PRINTER'S NO. 573
No. 512 Session of 1983
INTRODUCED BY PUNT, NAHILL, BURD, COSLETT, HASAY, CESSAR, NOYE,
CLYMER, DeVERTER, BOOK, MANMILLER, SPITZ, PERZEL, BUNT,
WILSON, PHILLIPS, E. Z. TAYLOR, MERRY, B. SMITH, FARGO,
J. L. WRIGHT, MARMION, WASS, MACKOWSKI, CARN, BATTISTO,
HERMAN, JAROLIN, MOWERY, KENNEDY AND LASHINGER, MARCH 21,
1983
REFERRED TO COMMITTEE ON BUSINESS AND COMMERCE, MARCH 21, 1983
AN ACT
1 Creating the Pennsylvania Development Authority; conferring
2 powers and imposing duties upon the authority; and providing
3 for development assistance.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Short title.
7 This act shall be known and may be cited as the Pennsylvania
8 Development Authority Act.
9 Section 2. Definitions.
10 The following words and phrases when used in this act shall
11 have the meanings given to them in this section unless the
12 context clearly indicates otherwise:
13 "Authority." The Pennsylvania Development Authority.
14 "Board." The governing body of the authority.
15 "Federal agency." The United States of America, the
16 President of the United States of America, and any department
1 of, or corporation, agency or instrumentality heretofore or
2 hereafter created, designated or established by the United
3 States of America.
4 "Fund." The Pennsylvania Development Fund.
5 "Government." The State and Federal governments, or any
6 political subdivision, agency or instrumentality, corporate or
7 otherwise, or either of them.
8 Section 3. Pennsylvania Development Authority.
9 (a) Creation.--There is hereby created a body corporate and
10 politic, constituting a public corporation and government
11 instrumentality by the name of the Pennsylvania Development
12 Authority.
13 (b) Board.--The board shall consist of the following persons
14 or their designee:
15 (1) The majority and minority leaders of the House of
16 Representatives.
17 (2) The majority and minority leaders of the Senate.
18 (3) The Governor.
19 (4) The State Treasurer.
20 (5) The Secretary of Banking.
21 (6) The Secretary of Commerce.
22 (c) Reimbursement.--Members of the authority shall not be
23 compensated for their services as members, but shall be entitled
24 to reimbursement for all necessary expenses incurred in
25 connection with the performance of their duties.
26 (d) Officers; staff.--The board shall meet monthly and at
27 the first meeting in each year elect a chairman from among its
28 members. The board may elect or appoint a secretary and a
29 treasurer and may appoint an executive director and such staff
30 as may be necessary.
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1 (e) Quorum.--Five members constitute a quorum of the board
2 for the purpose of organizing the authority and conducting the
3 business thereof, and, except as provided in subsection (f), all
4 action may be taken by a vote of a majority of the members
5 present.
6 (f) Duties.--The board shall manage the business of the
7 authority, and by a majority vote of the full membership of the
8 board to make rules and regulations governing the manner in
9 which the business of the authority may be conducted, and the
10 manner in which the powers granted to it may be exercised,
11 including the approval of loans.
12 Section 4. Powers of the authority.
13 The authority, as a public corporation and governmental
14 instrumentality exercising public powers of the Commonwealth, is
15 hereby granted and shall have and may exercise all powers
16 necessary or appropriate to carry out and effectuate the
17 purposes of this act, including the power:
18 (1) To disperse the funds provided by this act for the
19 purposes specified for the allocation of bond proceeds.
20 (2) To make all rules and regulations necessary to carry
21 out the purposes of this act including grant and loan
22 requirements.
23 (3) To conduct examinations and investigations and to
24 hear testimony and take proof, under oath or affirmation, at
25 public or private hearings, on any relevant matter for its
26 information and necessary to determine if a grant or loan
27 should be made.
28 (4) To issue subpoenas requiring the attendance of
29 witnesses and the production of books and papers pertinent to
30 any hearing before such authority, or before one or more
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1 members of the authority appointed by it to conduct such
2 hearing.
3 (5) To apply to any court, having territorial
4 jurisdiction of the offense, to have punished for contempt
5 any witness who refuses to obey a subpoena, or who refuses to
6 be sworn or affirmed or to testify, or who is guilty of any
7 contempt after summons to appear.
8 (6) To authorize any member or members of such authority
9 to conduct hearings and to administer oaths, take affidavits
10 and issue subpoenas.
11 (7) To make, upon proper application, grants or loans of
12 moneys held in the fund for development projects and to
13 provide for the repayment and redeposit of loans.
14 (8) To have existence for a term of 25 years from the
15 effective date of this act.
16 (9) To sue and be sued, implead and be impleaded,
17 complain and defend in all courts.
18 (10) To adopt, use and alter at will a corporate seal.
19 (11) To make bylaws for the management and regulation of
20 its affairs.
21 (12) To establish employment practices and policies, to
22 appoint officers, agents and employees to prescribe their
23 duties and to fix their compensation. Officers and employees
24 of the authority shall not be subject to the provisions of
25 the act of August 5, 1941 (P.L.752, No.286), known as the
26 Civil Service Act.
27 (13) To make contracts of every name and nature and to
28 execute all instruments necessary or convenient for the
29 carrying on of its business.
30 (14) To accept grants from and to enter into contracts
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1 or other transactions with any Federal agency.
2 Section 5. Bonds.
3 (a) Issuance; amount.--The authority shall have the power to
4 issue bonds in the amount of $1,000,000,000. The principal,
5 interest and other charges on the bonds shall be payable from
6 annual appropriations of not less than $50,000,000 each year
7 from the Commonwealth and from income from the investment of the
8 appropriations.
9 (b) Allocation of bond proceeds.--The proceeds of the bonds
10 shall be allocated to and used for the following programs in the
11 total amounts indicated:
12 (1) Five hundred million dollars for employer assistance
13 programs.
14 (2) Two hundred million dollars for employment of
15 personnel by political subdivisions in counties wherein the
16 unemployment rate is 10% or more. The persons employed shall
17 be paid at a rate equal to the Federal minimum wage and shall
18 perform only those duties that other employees of the
19 political subdivision may perform except that none shall work
20 in a dangerous occupation or on large construction projects.
21 The authority shall be liable for disability insurance
22 coverage.
23 (3) One hundred million dollars for counties having an
24 unemployment rate of 10% or more to help employers relocate
25 or open facilities in the county.
26 (4) One hundred and fifty million dollars for financial
27 assistance to farmers in the Commonwealth and persons closely
28 associated with agriculture such as feed mill operators. The
29 assistance may be for reduction of debt incurred in the past
30 or for aid in present or future purchases or programs.
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1 (5) Fifty million dollars for training programs. Of this
2 amount, $45,000,000 shall be to employers for on-the-job
3 training programs and $5,000,000 shall be to educational
4 institutions for preparing students for employment in high
5 technology jobs.
6 (c) Authorization.--The bonds of the authority shall be
7 authorized by resolution of the board, shall be of such series,
8 bear such date or dates, mature at such time or times, not
9 exceeding 20 years from their respective date, bear interest at
10 such rate or rates, payable at least semiannually, be in such
11 denominations, be in such form, either coupon or fully
12 registered without coupons, carry such registration,
13 exchangeability and interchangeability privileges, be payable in
14 medium of payment and at such place or places, be subject to
15 such terms of redemption, with or without premium and be
16 entitled to such priorities in the revenues or receipts of the
17 authority as such resolution or resolutions may provide. The
18 bonds shall be signed by or shall bear the facsimile signature
19 of such officers as the authority shall determine and coupon
20 bonds shall have attached thereto interest coupons bearing the
21 facsimile signature of the treasurer of the authority, all as
22 may be prescribed in such resolution or resolutions. Any such
23 bonds may be issued and delivered, notwithstanding that one or
24 more of the officers signing such bonds or the treasurer whose
25 facsimile signature shall be upon the coupon, shall have ceased
26 to be such officer or officers at the time when such bonds shall
27 actually be delivered. Said bonds may be sold at public or
28 private sale for such price or prices as the authority shall
29 determine. Pending the preparation of the definitive bonds,
30 interim receipts may be issued to the purchaser or purchasers of
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1 such bonds and may contain such terms and conditions as the
2 authority may determine. Any bond reciting in substance that it
3 has been issued by the authority to aid in the financing of
4 enterprise development projects to accomplish the public
5 purposes of this act shall be conclusively deemed in proceedings
6 involving the validity or enforceability of such bond or
7 security therefor, to have been issued for such purpose.
8 (d) Contract with holders.--Any resolution or resolutions
9 authorizing any bonds may contain provisions which shall be part
10 of the contract with the holders thereof, as to:
11 (1) Pledging the full faith and credit of the authority
12 and of the Commonwealth for such obligations or restricting
13 the same to all or any of the appropriations to and revenues
14 of the authority.
15 (2) The terms and provisions of the bonds.
16 (3) Limitations on the purposes to which the proceeds of
17 the bonds then or thereafter to be issued may be applied.
18 (4) The setting aside of reserves and the regulation and
19 disposition thereof.
20 (5) Limitations on the issuance of additional bonds.
21 (6) The terms and provisions of any indenture under
22 which the same may be issued.
23 (7) Any other or additional agreements with the holders
24 of the bonds.
25 (e) Indentures.--The authority may enter into any indentures
26 or other agreements, with any bank or trust company, including
27 any Federal agency and may assign and pledge all or any of the
28 revenues or receipts of the authority. Such indenture or other
29 agreement may contain such provisions as may be customary in
30 such instruments or as the authority may authorize, including,
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1 but without limitation, provisions as to:
2 (1) The application of funds and the safeguarding of
3 funds on hand or on deposit.
4 (2) The rights and remedies of the trustee and the
5 holders of the bonds, which may include restrictions upon the
6 individual right of action of such bondholders.
7 (3) The terms and provisions of the bonds or the
8 resolutions authorizing the issuance of the same.
9 (f) Negotiability.--The bonds shall have all the qualities
10 of negotiable instruments under the law merchant and the Uniform
11 Commercial Code.
12 (g) Default.--The rights and remedies herein conferred upon
13 or granted to the bondholders, shall be in addition to and not
14 in limitation of any rights and remedies lawfully granted to
15 such bondholders by the resolution or resolutions providing for
16 the issuance of bonds or by any indenture or other agreement
17 under which the same may be issued. In the event that the
18 authority shall default in the payment of principal of or
19 interest on any of the bonds after the said principal or
20 interest shall become due, whether at maturity or upon call for
21 redemption and such default shall continue for a period of 30
22 days or in the event that the authority shall fail or refuse to
23 comply with the provisions of this act or shall default in any
24 agreement made with the holders of the bonds, the holders of 25%
25 in aggregate principal amount of the bonds then outstanding, by
26 instrument or instruments filed in the Office of the Recorder of
27 Deeds in and for Dauphin County and proved or acknowledged in
28 the same manner as a deed to be recorded, may appoint a trustee
29 to represent the bondholders for the purpose herein provided.
30 Such trustee and any trustee under any indenture or other
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1 agreement, may, and upon written request of the holders of 25%,
2 or such other percentage as may be specified in any indenture or
3 other agreement aforesaid, in principal amount of the bonds then
4 outstanding, shall be in his or its own name:
5 (1) By mandamus or other suit, action or proceeding at
6 law, or in equity, enforce all rights of the bondholders,
7 including the right to require the authority to carry out any
8 agreement as to or pledge of the revenues or receipts of the
9 authority and to require the authority to carry out any other
10 agreements with or for the benefit of the bondholders and to
11 perform its and their duties under this act.
12 (2) Bring suit upon the bonds.
13 (3) By action or suit in equity require the authority to
14 account as if it were the trustee of an express trust for the
15 bondholders.
16 (4) By action or suit in equity enjoin any acts or
17 things which may be unlawful or in violation of the rights of
18 the bondholders.
19 (5) By notice in writing to the authority, declare all
20 bonds due and payable and if all defaults shall be made good,
21 then with the consent of the holders of 25%, or such other
22 percentage as may be specified in any indenture or other
23 agreement aforesaid, of the principal amount of the bonds
24 then outstanding, to annul such declaration and its
25 consequences.
26 The Commonwealth Court shall have jurisdiction of any suit,
27 action or proceedings by the trustee on behalf of the
28 bondholders. Any trustee appointed by the court or a trustee
29 acting under an indenture or other agreement and whether or not
30 all bonds have been declared due and payable, shall be entitled
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1 as of right to the appointment of a receiver, who may exercise
2 dominion over the mortgages of the authority or any part
3 thereof, the revenues or receipts from which are or may be
4 applicable to the payment of the bonds so in default and collect
5 and receive all revenues thereafter arising therefrom in the
6 same manner as the authority or the board could do and shall
7 deposit all such moneys in a separate account and apply the same
8 in such manner as the court shall direct. In any suit, action or
9 proceeding by a trustee, the fees, counsel fees and expenses of
10 such trustee and of the receiver, if any, and all costs and
11 disbursements allowed by the court shall be a first charge on
12 any revenues and receipts derived from the mortgages of the
13 authority, the revenues or receipts from which are or may be
14 applicable to the payment of the bonds so in default. A trustee
15 shall, in addition to the foregoing, have and possess all of the
16 powers necessary or appropriate for the exercise of any
17 functions specifically set forth herein or in any indenture or
18 other agreement or incident to the general representation of the
19 bondholders in the enforcement and protection of their rights.
20 (h) Programs.--The authority may issue bonds for one or more
21 programs provided under subsection (b) without reference to a
22 particular program and may combine for the purposes of a single
23 offering the bonds of more than one program.
24 Section 6. Annual reports.
25 The authority shall annually on or before January 1 make a
26 written report to the General Assembly stating the activities of
27 the authority during the preceding year.
28 Section 7. Pennsylvania Development Fund.
29 (a) Fund.--There is hereby created a special account in the
30 State Treasury to be known as the Pennsylvania Development Fund
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1 herein called the "fund," to which shall be credited any bond
2 proceeds, any appropriations made by the General Assembly to the
3 authority and all other money of the authority. The fund shall
4 also operate as a revolving fund as to all money not required
5 for preserving the principal.
6 (b) Fund balance.--In the second year of the operation of
7 the authority and each year thereafter, the balance in the fund
8 shall equal $50,000,000 for each year during which bonds are
9 outstanding up to a total of $1,000,000,000.
10 (c) Investment of funds.--The annual appropriation of
11 $50,000,000 shall be invested as other fiduciaries may invest
12 their funds. Bond proceeds and income not currently needed by
13 the authority shall also be invested in a like manner.
14 (d) Requisition.--The authority shall requisition from the
15 fund such amounts as may be necessary to allocate the bond
16 proceeds and to provide adequate funds for the payment of the
17 administration of this act. No part of the bond proceeds or the
18 annual $50,000,000 appropriations shall be used for operating
19 expenses.
20 (e) Excess in funds.--At any time that the authority
21 determines that funds held for the credit of the fund are in
22 excess of the amount needed by the authority to preserve the
23 principal, the excess may be used for the same purposes the bond
24 proceeds could be used.
25 Section 8. Examination and audit of authority affairs.
26 The accounts and books of the authority, including its
27 receipts, disbursements, contracts, mortgages, investments and
28 other matters relating to its finances, operation and affairs
29 shall be examined and audited from time to time by the Auditor
30 General as provided in the act of April 9, 1929 (P.L.177,
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1 No.175), known as The Administrative Code of 1929.
2 Section 9. Exemption from taxation.
3 The effectuation of the authorized purpose of the authority
4 shall and will be in all respects for the benefit of the people
5 of the Commonwealth, for the increase of their commerce and
6 prosperity, and for the improvement of their health and living
7 conditions; and, since it will as a government instrumentality
8 of the Commonwealth be performing essential governmental
9 functions in effectuating such purposes, the bonds or other
10 evidences of indebtedness issued by the authority, their
11 transfer and the income therefrom, including any profits made on
12 the sale thereof, shall at all times be free from taxation
13 within the Commonwealth.
14 Section 10. Appropriations.
15 (a) Specific appropriation.--The sum of $120,000 is
16 appropriated to the Pennsylvania Development Authority to
17 implement this act.
18 (b) Annual appropriations.--For the fiscal year 1984-1985
19 and for each fiscal year thereafter, the General Assembly shall
20 appropriate the sum of $50,000,000 to the authority for deposit
21 in the Pennsylvania Development Fund.
22 Section 11. Effective date.
23 This act shall take effect immediately.
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