Pa. General Assembly Approves Economic Stimulus Plan

Shortly after a General Assembly vote last week, Pennsylvania Gov. Ed Rendell announced the bipartisan approval of the remaining components to the state’s economic stimulus package. The governor's plan is intended to fuel major new investment in communities across the state.

Eight final programs were approved by the General Assembly, adding to the previous five that were passed in December 2003 and February 2004. The passage of all components of Pennsylvania's stimulus package calls for more than $2 billion in investment to attract at least another $5 billion in private investments for community revitalization, site preparation, infrastructure improvement and construction, and businesses. The investments will focus on high-growth companies and provide resources to allow traditional industries such as manufacturing access to new technologies in order to enhance productivity, according to the Department of Community and Economic Development.

Tech-based economic development initiatives include:

• $250 million for the New Pennsylvania Venture Guarantee Program. The program will provide guarantees to venture capital companies that invest in Pennsylvania businesses.
• $60 million for the New PA Venture Capital Investment Program. The program will provide funding to state-focused venture capital companies that agree to match the funds and make investments in Pennsylvania businesses; 50 percent must be invested in underserved areas.
• $50 million for the Second Stage Loan Program. Funding will be used to provide guarantees for bank loans to second-stage manufacturers and technology companies for working capital and other financing needs. This is targeted toward manufacturing, advanced technology and biotechnology.
• $10 million for grants and $25 million in tax credits to establish Keystone Innovation Zones. These zones are designed to foster innovation and create entrepreneurial opportunities in communities that host colleges and universities.
• $30 million for the Expanded Research and Development Tax Credit. Funding for this tax credit seeks to stimulate academic and private research as well as technology transfer.

Other initiatives include Businesses in Our Sites, which offers flexible loans and grants for local municipalities and their economic development partners, and Building PA, which provides funding for the development of real estate assets within Pennsylvania. Another program, Core Industries, will add an additional $75 million in revolving loan funds to the Machinery and Equipment Loan Fund and increase the maximum loan amount from $500,000 to $5 million.

More information on Pennsylvania's stimulus plan is available at: http://www.newpa.com