AICUP Message to Friends of Independent Higher Education
February 21, 2012

Redevelopment Assistance (RACP) Reform Bill Reported out of House Finance Committee

The House of Representatives debated and amended a bill (HB 2175) last week that would lower the debt ceiling over time for Redevelopment Assistance Capital Projects (RACP).  Many private colleges and universities used RACP over the past 12 years to provide state matching funds for economic development and other projects on campuses across the state. HB 2175 is sponsored by House Majority Leader Mike Turzai (Allegheny).  Rep. Turzai has said that he wants to reform RACP, not end it. 

HB 2175 clears up definitions.  For example, “capital projects” is amended to include five categories and to clarify that infrastructure can be funded as a part of the capital projects.  A minimum 50% match is required, but the Budget Office can give preference to projects with at least at 75% match. Upon enactment of this bill, the RACP debt limit would be cut from $4.05 billion to $3.5 billion, and would then decrease incrementally until it reaches $1.5 billion sometime after 2020. The bill also provides that no redevelopment assistance capital project may be approved in the period between the date of the general election at which the governor-elect was elected and the third Tuesday of January next following the election. All projects not authorized as of December 31, 2011 would expire and need to be re-listed in compliance with the updated requirements of the act.  The bill requires projects to be submitted to the General Assembly as a single piece of legislation and approved by the General Assembly as well as requiring certain reports on the projects to the General Assembly.  The bill further provides for disclosure of approved projects on a publicly accessible website.

In 1999, RACP had a debt ceiling of $1.2 billion.  The RACP debt ceiling has been raised six times since then and is now set at $4.05 billion. Approximately 8,000 RACP projects have been added to the program’s list since its inception, but most of those projects have not been authorized. Under HB 2175, projects would need to be at least $1.0 million and “shovel ready.” The legislation would create a stringent review and approval process within the Office of the Budget, which would develop eligibility criteria and establish guidelines for the process. Many see RACP as an area ripe for reform since political influence—as opposed to merit—is seen as the primary basis for approval.

HB 2175 was recommitted to the Appropriations Committee after consideration on the House floor.  Some Democratic members are critical of the bill, citing the lower debt ceilings as providing insignificant funding for economic stimulus.  Many university and college funding projects are still pending from the last RACP bill.

 

Did you know?  AICUP has produced a brochure on the valuable contribution the RACP program has provided communities around the Commonwealth by leveraging many private dollars raised by private colleges and universities for important economic development projects.  We will be sharing this information with key legislative leaders and Administration officials.

AICUP Message to Friends of Independent Higher Education
February 21, 2012

Redevelopment Assistance (RACP) Reform Bill Reported out of House Finance Committee

The House of Representatives debated and amended a bill (HB 2175) last week that would lower the debt ceiling over time for Redevelopment Assistance Capital Projects (RACP).  Many private colleges and universities used RACP over the past 12 years to provide state matching funds for economic development and other projects on campuses across the state. HB 2175 is sponsored by House Majority Leader Mike Turzai (Allegheny).  Rep. Turzai has said that he wants to reform RACP, not end it. 

HB 2175 clears up definitions.  For example, “capital projects” is amended to include five categories and to clarify that infrastructure can be funded as a part of the capital projects.  A minimum 50% match is required, but the Budget Office can give preference to projects with at least at 75% match. Upon enactment of this bill, the RACP debt limit would be cut from $4.05 billion to $3.5 billion, and would then decrease incrementally until it reaches $1.5 billion sometime after 2020. The bill also provides that no redevelopment assistance capital project may be approved in the period between the date of the general election at which the governor-elect was elected and the third Tuesday of January next following the election. All projects not authorized as of December 31, 2011 would expire and need to be re-listed in compliance with the updated requirements of the act.  The bill requires projects to be submitted to the General Assembly as a single piece of legislation and approved by the General Assembly as well as requiring certain reports on the projects to the General Assembly.  The bill further provides for disclosure of approved projects on a publicly accessible website.

In 1999, RACP had a debt ceiling of $1.2 billion.  The RACP debt ceiling has been raised six times since then and is now set at $4.05 billion. Approximately 8,000 RACP projects have been added to the program’s list since its inception, but most of those projects have not been authorized. Under HB 2175, projects would need to be at least $1.0 million and “shovel ready.” The legislation would create a stringent review and approval process within the Office of the Budget, which would develop eligibility criteria and establish guidelines for the process. Many see RACP as an area ripe for reform since political influence—as opposed to merit—is seen as the primary basis for approval.

HB 2175 was recommitted to the Appropriations Committee after consideration on the House floor.  Some Democratic members are critical of the bill, citing the lower debt ceilings as providing insignificant funding for economic stimulus.  Many university and college funding projects are still pending from the last RACP bill.

 

Did you know?  AICUP has produced a brochure on the valuable contribution the RACP program has provided communities around the Commonwealth by leveraging many private dollars raised by private colleges and universities for important economic development projects.  We will be sharing this information with key legislative leaders and Administration officials.