The Senate today concurred on House amendments to Senate Bill 778, which addresses a number of state economic development programs.

“I am pleased that my colleagues moved this bill quickly to the Governor’s desk,” Senator White said.  “Pennsylvania’s economic development initiatives have focused on main streets and brownfields.  They have drawn in small businesses and retained large corporate players.  Senate Bill 778 would take parts of those programs and create a great environment for high-tech business development by promoting cooperation with Pennsylvania’s outstanding colleges and universities.”

KIZs will provide such incentives as priority consideration for Pennsylvania Industrial Development Authority (PIDA) loans, grants for workforce development, as well as research and development tax credits.  This designation would also provide for support from the state Department of Community and Economic Development and the Ben Franklin Technology Development Authority.

Other highlights of the KIZ provisions include:

• Zones are determined by a KIZ partnership (colleges and businesses) and approved by DCED.

• KIZ-qualified companies are: less than 8 years old; have at least three employees in the zone; and fall within a targeted industry segment chosen by the KIZ Partnership in its strategic plan.

• Establishes Keystone Innovation Zone Tax Credit (maximum $100,000 per year per applicant; total $25 million per year).

• Provides for operational grants ($250,000 per year).

• Provides for technology transfer grants to colleges ($250,000 per year).

“KIZs will open new avenues for economic development by focusing on early stage capital, facilities, people and connectivity,” Senator White said.  “They will better align the Commonwealth’s economic development programs with high-growth companies that are creating the jobs of the future.”

Senator White noted that the legislation approved by the Senate today was somewhat more comprehensive than what he had set forth in his original bill.

“Those additional pages have made this a stronger piece of legislation, one that addresses a number of economic development areas and initiatives,” Senator White said.  “The House amendment added provisions regarding the Small Business Council; the Opportunity Grants Program; the Small Business First Program; and, the Machinery and Equipment Loan Program.  This is the first major revamping of these programs since 1996 and the most comprehensive revisions to Pennsylvania’s economic development programs in recent history.”

Highlights of the amendment include the following provisions:

Machinery and Equipment Loan Fund (MELF)

• Adds hospitals, information technology and biotechnology businesses as eligible applicants.

• Permits loans for computer hardware and software.

• Hospital loans limited to machinery and equipment used in the prescribing and dispensing of medication.

• Increases maximum loan amount to $5 million (from $500,000).

Small Business First

• Increases terms of loans from 10 years to 15 years for land and building loans, and from 7 years to 10 years for machinery and equipment.

• Adds purchases of land, building, machinery and equipment in the 12 months prior to applying as qualifying matches.

• Opportunity Grants

• Permits grants for production agriculture.

• Imposes penalties for noncompliance.