Pennsylvania Direct Financial Incentives
Pennsylvania's economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment.
Act 13 of 2012 established the Marcellus Legacy Fund and allocated funds to CFA for abandoned mine drainage, abatement and treatment with the (AMDATP). As one of the largest sources of stream impairment in Pennsylvania, billions of gallons of Abandoned Mine Drainage (AMD) impair over 5,500 miles of streams within the commonwealth. Funding is used for projects involving the reclamation of Abandoned Mine Well(s); construction of a new AMD site; remediation and repair of existing AMD project sites; operation and maintenance of current AMD remediation sites; establishment of a trust fund to ensure ongoing maintenance is achieved and monitoring of water quality to track or continue to trace nonpoint source load reductions resulting from AMD remediation projects.
Alternative and Clean Energy Program (ACE)
The Alternative and Clean Energy Program provides financial assistance in the form of grants and loan funds that will be used by eligible applicants for the utilization, development and construction of alternative and clean energy projects; infrastructure associated with compressed natural gas and liquefied natural gas fueling stations and energy efficiency and energy conservation projects throughout the commonwealth. The program is administered jointly by the Department of Community and Economic Development (DCED) and the Department of Environmental Protection (DEP), under the direction of the Commonwealth Financing Authority (CFA). Funds are used to promote the utilization, development and construction of alternative and clean energy projects, plus energy efficiency and energy conservation projects in the commonwealth.
Baseline Water Quality Data
Act 13 of 2012 established the Marcellus Legacy Fund and allocated funds to CFA to be used to fund statewide initiatives to establish baseline water quality data on private water supplies using the Baseline Water Quality Data Program (BWQDP). Funding is used for projects involving water sample collection and analysis to document existing groundwater quality conditions on private water supplies.
Ben Franklin Technology Development Authority – University Research Commercialization Grants
This is a competitive grant program to promote stronger synergy between university-based applied research and development (R&D) and the transfer of technology as it relates to economic and workforce development in the areas of: energy, nanotechnology and advanced materials. Eligible applicants include: Pennsylvania higher education institutions located in Pennsylvania that are legally authorized to grant degrees in the commonwealth, consortia of Pennsylvania higher educational institutions, Pennsylvania-based not-for-profit with the ability to advance commercialization of research done in the areas of energy, nanotechnology and advanced materials within the commonwealth in collaboration with a Pennsylvania higher education institution.
Ben Franklin Technology Development Authority (BFTDA) –Venture Capital Investment Program
The program is a Commonwealth of Pennsylvania initiative intended to address the financing needs of technology-oriented businesses by increasing the amount of risk capital available to technology businesses’ investment in venture capital partnerships. The venture capital partnerships invest mainly in early-stage PA technology companies. The funds are available to venture capital funds in the form of loans. A venture capital fund applying for this program will be most competitive when its primary investment targets are companies in the seed or early stage of development and/or sectors of strategic interest to the BFTDA. The investments are required to provide significant leverage as well as the potential to make Pennsylvania a national leader in support for its early-stage companies.
Ben Franklin Technology Partners Challenge Grant Program
The Ben Franklin Technology Partnership is comprised of a network of four independent organizations known as the Ben Franklin Technology Partners. The network serves the commonwealth by playing a major role in promoting and supporting business innovation within the state. The Ben Franklin Technology Partners provide access to capital, business expertise, technology commercialization services and a network of resources in order to advance the development of new technologies. Funding is used for Private Company and University joint research and development along with technology training and entrepreneurial infrastructure.
Broadband Outreach & Aggregation Fund (BOAF)
BOAF is a grant program designed to assist rural communities’ aggregate demand for broadband services. The goal is for rural communities to overcome challenges associated with low density populations and physically remote areas in procuring broadband services. BOAF is funded through PUC assessments on the rate increases of CenturyLink, Windstream and Verizon over the period 2006-2015, as detailed under Act 183 of 2004/Chapter 30.
The program provides mezzanine capital for developers for real estate assets in small to mid-sized Pennsylvania communities. Funds are awarded to Professional Investment Fund Managers through a Request for Qualification (RFQ) (advertised in Pennsylvania Bulletin), thorough the Commonwealth Financing Authority. The RFQ criteria includes: demonstrated capacity for serving the PA marketplace, including specific geographic areas and/or market segments; expertise in the proposed real estate sector; expertise in range of investments demonstrated by experience and success with previous investments and demonstrated capacity to attract additional investment for projects.
Business in Our Sites (BOS) Grants and Loans
The Business in Our Sites Program provides loans for the acquisition and development of key sites for future use by businesses, private developers and others. The program is administered through the Commonwealth Financing Authority (CFA). The program is intended to provide financial assistance to municipalities and others to plan and prepare sites for future use. Projects which require site development assistance where a business has already committed to locating at a specific site or where a private developer has already committed to locating a facility for a specific user may also seek financial assistance under other appropriate programs administered by DCED.
Community Based Services Tax Credit (CBSTC)
The Community Based Services Tax Credit (CBSTC) establishes a tax credit program for businesses that make contributions (cash, personal property or services) to non-profit entities that provide community-based services to individuals with Intellectual Disabilities. Tax credits may be applied against the tax liability of a business for the tax year in which the contribution was made.
Community Economic Development Loan Program (CED)
The Community Economic Development (CED) loan program provides loans for small business (100 full-time employees or less) located in designated distressed areas identified in Appendix IV to these guidelines. The purpose of the program is to assist businesses that will enhance the economic well-being of a community or neighborhood by providing products or services to communities previously unserved or underserved, or through the employment of residents of the community. Loan funds are available for eligible small business enterprises as an interest rate of 2 percent with flexible repayment terms that meet the needs of the business.
Discovered in PA, Developed in PA Program (D2PA)
The D2PA program is devoted to increasing economic opportunity in the commonwealth by seeking innovative ideas that promote entrepreneurship, technology transfer, business outreach and increased capacity. Eligible funding uses include: reasonable salary/personnel expenses; consultant fees relating to approved programmatic activities, land/building/equipment improvements, meeting/travel expenses and costs associated with preparation and publishing of educational/marketing materials.
Educational Improvement Tax Credit Program (EITC)
The Educational Improvement Tax Credit program provides an incentive for businesses to contribute to an educational improvement organization, a scholarship organization or a pre-kindergarten scholarship organization by providing tax credits. Tax credits may be applied against the tax liability of a business for the tax year in which the contribution was made. Businesses must be authorized to do business in the state and must be subject to business tax.
Export Finance Program (EFP)
The Export Finance Program (EFP) administered by DCED is designed to increase the level of foreign exports and the number of exporting companies in Pennsylvania. Many creditworthy small businesses do not have access to adequate financing because they either lack a relationship with a financial institution with export finance capabilities or the size of the transaction makes it uneconomical for the private sector to participate, even when credit risks are insured. The program fills the export financing gap by lending on export contracts. EFP provides assistance for two types of export financing projects. As a Delegated Authority Lender Authority under Ex-Im Bank’s Working Capital Guarantee Program, the Commonwealth of Pennsylvania is permitted to provide working capital financing for pre-export working capital needs. In addition, the program also provides accounts receivable financing for post-export assistance. This program is not intended to supplant or be a substitute for funds otherwise available from private lending sources.
Film Tax Credit Program
The Pennsylvania Film Tax Credit Program is an economic development tool to foster the growth and development of the commonwealth’s film industry. The program, authorized under Act 55 of 2007, provides a tax credit equal to 25 percent of a film production’s qualified Pennsylvania production expenses for film productions where at least 60 percent of the total production budget is spent in Pennsylvania. Qualified projects, including feature films, television pilots, each episode of a television series intended as programming for a national audience and television commercials. The eligible expenses includes the total amount of wages and salaries of individuals employed in the production of the film, the costs of construction, editing, photography, sound synchronization, lighting, wardrobe and accessories and the rental cost of the facilities and equipment.
First Industries Fund (FIF)
The First Industries Fund is a loan, loan guarantee and grant program aimed at strengthening Pennsylvania’s agriculture and tourism industries. The program is administered by both the Commonwealth Financing Authority (CFA) and the Department of Community and Economic Development (DCED). Funds for loan and loan guarantees are awarded for land and building acquisition and construction and machinery and equipment purchase and upgrades; working capital grants are for planning and predevelopment activities.
Flood Mitigation (FMP)
Act 13 of 2012 establishes the Marcellus Legacy Fund and allocates funds to the Commonwealth Financing Authority (CFA) for funding statewide initiatives to assist with flood mitigation projects. Projects authorized by a flood protection authority, the Department of Environmental Protection (DEP), the U.S. Army Corps of Engineers (Corps), or the U.S. Department of Agriculture's Natural Resources Conservation Service (NRCS) or identified by a local government for flood mitigation are eligible for the program.
Greenways, Trails & Recreation Program (GTRP)
Act 13 of 2012 established the Marcellus Legacy Fund and allocates funds to the CFA for planning, acquisition, development, rehabilitation and repair of greenways, recreational trails, open space, parks and beautification projects using the (GTRP). Funding is used for projects which involve development, rehabilitation and improvements to public parks, recreation areas, greenways, trails and river conservation.
Guaranteed Free Training Program (GFT-WEDnetPA)
Through the Guaranteed Free Training Program (GFT), qualified in-state businesses and out-of-state companies relocating to PA can access funding for a wide range of employee training. This program provides grant funding to PA companies for basic skills and information technology training of employees. Employees eligible for training under this program must be full-time employees of the business receiving GFT funding, must be PA residents, must work in PA, and must earn at least 150 percent of the federal minimum wage.
H2O PA Flood Control Program
The H2O PA Act was established by the General Assembly in July 2008. The Act provides single-year or multi-year grants to the commonwealth, independent agencies, municipalities, or municipal authorities for flood control projects. Funding is used for projects which involve construction, improvement, repair or rehabilitation of part or all of a flood control system.
H2O PA High Hazard Dams
The H2O PA Act was established by the General Assembly in July 2008. The Act provides for single-year or multi-year grants to the commonwealth, independent agencies, municipalities or municipal authorities for High Hazard Dams. Funding is used for activities to assist with repair, rehabilitation or removal of part or all of a High Hazard Dam.
High Performance Building Program (HPB)
The High Performance Building Program provides financial assistance in the forms of grants and loan funds to underwrite the cost premiums associated with the design and construction or major renovation of high performance buildings in the commonwealth. The program is administered jointly by the Department of Community and Economic Development (DCED) and the Department of Environmental Protection (DEP) under the direction of CFA.
*An HPB is a building that adheres to the standards adopted by the Department of General Services (DGS) in consultation with the DEP that optimizes the energy performance of buildings.
Historic Preservation Tax Credit
The program provides tax credits to qualified taxpayers for the restoration/conversion of a qualified historic structure into an income producing property. All projects must include a qualified rehabilitation and Museum Commission (PHMC) as being consistent with the standards for rehabilitation of historic buildings as adopted by the United States Secretary of the Interior. Tax credits may be applied against the tax liability of a qualified taxpayer. Qualified taxpayers include individuals, corporations, business trusts, limited liability companies (LLCs), limited liability partnerships (LLPs) or any other form of legal business entity. The tax credits awarded to a qualified taxpayer shall not exceed 25 percent of qualified expenditures. The total tax credits awarded to a qualified taxpayer may not exceed $500,000 in any fiscal year.
Industrial Sites Reuse Program (ISRP)
The Industrial Sites Reuse promotes the reuse and redevelopment of former industrial land and sites by providing funding for public entities, private non-profit economic development groups, and companies to perform environmental site assessment and remediation work. Entities cannot have caused or contributed to the environmental contamination, in order to receive funding. Funds are used for Phase I, II and III environmental assessments and remediation of hazardous substances.
Infrastructure & Facilities Improvement Program (IFIP)
The Infrastructure and Facilities Improvement Program (IFIP), established by Act 23 of 2004, provides multiyear grants for debt service incurred to pay costs of certain infrastructure and facilities improvements. Funds are used for reimbursement of debt service relating to the debt issued for eligible infrastructure and facilities improvement project costs. Eligible projects include: convention centers, hospitals, hotels, industrial enterprises, manufacturers, retail enterprises creating at least 200 jobs and occupying more than 200,000 square feet, and research and development enterprises.
Job Creation Tax Credits (JCTC)
The Job Creation Tax Credit Program was established for the purpose of securing job-creating economic development opportunities through the expansion of existing businesses and the attraction of economic development prospects to the Commonwealth of Pennsylvania. The JCTC program is available to eligible businesses that, within three years from a negotiated start date, create 25 or more jobs or increase employment by 20 percent. Every new full-time job, up to a set maximum which meets certain minimum wage standards, will result in a $1,000 tax credit that the business can use to pay a number of state business taxes. The business may claim these credits only after the jobs are created. A minimum of 25 percent of all tax credits available to be awarded each fiscal year will be allocated to businesses that employ 100 or fewer employees.
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