Due to the state's refusal to indemnify Butler County, the county commissioners may refuse to back one-sixth of a $35 million federal loan needed to resuscitate an ailing Boscov's store chain.

Commissioner Dale Pinkerton, board chairman, said at Monday's meeting the state's stance affects his support of the plan.

Butler is one of six counties the state and the company wanted to back the loan with their state grant money.

Prior to the end of last week, state consultants and officials from the state Department of Community and Economic Development insisted there would be no problem with the state attorney general indemnifying the counties.

However, Attorney General Tom Corbett last week informed the DCED he could not indemnify the counties from having to repay the loan if Boscov's defaults.

Attorney Charles Brown of the DCED then notified Butler County of the problem in an e-mail, stating the words "guarantee" and "indemnify" could not be used in the proposed agreement.

Without a state indemnification, Butler has only the DCED's word it would not lose up to 20 years worth of Community Development Block Grant money if Boscov's defaults.

While unwilling to jeopardize the county's future grant funding, Pinkerton still is concerned about the company's survival.

"I certainly would hate to lose 150 jobs," Pinkerton said, referring to the Clearview Mall outlet.

The state needed the counties' participation because the federal Housing and Urban Development loan must go through the counties.

County solicitor Julie Graham said the state is prohibited from granting the requested indemnification.

"In all fairness, the attorney general has the legal inability to give an absolute guarantee," she said.