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Inward Investment Guides

Pennsylvania Direct Financial Incentives 2012

Pennsylvania's economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include Building PA, the New Pennsylvania Venture Guarantee Program, and Keystone Opportunity Zones.

Area Development Online Research Desk (2012)
(page 2 of 3)


IDA Bond Financing Program
A regulatory program which reviews and approves applications for all tax-exempt and taxable projects being financed through an IDA.
Uses of Funds or Service
Tax exempt: land, building, equipment, limited closing costs, eligible refinancing Taxable: land, building, closing costs, working capital, refinancing
Contact Office
Center for Private Financing
Amounts (If Financing)
Tax exempt
$1-$10million
Taxable: unlimited
Misc.Info
Financing Terms/Conditions
This program is not available in ESA

Industrial Sites Clean-up (Act 2 and Act 4) Industrial Sites Reuse Program (ISRP) (Act 2 and Act 4)
Grants and low interest loans for assessment and remediation of property or environmental site assessment and remediation work at a former industrial sites.
Uses of Funds or Service
Assessment and remediation of property
Phase I,II,and III environmental assessment
Remediation of hazardous substances
Contact Office
Center for Business Financing, Site Development
Amounts (If Financing)
Grants and loans up to $200,000 for assessments and up to $1M for remediation, ISR pays 75% of all eligible total project costs
Misc.Info
Financing Terms/Conditions
Varies

Infrastructure and Facilities Improvement Program (IFIP)
A multi-year grant program that will provide grants to certain issuers of debt in order to assist with the payment of debt service.
Authorities that issue debt for Tax Increment Financing Redevelopment Authorities Convention center authorities, including municipal authorities formed for the purpose of convention center activities
The Pennsylvania Economic Development Financing Authority
Uses of Funds or Service
Payment of debt service incurred by the authority relating to debt issued for the project
Contact Office
Center for Business Financing, Site Development Division
Amounts (If Financing)
Varies
Misc.Info
Financing Terms/Conditions
Refer to Program Guidelines.

Infrastructure Development Program (IDP)
Grant and low-interest loan financing for public and private infrastructure improvements
Municipalities, industrial development authorities and corporations, municipal authorities, redevelopment authorities and local development districts may apply for IDP assistance for themselves or on behalf of eligible private companies engaged in the following enterprises Agriculture Industrial Manufacturing Research and development Export services Real estate developers who are developing sites for eligible private companies
Uses of Funds or Service
Transportation facilities, airports Clearing preparation of land environment remedation Watewre and Sewer Systems Energy facilities Parkng facilities
Clearing and preparation of land and environmental remediation Storm Sewers Bridges; Waterways Rail facilities Port facilities at former industrial sites only: land and building acquisition, construction and renovation by private developers Telecommunications infrastructure
Contact Office
Center for Business Financing, Site Development Division
Amounts (If Financing)
Loans and grants up to $1.25 million
No more than 20% of the annual appropriation for a single municipality
No more than 10% of the annual appropriation will be loans or granted to applicant for speculative Greenfield projects not involving private companies
Misc.Info
Financing Terms/Conditions
Grants for public infrastructure
Loans to private businesses at 3% interest rate
Up to 15-year term
2:1 private to public match required
$25,000 cost per job to be created within five years or 10 new full-time equivalent jobs (whichever is greater)

Job Creation Tax Credits (JCTC)
A $1,000-per-job tax credit to create new jobs in the Commonwealth within three years Approved businesses
Uses of Funds or Service
Tax credits used to offset various business tax liabilities
Contact Office
Center for Business Financing, Tax Credits Division
Amounts (If Financing)
$1,000-per-job tax credit to approved businesses that agree to create jobs within three years. 25% of the tax credits allocated each year must go to businesses with less than 100 employees
Misc.Info
Financing Terms/Conditions
Tax credits may not be utilized by a business until the jobs are actually created. Must create at least 25 new jobs equaling at least 20% of the existing workforce

Keystone Communities
Provides state-funded grants for community revitalization and economic development activities at the local level. The program assists the community in becoming competitive for business retention, expansion and attraction.
Local Governments
Redevelopment Authorities
Housing Authorities
Non-profits on a case by case basis
Uses of Funds or Service
Community revitalization and economic development
Development or rehabilitation of housing
Contact Office
Regional Office
Center for Community Financing
Amounts (If Financing)
No minimum or Maximum
Typical grants average between $150,000 and $200,000
Misc.Info
Financing Terms/Conditions
Refer to Program Guidelines

Keystone Innovation Zones (KIZ)
Provide grant funds to community/university partnerships to generate job growth through tech transfer and entrepreneurship. Focused around campuses and property around college and universities.
Partnerships must include: institution of higher education, economic development organizations, private sector businesses, business support organizations, commercial lending institutions, venture capital, and foundations.
Recommended partners include: local government organizations and workforce development organizations.
Uses of Funds or Service
Grant funds will be used for Zone coordination, strategic planning, personnel costs, hiring of consultants and administration of the zone. Companies located in tax zones, in operation less than 8 years and fall under the industry sector focus are eligible to apply for state tax credits
Contact Office
Technology Investment Office
Amounts (If Financing)
Maximum for the first year of $250,000. Declining funding in following years, operations required without state funds after three years.
Projects and companies in the KIZ are given priority reviews under various DCED Programs.
Misc.Info
Financing Terms/Conditions
Partnership must meet definition and required members
Zone must define industry sector focus
Zone must be geographically identified and should include an institution of higher education with research capabilities. Institution does not have to be located in zone boundaries, but must be formally linked to zone activities.
1:1 cash match required
Refer to Program Guidelines
1:1 cash match required
Program ends July 2007

Keystone Opportunity Zones (KOZ)
Provides state and local tax abatement to businesses and residents locating in one of the 12 designated zones.
Qualified businesses, property owners and residents. Qualified means you satisfactorily meet the necessary criteria listed in the Act.
Uses of Funds or Service
Businesses, property owners and residents that are located in a KOZ, KOEZ/KOIZ are eligible to receive significant state and local tax benefits.
Contact Office
Center for Business Financing, Site Development Division
Amounts (If Financing)
Projects in KOZ/KOEZ are given priority consideration for assistance under various community and economic building initiatives.
Misc.Info
Financing Terms/Conditions
Pennsylvania businesses relocating to a KOZ/KOEZ must either:
Increase their full-time employment by 20% within the first full year of operation, or make a 10% capital investment in the KOZ/KOEZ property based on their prior year's gross revenues. Eligibility for benefits is based upon annual certification. In order to receive benefits, any entity applying must be compliant with all local and state taxes and building and zoning codes.

KIZ Tax Credit and Tax Credit Sale
Tax credits are available for KIZ companies less than eight years old that operate within the geographic boundaries of a KIZ and are working in one of the KIZ targeted industry sectors.
The tax credits are based on the increase in annual gross revenues derived from operations in the KIZ for the two years prior to application for the tax credit.
Tax credits are one half of this increase in revenue or $100,000, whichever is the lesser amount
KIZ tax credit award applications must be submitted by September 15.
Uses of Funds or Service
The KIZ credits will first be applied to offset the company's tax liability for the taxable year in which the tax credits were awarded. The original company awarded the credits may used or sell/assign any remaining unused credits they have for up to five years from the original date.
Contact Office
Technology Investment
Amounts (If Financing)
$25,000,000 in KIZ tax credits is available annually for award.
Misc.Info
Financing Terms/Conditions
This program is not available in ESA

Life Science Greenhouse
Grants to help groups or consortia of Pennsylvania companies position themselves at the cutting edge of emerging technologies
Uses of Funds or Service
Technology Development
R&D Development
Technology Transfer
Contact Office
Technology Investment Office
Amounts (If Financing)
Varies

Local Government Capital Project Loan Program (LGCPL)
Low-interest loans to for equipment and facility needs.
Local Government with populations of 12,000 or less
Uses of Funds or Service
Rolling stock and data processing equipment purchases or the purchase, construction, renovation or rehabilitation of municipal facilities
Contact Office
Governor's Center for Local Government Services
Amounts (If Financing)
50% of the total cost of purchasing equipment up to a maximum of $25,000 or 50% of the total cost for purchase, construction of renovation of municipal facilities up to a maximum of $50,000
Misc.Info
Financing Terms/Conditions
2% interest rate
Repaid over a period not to exceed 10 years or the useful life of the equipment or facility.
Refer to program guidelines

Local Share Account - Washington -- (LSA - Washington)
Grants to eligible municipalities, economic development and redevelopment authorities in and around Washington. Funds usage is specific to needs of the area.
Uses of Funds or Service
Economic development projects
Health and safety projects
Public interest projects
Community improvement projects\ Job training
Reasonable administrative costs
Contact Office
Center for Business Financing, Grants Division
Amounts (If Financing)
Varies

Local Share Account - Luzerne (LSA - Luzerne)
Grants to eligible municipalities, economic development and redevelopment authorities in and around Luzerne. Funds usage is specific to needs of the area.
Uses of Funds or Service
Economic development projects Health and safety projects; Community improvement projects; Job training; reasnable administrative costs
Contact Office
Center for Business Financing, Grants Division
Amounts (If Financing)
Varies
Misc.Info
Financing Terms/Conditions
2% of gross terminal revenues of certain licensed gaming facilities are to be distributed in an orderly and timely fashion to support and enhance community and economic well-being and mitigate the impact of gaming and related activities.
REFER to GUIDELINES.
Detailed uses, application review process, and eligible entities are outlined in the guidelines. Program administered through CFA

Local Share Account - Monroe (LSA - Monroe)
Grants to eligible municipalities, economic development and redevelopment authorities in and around Monroe.
Funds usage is specific to needs of the area.
Uses of Funds or Service
Economic development projects
Health and safety projects
Public interest projects
Community improvement projects
Job training
Reasonable administrative costs
Contact Office
Center for Business Financing, Grants Division
Amounts (If Financing)
Varies
Misc.Info
Financing Terms/Conditions
2% of gross terminal revenues of certain licensed gaming facilities are to be distributed in an orderly and timely fashion to support and enhance community and economic well-being and mitigate the impact of gaming and related activities
REFER to GUIDELINES.
Detailed uses, application review process, and eligible entities are outlined in the guidelines.
Program administered through CFA

Machinery and Equipment Loan Fund
Low-interest loans to acquire and install new or used machinery and equipment or to upgrade existing machinery and equipment Uses of Funds or Service
Manufacturing Industrial Agricultural processors Direct mining operations
Machinery and equipment acquisition and upgrading, engineering/ installation costs directly related to the operation or processes
Contact Office
Center for Business Financing, Loans I Division
Amounts (If Financing)
Loans up to $500,000 or 50% of the total eligible project costs, whichever is less
Misc.Info
Financing Terms/Conditions
Interest rates 2.75%
Up to 10 year term, depending upon the useful life of the machinery being financed
$25,000 cost per job retained or created
Project must be directly related to the manufacturing process

Municipal Assistance Program
Provides grant funds that promote cooperation among municipalities. Also encourages more efficient and effective delivery of municipal services on a cooperative basis.
Two or more local government or Councils of Governments (COGSs).
Uses of Funds or Service
Combined police records administration, shared personnel activities, joint ownership of equipment, shared data processing operations, cooperative building code programs and COG start-up funding
Contact Office
Governor's Center for Local Government Services
Amounts (If Financing)
No minimum or Maximum
Grants range between $10,000 and $25,000
Misc.Info
Financing Terms/Conditions
50% match required.
Refer to Program Guidelines

Municipal Assisting Program
Pennsylvania Municipalities participating in the National Flood Insurance Program (NFIP), complying with Act 166 and submitting an Annual Report
Uses of Funds or Service
Preparation, administration and enforcement of floodplain management regulations.
Contact Office
Governor's Center for Local Government Services
Amounts (If Financing)
50% of the eligible costs. No maximum dollar limit
Misc.Info
Financing Terms/Conditions
Submission of a completed DCED-SPO-58/Reimbursement Application- Flood plain management activities on an annual basis along with supporting documentation

Neighborhood Stabilization Program (NSP)
Grants to communities to address the housing foreclosure crisis created by subprime and other problematic mortgage lending. This program is authorized under the federal Community Development Block Grant (CDBG) Program.
Contact Office
Regional Office
Center for Community Empowerment
Amounts (If Financing)
Loans no less than $,1000,000, no upper limit. In general $500,000 may be borrowed for every 10 new direct or indirect jobs the borrower can demonstrate the project will create Grants to local units of governments or non-profit entities for the stabilization of neighborhoods with significant foreclosure. Refer to the program guidelines for details

NewPA Venture Capital Investment Program
CFA initiative to address investment in early stage companies and includes provisions for investments in areas of PA underserved by the risk-capital market Loans to venture capital firms or regional angel investor groups that invest the financial capital of third party investors in private technology startup enterprises; 50% of program funds are available to venture capital firms which operate locations in historically underserved areas of PA defined as counties outside of the Philadelphia MSA and Allegheny County and those with populations below 1 million. Additionally 50% of the loaned funds are invested in these areas
Contact Office
Technology Investment Office
Amounts (If Financing)
Varies
Misc.Info
Financing Terms/Conditions
Program administered through CFA

Next Generation Farmer
Federal tax-exempt mortgage financing to reduce a farmer's interest rate for capital purchases such as farm land or agricultural machinery and equipment
Uses of Funds or Service
Purchase of land or machinery and equipment
Contact Office
Center for Private Financing
Amounts (If Financing)
Maximum loan amount of $470,000 with no more than $62,500 being used towards the purchase of used equipment
Misc.Info
Financing Terms/Conditions
IDA is only entity eligible to apply
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