CHAPTER 30

PENNSYLVANIA INDUSTRIAL DEVELOPMENT PROGRAM

 

Sec.

3001.  Scope of chapter.

3002.  Definitions.

3003.  Establishment.

3004.  Industrial Development Fund (Reserved).

3005.  Application.

3006.  Loans for industrial development projects.

3007.  Loans for industrial parks.

3008.  Loans for multiple-tenancy building projects.

3009.  Reporting and inspection.

3010.  Limitations.

3011.  Job creation.

 

Enactment.  Chapter 30 was added October 22, 2014, P.L.2569, No.161, effective November 1, 2014.

Special Provisions in Appendix.  See section 11 of Act 161 of 2014 in the appendix to this title for special provisions relating to continuation of prior law.

Cross References.  Chapter 30 is referred to in section 1102 of Title 64 (Public Authorities and Quasi-Public Corporations).

§ 3001.  Scope of chapter.

This chapter relates to the Pennsylvania Industrial Development Program.

§ 3002.  Definitions.

The following words and phrases when used in this chapter shall have the meanings given to them in this section unless the context clearly indicates otherwise:

"Agent."  The term includes the Department of Community and Economic Development.

"Agricultural processor."  An entity that adds value by subjecting one or more farm commodities to a process of manufacture, development or preparation for sale or a person that converts a farm product into a marketable form.

"Agricultural producer."  A person or entity involved in the management and use of an agricultural operation for the production of a farm commodity.

"Agriculture."  Any of the following:

(1)  The management and use of an agricultural operation for the production of a farm commodity.

(2)  The sale of a farm commodity at wholesale.

(3)  The sale of a farm commodity at retail by an urban and rural supermarket in an underserved area or farmers' markets.

(4)  An energy-related activity impacting production agriculture.

(5)  An activity which implements best industry practices related to an agricultural waste product, agriculture by-product or fertilizer.

"Authority."  The Pennsylvania Industrial Development Authority organized and existing under the act of May 17, 1956 (1955 P.L.1609, No.537), known as the Pennsylvania Industrial Development Authority Act.

"Board."  The board of directors of the authority.

"Fund."  The Industrial Development Fund.

"Industrial development project."  A project sponsored by a certified economic development organization involving the acquisition or improvement of real property within this Commonwealth which will be occupied and operated by any of the following:

(1)  An industrial enterprise.

(2)  A manufacturing enterprise.

(3)  A research and development enterprise.

(4)  An agricultural producer.

(5)  An agricultural processor.

"Industrial enterprise."  An enterprise which has created or will create substantial employment opportunities. The term may include a warehouse, distribution and terminal facility and office building utilized as national or regional headquarters or computer or clerical operations centers. The term shall not include a mercantile, commercial or retail enterprise.

"Industrial park project."  A project sponsored by a certified economic development organization for the purpose of creating sites for the establishment of two or more industrial development projects.

"Manufacturing enterprise."  An enterprise which is engaged in the giving of a new shape, new quality or new combination to matter by the application of skill and labor.

"Multiple-tenancy building project."  A project sponsored by a certified economic development organization involving the acquisition or construction of land, site, structure or facility for occupancy by two or more industrial enterprises, manufacturing enterprises, research and development enterprises, agricultural producers or agricultural processors.

"Program."  The Pennsylvania Industrial Development Program established under section 3003 (relating to establishment).

"Research and development enterprise."  An enterprise for the discovery of new and the refinement of known substances, processes, products, theories and ideas. The term does not include an enterprise activity directed primarily to the accumulation or analysis of commercial, financial or mercantile data.

(June 22, 2017, P.L.202, No.7, eff. imd.)

 

2017 Amendment.  Act 7 added the def. of "agent."

§ 3003.  Establishment.

There is established within the authority a program to be known as the Pennsylvania Industrial Development Program. The program shall be administered by the authority to provide loans for industrial development projects, industrial parks and multiple-tenancy building projects, to increase employment levels and to improve the overall economic health of this Commonwealth.

 

Cross References.  Section 3003 is referred to in section 3002 of this title.

§ 3004.  Industrial Development Fund (Reserved).

§ 3005.  Application.

A certified economic development organization may submit an application for assistance under this chapter and under 64 Pa.C.S. § 1121(a) (relating to common application process). The application shall be on the form required by the authority and shall include or demonstrate all of the following, in addition to the contents required under 64 Pa.C.S. § 1121(b):

(1)  A general description of the type, classes and number of employees employed or to be employed in the operation of the project.

(2)  The cost or estimate of the cost of establishing the project. As used in this paragraph, the term "cost" shall include financing charges, including interest incurred before and during construction but shall not include the cost of any machinery, equipment or fixtures necessary for the project or the installation or maintenance of any of the machinery, equipment or fixtures.

(3)  Financial statements of the applicant, proposed guarantors and any other party whose credit is significant to the approval of the financial assistance. By guideline, the authority may specify the period to be covered by the financial statements and whether they must be compiled, reviewed or prepared by a certified public accountant.

(4)  Evidence of the arrangement made by the borrower for the financing of all costs of the project exceeding the amount to be financed by the authority.

(5)  Evidence that the establishment of the project will not cause the removal of an industrial enterprise, manufacturing enterprise, research and development enterprise, agricultural producer or agricultural processor from one area of this Commonwealth to another area of this Commonwealth, as determined by the authority.

(6)  Evidence that the proposed project location has undergone an environmental assessment.

(7)  Any other information required by the authority.

§ 3006.  Loans for industrial development projects.

The authority may contract to loan an amount not to exceed 50% of the cost of establishing an industrial development project, subject to the following conditions:

(1)  Before making the loan, the authority shall determine that:

(i)  the borrower is responsible to assume all obligations imposed by the authority in connection with the project, financial or otherwise, and to undertake the operation of the project; and

(ii)  the borrower has obtained from other independent and responsible sources a firm commitment for any funds which, in addition to the loan and any other property or assets held by the borrower, are necessary for the completion and operation of the project.

(2)  The authority shall determine the interest rate and repayment period of the loan.

(3)  The loan must be evidenced by note of the borrower, and secured by a mortgage on the project for which the loan was made, subordinate only to the mortgage securing the first lien obligation issued to secure the commitment of funds provided to pay the cost of the project from the independent and responsible sources, and used in the financing of the project.

(4)  The authority may require additional security as it may deem necessary.

§ 3007.  Loans for industrial parks.

The authority may contract to loan an amount not to exceed 75% of the cost of establishing an industrial park project, subject to the following conditions:

(1)  The authority shall determine the interest rate and repayment period of the loan.

(2)  The loan must be evidenced by note of the borrower and secured by a first mortgage on the industrial park or by participation in a first mortgage. If a Federal agency participates in the financing of the industrial park, the authority may take as security for its loan a mortgage on the industrial park which is second only to the mortgage given to the Federal agency.

(3)  If the loan is secured by participation in a first mortgage on the industrial park, a portion of the loan, not to exceed 10% of the cost of the project, may be secured by a second mortgage on the industrial park which is second only to the participating first mortgage.

§ 3008.  Loans for multiple-tenancy building projects.

The authority may contract to loan an amount not to exceed 50% of the cost of establishing a multiple-tenancy building project, subject to the following conditions:

(1)  The authority shall determine the interest rate and repayment period of the loan.

(2)  The loan must be evidenced by note of the borrower and secured by a first mortgage or participation in a first mortgage on the multiple-tenancy building project.

(3)  The authority may contract to loan an amount not to exceed 50% of the cost of the project if the loan is secured by a first mortgage or participation in a first mortgage on the project. If the loan is not secured by a first mortgage or participation in a first mortgage on the project, the authority may contract to loan an amount not to exceed 40% of the cost of the project.

(4)  If the loan is secured by a participation in a first mortgage on the project, the authority may permit a portion of its loan, not to exceed 10% of the cost of the project, to be secured by a second mortgage on the project which is second only to the participating first mortgage.

§ 3009.  Reporting and inspection.

(a)  Inspection.--An applicant or a recipient shall, upon request, permit authorized employees of the authority or its agent to inspect the plant, books and records of the applicant or recipient.

(b)  Updating.--An applicant or a recipient shall provide updated information to the authority and its agents if conditions change or to the extent that the information originally given becomes inaccurate or misleading.

(c)  Periodic reports.--A recipient shall provide the authority and its agents with periodic financial reports as the authority may require until the loan is repaid in full.

(d)  Financial and performance audits.--A recipient shall annually submit to the authority, at the recipient's expense, an independent financial audit. If the audit reveals misconduct of a material nature on the part of the recipient, the authority shall take appropriate action.

§ 3010.  Limitations.

A loan may not be recommended or approved if the proceeds of the loan could do any of the following:

(1)  Cause, aid or assist directly in the relocation of any business operations from one part of this Commonwealth to another unless there is at least a 25% net increase in employment.

(2)  Refinance any portion of the total cost of an industrial development project, industrial park or multiple-tenancy building project or other existing loans or debt.

(3)  Finance an industrial development project, industrial park or multiple-tenancy building project located outside the geographic boundaries of this Commonwealth.

(4)  Provide funds, directly or indirectly, for payment distribution or as loan owners, partners or shareholders of a small business, except as ordinary compensation for services rendered.

(5)  Provide funds for speculation in real or personal property, whether tangible or intangible.

§ 3011.  Job creation.

The authority shall establish minimum levels of job creation for loans under this chapter, or a requirement that one new job be created for a certain amount of funds loaned. In establishing the minimum levels of job creation, the authority shall consider unemployment statistics, inflation, the authority's cash flow and the need to keep this Commonwealth and the businesses of this Commonwealth competitive. Notice of job creation requirements must be submitted to the Legislative Reference Bureau for publication in the Pennsylvania Bulletin.