http://www.cumberlink.com/articles/2006 ... news11.txt

HARRISBURG -- The Legislature on Wednesday unanimously approved legislation that would force local governments, nonprofit groups and businesses to repay state grants if any of the money is used to employ illegal immigrants.

The legislation also raises the possibility that the state could levy a higher interest rate on any of its loans that paid for work by illegal immigrants.

The penalties hinge on whether recipients of the money knew, or should have known, that they or their contractors were employing an illegal immigrant as part of a project that received state money.

The bill passed both chambers without debate or fanfare, and comes at a time when federal lawmakers are considering major changes to the nation's immigration laws.

A spokeswoman for Gov. Ed Rendell said the Democrat was reviewing the legislation and would not say whether he plans to sign it.

The state bill was introduced in December by Rep. Bob Allen, R-Schuylkill, less than a month after federal immigration authorities raided a Wal-Mart distribution center under construction near Pottsville, about 80 miles northwest of Philadelphia.

"When the commonwealth invests tax dollars in community economic development projects, one of the primary benefits is that it creates good job opportunities for area workers," Allen said in a statement. "The use of illegal labor undermines that benefit."

Only future grants and loans would be affected by the measure.

All told, the legislation could apply to more than $1 billion in annual state grants and loans. The state government regularly spends hundreds of millions of dollars a year on loans and grants to subsidize major civic projects or to help businesses expand.

In addition, the Rendell administration has begun major projects to finance environmental cleanups, improve public water and sewerage, and attract businesses.

Local government agencies, nonprofit development groups and businesses typically apply for the money for a specific project and hire contractors to work on it.

The legislation leaves an out for recipients of the money who notify federal authorities of a suspecte