PRINTER'S NO. 3247
No. 2421 Session of 2000
INTRODUCED BY FRANKEL, DeWEESE, M. COHEN, COSTA, COY, CALTAGIRONE, BATTISTO, BEBKO-JONES, BELARDI, BELFANTI, BROWNE, ARGALL, DALEY, DeLUCA, GEORGE, GIGLIOTTI, GORDNER, GRUCELA, HARHAI, HERMAN, HERSHEY, JOSEPHS, KENNEY, LAUGHLIN, LEDERER, LESCOVITZ, LEVDANSKY, MANN, MARKOSEK, McCALL, MELIO, MYERS, ORIE, PESCI, PIPPY, PISTELLA, READSHAW, RUBLEY, SEYFERT, STABACK, STEELMAN, STEVENSON, TANGRETTI, TIGUE, TRELLO, TRICH, VAN HORNE, VEON, WALKO, WILLIAMS, YOUNGBLOOD AND YUDICHAK, MARCH 22, 2000
REFERRED TO COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT, MARCH 22, 2000
AN ACT 1 Amending the act of May 17, 1956 (1955 P.L.1609, No.537), 2 entitled "An act to promote the welfare of the people of the 3 Commonwealth by the reduction of unemployment in certain 4 areas of the Commonwealth determined to be critical economic 5 areas; providing for the establishment of industrial 6 development projects in such areas; creating The Pennsylvania 7 Industrial Development Authority as a body corporate and 8 politic with power to allocate funds for and make secured 9 loans to industrial development agencies for the payment of a 10 part of the cost of industrial development projects in 11 critical economic areas; authorizing the Authority to enter 12 into agreements with the Government of the United States or 13 any Federal agency or industrial development agency; 14 empowering the Authority to take title to, sell, convey and 15 lease industrial development projects where necessary to 16 protect loans made by the Pennsylvania Industrial Development 17 Authority on industrial development projects; providing that 18 no debt of the Commonwealth, its municipalities or political 19 subdivisions shall be incurred in the exercise of any powers 20 granted by this act; and providing for the examination of the 21 accounts and affairs of the Authority; and making an 22 appropriation," including biotechnology enterprises and small 23 business incubators within the scope of the act; and further 24 regulating loans to industrial development agencies. 25 The General Assembly of the Commonwealth of Pennsylvania
1 hereby enacts as follows: 2 Section 1. The last paragraph of section 2 of the act of May 3 17, 1956 (1955 P.L.1609, No.537), known as the Pennsylvania 4 Industrial Development Authority Act, amended July 10, 1963 5 (P.L.221, No.125), is amended to read: 6 Section 2. Findings and Declaration of Policy.--It is hereby 7 determined and declared as a matter of legislative finding-- 8 * * * 9 Therefore, it is hereby declared to be the policy of the 10 Commonwealth of Pennsylvania to promote the health, safety, 11 morals, right to gainful employment, business opportunities and 12 general welfare of the inhabitants thereof by the creation of a 13 body corporate and politic to be known as "The Pennsylvania 14 Industrial Development Authority" which shall exist and operate 15 for the public purpose of alleviating unemployment with its 16 resulting spread of indigency and economic stagnation by the 17 promotion and development of industrial and manufacturing 18 enterprises [and], research and development facilities, 19 biotechnology enterprises and small business incubators in those 20 areas of the Commonwealth in which conditions of critical 21 unemployment currently or may from time to time exist. Such 22 purposes are hereby declared to be public purposes for which 23 public money may be spent. 24 Section 2. Section 3(i) of the act, amended June 16, 1972 25 (P.L.475, No.153), is amended and the section is amended by 26 adding clauses to read: 27 Section 3. Definitions.--The following terms, whenever used 28 or referred to in this act, shall have the following meanings, 29 except in those instances where the context clearly indicates 30 otherwise: 20000H2421B3247 - 2 -
1 * * * 2 (i) The term "industrial development project" shall mean any 3 land, site, structure, facility or undertaking comprising or 4 being connected with or being a part of (i) an industrial 5 enterprise, (ii) a manufacturing enterprise, (iii) a research 6 and development enterprise, [or] (iv) an agricultural 7 enterprise, (v) a biotechnology enterprise, or (vi) a small 8 business incubator, established or to be established by an 9 industrial development agency in a critical economic area. 10 * * * 11 (v) The term "biotechnology enterprise" shall mean an 12 enterprise which is engaged in the research, development, 13 production or provision of biotechnology for the purpose of 14 developing or providing products, processes or technologies for 15 specific commercial or public purposes, including, but not 16 limited to, medical, pharmaceutical, nutritional and other 17 health-related purposes, agricultural purposes and environmental 18 purposes, or engaged in providing services or products necessary 19 for such research, development, product or provision of service. 20 A biotechnology enterprise requires substantial capital by 21 virtue of its technology needs. A biotechnology enterprise 22 creates or will create substantial employment opportunities by 23 its nature and technological needs. 24 (w) The term "small business incubator" shall mean a 25 facility in which small units of space may be leased by a tenant 26 and in which management maintains or provides access to business 27 development services for use by tenants. 28 Section 3. Section 5(b) of the act, amended July 10, 1963 29 (P.L.221, No.125), is amended to read: 30 Section 5. Powers of the Authority; General.--The Authority, 20000H2421B3247 - 3 -
1 as a public corporation and governmental instrumentality 2 exercising public powers of the Commonwealth, is hereby granted 3 and shall have and may exercise all powers necessary or 4 appropriate to carry out and effectuate the purposes of this 5 act, including the following powers, in addition to others 6 herein granted: 7 * * * 8 (b) To co-operate with industrial development agencies in 9 their efforts to promote the expansion of industrial, 10 manufacturing [and], research and development, biotechnology and 11 small business incubator activity in critical economic areas; 12 * * * 13 Section 4. Section 6(a) of the act, amended July 13, 1988 14 (P.L.534, No.95), is amended to read: 15 Section 6. Powers of the Authority; Loans to Industrial 16 Development Agencies.--When it has been determined by the 17 Authority upon application of an industrial development agency 18 and hearing thereon in the manner hereinafter provided, that the 19 establishment of a particular industrial development project of 20 such industrial development agency in a critical economic area 21 has accomplished or will accomplish the public purposes of this 22 act, the Authority may contract to loan such industrial 23 development agency an amount not in excess of the percentage of 24 the cost of such industrial development project, as established 25 or to be established as hereinafter set forth, subject, however, 26 to the following conditions: 27 (a) Industrial development projects to be established: 28 (1) If the industrial development project is exclusively a 29 research and development facility other than research and 30 development of pollution control technology, the Authority may, 20000H2421B3247 - 4 -
1 in each class of critical economic area, contract to loan the 2 industrial development agency (45%) of the cost of such 3 industrial development project if it has determined that the 4 industrial development agency holds funds or property in an 5 amount or value equal to not less than (5%) of the cost of 6 establishing the industrial development project, which funds or 7 property are available for and shall be applied to the 8 establishment of such project. If the industrial development 9 project is exclusively a research and development facility for 10 technology concerning pollution control, the Authority may 11 contract to loan the industrial development agency in critical 12 economic area A an amount not in excess of (55%) and in a 13 critical economic area B or a critical economic area C an amount 14 not in excess of (50%) of the cost of the industrial development 15 project: Provided, however, That in each such instance, the 16 Authority has determined that the industrial development agency 17 holds funds or property in an amount or value equal to not less 18 than (5%) of the cost of establishing the industrial development 19 project, which funds or property are available for and shall be 20 applied to the establishment of such project. 21 (2) If the industrial development project is any other type 22 of industrial development project than exclusively a research 23 and development facility, the Authority may, in critical 24 economic area A contract to loan the industrial development 25 agency an amount not in excess of (40%) of the cost of such 26 industrial development project if it has determined that the 27 industrial development agency holds funds or property in an 28 amount or value equal to not less than (10%) of the cost of 29 establishing the industrial development project, which funds or 30 property are available for and shall be applied to establishment 20000H2421B3247 - 5 -
1 of such project. 2 (2.1) Where a contract to loan to an industrial development 3 agency is to be made under provisions of this subsection (a), 4 the following shall apply: that, in critical economic areas A, B 5 or C where an average of (8%) or more of the labor force has 6 been unemployed for the preceding calendar year, the Authority 7 may contract to loan the industrial development agency an amount 8 not in excess of (50%) of the cost of an industrial development 9 project and an amount not in excess of (60%) of the cost of an 10 industrial development project wherein the responsible buyer or 11 tenant is a small business on the date of the application; and 12 where an average of (10%) or more of the labor force has been 13 unemployed for the preceding calendar year, the Authority may 14 contract to loan the industrial development agency an amount not 15 in excess of (60%) of the cost of an industrial development 16 project and an amount not in excess of (70%) of the cost of an 17 industrial development project wherein the responsible buyer or 18 tenant is a small business on the date of application; further, 19 provided that in each such instance the industrial development 20 agency project percentage shall be removed. Where a contract to 21 loan to an industrial development agency is to be made under the 22 provisions of this subsection (a), the following shall apply: 23 that, in critical economic areas A, B or C where an average of 24 (4%) or more of the labor force has been unemployed for the 25 preceding calendar year, the Authority may contract to loan the 26 industrial development agency an amount not in excess of (40%) 27 of the cost of an industrial development project wherein the 28 responsible buyer or tenant is a small business and where an 29 average of (6%) or more of the labor force has been unemployed 30 for the preceding calendar year, the Authority may contract to 20000H2421B3247 - 6 -
1 loan the industrial development agency an amount not in excess 2 of (50%) of the cost of an industrial development project 3 wherein the responsible buyer or tenant is a small business and 4 in such latter instance the industrial development agency 5 project percentage shall be removed. 6 (3) If the industrial development project is any other type 7 of industrial development project than exclusively a research 8 and development facility, the Authority may, in critical 9 economic areas B and C, contract to loan the industrial 10 development agency an amount not in excess of (30%) of the cost 11 of such industrial development project if it has determined that 12 the industrial development agency holds funds or property in an 13 amount or value equal to not less than (20%) of the cost of 14 establishing the industrial development project, which funds or 15 property are available for or shall be applied to the 16 establishment of such project. 17 (4) Prior to the making of any loan under this subsection 18 (a), the Authority shall have determined that the industrial 19 development agency has obtained from other independent and 20 responsible sources, such as banks and insurance companies or 21 otherwise, a firm commitment for all other funds, over and above 22 the loan of the Authority and such funds or property as the 23 industrial development agency may hold, necessary for payment of 24 all of the cost of establishing the industrial development 25 project, and that the sum of all these funds, together with the 26 machinery and equipment to be provided by the responsible tenant 27 or responsible buyer, is adequate for the completion and 28 operation of the industrial development project. 29 (5) If the industrial development project is a biotechnology 30 enterprise or if it is a small business incubator, the Authority 20000H2421B3247 - 7 -
1 may contract to loan the industrial development agency an amount 2 not in excess of (40%) of the cost of such industrial 3 development project if it has determined that the industrial 4 development agency holds funds or property in an amount or value 5 equal to not less than (5%) of the cost of establishing the 6 industrial development project, which funds or property are 7 available for and shall be applied to establishment of such 8 project. 9 (6) If the industrial development project is a biotechnology 10 project and otherwise would not qualify based upon existing and 11 projected revenues, the Authority may contract to loan the 12 industrial development agency an amount not in excess of (40%) 13 of the cost of such industrial development project if it has 14 determined that the biotechnology enterprise has at least one 15 million dollars ($1,000,000) in unencumbered assets and if it 16 has determined that the industrial development agency holds 17 funds or property in an amount or value equal to not less than 18 (5%) of the cost of establishing the industrial development 19 project, which funds or property are available for and shall be 20 applied to establishment of such project. 21 * * * 22 Section 5. Section 7(a) of the act, amended July 10, 1963 23 (P.L.221, No.125), is amended to read: 24 Section 7. Loan Application Requirements.--Prior to the 25 loaning of any funds to an industrial development agency for an 26 industrial development project in a critical economic area, the 27 Authority shall receive from such industrial development agency 28 a loan application in form adopted by the Authority which shall 29 contain, without being limited to, the following provisions: 30 (a) A general description of the industrial development 20000H2421B3247 - 8 -
1 project and a general description of the industrial or 2 manufacturing enterprise [or], research and development 3 facility, biotechnology enterprise or small business incubator 4 for which the industrial development project has been or is to 5 be established; 6 * * * 7 Section 6. This act shall take effect in 60 days. C3L64BIL/20000H2421B3247 - 9 -