Infrastructure and Facilities Improvement Program

A multi-year grant program that will provide grants to certain issuers of debt in order to assist with the payment of debt service.

Guidelines:

• Infrastructure and Facilities Guidelines (Adobe PDF)

Uses:

Payment of debt service incurred by the authority relating to debt issued for the project

Funding:

Variable

Eligibility:

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

Terms:

Program Guidelines being developed. Visit www.newpa.com to confirm issuance and details of program.

Where to Apply:

DCED Center for Business Financing, Site Development Division

FAQs:

What is the Infrastructure and Facilities Improvement Program?

The Infrastructure and Facilities Improvement Program is a multi-year grant program for certain types of infrastructure and building projects. The amount of grant funding will be calculated on the basis of the anticipated amount of state sales tax, hotel occupancy tax, and employer withholding of personal income tax to be generated by a project.

Who can apply for a grant?

Entities that issue debt to finance a project may apply to the Department of Community and Economic Development (DCED) for grant funding. This would include:

• 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.

What can the grant be used for?

The grant must be used to pay debt service incurred by the authority relating to debt issued for the project.

What are the types of projects that could be covered by the program?

Projects involving infrastructure or environmental remediation activities would include the following:

• industrial enterprises, such as warehouse and distribution facilities
• retail establishments, if those establishments will create at least 200 full-time jobs and occupy at least 200,000 square feet of space.

Projects involving infrastructure, land and building, and environmental remediation would include the following:

• manufacturers
• hospitals
• convention centers
• hotels associated with convention centers

What would an authority have to do to apply for a grant?

The authority would submit an application to DCED. The application would identify the project and would provide financial information prepared or reported on by an independent certified public accountant that would project the anticipated state sales tax, hotel occupancy tax, and employer withholding of personal income tax for the first three years of the project. The authority would also identify the period for which grant funds are being requested. Grants may not be provided for longer than 10 years, except in the case of hospital and convention center projects when grants could be provided for a period of 20 years.

Would the authority apply for the grant before or after it issues debt for the project?

The authority could apply at any time for grant funding during the process of issuing debt, but the grants being applied for may not be used or serve as credit enhancement for the debt. In other words, when the authority puts together its debt financing it must show that someone other than the Commonwealth will be responsible for repayment of the debt issued for the project. Projects financed before the effective date of the act are not eligible for grant funding except for projects involving retail establishments.

What happens after an application is submitted to DCED?

DCED will review the application to determine if it meets the requirements of the act plus any other requirements established by DCED. If the application is deemed satisfactory, it will be forwarded to the Office of the Budget and the Department of Revenue for review of the information regarding the anticipated collection of state sales tax, hotel occupancy tax, and employer withholding of personal income taxes. If the information is accepted, the Secretary of the Budget will notify DCED as to the maximum amount of the grant that may be provided. The amount of the grant will not exceed the anticipated amount of tax revenues or the actual amount of debt service to be paid on the project.

How will the grant be provided to the authority?

Once the Secretary of the Budget notifies DCED as to the acceptability of the information and the amount of the grant, DCED will enter into a grant agreement with the authority and will provide a grant to the authority each year for a period of three years. After the end of the second year, the authority will submit information to DCED verifying the amount of taxes collected in years one and two and projecting the anticipated revenues to be collected in years 4 and 5. If the information is satisfactory to DCED, a grant award for years 4 and 5 will be made, again based on the anticipated revenues to be collected in those years and the actual debt service to be paid. This process will continue until the 10 year or 20 year grant period is completed.

What other restrictions will be placed on the authority or the project itself in order to receive the grant?

The grant must be used to pay debt service on the debt issued for the project. If it is not used for that purpose, the authority must repay the amount of the grant to DCED. Also, the amount of the grant may not exceed the actual amount of debt service owed. If the grant exceeds the debt service paid, any excess amount must be returned to DCED.

The project user must occupy the project site for the duration of the grant period. If the project user does not use the project site for the duration of the grant period, it may be required to repay all or a portion of the grant funds to DCED.

Where will the monies come from to fund these grants?

Monies will be provided through an annual appropriation to DCED which will be a continuing, non-lapsing appropriation.

Purpose of Funding:

• Site Development - Community