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Resources For Manufacturers AMC2

Resources For Manufacturers AMC2. December 8 th , 2009. Overview. Overview State of the Industry in PA Federal Economic Recovery and State Resources. PA Department of Community and Economic Development.

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Resources For Manufacturers AMC2

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  1. Resources For Manufacturers AMC2 December 8th, 2009

  2. Overview • Overview • State of the Industry in PA • Federal Economic Recovery and State Resources

  3. PA Department of Community and Economic Development GOAL: foster opportunities for businesses and communities to succeed and thrive in a global economy, thereby enabling Pennsylvanians to achieve a superior quality of life. • Business Financing: loans, guarantees, tax credits, workforce training grants, infrastructure • Office of International Business Development: export assistance, foreign direct investment, port development • Community Affairs and Development • Tourism, Film and Marketing • Technology Investment: manufacturing assistance, start-up company financing, venture capital, university R&D, Keystone Innovation Zones, telecom and broadband access, technical assistance providers (Industrial Resource Centers, Ben Franklin, PennTAP)

  4. Manufacturing Ombudsman • Created in December 2004 to serve as the advocate for manufacturing companies in state government • Cut through red tape; resolve problems involving state agencies. • Direct resources to firms inquiring about business finance, workforce training programs, technical assistance, technology development, some regulatory issues. • Advocate for manufacturing and advise on policy practices, identifying areas for new initiatives. • Outreach/education to the manufacturing sector. • 275 referrals, $4.4 million in funding, 50 presentations to 1,400 people. • Examples: • Connected manufacturers to DEP energy efficiency grant funds • Projects with large OEMs to leverage the manufacturing supply chain in the state • Provided support letters to manufacturers seeking federal research grants/contracts • A manufacturer of recycled plastic pellets was able to obtain keep their manufacturing exemption for the sales and use tax on machinery and equipment • A ceramics manufacturer, was able to retain over 50% of their government grant to support their R&D efforts rather than spending it on university overhead • A food manufacturer needed training on new equipment and was partnered with the regional Industrial Resource Center to access grant funds to support the employee training • Consortium of firms needed funding to support welding & machining training

  5. Common Manufacturing Perceptions…. Edward W. (Ned) Hill Vice President for Economic Development Interim Dean, Levin College of Urban Affairs Cleveland State University

  6. Pennsylvania Manufacturing • Manufacturing accounts for $63 billion in gross state product in 2008, 14% of PA GSP – the largest of any sector. • Productivity Increases - since 2001 a 17% increase (output per employee) • Exporting Boom – almost doubled exports to $32 billion between 2003 and 2008 • R&D • PA #1 in state funded R&D expenditures (NSF) • Manufacturing is responsible for more than 70% of business R&D supports • Capital • Pennsylvania ranks third nationally in manufacturing venture capital investments and has seen dramatic increases in recent years. • Over $1.2 billion invested in 200 deals from 2003 to 2008. • Investment • PA is an attractive investment location for foreign employers, ranking 4th in international investment • PA ranks fourth in the number of employees supported by subsidiaries, a total of 78,700 manufacturing employees. • Site Selection magazine 2008 ranked Pennsylvania 2nd in capital investment, 4th in total projects and 5th in jobs created. • IBM Plant Location International ranked PA as the top location for manufacturing projects (2005) • Industrial diversity • 4th most diverse in the nation (2007 Development Report Card - Corporation for Enterprise Development)

  7. American Recovery and Reinvestment ActManufacturing Opportunities • www.recovery.pa.gov • www.recovery.gov • www.recovery.org • Pennsylvanians will receive approximately $16 billion from the American Recovery and Reinvestment Act. This includes $6 billion in direct relief for PA taxpayers, residents, local governments, business and more than $9.8 billion in formula-driven funding for health care, education, infrastructure, job training, housing and other aid. Estimated to create 143,000 jobs in the next 2 years.

  8. American Recovery and Reinvestment ActManufacturing Opportunities Tax Incentives* • Larger Tax Deductions: 50% Bonus Depreciation extended one more year • Tax Credits: • Election to Accelerate AMT/R&D in lieu of Bonus Depreciation • Renewable Energy Tax Credit extended three more years. • Advanced Energy Project Credit – 30% investment tax credit for eligible property • Tax Relief: certain small business estimated tax payments are reduced, so companies can use more cash for operations. • If You Lost Money: Extension of NOL Carrybacks (manufacturers with $15 million in sales or less) • Equipment Purchases (section 179 expense): Expensing (is less that $800k) – extends through 2009 the higher limit of $250,000. • Enhanced Financing: tax exempt bonds – expansion of definition of “manufacturing facility” • If You Are Hiring: Work Opportunity Tax Credit - Expands existing WOTC qualifications for veterans and to disconnected youth, aged 16 to 25 *Obtained from National Association of Manufacturers and Deloitte: www.nam.org

  9. American Recovery and Reinvestment ActManufacturing Opportunities Broadband Access and Deployment • Commonwealth has submitted 7 applications - $108 million • DCED - $9.9 million project to increase use and deployment of broadband, including businesses. Training and Workforce Development • Increase in traditional formula funds (WIA, employment services, Trade Adjustment Assistance) • Unemployment Compensation – increases and extensions • Competitive grants through federal agencies for intermediaries to potentially support business and industry (industry partnerships) • Focus of Dollars: • Used to serve certain priority populations (Low income, multiple barriers to employment • Focus on high demand occupations (Particularly alternative energy and healthcare) • Help retool workers who lost their jobs due to the recession • Training may be provided through contracts to higher education institutions • May include adult basic education and English language services

  10. American Recovery and Reinvestment ActManufacturing Opportunities Energy • US Department of Energy • Research grants on renewable and clean energy - www.energy.gov/recovery • DOE Innovative Technology Loan Guarantee Program $6 billion – for guaranteed loans (authorized under section 1705 of the Energy Policy Act of 2005) • Clean Cities: funding for alternative fuel vehicles/fleets, www.pgh-cleancities.org • PA Department of Environmental Protection • PA Energy Development Authority – estimated new solicitation April 2010 • Grant funding for innovative, advanced energy projects • eligible businesses interested in locating or expanding their alternative energy manufacturing or production operations in the commonwealth • Small Business Advantage Grant Program – just announced, due Jan 15th, 2010 • Grant funding for pollution prevention and energy efficiency projects (Equipment or processes) • 50% reimbursement matching grants, to a maximum of $7,500 • save the business at least 20% annually in energy or pollution related expenses • All projects must be completed before June 30, 2010. • www.depweb.state.pa.us (DEP Keywords: SBAdvantage).

  11. American Recovery and Reinvestment ActManufacturing Opportunities Financing and Research • Mid Atlantic Trade Adjustment Assistance Center – www.MATAAC.org • grants funds to manufacturers negatively impacted by foreign trade. • 50% grant for project costs, up to $75k– competitiveness upgrades • SBA Loan Program • The government guarantee of SBA loans will increase from 75-85% (depending on the size of the loan) to 90% • Fees on SBA loans will be temporarily eliminated • Dept. of Defense • Energy Research and Development - $300 Million to be used for research, development, test and evaluation programs for improvements in energy generation, transmission, regulation, use, and storage, for military installations, military vehicles, and other military equipment • $75 million each for Army, Navy, Air Force, and Defense-Wide • US Treasury - Troubled Asset Relief Program (TARP) • Treasury Dept. will purchase up to $15 billion in small business loans, using bailout money, in order to increase the liquidity of community banks and enable them to provide new credit to small businesses. • Repayment of TARP uses?

  12. State Government and other Resources PA Department of Community and Economic Development PA Energy Independence Strategy - $650 Million in Funding Programs • Commonwealth Financing Authority – www.newPA.com – click on “alternative energy” • Grant, loan, loan guarantee programs • Solar, wind, geothermal, biofuels, energy efficiency/conservation • Purpose: deploying energy efficiency/conservation or manufacturing of alternative energy components • Uses: Facility, machinery/equipment • Department of Environmental Protection • Sunshine Solar Grant Program – 100 employees or less • Ben Franklin Partners ($40 million) • Investments for technology related renewable/alternative products and companies

  13. DCED Financing for Manufacturers • Legacy loan programs: machinery and equipment, construction, working capital for small manufacturers, loan guarantees. • Require job creation or retention • low interest rates, terms vary per program • Partner Loan programs: state contracted economic development agencies offer loans/invest. • Catalyst Connection – working capital, machinery and equipment • Innovation Works – new product, start up technology firms\ • Idea Foundry – typically start-up working capital • Tech Collaborative – techno funding typically for robotics and electronics • Nano Commercialization Center - commercialization grants • Venture Capital – commonwealth leverages investment into PA companies through three different funding sources: BFTDA Venture Investment Fund, CFA New PA Venture Investment Program, CFA New PA Venture Guarantee Program. • Current funds in PA: 21 with 8 additional commitments pending. • $57 Million invested, leveraging 5x for PA companies. • Fund Guarantee Program currently has 7 commitments; $182.5M committed, leveraging 5x for PA companies. • PA R&D Tax Credits - $40 million in credits available, option to sell credits for cash/working capital • WWW.NewPA.com

  14. Manufacturing Workforce Development Goal: to maintain its innovative edge, Pennsylvania needs a workforce with higher levels of education and marketable credentials in high-wage, high-demand occupations. – Governor’s Manufacturing Strategy, 2004. • Manufacturing Industry Partnerships and WIBs. • Align Community Colleges and others on the needs of manufacturing • Training grant programs • Customized Job Training – high level custom training for individual or a consortia training • WEDNet - basic skill training, max funding of $450 per employee, $850 for IT training • Workforce Leadership Grants • manufacturing workforce pipeline to attract and develop skilled technical workers (ex: Applied Eng Tech). • Regionally supported projects: Electro Optics –IUP, Advanced Mfg, Robotics, Biotech. • Student manufacturing programs: Bots IQ, Formula One, Adventures in Technology • Science, Technology, Engineering and Math (STEM) Centers • www.paSTEMinitiative.org • Educate to Innovate – www.whitehouse.gov

  15. International Business • Regional Export Networks • technical assistance help • Virtual Trade Advisor • online market research • 24 Global representatives • Market Access Grants • eligible uses include trade mission participation, trade show exhibition, consultant fees for website internationalization, training and workshops • Foreign Direct Investment • partnership or supplier opportunities from off shore firms - International Trade Shows

  16. Technical Support Goal: to help manufacturers develop, capitalize and implement new product and process innovations – Governor’s Manufacturing Strategy Industrial Resource Centers • Expanded services to market research/new customers, business strategy, new product development and sales development while continuing to offer performance improvement University engaged in industry-sponsored research • Keystone Innovation Zones will help support these efforts – tax credits, other services • Zones: Indiana, Westmoreland, Greater Johnstown, Oakland (CMU, Pitt), Central Pittsburgh • Innovation Partnership • network of economic development providers to provide assitance for companies applying to federal research grants – SBIR, STTR, others. Early Warning System • identify and assist distressed firms • No-cost consulting to companies on financial restructures, ownership changes, ESOPs, etc.

  17. Technical Assistance, con’t Succession planning programs • 30-40% of CEOs will be retiring in the next 5 years, which places many of PA’s manufacturers at risk for closure, downsizing or moving out of state. Reduce Energy Costs • identify pollution prevention and energy efficiency • Service providers can provide free or low cost assessments - PennTAP, SBDCs, others. Office of Trade Policy - Paul Piquado, Executive Director • Develop & coordinate proactive international trade and investment policy. • Promote PA business and worker interests by, among other things, advancing policies that seek to: • Ensure that PA businesses compete globally on level playing fields. • Challenge unfair trade practices. • Encourage investment in the Commonwealth. • Help firms understand trade agreements and trade-related rules and regulations (e.g. export control & sanctions rules).

  18. Questions? • Website: www.newPA.com – search on “manufacturing” • Customer Service center: 1-866-466-3972 • Manufacturing Ombudsman • Phone: 717-720-1396 • Email: tpalisin@state.pa.us

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