PRINTER'S NO. 559
No. 500 Session of 1985
INTRODUCED BY LASHINGER, AFFLERBACH, ARTY, BATTISTO, BUSH,
CLARK, CLYMER, COLAFELLA, CORNELL, DALEY, DAWIDA, FISCHER,
FLICK, A. C. FOSTER, JR., FREEMAN, GEIST, GODSHALL, HAGARTY,
HALUSKA, HERMAN, HOWLETT, JOHNSON, JOSEPHS, KUKOVICH, LINTON,
MAIALE, MARKOSEK, McVERRY, MICHLOVIC, MICOZZIE, NAHILL,
OLASZ, OLIVER, PERZEL, POTT, PRATT, PUNT, REBER, SAURMAN,
SEMMEL, D. W. SNYDER, STUBAN, SWEET, E. Z. TAYLOR, TIGUE,
TRELLO, VAN HORNE, WOGAN, J. L. WRIGHT, GREENWOOD, FOX AND
MERRY, FEBRUARY 27, 1985
REFERRED TO COMMITTEE ON APPROPRIATIONS, FEBRUARY 27, 1985
AN ACT
1 Creating the Pennsylvania Infrastructure Development Bank;
2 defining the powers, duties and functions thereof; providing
3 for the funding thereof; and making an appropriation.
4 TABLE OF CONTENTS
5 Section 1. Short title.
6 Section 2. Legislative findings and policy.
7 Section 3. Definitions.
8 Section 4. Establishment of bank; board of directors.
9 Section 5. Powers and duties.
10 Section 6. Specific power to issue bonds, notes and other
11 obligations.
12 Section 7. Covenants and express conditions on obligations.
13 Section 8. Nature and effect of pledges.
14 Section 9. Financing infrastructure projects.
15 Section 10. General equity funds; creation and purpose.
1 Section 11. Payments Fund; creation and purpose.
2 Section 12. Bank reserves, funds and accounts.
3 Section 13. Providing for bank solvency; deficiency penalty.
4 Section 14. Limitation on personal liability of directors
5 and others.
6 Section 15. Integrity of agreements.
7 Section 16. Investment by financiers.
8 Section 17. Transfers of real property.
9 Section 18. Public nature of bank property.
10 Section 19. Procedure upon bank's default or noncompliance.
11 Section 20. Proceeds, revenues and receipts.
12 Section 21. Criteria for loans from infrastructure bank.
13 Section 22. Local planning review.
14 Section 23. Infrastructure facility master plan; preparation;
15 use.
16 Section 24. Rules and regulations governing loan applications
17 and approvals.
18 Section 25. Provision of services by agencies.
19 Section 26. Annual reports; audits.
20 Section 27. Not debt of Commonwealth.
21 Section 28. Purpose of bank.
22 Section 29. Issuance of debt obligations.
23 Section 30. Inconsistent law.
24 Section 31. Appropriation.
25 Section 32. Effective date.
26 The General Assembly of the Commonwealth of Pennsylvania
27 hereby enacts as follows:
28 Section 1. Short title.
29 This act shall be known and may be cited as the Pennsylvania
30 Infrastructure Development Bank Act.
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1 Section 2. Legislative findings and policy.
2 The General Assembly finds and declares as follows:
3 (1) It is in the public interest and the policy of the
4 Commonwealth to foster and promote by all reasonable means
5 the provision of adequate capital for the financing of public
6 infrastructures or purposes to be undertaken by governmental
7 units and to assist those governmental units in fulfilling
8 their needs for improvements and to encourage and promote
9 continued investor interest in the purchase of bonds or notes
10 of those governmental units as sound and preferred securities
11 for investment.
12 (2) It is in the public interest and it is declared to
13 be the policy of the Commonwealth to encourage its
14 governmental units to continue their independent undertakings
15 of improvements of the public infrastructure and purposes and
16 the financing thereof and to assist them therein by making
17 funds available for the orderly financing of public
18 infrastructure improvements and purposes at the most
19 reasonable terms possible.
20 (3) The collective needs of the Commonwealth and of
21 governmental units within the Commonwealth for the financing
22 of public infrastructure necessary to promote the
23 revitalization and growth of the Commonwealth and to meet
24 changing economic, demographic and social conditions exceed
25 the sums of money currently available to the Commonwealth and
26 its governmental units for such purposes, and to perform
27 other essential governmental functions, are so great that
28 they cannot be met in a timely and cost-effective manner
29 through existing financial mechanisms and, as a result, new
30 revenues relating to the items being financed and new
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1 financing mechanisms, including financing mechanisms
2 supported by dedicated revenues, are needed.
3 (4) Some governmental units are unable to raise funds on
4 reasonable terms to finance public infrastructure projects
5 essential to maintain their economic well-being and quality
6 of life.
7 (5) The continuing economic growth and expansion of the
8 Commonwealth will place increasing demands on the public
9 infrastructure and increase the cost of maintaining and
10 expanding such infrastructure. It is further found that the
11 public infrastructure and resources of the Commonwealth have
12 been, and continue to be, essential to the promotion of
13 business prosperity and employment opportunities in all areas
14 of industry, commerce, technology and the liberal arts, and
15 which will require a substantial commitment to maintaining
16 and expanding the public infrastructure to sustain such
17 growth.
18 (6) It is the intention of the Commonwealth in creating
19 the Pennsylvania Infrastructure Development Bank that any
20 dedicated revenues that may hereafter be required to support
21 such new financing mechanisms, in excess of the amounts of
22 such revenues which are provided for in this act, should be
23 provided from fees and charges paid by the users of public
24 infrastructure projects.
25 (7) Maintenance and expansion of the Commonwealth's
26 public infrastructure will directly promote the economic
27 growth, prosperity and general welfare of the Commonwealth by
28 increasing the value of real estate, enhancing industrial
29 development and employment opportunities, thereby reducing
30 demands upon the Commonwealth's welfare programs and
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1 unemployment compensation burdens on existing private
2 enterprises within the Commonwealth by a reduction in
3 unemployment and underemployment resulting from an
4 improvement in the flow of private capital for investment in
5 productive enterprises.
6 (8) It is found that it is in the best interests of the
7 Commonwealth and of its citizens to create a public
8 instrumentality to be known as the Pennsylvania
9 Infrastructure Development Bank, which, by the receipt of
10 funds for its purposes from the Federal Government, from the
11 Commonwealth and from other governmental units and private
12 sources and from any other funds available to it, may provide
13 or obtain the capital necessary to meet such needs; that the
14 PID Bank may offer and provide organizational support and
15 financing assistance, including, without limitation, grants,
16 loans, debt obligation purchases, letters of credit,
17 guarantees and credit insurance, to the Commonwealth and its
18 governmental units, to assist them to meet the essential
19 needs found and set forth and conditions prescribed herein;
20 and that there should be an appropriation to the PID Bank to
21 fund its organizational, administrative and other costs
22 incident to its inception and early operation.
23 Section 3. Definitions.
24 The following words and phrases when used in this act shall
25 have the meanings given to them in this section unless the
26 context clearly indicates otherwise:
27 "Bonds." Those bonds issued by the bank under this act.
28 "Debt obligation." A bond, note, certificate of indebtedness
29 and any other instrument or evidence of indebtedness, including
30 a debt obligation issued to refund any of the foregoing.
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1 "Economic development." A process by which government,
2 through adoption and implementation of policies, provides
3 incentives or inducements to stimulate growth in the private
4 business sector that is manifested in increased commercial or
5 industrial activity and increased employment opportunities.
6 "Financing assistance." Any purchase or other acquisition by
7 the PID Bank of a municipal security and any financing by the
8 PID Bank of a State infrastructure project.
9 "Governmental unit." Any municipality, county, school
10 district or any agency or instrumentality thereof, any public
11 authority or public corporation of the State or any other public
12 body having local or regional jurisdiction or powers.
13 "Holder." Holder or any similar term when used in reference
14 to a debt obligation of the PID Bank means any person who shall
15 be the owner of any outstanding debt obligation of the PID Bank.
16 "Local aid." Any amount due and certified to the State
17 Treasurer for payment to a city, town, district, regional school
18 district or other local or regional authority, however named,
19 and any other local reimbursement and assistance programs as
20 authorized by law, including, but not limited to, school
21 building construction, school transportation, school lunches,
22 educational programs, veterans' benefits, public health and
23 housing and urban renewal, subsidies and reimbursements for loss
24 of taxes from State-owned lands and property tax exemptions.
25 "Local economic development project." A local infrastructure
26 project which results in private development investment
27 necessary or desirable for the economic development or
28 revitalization of the area in which the project is located.
29 "Local infrastructure project." Any infrastructure project
30 undertaken by a governmental unit, however named, to finance
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1 which such city, town, district or other local or regional
2 authority is authorized by law to borrow money.
3 "Local legislative body." That body of a governmental unit
4 which is empowered to adopt an annual budget or other spending
5 authorization whether styled a board of supervisors or
6 commissioners, city council, town council, town or district
7 meeting or any other title.
8 "Municipal project." Any project involving capital
9 construction or purchase of equipment, including a local
10 infrastructure project of a governmental unit, to finance which
11 such governmental unit is authorized by law, including, but not
12 limited to, section 16 to borrow money for a term of five years
13 or longer.
14 "Municipal security." Any debt obligation of a city, town,
15 district or other local or regional authority.
16 "Participating agency." Any department, board, commission,
17 bureau or agency of the Commonwealth empowered to carry out
18 infrastructure projects.
19 "Person." Any individual, governmental unit, partnership,
20 corporation or joint venture.
21 "PID Bank" or "Bank." The Pennsylvania Infrastructure
22 Development Bank.
23 "Project." A specific work or undertaking involving the
24 acquisition, ownership, construction, reconstruction,
25 rehabilitation, renovation, remodeling, repair, replacement,
26 dismantling, demolishing, equipping, reequipping or improving
27 of, without limitation, any land, building, structure, facility,
28 system, improvement, real and personal property or any interest
29 therein, including, without limitation, any highway, road,
30 alley, driveway, bridge, tunnel, parking garage and other
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1 parking facility, sidewalk, traffic-control device, mass transit
2 or other transportation system, recycling facility, resource
3 recovery facility and system, water supply and distribution
4 system, including, without limitation, any reservoir, dam, well,
5 catch basin, surface drain or other water storage and collection
6 facility, aqueduct, pipe, main, pumping and ventilating station
7 or any other devices, structures, improvements or facilities for
8 water treatment, distribution or flood control, sewer and any
9 other components of a waste water collection and treatment
10 system, or hazardous waste disposal system, pollution control
11 facility, solid waste disposal facility and any other structure,
12 facility, system, improvement, fixture and equipment which in
13 the judgment of the board are similar to, or necessary or
14 convenient to the effective operation of, any of the foregoing.
15 Whenever appropriate, project shall also mean such lands,
16 buildings or structures and appurtenances.
17 "Project cost" or "cost." The total of all costs incurred by
18 the PID Bank or by the Commonwealth or a governmental unit which
19 the PID Bank, the Commonwealth or such governmental unit deems
20 reasonable and necessary or desirable in connection with
21 considering, selecting, planning, designing, acquiring,
22 constructing, reconstructing, altering, remodeling or completing
23 a project or a portion of a project which may include, without
24 limitation, the cost of all labor, materials, machinery and
25 equipment, lands, property, rights and easements, financing
26 charges, interest, including, without limitation, any discount
27 or capitalized interest, plans and specifications, surveys or
28 estimates or projections of costs and revenues, engineering and
29 legal services, and all other expenses necessary or incident to
30 all or part of a project, or any financing or refinancing of, or
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1 any reimbursement with respect to all or any part of a project.
2 "Public infrastructure." Improvements to real property by a
3 governmental unit or State agency such as, but not necessarily
4 limited to, highways, roads, bridges, tunnels, traffic-control
5 devices, mass transit and other transportation facilities,
6 recycling facilities, resource recovery systems, wastewater
7 treatment and disposal systems, water supply systems, solid and
8 hazardous waste and disposal systems and other elements of such
9 improvements, structures, facilities and systems as are vital
10 parts of the physical plant of the Commonwealth and which
11 provide essential support to the economic well-being and quality
12 of life of the Commonwealth. Improvements as used in this
13 context shall mean the construction, reconstruction,
14 rehabilitation, repair or replacement of such structures,
15 facilities and systems.
16 "Revenue-producing local infrastructure project." The
17 acquisition, construction, reconstruction, improvement,
18 expansion, repair or rehabilitation of any infrastructure
19 project undertaken by a city, town or district from or on
20 account of which the city, town or district receives or expects
21 to receive revenues, including, but not limited to, a water
22 supply and distribution system, waste water treatment and
23 disposal system, solid waste disposal facility, recycling
24 facility, resource recovery facility or system or parking
25 facility.
26 "Revenues." All rates, rents, fees, charges, surcharges,
27 money, profits, earnings, payments or principal of or interest
28 on municipal securities and other investments, gifts,
29 governmental and other grants, contributions, appropriations and
30 all other income derived or to be derived by the PID Bank, the
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1 Commonwealth or a governmental unit in connection with any
2 project for which financing assistance has been provided by the
3 PID Bank or in connection with a revenue-producing local
4 infrastructure project.
5 "State agency." The Executive, Legislative or Judicial
6 Branch of State government or any officer, department, board,
7 commission, bureau or division of the State.
8 "State infrastructure fund." The fund established for the
9 receipt of financing assistance provided to a participating
10 agency by the PID Bank.
11 Section 4. Establishment of bank; board of directors.
12 (a) Establishment of bank.--There is hereby established in,
13 but not of the State Treasury, a body politic and corporate, to
14 be known as the Pennsylvania Infrastructure Development Bank,
15 with corporate succession. The bank is constituted an
16 instrumentality of the Commonwealth and the exercise by the bank
17 thereof of the powers conferred by this act shall be deemed and
18 held to be a public and essential governmental function. The
19 purpose of the PID Bank shall be to promote, encourage and
20 provide financing assistance to participating agencies and
21 governmental units in their efforts to promote, encourage and
22 finance the rehabilitation, repair and replacement of the aged,
23 outmoded, inadequate and deteriorating elements of the capital
24 infrastructure of the Commonwealth and of governmental units
25 within the Commonwealth and to promote, encourage and finance
26 the planning and construction of new and expanded infrastructure
27 projects to keep pace with and to promote the revitalization and
28 growth of the Commonwealth and to meet changing economic,
29 demographic and social conditions.
30 (b) Board of directors.--The bank shall be directed by a 15-
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1 member board of directors. The board shall be composed of the
2 State Treasurer, the Secretary of Community Affairs, the
3 Secretary of Environmental Resources, the Secretary of Banking,
4 the Secretary of Commerce and the Secretary of Transportation;
5 three persons appointed by the Governor at the recommendation of
6 the President pro tempore of the Senate and three persons
7 appointed by the Governor at the recommendation of the Speaker
8 of the House of Representatives, of whom no more than two of
9 each group of three shall be of the same political party and who
10 shall serve during the two-year legislative term in which they
11 are appointed; and three residents of the Commonwealth appointed
12 by the Governor with the advice and consent of the Senate, of
13 whom no more than two shall be of the same political party and
14 who shall serve for terms of four years, except that the first
15 three appointed shall serve terms of two, three and four years
16 respectively. Of the nine directors appointed by the Governor,
17 one shall be a registered engineer in the Commonwealth, one a
18 representative of a State local government association, one a
19 planning director of a county or regional planning commission
20 and one having financial experience in banking or a related
21 field. Each appointed director shall serve until his successor
22 has been appointed and qualified. A director may be reappointed.
23 A vacancy shall be filled in the same manner as the original
24 appointment but for the remainder of the unexpired term only.
25 (c) Removal for cause.--Each appointed director may be
26 removed from office by the Governor for cause, after a public
27 hearing, and may be suspended by the Governor pending the
28 completion of the hearing. Each director, before beginning his
29 duties, shall take and subscribe an oath to perform the duties
30 of his office faithfully, impartially and justly to the best of
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1 his ability. A record of oaths shall be filed with the Secretary
2 of the Commonwealth.
3 (d) Chairman; vested powers; quorum.--The Governor shall
4 designate one of the appointed members to be the chairman and
5 chief executive officer of the bank and the directors shall
6 elect biennially a vice chairman from among the appointed
7 directors. The chairman shall serve at the pleasure of the
8 Governor and until a successor shall be designated. The
9 directors shall elect a secretary and a treasurer who need not
10 be directors, and the same person may be elected to serve as
11 both secretary and treasurer. The powers of the bank shall be
12 vested in the directors in office from time to time and seven
13 directors shall constitute a quorum at any meeting. Action may
14 be taken and motions and resolutions adopted by the bank by the
15 affirmative vote of at least seven directors, except for the
16 following actions, which shall require the affirmative vote of
17 at least ten directors:
18 (1) An action to make or establish the terms and
19 conditions of a loan, grant, guarantee or lease arrangement
20 for a project.
21 (2) An action to adopt an infrastructure facility master
22 plan.
23 No vacancy on the board of directors shall impair the right of a
24 quorum to exercise the powers and perform the duties of the
25 bank.
26 (e) Performance bond.--Each director and the treasurer of
27 the bank shall execute a bond to be conditioned upon the
28 faithful performance of the duties of the directors or treasurer
29 in a form and amount as may be prescribed by the State
30 Treasurer. Bonds shall be filed in the office of the Secretary
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1 of the Commonwealth. At all times thereafter, the directors and
2 treasurer shall maintain these bonds in full effect. All costs
3 of the bonds shall be borne by the bank.
4 (f) Compensation.--The bank shall reimburse the directors
5 for actual and necessary expenses incurred in the performance of
6 their duties and shall fix the compensation of the appointed
7 members of the board of directors. Notwithstanding the
8 provisions of any other law, no officer or employee of the
9 Commonwealth shall be deemed to have forfeited nor shall he
10 forfeit his office or employment or any benefits or emoluments
11 of his office or employment because he accepts the office of ex
12 officio director of the bank or because he serves as an ex
13 officio director.
14 (g) Designated substitute.--Each ex officio director may
15 designate an officer of his department to represent him at
16 meetings of the bank. Each designee may lawfully vote and
17 otherwise act on behalf of the director for whom he constitutes
18 the designee. The designation shall be in writing delivered to
19 the bank and shall continue in effect until revoked or amended
20 in writing delivered to the bank.
21 (h) Dissolution of bank.--The bank may be dissolved by law
22 if it has no debts or obligations outstanding or if provision
23 has been made for paying or retiring these debts or obligations.
24 Upon a dissolution of the bank, all of its property, funds and
25 assets shall be vested in the Commonwealth.
26 (i) Minutes of meetings.--A true copy of the minutes of
27 every meeting of the bank shall be delivered by and under the
28 certification of the secretary of the board of directors to the
29 Governor and the presiding officers of both Houses of the
30 General Assembly. No action taken at a meeting by the bank shall
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1 have effect until 15 days after a copy of the minutes has been
2 delivered properly unless the Governor approves the action
3 during the 15-day waiting period, in which case the action shall
4 become effective upon approval. If, in the 15-day period, the
5 Governor returns the copy of the minutes with his veto of an
6 action taken by the bank or by a director, that action shall be
7 of no effect. The powers conferred in this subsection upon the
8 Governor shall be exercised with due regard for the rights of
9 the holders of bonds, notes and other obligations of the bank at
10 any time outstanding, and nothing in or done pursuant to this
11 subsection shall in any way limit, restrict or alter the
12 obligation or powers of the bank or a representative or officer
13 of the bank to carry out and perform each covenant, agreement or
14 contract made or entered into by or on behalf of the bank with
15 respect to its bonds, notes or other obligations or for the
16 benefit, protection or security of the holders of these
17 instruments.
18 (j) Executive approval.--No resolution or other action of
19 the bank providing for the issuance of bonds, refunding bonds or
20 other obligations shall be adopted or otherwise made effective
21 by the bank without the prior written approval of the Governor
22 and the State Treasurer.
23 Section 5. Powers and duties.
24 Except as otherwise limited by this act, the PID Bank may:
25 (1) Make and alter by laws for its organization and
26 internal management and, subject to agreements with holders
27 of its bonds, notes or other obligations, make rules and
28 regulations with respect to its operations, properties and
29 facilities.
30 (2) Adopt an official seal and alter it.
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1 (3) Sue and be sued.
2 (4) Make and enter into all contracts, leases and
3 agreements necessary or incidental to the performance of its
4 duties and the exercise of its powers under this act, and
5 subject to any agreement with the holders of the bank's
6 bonds, notes or other obligations, consent to any
7 modification, amendment or revision of any contract, lease or
8 agreement to which the bank is a party.
9 (5) Enter into agreements or other transactions with and
10 accept grants, appropriations and the cooperation of the
11 United States or any agency thereof or the State or any State
12 agency in furtherance of the purposes of this act and do
13 anything necessary in order to avail itself of that aid and
14 cooperation.
15 (6) Receive and accept aid or contributions from any
16 source of money, property, labor or other things of value, to
17 be held, used and applied to carry out the purposes of this
18 act, subject to such conditions upon which that aid and those
19 contributions may be made, including, but not limited to,
20 gifts or grants from any department or agency of the United
21 States or the State or any State agency for any purpose
22 consistent with this act.
23 (7) Borrow money and issue its debt obligations and
24 provide for the rights of the holders thereof, as long as the
25 issuance of such debt obligations has been approved by a
26 vote, taken by the yeas and nays, of two-thirds of each house
27 of the General Assembly.
28 (8) Subject to any agreement with holders of its bonds,
29 notes or other obligations, invest moneys of the bank not
30 required for immediate use, including proceeds from the sale
19850H0500B0559 - 15 -
1 of any bonds, notes or other obligations, in such
2 obligations, securities and other investments as the bank
3 shall deem prudent.
4 (9) Procure insurance against any loss in connection
5 with its property and other assets and operations in such
6 amounts and from such insurers as it deems desirable.
7 (10) Engage the services of attorneys, accountants and
8 financial experts and such other advisors, consultants and
9 agents as may be necessary in its judgment and fix their
10 compensation.
11 (11) Make and contract to make loans to governmental
12 units and acquire and contract to acquire notes and bonds
13 issued or to be issued by governmental units to evidence
14 those loans, all upon such terms and conditions not
15 inconsistent with the provisions of this act as the bank may
16 determine to be desirable.
17 (12) Subject to any agreement with holders of its bonds,
18 notes or other obligations, purchase bonds, notes and other
19 obligations of the bank.
20 (13) Fix, revise, charge and collect such fees and
21 charges, including, but not limited to, reimbursement of all
22 costs incurred by the bank in connection with its financings
23 and the establishment and maintenance of reserve funds, as
24 the bank may determine to be reasonable.
25 (14) Subject to any agreement with holders of its bonds,
26 notes or other obligations, obtain as security for payment of
27 all or any part of the principal of and interests and premium
28 on the bonds, notes and other obligations of the bank, lines
29 of credit and letters of credit in such amounts and upon such
30 terms as the bank may determine and pay such fees and
19850H0500B0559 - 16 -
1 expenses required in connection therewith.
2 (15) Provide to governmental units such financial and
3 credit advice as they may request.
4 (16) Make payments to the Commonwealth from any moneys
5 of the bank available therefor as may be required pursuant to
6 any agreement with the Commonwealth or act appropriating
7 moneys to the bank.
8 (17) Do any act necessary or convenient to the exercise
9 of the foregoing powers or reasonably implied therefrom.
10 (18) Establish such reserves as the board shall
11 authorize from time to time, including, without limitation,
12 any general fund, restricted reserve funds, unrestricted
13 reserve funds and sinking funds.
14 (19) Invest any money held in reserve or sinking funds
15 or any money not required for immediate use or disbursement
16 in such investments as may be lawful for fiduciaries in the
17 Commonwealth, subject to any limitations contained in any
18 agreement to which the PID Bank is a party.
19 (20) Contract for and accept any gifts, grants or loans
20 of funds or property or financial or other aid in any form
21 from the Commonwealth or any governmental unit or from any
22 other persons or source and to comply, subject to the
23 provisions of this act, with the terms and conditions thereof
24 and to take all necessary action to secure any Federal
25 assistance which is or may become available to it for any of
26 the purposes of this act. The provisions of any Federal law,
27 administrative regulation or practice governing Federal
28 assistance for the purposes of this act shall, to the extent
29 necessary to enable the PID Bank to receive such assistance
30 and not constitutionally prohibited, override any
19850H0500B0559 - 17 -
1 inconsistent provisions of this act.
2 (21) Monitor the progress of any project and the
3 expenditure or use of any financing assistance provided by
4 the PID Bank for such project and to establish procedures in
5 connection therewith, including requirements for reports
6 concerning the general conditions of and maintenance
7 necessary for such project and the timely and appropriate
8 publication of such reports.
9 (22) Collect fees in such amounts as the PID Bank may
10 from time to time establish for services performed by it.
11 (23) Provide financing assistance to participating
12 agencies and governmental units as provided in this act.
13 (24) Purchase or hold municipal securities at such
14 prices and in such manner as the PID Bank shall deem
15 advisable and to sell municipal securities acquired or held
16 by it at such prices without relation to cost and in such
17 manner as the PID Bank shall deem advisable.
18 (25) Do any and all things necessary or convenient to
19 carry out its purposes and exercise the powers given and
20 granted in this act.
21 (26) Do any act necessary or convenient to the exercise
22 of the foregoing powers or reasonably implied therefrom.
23 Section 6. Specific power to issue bonds, notes and other
24 obligations.
25 (a) Principal amounts.--The bank may issue its bonds, notes
26 or other obligations in principal amounts as in the judgment of
27 the bank shall be necessary to provide sufficient funds for any
28 of its corporate purposes. This includes the payment, funding or
29 refunding of the principal of, or interest or redemption
30 premiums on, any bonds, notes or other obligations issued by it
19850H0500B0559 - 18 -
1 whether the bonds, notes or other obligations or interest to be
2 funded or refunded have or have not become due, the
3 establishment or increase of reserves to secure or to pay the
4 bonds, notes or other obligations or interest thereon and all
5 other costs or expenses of the bank incident to and necessary to
6 carry out its corporate purposes and powers.
7 (b) Negotiable instrument designation.--Whether or not the
8 bonds, notes or other obligations are of a form and character as
9 to be negotiable instruments under the terms of Title 13 of the
10 Pennsylvania Consolidated Statutes (relating to commercial
11 code), the bonds, notes and other obligations are made
12 negotiable instruments within the meaning of and for the
13 purposes of Title 13, subject only to the provisions of the
14 bonds, notes and other obligations for registration.
15 (c) Formal requirements.--Bonds, notes or other obligations
16 of the bank shall be authorized by resolution of the bank and
17 may be issued in one or more series and shall bear any date or
18 dates, mature at any time or times, bear interest at any rate or
19 rates of interest per year, be in any denomination or
20 denominations, be in any form, either coupon or registered,
21 carry any conversion or registration privileges, have any rank
22 or priority, be executed in any manner, be payable from such
23 sources in any medium of payment at any place or places within
24 or without this Commonwealth and be subject to any terms of
25 redemption by the bank or the holders thereof, with or without
26 premium, as the resolution or resolutions may provide. A
27 resolution of the bank authorizing the issuance of bonds, notes
28 or other obligations may provide that the bonds, notes or other
29 obligations be secured by a trust indenture between the bank and
30 a trustee, vesting in the trustee any property, rights, powers
19850H0500B0559 - 19 -
1 and duties in trust consistent with the provisions of this act
2 as the bank may determine.
3 (d) Public or private sale.--Bonds, notes or other
4 obligations of the bank may be sold at public or private sale at
5 any price or prices and in any manner as the bank may determine.
6 Every bond, note or other obligation shall mature and be paid
7 not later than 35 years from the date of initial purchase.
8 (e) Autonomy.--Upon specific authorization by law of the
9 amount and purpose of an issue, bonds, notes or other
10 obligations of the bank may be issued under the provisions of
11 this act without obtaining the consent of any department,
12 division, board, bureau or agency of the Commonwealth and
13 without any other proceeding or the happening of any other
14 conditions or other things than those proceedings, conditions or
15 things which are specifically required by this act.
16 (f) Limitation on obligation.--Bonds, notes or other
17 obligations of the bank issued under the provisions of this act
18 shall not be a debt or liability of the Commonwealth or of any
19 of its political subdivisions other than the bank and shall not
20 create or constitute any indebtedness, liability or obligation
21 of the Commonwealth or of any political subdivision, but all
22 bonds, notes and other obligations, unless funded or refunded by
23 bonds, notes or other obligations of the bank, shall be payable
24 solely from revenues or funds pledged or available for their
25 payment as authorized in this act. Each bond, note and other
26 obligation shall contain on its face a statement to the effect
27 that the bank is obligated to pay the principal thereof or the
28 interest thereon only from its revenues, receipts or funds
29 pledged or available for their payment as authorized in this act
30 and that neither the Commonwealth nor any political subdivisions
19850H0500B0559 - 20 -
1 are obligated to pay the principal or interest and that neither
2 the faith and credit nor the taxing power of the Commonwealth or
3 any political subdivision is pledged to the payment of the
4 principal of or the interest on the bonds, notes or other
5 obligations.
6 (g) Nature of obligation and payment.--Each issue of bonds,
7 notes or other obligations of the bank may, if it is determined
8 by the bank, be general obligations payable out of any revenues,
9 receipts or funds of the bank, or special obligations payable
10 out of particular revenues, receipts or funds, subject only to
11 agreements with the holders of bonds, notes or other
12 obligations. Issues may be secured by one or more of the
13 following:
14 (1) Pledge of revenues and other receipts to be derived
15 from the payment of the interest on and principal of notes
16 and bonds issued to the bank by one or more governmental
17 units and any other payment made to the bank pursuant to
18 agreements with any governmental units, or a pledge or
19 assignment of any notes and bonds of any governmental units
20 and the rights and interests of the bank therein.
21 (2) Pledge of rentals, receipts and other revenues to be
22 derived from leases or other contractual arrangements with
23 any person or entity, public or private, including one or
24 more governmental units, or a pledge or assignment of those
25 leases or other contractual arrangements and the rights and
26 interests of the bank therein.
27 (3) Pledge of grants, subsidies, contributions,
28 appropriations or other payments to be received from the
29 United States or any instrumentality thereof or from the
30 Commonwealth or any Commonwealth agency.
19850H0500B0559 - 21 -
1 (4) Pledge of all moneys, funds, accounts, securities
2 and other funds, including the proceeds of the bonds, notes
3 or other obligations.
4 (5) Pledge of the receipts to be derived from the
5 payments of State aid to the bank under section 13.
6 (6) A mortgage on all or part of the property, real or
7 personal, of the bank then owned or thereafter to be
8 acquired, or a pledge or assignment of mortgages made to the
9 bank by any person or entity, public or private, including
10 one or more governmental units and the rights and interests
11 of the bank therein.
12 Section 7. Covenants and express conditions on obligations.
13 In any resolution of the bank authorizing or relating to the
14 issuance of bonds, notes or other obligations, the bank, in
15 order to secure payment of the bonds, notes or other obligations
16 and in addition to its other powers, may, by provisions in the
17 resolution which shall constitute covenants by the bank and
18 contracts with the holders of the bonds, notes or other
19 obligations, do the following:
20 (1) Secure the bonds, notes or other obligations as
21 provided in section 6.
22 (2) Covenant against pledging all or part of its
23 revenues or receipts.
24 (3) Covenant with respect to limitations on a right to
25 sell, mortgage, lease or otherwise dispose of notes and bonds
26 of governmental units or a part thereof or property of any
27 kind.
28 (4) Covenant as to bonds, notes or other obligations to
29 be issued, the limitations thereon, the terms and conditions
30 thereof and the custody, application, investment and
19850H0500B0559 - 22 -
1 disposition of the proceeds thereof.
2 (5) Covenant as to issuance of additional bonds, notes
3 or other obligations, the limitations on issuance of
4 additional bonds, notes or other obligations and the
5 incurring of other debts by it.
6 (6) Covenant as to the payment of principal of or
7 interest on bonds, notes or other obligations, the sources
8 and methods of the payment, the rank or priority of bonds,
9 notes or other obligations with respect to liens or security
10 interests or the acceleration of maturity of bonds, notes or
11 other obligations.
12 (7) Provide for replacement of lost, stolen, destroyed
13 or mutilated bonds, notes or other obligations.
14 (8) Covenant against extending the time for payment of
15 bonds, notes or other obligations or interest thereon.
16 (9) Covenant as to the redemption of bonds, notes or
17 other obligations by the bank or the holders thereof and the
18 privileges of exchanging them for other bonds, notes or other
19 obligations of the bank.
20 (10) Covenant to create or authorize the creation of
21 special funds or accounts to be held in trust or otherwise
22 for the benefit of holders of bonds, notes or other
23 obligations of the bank, or of reserves for other purposes
24 and as to the use, investment and disposition of moneys held
25 in those funds, accounts or reserves.
26 (11) Provide for the rights, liabilities, powers and
27 duties arising upon the breach of a covenant, condition or
28 obligation and prescribe the events of default and the terms
29 and conditions upon which any or all of the bonds, notes or
30 other obligations of the bank shall become or may be declared
19850H0500B0559 - 23 -
1 due and payable before maturity and the terms and conditions
2 upon which the declaration and its consequences may be
3 waived.
4 (12) Vest in a trustee or trustees within or without
5 this Commonwealth in trust any property, rights, powers and
6 duties as the bank may determine. These may include any or
7 all of the rights, powers and duties of any trustee appointed
8 by the holders of bonds or notes under section 19, including
9 rights with respect to the sale or other disposition of notes
10 and bonds of governmental units pledged pursuant to a
11 resolution or trust indenture for the benefit of the holders
12 of bonds, notes or other obligations of the bank and the
13 right by suit or action to foreclose any mortgage pledged
14 pursuant to the resolution of trust indenture for the benefit
15 of the holders of the bonds, notes or other obligations, and
16 to limit or abrogate the right of the holders of any bonds,
17 notes or other obligations of the bank to appoint a trustee
18 under this act, and to limit the rights, powers and duties of
19 the trustee.
20 (13) Pay the costs or expenses incident to the
21 enforcement of the bonds, notes or other obligations or of
22 the provisions of the resolution authorizing the issuance of
23 those bonds, notes or other obligations or the trust
24 indenture securing the bonds, notes or other obligations or
25 of any covenant or agreement of the bank with the holders of
26 the bonds, notes or other obligations.
27 (14) Limit the rights of the holders of any bonds, notes
28 or other obligations to enforce any pledge or covenant
29 securing bonds, notes or other obligations.
30 (15) Make covenants other than or in addition to the
19850H0500B0559 - 24 -
1 covenants authorized by this act of like or different
2 character, and make covenants to do or refrain from doing any
3 acts and things as may be necessary, or convenient and
4 desirable, in order to better secure bonds, notes or other
5 obligations or which, in the absolute discretion of the bank
6 will tend to make bonds, notes or other obligations more
7 marketable, notwithstanding that the covenants, acts or
8 things may not be enumerated herein.
9 Section 8. Nature and effect of pledges.
10 A pledge of revenues, receipts, moneys, funds or other
11 property or instruments made by the bank shall be valid and
12 binding from the time when the pledge is made. The revenues,
13 receipts, moneys, funds or other property pledged and thereafter
14 received by the bank shall be immediately subject to the lien of
15 the pledge without its physical delivery or further act, and the
16 lien of any pledge shall be valid and binding as against all
17 parties having claims of any kind in tort, contract or otherwise
18 against the bank irrespective of whether the parties have notice
19 of the lien. Neither the resolution nor any other instrument by
20 which a pledge under this section is created need be filed or
21 recorded except in the records of the bank.
22 Section 9. Financing infrastructure projects.
23 (a) Loans to governmental units.--The bank may make and
24 contract to make loans to governmental units to finance
25 infrastructure projects which the governmental unit may lawfully
26 make or acquire or for which the governmental unit is authorized
27 or required by law to make an appropriation. The bank may not
28 make or contract to make loans to governmental units for current
29 expenses and payment of obligations, other than those for
30 temporary financing. Each loan to a governmental unit shall be
19850H0500B0559 - 25 -
1 evidenced by notes or bonds of the governmental unit issued to
2 the bank. Notes and bonds to be issued to the bank by a
3 governmental unit:
4 (1) shall be authorized and issued as provided by law
5 for the issuance of notes and bonds by the governmental unit;
6 and
7 (2) notwithstanding a provision of law to the contrary,
8 may be sold at private sale to the bank at any price, whether
9 or not less than par value and shall be subject to redemption
10 prior to maturity at any times and at any prices as the bank
11 and governmental unit may agree.
12 Each loan to a governmental unit and the notes and bonds issued
13 under this section shall bear interest at rate or rates per year
14 as the bank and governmental unit may agree. Loans shall be made
15 in any amounts and for any purposes as the bank shall determine.
16 (b) Financing by lease.--The bank may finance all or any
17 part of the costs to the bank, a governmental unit, or any other
18 person or entity, public or private, of any infrastructure
19 project which a governmental unit may lawfully make or acquire,
20 through a leasing of all or a part of that project by the bank
21 and the subletting of that project to a governmental unit at a
22 rental as the bank determines to be appropriate.
23 (c) Guarantees.--The bank is authorized, subject to any
24 agreement with the holders of the bank's bonds, notes or other
25 obligations, to guarantee or contract to guarantee the payment
26 of all or any portion of the principal and interest on bonds or
27 other obligations issued by a governmental unit to finance any
28 infrastructure project which the unit may lawfully make or
29 acquire, or is required to make or acquire, except for current
30 expenses and payment of obligations, other than those for
19850H0500B0559 - 26 -
1 temporary financing, and to fix, charge and collect any fees in
2 connection with any guarantee as the bank may determine to be
3 reasonable and the guarantee shall constitute an obligation of
4 the bank for purposes of this act, provided that no guarantee
5 shall be payable from the proceeds of Commonwealth general
6 obligation bonds.
7 (d) Wastewater treatment systems.--All loans made by the
8 bank from its general equity funds to governmental units to
9 finance wastewater treatment systems shall be repaid in a period
10 of time, not to exceed 25 years, to be determined by the bank.
11 Section 10. General equity funds; creation and purpose.
12 The bank shall create and establish special funds to be known
13 as "general equity funds" and shall deposit into the funds all
14 proceeds of bonds issued by the Commonwealth for the purpose of
15 making loans or grants to governmental units and any grants,
16 contributions or other moneys from any source, including the
17 United States, available for purposes of the fund as the bank
18 may determine. In addition to other accounts within the funds
19 which the bank may establish, the bank shall establish a
20 separate account within the funds for each act authorizing the
21 Commonwealth to issue bonds pursuant to which the Commonwealth
22 has issued bonds and appropriated the proceeds to the bank, and
23 shall deposit those proceeds to the account established
24 therefor. The bank shall not make a loan or grant of the moneys
25 in any such account, exclusive of the earnings thereon, except
26 for the object or purpose for which the proceeds of bonds issued
27 by the Commonwealth or required to be used pursuant to the act
28 authorizing the issuance of bonds for which the account was
29 established. Except as otherwise expressly provided by law, the
30 moneys received by the bank as payment of the principal of and
19850H0500B0559 - 27 -
1 the interest on a loan made from moneys in any account or fund
2 shall be deposited into that account or fund and thereafter
3 shall be utilized only for the purposes for which the account or
4 fund was established. The earnings on the moneys in any account
5 or fund may be thereafter applied for any lawful purpose of the
6 bank.
7 Section 11. Payments Fund; creation and purpose.
8 The bank shall create and establish a special fund to be
9 known as the Payments Fund and deposit to the fund all moneys
10 appropriated to the bank for the purposes of the fund. This
11 shall include moneys constituting the proceeds of bonds issued
12 by the Commonwealth and any other moneys, including grants,
13 contributions or other moneys from the United States or other
14 source, legally available to the bank for the purposes of the
15 fund as the bank may determine. The bank shall apply the moneys
16 in the fund to make payments to or on behalf of the Commonwealth
17 or its agency of lawful expenditures made or to be made by any
18 department, board, commission, bureau or division of the
19 Commonwealth, provided that no payments from moneys required by
20 law to be applied for a particular object or purpose shall be
21 made except for that object or purpose. Moneys in the fund
22 required to be used for a particular object or purpose shall be
23 segregated in a separate account established within the fund.
24 Payments from the fund shall be made in accordance with
25 procedures established by the bank and approved by the State
26 Treasurer. Unless otherwise required by law, the earnings on the
27 moneys in the fund may be applied for any lawful purpose of the
28 bank.
29 Section 12. Bank reserves, funds and accounts.
30 The bank may establish any reserves, funds or accounts as it
19850H0500B0559 - 28 -
1 may determine necessary or desirable to further the
2 accomplishment of the purposes of the bank or to comply with the
3 provisions of any agreement made by or any resolution of the
4 bank.
5 Section 13. Providing for bank solvency; deficiency penalty.
6 To assure the continued operation and solvency of the bank,
7 the bank may require that if a governmental unit fails or is
8 unable to pay in full, when due, any of its obligations, an
9 amount sufficient to satisfy those obligations shall be paid by
10 the State Treasurer to the bank first from the Public Utility
11 Realty Tax, apportioned under section 1107-A of the act of March
12 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971,
13 and, to the extent permitted by Federal law, Federal moneys
14 appropriated or apportioned to the governmental unit by the
15 Commonwealth, and then from State aid payable to the
16 governmental unit. As used in this section, obligations of the
17 governmental unit include the principal of or interest on bonds
18 or notes of a governmental unit issued to or guaranteed by the
19 bank, including the subrogation of the bank to the right of the
20 holders of those obligations; any fees or charges payable to the
21 bank; any amounts payable by a governmental unit under any
22 service contract or other contractual arrangement under which
23 the payments are pledged to secure any bonds or notes issued to
24 the bank by another governmental unit, where the failure or
25 inability has resulted in a nonpayment of principal or interest
26 on those bonds or notes or rental payments under a lease with
27 the bank. State aid includes forms of State aid payable to the
28 governmental unit and to the extent permitted by Federal law,
29 Federal moneys appropriated or apportioned to the governmental
30 unit by the Commonwealth. If the bank requires, and there has
19850H0500B0559 - 29 -
1 been a failure or inability by a governmental unit remaining
2 uncured for a period of 30 days, the chairman of the bank shall
3 certify to the State Treasurer, with written notice to the
4 fiscal officer of the governmental unit, the amount remaining
5 unpaid. The State Treasurer shall pay that amount to the bank,
6 or if the right to receive those payments has been pledged or
7 assigned to a trustee for benefit of the holders of bonds, notes
8 or other obligations of the bank, to that trustee, out of moneys
9 next available or apportioned to the governmental unit for any
10 purpose, the amount remaining unpaid until the amount certified
11 is paid. The amount paid over to the bank shall be deducted from
12 the corresponding appropriation or apportionment of the Public
13 Utility Realty Tax, apportioned under section 1107-A of the Tax
14 Reform Code of 1971, and then from State aid and shall not
15 obligate the Commonwealth to make nor entitle the governmental
16 unit to receive any additional appropriation or apportionment.
17 Section 14. Limitation on personal liability of directors
18 and others.
19 Neither the directors of the bank nor any person executing
20 bonds, notes or other obligations issued under this act shall be
21 liable personally on the bonds, notes or other obligations by
22 reason of issuance.
23 Section 15. Integrity of agreements.
24 The Commonwealth pledges to covenant and agree with the
25 holders of any bonds, notes or other obligations issued pursuant
26 to authorization of this act that the Commonwealth will not
27 limit or alter the rights or powers vested in the bank to
28 perform and fulfill the terms of any agreement made with the
29 holders of the bonds, notes or other obligations or to fix,
30 establish, charge and collect any rents, fees, rates, payments
19850H0500B0559 - 30 -
1 or other charges as may be convenient or necessary to produce
2 sufficient revenues to meet all expenses of the bank and to
3 fulfill the terms of any agreement made with the holders of
4 bonds, notes or other obligations including the obligation to
5 pay the principal of and interest and premium on those bonds,
6 notes or other obligations, with interest on any unpaid
7 installments of interest, and all costs and expenses in
8 connection with any action or proceedings by or on behalf of the
9 holders, until the bonds, notes or other obligations, together
10 with interest thereon, are fully discharged.
11 Section 16. Investment by financiers.
12 The Commonwealth and all public officers, governmental units
13 and agencies thereof; all banks, trust companies, savings banks
14 and institutions, building and loan associations, savings and
15 loan associations, investment companies and other persons
16 carrying on a banking business; all insurance companies,
17 insurance associations and other persons carrying on an
18 insurance business; all executors, administrators, guardians,
19 trustees and other fiduciaries may invest any sinking funds,
20 moneys or other funds belonging to them or within their control
21 in any bonds, notes or other obligations issued under this act,
22 and those bonds, notes or other obligations shall be authorized
23 security for any and all public deposits.
24 Section 17. Transfers of real property.
25 All Commonwealth agencies and governmental units,
26 notwithstanding any contrary provision of law, may lease, lend,
27 grant or convey to the bank at its request, upon terms and
28 conditions as the governing body or other proper authorities of
29 the Commonwealth agencies or governmental units may deem
30 reasonable and fair and without the necessity for any
19850H0500B0559 - 31 -
1 advertisement, order of court or other action or formality,
2 other than the authorizing ordinance of the governing body
3 concerned, any real property or interest therein which may be
4 necessary or convenient to effect the purposes of the bank.
5 Section 18. Public nature of bank property.
6 All property of the bank is declared to be public property
7 devoted to an essential public and governmental function and
8 purpose and shall be exempt from all taxes of the Commonwealth
9 or any political subdivision thereof. All bonds, notes or other
10 obligations issued under this act are declared to be issued by a
11 body corporate and politic of the Commonwealth and for an
12 essential public and governmental purpose. Those bonds, notes or
13 other obligations, and the interest thereon and the income
14 therefrom and from the sale, exchange or other transfer thereof,
15 and all funds, revenues, income and other moneys received or to
16 be received by the bank shall at all times be exempt from
17 taxation, except for transfer, inheritance and estate taxes.
18 Section 19. Procedure upon bank's default or noncompliance.
19 (a) Appointment of trustee.--If the bank defaults in the
20 payment of principle of or interest on any issue of bonds, notes
21 or other obligations after the same becomes due, whether at
22 maturity or upon call for redemption, and the default continues
23 for a period of 30 days, or if the bank fails or refuses to
24 comply with the provisions of this act or defaults in any
25 agreement made with the holders of any issue of bonds, notes or
26 other obligations, then the holders of 25% in aggregate
27 principal amount of the bonds, notes or other obligations of the
28 issue then outstanding, by instrument or instruments filed in
29 the office of the clerk of any county in which the bank operates
30 and has an office and proved or acknowledged in the same manner
19850H0500B0559 - 32 -
1 as required for a deed to be recorded, may appoint a trustee to
2 represent the holders of the bonds, notes or other obligations
3 for the purposes provided in this section. Notarized instruments
4 of appointment shall be filed by the appointers in the office of
5 the prothonotary of any county in which the bank operates and
6 has an office.
7 (b) Trustee's options.--The trustee may, and upon written
8 request of the holders of 25% in principal amount of the bonds,
9 notes or other obligations then outstanding shall, in his or its
10 own name:
11 (1) By suit, action or proceeding, enforce all rights of
12 the holders of bonds, notes or other obligations, to require
13 the bank to carry out any other agreements with the holders
14 of the bonds, notes or other obligations and to perform its
15 duties under this act.
16 (2) Bring suit upon the bonds, notes or other
17 obligations.
18 (3) By action or suit, require the bank to account as if
19 it were the trustee of an express trust for the holders of
20 the bonds, notes or other obligations.
21 (4) By action or suit, enjoin any acts or things which
22 may be unlawful or in violation of the rights of the holders
23 of the bonds, notes or other obligations.
24 (5) Sell or otherwise dispose of bonds and notes of
25 governmental units pledged pursuant to resolution or trust
26 indenture for benefit of holders of bonds, notes or other
27 obligations on any terms as a resolution or trust indenture
28 may provide.
29 (6) By action or suit, foreclose any mortgage pledge
30 pursuant to the resolution or trust indenture for the benefit
19850H0500B0559 - 33 -
1 of the holders of the bonds, notes or other obligations.
2 (7) Declare all bonds, notes or other obligations due
3 and payable, and if all defaults shall be made good, then,
4 with the consent of the holders of 25% of the principal
5 amount of the bonds, notes or other obligations then
6 outstanding, to annul the declaration and its consequences.
7 (c) General powers.--The trustee shall, in addition to the
8 foregoing, have those powers necessary or appropriate for the
9 exercise of any function specifically set forth herein or
10 incident to the general representation of holders of bonds,
11 notes or other obligations in the enforcement and protection of
12 their rights.
13 (d) Commonwealth Court jurisdiction.--The Commonwealth Court
14 shall have jurisdiction of any suit, action or proceeding by the
15 trustee on behalf of the holders of bonds, notes or other
16 obligations. The venue of any suit, action or proceeding shall
17 be laid in the county in which the principal office of the bank
18 is located.
19 (e) Notice of demand.--Before declaring the principal of
20 bonds, notes or other obligations due and payable, the trustee
21 shall first give 30 days' notice in writing to the bank.
22 Section 20. Proceeds, revenues and receipts.
23 All sums of money received pursuant to the authority of this
24 act, whether as proceeds from the sale of bonds, notes or other
25 obligations or as revenues or receipts, shall be deemed to be
26 trust funds to be held and applied solely as provided in the
27 proceedings under which the bonds, notes or other obligations
28 are authorized. Any officer with whom, or any bank or trust
29 company with which, those sums of money are deposited as trustee
30 shall hold and apply the same for the purposes thereof, subject
19850H0500B0559 - 34 -
1 to any provision as this act and the proceedings authorizing the
2 bonds, notes or other obligations of any issue or the trust
3 indenture securing the bonds, notes or other obligations may
4 provide.
5 Section 21. Criteria for loans from infrastructure bank.
6 (a) Loan generally.--The PID Bank may provide financing
7 assistance to participating governmental units when the
8 requirements set forth in this section have been met and the
9 application and approval process provided herein have been
10 satisfactorily completed.
11 (b) General purpose of loan.--All loans of moneys to
12 governmental units shall be for the purpose of developing,
13 constructing, reconstructing, replacing, rehabilitating,
14 expanding or installing specific infrastructure projects which
15 will complement, result in or promote new or expanded economic
16 development.
17 (c) Application.--Any governmental unit which has authorized
18 the financing of a local infrastructure project in accordance
19 with the provisions of law applicable to it may request
20 financing assistance from the PID Bank by filing an application
21 for such assistance with the bank. Such application shall be in
22 such form and in compliance with such procedure as the PID Bank
23 may fix and prescribe.
24 (d) Processing application.--The bank shall review such
25 application and shall determine whether such project is in
26 accordance with Commonwealth policies and objectives, including
27 compatibility with the Commonwealth Infrastructure Facility
28 Master Plan as provided for in section 23, and with local and
29 regional policies and objectives as expressed in local urban
30 renewal, community renewal and local comprehensive land use
19850H0500B0559 - 35 -
1 plans and regional plans, if any, as provided in section 22, and
2 any other plan or planning objectives which have been duly
3 authorized and adopted, as provided in section 22. In carrying
4 out the duties assigned by this section, the bank shall work
5 closely, consult and cooperate with elected officials of
6 governmental units and citizens in consideration of the needs
7 and desires of the area served by the governmental unit and
8 shall foster local initiative and participation in the planning
9 and development of infrastructure projects. The bank shall
10 determine whether the application conforms with all appropriate
11 criteria and shall recommend approval or disapproval of the
12 application.
13 (e) Factors for certification.--Prior to certifying a local
14 economic development infrastructure project for financing
15 assistance pursuant to this section, the bank shall consider,
16 among other, the following factors:
17 (1) If the project is consistent with the sound needs of
18 the governmental unit in which it is to be located and will
19 meet a substantial State interest.
20 (2) If the project will have a significant, favorable or
21 positive impact on the economic condition of the governmental
22 unit or region in which the project is to be located and the
23 Commonwealth as a whole, including the generation or
24 retention of long-term employment.
25 (3) If the project is likely to occur without the
26 assistance provided by this section.
27 (f) Priority of loans.--The bank shall give priority to
28 economic development infrastructure projects which provide any
29 combination of the following:
30 (1) Substantial employment or other direct benefits to
19850H0500B0559 - 36 -
1 low income or unemployed or underemployed persons.
2 (2) Significant improvement of the physical condition of
3 neighborhoods, especially neighborhoods designated as
4 deteriorated.
5 (3) Reinforcement for other housing or economic
6 development related investments by a governmental unit or
7 units.
8 (g) Certificates by bank.--If the bank shall determine that
9 such project is in accordance with all other considerations and
10 policies of the Commonwealth, as determined by the bank on
11 behalf of the Governor, the bank shall so certify, in writing,
12 to the governmental unit making application. Prior to certifying
13 an infrastructure project for financing assistance, the bank
14 shall, after reasonable and appropriate inquiry, find and
15 determine that:
16 (1) The project and its financing have been duly
17 authorized by the sponsoring governmental unit in accordance
18 with law.
19 (2) All governmental approvals required to that point in
20 time in order to carry out and complete the infrastructure
21 project have been obtained and there is no reason to believe
22 that the approvals required to complete the project cannot be
23 obtained in due course in a timely fashion.
24 (3) The credit standing of the governmental unit is such
25 that the governmental unit would be unlikely to be able to
26 issue its debt obligations to finance the project on
27 reasonable terms to sources other than the bank.
28 (4) The project is not likely to be carried out without
29 the financing assistance to be provided by the bank.
30 (5) The repayment of its obligations to the bank in
19850H0500B0559 - 37 -
1 connection with such financing assistance will not adversely
2 affect the ability of the sponsoring governmental unit to
3 provide all other essential public services of the
4 governmental units.
5 (h) Level of financial assistance.--Such certification shall
6 include a recommendation of the level of financing assistance to
7 be provided. In recommending the level of financing assistance
8 to be provided, the bank shall consider, among other factors,
9 the following:
10 (1) The relative benefit of the project to the
11 Commonwealth as a whole and to the governmental unit.
12 (2) The type of project to be funded.
13 (3) The degree of economic distress of the governmental
14 unit.
15 (4) The minimum level of financing assistance which is
16 necessary to make the project feasible.
17 (i) Procedures for review application.--The bank shall
18 establish and, from time to time, may alter procedures governing
19 the process by which it shall review applications under this
20 section and determine whether to render financing assistance.
21 These procedures shall include such matters as evaluation
22 criteria, opportunity for public comment, standards for the
23 ranking of projects by priority, standards for allocation of
24 financing assistance among governmental units and among types of
25 projects and standards for the setting of the terms and
26 conditions of financing assistance, including the amount,
27 duration, fees, charges and interest charges, where applicable.
28 The bank shall not approve any financing assistance or any
29 project, with respect to such financing assistance, which does
30 not meet such criteria and standards.
19850H0500B0559 - 38 -
1 (j) Funding of board.--Prior to or upon the giving of its
2 approval of any financing assistance, the board shall find that
3 such financing assistance and any project with respect to which
4 such financing assistance is to be rendered:
5 (1) Are in compliance with the purposes of the bank and
6 the requirements of this act, including, without limitation,
7 the procedures provided for in subsection (i).
8 (2) Have received all approvals which were theretofor
9 required and that there is no reason to believe that the
10 approvals required to complete the project cannot be obtained
11 in due course in a timely fashion.
12 (3) Will be a public benefit, in the public interest and
13 for a public purpose, consistent with the sound needs of the
14 Commonwealth and of the area or region served by the
15 governmental unit or units involved.
16 (4) Either provide no benefits to private entities or
17 individuals or provide benefits to private entities and
18 individuals only indirectly and incidentally and not as the
19 purpose of the project and also that any:
20 (i) Agreement to which the PID Bank and a private
21 person are parties and the performance thereunder by and
22 any benefit to a private person are for a public purpose
23 and comply with the provisions of this act.
24 (ii) Payment made to a private person under any such
25 agreement is reasonable in light of the obligations of
26 such private person thereunder or in connection with the
27 project and the amount generally paid for the performance
28 of such obligation in the applicable locality and
29 provides no more than a reasonable return to such private
30 person.
19850H0500B0559 - 39 -
1 (iii) Agreement provides reasonable assurance that
2 the quality of performance by the private person
3 thereunder will be appropriate and adequate to accomplish
4 the purpose of the agreement and of this act and is
5 consistent with the welfare of the Commonwealth and of
6 any applicable governmental unit and furnished the PID
7 Bank with adequate remedies in the event of default.
8 (iv) Agreement contains such provisions as the board
9 deems necessary and desirable to assure the efficient
10 operation of the project and of the PID Bank and the
11 minimum burden on the Commonwealth and on any
12 governmental unit affected by the agreement.
13 (k) Limitations on owning debt obligations.--No debt
14 obligations of a governmental unit shall be purchased, held or
15 owned by the PID Bank in connection with the provision of
16 financing assistance unless, upon the original delivery of such
17 debt obligations to the PID Bank, they are accompanied by all
18 documentation required by the PID Bank, including, but not
19 limited to, such certificates, votes and other documents as are
20 customarily provided in connection with the issuance and
21 delivery of municipal debt obligations and an opinion of bond
22 counsel of generally recognized standing in the field of
23 municipal law whose opinions have been and are accepted by
24 purchasers of like debt obligations. The PID Bank may require
25 that debt obligations of a governmental unit which are
26 purchased, held or owned by the PID Bank shall be converted into
27 debt obligations of such minimum denominations and otherwise in
28 such marketable form as is generally required in the municipal
29 bond market, including provisions for authentication,
30 registration, transferability and payment by or at a bank or
19850H0500B0559 - 40 -
1 trust company within or without the Commonwealth as shall be
2 designated by the governmental unit.
3 (l) Security.--Any governmental unit when authorized by a
4 two-thirds vote of its legislative body may pledge to the PID
5 Bank local aid due and to become due to such governmental unit,
6 from the Commonwealth as security for the payments of its debt
7 obligations purchased or acquired by the bank, and the treasurer
8 and comptroller and such governmental unit may enter into
9 agreements with respect to such pledge including, without
10 limitation, agreements authorizing the treasurer and comptroller
11 to pay directly to the bank any aid so pledged: Provided,
12 however, That no such local aid shall be so pledged unless the
13 debt obligations payment of which is secured thereby are payable
14 from sums which must be included in the annual assessment of
15 taxes of one or more governmental unit, or unless the debt
16 obligations payment of which is secured thereby have been
17 purchased or acquired by the bank in connection with a revenue-
18 producing local infrastructure project and an agreement has been
19 entered into by the PID Bank and the governmental unit that the
20 schedule of revenues to support such project shall be
21 periodically reviewed so as to maintain an adequate level of
22 revenues for the payment of such debt obligations: Provided
23 further, That such pledge shall be on a parity with and shall
24 not be in derogation of, any other pledge or authorized use of
25 local aid to support the payment of principal and interest on
26 any of the debt obligations, whether or not sold to or held by
27 the PID Bank, which the governmental unit has made or is
28 authorized to make under any general or special law now or
29 hereafter enacted.
30 Section 22. Local planning review.
19850H0500B0559 - 41 -
1 (a) Local requirements.--The PID Bank, prior to providing
2 financial assistance to a governmental unit for a local
3 infrastructure project, shall insure that the following local
4 planning requirements have been satisfied.
5 (b) Review by local agency.--Prior to the submission of any
6 application for financial assistance to the PID Bank to fund a
7 local infrastructure project, the application shall first be
8 reviewed by the appropriate city, county or regional planning
9 agency; and upon the completion of that review, a written
10 statement of their findings shall be made which shall accompany
11 the application when submitted to the PID Bank. The statement
12 from the planning agency shall include, but not be limited to:
13 (1) Need for the project.
14 (2) Priority of the project with respect to other local,
15 county and regional infrastructure projects.
16 (3) The extent to which the infrastructure project meets
17 the goals and objectives of local, urban renewal, community
18 renewal, comprehensive and land use plans.
19 (4) The projected economic impact of the infrastructure
20 project on the municipality, county and region.
21 (5) The extent to which the infrastructure project meets
22 the objectives of this act.
23 Section 23. Infrastructure facility master plan; preparation;
24 use.
25 (a) Contents of plan.--In cooperation with appropriate
26 Commonwealth departments and agencies and municipal, county
27 and/or regional planning commissions and agencies, the bank
28 shall prepare or have prepared, publish and periodically update
29 at least once every five years, a State infrastructure facility
30 master plan. The plan shall include, but not be limited to:
19850H0500B0559 - 42 -
1 (1) An inventory of the existing primary infrastructure
2 elements located within each county, including but not
3 limited to, for each element:
4 (i) Identification of the type, capacity, location
5 and year constructed.
6 (ii) Current condition.
7 (iii) Current demand.
8 (iv) Current unit cost of operation and maintenance.
9 (v) Current service charges, if applicable.
10 (vi) Current rate setting methods, if applicable.
11 (vii) Financing history.
12 (viii) Twenty-year projected demand.
13 (ix) Twenty-year projections, by year, of capital
14 needs for repair, expansion or replacement.
15 (x) Criteria for determining investment needs.
16 (xi) To the extent possible, the identification of
17 existing and future financial barriers to meeting
18 projected financial needs, including but not limited to,
19 inadequate Federal or State funds, from current funding
20 sources; lack of "local match"; prevailing interest
21 rates; inability to charge needed "user fees at rates
22 projected"; credit rating of municipality or municipal
23 authority.
24 (xii) Economic impact of improvements on
25 municipality, county, region and Commonwealth, including
26 but not limited to, short term and permanent jobs
27 created, housing opportunities developed, and impact on
28 user fees.
29 (2) An assessment, evaluation and listing of new primary
30 infrastructure elements which should be constructed during
19850H0500B0559 - 43 -
1 the 20-year period following the creation of the PID Bank,
2 which should include, but not be limited to:
3 (i) Projected cost.
4 (ii) The rationale for the new construction of an
5 infrastructure element, as opposed to the repair,
6 expansion or replacement of an existing infrastructure
7 element, and consideration of the provisions of paragraph
8 (1)(xi) and (xii), as they relate to the proposed new
9 construction and consideration of as many other
10 provisions of paragraph (1) to the new construction as
11 may be applicable.
12 (3) The relationship and economic impact of needed local
13 infrastructure repair, expansion, replacement or new
14 construction projects to infrastructure projects contemplated
15 to be undertaken by the Commonwealth within each county
16 during the 20-year period following the creation of the PID
17 Bank.
18 (4) A prioritization by municipal, county or regional
19 planning commissions and agencies of local infrastructure
20 development needs, following the inventory and evaluation of
21 same as required by this section.
22 (b) Use of plan.--The bank shall use this infrastructure
23 facility master plan as a guide when evaluating request for
24 financial assistance for local infrastructure projects submitted
25 by a municipality or municipal authority and for the bank's
26 financial participation in all infrastructure projects Statewide
27 during any given five-year period.
28 Section 24. Rules and regulations governing loan applications
29 and approvals.
30 The bank shall prepare and submit to the General Assembly,
19850H0500B0559 - 44 -
1 for approval within 120 days of the effective date of this act,
2 the following:
3 (1) Procedures governing the process by which a
4 municipality or municipal authority applies for a loan,
5 grant, guarantee or lease agreement, including such matters
6 as eligibility criteria, prerequisites, accompanying
7 financial, engineering and other information, statements and
8 evidence of the purpose, necessity and appropriateness of a
9 project, including, but not limited to, local planning
10 reviews as provided in section 22 and evidence of the
11 economic impact of the project on the municipality, county,
12 region and Commonwealth, including, but not limited to, the
13 short term and permanent job opportunities created.
14 (2) Procedures governing the process by which the bank
15 reviews applications and makes loans, grants, guarantees or
16 lease agreements, including such matters as evaluation
17 criteria, opportunity for public comment and standards for
18 the ranking of projects on a priority basis, as well as
19 determining the compatibility of the projects with the
20 Commonwealth Infrastructure Facility Master Plan prepared by
21 the bank.
22 (3) Standards for the allocation of financial assistance
23 among loans, grants, guarantees or lease agreements, by
24 region, by category of government units and by category of
25 project type.
26 (4) Standards for the setting of the terms and
27 conditions of a loan, grant, guarantee or lease agreement,
28 including the amount, duration, fees, charges and interest
29 charges, where applicable.
30 (5) Standards for the allocation of financial assistance
19850H0500B0559 - 45 -
1 among:
2 (i) Reconstruction, rehabilitation and replacement
3 projects to meet current needs resulting in economic
4 development.
5 (ii) Reconstruction, rehabilitation and replacement
6 projects to meet future needs resulting in economic
7 development.
8 (iii) New construction projects to meet current or
9 future needs resulting in economic development.
10 (6) Procedures governing the manner in which the bank
11 monitors the progress of a project and the expenditure or use
12 of a loan, grant, guarantee or lease agreement, including
13 such matters as reporting requirements and sanctions for
14 noncompliance with the terms and conditions of a loan, grant,
15 guarantee or lease agreement or failure to provide proper
16 maintenance for a project.
17 Section 25. Provision of services by agencies.
18 All officers, departments, boards, units, divisions and
19 commissions of the Commonwealth are authorized to render any
20 services to the bank as may be within the area of their
21 respective governmental functions as fixed or established by
22 law, and as may be requested by the bank. The cost and expense
23 of those services shall be met and provided for by the bank.
24 Section 26. Annual reports; audits.
25 (a) Annual statement.--In connection with providing any
26 financial assistance, the PID Bank shall enter into an agreement
27 with the participating agency or governmental unit receiving
28 financing assistance requiring that annually, on a date to be
29 set by the bank, such agency or governmental unit will submit to
30 the bank a statement of the general condition of the project
19850H0500B0559 - 46 -
1 financed and the efforts expanded and the costs incurred during
2 the past year in carrying out and in maintaining the project.
3 Such agreement with a governmental unit shall also require such
4 governmental unit to submit to the bank such statements of the
5 financial condition of the governmental unit and the project
6 financed as the bank may require.
7 (b) Annual report.--On or before March 31 in each year, the
8 bank shall make an annual report of its activities for the
9 preceding calendar year to the Governor and to the General
10 Assembly. The report shall set forth a complete operating and
11 financial statement covering its operations during the year,
12 including amounts of income from all sources. The bank shall
13 cause an audit of its books and accounts to be made at least
14 once in each year by certified public accountants. The cost of
15 the audit shall be considered an expense of the bank. A copy of
16 the audit shall be filed with the State Treasurer and the
17 Auditor General.
18 Section 27. Not debt of Commonwealth.
19 This act shall not constitute a debt of the Commonwealth or
20 of any of its political subdivisions or a pledge of the faith
21 and credit of the Commonwealth or of any of its political
22 subdivisions. Debt obligations issued by the PID Bank under the
23 provisions of this act shall not constitute a debt of the
24 Commonwealth or of any of its political subdivisions or a pledge
25 of the faith and credit of the Commonwealth or of any of its
26 political subdivisions, except as provided in this act, and
27 shall be payable solely from the revenues, assets or funds
28 pledged or available for that purpose. Each such debt obligation
29 shall contain on its face a statement to the effect that the PID
30 Bank shall pay such principal or interest or premium, if any,
19850H0500B0559 - 47 -
1 from revenues, assets or funds of the PID Bank pledged or
2 available as authorized in this act, and that neither the faith
3 and credit nor the general taxing power of the Commonwealth or
4 of any of its political subdivisions is pledged to the payment
5 of the principal of or premium, if any, or interest on such debt
6 obligation.
7 Section 28. Purpose of bank.
8 (a) Purpose generally.--The PID Bank shall be organized and
9 operated for the general benefit, health safety, comfort,
10 security and well-being of the people of the Commonwealth. The
11 purposes of the PID Bank set forth herein are hereby declared to
12 be public purposes, and the functions of the bank in carrying
13 out these purposes are hereby declared to be essential
14 government functions. Interest accrued or paid on, and any other
15 income, increment or gain from the sale, exchange, transfer or
16 other disposition of, debt obligations of the bank or of any
17 governmental unit, if issued in accordance with the provisions
18 of this act, shall be free from, and excluded from the
19 measurement of, any and all taxes imposed by the Commonwealth or
20 by any agency or governmental unit within the Commonwealth.
21 (b) Trust.--In order to increase the marketability of debt
22 obligations to be issued by the PID Bank and thereby to promote
23 the purposes of the PID Bank, all revenues generated under this
24 act are hereby impressed with a trust and dedicated exclusively
25 to the purposes of the bank, to be disbursed solely in
26 accordance with the limitations and conditions prescribed
27 herein. It is declared to be the intention of the Commonwealth
28 that, so long as any such revenues are necessary for the
29 purposes for which they are hereby pledged and dedicated, they
30 shall be made available in the same manner set forth herein,
19850H0500B0559 - 48 -
1 subject to the conditions herein prescribed. In recognition of
2 this continuing commitment, and in consideration of the
3 acceptance of any payment for any debt obligation issued by the
4 bank, the Commonwealth covenants with the purchasers and all
5 subsequent holders and transferees of such debt obligations that
6 while any such obligation remains outstanding, and for so long
7 as the principal of or interest on any such obligation remains
8 unpaid:
9 (1) The income, assets and activities of the bank shall
10 at all times remain exempt from all taxes and assessments
11 whether imposed by the Commonwealth or by any agency or
12 governmental unit within the Commonwealth.
13 (2) The powers, duties and existence of the bank shall
14 not be diminished, altered or impaired so as to affect
15 adversely the interests and rights of the holders of any such
16 obligation.
17 (3) The revenues pledged and dedicated hereunder shall
18 not be diverted from the bank, nor shall the trust with which
19 they are hereby impressed be broken.
20 (4) The rates of the assessments shall not be repealed
21 or reduced except as provided for therein on the initial
22 effective date thereof, unless equivalent revenues similarly
23 pledged are provided, and the pledge and dedication in trust
24 of such revenues shall continue unimpaired and unabrogated.
25 Section 29. Issuance of debt obligations.
26 (a) Issuance of obligations; notes.--Any governmental unit
27 is hereby empowered, when authorized by a two-thirds vote, from
28 time to time to issue its debt obligations pursuant to this
29 section to pay project costs of a revenue-producing local
30 infrastructure project. Without limiting the generality of the
19850H0500B0559 - 49 -
1 foregoing, such debt obligations may be issued to pay project
2 costs, in whole or in part, to pay interest upon debt
3 obligations during the period of construction of such project
4 and for a period not exceeding one year from the date of
5 completion of such project, as estimated by the chief executive
6 officer, to provide reserves for debt service or other expenses,
7 to pay consulting, advisory and legal fees and costs incidental
8 to the issuance and sale of such debt obligations, and to
9 purchase, refund or renew debt obligations previously issued for
10 such purposes.
11 (b) Notes.--If a governmental unit has authorized the
12 issuance of debt obligations in accordance with this section,
13 the treasurer, with the approval of the chief executive officer,
14 may without further authority issue notes in anticipation of
15 such debt obligations. The maturity date of any such notes shall
16 not exceed three years from the date of issue of such notes or
17 six months after the date of completion of the revenue-producing
18 local infrastructure project, as determined by the chief
19 executive officer, whichever date is later, provided that notes
20 issued to mature earlier than such date may be refunded by other
21 notes maturing no later than three years from the date of issue
22 of the original loan or six months after the completion date of
23 the facility, whichever date is later. Subject to the
24 limitations set forth in this paragraph, the provisions of this
25 section applicable to debt obligations shall also apply to notes
26 issued in anticipation thereof.
27 (c) Source of payment.--The principal of, premium, if any,
28 and interest on all debt obligations issued under the provisions
29 of this section shall be payable solely from the revenues
30 provided therefor as herein provided and such debt obligations
19850H0500B0559 - 50 -
1 shall not be deemed to be a pledge of the full faith and credit
2 of the city, town or district or be payable out of any receipts
3 of real and personal property taxes. Sums required to pay such
4 debt obligations and the interest thereon shall not be included
5 in the annual assessment of taxes of the governmental unit. Such
6 debt obligations shall not at the time be included in the debt
7 of the city, town or district for the purposes of ascertaining
8 its legal borrowing capacity.
9 (d) Obligations; rate and term.--The debt obligations of
10 each issue shall be dated, shall bear interest at such rate or
11 rates including rates variable from time to time as determined
12 by an index, broker's loan rate or other method of
13 determination, payable at such time or times and shall mature at
14 such time or times as may be determined by the treasurer, with
15 the approval of the chief executive officer. In all cases,
16 however, the debt obligations shall be payable within a period
17 not exceeding the useful life of the project financed by such
18 debt, as determined by the chief executive officer, or, if
19 incurred to finance more than one project, the average useful
20 life of the projects financed. The determination of the useful
21 life of a project by the chief executive officer shall be
22 conclusive evidence of such useful life and shall be based upon
23 the useful life of such project used in computing the allowance
24 for depreciation for Federal income tax purposes or on any such
25 other method of computation which the chief executive officer
26 may deem more appropriate in the circumstances. The debt
27 obligations may be made redeemable before maturity at the option
28 of the governmental unit, acting by and through its chief
29 executive officer, at such price or prices, with or without
30 premium, and under such terms and conditions as such officer may
19850H0500B0559 - 51 -
1 determine. Debt obligations may be issued as serial debt
2 obligations or as term debt obligations or as a combination of
3 both, and in coupon or registered form, or both. Provision may
4 be made for the registration of any coupon debt obligations as
5 the principal alone, and also as to both principal and interest,
6 and for the reconversion into coupon debt obligations of any
7 debt obligations registered as to both principal and interest
8 and for the interchange of registered and coupon debt
9 obligations. The treasurer, with the approval of the chief
10 executive officer, shall determine the form of the debt
11 obligations, including any interest coupons to be attached
12 thereto, and the manner of execution of the debt obligations,
13 and shall fix the denomination or denominations of the debt
14 obligations and the place or places of payment of principal and
15 interest, which may be at any bank or trust company within or
16 without the Commonwealth.
17 (e) Signature of officer.--In case any officer whose
18 signature or a facsimile of whose signature shall appear on any
19 debt obligations or coupons shall cease to be such officer
20 before the delivery thereof, such signature or such facsimile
21 shall nevertheless be valid and sufficient for all purposes the
22 same as if he had remained in office until after such delivery.
23 (f) Refunding debt obligations.--The treasurer of a
24 governmental unit which has issued debt obligations pursuant to
25 this section may, with the approval of the chief executive
26 officer but without further authority, authorize and provide for
27 the issuance of refunding debt obligations for the purposes of
28 purchasing, renewing or refunding, at or prior to their stated
29 maturity dates, the debt obligations originally issued,
30 including the amount of any redemption premium thereon:
19850H0500B0559 - 52 -
1 Provided, That no such refunding debt obligations shall be
2 payable over a period longer than the period during which the
3 original debt obligations so refunded must be paid.
4 (g) Sale of obligations.--Debt obligations issued by a
5 governmental unit pursuant to this section may be sold in such
6 manner, either at public or private sale, and for such price or
7 prices, whether at par, premium or discount, as the treasurer,
8 with the approval of the chief executive officer, may determine.
9 (h) Agreements.--The chief executive officer of any
10 governmental unit borrowing money as provided in this section is
11 authorized and empowered to enter into any agreements,
12 including, without limitation, a loan agreement and a trust
13 agreement, necessary to effectuate and to secure such borrowing.
14 One or more of such agreements may pledge or assign, in whole or
15 in part, the revenues and other money held or to be received by
16 the governmental unit from any revenue-producing local
17 infrastructure project being financed and any contract or other
18 rights to receive the same, whether then existing or thereafter
19 coming into existence and whether then held or thereafter
20 acquired by the city, town or district and the proceeds thereof.
21 Such agreements may contain such provisions for protecting and
22 enforcing the rights, security and remedies of the holders of
23 such debt obligations, including, without limiting the
24 generality of the foregoing, provisions defining defaults and
25 providing for remedies in the event thereof which may include
26 the acceleration of maturities and covenants setting forth the
27 duties of, and limitations on, the city, town or district in
28 relation to the acquisition, construction, improvement,
29 enlargement, alteration, equipping, furnishing, maintenance,
30 use, operation, repair, insurance and disposition of its
19850H0500B0559 - 53 -
1 projects, the custody, safeguarding, investment and application
2 of money, the issuance of additional debt obligations, the
3 fixing, revision and collection of fees, rates, rents,
4 assessments or other charges, the use of any surplus proceeds of
5 the borrowing, including any investment earnings thereon, the
6 establishment of special funds and reserves and the making and
7 amending of contracts.
8 (i) Applicability of Uniform Commercial Code.--The pledge of
9 any such agreement shall be valid and binding and shall be
10 deemed continuously perfected for the purposes of Title 13 of
11 the Pennsylvania Consolidated Statutes (relating to commercial
12 code) from the time when the pledge is made; the revenues, money
13 rights and proceeds so pledged and then held or thereafter
14 acquired or received by the governmental unit shall immediately
15 be subject to the lien of such pledge without any physical
16 delivery or segregation thereof or further act, and the lien of
17 any such pledge shall be valid and binding against all parties
18 having claims of any kind in tort, contract or otherwise against
19 the city or town, irrespective of whether such parties have
20 notice thereof. No document by which a pledge is created need be
21 filed or recorded except in the records of the governmental
22 unit, and no filing need be made under Title 13.
23 (j) Trustee of trust agreement.--The trustee, with respect
24 to any such trust agreement entered into pursuant to this
25 section, shall be a trust company or a bank having the powers of
26 a trust company within the Commonwealth. Any such trust
27 agreement may provide that any money received thereunder may be
28 deposited or invested, pending the disbursement thereof, in any
29 deposits or investments which are lawful for the funds of
30 governmental units pursuant to the laws of the Commonwealth
19850H0500B0559 - 54 -
1 pertaining thereto, and shall provide that any officer with whom
2 or any bank or trust company with which such money shall be
3 deposited shall act as trustee of such money and shall hold and
4 apply the same for the purposes hereof and thereof, subject to
5 such regulation or limitation as this act or such trust
6 agreement may provide.
7 (k) Indemnifying bonds.--It shall be lawful for any bank or
8 trust company within the Commonwealth to act as depository of
9 the proceeds of obligations, revenues or other money hereunder
10 and to furnish such indemnifying bonds or to pledge such
11 security as may be required by the governmental unit. Any trust
12 agreement entered into pursuant to this section may set forth
13 the rights and remedies of the holders of any debt obligations
14 and of the trustee and may restrict the individual right of
15 action by any such holders. In addition to the foregoing, any
16 such trust agreement may contain such other provisions as the
17 city, town or district may deem reasonable and proper. All
18 expenses incurred in carrying out the provisions of such trust
19 agreement may be:
20 (1) Treated as part of the cost of operation of the
21 revenue-producing local infrastructure project or projects to
22 which such trust agreement pertains.
23 (2) Paid from the revenues or assets pledged or assigned
24 to the payment of the principal of and the premium, if any,
25 and interest on the debt obligations or from any other funds
26 available to such governmental unit. In addition to other
27 security provided herein or otherwise by law, debt
28 obligations issued under this section by a city, town or
29 district, may be secured, in whole or in part, by insurance
30 or by letters or lines of credit or other credit facilities
19850H0500B0559 - 55 -
1 issued to the governmental unit by any bank, trust company or
2 other financial institution, within or without the
3 Commonwealth, and the governmental unit may pledge or assign
4 any of the revenues in connection with the project as
5 security for the reimbursement by the governmental unit to
6 the issuers of such letters or lines of credit, insurance or
7 credit facilities of any payments made thereunder.
8 (l) Payment of obligations.--Debt obligations issued under
9 the provisions of this section shall not be deemed to be a debt
10 of the Commonwealth or of any governmental unit, but shall be
11 payable solely from the revenues of the city, town or district
12 pledged or assigned for such purpose as provided therein.
13 (m) Fees and charges.--Any governmental unit, acting by and
14 through the officer or officers, board, committee or other body
15 authorized by law, if any, to fix, revise, charge and collect
16 such fees, rates, rents, assessments and other charges,
17 otherwise, acting by and through its chief executive officer, is
18 hereby authorized to fix, revise, charge and collect fees,
19 rates, rents, assessments and other charges for use of the
20 revenue-producing local infrastructure projects. The fees,
21 rates, rents, assessments and other charges established as
22 aforesaid shall be fixed and adjusted so as to provide revenues
23 at least sufficient:
24 (1) To pay the current expenses of operating and
25 maintaining such projects.
26 (2) To pay the principal of, premium, if any, and
27 interest on all debt obligations issued to finance such
28 project by the governmental unit under this section as the
29 same become due and payable.
30 (3) To create and maintain such reserves as may be
19850H0500B0559 - 56 -
1 required by any resolution or agreement relating to the
2 issuance of debt obligations hereunder.
3 (4) To provide funds for paying projects costs and
4 maintenance, repair, replacement and renewal costs.
5 (5) To pay or provide for any and all amounts which the
6 governmental unit may be obligated to pay by law or contract
7 relating to such project.
8 (n) Constitution and State law.--In order to provide for the
9 collection and enforcement of fees, rates, rents, assessments
10 and other charges, governmental units are hereby granted all the
11 powers and privileges granted to them by the Constitution and
12 laws of the Commonwealth with respect to any similar fee, rate,
13 rent, assessment or other charge. Without limiting the
14 generality of the foregoing, governmental units shall have
15 powers and be subject to the limitations to the extent
16 applicable and consistent with this section provided in the laws
17 of the Commonwealth pertaining to the powers of governmental
18 units, whether or not said sections have been accepted by the
19 governmental units.
20 (o) Interpretation of section.--The foregoing provisions of
21 this section shall be deemed to provide an additional and
22 alternative means for the doing of things authorized hereby, and
23 shall be regarded as supplemental and additional to, and not in
24 derogation of, powers conferred upon governmental units by other
25 laws: Provided, That if any provision of this section shall be
26 contrary to or conflict with any provision of any other general
27 or special law in any circumstances, the provision of this
28 section shall control in such circumstances.
29 Section 30. Inconsistent law.
30 It is the intent of the General Assembly that if there is any
19850H0500B0559 - 57 -
1 conflict or inconsistency in the provisions of this act and any
2 other acts pertaining to matters herein established or provided
3 for or in any rules and regulations adopted under this act or
4 other acts, to the extent of the conflict or inconsistency, the
5 provisions of this act and the rules and regulations adopted
6 hereunder shall be enforced and the provisions of the other acts
7 and rules and regulations adopted thereunder shall be of no
8 effect.
9 Section 31. Appropriation.
10 (a) Initial appropriation.--To provide for the
11 organizational, administrative and other costs incident to the
12 inception and early operations of the PID Bank, including,
13 without limitation, any expenses necessary or incident to
14 determining the feasibility or practicability of any projects,
15 the sum of $1,000,000 is hereby appropriated from the General
16 Fund, which sum shall be paid to the bank, and which sum shall
17 be repaid, without interest, to the Commonwealth, as soon as
18 practicable and no later than the later of five years from the
19 effective date of this act or the date of the first issuance of
20 debt obligations by the bank.
21 (b) Subsequent appropriation.--Subsequent to the completion
22 of the second fiscal year following the effective date of this
23 act, the payment of costs incurred in the operation and
24 administration of the bank in any subsequent fiscal year,
25 excluding bond issuance costs, shall not exceed 2% of total
26 revenues received in the preceding year. As used in this section
27 "revenue" means all rates, rents, fees, charges, surcharges,
28 money, profits, earnings, payments of principal of or interest
29 on municipal securities and other investments, gifts,
30 governmental and other grants, contributions, appropriations and
19850H0500B0559 - 58 -
1 all other income derived or to be derived by the bank.
2 Section 32. Effective date.
3 This act shall take effect January 1, 1986.
A31L71JLW/19850H0500B0559 - 59 -