PRINTER'S NO. 1527
No. 1351 Session of 1979
INTRODUCED BY LAUGHLIN, IRVIS, KNEPPER, ZITTERMAN, TADDONIO,
BERSON, DOMBROWSKI, COHEN AND KOLTER, MAY 22, 1979
REFERRED TO COMMITTEE ON BUSINESS AND COMMERCE, MAY 22, 1979
AN ACT
1 Amending the act of May 2, 1945 (P.L.382, No.164), entitled "An
2 act providing for the incorporation as bodies corporate and
3 politic of 'Authorities' for municipalities, counties and
4 townships; prescribing the rights, powers and duties of such
5 Authorities heretofore or hereafter incorporated; authorizing
6 such Authorities to acquire, construct, improve, maintain and
7 operate projects, and to borrow money and issue bonds
8 therefor; providing for the payment of such bonds, and
9 prescribing the rights of the holders thereof; conferring the
10 right of eminent domain on such Authorities; authorizing such
11 Authorities to enter into contracts with and to accept grants
12 from the Federal Government or any agency thereof; and
13 conferring exclusive jurisdiction on certain courts over
14 rates," further providing for certain definitions, the
15 financing of certain residential housing, general purposes
16 and powers, purposes and powers as to bonds, and remedies of
17 bondholders, certain transfers.
18 The General Assembly of the Commonwealth of Pennsylvania
19 hereby enacts as follows:
20 Section 1. Clause (c) of section 2, act of May 2, 1945
21 (P.L.382, No.164), known as the "Municipality Authorities Act of
22 1945," amended June 12, 1947 (P.L.571, No.249), is amended and
23 clauses are added to read:
24 Section 2. Definitions.--The following terms whenever used
25 or referred to in this act shall have the following meanings,
1 except in those instances where the context clearly indicates
2 otherwise:
3 * * *
4 (c) The term "bonds" shall mean and include the notes, bonds
5 and other evidence of indebtedness or obligations which each
6 Authority is authorized to issue pursuant to section 4 B. (i)
7 and (w) of this act.
8 * * *
9 (k) The term "residential housing project" shall mean the
10 purchase by an Authority, from the proceeds of a designated
11 issue of bonds and from any other funds available to the
12 Authority and designated therefor, of loans made for the purpose
13 of financing or refinancing the construction, rehabilitation,
14 improvement, equipment or acquisition of residential housing
15 located within the field of operation of the Authority by or for
16 persons of low and moderate income. The cost of individual units
17 of a residential housing project shall not exceed fifty thousand
18 dollars ($50,000.00) on which a person of low and moderate
19 income may obtain a mortgage not exceeding forty-five thousand
20 dollars ($45,000.00). The maximum limit for the cost of
21 individual units and for mortgages shall be increased or
22 decreased each year after 1979 in an amount equal to the change
23 in the cost of residential housing during the preceding year as
24 determined by the United States Department of Housing and Urban
25 Affairs.
26 (l) The term "field of operation" shall mean the area within
27 the territorial boundaries of the counties or cities which
28 organized the particular Authority: Provided, however, That (i)
29 the field of operation of any Authority organized by a county
30 shall not include a city, except that the field of operation of
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1 a county authority may be expanded from time to time to permit
2 the county authority to engage in a residential housing project,
3 or a portion thereof, within a city with the approval of the
4 city, and (ii) the term field of operation is applicable only to
5 Authorities authorized under this act to engage in residential
6 housing projects.
7 (m) The term "persons of low and moderate income" shall mean
8 persons whose income does not exceed twenty-five thousand
9 dollars ($25,000.00) per year plus an amount equal to the
10 average annual increase in income in each year after 1979 in the
11 United States as determined and published by the Federal
12 Government. For purposes of calculating income, the income of a
13 spouse shall be included as income but shall not include the
14 income of any other person. The determination by an Authority of
15 persons of low and moderate income within this definition shall
16 be final.
17 Section 2. Subsection A of section 4 of the act, amended
18 August 1, 1975 (P.L.164, No.85), is amended to read:
19 Section 4. Purposes and Powers; General.--A. Every
20 Authority incorporated under this act shall be a body corporate
21 and politic, and (1) with respect to Authorities organized by
22 counties and cities, in addition to other purposes authorized
23 under this act, shall be for the purpose of engaging in
24 residential housing projects and (2) with respect to all
25 Authorities organized hereunder, shall be for the purpose of
26 acquiring, holding, constructing, improving, maintaining and
27 operating, owning, leasing, either in the capacity of lessor or
28 lessee, projects of the following kind and character, equipment
29 to be leased by an Authority to the municipality or
30 municipalities that organized it, buildings to be devoted wholly
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1 or partially for public uses, including public school buildings,
2 and facilities for the conduct of judicial proceedings, and for
3 revenue-producing purposes; transportation, marketing, shopping,
4 terminals, bridges, tunnels, flood control projects, highways,
5 parkways, traffic distribution centers, parking spaces,
6 airports, and all facilities necessary or incident thereto,
7 parks, recreation grounds and facilities, sewers, sewer systems
8 or parts thereof, sewage treatment works, including works for
9 treating and disposing of industrial waste, facilities and
10 equipment for the collection, removal or disposal of ashes,
11 garbage, rubbish and other refuse materials by incineration,
12 land fill or other methods, steam heating plants and
13 distribution systems, incinerator plants, waterworks, water
14 supply works, water distribution systems, swimming pools,
15 playgrounds, lakes, low head dams, hospitals, health centers,
16 motor buses for public use, when such motor buses are to be used
17 within any municipality, subways and industrial development
18 projects, including but not limited to projects to retain or
19 develop existing industries and the development of new
20 industries: Provided, That an Authority created by a school
21 district or school districts shall have the power only to
22 acquire, hold, construct, improve, maintain, operate and lease
23 public school buildings and other school projects acquired,
24 constructed or improved for public school purposes. The purpose
25 and intent of this act being to benefit the people of the
26 Commonwealth by, among other things, increasing their commerce,
27 health, safety and prosperity, and not to unnecessarily burden
28 or interfere with existing business by the establishment of
29 competitive enterprises, none of the powers granted by this act
30 shall be exercised in the construction, improvement,
19790H1351B1527 - 4 -
1 maintenance, extension or operation of any project or projects
2 which in whole or in part shall duplicate or compete with
3 existing enterprises serving substantially the same purposes.
4 This limitation shall not apply to the exercise of the powers
5 granted hereunder for facilities and equipment for the
6 collection, removal or disposal of ashes, garbage, rubbish and
7 other refuse materials by incineration, land fill or other
8 methods, if each municipality organizing or intending to use the
9 facilities of an Authority having such powers shall declare by
10 resolution or ordinance that it is desirable for the health and
11 safety of the people of such municipality that it use the
12 facilities of the Authority, and if any contract between such
13 municipality and any other person, firm or corporation for the
14 collection, removal or disposal of ashes, garbage, rubbish and
15 other refuse material has by its terms expired or is terminable
16 at the option of the municipality or will expire within six
17 months from the date such ordinance becomes effective. This
18 limitation shall not apply to the exercise of the powers granted
19 hereunder for industrial development projects if the Authority
20 does not develop industrial projects which will compete with
21 existing industries. This limitation shall also not apply to
22 hospital projects to be leased to public hospitals or nonprofit
23 hospital corporations serving the public if each municipality
24 organizing an Authority for such a project shall declare by
25 resolution or ordinance that it is desirable for the health and
26 safety of the people in the area served by such hospital to have
27 such facilities provided by an Authority. This limitation shall
28 also not apply to the exercise of any powers granted hereunder
29 by any Authority engaged in any residential housing project. The
30 municipality or municipalities organizing such an Authority may,
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1 in the resolution or ordinance signifying their intention so to
2 do, or from time to time by subsequent resolution or ordinance,
3 specify the project or projects to be undertaken by the said
4 Authority, and no other projects shall be undertaken by the said
5 Authority than those so specified. If the municipal authorities
6 organizing an Authority fail to specify the project or projects
7 to be undertaken, then the Authority shall be deemed to have all
8 the powers granted by this act.
9 * * *
10 Section 3. Subsection B. of section 4 of the act is amended
11 by adding a clause to read:
12 Section 4. Purposes and Powers; General.--* * *
13 B. Every Authority is hereby granted, and shall have and may
14 exercise all powers necessary or convenient for the carrying out
15 of the aforesaid purposes, including but without limiting the
16 generality of the foregoing, the following rights and powers:
17 * * *
18 (w) With respect to Authorities organized by counties and
19 cities, to borrow money and issue bonds for the purpose of
20 providing funds for residential housing projects and, in
21 connection with such projects, (i) to purchase and hold notes or
22 other obligations secured by mortgages, deeds of trust or other
23 security interests in residential housing, (ii) to sell, assign,
24 pledge, encumber or hypothecate any notes, obligations,
25 mortgages or other agreements acquired in connection with a
26 residential housing project, (iii) to grant to any trustee, in
27 addition to any other rights or remedies provided for in this
28 act, any rights or remedies contained in such notes,
29 obligations, mortgages or other agreements, (iv) to purchase, or
30 provide for the purchase of, insurance at rates approved by the
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1 Authority on any security acquired, held by or granted to the
2 Authority in connection with a residential housing project, and
3 (v) to establish, revise, charge and collect such fees and
4 charges, including but not limited to service charges, insurance
5 premiums, commitment fees and financing fees, as the Authority
6 determines.
7 Section 4. The act is amended by adding a section to read:
8 Section 4.1. Approval of Residential Housing Projects;
9 Participation of Banking Institutions.--A. No Authority shall
10 borrow money or issue bonds to engage in a residential housing
11 project until such residential housing project shall be approved
12 by the governing body of each of the municipalities which
13 organized the Authority or which are then members thereof.
14 B. Prior to issuing any bonds to engage in a residential
15 housing project, an Authority shall solicit the participation in
16 such project, on such reasonable terms as determined by the
17 Authority, of banking institutions with a branch in the
18 Authority's field of operation by publishing at least one time a
19 notice soliciting participation in such project at least thirty
20 (30) days prior to issuing such bonds in a newspaper circulating
21 generally in the Authority's field of operation. Participation
22 as used herein means originating and selling and/or servicing
23 loans for residential housing by or for persons of low and
24 moderate income.
25 Section 5. Subsection C. of section 5 of the act is amended
26 to read:
27 Section 5. Purposes and Powers; Bonds.--* * *
28 C. Any Authority may enter into any deeds of trust,
29 indentures or other agreements, with any bank or trust company,
30 or other person or persons in the United States having power to
19790H1351B1527 - 7 -
1 enter into the same, including any Federal agency, as security
2 for such bonds, and may assign and pledge thereunder all or any
3 of the revenues or receipts of the Authority [thereunder] and,
4 in connection with a residential housing project, such other
5 property or security acquired pursuant to section 4 B. (w). Such
6 deed of trust, indenture or other agreement, may contain such
7 provisions as may be customary in such instruments, or as the
8 Authority may authorize, including (but without limitation)
9 provisions as to (1) the construction, improvement, operation,
10 maintenance and repair of any project, and the duties of the
11 Authority with reference thereto, (2) the application of funds
12 and the safeguarding of funds on hand or on deposit, (3) the
13 rights and remedies of said trustee and the holders of the
14 bonds, (which may include restrictions upon the individual right
15 of action of such bondholders) and (4) the terms and provisions
16 of the bonds or the resolutions authorizing the issuance of the
17 same.
18 Said bonds shall have all the qualities of negotiable
19 instruments under the law merchant and the negotiable
20 instruments law of the Commonwealth of Pennsylvania.
21 Section 6. Subsection D. of section 6 of the act is amended
22 to read:
23 Section 6. Remedies of Bondholders.--* * *
24 D. Nothing in this section or any other section of this act
25 shall authorize any receiver appointed pursuant to this act for
26 the purpose of operating and maintaining any facilities of the
27 Authority, to sell, assign, mortgage or otherwise dispose of any
28 of the assets of whatever kind and character belonging to the
29 Authority. It is the intention of this act to limit the powers
30 of such receiver to the operation and maintenance of the
19790H1351B1527 - 8 -
1 facilities of the Authority as the court shall direct, and no
2 holder of bonds of the Authority nor any trustee shall ever have
3 the right in any suit, action or proceedings at law, or in
4 equity, to compel a receiver, nor shall any receiver ever be
5 authorized or any court be empowered to direct the receiver to
6 sell, assign, mortgage or otherwise dispose of any assets of
7 whatever kind or character belonging to the Authority.
8 Notwithstanding anything to the contrary contained in this
9 section or elsewhere in this act, any receiver or trustee shall
10 have the right to sell, assign, mortgage or otherwise dispose of
11 any assets or rights of any Authority pledged to, granted to,
12 assigned to, purchased by or otherwise acquired by an Authority
13 pursuant to section 4 B. (w).
14 Section 7. Subsection A. of section 9 of the act, amended
15 January 21, 1952 (1951 P.L.2188, No.626), is amended to read:
16 Section 9. Transfer of Existing Facilities to Authority.--A.
17 Any municipality, school district, or owner may, and they are
18 hereby authorized to sell, lease, lend, grant, convey, transfer
19 or pay over to any Authority, with or without consideration, any
20 project or any part or parts thereof, or any interest in real or
21 personal property, or any funds available for building,
22 construction or improvement purposes, or for residential housing
23 projects, including the proceeds of bonds previously or
24 hereafter issued for building construction or improvement
25 purposes or residential housing projects, which may be used by
26 the Authority in the construction, improvement, maintenance or
27 operation of any project or residential housing project. Any
28 municipality, or school district, is also authorized to
29 transfer, assign and set over to any Authority, any contracts
30 which may have been awarded by said municipality, or school
19790H1351B1527 - 9 -
1 district, for the construction of projects not begun, or if
2 begun not completed. The territory being served by any project,
3 or the territory within which such project is authorized to
4 render service at the time of the acquisition of such project by
5 an Authority, shall include the area served by the project and
6 the area in which the project is authorized to serve at the time
7 of acquisition, and any other area into which the service may be
8 extended, subject to the limitations of subsection A of section
9 four of this act.
10 * * *
11 Section 8. Nothing contained in this act shall be deemed to
12 alter, amend or repeal the act of July 14, 1970 (P.L.485,
13 No.165), entitled "An act removing for a limited time the
14 statutory limits imposed upon interest rates and interest costs
15 to be paid on obligations issued by State and local governments,
16 authorities, agencies and instrumentalities."
17 Section 9. This act shall take effect immediately.
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