act-2002-0-213•Pennsylvania Act 2002-213 — JOB ENHANCEMENT ACT - OMNIBUS AMENDMENTS
Pennsylvania Act 2002-213 — JOB ENHANCEMENT ACT - OMNIBUS AMENDMENTS
act-2002-0-2132002 Pa. Act 213Law
Act text
JOB ENHANCEMENT ACT - OMNIBUS AMENDMENTS
Act of Dec. 9, 2002, P.L. 1682, No. 213 Cl. 12
Session of 2002
No. 2002-213
SB 1370
AN ACT
Amending the act of June 29, 1996 (P.L.434, No.67), entitled, as
amended, "An act to enhance job creation and economic
development by providing for an annual financing strategy,
for opportunity grants, for job creation tax credits, for
small business assistance, for the Small Business Advocacy
Council, for a family savings program, for industrial
development assistance, for community development bank grants
and loans and for tax-exempt bond allocation; conferring
powers and duties on various administrative agencies and
authorities; further providing for various funds; and making
repeals," further providing for definitions, for the
Pollution Prevention Assistance Account and for eligibility
and terms and conditions of loans; providing for job
training; further providing for the power and authority for
the Pennsylvania Economic Development Financing Authority;
recodifying the Machinery and Equipment Loan Fund Act;
further providing for tax-exempt bond allocation and for loan
eligibility; and making repeals.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definitions of "capital development project"
or "project," "export activity" and "small business enterprise"
in section 1301 of the act of June 29, 1996 (P.L.434, No.67),
known as the Job Enhancement Act, amended or added June 24, 1997
(P.L.247, No.23), November 17, 1998 (P.L.788, No.100), October
2, 2002 (P.L.804, No.115), and October 2, 2002 (P.L.836,
No.120), are amended and the section is amended by adding
definitions to read:
Section 1301. 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:
* * *
"Agricultural producer." A person or entity involved in the
management and use of a normal agricultural operation for the
production of a farm commodity.
* * *
"Capital development project" or "project." Land, buildings,
equipment and machinery and working capital which is acquired,
constructed, renovated or used by a small business enterprise:
(1) As part of a for-profit project or venture not of a
mercantile or service-related nature, except for hospitality
industry projects and except as otherwise provided in section
1303(a.1).
(2) To bring a small business enterprise into compliance
with Federal or State environmental laws or regulations or to
complete an approved remediation project or to permit the
small business enterprise to adopt generally acceptable
pollution prevention practices.
(3) To provide assistance to a small business
[enterprises that are recyclers] enterprise which is a
recycler of municipal or commercial waste or [that are
manufacturers] which is a manufacturer using recycled
municipal or commercial waste materials.
(4) To assist a small business enterprise with defense
conversion activities.
(5) For the manufacture of products to be exported out
of the United States by a small business enterprise as part
of a for-profit project or venture not of a mercantile or
service-related nature, except for export-related services
and international export-related mercantile ventures or
advanced technology and computer-related services and
mercantile ventures, which will increase this Commonwealth's
national or international market shares.
(6) As part of a for-profit project or venture that
meets the requirements of section 1303(a.1).
(7) To assist in the start-up or expansion of a for-
profit or not-for-profit child day-care center subject to
licensure by the Commonwealth.
"Child day-care center." Any premises in which child day
care is provided simultaneously for seven or more children who
are not related to the provider.
* * *
"Export activity." An activity undertaken by [an] a small
business enterprise related to exports of goods and services
outside of the United States. [The term includes manufacturing,
assembling and like operations.]
* * *
"Small business enterprise." A for-profit corporation,
partnership, proprietorship, limited liability company or other
entity which meets the eligibility requirements established by
the department. The term shall include, but is not limited to, a
small business enterprise which:
(1) is located in a small business incubator facility;
(2) is an agricultural processor;
(3) is an agricultural producer; [or]
(4) manufactures apparel products[.]; or
(5) is a for-profit or not-for-profit child day-care
center subject to licensure by the Commonwealth.
* * *
Section 2. Sections 1302(b.1), 1303(a.1) and (a.2) and
1304(a.1) and (a.2) of the act, amended or added November 17,
1998 (P.L.788, No.100), are amended to read:
Section 1302. Small Business First Fund and Pollution
Prevention Assistance Account.
* * *
(b.1) Pollution Prevention Assistance Account.--There is
hereby created within the Small Business First Fund a Pollution
Prevention Assistance Account to provide revolving loans to
small [businesses] business enterprises that employ 100 or fewer
individuals[, that operate from a stationary source] and that
adopt or install pollution prevention or energy-efficient
equipment or processes. The account shall be administered by the
department. All appropriations made for the purposes of this
account and all proceeds from loan repayments, including
interest, and any and all other deposits, payments and
contributions from any other source made available to the
department for the purposes of this account shall be deposited
into this account.
* * *
Section 1303. Eligibility for and terms and conditions of
loans.
* * *
(a.1) Loans to small business enterprises in certain
areas.--
(1) The department may provide loans to small business
enterprises located in distressed communities which are in
the business-to-public service, mercantile, commercial or
point-of-sale retail business sectors in accordance with
conditions or criteria established by the department in
guidelines adopted for these loans. Loans shall be made in
accordance with the provisions of this chapter except that:
[(i) Loans may be made to mercantile or service-
related enterprises approved by the department.]
(ii) The [provisions of subsection (b) relating to
required increases in employment shall not apply to loans
made under this subsection] small business enterprise
must agree to retain, at a minimum, jobs in existence as
of the date of loan application.
(iii) The department may authorize flexible
repayment terms and an interest rate of not less than 2%.
(iv) The department may utilize additional area loan
organizations, including community development financial
institutions, to receive loan applications and administer
loans.
(v) The department may use its best judgment to
identify and secure collateral.
(2) Distressed communities shall include:
(i) Any census tract or other specifically defined
geographic area in which:
(A) there is a median income below 80% of the
median income for this Commonwealth or the United
States;
(B) 20% or more of the population is below the
poverty level by family size published by the Bureau
of the Census; or
(C) there is an unemployment rate 50% higher
than the national average.
(ii) A Keystone Opportunity Zone.
(iii) Any other geographic area designated by the
department as distressed. The designation shall be
published in the Pennsylvania Bulletin.
(3) The department and area loan organization shall not
make loans under this subsection on the basis of direct
financial return on investment and shall not be held to the
loan loss standards of private commercial lenders. Loans
shall be for the purpose of establishing a strong economic
base and promoting entrepreneurial activity within the
distressed community.
(4) In order to receive a loan under this subsection, a
small business enterprise must demonstrate a direct impact on
the community in which it is located, on residents of that
community or on the local and/or regional economy. The
department shall establish criteria that will assist the
small business enterprise in making this demonstration.
(a.2) Pollution prevention assistance loans.--The Pollution
Prevention Assistance Account created under section 1302(b.1)
shall provide revolving loans to small [businesses] business
enterprises.
(1) The loans shall be for the purpose of enabling [the
small business] a small business enterprise to adopt or
install pollution prevention equipment or processes to:
(i) Reduce or reuse raw materials onsite.
(ii) Reduce the production of waste.
(iii) Reduce energy consumption.
(2) The Pollution Prevention Assistance Account shall
not invest on the basis of direct financial return and shall
not be held to the loan loss standards of commercial lenders.
Loans shall be for the purpose of reducing pollution through
source reduction technologies or processes.
(3) A loan under this subsection may not exceed the
lesser of:
(i) [$50,000] $100,000; or
(ii) 75% of eligible project costs.
(4) Loans under this subsection shall have an interest
rate of 2% per year and a [maximum] repayment term [of seven]
not to exceed ten years.
(5) An industrial resource center receiving funds under
the act of [July 2, 1993 (P.L.439, No.64), known as the Ben
Franklin/IRC Partnership Act] June 22, 2001 (P.L.400, No.31),
known as the Industrial Resources Center Partnership Act, may
utilize the account to provide assistance to a small business
enterprise for which a loan application has been made.
(6) Loans under this subsection shall be used to further
the goal of pollution prevention through the purchase and
installation of equipment to make operational changes and
modify production practices.
* * *
Section 1304. Application and administration.
* * *
[(a.1) Distressed communities.--An area loan organization
designated to administer loans to distressed communities under
section 1303(a.1) shall provide documentation that the small
business enterprise is located in a distressed community as
required by the department.]
(a.2) Pollution prevention assistance loans.--
(1) Applications for loans from the Pollution Prevention
Assistance Account established under section 1302(b.1) shall
be on a form prescribed by the department and shall be
reviewed under subsection (b)(2). The Department of
Environmental Protection shall assist the department and
provide technical assistance with application review.
(2) The department, an area loan organization or an
industrial resource center may charge fees, costs, service
charges, loan commitment fees or other expenses not to exceed
[1%] 5% of the loan amount.
* * *
Section 3. Section 1311(e), (g) and (h) of the act, added
June 24, 1997 (P.L.247, No.23), are amended and the section is
amended by adding a subsection to read:
Section 1311. Export Financing Loan Fund; loans and
applications; powers and duties.
* * *
(e) Conditions.--A loan must comply with all of the
following:
[(1) Be to a company eligible for a policy.
(2) Be guaranteed by the Working Capital Guaranty
Program offered by the Ex-Im Bank or be on an export credit
sales contract insured by a policy.]
(3) Be limited to [companies that have facilities within
this Commonwealth which are involved in export activities]
the financing of export activities that take place within
this Commonwealth.
(4) Be based on an export contract that requires payment
in United States dollars.
[(5) Be for the purpose of financing export activity.]
(6) Be limited to companies with 250 or fewer full-time
[equivalent] employees.
(e.1) Additional conditions.--At the discretion of the
department, a loan may also be required to contain one or both
of the following conditions:
(1) The company is eligible for a policy.
(2) The loan is guaranteed by the Working Capital
Guaranty Program offered by the Ex-Im Bank or be on an export
credit sales contract insured by a policy.
* * *
(g) Restrictions.--Export Financing Loan Fund assistance
shall not exceed $350,000 for any individual project [or 50% of
the eligible project costs, whichever is less]. A loan must not
supplant funding which is otherwise available from private
sector sources on commercially reasonable terms.
(h) Terms.--A loan shall have a term, rate of interest,
transaction size and other business conditions that comply with
the requirements [of the Ex-Im Bank and any other requirements]
of the department.
* * *
Section 3.1. Section 2702 of the act, added November 17,
1998 (P.L.788, No.100), is amended by adding a definition to
read:
Section 2702. 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:
* * *
"First-time farmer." As defined in section 147(c)(2)(C) of
the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C.
§ 147(c)(2)(C)).
* * *
Section 3.2. Sections 2703 and 2704 of the act, added
November 17, 1998 (P.L.788, No.100), are amended to read:
Section 2703. Selection of projects.
(a) Criteria.--In selecting projects for allocation of the
tax-exempt bond authority of the Commonwealth, the department
shall endeavor to best serve the purposes set forth in section
2701 in accordance with the requirements of the Internal Revenue
Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.). In so
doing, the secretary may, among other things, consider all of
the following:
(1) The number of net new jobs to be created and the
number of jobs to be preserved.
(2) The economic distress of the county, municipality or
region as determined by its employment.
(3) The geographical diversity within this Commonwealth.
(4) The amount of private funds to be leveraged by the
tax-exempt bond financing.
(5) Coordination with community and economic development
plans of the Commonwealth and its counties, municipalities
and regions.
(6) Whether the community has been designated a Federal
disaster relief area or the community's business district has
been significantly damaged as a result of fire or natural
disaster.
(b) Tax-exempt bond authority set-aside.--Either at the
beginning of or at any time during the course of each year, the
department may set aside such tax-exempt bond authority as the
department, in consultation with the Secretary of the Budget,
determines for use during the year for the various categories of
tax-exempt bonds such as manufacturing facilities, enterprise
zone facilities, exempt facilities, mortgage revenue bonds,
student loan bonds, first-time farmers and redevelopment bonds.
Section 2704. Allocation.
(a) Application by agency.--An agency may apply to the
department for an allocation for a project to be undertaken by
the agency consistent with the purposes set forth in section
2701. The department, in consultation with the agency and the
Secretary of the Budget, shall determine what portion of an
allocation request the agency will receive and may establish
deadlines for the use of the allocation. A decision on the
application shall be provided by the department within 30 days
from the date that the application for an allocation is made to
the department. Nothing in this chapter shall prevent an agency
from applying for additional allocations for projects throughout
the year. Nothing in this chapter shall affect the rights of
constitutional home rule cities to receive allocations under
section 146(e)(3) of the Internal Revenue Code of 1986 (Public
Law 99-514, 26 U.S.C. § 146(e)(3)).
(b) Application by qualified local issuers.--A qualified
local issuer may apply to the department for an allocation for a
project consistent with purposes set forth in section 2701 with
respect to which the qualified local issuers are authorized by
the laws of the Commonwealth to issue a tax-exempt bond. [A]
Except as set forth in subsection (d.1), a qualified local
issuer shall apply directly to the department, and the
department shall determine what portion of an allocation request
a [particular authority organized by a county or other political
subdivision] qualified local issuer will receive.
(c) Recapture of unused allocation.--A portion of an
allocation provided under subsection (a) [or], (b) or (d.1)
which is not used before the earlier of the end of the calendar
year or the deadline set by the department under subsection (a),
including an extension by the department, shall be recaptured
for reallocation by the department in consultation with the
Secretary of the Budget.
(d) Allocations to Pennsylvania Housing Finance Agency.--As
provided by section 501-A.1 of the act of December 3, 1959
(P.L.1688, No.621), known as the Housing Finance Agency Law, an
allocation for a mortgage revenue bond shall only be made by the
department to the Pennsylvania Housing Finance Agency, which may
reallocate a mortgage revenue bond under the Housing Finance
Agency Law. The department may make an allocation for a
qualified multifamily residential facility to the Pennsylvania
Housing Finance Agency, the Pennsylvania Economic Development
Financing Authority or a qualified local issuer. An allocation
for a qualified multifamily residential facility made to the
Pennsylvania Housing Finance Agency may be reallocated in whole
or in part by the Pennsylvania Housing Finance Agency to a
qualified local issuer.
(d.1) First-time farmers.--An allocation for first-time
farmer projects shall be made by the department to the
Department of Agriculture, which may reallocate to qualified
local issuers. A qualified local issuer must apply directly to
the Department of Agriculture, and the Department of Agriculture
shall determine what portion of an allocation request a
qualified local issuer shall receive. The Department of
Agriculture has the authority to establish by regulation the
criteria under which a qualified local issuer may receive
allocation for a first-time farmer project. The criteria must be
consistent with Federal law. By June 30 and December 31 of each
year, the Department of Agriculture shall provide information to
the department on allocations provided to qualified local
issuers for first-time farmer projects, consistent with the
information set forth in section 2706(a)(2).
(e) Carryforward of unused authority.--The department shall
provide for the carryforward of any unused tax-exempt bond
authority at the close of a year in a manner the department
determines will best preserve the ability to use the allocation
to carry out the purposes of this chapter. In providing for the
carryforward, there shall be a presumption that ability to carry
out the purposes of this chapter will be best maintained if
carryforwards of unused tax-exempt bond authority are reserved
for agencies.
Section 4. The act is amended by adding chapters to read:
CHAPTER 29
CUSTOMIZED JOB TRAINING PROGRAM
Section 2901. 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:
"Applicant." Any of the following:
(1) A local education agency.
(2) An industrial resource center.
(3) An economic development organization.
(4) A greenhouse.
(5) A private company.
(6) A local work force investment board.
"Capital investment." An expenditure for land, buildings,
renovations, machinery and equipment which is directly related
to the need for the proposed training.
"Economic development organization." An entity certified by
the department. The term includes "area loan organizations" and
"industrial development corporations" as defined in section
2301.
"Educational institution." Any of the following:
(1) Area vocational-technical schools.
(2) Community and junior colleges.
(3) Intermediate units.
(4) Licensed private/proprietary business and trade
schools.
(5) Public school districts.
(6) State or private colleges or universities.
"Greenhouse." A nonprofit organization recognized under
section 501(c)(3) of the Internal Revenue Code of 1986 (Public
Law 99-514, 26 U.S.C. § 501(c)(3)) which is formed for the
express purpose of creating university/business partnerships to
advance science and technology and to support economic and work
force development.
"Industrial resource center." An industrial resource center
as defined in the act of June 22, 2001 (P.L.400, No.31), known
as the Industrial Resources Center Partnership Act.
"Labor organization." An organization, agency or employee
representation committee or plan in which employees participate
and which exists for the purpose, in whole or in part, of
dealing with disputes between an employer and its employees
involving grievances, labor disputes, wages, rates of pay, hours
of employment or conditions of work. The term does not include
an organization, agency, committee or plan which practices
discrimination in membership because of race, color, creed,
national origin, sex or political affiliation.
"Local education agency." An educational institution located
in the Commonwealth and certified by the Department of
Education.
"Local work force investment board." An entity recommended
for certification by the Pennsylvania Workforce Investment Board
and certified by the Governor in accordance with the act of
December 18, 2001 (P.L.949, No.114), known as the Workforce
Development Act.
"Private company." A business, professional service company
or other enterprise. The term may include a group of two or more
private companies operating as a consortium in order to take
advantage of a common training program. The term shall not
include point-of-sale retail businesses.
"Program." The Customized Job Training Program established
under this chapter.
"Trainee." An individual who is an employee or prospective
employee and is enrolled in an eligible training program which
is designed to enable the individual to obtain or retain
employment.
"Training program." A systematic program which is designed
to provide a trainee with the skills and knowledge necessary to
meet a private company's or labor organization's specifications
for an occupation or trade, the successful completion of which
results in one of the following:
(1) The trainee being employed or continuing to be
employed full time by that private company.
(2) A trainee receiving instruction or training related
to an occupation with a shortage of skilled workers or a
targeted industry cluster as referred in section 2905(3)(i).
The program may involve instruction within a local education
agency, within a private company or on-the-job training, within
a training program of a labor organization, through technology-
based instruction or any combination thereof.
Section 2902. Program.
(a) Program continuation.--The customized job training
program within the department is continued and reestablished.
Funds appropriated to the department for the program shall be
used to provide grants for training programs.
(b) Department responsibilities.--The department shall do
all of the following:
(1) Administer the program.
(2) Review, approve and award grants to applicants in
accordance with sections 2904 and 2905.
(3) Enter into one or more partnerships with one or more
local education agencies or other training providers in
accordance with section 2907.
(4) Establish, at the beginning of each fiscal year, a
reserve not to exceed 25% of the funds appropriated to the
department for the program for the use of small business
applicants. Any uncommitted funds in the reserve after March
1 of any fiscal year may be made available to any applicant.
(5) Establish a private matching fund requirement for
applicants. The department shall establish the private
matching fund requirement for applicants which are private
companies or labor organizations at not less than 25% of the
total eligible training project cost. The department may
establish different matching fund requirements for a small
business enterprise as defined in section 1301 and a labor
organization.
Section 2903. Applications.
(a) Provisions of application.--An applicant may submit an
application to the department for a grant to fund a training
program in accordance with the following:
(1) If an application is submitted by an industrial
resource center or economic development organization, the
industrial resource center or economic development
organization may apply for a grant on behalf of a private
company, greenhouse or labor organization. An economic
development organization may not serve as the direct training
provider of the trainees.
(2) If an application is submitted by a local work force
investment board, the local work force investment board may
apply for a grant only on behalf of projects which promote
local education agency and private company partnerships or
private company and private company partnerships.
(3) If an application to train entry-level employees is
submitted by or on behalf of a private company, the applicant
shall demonstrate that the private company has contacted the
local work force investment board and the local county board
of assistance to solicit referrals of candidates for the
training program.
(4) If an application is submitted by any other person,
the application shall satisfy any requirements established by
the department.
(b) Requirements of application.--An application shall:
(1) Demonstrate that the applicant considered other
available resources, including private sector funds, other
State or local agency training programs or funds made
available under the Workforce Investment Act of 1998 (Public
Law 105-200, 112 Stat. 936) or such other Federal programs
which provide funds for employment training.
(2) Contain a description of the proposed training or
instructional program to be carried out.
(3) Disclose if an applicant intends to contract with
other organizations or individuals for the provision of all
or a portion of the services to be provided and, if
disclosed, contain a request to allocate a portion of the
grant from the applicant to the subcontractor.
(4) Include a written commitment from the applicant to
invest private matching funds in the training project.
Section 2904. Review of applications.
The department shall review an application and may request
from the applicant and its training provider such additional
information and records as it deems necessary to carry out its
responsibilities under this chapter.
Section 2905. Approval of applications and award of grants.
The department may approve and award grants to applicants in
accordance with all of the following:
(1) The department must find that the applicant has
satisfied the applicable matching fund requirement and that
the grant will be used by the applicant to provide training
or instruction only to Commonwealth residents.
(2) The department must find that the grant will result
in any of the following objectives:
(i) The location or expansion of a private company
or greenhouse within this Commonwealth with the creation
of jobs paying competitive wages and the private company
or greenhouse making capital expenditures.
(ii) The expansion or upgrade of existing jobs which
result in increased wages for the jobs.
(iii) The retention of jobs in this Commonwealth
which would otherwise be lost.
(iv) The promotion of local education agency and
private company partnerships and private company and
private company partnerships if a direct connection
between the development of skills and subsequent
employment by one or more private companies can be
demonstrated.
(v) The promotion of efforts by a labor organization
to upgrade the skills of its members.
(3) The department shall give priority to those
applications which have any of the following characteristics:
(i) The application would establish a training
program determined by the department to be in a growth
industry vital to this Commonwealth's competitiveness.
These industries include: agribusiness, advanced
manufacturing, advanced materials, life sciences,
biotechnology and health care, environmental technology
and information technology.
(ii) The application is submitted on behalf of a
private company or labor organization which is located:
(A) in a municipality in which the average
unemployment rate in the most recently completed
calendar year is above the Statewide average
unemployment rate for the same period;
(B) in a State-designated enterprise zone; or
(C) in a municipality or region which has
suffered a significant loss of jobs due to one or
more major plant closings, layoffs or natural or man-
made disaster.
(iii) The application is submitted by or on behalf
of a private company which plans to create 50 or more
jobs and which is making a capital investment of at least
$1,000,000.
(4) The department may determine that the grant will be
used by the applicant to reimburse the cost of training.
Costs may include instructional costs, costs of instructional
or training material or software, costs associated with
tuition reimbursement and reasonable administrative costs as
determined by the department.
Section 2906. Limitations.
(a) Department.--The department may not do any of the
following:
(1) Award grants under this chapter which in the
aggregate exceed the amount of the annual appropriations to
the department for the program.
(2) Award more than 10% of the funds appropriated to the
program in any one fiscal year to any one private company,
greenhouse or labor organization, including any affiliates
thereof.
(3) Award a grant to or on behalf of any private company
or labor organization, including any affiliates thereof, for
more than two successive fiscal years and for no more than
three out of every five fiscal years.
(b) Recipients.--A recipient of a grant may not do any of
the following:
(1) Use a grant to do any of the following:
(i) Pay wages of trainees during training.
(ii) Pay any costs associated with building
construction or renovation or the acquisition, upgrade or
installation of equipment or machinery, including
computer equipment.
(2) Use a grant to reduce the work force or displace
workers of a private company prior to the commencement of a
training program except because the introduction of new
manufacturing techniques, technology and modernization may
lead to short-term reductions in a private company's work
force. The secretary may waive this grant limitation if the
long-term economic benefits to be gained by the private
company significantly exceed the short-term detriment to its
work force.
(3) Use a grant to violate any conditions of an existing
collective bargaining agreement.
(4) Use a grant for point-of-sale retail job training.
Section 2907. Partnerships.
If the department determines that a training program is more
effectively delivered through a partnership, the department may
enter into partnership agreements with one or more local
education agencies or other training providers to provide the
training program. The training programs shall consist of basic
and entry-level skills, technology skill training, training
related to job retention or other specified training assistance.
Under a partnership arrangement, the department may limit the
number and category of applicants which may submit applications
for assistance and may establish minimal standards and
requirements for project eligibility. These requirements may be
separate and distinct from the requirements established under
this chapter except that the provision of section 2906 shall
apply to all training programs funded under this chapter.
Section 2908. Compliance with statutes and collective
bargaining agreements.
The department shall require each person receiving a grant
under this chapter to comply with applicable Federal and State
statutes governing employment discrimination, minority
recruitment, minimum or prevailing wages, worksite safety and
procurement practices. The department shall require each private
company receiving a grant under this chapter to certify that its
training program does not abridge any contractual agreement
between the private company and the collective bargaining
representative of its employees.
Section 2909. Penalties and investigations.
(a) Private company.--Unless the department determines that
a private company's failure is due to circumstances outside the
control of the private company, the private company shall be
liable to repay all or part of the amount of a grant awarded
under this chapter if the private company does any of the
following:
(1) Fails to create the number of jobs specified in its
agreement with or commitment to the department.
(2) Fails to make the amount of capital investment
specified in the application to the department.
(3) Fails to substantially carry out the training
program approved by the department.
(b) Applicants.--An applicant or subcontractor that fails to
provide for or to perform a training program approved by the
department may be required to repay to the department any funds
it received under a grant awarded by the department.
(c) Investigation.--Upon receiving any complaint from a
private company, greenhouse, labor organization or trainee as to
the inadequacy of training received, the department may initiate
an investigation and take appropriate action, including the
recovery of grant funds expended.
CHAPTER 30
MACHINERY AND EQUIPMENT LOAN FUND
Section 3001. Scope.
This chapter deals with the Machinery and Equipment Loan
Fund.
Section 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:
"Business enterprise." A for-profit corporation, partnership
or proprietorship.
"Farm commodity." Any Pennsylvania-grown agricultural,
horticultural, aquacultural, vegetable, fruit and floricultural
product of the soil, livestock and meats, wools, hides, furs,
poultry, eggs, dairy products, nuts, mushrooms, honey products
and forest products.
"Fund." The Machinery and Equipment Loan Fund created and
established by this chapter.
"Normal agricultural operation." The term shall have the
same meaning as given to it in section 2 of the act of June 10,
1982 (P.L.454, No.133), entitled "An act protecting agricultural
operations from nuisance suits and ordinances under certain
circumstances."
"Production agriculture." The management and use of a normal
agricultural operation for the production of a farm commodity.
Section 3003. Machinery and Equipment Loan Fund.
(a) Creation.--There is hereby created a special account in
the Treasury Department, to be known as the Machinery and
Equipment Loan Fund, to which shall be credited all program
appropriations made by the General Assembly, all proceeds from
loan repayments and any and all other deposits, payments or
contributions from any other source made available to the fund.
The fund shall operate as a revolving fund whereby all
appropriations, payments and interest made thereto may be
applied and reapplied to the purposes of this chapter.
(b) Credits to fund.--All appropriations, deposits and
contributions made to the fund shall be immediately credited in
full to the fund, and earnings on the moneys held in the fund
shall also be credited to the fund for the purposes of this
chapter.
Section 3004. Eligibility for loans; terms and conditions.
(a) Loans; general rules.--The secretary shall make advances
from the fund, subject to the terms, conditions and restrictions
provided under this chapter, for the purpose of making loans to
business enterprises involved in industrial processes, mining,
manufacturing, production agriculture or other industrial
sectors, as defined by the department, to acquire and install
new machinery and equipment or upgrade existing machinery and
equipment. All loans shall be subject to the following
conditions:
(1) Be for eligible firms under the provisions of this
chapter.
(2) Have a maximum loan ceiling of $500,000 or 50% of
the cost of the project, whichever is less.
(3) Be limited to the purchase and installation of new
equipment and machinery or the upgrade of existing machinery
and equipment.
(4) Except for loans made to business enterprises
involved in production agriculture, be limited to projects
that demonstrate the creation or retention of one job for
every $25,000 received from the fund.
(5) Have an interest rate which shall be established by
the secretary based upon the current and longer term
unemployment levels of the region of this Commonwealth within
which the project is located.
(6) Have a term of not in excess of ten years or the
useful life of the machinery or equipment purchased or
upgraded, whichever is less.
(b) Restrictions.--No loans shall be made that do any of the
following:
(1) Cause, aid or assist in, directly or indirectly, the
relocation of any business operation from one part of this
Commonwealth to another unless there is at least a 25%
increase in net employment.
(2) Supplant funding that is otherwise available
expeditiously from private sector sources on commercially
reasonable terms.
(3) Be for the purpose of refinancing any portion of the
total project cost or other existing loans or debt.
(4) Be for the purpose of financing projects located
outside the geographic boundaries of this Commonwealth.
(5) Be for the purpose of paying off a creditor that is
inadequately secured and is in a position to sustain a loss.
(6) Be for the purpose of repaying a debt owed to a
small business investment company.
(7) Provide funds for speculation in any kind of
property, real or personal, tangible or intangible.
(c) Security.--All loans shall be secured by liens on the
equipment purchased and other sufficient collateral as
determined by the secretary.
Section 3005. Application and administration.
(a) Procedures.--Application and administration procedures
for fund loans shall be established by the secretary.
(b) Receipt.--The secretary shall receive applications from
eligible firms for machinery and equipment loans. Applications
shall be made to the secretary in the form and manner as the
department may require.
(c) Investigation.--Upon receipt of the application, the
secretary shall investigate and review the application and
either approve or disapprove the loan application by proper
action of the department. The decision of the secretary shall be
based, in whole or in part, upon the following criteria:
(1) Ability of the applicant to meet and satisfy all
debt service as it becomes due and payable.
(2) Sufficiency of available collateral, including
satisfactory lien positions on real and personal property.
(3) Eligibility of the applicant as a business
enterprise involved in industrial processes, manufacturing,
mining, production agriculture or other industrial sectors as
defined by the secretary.
(4) Sufficient evidence that funds shall be used only to
acquire and install new equipment and machinery or upgrade
existing equipment and machinery.
(5) Capital need of the applicant.
(6) Conformity of the project to the provisions of this
chapter.
(7) Relevant criminal and credit history and ratings of
applicant as determined from outside credit reporting
services and other sources.
(8) Number of net employment opportunities created and
retained by the proposed project.
(9) Supporting evidence that loan project will increase
the firm's competitiveness and value added within its
respective industry.
(10) Explanation of how loan will aid the Commonwealth
in its efforts to assist business enterprises to increase
their productivity and improve the future competitive
position of this Commonwealth's industries.
(11) Compliance with the loan amount limitations
provided for machinery and equipment loans.
(12) Payment to date of all tax obligations due and
owing to the Commonwealth or any political subdivision
thereof.
(13) Conformity of all aspects of the loan transaction
with the substantive and procedural provisions of this
chapter and regulations promulgated hereunder.
(14) Such information and documentation as the secretary
shall require.
(d) Notification.--The secretary shall notify the applicant
of final approval or disapproval of the loan application within
a reasonable period of time following the receipt of the
application. In the case of approval of a loan application, the
secretary shall arrange to draw the loan amount from the fund
and advance the sum to the recipient. The advance shall be made
available in the form of a loan transaction, which loan shall be
evidenced by a note executed by the recipient and secured in a
manner as the secretary shall require in conformity in all
respects to the loan as approved by the secretary.
(e) Policy requirements and report.--All loans shall be
administered and monitored by the department in accordance with
the policies and procedures prescribed by the secretary. On or
before June 30 each year, the secretary shall prepare a report
that includes the following:
(1) Each outstanding loan.
(2) The date of approval.
(3) The original principal balance.
(4) The current principal balance.
(5) The interest rate.
(6) The purpose for which the loan was made.
(7) An enumeration of any problems or issues which have
arisen with regard to each loan.
(8) A statement regarding the progress of the business
in creating and retaining its requisite number of employment
opportunities.
(9) Such other information and documentation as the
secretary shall require.
(f) Penalty for noncompliance.--In the event that a loan
recipient shall not comply with its approved application by
failing to create or preserve the number of employment
opportunities specified in its approved application, the
secretary shall impose a penalty equal to an increase in the
interest rate to 2% greater than the current prime interest rate
for the remainder of the loan unless the penalty is waived by
the secretary because the failure is due to circumstances
outside the control of the loan recipient. The penalty shall be
payable in installments that the secretary deems appropriate.
Section 3006. Powers of secretary.
The secretary shall have and may exercise all powers and
authority necessary to the proper administration and
implementation of this chapter and shall have the authority to
adopt policies, procedures and guidelines and promulgate rules
and regulations necessary to effectuate the provisions of this
chapter.
Section 3007. Reporting and inspection.
(a) Inspection.--Each business enterprise which applies for
or receives assistance under this chapter, upon reasonable
request of the department, shall permit duly authorized
employees of the department to inspect the plant, books and
records of the business enterprise.
(b) Updating.--Each business enterprise shall update the
information given to the department in its application if
conditions change or to the extent that the information given
originally becomes inaccurate or misleading.
(c) Periodic reports.--Each recipient of assistance under
this chapter shall provide the department with periodic
financial reports as the secretary may require until such time
as the loan is paid off.
Section 3008. Nondiscrimination.
No loan shall be made to a business enterprise unless the
business enterprise certifies to the department, in a form
satisfactory to the department, that it shall not discriminate
against any employee or any applicant for employment because of
race, religion, color, national origin, sex or age. The business
enterprise shall also certify to the department that it is not
currently under citation for pollution violations and that in
the future it will meet all applicable antipollution standards.
Section 3009. Conflict of interest.
No employee of the department shall, either directly or
indirectly, be a party to or have any financial interest in any
contract or agreement arising pursuant to this chapter.
Section 3010. Reports to the General Assembly.
(a) Annual reports.--On or before June 30 of each year, the
secretary shall provide a report to the Chief Clerk of the House
of Representatives and to the Secretary of the Senate. The
report shall describe all relevant activities of the department
pursuant to this chapter and shall include the following:
(1) List of business enterprises receiving loans from
the fund and the amounts and terms of this assistance.
(2) Loan amounts repaid.
(3) Loans outstanding and balances due, including
delinquent payments.
(4) Jobs created by businesses receiving funds in all
previous years.
(5) Other relevant information as determined by the
Secretary of Commerce.
(b) Availability of departmental reports.--Reports received
by the department under section 3005(e) shall be made available
upon request to members of the General Assembly.
Section 5. Section 5105 of the act is amended to read:
Section 5105. Power and authority of the Pennsylvania Economic
Development Financing Authority.
In addition to the powers set forth in section 6.3 of the act
of August 23, 1967 (P.L.251, No.102), known as the Economic
Development Financing Law, the Pennsylvania Economic Development
Financing Authority established under that act shall have the
power and is hereby authorized to issue its limited obligation
revenue bonds and other types of financing, as in the judgment
of the financing authority shall be necessary, to provide
sufficient funds for any activity the department or the
Pennsylvania Industrial Development Authority is permitted to
take with respect to the loan portfolios subject to their
respective administrative authority [as set forth in section
1302]. Bonds authorized to be issued under this section shall
not be a debt or liability of the Commonwealth and shall not
create or constitute any indebtedness, liability or obligation
of the Commonwealth except to the extent the bonds are secured
by the pledge of loan portfolios. Bonds authorized to be issued
under this section shall be payable solely from the revenues or
funds pledged or available for their repayment.
Section 6. The following acts and parts of acts are
repealed:
Act of December 20, 1985 (P.L.492, No.116), known as the
Customized Job Training Act.
Act of October 21, 1988 (P.L.1050, No.120), known as the
Machinery and Equipment Loan Fund Act.
Section 12(b) of the act of November 26, 1997 (P.L.504,
No.54), known as the Self-Employment Assistance Program Act.
Section 7. The addition of Chapter 29 of the act shall be
deemed a continuation of the program authorized by the former
act of December 20, 1985 (P.L.492, No.116), known as the
Customized Job Training Act, and the addition of Chapter 30 of
the act shall be deemed a continuation of the act of October 21,
1988 (P.L.1050, No.120), known as the Machinery and Equipment
Loan Fund Act. Except where in conflict with the provisions of
this act, the regulations promulgated under the former acts
shall remain in force and effect until they are amended or
repealed in accordance with law.
Section 8. This act shall take effect immediately.
APPROVED--The 9th day of December, A. D. 2002.
MARK S. SCHWEIKER
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