755, No.77), known as 11 the Tobacco Settlement Act. 12 (b) Loans.--A qualified employer with a project approved for 13 financing under this part, Part IV or by the Pennsylvania 14 Industrial Development Authority shall receive the lowest 15 interest rate extended to borrowers. 16 (c) Grants.--The department may provide a one-time $250,000 17 grant to a keystone innovation zone to establish and implement 18 the zone. The grant shall be drawn down as needed over a period 19 not to exceed the first five years of authorization as a 20 keystone innovation zone. Grant recipients shall comply with the 21 provisions of the grant. 22 § 3705. Expansion subzone designation. 23 (a) Establishment.--Notwithstanding sections 301.1, 303 and 24 304 of the act of October 6, 1998 (P.L 705, No.92), known as the 25 Keystone Opportunity Zone and Keystone Opportunity Expansion 26 Zone Act, and within one year of being designated a keystone 27 innovation zone under this chapter, a keystone innovation zone 28 may apply to the department to be designated as an expansion 29 subzone under the Keystone Opportunity Zone and Keystone 30 Opportunity Expansion Zone Act. The application shall be on a 20030S0010B1515 - 79 -
1 form provided by the department. In addition to the completed 2 application, the keystone innovation zone shall submit a copy of 3 an ordinance, resolution or other required action from the 4 governing body of each of the political subdivisions located 5 within the keystone innovation zone which exempts or provides 6 the deductions, abatements or credits required by Chapter 7 of 7 the Keystone Opportunity Zone and Keystone Opportunity Expansion 8 Zone Act to qualified persons and qualified businesses within 9 the keystone innovation zone as those terms are defined within 10 that act. The department may approve the application and 11 designate the property located within the keystone innovation 12 zone as an expansion subzone for the period beginning on the 13 date of designation and ending on December 31, 2013. Qualified 14 persons and qualified businesses within the expansion subzone 15 shall be entitled to the State tax exemptions, deductions, 16 abatements or credits set forth in Chapter 5 of the Keystone 17 Opportunity Zone and Keystone Opportunity Expansion Zone Act and 18 the local tax exemptions, deductions, abatements or credits set 19 forth in Chapter 7 of the Keystone Opportunity Zone and Keystone 20 Opportunity Expansion Zone Act for the period for which the 21 expansion subzone has been designated. 22 (b) Construction.--A keystone innovation zone designated an 23 expansion subzone under this section shall be subject to the 24 requirements of the Keystone Opportunity Zone and Keystone 25 Opportunity Expansion Zone Act. 26 PART IV 27 ECONOMIC DEVELOPMENT FINANCING 28 Chapter 29 41. Pennsylvania Industrial Development Authority (Reserved) 30 43. Pennsylvania Economic Development Financing Authority 20030S0010B1515 - 80 -
1 45. Local Economic Development Financing Authority 2 (Reserved) 3 47. Pennsylvania Infrastructure Investment Authority 4 (Reserved) 5 CHAPTER 41 6 PENNSYLVANIA INDUSTRIAL DEVELOPMENT AUTHORITY 7 (RESERVED) 8 CHAPTER 43 9 PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY 10 Subchapter 11 A. General Provisions 12 B. Structure and Powers 13 C. Bonds 14 D. Programs 15 E. Miscellaneous 16 SUBCHAPTER A 17 GENERAL PROVISIONS 18 Sec. 19 4301. Scope of chapter. 20 4302. Definitions. 21 § 4301. Scope of chapter. 22 This chapter relates to the Pennsylvania Economic Development 23 Financing Authority. 24 § 4302. Definitions. 25 The following words and phrases when used in this chapter 26 shall have the meaning given to them in this section unless the 27 context clearly indicates otherwise: 28 "Acquisition." The act of acquiring or equipping a project. 29 The term includes installation of equipment. 30 "Agricultural production." The raising, preparing or 20030S0010B1515 - 81 -
1 marketing of crops, livestock or other related farm products. 2 "Applicant." A person that applies for financial assistance 3 in accordance with this chapter. 4 "Authority." The Pennsylvania Economic Development Financing 5 Authority created in section 4303 (relating to authority). 6 "Board." The board of Pennsylvania Economic Development 7 Financing Authority created in accordance with section 4304 8 (relating to board). 9 "Business site infrastructure." Tangible personal property 10 which is purchased and used to construct utility services and to 11 provide access to a location within the Commonwealth to be used 12 by a business. The term includes electric lines, water 13 pipelines, wastewater facilities and pipelines, 14 telecommunications lines, natural gas pipelines and roads. The 15 term does not include working capital, buildings or land except 16 those acquired to provide utilities or access to the location. 17 "Committee." The Project Review Committee established in 18 section 4303 (relating to authority). 19 "Construction." The act of erecting, reconstructing, 20 expanding, extending, improving, rehabilitating, remodeling, 21 renovating or repairing a building or structure employed in or 22 related to a project. 23 "Cost of the project." An expense associated with a project. 24 The term includes all of the following: 25 (1) Costs and expenses of acquisition of interests in 26 real estate, buildings, structures, equipment, furnishings 27 and other tangible or intangible property comprising the 28 project. 29 (2) Costs and expenses of construction of buildings and 30 structures. 20030S0010B1515 - 82 -
1 (3) Costs and expenses of demolishing, removing or 2 relocating any buildings or structures on lands acquired or 3 to be acquired, including the cost or expense of acquiring 4 any lands onto which buildings or structures may be moved or 5 relocated. 6 (4) Financing charges and other costs and expenses of 7 financing and issuing bonds. 8 (5) Interest expenses prior to and during construction 9 and for a period of 12 months after construction is 10 completed, including any reserves for interest and such other 11 expenses as may be necessary or incidental to the 12 development, implementation or use of the project and 13 placement of the same in operation. 14 (6) Costs and expenses of administrative expenses and 15 professional services, including the costs of engineering, 16 financial services, accounting and legal services. 17 (7) Costs and expenses associated with the preparation 18 of plans, specifications, studies, surveys necessary or 19 incidental to determining the feasibility or practicability 20 of constructing the project. 21 (8) Operating capital or other capital needs related to 22 the project subject to limitation by the authority. 23 "Department." The Department of Community and Economic 24 Development of the Commonwealth. 25 "Economic Enhancement Fund." The Economic Enhancement Fund 26 established in 72 Pa.C.S. § 7203 (relating to establishment). 27 "Federal agency." The President of the United States of 28 America; the Congress and any department, agency or 29 instrumentality of the government of the United States of 30 America. 20030S0010B1515 - 83 -
1 "Infrastructure." Tangible personal property which is 2 purchased and used in creation or provision of goods or 3 services. The term does not include working capital, buildings, 4 structures or land. 5 "Interagency project." A project which meets the definition 6 of project under the provisions of the act of March 1, 1988 7 (P.L.82, No.16), known as the Pennsylvania Infrastructure 8 Investment Authority Act. 9 "Local economic development agency." An entity certified as 10 an industrial development agency under the act of May 17, 1956 11 (1955 P.L.1609, No.537), known as the Pennsylvania Industrial 12 Development Authority Act. 13 "Local economic development financing authority." An entity 14 created under the act of August 23, 1967 (P.L.251, No.102), 15 known as the Economic Development Financing Law. 16 "Manufacturer." An entity which is engaged in the giving of 17 new shapes, new qualities or new combinations to matter by the 18 application of skill and labor. 19 "Medical facility." A private entity licensed as a medical 20 facility under the act of June 13, 1967 (P.L.31, No.21), known 21 as the Public Welfare Code, or under the act of July 19, 1979 22 (P.L.130, No.48), known as the Health Care Facilities Act. 23 "Medical infrastructure." Tangible personal property which 24 is purchased and used by a medical facility in providing patient 25 care. The term does not include working capital, buildings, 26 structures or land. 27 "Municipal authority." A public authority created under 53 28 Pa.C.S. Ch. 56 (relating to municipal authorities) or under the 29 former act of May 2, 1945 (P.L.382, No.164), known as the 30 Municipality Authorities Act of 1945. 20030S0010B1515 - 84 -
1 "Project." An activity which increases economic activity 2 within this Commonwealth. The term includes the acquisition of 3 real or personal property, whether tangible or intangible. 4 "Project user." A person that owns, leases or uses all or 5 any part of a project. 6 "Water and wastewater infrastructure." Real property or 7 tangible personal property which is part of a publicly owned 8 facility or system: 9 (1) for the collection, treatment or disposal of sewage 10 and wastewater, including industrial waste; or 11 (2) for the supply, treatment, storage or distribution 12 of drinking water. 13 SUBCHAPTER B 14 STRUCTURE AND POWERS 15 Sec. 16 4303. Authority. 17 4304. Board. 18 4305. Powers and duties. 19 § 4303. Authority. 20 (a) Establishment.--There is hereby established a public 21 authority to be known as the Pennsylvania Economic Development 22 Financing Authority. The authority shall be an instrumentality 23 of the Commonwealth and a body corporate and politic which shall 24 assist persons in funding industrial and commercial development 25 within this Commonwealth. 26 (b) Governance.--The powers and duties of the authority 27 shall be exercised by a board. 28 (c) Committee.--There is hereby established a committee to 29 be known as the Project Review Committee. The committee shall 30 review and recommend certain projects to the board. The 20030S0010B1515 - 85 -
1 committee shall be composed of the following five members: 2 (1) The Governor or the Secretary of the Budget. 3 (2) The Majority Leader of the Senate, or a designee. 4 (3) The Minority Leader of the Senate, or a designee. 5 (4) The Majority Leader of the House of Representatives, 6 or a designee. 7 (5) The Minority Leader of the House of Representatives, 8 or a designee. 9 The Governor or the Secretary of the Budget shall serve as 10 chairperson. The committee shall meet at the call of the 11 chairperson. Four members shall constitute a quorum, and the 12 consent of four members of the committee shall be required to 13 award a grant or recommend a loan for a project. 14 (d) Revenues.--Expenses of the authority shall be paid from 15 assets or income of the authority. Except as provided in this 16 chapter, the Commonwealth shall not be responsible for funding 17 the annual budget of the authority. 18 (e) Fiscal year.--The fiscal year of the authority shall be 19 the same as the fiscal year of the Commonwealth. 20 (f) Audit.--The authority shall conduct an independent audit 21 of its accounts and records annually. 22 (g) General Assembly review.-- 23 (1) The Appropriations Committee of the Senate and the 24 Appropriations Committee of the House of Representatives 25 shall have the right at any time to examine the books, 26 accounts and records of the authority. 27 (2) The authority shall file an annual report with the 28 Appropriations Committee of the Senate and the Appropriations 29 Committee of the House of Representatives. The report shall 30 include all of the following: 20030S0010B1515 - 86 -
1 (i) A copy of the authority's budget. 2 (ii) The total amount of debt service to become due 3 on authority bonds for the ensuing fiscal year, including 4 payments of interest and principal, maturity value or 5 sinking fund payments. 6 (iii) The amount, if any, due to any provider of any 7 credit or liquidity facility representing payments made 8 by the provider as provided in the applicable resolution 9 or trust indenture as a result of any previous failure of 10 the authority to make any payment provided for in the 11 applicable resolution or trust indenture, including any 12 related reasonable interest, fees or charges and interest 13 rate exchange agreements, interest rate cap and floor 14 agreements and other similar agreements which the 15 authority enters into to manage the interest costs of the 16 authority. 17 (iv) The amount, if any, required to restore a debt 18 service reserve fund and the resolution of the authority 19 establishing the fund. 20 (v) The amount, if any, required to be rebated to 21 the United States for continued Federal tax exemption for 22 bonds of the authority. 23 (h) Publication.--The authority shall annually publish a 24 concise financial statement in the Pennsylvania Bulletin. 25 (i) Funds of authority.-- 26 (1) The authority may create funds and accounts 27 necessary or desirable for its corporate purposes and shall 28 pay into each fund or account any money of the authority 29 available. No other provision of this chapter shall be 30 construed to prohibit the authority from creating within any 20030S0010B1515 - 87 -
1 fund one or more accounts which may be used or pledged by the 2 authority for a special purpose. 3 (2) All funds of the authority received from any source 4 shall be delivered to or upon the order of the treasurer of 5 the authority or to such other agent of the authority as the 6 board may designate. Funds received by the authority shall be 7 promptly deposited in a bank or banks in this Commonwealth 8 chosen by the board. The money in the accounts of the 9 authority may be paid by the treasurer of the authority or 10 other designated agent of the authority on warrant of the 11 treasurer of the authority. All deposits of money may, if 12 required by the authority, be secured by obligations of the 13 United States or of the Commonwealth of a market value equal 14 at all times to the amount of the deposit, and all banks and 15 trust companies are authorized to give security for such 16 deposits. 17 (3) Subject to the provisions of any agreements with 18 obligees of the authority, all funds of the authority, 19 including the proceeds from the sale of bonds, which are not 20 required for immediate use may be invested in obligations of 21 the Federal Government or of the Commonwealth or other 22 obligations which are legal investments for Commonwealth 23 funds. 24 (j) Termination.--The authority may, with the approval of 25 the Governor, terminate one year after all of its liabilities 26 have been fully paid and discharged. Upon the termination, all 27 of its rights and properties, including funds remaining in the 28 debt service reserve fund, shall be paid to the Commonwealth. 29 (k) Applicability.--The following acts shall apply to the 30 board: 20030S0010B1515 - 88 -
1 (1) The act of June 21, 1957 (P.L.390, No.212), referred 2 to as the Right-to-Know Law. 3 (2) The act of July 19, 1957 (P.L.1017, No.451), known 4 as the State Adverse Interest Act. 5 (3) The provisions of 65 Pa.C.S. Chs. 7 (relating to 6 open meetings) and 11 (relating to ethics standards and 7 financial disclosure). 8 § 4304. Board. 9 (a) Composition.--The board of the authority shall be 10 composed of the following 15 members: 11 (1) The Secretary of Community and Economic Development. 12 (2) The Secretary of the Budget. 13 (3) The Secretary of Labor and Industry. 14 (4) The Secretary of Agriculture. 15 (5) The Secretary of Banking. 16 (6) One member appointed by the Majority Leader of the 17 Senate, or a designee; one member appointed by the Minority 18 Leader of the Senate, or a designee; one member appointed by 19 the Majority Leader of the House of Representatives, or a 20 designee; and one member appointed by the Minority Leader of 21 the House of Representatives, or a designee. Legislative 22 appointments shall serve at the pleasure of the appointing 23 authority. 24 (7) Six members of the public with experience in finance 25 or management appointed, with the advice and consent of the 26 Senate, by the Governor. 27 (b) Term.--The members of the board appointed by the 28 Governor shall serve for a term of three years. 29 (c) Organization.--The Secretary of Community and Economic 30 Development shall serve as chairperson. The members of the board 20030S0010B1515 - 89 -
1 shall elect from among themselves a vice chairperson, secretary, 2 treasurer and any other officers as they may determine. 3 (d) Meetings.--The board shall meet at the call of the 4 chairperson but shall meet at least once each month. 5 (e) Quorum.--Eleven members of the board shall constitute a 6 quorum for the transaction of any authority business. The 7 consent of at least ten members of the board shall be necessary 8 to transact business on behalf of the authority. 9 (f) Expenses.--A member of the board shall not receive 10 compensation or remuneration, but shall be entitled to 11 reimbursement for all reasonable and necessary actual expenses. 12 (g) Public officials and party officers.--The members of the 13 board appointed by the Governor shall not seek or hold a 14 position as a public official within this Commonwealth or as a 15 party officer while being a member of the board. 16 (h) Liability.--Members of the board and the committee shall 17 not be liable personally on any obligations of the authority, 18 including, without limitation, bonds of the authority and shall 19 be immune from suit. 20 § 4305. Powers and duties. 21 (a) Powers.--The authority, through action of the board, 22 shall have all of the following powers: 23 (1) The power to adopt bylaws and guidelines as it deems 24 necessary. 25 (2) The power to contract and to execute instruments, 26 including financing agreements, letters of credit, 27 guarantees, sureties, mortgages, loans, standby loan 28 commitments and contracts of insurance, which are necessary 29 or convenient for the carrying on of its business. 30 (3) The power to sue and be sued, implead and be 20030S0010B1515 - 90 -
1 impleaded, complain and defend in court. 2 (4) The power to borrow money, obtain lines and letters 3 of credit, incur debt and, in anticipation of the receipt of 4 income of the authority, make, issue and secure taxable and 5 tax-exempt bonds or notes, including limited obligation 6 revenue bonds. 7 (5) The power to acquire, accept, purchase, receive, 8 collect, hold, convey and invest funds, fees and property, 9 whether tangible or intangible, from all sources, directly or 10 by assignment, pledge or otherwise. 11 (6) The power to sell, transfer, convey and dispose of 12 any property, tangible or intangible. 13 (7) The power to adopt, use and alter at will a 14 corporate seal. 15 (8) The power to employ an executive director and such 16 other persons as are necessary or convenient for the carrying 17 on of its business. 18 (9) The power to retain counsel and auditors to render 19 professional services as the authority deems appropriate. 20 (10) The power to pledge the credit of the authority and 21 to provide security and liquidity as may be required by 22 creditors. 23 (11) The power to cooperate with any Federal agency or 24 Commonwealth agency. 25 (12) Any other power necessary or convenient for the 26 promotion or general welfare of the authority. 27 (b) Duties.--The authority shall provide financial 28 assistance to applicants for projects. The financial assistance 29 shall be in the form of loans or single-year or multiyear grants 30 and may include proceeds from the sale of bonds. Prior to 20030S0010B1515 - 91 -
1 providing funds to an applicant, the authority shall enter into 2 a contract with the applicant. The contract shall include all of 3 the following: 4 (1) A provision requiring the applicant to repay any 5 grant made under this chapter from any proceeds resulting 6 from a sale or partial sale of the project by the applicant. 7 Grants shall be repaid in accordance with the following: 8 (i) If the project is sold less than two years after 9 receipt of the grant, the applicant shall pay to the 10 authority 90% of the grant received. 11 (ii) If the project is sold more than two years but 12 less than four years after receipt of the grant, the 13 applicant shall pay to the authority 80% of the grant 14 received. 15 (iii) If the project is sold more than four years 16 but less than six years after receipt of the grant, the 17 applicant shall pay to the authority 70% of the grant 18 received. 19 (iv) If the project is sold more than six years but 20 less than eight years after receipt of the grant, the 21 applicant shall pay to the authority 60% of the grant 22 received. 23 (v) If the project is sold more than eight years but 24 less than ten years after receipt of the grant, the 25 applicant shall pay to the authority 50% of the grant 26 received. 27 (2) Any other terms or conditions on the financial 28 assistance authorized by this chapter as the board determines 29 to be in the best interests of the Commonwealth. 30 (c) Limitations.-- 20030S0010B1515 - 92 -
1 (1) In accordance with section 8 of Article VIII of the 2 Constitution of Pennsylvania, the board and the authority 3 shall have no power to pledge the credit or taxing powers of 4 the Commonwealth or of a political subdivision or other 5 instrumentality of the Commonwealth, nor, except as provided 6 in this chapter, shall any of the bonds of the authority be 7 deemed a debt or liability of the Commonwealth or a political 8 subdivision or instrumentality of the Commonwealth. 9 (2) Except as provided in this chapter, the authority 10 shall be solely liable for the payment of the principal, 11 interest or premium on any bonds issued by the authority. 12 Except as provided in this chapter, the Commonwealth or a 13 political subdivision or instrumentality of the Commonwealth 14 shall have no legal or moral obligation for the payment of 15 any expenses or obligations of the authority, including bond 16 principal and interest, the funding or refunding of any 17 reserves and any administrative or operating expenses 18 whatsoever. Bonds issued by the authority shall contain a 19 prominent statement of the limitations set forth in this 20 subsection and shall further recite that obligees of the 21 authority shall have no recourse, either legal or moral, to 22 the Commonwealth or a political subdivision or 23 instrumentality of the Commonwealth for payment of the bonds 24 of the authority. 25 SUBCHAPTER C 26 BONDS 27 Sec. 28 4306. Bonds issuances. 29 4307. Commonwealth taxation. 30 4308. Federal taxation. 20030S0010B1515 - 93 -
1 4309. Validity of bonds; limitation on actions. 2 4310. Provisions of bonds; trust indentures. 3 4311. Remedies of obligee of authority. 4 4312. Validity of pledge. 5 4313. Commonwealth pledges. 6 4314. Resolution and law are contracts with holders of bonds. 7 4315. Bonds to be legal investments. 8 4316. Right to enforcement of pledge of revenues. 9 4317. Debt service reserve fund. 10 4318. Debt service funds. 11 § 4306. Bonds issuances. 12 (a) Authorization.-- 13 (1) Bonds of the authority, whether taxable or tax 14 exempt, shall be authorized by a resolution of the board and 15 shall be of a series, bear such date or dates and bear or 16 accrue interest at the rate or rates determined by the board 17 to be necessary to issue and sell the authorized bonds. 18 (2) The bonds shall: 19 (i) be in the denominations; 20 (ii) be in the form, either coupon or fully 21 registered without coupons or in certificated or book- 22 entry-only form; 23 (iii) carry such registration, exchangeability and 24 interchangeability privileges; 25 (iv) be payable in the medium of payment and at such 26 place or places; 27 (v) be subject to the terms of redemption; and 28 (vi) be entitled to the priorities of payment in the 29 revenues or receipts of the authority as the board 30 provides by resolution. 20030S0010B1515 - 94 -
1 (3) Bonds shall be signed by or shall bear the facsimile 2 signatures of the officer designated by the board. 3 (4) Interest coupons shall be attached to coupon bonds 4 and shall bear the facsimile signature of the treasurer of 5 the authority. 6 (5) Bonds shall be authenticated by an authenticating 7 agent, fiscal agent or trustee. 8 (6) Bonds may be issued and delivered notwithstanding 9 that the officer signing the bonds or the treasurer whose 10 facsimile signature is on a coupon shall have ceased to be 11 the officer at the time when the bond is actually delivered. 12 (b) Maturity date.-- 13 (1) Except as provided in paragraph (2), bonds issued to 14 finance the costs of a project shall mature at a time or 15 times not exceeding the weighted average useful life of the 16 projects being financed and in no event exceeding 30 years 17 from their respective dates of original issue. 18 (2) Bonds issued in anticipation of income of the 19 authority shall mature within the fiscal year of the date of 20 issuance thereof, except for bonds issued in anticipation of 21 a grant or appropriation from the Commonwealth, a 22 Commonwealth agency or a Federal agency, which bonds shall 23 mature no later than the time of anticipated receipt of the 24 grant or appropriation. 25 (c) Sale.--Bonds may be sold at public sale or invited sale 26 for the price or prices and at the rate or rates of interest as 27 the authority determines. Bonds may be sold at private sale by 28 negotiation at the price or prices and at the rate or rates of 29 interest as the authority determines, but only if the authority 30 makes a written public explanation of the circumstances and 20030S0010B1515 - 95 -
1 justification for the private sale by negotiation. Pending the 2 preparation of the definitive bonds, interim receipts may be 3 issued to the purchaser or purchasers of the bonds and shall 4 contain the terms and conditions established by the authority. 5 The authority shall ensure that minority-owned or minority- 6 controlled firms shall have a opportunity to participate in a 7 significant way in any bond sale activities. 8 (d) Negotiable instruments.--Bonds of the authority shall 9 have the qualities of negotiable instruments under 13 Pa.C.S. 10 (relating to commercial code). 11 (e) Use of proceeds.--The proceeds of an issue of bonds may 12 be used for any of the following: 13 (1) To pay the costs of issuance of the bonds. 14 (2) To fund reserves for the bond. 15 (3) To capitalize interest on the bonds for a period not 16 to exceed 12 months. 17 (4) To pay costs of administration of the authority. 18 (5) To make grants in accordance with sections 4321 19 (relating to Water and Wastewater Infrastructure 20 Capitalization Program) and 4324 (relating to Economic 21 Enhancement Financing Program). 22 (6) To make loans in accordance with sections 4319 23 (relating to the Infrastructure Development Program), 4320 24 (relating to Core Industries Infrastructure Capitalization 25 Program), 4321, 4322 (relating to Business in Our Sites 26 Program), 4323 (relating to First Industries Program), 4324 27 and 4325 (relating to Secondary Growth Stage Financing 28 Program). 29 (7) To purchase loans, mortgages, security interests or 30 loan participations agreements which the authority determines 20030S0010B1515 - 96 -
1 is in its best interest. 2 (f) Refunding.--Subject to provisions of this chapter and 3 bonds, notes or other obligations issued in accordance with this 4 chapter, the authority may refund any outstanding debt of the 5 authority, whether the debt represents principal or interest, in 6 whole or in part, at any time. For the purposes of this 7 subsection, the term "refund" and its variations shall mean the 8 issuance and sale of obligations the proceeds of which are used 9 or are to be used for the payment or redemption of outstanding 10 obligations upon or prior to maturity. The term of any bonds 11 issued for refunding purposes shall not extend to a maturity 12 date which could not have been included in the original issue of 13 bonds being refunded. 14 § 4307. Commonwealth taxation. 15 The effectuation of Subchapter D (relating to programs) by 16 the authority shall and will be in all respects for the benefit 17 of the people of this Commonwealth, for the increase of their 18 commerce and prosperity and for the improvement of their health, 19 safety, welfare and living conditions. Since the authority will 20 be performing essential governmental functions in effectuating 21 such purposes, the authority shall not be required to pay any 22 taxes or assessments upon any property acquired or used or 23 permitted to be used by the authority for its purposes, and the 24 bonds issued by the authority, their transfer and the income 25 therefrom, including any profits made on their sale, shall at 26 all times be free from State and local taxation within this 27 Commonwealth. This exemption shall not extend to gift, estate, 28 succession or inheritance taxes or any other taxes not levied 29 directly on the bonds, their transfer, the income therefrom or 30 the realization of profits on their sale. 20030S0010B1515 - 97 -
1 § 4308. Federal taxation. 2 (a) Allocation.--If the bonds issued by the authority for a 3 project are federally tax-exempt bonds for which Federal law 4 requires an allocation, the department shall, upon receipt of a 5 written request from the authority, issue an allocation charging 6 the project's pro rata share of the issue to the county in which 7 the project will be located. 8 (b) Approval.--If gubernatorial approval is required by a 9 Federal agency in order for a bond issue of the authority to 10 qualify for tax-exempt status, the Governor shall, upon receipt 11 of a written request from the authority, approve the bond issue. 12 The request shall state that the authority has conducted a 13 hearing in accordance with 65 Pa.C.S. Ch. 7 (relating to open 14 meetings) and shall contain a description of the project to be 15 financed, a summary of the method of financing and a summary of 16 the comments made and questions posed at the hearing. 17 § 4309. Validity of bonds; limitation on actions. 18 (a) Presumption.--A bond reciting in substance that it has 19 been issued by the authority to accomplish the public purposes 20 of this chapter shall be conclusively deemed in any suit, action 21 or proceeding involving the validity or enforceability of the 22 bonds or their security to have been issued for the public 23 purposes of this chapter. 24 (b) Filing.-- 25 (1) The authority shall file a copy of a resolution 26 authorizing the issuance of bonds in its office for public 27 inspection and shall publish in three newspapers of general 28 circulation in this Commonwealth a notice stating: 29 (i) The fact and date of the resolution. 30 (ii) The places where the resolution has been filed 20030S0010B1515 - 98 -
1 for public inspection. 2 (iii) The date of publication of the notice. 3 (iv) Any action or proceeding of any kind or nature 4 in any court questioning the validity or proper 5 authorization of bonds provided for by the resolution or 6 the validity of any covenants, agreements or contract 7 provided for by the resolution shall be commenced within 8 ten days after the publication of the notice. 9 (2) If no action or proceeding questioning the validity 10 or proper authorization of bonds provided for by the 11 resolution referred to in the notice required under paragraph 12 (1) or questioning the validity of any covenant, agreement or 13 contract provided by the resolution is commenced within ten 14 days after the publication of the notice required under 15 paragraph (1): 16 (i) All persons shall be forever barred and 17 foreclosed from instituting or commencing any action or 18 proceeding in any court or pleading any defense to any 19 action or proceedings questioning the validity or proper 20 authorization of the bonds or the validity of the 21 covenants, agreements or contracts; and 22 (ii) the bonds, covenants, agreements and contracts 23 shall be conclusively deemed to be valid and binding 24 obligations in accordance with their terms and tenor. 25 (c) Estoppel.--After issuance, bonds shall be conclusively 26 presumed to be fully authorized and issued by all the laws of 27 this Commonwealth, and any person shall be estopped from 28 questioning their sale, execution or delivery by the authority. 29 § 4310. Provisions of bonds; trust indentures. 30 (a) Powers.--In connection with the issuance of bonds and in 20030S0010B1515 - 99 -
1 order to secure the payment of its bonds, the authority, in 2 addition to its other powers, shall have the power to do all of 3 the following: 4 (1) Pledge or grant a security interest in all or any 5 part of its gross or net revenues to which its right then 6 exists or which may later come into existence. 7 (2) Grant a security interest in all or any part of its 8 personal property then owned or later acquired. 9 (3) Covenant against: 10 (i) pledging or granting a security interest in all 11 or any part of its revenues or all or any part of its 12 personal property to which its right or title exists or 13 which may later come into existence; or 14 (ii) permitting or suffering any lien on its 15 revenues or property. 16 (4) Covenant with respect to limitations on its right to 17 sell, lease or otherwise dispose of any of its real property. 18 (5) Covenant as to which other or additional debts or 19 obligations may be incurred by it. 20 (6) Covenant as to the bonds to be issued and as to the 21 issuance of the bonds, in escrow or otherwise, and as to the 22 use and disposition of the proceeds thereof. 23 (7) Provide for the replacement of lost, destroyed or 24 mutilated bonds. 25 (8) Covenant against extending the time for the payment 26 of bonds or interest thereon. 27 (9) Redeem bonds. 28 (10) Covenant for their redemption and provide the terms 29 and conditions thereof. 30 (11) Covenant as to the amount of revenues to be 20030S0010B1515 - 100 -
1 received in each fiscal year or other period of time by the 2 authority and to the use and disposition to be made of the 3 revenues. 4 (12) Create or authorize the creation of special funds 5 or reserves for debt service or other purposes and covenant 6 as to the use and disposition of the money held in the 7 special funds. 8 (13) Prescribe the procedure, if any, by which the terms 9 of any contract with bondholders may be amended or abrogated, 10 the amount of bonds the holders of which must consent to and 11 the manner in which the consent may be given. 12 (14) Covenant as to the use of any or all of its real or 13 personal property to warrant its title. 14 (15) Covenant as to the maintenance of its real and 15 personal property, the replacement of its real and personal 16 property, the insurance to be carried on its real and 17 personal property and the use and disposition of insurance 18 proceeds. 19 (16) Covenant as to the rights, liabilities, powers and 20 duties arising upon the breach by it of any covenant, 21 condition or obligation, except that the authority shall not 22 be permitted to covenant that upon a breach any or all of its 23 bonds shall become or may be declared due before their stated 24 maturity. 25 (17) Pay the costs or expenses incident to: 26 (i) the enforcement of the bonds; 27 (ii) the provisions of the resolution authorizing 28 the issuance of the bonds; 29 (iii) the trust indenture securing the bonds; or 30 (iv) any covenant or agreement of the financing 20030S0010B1515 - 101 -
1 authority with the holders of the bonds, notes or other 2 obligations. 3 (18) Vest in a trustee or the holders of bonds or any 4 proportion of them the right to enforce the payment of the 5 bonds or any covenants securing or relating to the bonds. 6 (19) Vest in a trustee the right, in the event of 7 default in payments of interest or on principal of bonds by 8 the authority, to take possession and use, operate and manage 9 any real or personal property, to collect the revenues and 10 receipts of an authority and to dispose of the money in 11 accordance with the agreement of the authority with the 12 trustee. 13 (20) Provide for the: 14 (i) powers and duties of a trustee and to limit the 15 trustee's liabilities; and 16 (ii) terms and conditions upon which a trustee or 17 the holders of bonds or any proportion of them may 18 enforce any covenant or rights securing or relating to 19 the bonds. 20 (21) Enter into interest rate exchange agreements, 21 interest rate cap and floor agreements and other similar 22 agreements which in the judgment of the authority will assist 23 the authority in managing the interest costs of the 24 authority. 25 (22) Obtain letters of credit, bonds insurance and other 26 facilities for credit enhancement and liquidity. 27 (23) Exercise all or any part or combination of the 28 powers granted in this chapter. 29 (24) Make covenants other than and in addition to the 30 covenants expressly authorized by this chapter. 20030S0010B1515 - 102 -
1 (25) Make any other covenants and do any and all other 2 acts and things as may be necessary, convenient or desirable 3 in order to secure its bonds or, in the absolute discretion 4 of the authority, as will tend to accomplish the purposes of 5 this chapter by making the bonds more marketable, 6 notwithstanding that the covenants, acts or things may not be 7 specifically enumerated by this chapter. 8 (b) Limitations.--Notwithstanding any provision of this 9 chapter to the contrary, the real property of the authority 10 shall not be mortgaged and shall not be subject to attachment 11 nor levied upon by execution or otherwise. The revenues of the 12 authority and the personal property of the authority shall be 13 pledged or otherwise encumbered only as expressly provided in 14 this chapter and, except to the extent necessary to effectuate 15 the pledge or encumbrance, shall not be subject to attachment 16 nor levied upon by execution or otherwise. 17 § 4311. Remedies of obligee of authority. 18 In addition to all other rights which may be conferred on the 19 obligee subject only to any contractual restrictions binding 20 upon the obligee, an obligee of the authority shall have all of 21 the following rights: 22 (1) To compel, by mandamus, suit, action or proceeding 23 at law or in equity, the authority and the members of its 24 governing board, officers, agents or employees to perform 25 each and every term, provision and covenant contained in any 26 bond or contract of the authority with or for the benefit of 27 the obligee and to require the carrying out of any covenants 28 and agreements of the authority and the fulfillment of all 29 duties imposed upon the authority by this chapter. 30 (2) To obtain, by proceeding in equity, an injunction 20030S0010B1515 - 103 -
1 against any acts or things which may be unlawful or the 2 violation of any of the rights of the obligee. 3 (3) To require the authority to account as if it were 4 the trustee of an express trust for the obligees of the 5 authority for any pledged revenues received. 6 § 4312. Validity of pledge. 7 Any pledge of or grant of a security interest in revenues or 8 personal property of the authority made by the authority shall 9 be valid and binding from the time when the pledge is made. The 10 revenues or other property pledged and later received by the 11 authority shall immediately be subject to the lien of the pledge 12 or security interest without any physical delivery thereof or 13 further act. The lien of the pledge or security interest shall 14 be valid and binding as against all parties having claims of any 15 kind in tort, contract or otherwise against the authority 16 irrespective of whether the parties have notice. Neither the 17 resolution nor any other instrument of the authority by which a 18 pledge or security interest is created need be recorded or filed 19 to perfect the pledge or security interest. 20 § 4313. Commonwealth pledges. 21 (a) Bondholders.--The Commonwealth does hereby pledge to and 22 agree with each and every obligee of the authority that the 23 Commonwealth will not limit or alter the rights hereby vested in 24 the authority in any manner inconsistent with the obligations of 25 the authority to its obligees until all bonds at any time 26 issued, together with the interest on the bonds, are fully paid 27 and discharged. 28 (b) Lessees.--The Commonwealth does hereby pledge to and 29 agree with any person who, as owner of property that is leased 30 or subleased to or from the authority, that it will not limit or 20030S0010B1515 - 104 -
1 alter the rights and powers vested in the authority or otherwise 2 created by this chapter in any manner which impairs the 3 obligations of the authority until all the obligations of the 4 authority under the lease or sublease are fully met and 5 discharged. 6 § 4314. Resolution and law are contracts with holders of bonds. 7 Except as otherwise provided in any resolution of the 8 authority authorizing or awarding bonds, the terms of a 9 resolution and any agreement authorized by the resolution and 10 the terms of this chapter as in effect when the bonds were 11 authorized shall constitute a contract between the authority and 12 the obligees, subject to modification by the vote by holders of 13 the percentage of bonds as the resolution authorizing or 14 awarding the bonds provides. 15 § 4315. Bonds to be legal investments. 16 Bonds issued pursuant to this chapter are made securities in 17 which all government agencies, insurance companies, trust 18 companies, banking associations, banking corporations, savings 19 banks, investment companies, executors, the trustees of any 20 retirement, pension or annuity fund or system of the 21 Commonwealth, trustees and other fiduciaries may properly and 22 legally invest funds, including capital, deposits or other funds 23 in their control or belonging to them. The bonds are hereby made 24 securities which may properly and legally be deposited with and 25 received by any government agency for any purpose for which the 26 deposit of bonds or other obligations of the Commonwealth are 27 authorized by law. 28 § 4316. Right to enforcement of pledge of revenues. 29 The obligees of the authority shall have the right to enforce 30 a pledge of or security interest in revenues of the authority 20030S0010B1515 - 105 -
1 securing payment of bonds of the authority against all 2 government agencies in possession of any such revenues at any 3 time. The revenues may be collected directly from such officials 4 upon notice by the obligees or a trustee for the obligees for 5 application to the payment of the bonds as and when due or for 6 deposits in any sinking, bond or debt service fund established 7 in accordance with this chapter or established by resolution of 8 the authority with the trustee at the times and in the amounts 9 specified in the bonds or the resolution or indenture or trust 10 agreement securing the bonds. Any government agency in 11 possession of any such revenues shall make payment against 12 receipt and shall be discharged from any further liability or 13 responsibility for such revenues. If payment is made to a holder 14 of bonds, it shall be made against surrender of the bonds to the 15 payor for delivery to the authority in the case of payment in 16 full; otherwise, it shall be made against production of the 17 bonds for notation thereon of the amount of the payment. The 18 provisions of this section with respect to the enforceability 19 and collection of revenues which secure bonds shall supersede 20 any contrary or inconsistent statutory provision or rule of law. 21 This section shall be construed and applied to fulfill the 22 legislative purpose of clarifying and facilitating the financing 23 of the authority by assuring to the obligees of the authority 24 the full and immediate benefit of the security for the bonds 25 without delay, diminution or interference based on any statute, 26 decision, ordinance or administrative rule or practice. 27 § 4317. Debt service reserve fund. 28 (a) Authorization.-- 29 (1) The authority may establish one or more debt service 30 reserve funds into which it shall deposit: 20030S0010B1515 - 106 -
1 (i) Proceeds from the sale of bonds, to the extent 2 provided in the resolution or resolutions authorizing the 3 bonds. 4 (ii) Any other money made available to the authority 5 from any source. 6 (2) All money held in any debt service reserve fund, 7 except as provided in this subsection, shall be used when 8 required solely for the: 9 (i) payment of the principal of bonds secured in 10 whole or in part by the fund; 11 (ii) payment of sinking fund payments, if any, with 12 respect to the bonds; 13 (iii) purchase or redemption of bonds; 14 (iv) payment of interest on bonds; or 15 (v) payment of any redemption premium required to be 16 paid when bonds and notes are redeemed prior to maturity. 17 (3) Any debt service reserve fund established pursuant 18 to this section shall be a trust fund held for the benefit 19 and security of the obligees of the authority whose bonds are 20 secured by the fund. 21 (4) Money in a debt service reserve fund shall not be 22 withdrawn from the fund at any time in an amount that would 23 reduce the amount of the fund to less than the minimum 24 reserve fund requirement established for the fund in the 25 resolution of the authority creating the fund, except for 26 withdrawals for the purpose of making payments when due of 27 principal, interest, redemption premiums and sinking fund 28 payments, if any, with respect to the bonds for the payment 29 of which other money of the authority are not available. 30 (5) Any income or interest earned by or increments to 20030S0010B1515 - 107 -
1 any debt service reserve fund due to the investment thereof 2 may be transferred by the authority to other funds or 3 accounts of the authority to the extent the transfer does not 4 reduce the amount of the debt service reserve fund below the 5 minimum reserve fund requirement established for that fund. 6 (6) Funds transferred to other accounts in accordance 7 with the requirements of paragraph (5) may be used for 8 whatever purposes the authority deems appropriate if the 9 purposes are consistent with this chapter and the contracts 10 of the authority with obligees of the authority. 11 (b) Bond limitation.--The authority shall not at any time 12 issue bonds secured in whole or in part by a debt service 13 reserve fund if issuance of the bonds would cause the amount in 14 the debt reserve fund to fall below the minimum reserve 15 requirement for the fund, unless the authority at the time of 16 issuance of the bonds shall deposit in the fund an amount, from 17 the proceeds of the bonds to be issued or from other sources, 18 which when added to the amount already in the fund will cause 19 the total amount on deposit in the fund to equal or exceed the 20 minimum reserve fund requirement. 21 (c) Definition.--For the purposes of this section, the term 22 "minimum reserve fund requirement" shall mean that amount 23 defined as the minimum reserve fund requirement in the 24 resolution of the authority authorizing the bonds. 25 § 4318. Debt service funds. 26 Any money deposited in any fund created by the authority to 27 be used to pay debt service, including, without limitation, the 28 bond payment account, any sinking fund or debt service reserve 29 fund and all investments and proceeds of investments thereof 30 shall, without further action or filing, be subjected to a 20030S0010B1515 - 108 -
1 perfected security interest for the obligees of the authority 2 for whom the fund is held until the money or investments shall 3 be properly disbursed in accordance with this chapter and with 4 the terms of the contract of the authority with its obligees. 5 SUBCHAPTER D 6 PROGRAMS 7 Sec. 8 4319. Infrastructure Development Program. 9 4320. Core Industries Infrastructure Capitalization Program. 10 4321. Water and Wastewater Infrastructure Capitalization 11 Program. 12 4322. Business in Our Sites Program. 13 4323. First Industries Program. 14 4324. Economic Enhancement Financing Program. 15 4325. Secondary Growth Stage Financing Program. 16 4326. Community Development Bank Program. (Reserved) 17 § 4319. Infrastructure Development Program. 18 (a) Establishment.--There is hereby established within the 19 authority a program to be known as the Infrastructure 20 Development Program. The program shall provide financial 21 assistance in the form of loans for projects which, when 22 completed, increase economic development within this 23 Commonwealth. 24 (b) Application.--A person may submit an application to the 25 authority requesting financial assistance for a project. The 26 application shall be on the form required by the authority and 27 shall include or demonstrate all of the following: 28 (1) The name and address of the applicant. 29 (2) A statement of the amount of finance assistance 30 sought. 20030S0010B1515 - 109 -
1 (3) A statement of the project, including a detailed 2 statement of the cost of the project. 3 (4) A firm financial commitment from a responsible 4 source for any cost of the project in excess of the amount 5 requested. 6 (5) A firm commitment from the applicant or project user 7 to use or lease the project upon completion. 8 (6) Any other information required by the authority. 9 (c) Additional requirements for certain projects.--If the 10 applicant is not a political subdivision, local economic 11 development agency or local economic development financing 12 authority, the applicant shall, in addition to the information 13 required by subsection (b), submit a copy of the document 14 verifying approval of the project by the appropriate local 15 economic development agency or local economic development 16 financing authority. If the applicant is requesting financial 17 assistance for a project which is an interagency project, the 18 applicant shall, in addition to the information required by 19 subsection (b), submit a copy of the document issued by the 20 Pennsylvania Infrastructure Investment Authority referring the 21 applicant to the authority for financial assistance. If the 22 applicant is not a municipality or municipal authority and is 23 requesting financial assistance for a project constructing or 24 improving transportation infrastructure, the applicant shall, in 25 addition to the information required by subsection (b), submit a 26 copy of the document verifying approval of the project by the 27 appropriate municipality or municipal authority or a 28 Commonwealth agency and a determination by the applicant that 29 financing the project through the authority will reduce the cost 30 of the project. 20030S0010B1515 - 110 -
1 (d) Local economic development agencies.--If the applicant 2 is a local economic development agency, in addition to the 3 information required by subsection (b), the applicant shall do 4 all of the following: 5 (1) Be incorporated under the laws of this Commonwealth. 6 (2) Agree to be bound by the rules of the authority 7 relating to projects which receive financial assistance under 8 this chapter. 9 (3) Agree to submit to examination of its books, records 10 and accounts by the authority at times as the authority may 11 require during the term of any loan made to it by the 12 authority. 13 (e) Local economic development financing authorities.--If 14 the applicant is a local economic development financing 15 authority, in addition to the information required by subsection 16 (b), the applicant shall do all of the following: 17 (1) Submit an application verified by the chairperson of 18 the local economic development financing authority and any 19 other information required by the authority, including any 20 application fee. 21 (2) Agree to be bound by the rules of the authority 22 relating to projects which receive financial assistance under 23 this chapter. 24 (3) Agree to submit to examination of its books, records 25 and accounts by the authority at times as the authority may 26 require during the term of any loan made to it by the 27 authority. 28 (f) Review.--Within 45 days of a completed application being 29 submitted, the board shall review the application to determine 30 all of the following: 20030S0010B1515 - 111 -
1 (1) If the financial commitment exists for any cost of 2 the project in excess of the amount requested. 3 (2) If the financial commitment from the source is firm. 4 (3) If the source of the financial commitment is 5 responsible. 6 (4) If the commitment to use or lease the project upon 7 completion is firm. 8 (5) If, in the case where the project will not be used 9 by the applicant, the project user may reasonably be expected 10 to comply with the terms of the use or lease. 11 (6) If the applicant satisfied the requirements of 12 subsections (c), (d) and (e), if applicable. 13 (7) If the project complies with all other rules and 14 regulations of the authority governing projects. 15 (g) Approval.--Upon being satisfied that all applicable 16 requirements have been met, the board may approve the 17 application. If the board approves the application, the board 18 shall enter into a contract with the applicant and finance the 19 loan. 20 (h) Applicability.--If a project of a local economic 21 development agency or a local economic development financing 22 authority has been approved for financing and the project is to 23 be financed with the proceeds of bonds which are not exempt from 24 Federal income taxation, the provisions of Chapter 27 of the act 25 of June 29, 1996 (P.L.434, No.67), known as the Job Enhancement 26 Act, shall not apply to the financing of the project. 27 (i) Limitations.-- 28 (1) Except upon foreclosure or default or violation of a 29 loan made, the authority may not approve an application and 30 finance a project if the authority would be required to 20030S0010B1515 - 112 -
1 operate, service or maintain the project under a lease or 2 other agreement. Nothing in this paragraph shall prohibit the 3 authority from approving an application or financing a 4 project if, at the end of the term of a loan, the authority 5 transferred the project to the applicant, any project user or 6 a designee of either. 7 (2) The authority may not approve an application and 8 finance a project which is a public facility if the authority 9 determines that, if the project was financed by an entity 10 other than the authority, the project could receive a rating 11 of A or better from either Moodys Investors Service or 12 Standard & Poors Corporation. 13 § 4320. Core Industries Infrastructure Capitalization Program. 14 (a) Establishment.--There is established within the 15 authority a program to be known as the Core Industries 16 Infrastructure Capitalization Program. The program shall provide 17 financial assistance in the form of loans to all of the 18 following: 19 (1) To medical facilities for the acquisition or 20 construction of projects which, when completed, improve or 21 construct medical infrastructure directly related to patient 22 safety. 23 (2) To manufacturers for the acquisition or construction 24 of projects which, when completed, improve or construct 25 infrastructure which creates additional full-time jobs. 26 (b) Application.--A medical facility or a manufacturer may 27 submit an application to the authority requesting financial 28 assistance for a project. The application shall be on the form 29 required by the authority and shall include or demonstrate all 30 of the following: 20030S0010B1515 - 113 -
1 (1) The name and address of the applicant. 2 (2) A statement of the amount of financial assistance 3 sought. 4 (3) A statement of the project, including a detailed 5 statement of the cost of the project, and how it directly 6 relates to patient safety. 7 (4) A firm financial commitment from a responsible 8 source for any cost of the project in excess of the amount 9 requested. 10 (5) A firm commitment from the applicant to use or lease 11 the project upon completion. 12 (6) Any other information required by the authority. 13 (c) Review.--The authority shall forward the application to 14 the committee when it is complete. The committee shall review 15 the application to determine all of the following: 16 (1) If the project is for the construction or 17 acquisition of medical infrastructure directly related to 18 patient safety or for the construction or acquisition of 19 manufacturing infrastructure which creates additional full- 20 time jobs. 21 (2) If a financial commitment exists for any cost of the 22 project in excess of the amount requested. 23 (3) If the financial commitment from the source is firm. 24 (4) If the source of the financial commitment is 25 responsible. 26 (5) If the applicant is firmly committed to using or 27 leasing the project upon completion. 28 (6) If the applicant complied with all other criteria 29 established by the committee. 30 (d) Approval.--Upon being satisfied that all requirements 20030S0010B1515 - 114 -
1 have been met, the committee may approve the application and 2 notify the board. Upon being notified that a loan has been 3 approved, the board shall enter into a contract with the 4 applicant and finance the loan. As provided in subsection (e), 5 the contract may permit performance-based loan forbearance or 6 forgiveness. 7 (e) Forbearance or forgiveness.--The board, in consultation 8 with the department, may establish guidelines permitting 9 performance-based forbearance or forgiveness of payments by loan 10 recipients under this program. If the board establishes 11 guidelines, the guidelines shall permit the board to forbear or 12 forgive payments by loan recipients under this program when, in 13 the discretion of the board, the board determines that it is in 14 the interest of the Commonwealth to grant forbearance or 15 forgiveness. 16 (f) Applicability.--If a project of a medical facility or a 17 manufacturer has been approved for loan financing and the 18 project is to be financed with the proceeds of bonds which are 19 not exempt from Federal income taxation, the provisions of 20 Chapter 27 of the act of June 29, 1996 (P.L.434, No.67), known 21 as the Job Enhancement Act, shall not apply to the financing of 22 the project. 23 (g) Limitation.--Except upon foreclosure or default or 24 violation of a loan made, the board may not approve an 25 application or finance a project if the authority would be 26 required to operate, service or maintain the project under a 27 lease or other agreement. Nothing in this subsection shall 28 prohibit the authority from approving an application or 29 financing a project if at the end of the term of a loan the 30 authority transferred the project to the medical facility or 20030S0010B1515 - 115 -
1 manufacturer or a designee of the medical facility or 2 manufacturer. 3 § 4321. Water and Wastewater Infrastructure Capitalization 4 Program. 5 (a) Establishment.--There is established within the 6 authority a program to be known as the Water and Wastewater 7 Infrastructure Capitalization Program. The program shall provide 8 financial assistance in the form of loans or single-year or 9 multiyear grants to municipalities and municipal authorities for 10 projects which, when completed, improve or construct water and 11 wastewater infrastructure related to economic development. 12 (b) Application.--A municipality or a municipal authority 13 may submit an application to the authority requesting financial 14 assistance for a project. The application must be on the form 15 required by the authority and must include or demonstrate all of 16 the following: 17 (1) The name and address of the municipality or 18 municipal authority. 19 (2) A statement of the type and amount of financial 20 assistance sought. If the applicant is requesting financial 21 assistance in the form of a grant, the request may not exceed 22 75% of the cost of the project. 23 (3) A statement of the project, including a detailed 24 statement of the cost of the project. 25 (4) A firm financial commitment from a responsible 26 source for any cost of the project in excess of the amount 27 requested. If the applicant is requesting financial 28 assistance in the form of a grant from the authority, the 29 commitment may not be in the form of a grant from a 30 Commonwealth agency. 20030S0010B1515 - 116 -
1 (5) A firm commitment from the municipality or municipal 2 authority to use the project upon completion. 3 (6) Any other information required by the authority. 4 (c) Grants.-- 5 (1) If an applicant is requesting financial assistance 6 in the form of a grant, the authority shall forward the 7 application to the committee when it is complete. The 8 committee shall review the application to determine all of 9 the following: 10 (i) If the project is for the improvement or 11 construction of water and wastewater infrastructure 12 related to economic development. 13 (ii) If there is a financial commitment for at least 14 25% of the project. 15 (iii) If the financial commitment from the source is 16 firm. 17 (iv) If the source of the financial commitment is 18 responsible. 19 (v) If the municipality or municipal authority is 20 firmly committed to using the project upon completion. 21 (vi) If the municipality or municipal authority 22 complied with all other criteria established by the 23 committee. 24 (2) Upon being satisfied that all requirements have been 25 met, the committee may approve the application and award a 26 grant to the applicant for the project in accordance with all 27 of the following: 28 (i) The grant may not exceed $10,000,000 in the 29 aggregate. 30 (ii) The aggregate amount of grants awarded to all 20030S0010B1515 - 117 -
1 applicants under this subsection shall not exceed 2 $250,000,000. 3 (3) Upon being notified that a grant has been awarded to 4 an applicant, the board shall enter into a contract with the 5 applicant and finance the grant. 6 (d) Authority loans.-- 7 (1) If an applicant is requesting financial assistance 8 in the form of a loan, the authority shall forward the 9 application to the board when it is complete. Within 45 days 10 of a completed application being submitted, the board shall 11 review the application to determine all of the following: 12 (i) If the project is for the improvement or 13 construction of water and wastewater infrastructure 14 related to economic development. 15 (ii) If a financial commitment exists for any cost 16 of the project in excess of the amount requested. 17 (iii) If the financial commitment from the source is 18 firm. 19 (iv) If the source of the financial commitment is 20 responsible. 21 (v) If the municipality or municipal authority is 22 firmly committed to using the project upon completion. 23 (vi) If the municipality or municipal authority 24 complied with all other criteria established by the 25 board. 26 (2) Upon being satisfied that all program requirements 27 have been met, the board may approve the application. If the 28 board approves the application, the board shall enter into a 29 contract with the applicant and finance the loan. 30 (e) Pennvest loans.--In order to facilitate additional 20030S0010B1515 - 118 -
1 funding for water and wastewater infrastructure projects related 2 to economic development, the authority may utilize the remaining 3 amount of voter-approved debt under the act of March 16, 1992 4 (P.L.10, No.5), known as the Small Water Systems Assistance Act, 5 in accordance with the following: 6 (1) If an applicant is requesting financial assistance 7 in the form of a loan, the authority shall forward the 8 application to the board when it is complete. Within 45 days 9 of a completed application being submitted, the board shall 10 review the application to determine all of the following: 11 (i) If the project is for the improvement or 12 construction of water and wastewater infrastructure 13 related to economic development. 14 (ii) If a financial commitment exists for any cost 15 of the project in excess of the amount requested. 16 (iii) If the financial commitment from the source is 17 firm. 18 (iv) If the source of the financial commitment is 19 responsible. 20 (v) If the municipality or municipal authority is 21 firmly committed to using the project upon completion. 22 (vi) If the municipality or municipal authority 23 complied with all other criteria established by the 24 board. 25 (2) Upon being satisfied that all program requirements 26 have been met, the board may approve the application. If the 27 board approves the application, the board shall do all of the 28 following: 29 (i) Notify the applicant of the approval. 30 (ii) Notify the Pennsylvania Infrastructure 20030S0010B1515 - 119 -
1 Investment Authority of the amount approved. 2 (3) Loans approved under paragraph (2) shall not exceed 3 $220,000,000 in the aggregate. 4 (4) Upon being notified that a loan has been approved 5 for an applicant, the Pennsylvania Infrastructure Investment 6 Authority shall enter into a contract with the applicant and 7 finance the loan. 8 (f) Limitation.--Except upon foreclosure or default or 9 violation of a loan made, the board may not approve an 10 application or finance a project if the authority would be 11 required to operate, service or maintain the project under a 12 lease or other agreement. Nothing in this subsection shall 13 prohibit the authority from approving an application or 14 financing a project if, at the end of the term of a loan, the 15 authority transferred the project to the municipal authority. 16 (g) Debt.--If the question is submitted to the electors and 17 approved in accordance with law, the authority is authorized to 18 incur a maximum of $250,000,000 to finance grants and loans 19 awarded under subsection (c) and (d). Annual payments for 20 principal and interest resulting from grants made under this 21 section shall be annually appropriated to the authority from the 22 General Fund. 23 § 4322. Business in Our Sites Program. 24 (a) Establishment.--There is established within the 25 authority a program to be known as the Business in Our Sites 26 Program. The program shall provide financial assistance in the 27 form of loans to persons for projects which, when completed, 28 improve existing business sites, construct new business sites or 29 improve or construct business site infrastructure. 30 (b) Application.--A person may submit an application to the 20030S0010B1515 - 120 -
1 authority requesting financial assistance for a project. The 2 application shall be on the form required by the authority and 3 shall include or demonstrate all of the following: 4 (1) The name and address of the applicant. 5 (2) A statement of the amount of financial assistance 6 sought. 7 (3) A statement of the project, including a detailed 8 statement of the cost of the project. 9 (4) If the applicant is not a local economic development 10 agency, a copy of the document verifying approval of the 11 project by the appropriate local economic development agency. 12 (5) A firm financial commitment from a responsible 13 source for any cost of the project in excess of the amount 14 requested. 15 (6) A firm commitment from the applicant to use or lease 16 the project upon completion. 17 (7) Any other information required by the authority. 18 (c) Review.--The authority shall forward the application to 19 the committee when it is complete. The committee shall review 20 the application to determine all of the following: 21 (1) If the project is for the improvement of existing 22 business sites, the construction of new business sites or the 23 improvement or construction of business site infrastructure. 24 (2) If the project is approved by the appropriate local 25 economic development agency when the applicant is not a local 26 economic development agency. 27 (3) If a financial commitment exists for any cost of the 28 project in excess of the amount requested. 29 (4) If the financial commitment from the source is firm. 30 (5) If the source of the financial commitment is 20030S0010B1515 - 121 -
1 responsible. 2 (6) If the applicant is firmly committed to using or 3 leasing the project upon completion. 4 (7) If the applicant complied with all other criteria 5 established by the committee. 6 (d) Approval.--Upon being satisfied that all requirements 7 have been met, the committee may approve the application and 8 notify the board. Upon being notified that a loan has been 9 approved, the board shall enter into a contract with the 10 applicant and finance the loan. As provided in subsection (e), 11 the contract may permit performance-based loan forbearance or 12 forgiveness. 13 (e) Forbearance or forgiveness.--The board, in consultation 14 with the department, may establish guidelines permitting 15 performance-based forbearance or forgiveness of payments by loan 16 recipients under this program. If the board establishes 17 guidelines, the guidelines shall permit the board to forbear or 18 forgive payments by loan recipients under this program when, in 19 the discretion of the board, the board determines that it is in 20 the interest of the authority to grant forbearance or 21 forgiveness. 22 (f) Limitation.--Except upon foreclosure or default or 23 violation of a loan made, the board may not approve an 24 application or finance a project if the authority would be 25 required to operate, service or maintain the project under a 26 lease or other agreement. Nothing in this subsection shall 27 prohibit the authority from approving an application or 28 financing a project if, at the end of the term of a loan, the 29 authority transferred the project to the local economic 30 development authority. 20030S0010B1515 - 122 -
1 § 4323. First Industries Program. 2 (a) Establishment.--There is established within the 3 authority a program to be known as the First Industries Program. 4 The program shall provide financial assistance in the form of 5 loans to persons engaged in agriculture production or to persons 6 involved in tourism-related activities. 7 (b) Application.--A person may submit an application to the 8 authority requesting financial assistance for a project. The 9 application shall be on the form required by the authority and 10 shall include or demonstrate all of the following: 11 (1) The name and address of the person. 12 (2) A statement that the person is engaged in 13 agriculture production or is involved in tourism-related 14 activities. 15 (3) A statement of the amount of financial assistance 16 sought. 17 (4) A statement of the project, including a detailed 18 statement of the cost of the project. 19 (5) Any additional information required by Chapter 23 20 (relating to small business first). 21 (6) Any other information required by the authority. 22 (c) Review.--The authority shall forward the application to 23 the department when it is complete. The department shall review 24 the application in accordance with the requirements of this 25 section and Chapter 23 (relating to Small Business First). If 26 the department is satisfied that all requirements have been met, 27 the department may recommend approval of the application to the 28 board. 29 (d) Approval.--If the board receives a recommendation for 30 approval of an application from the department, the board may 20030S0010B1515 - 123 -
1 approve the application and finance the loan. 2 (e) Loan service.--Any loan financed by the authority under 3 this program shall be administered by the department. The 4 authority and the department shall enter into an agreement in 5 which the department agrees to transfer to the authority in a 6 timely manner any payments the department receives on loans made 7 in accordance with this section. 8 § 4324. Economic Enhancement Financing Program. 9 (a) Establishment.--There is established within the 10 authority a program to be known as the Economic Enhancement 11 Financing Program. The program shall provide financial 12 assistance to persons in the form of loans or single-year or 13 multiyear grants for projects. 14 (b) Application.--A person may submit an application to the 15 authority requesting financial assistance for a project. The 16 application shall be on the form required by the authority and 17 shall include or demonstrate all of the following: 18 (1) The name and address of the applicant. 19 (2) A statement of the type of financial assistance 20 sought. 21 (3) A statement of the project, including a detailed 22 statement of the cost of the project. 23 (4) Any other information required by the authority. 24 (c) Review.--The authority shall forward the application to 25 the committee when it is complete. The committee shall review 26 the application to determine all of the following: 27 (1) If the applicant is a person that owns property in a 28 tax incentive district or if the applicant is an issuing 29 authority of a tax increment district located within a tax 30 incentive district. 20030S0010B1515 - 124 -
1 (2) The project would be located in a tax incentive 2 district or is located in a tax increment district. 3 (3) The project would do or does any of the following: 4 (i) Creates career-oriented net new jobs or preserve 5 jobs. 6 (ii) Increases and diversifies the manufacturing 7 base of this Commonwealth. 8 (iii) Aids in the expansion of existing private 9 companies, particularly those that sell their products 10 outside this Commonwealth. 11 (iv) Attracts new industries with new products into 12 this Commonwealth. 13 (v) Promotes industrial, commercial and other 14 economic development within this Commonwealth. 15 (vi) Promotes a healthy environment through the 16 abatement, safe storage, transportation, reduction, 17 elimination, remediation and disposal within this 18 Commonwealth of pollutants and wastes. 19 (vii) Otherwise promotes the health, welfare and 20 safety of the residents of this Commonwealth by promoting 21 economic activity and efficiency or alleviating or 22 eliminating unemployment, blight and other unhealthy 23 conditions. 24 (4) If the applicant complied with all other criteria 25 established by the committee. 26 (d) Award.--Upon being satisfied that all requirements have 27 been met, the committee may approve an application and award a 28 grant or loan for a project in accordance with the following: 29 (1) The grant or loan may not exceed $10,000,000 in the 30 aggregate. 20030S0010B1515 - 125 -
1 (2) The aggregate amount of grants or loans awarded to 2 all applicants under this section shall not exceed financing 3 supported by the Economic Enhancement Fund. 4 (e) Financing.--Upon being notified that a grant or loan has 5 been awarded to an applicant, the board shall finance the grant 6 or loan. 7 (f) Debt limitation.--The authority is authorized on a 8 continuing basis to incur debt supported by the Economic 9 Enhancement Fund to finance grants and loans awarded under this 10 section. All payments for the debt resulting from grants or 11 loans made under this section shall be paid from the Economic 12 Enhancement Fund. 13 (g) Contract proceeds.--Any money received from a grant or 14 loan recipient under this program shall be deposited in the 15 Economic Enhancement Fund. 16 (h) First issuance.--The first series of bonds to be issued 17 by the authority shall be issued in a manner and at a time so 18 that the net proceeds of the bonds shall be available on or 19 before June 30, 2004, or as soon as practicable after June 30, 20 2004. 21 § 4325. Secondary Growth Stage Financing Program. 22 (a) Establishment.--There is established within the 23 authority a program to be known as the Secondary Growth Stage 24 Financing Program. The program shall provide financial 25 assistance to certain persons in the form of loans for projects. 26 (b) Growth stage partners.-- 27 (1) A person may submit an application to the authority 28 requesting designation as a growth stage partner. The 29 application shall be on the form required by the authority 30 and shall include or demonstrate all of the following: 20030S0010B1515 - 126 -
1 (i) The name and address of the person. 2 (ii) A statement demonstrating that the person is 3 experienced in financing expanding businesses. 4 (iii) A statement of the maximum amount of 5 investment the person is willing to make in the program. 6 (iv) Any other information required by the 7 authority. 8 (2) The authority shall forward the application to the 9 committee. The committee shall review the application and 10 determine if the person possesses prudent investment 11 experience. Upon being satisfied that all requirements have 12 been met, the committee shall recommend the person to the 13 board. 14 (3) If the board receives a recommendation from the 15 committee, the board shall enter into a contract with the 16 person and designate the person a growth stage partner in 17 accordance with all of the following: 18 (i) The board shall ensure that at least one growth 19 stage partner exists in each geographic region of the 20 Commonwealth. 21 (ii) The contract shall specify that loan payments 22 will be applied on a pro rata basis. 23 (c) Loans.-- 24 (1) A person may submit an application to a growth stage 25 partner requesting financial assistance for a project. The 26 application shall be on the form required by the authority 27 and shall include or demonstrate all of the following: 28 (i) The name and address of the person. 29 (ii) A statement that the person has been in 30 business more than two years but less than seven. 20030S0010B1515 - 127 -
1 (iii) A statement of the amount of financial 2 assistance sought. 3 (iv) A statement of the project including a detailed 4 statement of the cost of the project. 5 (v) Any other information required by the authority 6 or by the growth stage partner. 7 (2) The growth stage partner shall review the 8 application to determine if the project is a responsible 9 investment. If the growth stage partner is satisfied that the 10 project is responsible, the growth stage partner may 11 recommend approval of the application to the board. 12 (3) If the board receives a recommendation for approval 13 of an application from a growth stage partner, the board may 14 approve the application. 15 (4) Upon approval of the application, the growth stage 16 partner and the authority shall enter into a contract with 17 the applicant and finance the loan in accordance with the 18 following: 19 (i) The growth stage partner shall finance at least 20 25% of the loan amount. 21 (ii) The authority may finance the loan in an amount 22 not to exceed 75% of the loan. 23 (iii) The contract may include a provision granting 24 the growth stage partner a mortgage interest in property 25 owned by the applicant. 26 (d) Loan service.--Any loan financed by the authority under 27 this section shall be administered by the growth stage partner. 28 The authority and each growth stage partner shall enter into an 29 agreement pursuant to which the growth stage partner agrees to 30 transfer to the authority in a timely manner its pro rata share 20030S0010B1515 - 128 -
1 of any payments received by the growth stage partner on loans 2 made in accordance with this section. 3 § 4326. Community Development Bank Program (Reserved). 4 SUBCHAPTER E 5 MISCELLANEOUS 6 (RESERVED) 7 CHAPTER 45 8 LOCAL ECONOMIC DEVELOPMENT FINANCING AUTHORITIES 9 (RESERVED) 10 CHAPTER 47 11 PENNSYLVANIA INFRASTRUCTURE INVESTMENT AUTHORITY 12 (RESERVED) 13 Section 2. Title 72 is amended by adding parts to read: 14 PART III 15 FUNDS 16 Chapter 17 72. Economic Enhancement Fund 18 CHAPTER 72 19 ECONOMIC ENHANCEMENT FUND 20 Sec. 21 7201. Scope. 22 7202 Definitions. 23 7203. Establishment. 24 7204. Calculation. 25 7205. Transfer. 26 7206. Appropriation and payments. 27 § 7201. Scope. 28 This chapter relates to the Economic Enhancement Fund. 29 § 7202. Definitions. 30 The following words and phrases when used in this chapter 20030S0010B1515 - 129 -
1 shall having the meaning given to them in this section unless 2 the context clearly indicates otherwise: 3 "Authority." The Pennsylvania Economic Development Authority 4 established by 12 Pa.C.S. Ch. 43 (relating to Pennsylvania 5 Economic Development Financing Authority). 6 "Department." The Department of Revenue of the Commonwealth. 7 "Fund." The Economic Enhancement Fund established by section 8 7203 (relating to establishment). 9 "Tax incentive district." Property designated by the 10 Department of Community and Economic Development as a tax 11 incentive district in accordance with 12 Pa.C.S. Ch. 33 12 (relating to economic enhancement). 13 "Tax Reform Code of 1971." The act of March 4, 1971 (P.L.6, 14 No.2), known as the Tax Reform Code of 1971. 15 § 7203. Establishment. 16 There is hereby established a special fund known as the 17 Economic Enhancement Fund. Interest income derived from 18 investment of the money in the fund shall be credited by the 19 Treasury Department to the fund. 20 § 7204. Calculation. 21 Within 30 days of the end of each quarter, the department 22 shall calculate and notify the Secretary of the Budget of the 23 aggregate revenue received pursuant to Articles II, IV and VI of 24 the Tax Reform Code of 1971 from taxpayers located within tax 25 incentive districts. 26 § 7205. Transfer. 27 Within ten days of receiving notification in accordance with 28 section 7204 (relating to calculation), the Secretary of the 29 Budget shall direct the State Treasurer to transfer a sum, equal 30 to 25% of the aggregate revenue received pursuant to Articles 20030S0010B1515 - 130 -
1 II, IV and VI of the Tax Reform Code of 1971, from taxpayers 2 located within tax incentive districts, from the General Fund to 3 the fund. Transfers from the General Fund to the fund shall not 4 exceed $10,000,000 in the aggregate in any one fiscal year. 5 § 7206. Appropriation and payments. 6 Money in the fund is hereby appropriated on a continuing 7 basis to the authority for the Economic Enhancement Financing 8 Program established in 12 Pa.C.S. § 4324 (relating to Economic 9 Enhancement Financing Program). The State Treasurer shall 10 provide semiannual payments to the authority on August 1 and 11 February 1 of each year until the authority is terminated in 12 accordance with 12 Pa.C.S. § 4303(j) (relating to authority). 13 August 1 payments shall be equal to the balance of the fund on 14 July 15 of that calendar year, and February 1 payments shall be 15 equal to the balance of the fund on January 15 of that calendar 16 year. 17 PART IV 18 DEBT 19 Chapter 20 91. Capital Facilities 21 92. Sports Facilities 22 CHAPTER 91 23 CAPITAL FACILITIES 24 Sec. 25 9101. Scope of chapter. 26 9102. Definitions. 27 9103. Procedures for capital budget bill and debt-authorizing 28 legislation. 29 9104. Certificates of the Auditor General. 30 9105. Constitutional limitations, authorizations, issuing 20030S0010B1515 - 131 -
1 officials. 2 9106. Temporary borrowing. 3 9107. Bonds, issue of bonds and notes, maturity, interest. 4 9108. Direct obligations, exemption from taxation, means of 5 payment. 6 9109. Sale of bonds. 7 9110. Disposition and use of proceeds. 8 9111. Capital Debt Fund; investments; redemption of bonds. 9 9112. Funding bonds. 10 9113. Reporting requirements. 11 9114. Registration of bonds. 12 9115. Voting requirements. 13 9116. Appropriation. 14 9117. Appropriation for and limitation on redevelopment 15 assistance and site development capital projects. 16 9118. Funding and administration of redevelopment assistance 17 capital projects. 18 9119. Funding and administration of site development capital 19 projects. 20 9120. Capital Project Oversight and Review Committee. 21 § 9101. Scope of chapter. 22 This chapter deals with capital facilities. 23 § 9102. Definitions. 24 The following words and phrases when used in this chapter 25 shall have the meanings given to them in this section unless the 26 context clearly indicates otherwise: 27 "Acquisition cost." The cost of acquiring: 28 (1) buildings; 29 (2) structures; 30 (3) facilities; 20030S0010B1515 - 132 -
1 (4) property, real, personal or mixed, tangible or 2 intangible; or 3 (5) any other interest; 4 necessary or desirable in connection with a capital project, 5 whether the acquisition be by purchase or by condemnation, 6 including the amount of an award or final judgment in a 7 proceeding to acquire by condemnation lands, rights-of-way, 8 rights-of-slope, property rights, franchises, easements or other 9 interests as deemed necessary or convenient in connection with 10 the acquisition or construction of a project, and costs of 11 options and partial payments on and under options. 12 "Capital project." A project which is financed by debt or by 13 other funds and which meets all of the following: 14 (1) Is an undertaking to construct, repair, renovate, 15 improve, equip, furnish or acquire any: 16 (i) building, structure, facility or physical public 17 betterment or improvement; 18 (ii) land or rights in land; or 19 (iii) furnishings, machinery, apparatus or equipment 20 for a building, structure, facility or physical public 21 betterment or improvement. 22 (2) Is designated in a capital budget as a capital 23 project. 24 (3) Has an estimated useful life in excess of five 25 years. 26 (4) Has an estimated financial cost in excess of 27 $250,000. This paragraph does not apply to original equipment 28 or furnishings for previously authorized public improvement 29 projects. 30 Capital projects are categorized as flood control projects, 20030S0010B1515 - 133 -
1 highway projects, public improvement projects, redevelopment 2 assistance capital projects, site development capital projects 3 and transportation assistance projects. 4 "Committee." The Capital Project Oversight and Review 5 Committee established in section 9120 (relating to Capital 6 Project Oversight and Review Committee). 7 "Commonwealth agency or authority." Excludes an agency or 8 authority organized by action of a political subdivision. 9 "Construction cost." Obligations incurred: 10 (1) for labor and to contractors, builders and 11 materialmen in connection with the construction, fabrication 12 or assembly of a capital project; 13 (2) for machinery and equipment required for 14 construction under paragraph (1); 15 (3) for the restoration of property damaged or destroyed 16 in connection with construction under paragraph (1); and 17 (4) for the payment of damages incurred by others 18 incident to or consequent upon construction under paragraph 19 (1) which the Commonwealth or its agency or authority is 20 under legal obligation to pay or desires to pay in settlement 21 of a disputed claim of liability. 22 "Debt." The issued and outstanding obligations of the 23 Commonwealth incurred without a vote of the electorate or 24 incurred with such vote under a law making such debt subject to 25 the provisions of section 7(a)(4) of Article VIII of the 26 Constitution of Pennsylvania. The term includes obligations of 27 Commonwealth agencies and authorities to the extent that such 28 obligations are to be repaid from lease rentals or other charges 29 payable directly or indirectly from revenues of the 30 Commonwealth. The term does not include: 20030S0010B1515 - 134 -
1 (1) that portion of debt which is to be repaid from 2 charges made to the public for the use of the capital 3 projects financed, as such portion of debt may be determined 4 by the Auditor General; 5 (2) obligations to be repaid from lease rentals or other 6 charges payable by a school district or other local taxing 7 authority; or 8 (3) obligations to be repaid by agencies or authorities 9 created for the joint benefit of the Commonwealth and one or 10 more other state governments. 11 "Debt-authorizing act." The legislation required by section 12 9103(d) (relating to procedures for capital budget bill and 13 debt-authorizing legislation). 14 "Financial cost." Acquisition cost and construction cost, 15 where applicable, and an allocated portion of all of the 16 following: 17 (1) Fees, expenses and costs of issuing obligations the 18 proceeds of which are used to finance the project. 19 (2) Fees, expenses and costs of issuing and selling 20 notes or replacement notes issued under this chapter. 21 (3) Establishing and maintaining any purchase, loan or 22 credit agreements in connection with an issue or series of 23 issues of notes, and the fees and expenses of any fiscal or 24 loan and transfer agent and bond counsel incurred in 25 connection with the issue of the obligations. 26 (4) Premiums on insurance in connection with a project 27 during construction. 28 (5) Taxes and other municipal or governmental charges 29 lawfully levied or assessed during construction. 30 (6) Fees and expenses of architects, engineers and other 20030S0010B1515 - 135 -
1 professionals for: 2 (i) making preliminary studies, reports or estimates 3 of costs; 4 (ii) preparing plans and specifications and 5 inspecting and reviewing the progress of construction; 6 and 7 (iii) obtaining abstracts of title, title insurance 8 or title opinions. 9 (7) Costs and expenses of preliminary investigations, 10 preplanning, surveys and reports to determine the proper 11 scope, feasibility and probable costs of capital projects to 12 be included in future capital budgets. 13 (8) Costs of administration, including the salaries and 14 expenses of administrators, reviewing architects and 15 engineers, construction inspectors, accountants and legal 16 counsel of the Commonwealth and its agencies or authorities, 17 incurred for the proper planning and supervision of the 18 capital projects program. 19 "Flood control projects." Projects of the type which the 20 Water and Power Resources Board is authorized to construct, 21 improve, equip, maintain, acquire or operate under the 22 provisions of the act of August 7, 1936 (1st Sp.Sess., P.L.106, 23 No.46), referred to as the Flood Control Law. 24 "Fund." Any fund other than a fund, or an account in a fund, 25 established by this chapter. 26 "Funding bonds." General obligation bonds used to provide 27 funds for and towards the payment of outstanding notes or to 28 refund other outstanding bonds prior to or at or after the 29 stated maturity date of the bonds being refunded or of the notes 30 being funded. 20030S0010B1515 - 136 -
1 "Highway projects." Projects of a type which the Department 2 of Transportation is authorized to construct, improve, equip, 3 maintain, acquire or operate. 4 "Hospital." As defined in section 802.1 of the act of July 5 19, 1979 (P.L.130, No.48), known as the Health Care Facilities 6 Act. 7 "Issuing officials." The Governor, the Auditor General and 8 the State Treasurer. 9 "Net debt." 10 (1) The aggregate principal amount of all debt; plus 11 (2) the amount of any past due and unpaid interest on 12 that debt; minus 13 (3) all funds held exclusively for the payment of that 14 principal and past due interest. 15 Neither accrued but not yet past due interest nor funds held for 16 the payment of the interest next falling due, up to the amount 17 of such interest, shall be included in such computations. 18 "Notes." Temporary obligations and replacement notes issued 19 by the Commonwealth pursuant to this chapter in anticipation of 20 bonds. 21 "Obligations." Notes or bonds of the Commonwealth, its 22 agencies or authorities, issued pursuant to any debt authorizing 23 act. 24 "Public improvement projects." Projects of a type which the 25 General State Authority is authorized to construct, improve, 26 equip, furnish, maintain, acquire or operate under the 27 provisions of the act of March 31, 1949 (P.L.372, No.34), known 28 as The General State Authority Act of one thousand nine hundred 29 forty-nine, and projects which the Department of General 30 Services is authorized to construct, improve, equip, furnish, 20030S0010B1515 - 137 -
1 maintain, acquire or operate. 2 "Redevelopment assistance capital project." The design and 3 construction of facilities which meet the following: 4 (1) Are facilities, other than housing units, highways, 5 bridges, waste disposal facilities, sewage facilities or 6 water facilities. This paragraph includes: 7 (i) water and sewer infrastructure, bridges and 8 roads included in business or industrial park facilities; 9 and 10 (ii) hospital facilities and capital improvements 11 for hospital facilities. 12 (2) Are economic development projects which generate 13 substantial increases in employment, tax revenues or other 14 measures of economic activity. This paragraph includes 15 projects with cultural, historical or civic significance. 16 (3) Are facilities which have a regional or 17 multijurisdictional impact. 18 (4) Are eligible for tax-exempt bond funding under 19 existing Federal law and regulations. 20 (5) Have a 50% non-State participation documented at the 21 time of application, including a portion of any funds 22 reserved for future physical maintenance and operation of the 23 facilities: 24 (i) at least half of which is secured funding; 25 (ii) toward which the only noncash non-State 26 participation permitted is land or fixed assets which 27 have a substantial useful life and are directly related 28 to the project; 29 (iii) toward which State funds from other programs 30 may not be used; and 20030S0010B1515 - 138 -
1 (iv) toward which funds from Federal sources may be 2 used. 3 (6) Have a total project cost of at least $1,000,000. 4 Applicants must be one of the following: 5 (i) A redevelopment authority. 6 (ii) An industrial development authority. 7 (iii) A general purpose unit of local government. 8 (iv) A local development district which has an 9 agreement with a general purpose unit of local government 10 under which the unit assumes ultimate responsibility for 11 debt incurred to obtain the 50% non-State participation 12 required by paragraph (5). 13 (v) An industrial development corporation. 14 "Replacement notes." Notes: 15 (1) the net proceeds of which are used to pay principal, 16 accrued interest and premium of previously issued notes or 17 replacement notes; and 18 (2) which evidence the same temporary borrowing of the 19 Commonwealth as the notes or replacement notes replaced. 20 "Site development capital projects." The design and 21 construction of infrastructure and improvements for locations 22 which meet all of the following: 23 (1) Are locations suitable for the siting of business, 24 industrial or research facilities upon completion of the 25 project. 26 (2) Create opportunities to develop new facilities or to 27 expand existing facilities for business, service industries, 28 manufacturing, research and development or other business or 29 industrial operations which produce goods or services as 30 determined by the Secretary of Community and Economic 20030S0010B1515 - 139 -
1 Development. 2 (3) Result in the creation of new jobs or the 3 preservation of existing jobs. 4 (4) Have a 50% non-State participation documented at the 5 time of application: 6 (i) at least one-half of which is secured funding; 7 (ii) toward which the only noncash, non-State 8 participation permitted is land or fixed assets which 9 have a substantial useful life and are directly related 10 to the project; and 11 (iii) toward which State funds from other programs 12 may not be used. 13 (5) Have a total project cost of at least $1,000,000. 14 (6) The project applicant is a municipality, municipal 15 authority, industrial development authority, redevelopment 16 authority, industrial development corporation or a general 17 purpose unit of local government. 18 (7) The project applicant can demonstrate to the 19 secretary that the location will be occupied by a business or 20 industrial tenant within five years of completion of the 21 project or such other reasonable period of time as may be 22 designated by the secretary. 23 "Tax revenues." All revenues from Commonwealth imposed 24 taxes, regardless of the fund to which they are deposited, 25 including revenues from motor vehicle licenses, which are 26 declared to be taxes for purposes of this chapter. The term does 27 not include revenues from any other licenses or from interest, 28 fees, fines or penalties. 29 "Transportation assistance projects." Projects of a type 30 which the Department of Transportation is authorized to 20030S0010B1515 - 140 -
1 construct, improve, equip, furnish, maintain, acquire or operate 2 under 74 Pa.C.S. Pt. II (relating to public transportation) and 3 capital projects which the Department of Transportation is 4 authorized to construct, improve, equip or furnish under the 5 provisions of the act of February 11, 1976 (P.L.14, No.10), 6 known as the Pennsylvania Rural and Intercity Common Carrier 7 Surface Transportation Assistance Act, including the acquisition 8 of property authorized in those statutes. 9 § 9103. Procedures for capital budget bill and debt-authorizing 10 legislation. 11 (a) Legislative process.--A capital budget prepared in 12 accordance with this chapter shall be submitted for each fiscal 13 year by the Governor to the General Assembly and shall be 14 considered in the form of a bill as provided in Article III of 15 the Constitution of Pennsylvania. 16 (b) Itemization.-- 17 (1) Except as set forth in paragraph (2), the capital 18 budget bill must specifically itemize, by brief identifying 19 description and estimated financial cost, the capital 20 projects to be financed from: 21 (i) the proceeds of obligations of the Commonwealth; 22 or 23 (ii) current revenues. 24 (2) Paragraph (1) does not apply if the itemization is: 25 (i) contained in or approved by prior legislation 26 referred to in the capital budget bill; or 27 (ii) included in one or more supplemental capital 28 budget bills. 29 (3) Projects must be listed in separate categories as 30 well as according to the fund to be charged with the 20030S0010B1515 - 141 -
1 repayment of the obligations to be incurred. 2 (4) The capital budget bill must state the maximum 3 amount of such obligations which may be incurred in the 4 ensuing fiscal year to provide funds for and towards the 5 financial costs of each category of capital projects, which 6 shall be by the issue of general obligations of the 7 Commonwealth. 8 (c) Timing.--Each year the Governor shall submit a capital 9 budget bill for the ensuing fiscal year. 10 (d) Debt-authorizing legislation.--At the time the Governor 11 submits the capital budget or a supplement, the Governor shall, 12 to the extent the debt to be incurred is not within the limits 13 of legislation then in force authorizing the incurring of debt, 14 submit additional bills for each category of capital projects, 15 authorizing the incurring of debt to provide funds for and 16 towards the payment of the financial costs of capital projects 17 in such category which have been specifically itemized in a 18 capital budget for the same or any prior year. 19 (e) Categories.--Each debt-authorizing bill must do all of 20 the following: 21 (1) State the category of capital projects to be 22 financed by the debt so authorized but need not enumerate the 23 capital projects to be financed. 24 (2) Authorize the incurring of debt in not less than the 25 amount of the incurred or expected to be incurred financial 26 cost of all capital projects in such category not covered by 27 a previous debt authorization, including any overall 28 allowance for contingencies. 29 (3) State the estimated useful lives of the capital 30 projects to be financed in such detail as may be requisite if 20030S0010B1515 - 142 -
1 capital projects of varying useful lives are to be combined 2 for financing purposes. 3 (4) State the maximum term of the debt to be incurred. 4 § 9104. Certificates of the Auditor General. 5 (a) Requirement.--By March 1 and September 1, the Auditor 6 General shall certify to the Governor and the General Assembly 7 the average annual tax revenues deposited in all funds in the 8 five fiscal years ended next preceding the date of the 9 certificate, determined by adding the total of such revenues so 10 deposited and dividing the sum by five. At the time of each 11 certification, the Auditor General shall also certify as 12 separate items: 13 (1) the amount of outstanding net debt as of the end of 14 the preceding fiscal year; 15 (2) the amount of outstanding net debt as of the date of 16 the certificate; 17 (3) the difference between the limitation upon all 18 outstanding net debt as provided in section 7(a)(4) of 19 Article VIII of the Constitution of Pennsylvania and 20 paragraph (2); 21 (4) the amount of outstanding net debt scheduled to be 22 repaid during the remainder of the fiscal year in which the 23 certificate is issued; 24 (5) the amount of debt authorized by law to be issued 25 but not yet incurred; and 26 (6) the amount of outstanding obligations excluded from 27 outstanding debt as self-sustaining pursuant to section 28 7(c)(1), (2) and (3) of Article VIII of the Constitution of 29 Pennsylvania. 30 (b) Additional certificates.--As required in connection with 20030S0010B1515 - 143 -
1 the sale of or settlement for obligations of the Commonwealth, 2 the Auditor General shall issue certificates containing items 3 listed in subsection (a)(2) and (3) as of the dates determined 4 by the Governor to be relevant to such sales or settlements. 5 (c) Reliance on certifications.--In making certificates, the 6 Auditor General shall be entitled to rely, as to any of items 7 listed in subsection (a)(1) through (5), upon: 8 (1) any certificate furnished by the State Treasurer 9 with respect to outstanding Commonwealth general obligation 10 bonds; 11 (2) any certificate furnished by the Department of 12 Revenue; and 13 (3) any certificate furnished by the appropriate bank or 14 trust company operating as fiscal agent or trustee with 15 respect to the outstanding obligations of any authority. 16 § 9105. Constitutional limitations, authorizations, issuing 17 officials. 18 Within the limitation set forth in section 7(a)(4) of Article 19 VIII of the Constitution of Pennsylvania, the issuing officials 20 are authorized and directed to borrow, on the credit of the 21 Commonwealth and subject to the conditions and limitations of 22 the act of April 9, 1929 (P.L.343, No.176), known as The Fiscal 23 Code, money necessary to carry out the purposes of debt- 24 authorizing acts passed in accordance with the provisions of 25 this chapter. 26 § 9106. Temporary borrowing. 27 (a) Authorization.--Pending the issuance of bonds of the 28 Commonwealth as authorized in section 9107 (relating to bonds, 29 issue of bonds and notes, maturity, interest), the issuing 30 officials are authorized, in accordance with the provisions of 20030S0010B1515 - 144 -
1 this chapter and on the credit of the Commonwealth, to make 2 temporary borrowings not to exceed three years in anticipation 3 of the issue of bonds in order to provide funds in such amounts 4 as deemed advisable to carry out the purposes of any debt- 5 authorizing acts prior to the issue of bonds. In order to 6 provide for and in connection with the temporary borrowings, the 7 issuing officials are authorized in the name and on behalf of 8 the Commonwealth to enter into any purchase, loan or credit 9 agreement or other agreement with banks, trust companies, 10 lending institutions, investment banking firms or persons in the 11 United States having the appropriate power. Agreements may 12 contain provisions not inconsistent with the provisions of this 13 chapter, as authorized by the issuing officials. 14 (b) Evidence.--All temporary borrowings made under the 15 authorization of this section shall be evidenced by notes of the 16 Commonwealth, which shall be issued for such amounts not 17 exceeding in the aggregate the applicable statutory and 18 constitutional debt limitation, in form and denominations and 19 subject to terms and conditions of sale and issue, prepayment or 20 redemption and maturity, rate of interest and time of payment of 21 interests, as the issuing officials authorize and direct and in 22 accordance with the applicable debt-authorizing act. 23 Authorization and direction may provide for the subsequent 24 issuance of replacement notes to refund outstanding notes or 25 replacement notes. Replacement notes shall, upon issuance, 26 evidence the borrowing and may specify other terms and 27 conditions with respect to the notes and replacement notes 28 authorized for issuance as the issuing officials may determine 29 and direct. 30 (c) Replacement notes.-- 20030S0010B1515 - 145 -
1 (1) If the authorization and direction of the Governor, 2 the Auditor General and the State Treasurer provide for the 3 issuance of replacement notes, the Governor, the Auditor 4 General and the State Treasurer are authorized, in the name 5 and on behalf of the Commonwealth, to issue, enter into or 6 authorize and direct the State Treasurer to do the following: 7 (i) Enter into agreements with banks, trust 8 companies, investment banking firms or other institutions 9 or persons in the United States having appropriate power 10 to purchase or underwrite an issue or series of issues of 11 notes. 12 (ii) Enter into a purchase, loan or credit 13 agreement. 14 (iii) Draw money pursuant to a purchase, loan or 15 credit agreement on the terms and conditions set forth in 16 the agreement. 17 (iv) Issue notes as evidence of borrowings made 18 under a purchase, loan or credit agreement. 19 (v) Appoint an issuing and paying agent or agents 20 with respect to notes. 21 (vi) Perform acts necessary or appropriate to 22 provide for the payment, when due, of the interest on and 23 principal of notes. 24 (2) Agreements under paragraph (1) may provide that the 25 compensation of purchasers or underwriters of notes or 26 replacement notes, by discount in the purchase price of the 27 notes or by payment of a fixed fee or commission at the time 28 of issuance of the notes, and that all other costs and 29 expenses, including fees for agreements related to the notes, 30 issuing and payment agent costs and costs and expenses of 20030S0010B1515 - 146 -
1 issuance, may be paid from the proceeds of the notes. 2 (d) Issuance of replacement notes.--If the authorization and 3 direction of the Governor, the Auditor General and the State 4 Treasurer provide for the issuance of replacement notes, the 5 State Treasurer shall, by the time of delivery of these notes or 6 replacement notes, determine the principal amounts, dates of 7 issuance, interest rates or procedures for establishing interest 8 rates, rates of discount, denominations and all other terms and 9 conditions relating to the issuance and shall perform all acts 10 necessary to pay or cause to be paid when due all principal of 11 and interest on the notes being refunded by replacement notes 12 and to assure that payment may draw upon any money available for 13 that purpose pursuant to any purchase, loan or credit agreements 14 established with respect to the notes, subject to the 15 authorization and direction of the Governor, the Auditor General 16 and the State Treasurer. 17 (e) Funding and retirement.--Outstanding notes evidencing 18 borrowings may be funded and retired by the issuance and sale of 19 the bonds of the Commonwealth under section 9112 (relating to 20 funding bonds). Funding bonds must be issued and sold not later 21 than a date three years after the date of issuance of the first 22 notes evidencing the borrowings, to the extent that payment of 23 the notes has not otherwise been made or provided for by sources 24 other than proceeds of replacement notes. 25 (f) Proceeds.--The proceeds of temporary borrowings except 26 those evidenced by replacement notes shall be paid to the State 27 Treasurer to be held and disposed of under section 9110 28 (relating to disposition and use of proceeds). The proceeds of 29 temporary borrowings evidenced by replacement notes shall be 30 paid to the State Treasurer to be held and disposed of under 20030S0010B1515 - 147 -
1 subsection (d). 2 § 9107. Bonds, issue of bonds and notes, maturity, interest. 3 (a) Issue.--As evidence of indebtedness as authorized, 4 bonds, which may be for one or more purposes, shall be issued 5 under this chapter for all of the following purposes: 6 (1) To fund or retire notes issued under section 9106 7 (relating to temporary borrowing) and bonds issued under 8 paragraph (2). 9 (2) To provide money necessary to carry out the purposes 10 of a debt-authorizing statute. 11 (b) Series.--The bonds of each issue shall constitute a 12 separate series to be designated by the issuing officials or may 13 be combined for sale as one series with other general obligation 14 bonds of the Commonwealth. Each series of bonds shall bear such 15 rate of interest as determined by the issuing officials. Bonds 16 shall be issued in denominations and in form, whether coupon or 17 registered as to both principal and interest, and with or 18 without such provisions of interchangeability, as the issuing 19 officials determine. If interest coupons are attached, they 20 shall, unless the debt-authorizing act provides otherwise, 21 contain the facsimile signature of the State Treasurer. 22 (c) Terms and conditions.-- 23 (1) Except as set forth in subsection (a) or (b), the 24 terms and conditions of issue, redemption and maturity and 25 time of payment of interest shall be as the issuing officials 26 shall specify. Bonds of any series shall mature within a 27 period not to exceed the estimated useful lives of the 28 capital projects as stated in the debt-authorizing act but 29 not later than 30 years from the date of issuance. 30 (2) The issuing officials shall provide for the 20030S0010B1515 - 148 -
1 amortization of the bonds in substantial and regular amounts 2 over the term of the debt, but the first retirement of 3 principal shall be stated to mature prior to the expiration 4 of a period of time equal to one-tenth of the time from the 5 date of the first obligation issued to evidence the debt to 6 the date of the expiration of the term of the debt. 7 (3) Retirements of principal shall be regular and 8 substantial if made in annual or semiannual amounts whether 9 by stated serial maturities or by mandatory sinking fund 10 retirements computed in accordance with either a level annual 11 debt service plan as nearly as may be or upon the equal 12 annual maturities plan. 13 (4) If debt is incurred in one issue of bonds to provide 14 funds for and towards the financial cost of capital projects 15 having estimated useful lives of varying length, the 16 following shall apply: 17 (i) The aggregate of the financial costs shall be 18 considered as the debt to be incurred for the purpose of 19 fixing the regular and substantial amounts of principal 20 to be retired. 21 (ii) The term of the debt shall be to the end of the 22 longest estimated useful life for the purpose of 23 determining the first date for the retirement of 24 principal. At the end of the estimated useful life of 25 each project, the aggregate principal retirements 26 required to be made at or before that date shall exceed: 27 (A) the aggregate financial cost of all capital 28 projects having the same or shorter estimated useful 29 lives; or 30 (B) if bonds are issued for less than the full 20030S0010B1515 - 149 -
1 financial cost of all projects being financed in the 2 same category, a proportionate amount in each case. 3 (5) The issuing officials may enter into the following 4 agreements and contracts, which in the judgment of the 5 issuing officials will assist in managing the interest costs 6 of the debt of the Commonwealth: 7 (i) Interest rate exchange agreements, interest rate 8 cap and floor agreements and other similar agreements. 9 (ii) Contracts to insure or secure payment of 10 principal, interest or the purchase price of bonds. 11 (6) The issuing officials are authorized to carry out 12 the provisions of this chapter relating to the issuance of 13 bonds and shall determine all matters in connection with the 14 issuance of bonds subject to the provisions hereof. 15 (d) Verification.-- 16 (1) Bonds issued under the authority of this chapter, 17 unless the debt-authorizing acts provide another method of 18 signature, shall bear the facsimile signatures of the issuing 19 officials and a facsimile of the Great Seal of the 20 Commonwealth of Pennsylvania and shall be countersigned by an 21 officer of an authorized loan and transfer agent of the 22 Commonwealth. 23 (2) The action taken by the issuing officials 24 authorizing the issuance of bonds or notes shall set forth 25 the title and citation of the debt-authorizing acts. 26 (3) Notes and bonds issued under the authority of this 27 chapter shall: 28 (i) either contain a similar recital or refer to the 29 recital of titles and citations set forth in the action 30 authorizing issuance; and 20030S0010B1515 - 150 -
1 (ii) state that the bonds or notes are issued in 2 accordance with the provisions of this chapter. In any 3 action or proceeding involving the validity or 4 enforceability of bonds or notes under this chapter, a 5 recital under paragraph (3) shall be conclusive as to 6 their authorization. 7 § 9108. Direct obligations, exemption from taxation, means of 8 payment. 9 (a) Direct obligation.--Notes and bonds issued under this 10 chapter shall be direct obligations of the Commonwealth, and the 11 full faith and credit of the Commonwealth are pledged for the 12 payment of the interest as it becomes due and the payment of the 13 principal at maturity. 14 (b) Exemptions.--Notes and bonds issued under this chapter 15 shall be exempt from taxation for State and local purposes 16 except as provided under the act of March 4, 1971 (P.L.6, No.2), 17 known as the Tax Reform Code of 1971. 18 (c) Payment.--The principal of and interest on notes and 19 bonds issued under this chapter shall be payable in lawful money 20 of the United States of America. 21 § 9109. Sale of bonds. 22 (a) Public sale.--When bonds are issued under this chapter, 23 they shall be offered for sale at not less than 98% of the 24 principal amount and accrued interest and shall be sold by the 25 issuing officials to the highest and best bidder or bidders 26 after public advertisement on terms and conditions and upon open 27 competitive bidding as the issuing officials direct. The manner 28 and times of advertising shall be prescribed by the issuing 29 officials. 30 (b) Private sale.--Any portion of a bond issue offered under 20030S0010B1515 - 151 -
1 subsection (a) and not sold or subscribed to may be disposed of 2 by private sale by the issuing officials in a manner and at 3 prices, not less than 98% of the principal amount and accrued 4 interest, as the Governor directs. No commission shall be 5 allowed or paid for the sale of bonds issued under this chapter. 6 (c) Temporary bonds.--Until permanent bonds can be prepared, 7 the issuing officials may issue, in lieu of permanent bonds, 8 temporary bonds in form and with privileges as to the 9 registration and exchange for permanent bonds as may be 10 determined by the issuing officials. 11 § 9110. Disposition and use of proceeds. 12 (a) General rule.--The proceeds of temporary borrowings made 13 under section 9106 (relating to temporary borrowing), other than 14 the proceeds of replacement notes, and the proceeds from the 15 sale of bonds, other than funding bonds, shall be paid to the 16 State Treasurer and be held by the State Treasurer in a separate 17 fund and shall be deposited in depositories as selected by the 18 State Treasurer to the credit of the Capital Facilities Fund, 19 which shall have such separate accounts as may be deemed 20 desirable by the issuing officials, but not less than one 21 separate account for each category of capital projects. The 22 proceeds of replacement notes shall be deposited and applied as 23 provided in section 9106(d). The proceeds of funding bonds shall 24 be deposited and applied as provided in section 9112 (relating 25 to funding bonds). 26 (b) Dedication.--The money in the Capital Facilities Fund is 27 specifically dedicated to meeting the financial costs of capital 28 projects. The money shall be paid by the State Treasurer to 29 those departments, agencies or authorities authorized to expend 30 it as required by them to pay financial costs at the time the 20030S0010B1515 - 152 -
1 department, agency or authority certifies the payment to be due 2 and payable. 3 (c) Investment.--Pending their application to the purposes 4 authorized, money held or deposited by the State Treasurer may 5 be invested and reinvested as are other funds in the custody of 6 the State Treasurer in the manner provided by law. Earnings 7 received from the investment or deposit of the funds shall be 8 paid into the State Treasury to the credit of the account in the 9 Capital Facilities Fund to which the funds were originally 10 deposited. 11 § 9111. Capital Debt Fund; investments; redemption of bonds. 12 (a) Capital Debt Fund.--Bonds issued under this chapter 13 shall be paid at maturity. Interest due after July 1, 1968, on 14 bonds and on notes issued under this chapter shall be paid by 15 the Board of Finance and Revenue from the Capital Debt Fund. The 16 General Assembly shall appropriate annually the money necessary 17 to pay the interest on the bonds and notes and the principal of 18 the bonds and notes at maturity if no other provision is made. 19 Money appropriated shall be paid into the Capital Debt Fund by 20 the State Treasurer. 21 (b) Investment.--Money received under subsection (a) prior 22 to the date for disbursement shall be invested by the board 23 pending disbursement in securities as are provided by law for 24 the investment of surplus money of the Commonwealth. The 25 investment and the accumulations in the Capital Debt Fund shall 26 be devoted to and be used exclusively for the payment of the 27 interest accruing on the bonds and notes and for the redemption 28 of the bonds and notes at maturity or upon the redemption date 29 if called for prior redemption. The board is authorized to use 30 such funds for the purchase and retirement of all or any part of 20030S0010B1515 - 153 -
1 the bonds issued under this chapter; but no purchase may be made 2 which will reduce the money in the Capital Debt Fund below the 3 amount necessary to pay all principal and interest still to 4 become due in the fiscal year of the purchase. If all or any 5 part of any bonds issued under this chapter are purchased by the 6 Commonwealth, they shall be canceled and returned to the State 7 Treasurer as canceled and paid bonds. Thereafter, all payment of 8 interest on the bonds shall cease; and the canceled bonds and 9 coupons shall be destroyed in accordance with the act of April 10 27, 1925 (P.L.319, No.180), entitled, "An act relating to the 11 destruction of canceled or unused bonds or other evidences of 12 indebtedness of this Commonwealth." 13 § 9112. Funding bonds. 14 The issuing officials, subject to the provisions of a bond 15 resolution or trust indenture, are authorized to issue funding 16 bonds for the purpose of refunding obligations then outstanding 17 to provide funds to redeem and retire such outstanding 18 obligations with accrued interest and any premium payable 19 thereon at maturity or any call date. The issuance of funding 20 bonds, the maturities and other details, the rights of the 21 holders and the duties of the issuing officials shall be 22 governed by the applicable provisions of sections 9103 (relating 23 to procedures for capital budget bill and debt-authorizing 24 legislation) through 9111 (relating to Capital Debt Fund; 25 investments; redemption of bonds). Funding bonds may be issued 26 to refund bonds previously issued for refunding purposes. The 27 proceeds of the sale of funding bonds shall be paid to the State 28 Treasurer and applied to the payment of the principal of, and 29 any accrued interest and premium on, the bonds or notes for the 30 refunding of which funding bonds have been issued. No funding 20030S0010B1515 - 154 -
1 bonds shall be issued having a stated maturity date later than 2 the expiration of the useful life of the capital projects 3 constructed or acquired from the proceeds of the debt originally 4 incurred in respect of the bonds or notes being refunded, nor 5 shall funding bonds be issued to refund beyond the same fiscal 6 year any portion of debt required by this chapter and the 7 Constitution of Pennsylvania to be retired in the year of issue 8 of the funding bonds in order to comply with the retirement in 9 substantial and regular amounts as provided in section 9107(d) 10 (relating to bonds, issue of bonds and notes, maturity, 11 interest). 12 § 9113. Reporting requirements. 13 The State Treasurer shall determine and report to the 14 Secretary of the Budget and the chairman and minority chairman 15 of the Appropriations Committee of the Senate and the chairman 16 and minority chairman of the Appropriations Committee of the 17 House of Representatives by January 1 of each year the amount of 18 money necessary for the payment of interest on outstanding 19 obligations and the principal of the obligations for the 20 following fiscal year and the time and amounts of payments. 21 § 9114. Registration of bonds. 22 The Auditor General shall prepare the necessary registry 23 books to be kept in the office of the authorized loan and 24 transfer agent of the Commonwealth for the registration of any 25 bonds of the Commonwealth according to the terms and conditions 26 of issue specified by the issuing officials under section 27 9107(d) (relating to bonds, issue of bonds and notes, maturity, 28 interest). Bonds issued without interest coupons attached shall 29 be registered in the registry books kept by the authorized loan 30 and transfer agent of the Commonwealth. 20030S0010B1515 - 155 -
1 § 9115. Voting requirements. 2 If this chapter requires an action to be taken or a decision 3 to be made by the issuing officials and the three officers shall 4 not be able to agree unanimously, the action or decision of the 5 Governor and either the Auditor General or State Treasurer shall 6 be binding and final. 7 § 9116. Appropriation. 8 The money received by the Commonwealth from the issuance and 9 sale of bonds and notes pursuant to this chapter and any debt- 10 authorizing act adopted after July 23, 1984, shall be 11 appropriated by the General Assembly from the Capital Facilities 12 Fund in the debt-authorizing acts for the purposes set forth in 13 those acts. 14 § 9117. Appropriation for and limitation on redevelopment 15 assistance and site development capital projects. 16 (a) Appropriation.--The amount necessary to pay principal of 17 and interest on all obligations issued to provide funds for 18 redevelopment assistance capital projects and site development 19 capital projects is hereby appropriated from the General Fund 20 and shall be transferred to the Capital Debt Fund upon 21 authorization by the Governor. 22 (b) Limitation.-- 23 (1) The maximum amount of redevelopment assistance 24 capital projects undertaken by the Commonwealth for which 25 obligations are outstanding shall not exceed, in the 26 aggregate, $1,550,000,000. On or after the effective date of 27 this section, at least $100,000,000 shall be specifically set 28 aside for projects for the construction of or improvements to 29 hospital facilities. 30 (2) The maximum amount of site development capital 20030S0010B1515 - 156 -
1 projects for which obligations are outstanding shall not 2 exceed, in the aggregate, $100,000,000. 3 § 9118. Funding and administration of redevelopment assistance 4 capital projects. 5 (a) Applications.--Persons seeking funding for redevelopment 6 assistance capital projects itemized in accordance with section 7 9103(b) (relating to procedures for capital budget bill and 8 debt-authorizing legislation) may request an application from 9 the Office of the Budget. Completed applications shall be 10 submitted to the Office of the Budget which shall review them to 11 determine if the proposed project meets the definition of 12 redevelopment assistance capital project and for compliance with 13 application requirements, including the submission of all 14 project descriptions, schedules, budgets and other materials as 15 may be required. Deficient applications shall be returned to the 16 applicant for revision. Applications found to be complete by the 17 Office of the Budget shall be forwarded to the Secretary of the 18 Budget for review. 19 (b) Review and approval.--The Secretary of the Budget, in 20 consultation with the Secretary of Community and Economic 21 Development, shall review completed applications and shall 22 approve or disapprove applications for redevelopment assistance 23 capital projects. If an application is approved, the Secretary 24 of the Budget shall execute a grant agreement or contract with 25 the applicant. State funding for approved redevelopment 26 assistance projects shall be paid in accordance with subsection 27 (c). 28 (c) Time period.--State funding for approved redevelopment 29 assistance capital projects shall be paid over not less than a 30 36-month period unless the Secretary of the Budget authorizes a 20030S0010B1515 - 157 -
1 shorter period. 2 (d) Costs.--Fees for professional services incurred for the 3 design and construction of redevelopment assistance capital 4 projects shall be paid from non-State funds. Land acquisition is 5 a permissible State-funded expenditure if the acquisition cost 6 is supported by an appraisal done by a certified appraiser. 7 (e) Proportion.--Expenditure of State and non-State funds 8 shall be made on a proportional basis for direct land and 9 building acquisition costs and construction expenses. 10 (f) Verification.--Redevelopment assistance capital project 11 cost estimates must be verified by the Office of the Budget or 12 its designated agent before final approval is given to a project 13 application. Cost estimates include total project cost, 14 projected use for State and non-State funds and a year-by-year 15 schedule of costs for the entire project construction phase. 16 (g) Bids.-- 17 (1) Notwithstanding any other provisions of law and 18 subject to paragraph (2), the solicitation of a minimum of 19 three written bids for all contracted construction work on 20 redevelopment assistance capital projects shall be the sole 21 requirement for the composition, solicitation, opening and 22 award of bids on such projects. 23 (2) The construction work shall be performed subject to 24 the act of March 3, 1978 (P.L.6, No.3), known as the Steel 25 Products Procurement Act. 26 (h) Review and audit.--Redevelopment assistance capital 27 projects shall be reviewed at regular intervals by the Office of 28 the Budget or its designated agent during the funding phase to 29 ensure financial and program compliance. A final closeout audit 30 shall be performed by the Office of the Budget or its designated 20030S0010B1515 - 158 -
1 agent for all projects. Copies of closeout audits shall be 2 provided to the committee by the Office of the Budget upon 3 completion. 4 (i) Grant administration.--In the event an applicant does 5 not administer the grant, the applicant shall enter into a 6 cooperation agreement with the entity administering the grant 7 which agreement shall be subject to the approval of the Office 8 of the Budget. 9 § 9119. Funding and administration of site development capital 10 projects. 11 (a) Applications.--Persons seeking funding for site 12 development capital projects itemized in a capital budget 13 itemization act may request an application from the Office of 14 the Budget. Completed applications shall be submitted to the 15 Office of the Budget which shall review them to determine if the 16 proposed project meets the definition of site development 17 capital project and for compliance with application 18 requirements, including the submission of all project 19 descriptions, schedules, budgets and other materials as may be 20 required. Deficient applications shall be returned to the 21 applicant for revision. Applications found to be complete by the 22 Office of the Budget shall be forwarded to the committee for 23 review. The Secretary of the Budget may recommend projects to 24 the committee for approval. The committee shall not be bound by 25 a recommendation by the Secretary of the Budget. 26 (b) Review.--The following shall apply: 27 (1) The committee shall review an application for a site 28 development capital project to determine all of the 29 following: 30 (i) If the project locations are suitable for the 20030S0010B1515 - 159 -
1 siting of business, industrial or research facilities. 2 (ii) If the project creates opportunities to develop 3 new facilities or to expand existing facilities for 4 business, service industries, manufacturing, research and 5 development or other business or industrial operations 6 that produce goods or services. 7 (iii) If the project will result in the creation of 8 new jobs or the preservation of existing jobs. 9 (iv) If the project has 50% non-State participation 10 documented at the time of application. 11 (v) If the project has a total project cost of at 12 least $1,000,000. 13 (vi) If it is likely that the project will be 14 occupied by a business or industrial tenant within five 15 years of completion or any other reasonable period of 16 time as may be designated by the Secretary of Community 17 and Economic Development. 18 (2) The committee may consider the following when 19 reviewing site development capital projects: 20 (i) The geographic distribution of site development 21 capital projects throughout this Commonwealth. 22 (ii) The ratio of State share to non-State share of 23 the total project cost. 24 (c) Approval.--The following shall apply: 25 (1) The committee may approve a site development capital 26 project for which an application has been submitted if it 27 determines that the proposed project meets the requirements 28 of the definitions of site development capital project 29 contained in section 9102 (relating to definitions) and will 30 result in a significant positive impact as evidenced by the 20030S0010B1515 - 160 -
1 review criteria contained in subsection (b). 2 (2) Upon the approval of an application by the 3 committee, the Secretary of the Budget shall execute a grant 4 agreement or contract with the applicant. State funding for 5 approved site development capital projects shall be paid in 6 accordance with subsection (d). 7 (3) The Commonwealth shall not contract with or enter 8 into a grant agreement with an applicant for a site 9 development capital project itemized in a capital budget 10 itemization act for the purpose of providing funding unless 11 the project has been approved by at least four members of the 12 committee. 13 (d) Time period.--State funding for approved site 14 development capital projects shall be paid over not less than a 15 36-month period unless the Secretary of the Budget or the 16 committee authorizes a shorter period. 17 (e) Costs.--Fees for professional services incurred for the 18 design and construction of site development capital projects 19 shall be paid from non-State funds. Land acquisition shall be a 20 permissible State-funded expenditure if the acquisition cost is 21 supported by an appraisal done by a certified appraiser. 22 (f) Proportion.--Expenditure of State and non-State funds 23 shall be made on a proportional basis for direct land 24 acquisition costs and construction expenses. 25 (g) Verification.--Site development capital project cost 26 estimates must be verified by the Office of the Budget or its 27 designated agent before final approval is given to a project 28 application by the committee. Cost estimates shall include total 29 project cost, projected use for State and non-State funds and a 30 year-by-year schedule of costs for the entire project 20030S0010B1515 - 161 -
1 construction phase. 2 (h) Bids.--The following shall apply: 3 (1) Notwithstanding any other provisions of law and 4 subject to paragraph (2), the solicitation of a minimum of 5 three written bids for all contracted construction work on 6 site development capital projects shall be the sole 7 requirement for the composition, solicitation, opening and 8 award of bids on such projects. 9 (2) The construction work shall be performed subject to 10 the act of March 3, 1978 (P.L.6, No.3), known as the Steel 11 Products Procurement Act. 12 (i) Review and audit.--Site development capital projects 13 shall be reviewed at regular intervals by the Office of the 14 Budget or its designated agent during the funding phase to 15 ensure financial and program compliance. A final closeout audit 16 shall be performed by the Office of the Budget or its designated 17 agent for all projects. Copies of closeout audits shall be 18 provided to the committee by the Office of the Budget upon 19 completion. 20 (j) Grant administration.--In the event an applicant does 21 not administer the grant, the applicant shall enter into a 22 cooperation agreement with the entity administering the grant. 23 The cooperation agreement shall be subject to the approval of 24 the Office of the Budget. 25 § 9120. Capital Project Oversight and Review Committee. 26 (a) Establishment.--There is established a Capital Project 27 Oversight and Review Committee for the purpose of reviewing and 28 approving site development capital projects. 29 (b) Composition.--The following shall apply: 30 (1) The Capital Project Oversight and Review Committee 20030S0010B1515 - 162 -
1 shall consist of: 2 (i) the Governor or a designee; 3 (ii) the Majority Leader of the Senate or a 4 designee; 5 (iii) the Minority Leader of the Senate or a 6 designee; 7 (iv) the Majority Leader of the House of 8 Representatives or a designee; 9 (v) the Minority Leader of the House of 10 Representatives or a designee. 11 (2) The Governor or the Governor's designee shall act as 12 chairman of the committee. 13 (3) The Secretary of the Budget shall act as the 14 committee secretary and shall provide staff support as 15 required by the committee. The Secretary of the Budget shall 16 not be a voting member of the committee. 17 (c) Meetings.-- 18 (1) The committee shall meet at the call of the chairman 19 but at least once during each quarter of the fiscal year. 20 (2) Four members shall constitute a quorum. 21 (3) The consent of four members of the committee shall 22 be required to approve an application for a site development 23 capital project. 24 CHAPTER 92 25 SPORTS FACILITIES 26 Sec. 27 9201. Definitions. 28 9202. Commonwealth funds. 29 9203. Eligibility. 30 9204. Requirement. 20030S0010B1515 - 163 -
1 9205. Other agreements. 2 9206. Report. 3 9207. Financial commitment. 4 9208. Enforcement and penalties. 5 9209. Expiration. 6 9210. Scope. 7 § 9201. Definitions. 8 The following words and phrases when used in this chapter 9 shall have the meanings given to them in this section unless the 10 context clearly indicates otherwise: 11 "Baseline tax amount." The average of taxes referred to in 12 section 9204(7)(i) (relating to requirement) paid to the 13 Commonwealth in 1996, 1997 and 1998. 14 "Contracting authority." An authority created pursuant to 53 15 Pa.C.S. Ch. 56 (relating to municipal authorities), for the 16 purpose of constructing or renovating a facility or other 17 authority established under the laws of this Commonwealth which 18 is eligible to apply for and receive redevelopment assistance 19 capital grants under Chapter 91 (relating to capital facilities) 20 under a contract with the office to receive Commonwealth grants 21 under this chapter. 22 "Contracting municipality." A city, county, township, town 23 or borough which contracts with the office to receive 24 Commonwealth funds to construct or renovate a facility. 25 "Facility." A stadium, arena or other place owned or leased 26 by a professional sports organization at which a professional 27 athletic event is conducted in the presence of individuals who 28 pay admission to view the event. The term includes a facility to 29 be constructed as well as an existing facility. 30 "Office." The Office of the Budget. 20030S0010B1515 - 164 -
1 "Professional sports organization." A sole proprietorship, 2 corporation, limited liability company, partnership or 3 association that: 4 (1) owns a professional major league baseball or 5 national football franchise; and 6 (2) conducts professional athletic events of the 7 franchise at a facility. 8 § 9202. Commonwealth funds. 9 The receipt of grants of Commonwealth funds by a contracting 10 municipality or contracting authority under Chapter 91 (relating 11 to capital facilities) or this chapter to finance any cost 12 related to the construction or renovation of a facility shall be 13 subject to the requirements of this chapter. 14 § 9203. Eligibility. 15 In order for a facility to qualify for grants of Commonwealth 16 funds, the professional sports organization utilizing the 17 facility must certify that: 18 (1) it maintains its headquarters, principal business 19 offices, training facilities and camps, except baseball 20 spring training, and related enterprises and activities, 21 except minor league activities, in this Commonwealth; 22 (2) except for a sole proprietorship, it is 23 incorporated, organized or otherwise created under the laws 24 of this Commonwealth; and 25 (3) it will continue to comply with the certifications 26 under paragraphs (1) and (2) for the duration of the lease 27 under section 9204(1) (relating to requirement) or for the 28 initial term of the debt, whichever is longer. 29 § 9204. Requirement. 30 In order for grants of Commonwealth funds to be used to 20030S0010B1515 - 165 -
1 construct or renovate a facility, the contracting municipality 2 or contracting authority must contract with the professional 3 sports organization to ensure compliance by the professional 4 sports organization with the following terms and conditions: 5 (1) Agreement by the professional sports organization to 6 remain and conduct professional sporting events in the 7 facility for the duration of the lease or for the term of any 8 debt of the Commonwealth, whichever is longer, but in no 9 event longer than 29.5 years. The contract shall include 10 agreement by the professional sports organization that if the 11 agreement to remain and conduct professional sporting events 12 is violated, the contracting municipality or contracting 13 authority shall seek specific performance of the agreement to 14 remain and conduct professional sporting events or receive a 15 payment in the amount set forth in the agreement between the 16 contracting municipality or contracting authority and the 17 professional sports organization and the amount equal to the 18 Commonwealth's principal contribution under Chapter 91 19 (relating to capital facilities) or this chapter to the 20 construction or renovation of the facility. 21 (2) Establishment of a procedure to provide written 22 notice by the professional sports organization to the 23 contracting municipality or contracting authority and the 24 Commonwealth of any sale, transfer or relocation of its 25 sports franchise or team immediately upon entering into any 26 commitment to sell, transfer or relocate the sports franchise 27 or team. 28 (3) Agreement that if the professional sports 29 organization sells or transfers its sports franchise or team, 30 the purchaser or transferee shall be bound by and shall 20030S0010B1515 - 166 -
1 contract to be subject to the same terms and conditions 2 required by this chapter as a condition of the sale. 3 (4) Agreement that all costs of design and construction 4 of a new or renovated facility which are due to delays or 5 which exceed the projected costs set forth in the financial 6 plan or contract with the office shall be the responsibility 7 of the contracting municipality or contracting authority or 8 the professional sports organization. 9 (5) Agreement that during the term of the lease for the 10 facility, the professional sports organization or the 11 contracting municipality or contracting authority shall be 12 responsible for all capital improvements to the facility and 13 for all operating expenses relating to the use of the 14 facility, including security, cleaning, insurance, 15 maintenance and utilities. 16 (6) Agreement to set aside a specified minimum number of 17 days, at reasonable times throughout the year, to be 18 available for the use of the facility by the contracting 19 municipality or contracting authority or by the Commonwealth. 20 Under this agreement, the Commonwealth shall receive the same 21 number of days and be entitled to the same terms as the 22 contracting municipality or contracting authority. 23 (7) Agreement to make an additional rental payment of 24 $25,000,000 reduced by available credits under subparagraphs 25 (i) through (iii) in the tax year immediately following the 26 expiration of the first ten-year period of occupancy or lease 27 of the facility and at the expiration of every ten-year 28 period thereafter. The professional sports organization shall 29 pay the additional rental payment to the contracting 30 municipality or contracting authority, which shall remit the 20030S0010B1515 - 167 -
1 additional rental payment to the Commonwealth. The additional 2 rental payment made by the professional sports organization 3 shall be reduced by the following credits: 4 (i) The credits available for the first ten-year 5 period of occupancy or lease shall be amounts paid to the 6 Commonwealth which exceed the product of the baseline tax 7 amount multiplied by 7.5. The credits available for each 8 subsequent ten-year period of occupancy shall be the 9 amounts paid to the Commonwealth which exceed the product 10 of the baseline tax amount multiplied by 10. Available 11 credits include all of the following: 12 (A) An amount equal to all corporate net income 13 tax, capital stock and franchise tax and personal 14 income tax related to the ownership and operation of 15 the professional sports organization. 16 (B) An amount equal to: 17 (I) all personal income tax withheld from 18 its employees by the professional sports 19 organization; 20 (II) all personal income tax withheld from 21 the employees of any provider of events at or 22 services to, or any operator of an enterprise in, 23 a facility or facility complex; and 24 (III) all personal income tax to which the 25 Commonwealth would be entitled from performers or 26 other participants, including visiting teams, at 27 an event or activity at the facility. 28 (C) An amount equal to all sales and use tax 29 related to the operation of the professional sports 30 organization and the facility and enterprises 20030S0010B1515 - 168 -
1 developed as part of the facility complex. This 2 clause includes sales and use tax paid by any 3 provider of events or activities at or services to a 4 facility, including sales and use tax paid by vendors 5 and concessionaires and contractors at the facility. 6 (D) An amount equal to all tax paid, by the 7 professional sports organization or by any provider 8 of events or activities at or services to a facility, 9 to the Commonwealth related to the sale of any 10 liquor, wine or malt or brewed beverage in the 11 facility or facility complex. 12 (E) The amount paid by the professional sports 13 organization or by any provider of events or 14 activities at or services to a facility or facility 15 complex of any new tax enacted by the Commonwealth 16 after February 9, 1999. 17 (ii) In addition to the credits available under 18 subparagraph (i), the professional sports organization 19 may credit an amount equal to one-third of the following, 20 incurred prior to the occupancy or lease of the facility: 21 (A) all personal income tax withheld from 22 personnel by the professional sports organization or 23 by a contractor or other entity involved in the 24 construction or renovation of the facility; and 25 (B) sales and use tax paid on materials and 26 other construction costs, whether withheld or paid by 27 the professional sports organization or other entity, 28 directly related to the construction or renovation of 29 the facility. 30 (iii) To the extent the amount of the credits 20030S0010B1515 - 169 -
1 available for a specific ten-year period under 2 subparagraphs (i) and (ii) exceeds $25,000,000, the 3 excess may be carried over and added to the amount of 4 credits claimed under subparagraphs (i) and (ii) for the 5 following ten-year period. Any excess credit still 6 remaining shall be carried over to subsequent ten-year 7 periods until it is exhausted or until the expiration of 8 this chapter under section 9209 (relating to expiration), 9 whichever is sooner. 10 (iv) Payments shall be made by the professional 11 sports organization and remitted by the contracting 12 municipality or contracting authority at a time and in a 13 manner, including required documentation of all credits, 14 as the office prescribes. This subparagraph includes 15 annual reconciliation of all credits under subparagraphs 16 (i) through (iii). All tax records and information shall 17 be subject to all confidentiality protections provided by 18 the act of March 4, 1971 (P.L.6, No.2), known as the Tax 19 Reform Code of 1971; however, the Department of Revenue 20 shall provide records and information to the office as 21 necessary for the office to enforce this chapter. 22 (8) An agreement that, upon sale of the facility or the 23 expiration or termination of the lease at the facility, the 24 Commonwealth shall have an option to purchase for $1 a one- 25 third interest in the facility. 26 § 9205. Other agreements. 27 The contracting municipality or the contracting authority and 28 the professional sports organization may enter into all other 29 agreements necessary and appropriate for the construction, 30 renovation and operation of the facility. The contracting 20030S0010B1515 - 170 -
1 municipality or the contracting authority shall enter into all 2 contracts with the office required to receive Commonwealth 3 funds. 4 § 9206. Report. 5 The office shall file a report every ten years to the General 6 Assembly regarding the additional rental payments under this 7 chapter. 8 § 9207. Financial commitment. 9 The contracting municipality or contracting authority and the 10 professional sports organization must provide to the office all 11 of the following: 12 (1) A financial plan for all funding related to the 13 construction or renovation of the facility, to include 14 details regarding the financial commitment of the parties to 15 the project. 16 (2) An economic development plan for the area 17 surrounding the facility. 18 (3) A plan to provide affordable seating within a 19 portion of the facility. 20 (4) A representation from the contracting municipality 21 or contracting authority that tax revenues to the 22 Commonwealth will be increased and a description of how the 23 grant of Commonwealth funds will provide the increase. 24 § 9208. Enforcement and penalties. 25 (a) Injunction.--The Commonwealth may enjoin a violation of 26 section 9204 (relating to requirement). 27 (b) Withhold funding.--The Commonwealth has the right to 28 withhold funding under this chapter and to exercise all rights 29 and remedies at law or in equity for any of the following: 30 (1) Failure of a professional sports organization to 20030S0010B1515 - 171 -
1 comply with the provisions of this chapter in a timely and 2 appropriate manner. 3 (2) A violation of a covenant under any agreement with 4 or for the benefit of the Commonwealth relating to the 5 construction or renovation or use of the facility. 6 (3) Any other violation of law applicable to the 7 construction or renovation or use of the facility. 8 (c) Civil penalty.--A person that intentionally, recklessly 9 or negligently violates this chapter shall be subject to a civil 10 penalty of up to $100,000 per violation. 11 (d) Criminal penalty.--A person that intentionally or 12 knowingly provides false or fraudulent information or makes a 13 material misrepresentation under this chapter commits a 14 misdemeanor of the third degree. 15 § 9209. Expiration. 16 This chapter shall cease to apply to each participating 17 professional sports organization 30 years following the 18 occupancy or lease of the facility. 19 § 9210. Scope. 20 This issuance of grants under this chapter is subject to 21 Chapter 91. 22 Section 2.1. The addition of 12 Pa.C.S. § 3503 is intended 23 to be in pari materia with section 103 of the act of October 6, 24 1998 (P.L.705, No.92), known as the Keystone Opportunity Zone 25 and Keystone Opportunity Expansion Zone Act. 26 Section 2.2. The Pennsylvania Economic Development Financing 27 Authority is authorized to incur debt on behalf of the 28 Commonwealth in an amount equal to the remaining debt authorized 29 by section 16 of act of March 1, 1988 (P.L.82, No.16), known as 30 the Pennsylvania Infrastructure Investment Authority Act, for 20030S0010B1515 - 172 -
1 loans under 12 Pa.C.S. § 4321. 2 Section 3. Repeals are as follows: 3 (1) Sections 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7 and 6.8 4 of the act of August 23, 1967 (P.L.251, No.102), known as the 5 Economic Development Financing Law, are repealed. 6 (2) The following provisions of the act of June 29, 1996 7 (P.L.434, No.67), known as the Job Enhancement Act, are 8 repealed: 9 (i) Chapter 3. 10 (ii) Chapter 7. 11 (iii) Chapter 13. 12 (iv) Chapter 17. 13 (2.1) Chapter 3 of the act of October 6, 1998 (P.L.705, 14 No.92), known as the Keystone Opportunity Zone and Keystone 15 Opportunity Expansion Zone Act, is repealed. 16 (2.2) The following apply: 17 (i) Except as set forth in subparagraph (ii), the 18 act of February 9, 1999 (P.L.1, No.1), known as the 19 Capital Facilities Debt Enabling Act, is repealed. 20 (ii) Section 301 of the Capital Facilities Debt 21 Enabling Act is saved from repeal. 22 (3) Section 305(e) of the act of June 26, 2001 (P.L.755, 23 No.77), known as the Tobacco Settlement Act, is repealed. 24 (4) All acts and parts of acts are repealed insofar as 25 they are inconsistent with this act. 26 Section 4. Chapters 3, 7, 13, and 17 of the act of June 29, 27 1996 (P.L.434, No.67), known as the Job Enhancement Act, are 28 continued by this codification as follows: 29 (1) The addition of 12 Pa.C.S. Ch. 3 is a continuation 30 of Chapter 3 of the Job Enhancement Act. The following apply: 20030S0010B1515 - 173 -
1 (i) Except as otherwise provided in 12 Pa.C.S. Ch. 2 3, all activities initiated under Chapter 3 of the Job 3 Enhancement Act shall continue and remain in full force 4 and effect and may be completed under 12 Pa.C.S. Ch. 3. 5 Orders, regulations, rules and decisions which were made 6 under Chapter 3 of the Job Enhancement Act and which are 7 in effect on the effective date of section 3(2)(i) of 8 this act shall remain in full force and effect until 9 revoked, vacated or modified under 12 Pa.C.S. Ch. 3. 10 Contracts, obligations and collective bargaining 11 agreements entered into under Chapter 3 of the Job 12 Enhancement Act are not affected nor impaired by the 13 repeal of Chapter 3 of the Job Enhancement Act. 14 (ii) Any difference in language between 12 Pa.C.S. 15 Ch. 3 and Chapter 3 of the Job Enhancement Act is 16 intended only to conform to the style of the Pennsylvania 17 Consolidated Statutes and is not intended to change or 18 affect the legislative intent, judicial construction or 19 administration and implementation of Chapter 3 of the Job 20 Enhancement Act. 21 (2) The addition of 12 Pa.C.S. Ch. 5 is a continuation 22 of Chapter 17 of the Job Enhancement Act. The following 23 apply: 24 (i) All activities initiated under the Chapter 17 of 25 the Job Enhancement Act shall continue and remain in full 26 force and effect and may be completed under 12 Pa.C.S. 27 Ch. 5. Orders, regulations, rules and decisions which 28 were made under Chapter 17 of the Job Enhancement Act and 29 which are in effect on the effective date of section 30 3(2)(iv) of this act shall remain in full force and 20030S0010B1515 - 174 -
1 effect until revoked, vacated or modified under 12 2 Pa.C.S. Ch. 5. Contracts, obligations and collective 3 bargaining agreements entered into under Chapter 17 of 4 the Job Enhancement Act are not affected nor impaired by 5 the repeal of Chapter 17 of the Job Enhancement Act. 6 (ii) Except as set forth in subparagraph (iii), any 7 difference in language between 12 Pa.C.S. Ch. 5 and 8 Chapter 17 of the Job Enhancement Act is intended only to 9 conform to the style of the Pennsylvania Consolidated 10 Statutes and is not intended to change or affect the 11 legislative intent, judicial construction or 12 administration and implementation of Chapter 17 of the 13 Job Enhancement Act. 14 (iii) Subparagraph (ii) does not apply to the 15 following: 16 (A) The addition of 12 Pa.C.S. § 502. 17 (B) The addition of 12 Pa.C.S. § 503. 18 (iv) The members of Small Business Council in office 19 on the effective date of section 3(2)(iv) of this act 20 shall continue in office under the addition of 12 Pa.C.S. 21 Ch. 5. 22 (3) The addition of 12 Pa.C.S. Ch. 21 is a continuation 23 of Chapter 7 of the Job Enhancement Act. The following apply: 24 (i) Except as otherwise provided in 12 Pa.C.S. Ch. 25 21, all activities initiated under the Chapter 7 of the 26 Job Enhancement Act shall continue and remain in full 27 force and effect and may be completed under 12 Pa.C.S. 28 Ch. 21. Orders, regulations, rules and decisions which 29 were made under Chapter 7 of the Job Enhancement Act and 30 which are in effect on the effective date of section 20030S0010B1515 - 175 -
1 3(2)(ii) of this act shall remain in full force and 2 effect until revoked, vacated or modified under 12 3 Pa.C.S. Ch. 21. Contracts, obligations and collective 4 bargaining agreements entered into under Chapter 7 of the 5 Job Enhancement Act are not affected nor impaired by the 6 repeal of Chapter 7 of the Job Enhancement Act. 7 (ii) Except as set forth in subparagraph (iii), any 8 difference in language between 12 Pa.C.S. Ch. 21 and 9 Chapter 7 of the Job Enhancement Act is intended only to 10 conform to the style of the Pennsylvania Consolidated 11 Statutes and is not intended to change or affect the 12 legislative intent, judicial construction or 13 administration and implementation of Chapter 7 of the Job 14 Enhancement Act. 15 (iii) Subparagraph (ii) does not apply to any of the 16 following provisions: 17 (A) The addition of 12 Pa.C.S. § 2106(2). 18 (B) The addition of 12 Pa.C.S. § 2109(b). 19 (4) The addition of 12 Pa.C.S. Ch. 23 is a continuation 20 of Chapter 13 of the Job Enhancement Act. The following 21 apply: 22 (i) Except as otherwise provided in 12 Pa.C.S. Ch. 23 23, all activities initiated under the Chapter 13 of the 24 Job Enhancement Act shall continue and remain in full 25 force and effect and may be completed under 12 Pa.C.S. 26 Ch. 23. Orders, regulations, rules and decisions which 27 were made under Chapter 13 of the Job Enhancement Act and 28 which are in effect on the effective date of section 29 3(2)(iii) of this act shall remain in full force and 30 effect until revoked, vacated or modified under 12 20030S0010B1515 - 176 -
1 Pa.C.S. Ch. 23. Contracts, obligations and collective 2 bargaining agreements entered into under Chapter 13 of 3 the Job Enhancement Act are not affected nor impaired by 4 the repeal of Chapter 13 of the Job Enhancement Act. 5 (ii) Except as set forth in subparagraph (iii), any 6 difference in language between 12 Pa.C.S. Ch. 23 and 7 Chapter 13 of the Job Enhancement Act is intended only to 8 conform to the style of the Pennsylvania Consolidated 9 Statutes and is not intended to change or affect the 10 legislative intent, judicial construction or 11 administration and implementation of Chapter 13 of the 12 Job Enhancement Act. 13 (iii) Subparagraph (ii) does not apply to any of the 14 following provisions: 15 (A) The addition of 12 Pa.C.S. § 2305(a). 16 (B) The addition of 12 Pa.C.S. § 2306(a), (b) 17 and (e). 18 (C) The addition of 12 Pa.C.S. § 2308(a) and 19 (b). 20 (D) The addition of 12 Pa.C.S. § 2309(b). 21 (E) The addition of 12 Pa.C.S. § 2310(b). 22 (iv) In continuation of section 1302 of the Job 23 Enhancement Act, all funds, accounts, assets, 24 encumbrances and liabilities located in or associated 25 with the Air Quality Improvement Fund, the Storage Tank 26 Loan Fund and the Recycling Incentive Development Account 27 shall be transferred to the Pollution Prevention 28 Assistance Account and shall be administered in 29 accordance with 12 Pa.C.S. §§ 2304 and 2309. The 30 Department of Community and Economic Development shall 20030S0010B1515 - 177 -
1 report annually to the Department of Environmental 2 Protection on the status of the Pollution Prevention 3 Assistance Account and the loans made under 12 Pa.C.S. § 4 2309. 5 (v) In continuation of section 1309(a) of the Job 6 Enhancement Act, as of July 1, 1997, all funds, accounts, 7 assets, encumbrances and liabilities located in or 8 associated with the Capital Loan Fund shall be 9 transferred to the Small Business First Fund and shall 10 thereafter be administered in accordance with 12 Pa.C.S. 11 Ch. 23. 12 (vi) In continuation of section 1309(b) of the Job 13 Enhancement Act, annually on July 1, the State Treasurer 14 may transfer, upon approval by the Governor, up to 15 $2,000,000 from the Hazardous Sites Cleanup Fund into the 16 Pollution Prevention Assistance Account. This transfer 17 shall be in addition to other appropriations, Federal 18 funding and private contributions received by the 19 account. 20 Section 4.1. The addition of 12 Pa.C.S. Ch. 35 is a 21 continuation of Chapter 3 of the act of October 6, 1998 22 (P.L.705, No.92), known as the Keystone Opportunity Zone and 23 Keystone Opportunity Expansion Zone Act. The following apply: 24 (1) Except as otherwise provided in 12 Pa.C.S. Ch. 35, 25 all activities initiated under Chapter 3 of the Keystone 26 Opportunity Zone and Keystone Opportunity Expansion Zone Act 27 shall continue and remain in full force and effect and may be 28 completed under 12 Pa.C.S. Ch. 35. Orders, regulations, rules 29 and decisions which were made under Chapter 3 of the Keystone 30 Opportunity Zone and Keystone Opportunity Expansion Zone Act 20030S0010B1515 - 178 -
1 and which are in effect on the effective date of section 2 3(2.1) of this act shall remain in full force and effect 3 until revoked, vacated or modified under 12 Pa.C.S. Ch. 35. 4 Contracts, obligations and collective bargaining agreements 5 entered into under Chapter 3 of the Keystone Opportunity Zone 6 and Keystone Opportunity Expansion Zone Act are not affected 7 nor impaired by the repeal of Chapter 3 of the Keystone 8 Opportunity Zone and Keystone Opportunity Expansion Zone Act. 9 (2) Except as set forth in paragraph (3), any difference 10 in language between 12 Pa.C.S. Ch. 35 and Chapter 3 of the 11 Keystone Opportunity Zone and Keystone Opportunity Expansion 12 Zone Act is intended only to conform to the style of the 13 Pennsylvania Consolidated Statutes and is not intended to 14 change or affect the legislative intent, judicial 15 construction or administration and implementation of Chapter 16 3 of the Keystone Opportunity Zone and Keystone Opportunity 17 Expansion Zone Act. 18 (3) Paragraph (2) does not apply to the following: 19 (i) The addition of 12 Pa.C.S. § 3512(e). 20 (ii) The addition of 12 Pa.C.S. § 3513(c). 21 (iii) The addition of 12 Pa.C.S. § 3514(c). 22 (iv) The addition of 12 Pa.C.S. § 3515(a) and (c). 23 Section 5. Sections 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7 and 24 6.8 of the act of August 23, 1967 (P.L.251, No.102), known as 25 the Economic Development Financing Law, are continued by the 26 addition of 12 Pa.C.S. Ch. 43. The following apply: 27 (1) Except as otherwise provided in 12 Pa.C.S. Ch. 43, 28 all activities initiated under sections 6.1 through 6.8 of 29 the Economic Development Financing Law shall continue and 30 remain in full force and effect and may be completed under 12 20030S0010B1515 - 179 -
1 Pa.C.S. Ch. 43. Orders, regulations, rules and decisions 2 which were made under sections 6.1 through 6.8 of the 3 Economic Development Financing Law and which are in effect on 4 the effective date of section 3(1) of this act shall remain 5 in full force and effect until revoked, vacated or modified 6 under 12 Pa.C.S. Ch. 43. Contracts, obligations, collective 7 bargaining agreements and outstanding bonds entered into 8 under sections 6.1 through 6.8 of the Economic Development 9 Financing Law are not affected nor impaired by the repeal of 10 sections 6.1 through 6.8 of the Economic Development 11 Financing Law. The provisions of 12 Pa.C.S. Ch. 43 shall not 12 in any way impair or in any manner affect the rights and 13 remedies of obligees of the Pennsylvania Economic Development 14 Authority. Notwithstanding any other provision of 12 Pa.C.S. 15 Ch. 43, all such rights and remedies shall be preserved by 12 16 Pa.C.S. Ch. 43 and shall be and shall remain valid, binding 17 and enforceable in all respects. As used in this paragraph, 18 "obligees of the Pennsylvania Economic Development Authority" 19 shall mean the holders of any notes, bonds, refunding notes 20 and bonds, interim certificates, debentures and other 21 evidences of indebtedness, obligees of contracts or other 22 obligations of the Pennsylvania Economic Development 23 Authority established under the provisions of sections 6.1 24 through 6.8 of the Economic Development Finance Law. 25 (2) Except as set forth in paragraph (3), any difference 26 in language between 12 Pa.C.S. Ch. 43 and sections 6.1 27 through 6.8 of the Economic Development Financing Law is 28 intended only to conform to the style of the Pennsylvania 29 Consolidated Statutes and is not intended to change or affect 30 the legislative intent, judicial construction or 20030S0010B1515 - 180 -
1 administration and implementation of sections 6.1 through 6.8 2 of the Economic Development Financing Law. 3 (3) Paragraph (2) does not apply to any of the following 4 provisions: 5 (i) The addition of 12 Pa.C.S. § 4303(c). 6 (ii) The addition of 12 Pa.C.S. § 4305(b) and (c). 7 (iii) The addition of 12 Pa.C.S. § 4320. 8 (iv) The addition of 12 Pa.C.S. § 4321. 9 (v) The addition of 12 Pa.C.S. § 4322. 10 (vi) The addition of 12 Pa.C.S. § 4323. 11 (vii) The addition of 12 Pa.C.S. § 4324. 12 (viii) The addition of 12 Pa.C.S. § 4325. 13 (4) The members of board of the Pennsylvania Economic 14 Development Financing Authority in office on the effective 15 date of section 3(1) of this act shall continue in office 16 under the addition of 12 Pa.C.S. Ch. 43. 17 Section 5.1. The addition of 72 Pa.C.S. Ch. 91 is a 18 continuation of Chapter 3 of the act of February 9, 1999 (P.L.1, 19 No.1), known as the Capital Facilities Debt Enabling Act. The 20 following apply: 21 (1) Except as otherwise provided in 72 Pa.C.S. Ch. 91, 22 all activities initiated under Chapter 3 of the Capital 23 Facilities Debt Enabling Act shall continue and remain in 24 full force and effect and may be completed under 72 Pa.C.S. 25 Ch. 91. 26 (2) Orders, regulations, rules and decisions which were 27 made under Chapter 3 of the Capital Facilities Debt Enabling 28 Act and which are in effect on the effective date of section 29 3(2.2) of this act shall remain in full force and effect 30 until revoked, vacated or modified under 72 Pa.C.S. Ch. 91. 20030S0010B1515 - 181 -
1 (3) Contracts, obligations and collective bargaining 2 agreements entered into under Chapter 3 of the Capital 3 Facilities Debt Enabling Act are not affected nor impaired by 4 the repeal of the Capital Facilities Debt Enabling Act. 5 (4) Except as set forth in paragraph (5), any difference 6 in language between 72 Pa.C.S. Ch. 91 and Chapter 3 of the 7 Capital Facilities Debt Enabling Act is intended only to 8 conform to the style of the Pennsylvania Consolidated 9 Statutes and is not intended to change or affect the 10 legislative intent, judicial construction or administration 11 and implementation of Chapter 3 of the Capital Facilities 12 Debt Enabling Act. 13 (5) Paragraph (4) does not apply to any of the following 14 provisions: 15 (i) The addition of 72 Pa.C.S. § 9102. 16 (ii) The addition of 72 Pa.C.S. § 9103(b)(1)(ii). 17 (iii) The addition of 72 Pa.C.S. § 9107(c)(5). 18 (iv) The addition of 72 Pa.C.S. § 9113. 19 (v) The addition of 72 Pa.C.S. § 9117. 20 (vi) The addition of 72 Pa.C.S. § 9118(a), (g) and 21 (i). 22 (vii) The addition of 72 Pa.C.S. § 9119. 23 (viii) The addition of 72 Pa.C.S. § 9120. 24 Section 5.2. The addition of 72 Pa.C.S. Ch. 92 is a 25 continuation of Chapter 5 of the act of February 9, 1999 (P.L.1, 26 No.1), known as the Capital Facilities Debt Enabling Act. The 27 following apply: 28 (1) Except as otherwise provided in 72 Pa.C.S. Ch. 92, 29 all activities initiated under Chapter 5 of the Capital 30 Facilities Debt Enabling Act shall continue and remain in 20030S0010B1515 - 182 -
1 full force and effect and may be completed under 72 Pa.C.S. 2 Ch. 92. 3 (2) Orders, regulations, rules and decisions which were 4 made under Chapter 5 of the Capital Facilities Debt Enabling 5 Act and which are in effect on the effective date of section 6 3(2.2) of this act shall remain in full force and effect 7 until revoked, vacated or modified under 72 Pa.C.S. Ch. 92. 8 (3) Contracts, obligations and collective bargaining 9 agreements entered into under Chapter 5 of the Capital 10 Facilities Debt Enabling Act are not affected nor impaired by 11 the repeal of Chapter 5 of the Capital Facilities Debt 12 Enabling Act. 13 (4) Any difference in language between 72 Pa.C.S. Ch. 92 14 and Chapter 5 of the Capital Facilities Debt Enabling Act is 15 intended only to conform to the style of the Pennsylvania 16 Consolidated Statutes and is not intended to change or affect 17 the legislative intent, judicial construction or 18 administration and implementation of Chapter 5 of the Capital 19 Facilities Debt Enabling Act. 20 Section 6. The following apply to the Tobacco Settlement 21 Investment Board: 22 (1) The board is authorized to invest, in addition to 23 any amount invested on the effective date of this section in 24 venture capital, $30,000,000 in primary growth stage 25 investments: 26 (i) in which at least 70% of the investments will be 27 made in companies located primarily in this Commonwealth 28 or in companies willing to relocate significant business 29 operations to this Commonwealth; and 30 (ii) which are equitably distributed geographically 20030S0010B1515 - 183 -
1 throughout this Commonwealth. 2 (2) Primary growth stage investments must comply with 3 the requirements of section 305(a) and (g) of the act of June 4 26, 2001 (P.L.755, No.77), known as the Tobacco Settlement 5 Act. 6 Section 7. The following shall apply: 7 (1) Pursuant to the provisions of section 7(a)(3) of 8 Article VIII of the Constitution of Pennsylvania, the 9 question of incurring indebtedness of $250,000,000 for grants 10 and loans for the acquisition, repair, construction, 11 reconstruction, rehabilitation, extension, expansion and 12 improvement of water and wastewater infrastructure, including 13 water supply and sewage treatment systems, subject to 14 implementation through 12 Pa.C.S. § 4321, shall be submitted 15 to the electors at the next primary election following the 16 effective date of this section. 17 (2) The Secretary of the Commonwealth shall forthwith 18 certify the question to the county boards of elections. 19 (3) The question shall be in substantially the following 20 form: 21 Do you favor the incurring of indebtedness by the 22 Commonwealth in the amount of $250,000,000 for use as 23 grants and loans for construction, expansion and 24 improvement of water and wastewater infrastructure, 25 including water supply and sewage treatment systems? 26 Section 8. Appropriations are as follows: 27 (1) The sum of $10,000,000, or as much thereof as may be 28 necessary, is hereby appropriated to the Economic Enhancement 29 Fund for the fiscal year July 1, 2003, to June 30, 2004, to 30 carry out the provisions of 12 Pa.C.S. § 4324. 20030S0010B1515 - 184 -
1 (2) The sum of $2,000,000, or as much thereof as may be 2 necessary, is hereby appropriated to the Department of 3 Community and Economic Development for the fiscal year July 4 1, 2003, to June 30, 2004, for the following: 5 (i) For the Base Retention and Conversion 6 Pennsylvania Action Committee to develop a Statewide 7 strategy. 8 (ii) For matching grants for economic impact 9 studies, environmental impact studies, encroachment 10 studies, community and regional interaction with military 11 bases, infrastructure needs at military bases and job 12 training needs at or near military bases. Grants under 13 this subparagraph: 14 (A) shall be awarded by the Base Retention and 15 Conversion Pennsylvania Action Committee; 16 (B) require a 25% local match; and 17 (C) are limited to less than $75,000 per 18 military base. 19 Section 8.1. The addition of 12 Pa.C.S. § 3513(c) shall 20 apply retroactively to May 31, 2003. 21 Section 9. This act shall take effect July 1, 2003, or 22 immediately, whichever is later. 23 SECTION 1. TITLE 12 OF THE PENNSYLVANIA CONSOLIDATED <-- 24 STATUTES IS AMENDED BY ADDING A CHAPTER TO READ: 25 CHAPTER 33 26 INFRASTRUCTURE AND FACILITIES IMPROVEMENT PROGRAM 27 SEC. 28 3301. SCOPE OF CHAPTER. 29 3302. DEFINITIONS. 30 3303. ESTABLISHMENT. 20030S0010B1515 - 185 -
1 3304. APPLICATION. 2 3305. REVIEW. 3 3306. APPROVAL. 4 § 3301. SCOPE OF CHAPTER. 5 THIS CHAPTER RELATES TO THE INFRASTRUCTURE AND FACILITIES 6 IMPROVEMENT PROGRAM. 7 § 3302. DEFINITIONS. 8 THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS CHAPTER 9 SHALL HAVE THE MEANING GIVEN TO THEM IN THIS SECTION UNLESS THE 10 CONTEXT CLEARLY INDICATES OTHERWISE: 11 "APPLICANT." AN ISSUING AUTHORITY WHICH APPLIES FOR 12 FINANCIAL ASSISTANCE UNDER SECTION 3304 (RELATING TO 13 APPLICATION). 14 "CONVENTION CENTER." INTERESTS IN LAND, IMPROVEMENT, 15 STRUCTURE, BUILDINGS OR PART OF A BUILDING, WHETHER OWNED BY, 16 LEASED BY OR TO OR OTHERWISE ACQUIRED BY AN AUTHORITY WHICH ARE 17 APPROPRIATE FOR LARGE PUBLIC ASSEMBLIES, THE HOLDING OF 18 CONVENTIONS, CONFERENCES, TRADE EXHIBITIONS AND OTHER BUSINESS, 19 SOCIAL, CULTURAL, SCIENTIFIC AND PUBLIC INTEREST EVENTS. 20 "CONVENTION CENTER AUTHORITY." AN ENTITY CREATED UNDER ANY 21 OF THE FOLLOWING: 22 (1) ARTICLE XXV-A OF THE ACT OF JULY 28, 1953 (P.L.723, 23 NO.230), KNOWN AS THE SECOND CLASS COUNTY CODE. 24 (2) ARTICLE XXIII(N) AND (O) OF THE ACT OF AUGUST 9, 25 1955 (P.L.323, NO.130), KNOWN AS THE COUNTY CODE. 26 (3) 53 PA.C.S. CH. 56 (RELATING TO MUNICIPAL 27 AUTHORITIES) OR THE FORMER ACT OF MAY 2, 1945 (P.L. 382, NO. 28 164), KNOWN AS THE MUNICIPALITY AUTHORITIES ACT OF 1945 FOR 29 PURPOSES RELATED TO CONVENTION CENTERS. 30 (4) 64 PA.C.S. CH. 60 (RELATING TO PENNSYLVANIA 20030S0010B1515 - 186 -
1 CONVENTION CENTER AUTHORITY). 2 "COST OF A PROJECT." ANY OF THE FOLLOWING EXPENSES INCURRED 3 FOR A PROJECT: 4 (1) EXPENSES FOR THE ACQUISITION, CONSTRUCTION, 5 RECONSTRUCTION, EXPANSION, EXTENSION, DEMOLITION, 6 IMPROVEMENT, REHABILITATION OR REMODELING OF INTERESTS IN 7 LAND, BUILDINGS, STRUCTURES, IMPROVEMENTS OR INFRASTRUCTURE, 8 WHICH ARE PART OF THE PROJECT. 9 (2) EXPENSES FOR THE REMEDIATION OF EXISTING 10 ENVIRONMENTAL HAZARDS ON LAND WHERE THE PROJECT IS OR WILL BE 11 LOCATED. 12 (3) FINANCING CHARGES AND OTHER COSTS AND EXPENSES 13 INCURRED IN FINANCING AND ISSUING BONDS FOR THE PROJECT. 14 (4) COSTS AND EXPENSES OF ADMINISTRATIVE EXPENSES AND 15 PROFESSIONAL SERVICES, INCLUDING THE COSTS OF ENGINEERING, 16 FINANCIAL SERVICES, ACCOUNTING AND LEGAL SERVICES, RENDERED 17 IN COMPLETING THE PROJECT. 18 (5) COSTS AND EXPENSES ASSOCIATED WITH THE PREPARATION 19 OF PLANS, SPECIFICATIONS, STUDIES, AND SURVEYS, NECESSARY OR 20 INCIDENTAL TO DETERMINING THE FEASIBILITY OR PRACTICABILITY 21 OF CONSTRUCTING THE PROJECT. 22 "DEPARTMENT." THE DEPARTMENT OF COMMUNITY AND ECONOMIC 23 DEVELOPMENT OF THE COMMONWEALTH. 24 "HOSPITAL." A FACILITY OPERATED BY AN ENTITY LICENSED AS A 25 HOSPITAL UNDER THE ACT OF JUNE 13, 1967 (P.L.31, NO.21), KNOWN 26 AS THE PUBLIC WELFARE CODE OR THE ACT OF JULY 19, 1979 (P.L.130, 27 NO.48), KNOWN AS THE HEALTH CARE FACILITIES ACT, WHICH IS USED 28 TO PROVIDE INPATIENT CARE AND SERVICES. 29 "HOTEL ESTABLISHMENT." A HOTEL WHICH IS ASSOCIATED WITH A 30 CONVENTION CENTER. 20030S0010B1515 - 187 -
1 "INDUSTRIAL ENTERPRISE." AN ENTERPRISE OTHER THAN A 2 MERCANTILE, COMMERCIAL OR RETAIL ENTERPRISE, WHICH, BY VIRTUE OF 3 ITS SIZE, REQUIRES SUBSTANTIAL CAPITAL AND WILL CREATE 4 SIGNIFICANT EMPLOYMENT OPPORTUNITIES. 5 "INFRASTRUCTURE." ANY OF THE FOLLOWING: 6 (1) DRAINAGE AND STORM WATER SYSTEMS. 7 (2) ENERGY FACILITIES WHICH DISTRIBUTE ELECTRIC POWER. 8 (3) WASTEWATER SYSTEMS. 9 (4) TRANSPORTATION FACILITIES. THE TERM INCLUDES ROADS, 10 PARKING FACILITIES, SIDEWALKS, BRIDGES, RAILS, PORTS, 11 WATERWAYS AND AIRPORTS. 12 (5) PIPELINES FOR TRANSPORTING NATURAL GAS. 13 (6) FACILITIES FOR THE TRANSMISSION OF INFORMATION. THE 14 TERM INCLUDES TELECOMMUNICATION AND CABLE. 15 (7) WATER SUPPLY FACILITIES. 16 (8) INTERESTS IN LAND TO CONSTRUCT A FACILITY, PIPELINE 17 OR SYSTEM LISTED IN PARAGRAPHS (1) THROUGH (7). 18 (9) ENGINEERING, DESIGN AND INSPECTION COSTS ASSOCIATED 19 WITH THE CONSTRUCTION OF A FACILITY, PIPELINE OR SYSTEM 20 LISTED IN PARAGRAPHS (1) THROUGH (7). 21 "ISSUING AUTHORITY." ANY OF THE FOLLOWING: 22 (1) AN AUTHORITY CREATED UNDER THE ACT OF MAY 24, 1945 23 (P.L. 991, NO.385), KNOWN AS THE URBAN REDEVELOPMENT LAW. 24 (2) AN AUTHORITY CREATED UNDER ARTICLE XXV-A OF THE ACT 25 OF JULY 28, 1953 (P.L.723, NO.230), KNOWN AS THE SECOND CLASS 26 COUNTY CODE. 27 (3) ARTICLE XXIII(N) AND (O) OF THE ACT OF AUGUST 9, 28 1955 (P.L.323, NO.130), KNOWN AS THE COUNTY CODE. 29 (4) THE PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING 30 AUTHORITY OR AN AUTHORITY ESTABLISHED UNDER SECTION 4 OF THE 20030S0010B1515 - 188 -
1 ACT OF AUGUST 23, 1967 (P.L.251, NO.102), KNOWN AS THE 2 ECONOMIC DEVELOPMENT FINANCING LAW. 3 (5) AN ISSUING AUTHORITY AS DEFINED IN SECTION 3 OF THE 4 ACT OF JULY 11, 1990 (P.L.465, NO.113), KNOWN AS THE TAX 5 INCREMENT FINANCING ACT. 6 (6) AN AUTHORITY CREATED UNDER 53 PA.C.S. CH. 56 7 (RELATING TO MUNICIPAL AUTHORITIES) OR THE FORMER ACT OF MAY 8 2, 1945 (P.L. 382, NO. 164), KNOWN AS THE MUNICIPALITY 9 AUTHORITIES ACT OF 1945 FOR PURPOSES RELATED TO CONVENTION 10 CENTERS. 11 (7) AN AUTHORITY CREATED AND CONTINUED UNDER 64 PA.C.S. 12 CH. 60 (RELATING TO PENNSYLVANIA CONVENTION CENTER 13 AUTHORITY). 14 "MANUFACTURER." AN ENTITY WHICH IS ENGAGED IN THE GIVING OF 15 NEW SHAPES, NEW QUALITIES OR NEW COMBINATIONS TO MATTER BY THE 16 APPLICATION OF SKILL AND LABOR. 17 "PROJECT." AS FOLLOWS: 18 (1) IF THE PROJECT USER IS AN INDUSTRIAL ENTERPRISE OR 19 RETAIL ENTERPRISE: 20 (I) INFRASTRUCTURE. 21 (II) REMEDIATION OF ENVIRONMENTAL HAZARDS WHICH WERE 22 NOT CAUSED OR CONTRIBUTED TO BY THE APPLICANT OR THE 23 PROJECT USER. 24 (2) IF THE PROJECT USER IS A MANUFACTURER, HOSPITAL, 25 CONVENTION CENTER OR HOTEL ESTABLISHMENT: 26 (I) INFRASTRUCTURE. 27 (II) REMEDIATION OF ENVIRONMENTAL HAZARDS WHICH WERE 28 NOT CAUSED OR CONTRIBUTED TO BY THE APPLICANT OR THE 29 PROJECT USER. 30 (III) INTERESTS IN LAND, BUILDINGS, STRUCTURE OR 20030S0010B1515 - 189 -
1 IMPROVEMENTS REQUIRED BY THE PROJECT USER. 2 "PROJECT USER." AN INDUSTRIAL ENTERPRISE, RETAIL ENTERPRISE, 3 MANUFACTURER, HOSPITAL, CONVENTION CENTER OR HOTEL 4 ESTABLISHMENT, WHICH OWNS, LEASES OR USES ALL OR ANY PART OF A 5 PROJECT. 6 "RETAIL ENTERPRISE." AN ENTITY ENGAGED IN RETAIL SALES WHICH 7 CREATED OR WILL CREATE AT LEAST 200 FULL-TIME JOBS AND OCCUPIES 8 OR WILL OCCUPY AT LEAST A 200,000 SQUARE FOOT FACILITY. 9 "SECRETARY." THE SECRETARY OF COMMUNITY AND ECONOMIC 10 DEVELOPMENT OF THE COMMONWEALTH. 11 "YEAR." THE FISCAL YEAR OF THE COMMONWEALTH. 12 § 3303. ESTABLISHMENT. 13 THERE IS ESTABLISHED WITHIN THE DEPARTMENT A PROGRAM TO BE 14 KNOWN AS THE INFRASTRUCTURE AND FACILITIES IMPROVEMENT PROGRAM. 15 THE PROGRAM SHALL ENHANCE THE ECONOMIC DEVELOPMENT OF THE 16 COMMONWEALTH BY PROVIDING FINANCIAL ASSISTANCE IN THE FORM OF 17 MULTIYEAR GRANTS TO ISSUING AUTHORITIES TOWARD PAYMENT OF DEBT 18 SERVICE ON PROJECTS. 19 § 3304. APPLICATION. 20 AN ISSUING AUTHORITY MAY SUBMIT AN APPLICATION TO THE 21 DEPARTMENT REQUESTING FINANCIAL ASSISTANCE FOR A PROJECT. THE 22 APPLICATION MUST BE ON A FORM REQUIRED BY THE DEPARTMENT AND 23 MUST INCLUDE ALL OF THE FOLLOWING: 24 (1) THE NAME AND ADDRESS OF THE APPLICANT. 25 (2) THE NAME, ADDRESS AND STATE TAX IDENTIFICATION 26 NUMBERS OF THE PROJECT USER. 27 (3) A DESCRIPTION OF THE PROJECT. THE DESCRIPTION SHALL 28 INCLUDE ALL OF THE FOLLOWING: 29 (I) A DETAILED NARRATIVE DESCRIBING THE PROJECT AND 30 THE PROJECT USER. 20030S0010B1515 - 190 -
1 (II) A DETAILED STATEMENT OF THE COST OF THE 2 PROJECT. THE STATEMENT MUST INCLUDE THE AMOUNT AND TYPE 3 OF DEBT TO BE ISSUED BY THE APPLICANT FOR THE PROJECT, 4 THE IDENTITY OF THE PARTY RESPONSIBLE FOR REPAYMENT OF 5 THE DEBT AND THE COLLATERAL OR SECURITY TO BE PROVIDED. 6 (III) A STATEMENT OF THE NUMBER OF NET NEW FULL-TIME 7 JOBS TO BE CREATED BY THE PROJECT AND THE NUMBER OF 8 EXISTING FULL-TIME JOBS TO BE PRESERVED BY THE PROJECT. 9 (4) A STATEMENT OF THE AMOUNT OF GRANT FUNDS BEING 10 REQUESTED PER YEAR. 11 (5) A STATEMENT OF THE NUMBER OF YEARS A GRANT IS BEING 12 REQUESTED. IF THE APPLICANT IS REQUESTING A GRANT FOR A 13 PROJECT OF A PROJECT USER THAT IS AN INDUSTRIAL ENTERPRISE, 14 RETAIL ENTERPRISE OR A MANUFACTURER, THE REQUEST MAY NOT 15 EXCEED TEN YEARS. IF THE APPLICANT IS REQUESTING A GRANT FOR 16 A PROJECT OF A PROJECT USER THAT IS A HOSPITAL, CONVENTION 17 CENTER OR HOTEL ESTABLISHMENT, THE REQUEST MAY NOT EXCEED 20 18 YEARS. 19 (6) FINANCIAL INFORMATION FROM THE PROJECT USER PREPARED 20 OR REPORTED ON BY AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT 21 PROJECTING FOR THE NEXT THREE YEARS ALL OF THE FOLLOWING: 22 (I) THE SALES OR EXPECTED SALES TAX COLLECTED OR TO 23 BE COLLECTED BY THE PROJECT USER FROM ACTIVITIES AS A 24 RESULT OF THE PROJECT. 25 (II) THE EXPECTED HOTEL OCCUPANCY TAX TO BE 26 COLLECTED BY THE PROJECT USER FROM ACTIVITIES AS A RESULT 27 OF THE PROJECT. 28 (III) THE EXPECTED NET INCREASE IN PERSONAL INCOME 29 TAX WITHHELD BY THE PROJECT USER AS AN EMPLOYER PURSUANT 30 TO ARTICLE III OF THE ACT OF MARCH 4, 1971 (P.L.6, NO.2), 20030S0010B1515 - 191 -
1 KNOWN AS THE TAX REFORM CODE OF 1971, FROM ACTIVITIES AS 2 A RESULT OF THE PROJECT. 3 (7) EVIDENCE OF A FIRM COMMITMENT FROM THE PROJECT USER 4 TO USE THE PROJECT UPON COMPLETION. 5 (8) IF THE PROJECT IS SOLELY FOR INFRASTRUCTURE, A 6 STATEMENT THAT A PORTION OF THE PROJECT IS BEING FUNDED UNDER 7 THE ACT OF JULY 11, 1990 (P.L. 465, NO. 113), KNOWN AS THE 8 TAX INCREMENT FINANCING ACT. 9 (9) ANY OTHER INFORMATION REQUIRED BY THE DEPARTMENT. 10 SECTION 3305. REVIEW. 11 (A) PROJECT REVIEW.--UPON RECEIVING A COMPLETED APPLICATION, 12 THE DEPARTMENT SHALL REVIEW THE APPLICATION TO DETERMINE ALL OF 13 THE FOLLOWING: 14 (1) THAT THE COST OF THE PROJECT IS REASONABLE. 15 (2) THE NUMBER OF NET NEW FULL-TIME JOBS CREATED OR TO 16 BE CREATED BY THE PROJECT AND THE NUMBER OF EXISTING FULL- 17 TIME JOBS TO BE PRESERVED BY THE PROJECT. 18 (3) THAT A FIRM COMMITMENT FROM THE PROJECT USER TO USE 19 THE PROJECT UPON COMPLETION EXISTS. 20 (4) THAT THE FINANCING FOR THE PROJECT IDENTIFIES A 21 PARTY OTHER THAN THE COMMONWEALTH THAT WILL BE RESPONSIBLE 22 FOR REPAYMENT OF THE DEBT. 23 (5) THAT THE APPLICANT SUBMITTED SATISFACTORY FINANCIAL 24 INFORMATION FROM THE PROJECT USER PREPARED OR REPORTED ON BY 25 AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT. 26 (6) THAT THE FINANCING FOR THE PROJECT DOES NOT PLEDGE 27 THE FULL FAITH AND CREDIT OF THE COMMONWEALTH. 28 (7) IF THE PROJECT IS SOLELY FOR INFRASTRUCTURE, THAT A 29 PORTION OF THE PROJECT IS BEING FUNDED UNDER THE TAX 30 INCREMENT FINANCING ACT. 20030S0010B1515 - 192 -
1 (8) IF THE PROJECT WAS COMPLETED PRIOR TO THE EFFECTIVE 2 DATE OF THIS SECTION, THAT THE PROJECT USER IS A RETAIL 3 ENTERPRISE. 4 (9) THAT THE APPLICANT AND THE PROJECT USER COMPLIED 5 WITH ALL OTHER CRITERIA ESTABLISHED BY THE DEPARTMENT. 6 (B) FINANCIAL REVIEW.-- 7 (1) UPON BEING SATISFIED THAT ALL REQUIREMENTS HAVE BEEN 8 MET, THE DEPARTMENT SHALL FORWARD THE APPLICATION TO THE 9 OFFICE OF THE BUDGET AND THE DEPARTMENT OF REVENUE. THE 10 OFFICE, IN CONJUNCTION WITH THE DEPARTMENT OF REVENUE, SHALL 11 REVIEW THE APPLICATION. NOTWITHSTANDING THE PROVISIONS OF 12 SECTION 353(F) OF THE ACT OF MARCH 4, 1971 (P.L.6, NO.2), 13 KNOWN AS THE TAX REFORM CODE OF 1971, THE DEPARTMENT OF 14 REVENUE MAY SUPPLY THE DEPARTMENT AND THE OFFICE WITH 15 INFORMATION CONCERNING TAXES OWED OR PAID BY A PROJECT USER 16 OR FOR WHICH A PROJECT USER MAY OTHERWISE BE LIABLE OR WITH 17 ANY OTHER ASPECT OF AN APPLICANT'S TAX LIABILITY. THE OFFICE, 18 IN CONJUNCTION WITH THE DEPARTMENT OF REVENUE, SHALL EVALUATE 19 ALL OF THE FOLLOWING: 20 (I) THE SALES TAX COLLECTED OR EXPECTED TO BE 21 COLLECTED BY THE PROJECT USER PURSUANT TO ARTICLE II OF 22 THE TAX REFORM CODE OF 1971 FROM ACTIVITIES AS A RESULT 23 OF THE PROJECT. 24 (II) THE HOTEL OCCUPANCY TAX TO BE COLLECTED BY THE 25 PROJECT USER PURSUANT TO ARTICLE II OF THE TAX REFORM 26 CODE OF 1971 FROM ACTIVITIES AS A RESULT OF THE PROJECT. 27 (III) THE EXPECTED NET INCREASE IN PERSONAL INCOME 28 TAX WITHHELD BY THE PROJECT USER AS AN EMPLOYER PURSUANT 29 TO ARTICLE III OF THE TAX REFORM CODE OF 1971 FROM 30 ACTIVITIES AS A RESULT OF THE PROJECT. 20030S0010B1515 - 193 -
1 (2) THE OFFICE OF THE BUDGET MAY ACCEPT, REJECT OR 2 ADJUST THE ESTIMATE OF THE AMOUNT OF TAX REMITTED OR TO BE 3 REMITTED TO THE COMMONWEALTH BY THE PROJECT USER FROM 4 ACTIVITIES RESULTING FROM THE PROJECT. 5 § 3306. APPROVAL. 6 (A) FINANCIAL APPROVAL.--UPON BEING SATISFIED THAT ALL 7 REQUIREMENTS HAVE BEEN MET, THE SECRETARY OF THE BUDGET SHALL 8 ESTABLISH A MAXIMUM ANNUAL AMOUNT FOR THE GRANT AND SHALL NOTIFY 9 THE DEPARTMENT AND THE DEPARTMENT OF REVENUE. THE ANNUAL AMOUNT 10 ESTABLISHED SHALL BE BASED UPON THE REVIEW MADE IN SECTION 11 3305(B) (RELATING TO REVIEW) AND THE ANNUAL DEBT SERVICE OF THE 12 PROJECT. 13 (B) GRANT APPROVAL.--UPON RECEIPT OF THE NOTIFICATION 14 REQUIRED IN SUBSECTION (A), THE DEPARTMENT MAY APPROVE THE 15 APPLICATION AND AWARD THE APPLICANT A GRANT IN AN ANNUAL AMOUNT 16 NOT TO EXCEED THE AMOUNT ESTABLISHED BY THE SECRETARY OF THE 17 BUDGET. PRIOR TO PROVIDING GRANT FUNDS TO THE APPLICANT, THE 18 DEPARTMENT SHALL ENTER INTO A CONTRACT WITH THE APPLICANT AND 19 THE PROJECT USER. THE CONTRACT SHALL INCLUDE PROVISIONS WHICH DO 20 ALL OF THE FOLLOWING: 21 (1) SPECIFY THE AMOUNT OF THE GRANT PER YEAR FOR THE 22 FIRST THREE YEARS. 23 (2) SPECIFY THE TOTAL NUMBER OF YEARS THAT GRANT FUNDS 24 MAY BE PROVIDED TO THE APPLICANT. IF THE APPLICANT IS AN 25 INDUSTRIAL ENTERPRISE, RETAIL ENTERPRISE OR A MANUFACTURER, 26 THE NUMBER OF YEARS MAY NOT EXCEED TEN YEARS. IF THE 27 APPLICANT IS A HOSPITAL, CONVENTION CENTER OR HOTEL 28 ESTABLISHMENT, THE NUMBER OF YEARS MAY NOT EXCEED 20 YEARS. 29 (3) IF THE GRANT WILL BE AWARDED FOR MORE THAN THREE 30 YEARS, ESTABLISH THE PROCEDURE FOR THE AWARD OF A GRANT AFTER 20030S0010B1515 - 194 -
1 YEAR THREE. TO PROVIDE A GRANT BEYOND THE INITIAL THREE-YEAR 2 PERIOD, THE APPLICANT SHALL BE REQUIRED TO DEMONSTRATE TO THE 3 SATISFACTION OF THE DEPARTMENT, THE SECRETARY OF THE BUDGET 4 AND THE DEPARTMENT OF REVENUE ALL OF THE FOLLOWING: 5 (I) THAT THE TAX REVENUES SPECIFIED IN SECTION 3305 6 DURING THE FIRST OR SECOND YEAR GENERATED AN AMOUNT EQUAL 7 TO OR EXCEEDING THE AMOUNT OF THE GRANT AWARDED FOR THAT 8 YEAR. 9 (II) THAT THE TAX REVENUES SPECIFIED IN SECTION 10 3305(A) DURING THE THIRD YEAR ARE ANTICIPATED TO BE EQUAL 11 TO OR EXCEED THE AMOUNT OF THE GRANT TO BE AWARDED DURING 12 THE THIRD YEAR. 13 (III) THAT THE TAX REVENUES SPECIFIED IN SECTION 14 3305(A) DURING THE SUCCEEDING TWO-YEAR PERIOD ARE 15 ANTICIPATED TO BE EQUAL TO OR EXCEED THE AMOUNT OF THE 16 GRANT TO BE AWARDED DURING THAT SAME PERIOD. GRANTS MUST 17 BE VERIFIED PRIOR TO ANY SUBSEQUENT REQUEST BEING 18 GRANTED. 19 (IV) THAT THE AMOUNT OF THE ANNUAL GRANT REQUESTED 20 IN YEAR FOUR AND THEREAFTER WILL NOT EXCEED THE AMOUNT OF 21 THE ANNUAL DEBT SERVICE OWED ON THE PROJECT. 22 (4) REQUIRE THE APPLICANT TO USE THE GRANT TO PAY DEBT 23 SERVICE FOR THE PROJECT AND TO REPAY ALL OR ANY PORTION OF A 24 GRANT IF THE APPLICANT FAILS TO USE THE GRANT TO PAY DEBT 25 SERVICE. 26 (5) SPECIFY THAT THE ANNUAL AMOUNT OF THE GRANT IN ANY 27 ONE YEAR MAY NOT EXCEED THE ANNUAL AMOUNT OF THE DEBT SERVICE 28 ON THE PROJECT FOR THAT YEAR. 29 (6) IF THE GRANT IN ANY ONE YEAR EXCEEDS THE ANNUAL 30 PAYMENT ON DEBT SERVICE IN THAT YEAR, REQUIRE THE APPLICANT 20030S0010B1515 - 195 -
1 TO REPAY THE AMOUNT OF THE GRANT FOR THAT YEAR WHICH EXCEEDS 2 THE PAYMENT ON DEBT SERVICE FOR THAT YEAR. 3 (7) IF THE PROJECT USER IS NOT A GOVERNMENTAL ENTITY, 4 PROHIBIT THE PROJECT USER FROM HOLDING TITLE TO THE PROJECT 5 DURING THE PERIOD WHICH THE APPLICANT IS RECEIVING A GRANT 6 FROM THE DEPARTMENT. 7 (8) REQUIRE THE PROJECT USER TO PAY TO THE APPLICANT A 8 SUM EQUAL TO ANY PAYMENTS RECEIVED BY THE PROJECT USER FROM 9 THIRD PARTIES FOR INFRASTRUCTURE WHICH IS PART OF THE PROJECT 10 DURING THE PERIOD WHICH THE APPLICANT IS RECEIVING A GRANT 11 FROM THE DEPARTMENT. ANY PAYMENT RECEIVED BY THE APPLICANT 12 UNDER THIS PARAGRAPH MUST BE APPLIED TO PAYMENT OF THE DEBT 13 SERVICE FOR THE PROJECT. 14 (9) REQUIRE THE APPLICANT TO INSURE THAT THE FULL AMOUNT 15 OF ANNUAL DEBT SERVICE IS PAID FOR THE PROJECT, REGARDLESS OF 16 THE AMOUNT OF THE GRANT RECEIVED. 17 (10) REQUIRE THE PROJECT USER TO USE THE PROJECT FOR THE 18 PERIOD OF TIME THE APPLICANT IS RECEIVING GRANTS UNDER THIS 19 CHAPTER AND TO REPAY ALL OR ANY PORTION OF A GRANT IF THE 20 PROJECT USER FAILS TO USE THE PROJECT FOR THE PERIOD OF TIME 21 THE APPLICANT IS RECEIVING GRANTS. 22 (11) REQUIRE THE PROJECT USER TO TIMELY PAY ALL 23 COMMONWEALTH AND LOCAL TAXES AND FEES. 24 (12) REQUIRE THE DEPARTMENT TO APPROVE ANY CHANGE OF USE 25 OF A PROJECT DURING THE PERIOD IN WHICH THE APPLICANT IS 26 RECEIVING A GRANT FROM THE DEPARTMENT. THE DEPARTMENT MAY NOT 27 UNREASONABLY WITHHOLD ITS CONSENT TO A CHANGE OF USE. 28 (C) LIMITATIONS.-- 29 (1) IF SUFFICIENT FUNDS ARE NOT APPROPRIATED TO COVER 30 THE ANTICIPATED COST OF THE GRANTS AWARDED IN ANY GIVEN 20030S0010B1515 - 196 -
1 FISCAL YEAR, THE DEPARTMENT SHALL PRORATE PAYMENTS TO ISSUING 2 AUTHORITIES. 3 (2) FOR GRANTS RENEWED IN ACCORDANCE WITH SUBSECTION 4 (B)(3), GRANTS MAY NOT EXCEED THE INCREMENTAL GROWTH IN 5 REVENUES REALIZED BY THE COMMONWEALTH FROM THE TAX SOURCES 6 IDENTIFIED IN SECTION 3305(B). 7 (3) GRANTS MAY NOT BE USED TO PAY DEBT SERVICE FOR <-- 8 PROJECTS DIRECTLY RELATED TO GAMING. 9 SECTION 2. ALL ACTS OR PARTS OF ACTS ARE REPEALED INSOFAR AS 10 THEY ARE INCONSISTENT WITH THIS ACT. 11 SECTION 3. THIS ACT SHALL TAKE EFFECT JULY 1, 2004, OR 12 IMMEDIATELY, WHICHEVER IS LATER. C20L14RLE/20030S0010B1515 - 197 -