PRIOR PRINTER'S NOS. 3113, 3369 PRINTER'S NO. 3585
No. 2335 Session of 2000
INTRODUCED BY STAIRS, COLAFELLA, HERMAN, McILHATTAN, SCHULER,
STEVENSON, WILLIAMS, ADOLPH, ARGALL, BUNT, M. COHEN, COY,
FARGO, FICHTER, GEIST, GEORGE, HARHAI, HESS, HUTCHINSON, LEH,
MELIO, R. MILLER, SATHER, SAYLOR, SCRIMENTI, SEYFERT, SHANER,
B. SMITH, E. Z. TAYLOR, TULLI, WOJNAROSKI, VAN HORNE, HORSEY,
SEMMEL AND YOUNGBLOOD, MARCH 14, 2000
AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES,
MAY 16, 2000
AN ACT
1 To promote the education and welfare of the people of the
2 Commonwealth of Pennsylvania; to provide educational
3 facilities at public schools, nonprofit private schools,
4 nonprofit institutions of higher education and cultural
5 institutions in the Commonwealth of Pennsylvania; to provide
6 short-term loans for working capital; establishing the
7 Pennsylvania Educational Facilities Authority as a body
8 corporate and politic with power to finance, refinance,
9 acquire, construct, improve, equip, furnish, operate, lease,
10 and dispose of projects and provide short-term loans;
11 authorizing authorized borrowers to enter into loan
12 agreements to lease and other debt instruments; authorizing
13 and regulating the issuance of notes and bonds and the
14 payment thereof by the authority; granting the right of
15 eminent domain; providing that no debt, obligation or credit
16 of the Commonwealth shall be incurred in the exercise of any
17 powers granted by this act; transferring the rights, assets,
18 powers, duties, liabilities and responsibilities of the State
19 Public School Building Authority and the Pennsylvania Higher
20 Educational Facilities Authority to the Pennsylvania
21 Educational Facilities Authority; and making repeals.
22 TABLE OF CONTENTS
23 Chapter 1. General Provisions
24 Section 101. Short title.
25 Section 102. Definitions.
1 Section 103. Construction of act.
2 Chapter 3. Organization and Operation of Authority
3 Section 301. Pennsylvania Educational Facilities Authority.
4 Section 302. Governing body.
5 Section 303. Purposes.
6 Chapter 5. Powers and Duties of Authority
7 Section 501. Powers and duties.
8 Section 502. Limitations on authority power.
9 Section 503. Moneys of authority.
10 Section 504. Audit.
11 Section 505. Conditions for certain contracts.
12 Section 506. School district leases from authority.
13 Section 507. Community college leases.
14 Section 508. School district and community college loans from
15 authority.
16 Section 509. Leases and loans to others.
17 Section 510. Transfer of projects to lessees or sublessees.
18 Section 511. Actions for nonpayment.
19 Chapter 7. Bonds of Authority
20 Section 701. Bonds.
21 Section 702. Legal investments.
22 Section 703. Terms of trust indentures.
23 Section 704. Authority security agreement.
24 Section 705. Temporary financing.
25 Section 706. Negotiable instruments.
26 Section 707. Refunding bonds.
27 Section 708. Remedies of bondholders.
28 Section 709. Limitation of powers.
29 Section 710. Exemption from taxation.
30 Chapter 19. Miscellaneous Provisions
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1 Section 1901. Succession.
2 Section 1902. Members, officers and employees.
3 Section 1903. Repeals.
4 Section 1904. Effective date.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 CHAPTER 1
8 GENERAL PROVISIONS
9 Section 101. Short title.
10 This act shall be known and may be cited as the Pennsylvania
11 Educational Facilities Authority Act.
12 Section 102. Definitions.
13 The following words and phrases when used in this act shall
14 have the meanings given to them in this section unless the
15 context clearly indicates otherwise:
16 "Authority." The body politic and corporate created by this
17 act.
18 "Authorized borrower." The term means and includes:
19 (1) a school district;
20 (2) the board of trustees of a community college;
21 (3) a college;
22 (4) a cultural institution; or
23 (5) an educational broadcasting facility.
24 "Board of trustees." The board of trustees of a community
25 college.
26 "Bondholder." The holder of a bond.
27 "Bonds." The notes, bonds and other evidences of
28 indebtedness or obligations which the authority is authorized to
29 issue pursuant to this act.
30 "College." Any nonprofit educational institution situated
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1 within this Commonwealth which places no restriction upon the
2 admission of students based upon race, creed or national origin
3 and which:
4 (1) is empowered to provide a program of education
5 beyond the high school level and which is recognized by the
6 State Board of Education as an institution of higher
7 education; or
8 (2) supports or fosters higher educational activities by
9 providing research, advisory services, administrative
10 assistance or other services to institutions of higher
11 education or cultural institutions.
12 "Community college." A public college or technical institute
13 as established under the former act of August 24, 1963
14 (P.L.1132, No.484), known as the Community College Act of 1963
15 or Article XIX-A of the act of March 10, 1949 (P.L.30, No.14),
16 known as the Public School Code of 1949.
17 "Community college building." Any facility or structure used
18 or useful for a community college, the furnishings and equipment
19 thereof and any land or interest in land related thereto.
20 "Construction" or "to construct." The term means and
21 includes acquisition, construction, improvement, equipping and
22 furnishing and to acquire, to construct, to improve, to equip,
23 and to furnish in such manner as may be deemed desirable.
24 "Cost of a project." The term means and includes, but is not
25 limited to, all or any part of the cost of construction,
26 acquisition, alteration, enlargement, reconstruction or
27 rehabilitation of a project, including all lands, structures,
28 real or personal property, rights, rights of way, roads,
29 franchises, easements and interests acquired or used for or in
30 connection with a project, the cost of demolishing or removing
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1 any buildings or structures on land so acquired, including the
2 cost of acquiring any lands to which such buildings or
3 structures may be moved or relocated, the cost of all utility
4 lines, structures or equipment, all financing charges, interest
5 prior to, during and after completion of such construction and
6 acquisition, provisions for reserves for principal and interest
7 and for extensions, enlargements, additions and improvements,
8 cost of architectural, engineering, financial and legal
9 services, plans, specifications, studies, surveys, estimates of
10 cost and of revenues, administrative expenses, expenses
11 necessary or incident to determining the feasibility or
12 practicability of constructing the project and such other
13 expense as may be necessary or incident to the construction,
14 acquisition or financing of the project and the placing of the
15 project in operation. ALL FUNDS EXPENDED WHICH ARE, IN THE WHOLE <--
16 OR IN PART, RELATED TO THE COST OF A PROJECT, SHALL BE DEEMED AS
17 THE FUNDS OF A PUBLIC BODY FOR ALL PURPOSES.
18 "Cultural institution." Any not-for-profit museum which
19 engages in the cultural, intellectual, scientific, educational
20 or artistic enrichment of the people of this Commonwealth and
21 which places no restrictions upon admissions based on race,
22 creed, gender or national origin.
23 "Department." The Department of Education of the
24 Commonwealth.
25 "Educational broadcasting facility." A facility which meets
26 the requirements of section 523(b) of the act of March 10, 1949
27 (P.L.30, No.14), known as the Public School Code of 1949.
28 "Educational facility." Any site, structure or equipment
29 suitable for use by an authorized borrower in academic,
30 educational, research or cultural activities including, but not
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1 limited to, classrooms, laboratories, libraries, research
2 facilities, academic buildings, dormitory and housing units,
3 dining halls, student unions, administration buildings, athletic
4 and health care facilities, parking, maintenance, storage and
5 utility facilities and all the facilities, equipment, materials
6 and furnishings necessary or usually attendant thereto. The term
7 does not include any facility used or to be used for sectarian
8 instruction or study, or as a place for devotional activities or
9 religious worship.
10 "Financing" or "to finance." The term means and includes the
11 lending or providing of funds to an authorized borrower for
12 payment of the cost of a project.
13 "Improvement" or "to improve." The term means and includes
14 any extension, enlargement, equipping, reconstruction,
15 rehabilitation, furnishing and improvement. The term "to
16 improve" means and includes to extend, to enlarge, to equip, to
17 reconstruct, to rehabilitate, to furnish and to improve in such
18 manner as may be deemed desirable.
19 "Local sponsor." A school district or a municipality or a
20 county board of school directors, or any combination of school
21 districts, municipalities or county boards of school directors
22 which participate in the establishment and operation of a
23 community college.
24 "Present value method." The semiannual rate, compounded
25 semiannually, necessary to discount to present value as of the
26 date of the bonds the amounts payable on each interest payment
27 date and on each stated maturity or earlier mandatory redemption
28 date so that the aggregate of such amounts will equal the
29 purchase price offered therefor exclusive of interest accrued to
30 the date of delivery. The present value interest cost shall be
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1 stated in terms of an annual percentage rate and shall be that
2 rate of interest which is twice the semiannual rate so
3 ascertained.
4 "Project." Any educational facility or undertaking which the
5 authority is authorized to acquire, construct, finance,
6 refinance, undertake, improve, install, maintain or operate
7 under the provisions of this act.
8 "Public School Code of 1949." The act of March 10, 1949
9 (P.L.30, No.14), known as the Public School Code of 1949.
10 "School building." The term means, but is not limited to,
11 any structure used or useful for schools and playgrounds,
12 including facilities for physical education, and any community
13 college building.
14 "Working capital." The term means and includes, but is not
15 limited to, funds for supplies, materials, services, salaries,
16 pensions and any other proper operating expenses.
17 "Working capital notes." The notes and other evidence of
18 indebtedness or obligations which the authority is authorized to
19 issue pursuant to this act for the purpose of providing loans to
20 authorized borrowers to fund their working capital requirements.
21 Section 103. Construction of act.
22 (a) Liberal construction.--This act, being necessary for the
23 welfare of the Commonwealth and its inhabitants, shall be
24 liberally construed to effect its purposes.
25 (b) Severability.--If any provision of the title or any
26 section or clause of this act, or the application thereof to any
27 person, party, corporation, public or private, shall be judged
28 invalid by a court of competent jurisdiction, such order or
29 judgment shall be confined in its operation to the controversy
30 in which it was rendered, and shall not affect or invalidate the
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1 remainder of any provision of the title or any section or clause
2 of this act, or the application of any part thereof to any other
3 person, party, corporation, public or private, or circumstance
4 and, to this end, the provisions of the title, or any section or
5 clause of this act, hereby are declared to be severable. It
6 hereby is declared as the legislative intent that this act would
7 have been adopted had any provision declared unconstitutional
8 not been included herein.
9 CHAPTER 3
10 ORGANIZATION AND OPERATION OF AUTHORITY
11 Section 301. Pennsylvania Educational Facilities Authority.
12 (a) Establishment.--There is hereby established a body
13 corporate and politic, constituting a public corporation and
14 governmental instrumentality to be known as the Pennsylvania
15 Educational Facilities Authority.
16 (b) Membership.--The authority shall be composed of the
17 following members:
18 (1) The Governor.
19 (2) The State Treasurer.
20 (3) The Auditor General.
21 (4) The Secretary of Education.
22 (5) The Secretary of General Services.
23 (6) The President pro tempore of the Senate.
24 (7) The Speaker of the House of Representatives.
25 (8) The Minority Leader of the Senate.
26 (9) The Minority Leader of the House of Representatives
27 and their respective successors in office.
28 (c) Designees.--The President pro tempore of the Senate and
29 Minority Leader of the Senate and the Speaker of the House of
30 Representatives and Minority Leader of the House of
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1 Representatives may designate any member of the Senate or House,
2 respectively, to act in their stead to serve at the discretion
3 of the respective President pro tempore of the Senate or
4 Minority Leader of the Senate and Speaker of the House of
5 Representatives or Minority Leader of the House of
6 Representatives.
7 (d) Compensation.--The members of the authority shall not be
8 entitled to compensation for their services as members but shall
9 be entitled to reimbursement for all necessary expenses incurred
10 in connection with the performance of their duties as members.
11 (e) Term of office.--The President pro tempore of the Senate
12 and the Speaker of the House of Representatives, the Minority
13 Leader of the Senate and the Minority Leader of the House of
14 Representatives shall continue as members of the authority until
15 their respective successors in office assume such office,
16 regardless of whether or not they have ceased to be members of
17 the Senate or the House of Representatives.
18 (f) Use of designee.--The members of the authority may
19 authorize by written proxy or authorization a personal designee
20 to appear and act for them at a meeting and for the purposes
21 specified in such written proxy or authorization.
22 Section 302. Governing body.
23 (a) General rule.--The powers of the authority shall be
24 exercised by a governing body consisting of the members of the
25 authority acting as a board.
26 (b) Organization.--Within 90 days of the effective date of
27 this act, the board shall meet and organize and elect from their
28 number a president, three vice presidents, a secretary and a
29 treasurer.
30 (c) Quorum.--Five members shall constitute a quorum of the
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1 board for the purpose of organizing the authority and conducting
2 the business thereof and for all other purposes. All action of
3 the board shall only be taken by vote of a majority of the
4 members of the authority, unless in any case the bylaws shall
5 require a larger number.
6 (d) Management.--The board shall have full authority to
7 manage the properties and business of the authority, to
8 prescribe, amend and repeal bylaws, rules and regulations
9 governing the manner in which the business of the authority may
10 be conducted and the powers granted to it may be exercised and
11 embodied.
12 (e) Employees.--The board shall fix and determine the number
13 of officers, agents and employees of the authority and their
14 respective compensation and duties and may delegate to one or
15 more of their number, or to one or more of the officers, agents
16 or employees, such power and duties as it may deem proper.
17 Section 303. Purposes.
18 The authority is created for the purposes of:
19 (1) Acquiring, financing, refinancing, constructing,
20 improving, furnishing, equipping, maintaining and operating
21 buildings for public schools and educational broadcasting
22 facilities for use as a part of the public school system of
23 the Commonwealth of Pennsylvania under the jurisdiction of
24 the Department of Education.
25 (2) Acquiring, financing, refinancing, constructing,
26 improving, furnishing, equipping, maintaining and operating
27 community college buildings and educational facilities and
28 projects for authorized borrowers.
29 (3) Providing loans, through the issuance of working
30 capital notes of the authority, to fund working capital for
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1 authorized borrowers.
2 (4) Succeeding to and carrying on the activities,
3 rights, powers, duties and purposes of the State Public
4 School Building Authority under the act of July 5, 1947
5 (P.L.1217, No.498), known as the State Public School Building
6 Authority Act, and the Pennsylvania Higher Educational
7 Facilities Authority under the act of December 6, 1967
8 (P.L.678, No.318), known as The Pennsylvania Higher
9 Educational Facilities Authority Act of 1967, without
10 interruption and without need for documents of assignment,
11 transfer or assumption relating to the assets, property,
12 liens, security interests, rights, contracts, agreements,
13 indentures of trust, debts, obligations, commitments, bonds,
14 and promissory notes of either authority.
15 CHAPTER 5
16 POWERS AND DUTIES OF AUTHORITY
17 Section 501. Powers and duties.
18 The authority is hereby granted and shall have and may
19 exercise all the powers necessary or convenient for the carrying
20 out of its purposes, including, but without limiting the
21 generality of the foregoing, the following rights and powers:
22 (1) To have perpetual existence as a corporation.
23 (2) To sue and be sued, implead and be impleaded,
24 complain and defend, in all courts.
25 (3) To adopt, use and alter at will a corporate seal.
26 (4) To acquire, purchase, hold, lease as lessee, and use
27 any property, real, personal or mixed, tangible or
28 intangible, or any interest therein, or any contract for the
29 acquisition, construction, furnishing or equipping thereof,
30 which is necessary or desirable for carrying out the purposes
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1 of the authority, and lease as lessor, transfer, sell, grant
2 options for, and dispose of any property or any interest
3 therein at any time acquired by it.
4 (5) To acquire by purchase, lease, gift or otherwise and
5 to construct, improve, maintain, repair and operate projects.
6 (6) To finance projects by making loans to authorized
7 borrowers, which loans may be evidenced by, and secured as
8 may be provided in, leases, loan agreements, mortgages,
9 security agreements or any other contracts, instruments or
10 agreements, which contracts, instruments or agreements may
11 contain provisions that the authority shall determine
12 necessary or desirable for the security or protection of the
13 authority or its bondholders. All such provisions shall be a
14 part of the contract with the holders of the bonds of the
15 authority issued with respect to such project, and all
16 authorized borrowers are hereby authorized to enter into such
17 contracts, instruments or agreements containing the
18 provisions authorized in this act, anything in the charters
19 of the authorized borrowers or in any other law to the
20 contrary notwithstanding. The authority shall not have the
21 power to borrow money on behalf of or make loans to any
22 authorized borrower which has a credit rating below the
23 guidelines established by the authority's board, unless the
24 borrower utilizes credit enhancement such that the credit
25 meets the authority's guidelines.
26 (7) To make short-term loans to authorized borrowers for
27 the purpose of funding their working capital requirements,
28 which loans may be evidenced by, and secured as may be
29 provided in, loan agreements or similar instruments entered
30 into by the authority and the authorized borrower. Such loans
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1 may be secured by a pledge of or security interest in
2 revenues receivable by the authorized borrower during the
3 term of the loan and by such additional security as the
4 authority deems necessary. For the purpose of this paragraph,
5 the term "revenues receivable" means all tax and/or other
6 revenues reasonably estimated to be receivable by the
7 authorized borrower during the term of the loan and shall
8 include, without limitation, to the extent not previously
9 received, funds appropriated for the use of the authorized
10 borrower by the Commonwealth or the Federal Government or any
11 agency thereof, revenues estimated to be receivable under the
12 authorized borrower's current schedules of tuitions, taxes,
13 fees or admission charges and all other revenues reasonably
14 committed to the use of the authorized borrower. The term
15 does not include funds receivable subject to restrictions as
16 to use and which may not be applied to or pledged for the
17 repayment of such loans. All provisions contained in a loan
18 agreement or similar instrument relating to the security or
19 protection of the authority shall be a part of the contract
20 with the holders of the working capital notes issued with
21 respect to such loans and all authorized borrowers are hereby
22 authorized to enter into agreements or instruments containing
23 such provisions, anything in the charters of such authorized
24 borrowers or in any other law to the contrary
25 notwithstanding. The authority shall not have the power to
26 borrow money on behalf of or make loans to any borrower which
27 has a credit rating below the guidelines established by the
28 authority's board, unless the borrower utilizes credit
29 enhancement such that the credit meets the authority's
30 guidelines.
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1 (8) To make bylaws for the management and regulation of
2 its affairs.
3 (9) To fix, alter, charge and collect rentals, loan
4 payments and other charges in respect of any educational
5 facility or for the services rendered by the authority, at
6 reasonable rates to be determined by it for the purpose of
7 providing for the payment of the expenses of the authority
8 not provided for otherwise, the acquisition, construction,
9 financing, improvement, repair, equipping and furnishing,
10 maintenance or operation of any educational facility, the
11 payment of the principal of, and interest on, its obligations
12 and to fulfill the terms and provisions of any agreements
13 made with the purchasers or holders of any such obligations.
14 (10) To borrow money for the purpose of financing,
15 refinancing or paying the cost of a project, to make and
16 issue negotiable bonds of the authority, to secure the
17 payment of such bonds, or any part thereof, by pledge or deed
18 of trust of all, or any, of its revenues, rentals, receipts
19 and contract rights, and to make such agreements with the
20 purchasers or holders of such bonds or with others in
21 connection with any such bonds, whether issued or to be
22 issued as the authority shall deem advisable, and in general
23 to provide for the security for such bonds and the rights of
24 the holders thereof.
25 (11) To borrow money for the purpose of providing short-
26 term loans to authorized borrowers to fund their working
27 capital requirements and paying the expenses incident to the
28 provision of such loans, to make and issue negotiable notes
29 of the authority for such purpose, to secure the payment of
30 such notes, or any part thereof, by pledge or assignment of
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1 the income and revenues receivable by the authority under
2 loan agreements or similar instruments entered into by the
3 authority and the authorized borrower, to make such
4 agreements with the purchasers or holders of such notes or
5 with others in connection with such notes, whether issued or
6 to be issued, as the authority shall deem advisable, and in
7 general to provide for the security of such notes and the
8 rights of the holders thereof.
9 (12) To invest moneys not required for current
10 expenditures, pending such expenditures, in any securities
11 eligible for the investment of funds in the Commonwealth or
12 allowable pursuant to any trust indenture or other type of
13 trust document for bonds issued by the authority.
14 (13) To make contracts of every name and nature, and to
15 execute all instruments necessary or convenient for the
16 carrying on of its business.
17 (14) Without limitation of the foregoing, to borrow
18 money and accept grants from, and to enter into contracts,
19 leases or other transactions with any Federal or other
20 governmental agency.
21 (15) To pledge, hypothecate or otherwise encumber all or
22 any of the revenues, receipts or contract rights of the
23 authority as security for all, or any of, the obligations of
24 the authority.
25 (16) To appoint officers, agents, employees and
26 servants, to prescribe their duties and to fix their
27 compensation.
28 (17) To enter into contracts with an authorized borrower
29 for the purpose of acquiring, financing, refinancing,
30 constructing, improving, furnishing, equipping, maintaining
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1 or operating educational broadcasting facilities as a part of
2 the public school system of the Commonwealth.
3 (18) To have the power of eminent domain.
4 (19) Notwithstanding any other provisions contained in
5 this act, to combine for financing purposes, with the consent
6 of all authorized borrowers involved, the project or the
7 projects and some or all future projects of any two or more
8 authorized borrowers, and to provide reserves, out of lease
9 rentals or other funds made available for the purpose, for
10 debt service, maintenance, repairs and replacements and to
11 combine, with the consent of all authorized borrowers
12 involved, separately secured financings of working capital of
13 two or more authorized borrowers.
14 (20) To do all acts and things necessary or convenient
15 to carry out the powers granted to it by this act or any
16 other acts.
17 Section 502. Limitations on authority power.
18 (a) Commonwealth.--The authority shall have no power, at any
19 time or in any manner, to pledge the credit or taxing power of
20 the Commonwealth, nor shall any of its obligations or debts be
21 deemed to be obligations of the Commonwealth, nor shall the
22 Commonwealth be liable for the payment of principal or interest
23 on such obligations.
24 (b) Local governments.--The authority shall have no power,
25 at any time or in any manner, to pledge the credit or taxing
26 power of any political subdivision or local sponsor or board of
27 trustees of a community college nor shall any of the obligations
28 or debts of the authority be deemed to be obligations of any
29 political subdivision or local sponsor or board of trustees of
30 any community college, nor shall any political subdivision or
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1 local sponsor or board of trustees of any community college be
2 liable for the payment of principal or interest on such
3 obligations.
4 Section 503. Moneys of authority.
5 (a) General rule.--All moneys of the authority from whatever
6 source derived shall be deposited with the treasurer of the
7 authority or in one or more banks or trust companies in one or
8 more special accounts, and each of the special accounts shall be
9 invested in any of the following:
10 (1) United States Treasury and Federal agency
11 securities;
12 (2) repurchase agreements using government securities,
13 provided they are controlled by a master agreement, delivery
14 versus payment (DVP) with excess collateral marked to market
15 at least weekly;
16 (3) collateralized or insured bank deposits;
17 (4) money market mutual funds which invest in government
18 securities and repurchase agreements;
19 (5) State investment pool;
20 (6) commercial paper rated A1/P1 or equivalent;
21 (7) securities allowed pursuant to trust indentures for
22 bonds issued by the authority; or
23 (8) other securities specifically approved by the board
24 of the authority.
25 The moneys in the accounts shall be paid out on a requisition or
26 other order of the treasurer of the authority, or of other
27 person or persons as it may authorize, to execute such
28 requisitions or orders.
29 (b) Use of authority money.--All moneys of the authority,
30 from whatever source derived, except such part thereof as may be
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1 required to pay the administrative and other costs of operating
2 the authority, plus an allowance for contingencies, may be used
3 for programs authorized by the authority board for the
4 betterment of the authority or to enhance the authority's
5 financing program.
6 (c) Control and management of moneys.--The members of the
7 board shall be the trustees of the moneys of the authority. The
8 trustees shall have exclusive control and management of said
9 moneys and full power to invest the same, in accordance with the
10 provisions of this section, subject, however, to the exercise of
11 that degree of judgment, skill and care under the circumstances
12 then prevailing which persons of prudence, discretion and
13 intelligence who are familiar with such matters exercise in the
14 management of their own affairs not in regard to speculation,
15 but in regard to the permanent disposition of the moneys,
16 considering the probable income to be derived therefrom as well
17 as the probable safety of their capital. The trustees shall have
18 the power to hold, purchase, sell, lend, assign, transfer or
19 dispose of the moneys of the authority and any of the
20 investments in which any of the moneys shall have been invested
21 as well as the income from and the proceeds of said investments,
22 subject in every case to meeting the standard of prudence set
23 forth in this subsection.
24 Section 504. Audit.
25 The authority shall, within 120 days after the end of each
26 fiscal year, cause an independent firm of certified public
27 accountants to examine the accounts and books of the authority
28 and provide an annual audit report.
29 Section 505. Conditions for certain contracts.
30 All contracts between the authority and local sponsors and/or
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1 boards of trustees of community colleges and/or the Department
2 of Education shall be conditioned upon any approval of the State
3 Board of Education or the Department of Education required by
4 the former act of August 24, 1963 (P.L.1132), known as the
5 Community College Act of 1963 or Article XIX-A of the Public
6 School Code of 1949.
7 Section 506. School district leases from authority.
8 Any school district or districts within this Commonwealth
9 shall have power and authority to enter into contracts with the
10 authority to lease as lessee from the authority any school
11 building, and the furnishings and equipment thereof, for a term,
12 with respect to each, not exceeding 40 years, at such rental or
13 rentals as may be determined by the authority, and upon the
14 execution of a contract or contracts for the construction of, or
15 during the period of construction of, or upon the completion of,
16 said school building and the furnishings and equipment thereof,
17 the school district or districts shall have power and authority
18 to lease as lessee any school building and the furnishings and
19 equipment thereof, for a term, with respect to each, not
20 exceeding 40 years, at such rental or rentals as may be
21 determined by the authority.
22 Section 507. Community college leases.
23 (a) General rule.--The board of trustees of a community
24 college, with the approval of the department, and the
25 department, with the approval of the Governor, each shall have
26 the power and authority to enter into contracts with the
27 authority to lease, as lessee, from the authority any community
28 college building constructed, improved, maintained and operated
29 by the authority, for a term, with respect to each, not
30 exceeding 30 years, at such rental or rentals as may be
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1 determined by the authority, and upon execution of a contract or
2 contracts for the construction of or during the period of
3 construction of, or upon the completion of, said community
4 college building, the board of trustees or the department shall
5 have power and authority, with further approval of the
6 department in the case of the board of trustees, or the
7 Governor, in the case of the department, to lease, as lessee,
8 from the authority any such community college building for a
9 term, with respect to each, not exceeding 30 years, at such
10 rental or rentals as may be determined by the authority.
11 (b) Sublease by department.--When any community college
12 building is leased by the authority to the department, the
13 department shall have power and authority, with the approval of
14 the Governor, to sublease that community college building to the
15 board of trustees of the community college for which said
16 community college building was constructed or improved, upon
17 such terms and conditions as shall be agreed to, and the board
18 of trustees of a community college, with the approval of the
19 department, shall have the power and authority to sublease, as
20 sublessee, from the department, any community college building
21 leased by the authority to the department.
22 (c) Annual budget for rental payments.--
23 (1) There shall be included in the annual budget of a
24 community college as prepared by each board of trustees which
25 has entered into such a lease or sublease an amount equal to
26 the annual amount of such rentals.
27 (2) Rentals payable by the department shall be payable
28 out of current revenues of the Commonwealth; in pursuance
29 thereof, the subleases from the department shall provide that
30 rental payments thereunder shall be paid directly to the
20000H2335B3585 - 20 -
1 authority or its assigns. Rentals payable to the department
2 or its assigns pursuant to subleases, as provided above,
3 shall be considered capital expenses for the purpose of
4 reimbursement or payment by the Commonwealth as provided in
5 the former act of August 24, 1963 (P.L.1132, No.484), known
6 as the Community College Act of 1963.
7 (d) Payment default.--In all cases where the board of
8 trustees of a community college fails to pay or provide for the
9 payment of any rental or rentals due the authority or its
10 assigns for any period in accordance with the terms of any
11 sublease of a community college building entered into between
12 the department, as sublessor, and the board of trustees, as
13 sublessee, the Secretary of Education shall notify such board of
14 trustees and local sponsor of its obligation and shall withhold
15 out of any State appropriation that may be due to such community
16 college on behalf of the local sponsor an amount equal to the
17 amount of rental or rentals owing by such board of trustees to
18 the department or its assigns, and shall apply such amount
19 toward such rental or rentals due the department or its assigns.
20 (e) Other rental payors.--Any lessee or sublessee of a
21 community college building shall have the power and authority to
22 pay for the operation and maintenance of such community college
23 building.
24 Section 508. School district and community college loans from
25 authority.
26 Any school district or districts, or any board of trustees of
27 a community college within this Commonwealth, shall have the
28 power and authority, with the approval of the department, when
29 necessary, to enter into loan agreements, mortgages, security
30 agreements or any other loan contracts with the authority for a
20000H2335B3585 - 21 -
1 term not exceeding 40 years in the case of a school district and
2 30 years in the case of a community college and providing for
3 the repayment of any such loans at such times and in such
4 amounts as may be determined by the authority. There shall be
5 included in the annual budget of each school district or
6 community college board of trustees which has entered into a
7 loan contract with the authority an amount equal to the amount
8 due annually to the authority under such loan contract, and such
9 amounts shall be payable out of current revenues of the school
10 district or board of trustees of the community college. Amounts
11 payable under such loan contracts shall be considered capital
12 expenses for the purpose of reimbursement or payment by the
13 Commonwealth to school districts or boards of trustees of
14 community colleges.
15 Section 509. Leases and loans to others.
16 (a) General rule.--Any lease or instrument of transfer, sale
17 or option of any educational facility to, or loan agreement with
18 a college, university, cultural institution or educational
19 broadcasting facility may contain provisions, which shall be a
20 part of the contract with the holders of the bonds of the
21 authority issued with respect to such educational facility,
22 that:
23 (1) Pledge or grant a security interest in all or any
24 part of the present and future accounts, revenues, contract
25 rights and general intangibles of such authorized borrower,
26 consisting of fees, rates, admissions or other charges billed
27 to and payable by all occupants or users of such educational
28 facility, and all or any part of present and future tuition
29 fees billed to and payable by all full-time and part-time
30 students enrolled in such college, or revenues of such
20000H2335B3585 - 22 -
1 educational broadcasting facility or membership or admission
2 fees of persons belonging to or using such cultural
3 institution, to secure payments required under the terms of
4 such lease, loan agreement or instrument.
5 (2) Specify or regulate the minimum rates, rentals,
6 fees, tuitions, admissions and other charges to be fixed and
7 collected by such authorized borrower, the amounts to be
8 raised in each year thereby, and the use and disposition of
9 such moneys, earnings, income and revenues, including the
10 setting aside of reserves and the creation of special funds
11 and the collection and disposition thereof for the protection
12 of the authority or its bondholders.
13 (3) Provide for any other matters of like or different
14 character which may be deemed necessary or desirable for the
15 security or protection of the authority or its bondholders.
16 Any pledge of present and future accounts, revenues, contract
17 rights and general intangibles hereby authorized shall be
18 valid, binding and perfected pledges and security interests
19 from the time when such pledge is made or such security
20 interest granted.
21 (b) Liens.--The accounts, revenues, contract rights and
22 general intangibles so pledged and the moneys, earnings, income
23 and revenues derived therefrom when received by the pledgor
24 shall immediately be subject to the lien of such pledge or
25 security interest without any physical delivery thereof or
26 further act. The lien of any such pledge or security interest
27 shall be valid and binding as against all parties claiming liens
28 upon such accounts, revenues, contract rights or general
29 intangibles as a result of legal or equitable proceedings based
30 on claims of any kind in tort, contract or otherwise against the
20000H2335B3585 - 23 -
1 pledgor irrespective of whether such parties have notice
2 thereof. No instrument by which such pledge is created or
3 security interest granted need be recorded or otherwise filed of
4 record. All colleges, cultural institutions and educational
5 broadcasting facilities are hereby authorized to enter into
6 leases, loan agreements or other instruments containing the
7 provisions herein authorized, anything in their charters or in
8 any other law to the contrary notwithstanding.
9 Section 510. Transfer of projects to lessees or sublessees.
10 When the authority shall have finally paid and discharged all
11 bonds, including refunding bonds, together with all interest due
12 thereon, which were issued for the purpose of financing the cost
13 of a project and shall have paid any and all other charges and
14 obligations incurred in connection with such project, the
15 authority may, subject to the terms of any agreements, leases or
16 indentures of trust concerning the operation, financing and
17 disposition of such project, convey such project to the
18 authorized borrower to which such project was leased or
19 subleased. If the authority determines that it is in the best
20 interests of the authority and the authorized borrower to convey
21 the project to the authorized borrower prior to the retirement
22 of bonds that were issued therefor, then the authority may do so
23 after the authority has determined that such conveyance would
24 not jeopardize the interests of the bondholders, subject to the
25 terms of any agreements, leases or indentures of trust
26 concerning the operation, financing and disposition of such
27 project.
28 Section 511. Actions for nonpayment.
29 (a) State Treasurer.--In all cases where an authorized
30 borrower not covered under subsection (d) fails to pay or
20000H2335B3585 - 24 -
1 provide for the payment of any rental or rentals or other sums
2 due to the authority or its assigns in accordance with any
3 lease, loan agreement or other contract entered into between the
4 authority and that authorized borrower, upon written notice
5 thereof from the authority, the State Treasurer shall:
6 (1) Notify the authorized borrower of its obligation and
7 of the withholding provisions of this section.
8 (2) Withhold, out of any State appropriations payable to
9 that authorized borrower, an amount equal to the unpaid
10 rentals or other sums owing by such authorized borrower.
11 (3) Notify the Auditor General of such actions and
12 request the Auditor General to issue a warrant for payment to
13 the authority of the amount withheld.
14 (b) Auditor General.--Upon receipt of such notice from the
15 State Treasurer, the Auditor General shall issue to the State
16 Treasurer a warrant for payment to the authority and the State
17 Treasurer shall pay over the amount so withheld to the
18 authority, which shall apply said amount to the rental or other
19 sums due from such authorized borrower.
20 (c) Authority notice.--The authority shall also give written
21 notice of any such nonpayment to the Secretary of Education or
22 in the case of a cultural institution to the Executive Director
23 of the Pennsylvania Historical and Museum Commission.
24 (d) Secretary of Education.--In all cases where a school
25 district or the board of trustees of a community college fails
26 to pay or provide for payment of any amount due the authority or
27 its assigns for any period in accordance with the terms of any
28 loan contract or lease entered into between the authority and
29 such school district or board of trustees of a community
30 college, the Secretary of Education shall notify such school
20000H2335B3585 - 25 -
1 district or board of trustees of a community college of its
2 obligations and shall withhold out of any State appropriation
3 that may be due such school district or board of trustees of a
4 community college an amount equal to the amount of any such
5 payment due and owing and shall apply such amount to the payment
6 or payments due to the authority or its assigns.
7 (e) Executive Director of the Pennsylvania Historical and
8 Museum Commission.--In all cases where the board of trustees of
9 a cultural institution fails to pay or provide for payment of
10 any amount due the authority or its assigns for any period in
11 accordance with the terms of any loan contract or lease entered
12 into between the authority and the board of trustees of a
13 cultural institution, the authority shall notify the Executive
14 Director of the Pennsylvania Historical and Museum Commission,
15 who shall withhold out of any State appropriation that may be
16 due such board of trustees of the cultural institution an amount
17 equal to the amount of any such payment due and owing and shall
18 apply such amount to the payment or payments due to the
19 authority or its assigns.
20 (f) Additional security agreements.--In order to provide
21 additional security for the prompt payment in full of any
22 rentals or loan contract payments to the Pennsylvania
23 Educational Facilities Authority by school districts or cultural
24 institutions receiving State funds, a school district or such
25 cultural institution for whom the Pennsylvania Educational
26 Facilities Authority has issued its bonds, notes or other
27 obligations is authorized to enter into an agreement with the
28 State Treasurer providing for the withholding of any State funds
29 due such school district or such cultural institution and the
30 payment directly to the Pennsylvania Educational Facilities
20000H2335B3585 - 26 -
1 Authority toward satisfaction of such rentals or loan contract
2 payments due by the school district or such cultural institution
3 during the fiscal year.
4 CHAPTER 7
5 BONDS OF AUTHORITY
6 Section 701. Bonds.
7 (a) General rule.--The bonds of the authority shall be
8 authorized by resolution of the board or by the terms of a trust
9 indenture authorized by the board.
10 (b) Form.--The bonds shall be of such series, shall bear
11 such date or dates, shall mature at such time or times, not
12 exceeding 40 years from their respective dates, shall bear
13 interest at such rate or rates, shall be in such denominations,
14 shall be in such form, either coupon or fully registered without
15 coupons, shall carry such registration, exchangeability and
16 interchangeability privileges, shall be payable in such medium
17 of payment and at such place or places, shall be subject to such
18 terms of redemption, not exceeding 105% of the principal amount
19 thereof, and shall be entitled to such priorities in the
20 revenues, rentals or receipts of the authority as such
21 resolution or trust indenture may provide subject to the
22 limitation that the notes of the authority issued to fund the
23 working capital requirements of authorized borrowers shall
24 mature not more than 13 months from the date on which they were
25 issued.
26 (c) Signatures.--The bonds shall be signed by such officers,
27 either manually or by facsimile, as the authority shall
28 determine. The bonds shall have imprinted thereon the corporate
29 seal of the authority or a facsimile thereof, attested by the
30 manual or facsimile signature of the secretary of the authority.
20000H2335B3585 - 27 -
1 Coupon bonds shall have attached thereto interest coupons
2 bearing the facsimile signature of the treasurer of the
3 authority, all as may be prescribed in such resolution. The
4 bonds may be issued and delivered notwithstanding that one or
5 more of the officers signing such bonds or whose facsimile
6 signature shall be upon the bonds or coupons shall have ceased
7 to be such officer or officers at the time when such bonds
8 actually shall be delivered.
9 (d) Sale.--The bonds may be sold at public or private sale
10 for such price or prices as the authority shall determine, with
11 the approval of the authorized borrower for whose use the
12 project is being financed.
13 (e) Net interest cost.--Net interest cost shall be
14 determined by ascertaining the total amount of interest payable
15 with respect to the bonds, computed from the date of the bonds
16 to the stated maturity dates thereof, plus the amount of any
17 discount from the principal amount of the bonds or less the
18 amount of any premium in excess of the principal amount of the
19 bonds.
20 (f) Interim receipts.--Pending the preparation of the
21 definitive bonds, interim receipts may be issued to the
22 purchaser or purchasers of such bonds and may contain such terms
23 and conditions as the authority may determine.
24 Section 702. Legal investments.
25 Bonds issued under this act are hereby made securities in
26 which all officers of the State and its political subdivisions
27 and municipal officers and administrative departments, boards
28 and commissions of the Commonwealth, all banks, bankers, savings
29 banks, trust companies, saving and loan associations, investment
30 companies, and other persons carrying on a banking business, all
20000H2335B3585 - 28 -
1 insurance companies, insurance associations, and other persons
2 carrying on an insurance business, and all administrators,
3 executors, guardians, trustees, and other fiduciaries, and all
4 other persons whatsoever who are authorized to invest in bonds
5 or other obligations of the Commonwealth, properly and legally
6 may invest any funds, including capital, belonging to them or
7 within their control. The bonds hereby are made securities which
8 properly and legally may be deposited with, and received by, any
9 State or municipal officers or agency of the Commonwealth for
10 any purpose for which the deposit of bonds or other obligations
11 of the Commonwealth is authorized by law.
12 Section 703. Terms of trust indentures.
13 Any trust indenture or resolution authorizing any bonds may
14 contain provisions which shall be part of the contract with the
15 holders thereof as to:
16 (1) Pledging all or any of the revenues, rentals or
17 receipts and contract rights of the authority from such
18 projects or properties, as the authorized borrower owning,
19 using or leasing the same may approve, or pledging revenues
20 receivable by the authority under loan agreements, leases or
21 similar instruments entered into by the authority and an
22 authorized borrower.
23 (2) The acquisition, construction, financing,
24 refinancing, improvement, operation, extension, enlargement,
25 maintenance or repair of any project or projects, and the
26 duties of the authority with reference thereto.
27 (3) The terms and provisions of the bonds.
28 (4) Limitations on the purposes to which the proceeds of
29 the bonds, then or thereafter to be issued under such
30 indenture or resolution, or of any loan or grant by the
20000H2335B3585 - 29 -
1 United States, may be applied.
2 (5) The rate of rentals and other charges for use of any
3 educational facility of, or for the services rendered by, the
4 authority, including limitations upon the power of the
5 authority to modify any leases or other agreements pursuant
6 to which any rentals or other charges are payable.
7 (6) The setting aside of reserves or sinking funds and
8 the regulation and disposition thereof, provided that any
9 income received from the investment of such reserves or
10 sinking funds shall be applied in reduction of the rentals or
11 other charges payable by the authorized borrower for whose
12 project or working capital requirements such reserves or
13 sinking fund are created.
14 (7) Limitations on the issuance of additional bonds.
15 (8) The terms and provisions of any deed of trust or
16 indenture securing the bonds, or under which the same may be
17 issued.
18 (9) Any other or additional agreements with the holders
19 of the bonds.
20 Section 704. Authority security agreement.
21 The authority may enter into any deeds of trust, indentures
22 or other agreements with any bank or trust company, or other
23 person or persons in the United States having power to enter
24 into the same, including any Federal or other governmental
25 agency, as security for such bonds, and may assign and pledge
26 all or any of the revenues, rentals, receipts and contract
27 rights of the authority thereunder. Such deed of trust,
28 indenture or other agreement may contain such provisions as may
29 be customary in such instruments, or as the authority may
30 authorize, including, but without limitation, provisions as to:
20000H2335B3585 - 30 -
1 (1) The acquisition, construction, financing,
2 refinancing, improvement, operation, maintenance or repair of
3 any project or projects or the provision of working capital
4 requirements for authorized borrowers, and the duties of the
5 authority with reference thereto.
6 (2) The application of funds and the safeguarding of
7 funds on hand or on deposit.
8 (3) The rights and remedies of the trustee and the
9 holders of the bonds, which may include restrictions upon the
10 individual right of action of such bondholders.
11 (4) The terms and provisions of the bonds or the
12 resolutions authorizing the issuance of the same.
13 Section 705. Temporary financing.
14 Nothing in this act shall prevent the authority from
15 obtaining temporary financing where necessary or desirable for
16 any project by issuance of negotiable notes or other
17 obligations, the maturity of which shall not exceed five years
18 from the date of issue, and which shall be paid, as to both
19 principal and interest, from proceeds of sale of bonds of the
20 authority, in anticipation of which such obligations were
21 issued.
22 Section 706. Negotiable instruments.
23 The bonds issued under this act shall have all the qualities
24 of negotiable instruments under 13 Pa.C.S. (relating to
25 commercial code).
26 Section 707. Refunding bonds.
27 The authority is authorized to provide, by resolution of the
28 board, for the issuance of refunding bonds for the purpose of
29 refunding any bonds or other obligations which were issued by
30 the authority or others for a purpose for which the authority is
20000H2335B3585 - 31 -
1 authorized by this act to issue bonds, either by voluntary
2 exchange with the holders of such outstanding obligations or to
3 provide funds to redeem and retire such outstanding obligations,
4 with accrued interest, and any premium payable thereon at
5 maturity or at any call date. The issuance of such refunding
6 bonds, the maturities and other details thereof, the rights of
7 the holders thereof and the duties of the authority in respect
8 to the same shall be governed by the provisions of this act in
9 so far as may be applicable. Refunding bonds may be issued by
10 the authority to refund bonds or other obligations previously
11 issued for refunding purposes.
12 Section 708. Remedies of bondholders.
13 (a) General rule.--The rights and remedies herein conferred
14 upon or granted to the holders of bonds shall be in addition to,
15 and not in limitation of, but may be limited by, any rights and
16 remedies lawfully granted to such holders by the resolution
17 providing for the issuance of bonds or by any deed of trust,
18 indenture or other agreement under which the bonds shall be
19 issued.
20 (b) Default by authority.--In the event that the authority
21 shall default in the payment of principal of, or interest on,
22 any of the bonds after said principal or interest shall become
23 due, whether at maturity or upon mandatory call for redemption,
24 and such default shall continue for a period of 30 days, or in
25 the event that the authority shall default in any material
26 agreement made with the holders of the bonds, the holders of 25%
27 in aggregate principal amount of the bonds then outstanding, by
28 instrument or instruments filed in the office of the recorder of
29 deeds of the county in which the authority maintains its
30 principal office, and proved or acknowledged in the same manner
20000H2335B3585 - 32 -
1 as a deed to be recorded, may appoint a trustee to represent the
2 bondholders.
3 (c) Powers and duties of trustee.--The trustee and any
4 trustee under any deed of trust, indenture or other agreement
5 may, and upon written request of the holders of 25%, or such
6 other percentage as may be specified in any deed of trust,
7 indenture or other agreement aforesaid, in aggregate principal
8 amount of the bonds then outstanding shall, in his or its own
9 name:
10 (1) By mandamus or other suit, action or proceeding at
11 law or in equity, enforce all rights of the bondholders
12 including the right to require the authority to collect
13 rates, rentals, charges and other pledged assets adequate to
14 carry out any agreements as to, or pledge of the revenues,
15 rentals, receipts and contract rights of, the authority, and
16 to require the authority to carry out any other agreements
17 with or for the benefit of the bondholders, and to perform
18 its and their duties under this act.
19 (2) Bring suit upon the bonds.
20 (3) By action or suit in equity, require the authority
21 to account as if it were the trustee of an express trust for
22 the bondholders.
23 (4) By action or suit in equity, enjoin any acts or
24 things which may be unlawful or in violation of the rights of
25 the bondholders.
26 (5) By notice in writing to the authority, declare all
27 the bonds due and payable, and if all defaults shall be made
28 good, then with the consent of the holders of 25%, or such
29 other percentage as may be specified in any deed of trust,
30 indenture or other agreement aforesaid, in aggregate
20000H2335B3585 - 33 -
1 principal amount of the bonds then outstanding, to annul such
2 declaration and its consequences.
3 (d) Receiver.--Any trustee, whether appointed as aforesaid
4 or acting under a deed of trust, indenture or other agreement,
5 and whether or not all the bonds have been declared due and
6 payable, shall be entitled, as of right, to the appointment of a
7 receiver, who to the same extent that the authority itself could
8 do so may enter and take possession of the facilities of the
9 authority or any parts thereof, the revenues, rentals, receipts
10 or pledges from which are applicable to the payment of the bonds
11 in default, and operate and maintain the same and collect and
12 receive all rentals and other revenues thereafter arising
13 therefrom in the same manner as the authority might do, and
14 shall deposit all such moneys in a separate account and apply
15 the same in such manner as the court shall direct.
16 (e) Fees.--In any suit, action or proceeding by the trustee,
17 the fees, counsel fees and expenses of the trustee, and of the
18 receiver, if any, and all costs and disbursements allowed by the
19 court, shall be a first charge on any revenues, rentals and
20 receipts derived from the facilities of the authority, the
21 revenues, rentals, receipts or pledges from which are or may be
22 applicable to the payment of the bonds in default. The trustee,
23 in addition to the previous powers, shall have and possess all
24 of the powers necessary or appropriate for the exercise of any
25 functions specifically set forth herein or incident to the
26 general representation of the bondholders in the enforcement and
27 protection of their rights.
28 Section 709. Limitation of powers.
29 The Commonwealth does hereby pledge to, and agree with, any
30 person, firm or corporation or Federal or other governmental
20000H2335B3585 - 34 -
1 agency subscribing to, or acquiring, the bonds to be issued by
2 the authority for the acquisition, construction, extension,
3 financing, refinancing, improvement or enlargement of any
4 project, or part thereof, or for refunding purposes, or the
5 working capital notes to be issued by the authority for the
6 funding of working capital requirements of authorized borrowers,
7 that the Commonwealth will not limit or alter the rights hereby
8 vested in the authority, or limit or alter any provisions for
9 the security and protection of the authority and its bondholders
10 contained in this act or as now provided by law, until all bonds
11 at any time issued, together with the interest thereon, fully
12 are met and discharged. The Commonwealth further does pledge to
13 and agree with the United States and any Federal or other
14 governmental agency that, in the event that any such agency
15 shall construct or contribute any funds for the acquisition,
16 construction, extension, financing, improvement or enlargement
17 of any project or any portion thereof, the Commonwealth will not
18 alter or limit the rights and powers of the authority in any
19 manner which would be inconsistent with the continued
20 maintenance and operation of the project, or the improvement
21 thereof, or which would be inconsistent with the due performance
22 of any agreements between the authority and any such agency, and
23 the authority shall continue to have and may exercise all powers
24 herein granted so long as the same shall be necessary or
25 desirable for the carrying out of the purposes of this act and
26 the purposes of the United States and any Federal or other
27 governmental agency in the construction or improvement or
28 enlargement of any project or such portion thereof.
29 Section 710. Exemption from taxation.
30 The effectuation of the authorized purposes of the authority
20000H2335B3585 - 35 -
1 created under this act in all respects shall and will be for the
2 benefit of the people of this Commonwealth, for the increase of
3 their welfare and prosperity and for the improvement of their
4 education and educational facilities, and since the authority
5 will be performing essential public functions in effectuating
6 such purposes, the authority shall be exempt from payment of any
7 taxes or assessments upon any property acquired, held, owned,
8 leased or used by it for such purposes, and the bonds issued by
9 the authority, their transfer and the income therefrom,
10 including any profits made on the sale thereof, at all times
11 shall be free from taxation, other than inheritance and estate
12 taxation, within this Commonwealth.
13 CHAPTER 19
14 MISCELLANEOUS PROVISIONS
15 Section 1901. Succession.
16 The authority created by this act shall succeed to and carry
17 on the activities, rights, powers and purposes of the State
18 Public School Building Authority and the Pennsylvania Higher
19 Educational Facilities Authority and shall succeed to and
20 assume, without interruption and without need for documents of
21 assignment, transfer or assumption, all of the assets,
22 properties, liens, security interests, rights, contracts,
23 agreements, indentures of trust, debts, obligations,
24 commitments, bonds and promissory notes of those authorities.
25 Neither such succession nor anything in this act shall
26 constitute or be construed as a breach of, default under or
27 event of default under any contract, agreement, indenture of
28 trust, debt, obligation, commitment, bond or promissory note
29 entered into or issued by the State Public School Building
30 Authority or the Pennsylvania Higher Educational Facilities
20000H2335B3585 - 36 -
1 Authority.
2 Section 1902. Members, officers and employees.
3 (a) Members.--The members of the State Public School
4 Building Authority and the Pennsylvania Higher Educational
5 Facilities Authority shall succeed to Pennsylvania Educational
6 Facilities Authority under section 301.
7 (b) Officers and employees.--All officers and employees of
8 the State Public School Building Authority and the Pennsylvania
9 Higher Educational Facilities Authority are hereby transferred
10 to the Pennsylvania Educational Facilities Authority under
11 section 301.
12 Section 1903. Repeals.
13 The following acts and parts of acts are repealed:
14 Act of July 5, 1947 (P.L.1217, No.498), known as the State
15 Public School Building Authority Act.
16 Act of December 6, 1967 (P.L.678, No.318), known as The
17 Pennsylvania Higher Educational Facilities Authority Act of
18 1967.
19 Section 1904. Effective date.
20 This act shall take effect July 1, 2000.
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