PRIOR PRINTER'S NOS. 1507, 2857 PRINTER'S NO. 2915
No. 1290 Session of 2001
INTRODUCED BY RUBLEY, HENNESSEY, ALLEN, ARGALL, M. BAKER, BARD,
BARRAR, BASTIAN, BEBKO-JONES, BELARDI, BELFANTI, BLAUM,
BROWNE, CALTAGIRONE, CAPPABIANCA, CAPPELLI, CLARK, CORRIGAN,
COSTA, CRUZ, DALLY, DeLUCA, DeWEESE, FAIRCHILD, FICHTER,
FORCIER, FRANKEL, GABIG, GEIST, GEORGE, GORDNER, GRUCELA,
HALUSKA, HERMAN, HERSHEY, HORSEY, LaGROTTA, LAUGHLIN, LEH,
LESCOVITZ, LEVDANSKY, LYNCH, MAITLAND, McCALL, MELIO,
R. MILLER, S. MILLER, NAILOR, NICKOL, PHILLIPS, PIPPY,
ROHRER, SANTONI, SCHRODER, SCRIMENTI, B. SMITH, S. H. SMITH,
SOLOBAY, STABACK, STERN, E. Z. TAYLOR, THOMAS, TIGUE,
TRAVAGLIO, TRELLO, TRICH, WALKO, WANSACZ, WATSON,
C. WILLIAMS, WILT, YUDICHAK, FREEMAN, J. EVANS, SAINATO,
SHANER, McNAUGHTON, MARSICO, MAJOR, CURRY, ROSS, STEELMAN,
HARHAI, HARPER, MACKERETH AND L. I. COHEN, APRIL 4, 2001
AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF
REPRESENTATIVES, AS AMENDED, NOVEMBER 19, 2001
AN ACT
1 Amending the act of March 1, 1988 (P.L.82, No.16), entitled "An
2 act providing for the establishment, implementation and
3 administration of the Pennsylvania Infrastructure Investment
4 Authority; imposing powers and duties on a board of trustees;
5 transferring the rights, powers, duties and obligations of
6 the Water Facilities Loan Board to the Pennsylvania
7 Infrastructure Investment Authority; providing for the
8 issuance of notes and bonds; providing for financial
9 assistance and for a comprehensive water facilities plan;
10 authorizing a referendum to incur indebtedness; making an
11 appropriation; and making repeals," establishing the Tapping
12 Fee-Property Lateral Funding Program; making an
13 appropriation; and making editorial changes.
14 The General Assembly of the Commonwealth of Pennsylvania
15 hereby enacts as follows:
16 Section 1. The act of March 1, 1988 (P.L.82, No.16), known
17 as the Pennsylvania Infrastructure Investment Authority Act, is
1 amended by adding a chapter heading to read:
2 CHAPTER 1
3 PRELIMINARY PROVISIONS
4 Section 2. Section 1 heading of the act is amended to read:
5 Section [1] 101. Short title.
6 * * *
7 Section 3. Section 2 heading of the act, amended December
8 16, 1992 (P.L.1137, No.149), is amended to read:
9 Section [2] 102. Legislative intent.
10 * * *
11 Section 4. Section 3 of the act, amended or added December
12 16, 1992 (P.L.1137, No.149), is amended to read:
13 Section [3] 103. Definitions.
14 The following words and phrases when used in this act shall
15 have the meanings given to them in this section unless the
16 context clearly indicates otherwise:
17 "Authority." The Pennsylvania Infrastructure Investment
18 Authority.
19 "Board." The board of directors of the authority.
20 "Bonds." Bonds, notes or other evidences of indebtedness
21 issued by the authority pursuant to this act.
22 "Borrower." An individual owner of a housing unit or mobile
23 home and eligible owners of other enterprises.
24 "Department." The Department of Environmental [Resources]
25 Protection of the Commonwealth.
26 "Eligible cost." The cost of all labor, materials, machinery
27 and equipment, lands, property, rights and easements, plans and
28 specifications, surveys or estimates of costs and revenues, pre-
29 feasibility studies, engineering and legal services, and all
30 other expenses necessary or incident to the acquisition,
20010H1290B2915 - 2 -
1 construction, improvement, expansion, extension, repair or
2 rehabilitation of all or part of a project.
3 "Equivalent Dwelling Unit" or "EDU." Unit of measure by
4 which the sewer rates and connection charges that are imposed
5 upon each improved property by the governmental unit, which is
6 deemed to constitute the estimated, equivalent amount of waste
7 water discharged by a single-family dwelling unit or an average
8 of 250 gallons per day.
9 "Governmental unit." Any agency of the Commonwealth or any
10 county, municipality or school district, or any agency,
11 instrumentality, authority or corporation thereof, or any public
12 body having local or regional jurisdiction or power.
13 "Housing unit." A single-family residential structure
14 including a manufactured home whether or not it is on a
15 permanent foundation which is a permanent residence and is owned
16 and occupied by one or more individuals.
17 "Loan origination fees." Fees paid by a borrower to the
18 local lending institution for originating the borrower's loan.
19 "Loan servicing fees." A bank, savings and loan or other
20 financial institution authorized by the authority and the agency
21 to extend financial assistance under the Tapping Fee-Property
22 Lateral Funding Program.
23 "Manufactured home." A movable, single-family dwelling unit
24 designed for long-term occupancy, built on a chassis at a
25 factory, not less than eight feet wide and 32 feet long, with or
26 without a permanent foundation, and consisting of a complete
27 package with major appliances, plumbing and electrical
28 facilities prepared for appropriate connections.
29 "Manufactured home community." An area under single
30 ownership where designated spaces for manufactured homes are
20010H1290B2915 - 3 -
1 rented, having two or more such houses occupied as residences,
2 with its operations managed on a full-time or part-time basis
3 and providing a number of various facilities for common use.
4 "Program." The Tapping Fee-Property Lateral Funding Program
5 established under section 501.
6 "Project." The eligible costs associated with the
7 acquisition, construction, improvement, expansion, extension,
8 repair or rehabilitation of all or part of any facility or
9 system, whether publicly or, in the case of paragraph (1) or
10 (2), privately owned:
11 (1) for the collection, treatment or disposal of
12 wastewater, including industrial waste;
13 (2) for the supply, treatment, storage or distribution
14 of drinking water;
15 (3) for the control of storm water, which may include,
16 but need not be limited to, the transport, storage and the
17 infiltration of storm water; or
18 (4) for the best management practices to address point
19 or nonpoint source pollution associated with storm water
20 runoff or any other innovative techniques identified in the
21 county-prepared watershed plans pursuant to the act of
22 October 4, 1978 (P.L.864, No.167), known as the Storm Water
23 Management Act.
24 "Project permitting fees." Fees charged by local
25 governmental units for the processing of property lateral permit
26 applications by a sewer enforcement officer.
27 "Property lateral." The pipe connecting a housing unit or
28 other enterprise to the street lateral.
29 "Secretary." The Secretary of Environmental [Resources]
30 Protection of the Commonwealth.
20010H1290B2915 - 4 -
1 "Sewage Enforcement Officer" or "SEO." An official of a
2 local agency who reviews permit applications, issues permits and
3 conducts investigations and inspections that are necessary to
4 implement the provisions of the act of January 24, 1966 (1965
5 P.L.1535, No.537), known as the Pennsylvania Sewage Facilities
6 Act, and the regulations promulgated thereunder, including the
7 individual designated by a municipality as the code enforcement
8 officer.
9 "Storm water." Drainage runoff from the surface of the land
10 resulting from precipitation or snow or ice melt.
11 "Water Facilities Loan Board." The board established under
12 32 Pa.C.S. § 7504 (relating to Water Facilities Loan Board).
13 Section 5. The act is amended by adding a chapter heading to
14 read:
15 CHAPTER 3
16 PENNSYLVANIA INFRASTRUCTURE INVESTMENT
17 AUTHORITY
18 Section 6. Section 4 heading of the act is amended to read:
19 Section [4] 301. Pennsylvania Infrastructure Investment
20 Authority; board of directors.
21 * * *
22 Section 7. Section 5 heading and (a), amended December 16,
23 1992 (P.L.1137, No.149), are amended to read:
24 Section [5] 302. Revenues of authority.
25 (a) Sources of revenues.--The authority may receive money
26 from sources of revenue, including, but not limited to, the
27 following:
28 (1) State funds appropriated to the authority.
29 (2) Federal funds appropriated to or granted to the
30 authority.
20010H1290B2915 - 5 -
1 (3) Proceeds from the sale of bonds of the authority
2 authorized under section [7] 304.
3 (4) Proceeds from the sale of bonds issued on or after
4 the effective date of this act from the remaining unused
5 authorization in addition to any other funds that remain
6 unencumbered on the effective date of this act from the act
7 of July 12, 1981 (P.L.263, No.88), entitled "An act
8 authorizing the incurring of indebtedness, with approval of
9 the electors, of $300,000,000 for the repair, construction,
10 reconstruction, rehabilitation, extension and improvement of
11 community water supply systems, and for the repair,
12 reconstruction or rehabilitation of flood control facilities,
13 dams and port facilities and providing the allotment of
14 proceeds from borrowing hereunder," approved by the
15 electorate on November 3, 1981.
16 (5) Proceeds from the sale of bonds not to exceed a
17 total sum of $150,000,000 issued for site development under
18 the provisions of Article XVI-B of the act of April 9, 1929
19 (P.L.343, No.176), known as The Fiscal Code. This paragraph
20 shall expire on December 31, 1989, except that the board may
21 fund projects approved prior to December 31, 1989.
22 (6) Proceeds from the sale of any Commonwealth general
23 obligation bonds issued under sections [16 and 17] 318 and
24 319.
25 (7) Proceeds from the sale of any Commonwealth general
26 obligation bonds issued under section 12 of the act of March
27 16, 1992 (P.L.10, No.5), known as the Small Water Systems
28 Assistance Act.
29 (8) Proceeds from the sale of authority assets.
30 (9) Repayment of loan principal.
20010H1290B2915 - 6 -
1 (10) Payment of interest on loans made by the authority.
2 (11) Interest earned on the investments of authority
3 moneys.
4 * * *
5 Section 8. The headings of sections 6, 7, 8 and 9 of the act
6 are amended to read:
7 Section [6] 303. Powers and duties of authority.
8 * * *
9 Section [7] 304. Specific power to issue bonds.
10 * * *
11 Section [8] 305. Covenants and express conditions on
12 obligations.
13 * * *
14 Section [9] 306. Nature and effect of pledges.
15 * * *
16 Section 9. Section 10 heading and (f) of the act are amended
17 to read:
18 Section [10] 307. Financial assistance.
19 * * *
20 (f) Loans.--Subject to any agreements with the holders of
21 bonds, the board shall have the power to set terms applicable to
22 loans in any manner it deems appropriate, subject to the
23 provisions of this subsection. The board may consider such
24 factors as it deems relevant, including current market interest
25 rates, the financial and economic distress of the area which the
26 project serves, and the necessity to maintain the authority
27 funds in a financially sound manner. Loans may be made based on
28 the ability to repay the loan from future revenue to be derived
29 from the project, by a mortgage or other property lien, or on
30 any other fiscal matters which the authority deems appropriate.
20010H1290B2915 - 7 -
1 The board shall have the power to defer principal on loans for
2 up to five years. In the event of a default on the repayment of
3 a loan, the board may apply to the court of common pleas of the
4 county where the project is located for the appointment of a
5 receiver to assume operation and supervision of the facility
6 under the supervision of the court. The minimum rate of interest
7 to be paid on any loan made pursuant to this act shall be 1%.
8 The maximum rate of interest shall not exceed the following:
9 (1) For projects in counties whose unemployment rate
10 exceeds the Statewide unemployment rate by 40% or more, 1%
11 for the first five years and 25% of the bond issue rate for
12 the remainder of the loan.
13 (2) For projects in counties whose unemployment rate
14 exceeds the Statewide unemployment rate, but exceeds it by
15 less than 40%, 30% of the bond issue rate for the first five
16 years and 60% of the bond issue rate for the remainder of the
17 loan.
18 (3) For all other projects, 60% of the bond issue rate
19 for the first five years and 75% of the bond issue rate for
20 the remainder of the loan.
21 (4) For projects located within municipalities for which
22 unemployment rates exist which would qualify the project for
23 lower interest rates than if the relevant county unemployment
24 rate were used, the unemployment rate of that municipality
25 may be used in determining the interest rate on the loan.
26 For purposes of this subsection, the phrase "unemployment rate
27 of the county" shall mean the average unemployment rate for the
28 county in the most recent calendar year for which data has been
29 finalized. For the projects which serve multiple counties, the
30 highest unemployment rate of the counties involved shall be
20010H1290B2915 - 8 -
1 used. The unemployment data utilized shall be data reported by
2 the Department of Labor and Industry. For purposes of this
3 subsection, the phrase "bond interest rate" shall be the rate of
4 interest paid by the Commonwealth immediately preceding the date
5 of the loan for the bonds issued under sections [16 and 17] 313
6 and 314.
7 * * *
8 Section 10. The headings of sections 11 and 12 of the act
9 are amended to read:
10 Section [11] 308. Comprehensive water facilities plan.
11 * * *
12 Section [12] 309. Audits.
13 * * *
14 Section 11. Section 13 of the act is amended to read:
15 Section [13] 310. Annual report.
16 The board shall provide the General Assembly with an annual
17 report detailing all projects funded under section [10] 307.
18 Section 12. Section 14 heading of the act is amended to
19 read:
20 Section [14] 311. Expedited approval of rate relief.
21 * * *
22 Section 13. Sections 15, 16 and 17 of the act are amended to
23 read:
24 Section [15] 312. Transfer of Water Facilities Loan Board.
25 (a) Removal of members.--All existing members of the Water
26 Facilities Loan Board shall cease to hold office on the day that
27 the Governor certifies by publication in the Pennsylvania
28 Bulletin the existence of a quorum on the board created under
29 section [4] 301.
30 (b) Board of directors to serve as Water Facilities Loan
20010H1290B2915 - 9 -
1 Board.--For purposes of satisfying all outstanding obligations
2 of the Water Facilities Loan Board and for purposes of
3 collecting loan and interest repayments, the board established
4 in section [4] 301 shall constitute the membership of the Water
5 Facilities Loan Board.
6 (c) Transfer of function.--All remaining unencumbered funds,
7 rights, powers, duties, obligations, liabilities, records and
8 equipment of the Water Facilities Loan Board are transferred to
9 the authority.
10 Section [16] 313. Referendum.
11 (a) General rule.--Pursuant to the provisions of section
12 [7(a)(3)] 304(a)(3) of Article VIII of the Constitution of
13 Pennsylvania, the question of incurring indebtedness of
14 $300,000,000 for loans for the acquisition, repair,
15 construction, reconstruction, rehabilitation, extension,
16 expansion and improvement of water supply and sewage treatment
17 systems, subject to implementation through this act, shall be
18 submitted to the electors at the next primary, municipal or
19 general election following the effective date of this act.
20 (b) Certification.--The Secretary of the Commonwealth shall
21 forthwith certify the question to the county boards of
22 elections.
23 (c) Form of question.--The question shall be in
24 substantially the following form:
25 Do you favor the incurring of indebtedness by the
26 Commonwealth of $300,000,000 for use as loans to acquire,
27 repair, construct, reconstruct, rehabilitate, extend,
28 expand and improve water supply and sewage treatment
29 systems?
30 Section [17] 314. Bonds.
20010H1290B2915 - 10 -
1 (a) Issuance of general obligation bonds.--As evidence of
2 the indebtedness if authorized under section [16] 313, general
3 obligation bonds of the Commonwealth shall be issued from time
4 to time to fund and retire notes issued pursuant to section [16]
5 313 to carry out the purposes of this act, or both, for such
6 total amounts, in such form, in such denominations and subject
7 to such terms and conditions of issue, redemption and maturity,
8 rate of interest and time of payment of interest as the issuing
9 officials direct except that the latest stated maturity date
10 shall not exceed 30 years from the date of the debt first issued
11 for each series.
12 (b) Execution of bonds.--All bonds and notes issued under
13 the authority of section [16] 313 shall bear facsimile
14 signatures of the issuing officials and a facsimile of the great
15 seal of the Commonwealth and shall be countersigned by a duly
16 authorized loan and transfer agent of the Commonwealth.
17 (c) Direct obligation of Commonwealth.--All bonds and notes
18 issued in accordance with section [16] 313 shall be direct
19 obligations of the Commonwealth, and the full faith and credit
20 of the Commonwealth are hereby pledged for the payment of the
21 interest thereon as it becomes due and the payment of the
22 principal at maturity. The principal of and interest on the
23 bonds and notes shall be payable in lawful money of the United
24 States of America.
25 (d) Exemption from taxation.--All bonds and notes issued
26 under the provisions of this section shall be exempt from
27 taxation for State and local purposes.
28 (e) Form of bonds.--The bonds may be issued as coupon bonds
29 or registered as to both principal and interest as the issuing
30 officials may determine. If interest coupons are attached, they
20010H1290B2915 - 11 -
1 shall contain the facsimile signature of the State Treasurer.
2 (f) Bond amortization.--The issuing officials shall provide
3 for the amortization of the bonds in substantial and regular
4 amounts over the term of the debt. The first retirement of
5 principal shall be stated to mature prior to the expiration of a
6 period of time equal to one-tenth of the time from the date of
7 the first obligation issued to evidence the debt to the date of
8 the expiration of the term of the debt. Retirements of principal
9 shall be regular and substantial if made in annual or semiannual
10 amounts, whether by stated serial maturities or by mandatory
11 sinking fund retirements.
12 (g) Refunding bonds.--The issuing officials are authorized
13 to provide, by resolution, for the issuance of refunding bonds
14 for the purpose of refunding any bonds issued under this section
15 and then outstanding, either by voluntary exchange with the
16 holders of the outstanding bonds, or to provide funds to redeem
17 and retire the outstanding bonds with accrued interest, any
18 premium payable thereon and the costs of issuance and retirement
19 of bonds, at maturity or at any call date. The issuance of the
20 refunding bonds, the maturities and other details thereof, the
21 rights of the holders thereof and the duties of the issuing
22 officials in respect to the same shall be governed by the
23 provisions of this section, insofar as they may be applicable.
24 Refunding bonds may be issued by the issuing officials to refund
25 bonds originally issued or to refund bonds previously issued for
26 refunding purposes.
27 (h) Quorum.--Whenever any action is to be taken or decision
28 made by the Governor, the Auditor General and the State
29 Treasurer acting as issuing officials and the three officers are
30 not able unanimously to agree, the action or decision of the
20010H1290B2915 - 12 -
1 Governor and either the Auditor General or State Treasurer shall
2 be binding and final.
3 (i) Public sale.--Whenever bonds are issued, they shall be
4 offered for sale at not less than 98% of the principal amount
5 and accrued interest and shall be sold by the issuing officials
6 to the highest and best bidder or bidders after due public
7 advertisement on such terms and conditions and upon such open
8 competitive bidding as the issuing officials shall direct. The
9 manner and character of the advertisement and the time of
10 advertising shall be prescribed by the issuing officials.
11 (j) Private sale.--Any portion of any bond issue so offered
12 and not sold or subscribed for may be disposed of by private
13 sale by the issuing officials in such manner and at such prices,
14 not less than 98% of the principal amount and accrued interest,
15 as the issuing officials shall direct. No commission shall be
16 allowed or paid for the sale of any bonds issued under the
17 authority of this section.
18 (k) Bond series.--When bonds are issued from time to time,
19 the bonds of each issue shall constitute a separate series to be
20 designated by the issuing officials or may be combined for sale
21 as one series with other general obligation bonds of the
22 Commonwealth.
23 (l) Temporary bonds.--Until permanent bonds can be prepared,
24 the issuing officials may in their discretion issue, in lieu of
25 permanent bonds, temporary bonds in such form and with such
26 privileges as to registration and exchange for permanent bonds
27 as may be determined by the issuing officials.
28 (m) Disposition and use of proceeds.--The proceeds realized
29 from the sale of bonds and notes, except funding bonds,
30 refunding bonds and renewal notes, under the provisions of this
20010H1290B2915 - 13 -
1 section are specifically dedicated to the purposes of the
2 referendum to be implemented by this act and shall be paid into
3 the special funds established in the State Treasury in such
4 amounts as may be specified by the board pursuant to section
5 [5(c)] 302(c). The proceeds shall be paid by the State Treasurer
6 periodically to the board to expend them at such times and in
7 such amounts as may be necessary to satisfy the funding needs of
8 the board. The proceeds of the sale of funding bonds, refunding
9 bonds and renewal notes shall be paid to the State Treasurer and
10 applied to the payment of principal, the accrued interest and
11 premium, if any, and costs of redemption of the bonds and notes
12 for which such obligations shall have been issued.
13 (n) Investment of funds.--Pending their application to the
14 purposes authorized, moneys held or deposited by the State
15 Treasurer may be invested or reinvested as are other funds in
16 the custody of the State Treasurer in the manner provided by
17 law. All earnings received from the investment or deposit of
18 such funds shall be paid into the State Treasury to the credit
19 of the funds established by the board in section [5(c)] 302(c)
20 in such amounts as may be specified by the board pursuant to
21 that section.
22 (o) Registration of bonds.--The Auditor General shall
23 prepare the necessary registry book to be kept in the office of
24 the duly authorized loan and transfer agent of the Commonwealth
25 for the registration of any bonds, at the request of owners
26 thereof, according to the terms and conditions of issue directed
27 by the issuing officials.
28 (p) Expenses of preparation for issue and sale of bonds and
29 notes.--There is hereby appropriated to the State Treasurer from
30 the proceeds of the bonds and notes issued as much money as may
20010H1290B2915 - 14 -
1 be necessary for all costs and expenses in connection with the
2 issue of and sale and registration of the bonds and notes in
3 connection with this act.
4 Section 14. The act is amended by adding a chapter to read:
5 CHAPTER 5
6 TAPPING FEE-PROPERTY LATERAL FUNDING PROGRAM
7 Section 501. Establishment of program.
8 There is hereby established the Tapping Fee-Property Lateral
9 Funding Program for the purpose of awarding financial assistance
10 to borrowers for tapping fees and the costs relating to the
11 installation of a property lateral for homes constructed prior
12 to the effective date of this chapter.
13 Section 502. Scope.
14 This chapter applies to the owners of single-family homes,
15 including manufactured homes on a permanent foundation.
16 Section 503. Applicant eligibility.
17 Eligible applicants shall be owners of single-family homes
18 and manufactured homes on a permanent foundation if:
19 (i) the owner occupies the home and the home is or
20 will be served by a public sewer system owned by a
21 municipality or municipal authority; and
22 (ii) the owner's family income does not exceed 235%
23 of the Federal poverty income guidelines.
24 Section 504. Project eligibility.
25 The following conditions shall be satisfied for an eligible
26 project:
27 (1) The owner of the real property into which the
28 lateral will be installed must also be the owner of the
29 housing unit located thereon.
30 (2) The property lateral is located in an area that is
20010H1290B2915 - 15 -
1 or will be served by a sewage collection and treatment system
2 and the property lateral is required by the municipality or
3 municipal authority to connect to the system.
4 (3) The design and installation of the property lateral
5 is the most cost-effective system available that will meet
6 the needs of the unit.
7 (4) The governmental unit has established a tapping fee.
8 (5) The inspector employed by the municipal authority
9 which will operate the collection and treatment system to
10 which the lateral is connected, or the municipal code
11 enforcement officer or the designee of the municipality or
12 the SEO has certified that the property lateral, including
13 piping within the unit, meets all permit requirements under
14 applicable State and municipal laws and regulations.
15 (6) The construction activity to be financed by a loan
16 under this program has not commenced and the tapping fee has
17 not been paid prior to the time of application approval by
18 the local lending institution.
19 Section 505. Eligible costs.
20 Eligible costs shall include:
21 (1) All testing, design, materials and construction
22 costs associated with the property lateral, including a
23 grinder pump, if required.
24 (2) Permit fees.
25 (3) Interest during construction or financing of the
26 project and allowance for funds used during construction.
27 (4) Costs relating to the closing of an applicant's
28 loan, such as legal fees, credit reports, title reports,
29 insurance, judgment reports, lien certificates, appraisal
30 fees and loan origination fees.
20010H1290B2915 - 16 -
1 (5) Tapping fees.
2 Section 506. Ineligible costs.
3 Costs of acquisition of land or right-of-way for the project
4 are ineligible costs.
5 Section 507. Financial assistance terms and conditions.
6 (a) Financial assistance.--All financial assistance shall be
7 in the form of loans.
8 (b) Interest rate.--The interest rate offered on loans shall
9 be 1% per annum.
10 (c) Maximum amount of loan.--The maximum amount of the loan
11 shall be $15,000.
12 (d) Minimum amount of loan.--The minimum amount of a loan
13 shall be $1,500.
14 (e) Term.--The maximum term of a loan shall be 15 years.
15 (f) Repayment.--Loan repayment shall commence no later than
16 60 days after the date of loan closing.
17 (g) Collateral.--Collateral shall be determined by the local
18 financial institution under guidance and policies established by
19 the authority and may include, but are not limited to, a
20 mortgage on the borrower's property subordinate only to the debt
21 outstanding at the time of loan approval by the local financial
22 institution.
23 (h) Repayment.--The loan shall be repaid in full if the
24 property to which it applies is either sold or transferred to
25 other than an immediate family member.
26 (i) Fees.--The borrower may be charged fees for delinquent
27 payment of either principal or interest in a loan if the
28 potential fees are described in the loan agreement entered into
29 and agreed to by the borrower and the local lending institution.
30 (j) Documentation.--The applicant shall apply for funding to
20010H1290B2915 - 17 -
1 a local lending institution by submitting documentation required
2 to demonstrate compliance with documentation and information
3 which the local lending institution may require, under guidance
4 and policies of the authority.
5 (k) Local lending institution.--Upon receipt of a funding
6 application, the local lending institution shall:
7 (1) Verify that the applicant meets the eligibility
8 criteria of section 503.
9 (2) Verify that the application is valid and contains
10 all required documentation.
11 (3) Check with the authority to verify that sufficient
12 funds are available to approve the application.
13 (4) Perform credit and security checks needed to ensure
14 that the applicant meets the collateral requirements of the
15 authority.
16 (l) Approval.--A local lending institution is authorized to
17 approve an application for funding under the program only if the
18 conditions under subsection (k) are satisfied.
19 (m) Completion of review.--Upon completion of its
20 application review, the local lending institution shall notify
21 the applicant and the authority of the following:
22 (1) The outcome of its review.
23 (2) Whether the applicant's loan is approved.
24 (3) The amount and terms of the loan.
25 (n) Funds.--Funds will be disbursed to the contractor on
26 behalf of the borrower or to the borrower upon completion of
27 construction and final inspection and certification from the
28 municipality or municipal authority that the project has been
29 completed in accordance with all permit requirements and is
30 operable as designed and intended.
20010H1290B2915 - 18 -
1 (o) Changes.--Any changes to an approved project which are
2 not consistent with the approved design for which a permit was
3 issued shall be approved by the municipality or municipal
4 authority prior to making the change.
5 (p) Financial records.--The borrower shall maintain
6 financial records to substantiate expenditures on the project.
7 (q) Local financial institutions.--Local financial
8 institutions shall maintain financial and activity records on
9 all loan applications and approved loans and shall report this
10 information to the authority in a form and at those times as the
11 authority may request.
12 (r) Financial assistance documents.--The authority and the
13 agency shall develop and adopt financial assistance documents
14 which will, among other things, define the terms and conditions
15 under which financial assistance is offered. These documents
16 shall be used by all local financial institutions participating
17 in the program without change, except as approved by the
18 authority.
19 Section 508. Funds and accounts.
20 (a) Establishment of funds.--The authority may establish
21 separate funds, accounts or other financial structures, under
22 section 504(c), as may be needed to implement and operate the
23 program.
24 (b) Approval.--The authority may from time to time approve
25 such funding, including the pledging of the authority's
26 revenues, as it deems appropriate to finance the program.
27 (c) Liability.--The authority shall not be held liable for
28 loan offers or approvals made by a local lending institution in
29 the absence of prior authority-approved funding.
30 Section 509. Loan servicing.
20010H1290B2915 - 19 -
1 (a) Purchase of loans.--The authority shall purchase loans
2 originated by local lending institutions on a schedule agreed to
3 by the local lending institution.
4 (b) Monitoring.--The authority shall monitor and service the
5 loans purchased.
6 (c) Loan servicing fee.--The authority may charge a loan
7 servicing fee to defray the costs that it incurs to service
8 loans under the program. These fees shall be charged to and
9 shall be the sole responsibility of program borrowers.
10 Section 510. Program monitoring.
11 The borrower shall submit to the department receipts for the
12 system in accordance with the schedule and requirements
13 contained in the loan agreement. Failure to provide the receipts
14 in accordance with the schedule shall constitute a violation of
15 the loan agreement.
16 Section 15. Sections 18, 19, 20 and 21 of the act are
17 repealed.
18 Section 16. The act is amended by adding a chapter to read:
19 CHAPTER 9
20 MISCELLANEOUS PROVISIONS
21 Section 901. Severability.
22 The provisions of this act are severable. If any provision of
23 this act or its application to any person or circumstance is
24 held invalid, the invalidity shall not affect other provisions
25 or applications of this act which can be given effect without
26 the invalid provision or application.
27 Section 902. Appropriation.
28 The sum of $5,000,000, or as much as may be necessary, is
29 hereby appropriated to the Pennsylvania Infrastructure Authority
30 for the fiscal year July 1, 2001, to June 30, 2002 JULY 1, 2002, <--
20010H1290B2915 - 20 -
1 TO JUNE 30, 2003, to carry out the provisions of this act.
2 Section 903. Repeal.
3 All acts and parts of acts are repealed insofar as they are
4 inconsistent with this act.
5 Section 17. This act shall take effect in 90 days.
C22L64JS/20010H1290B2915 - 21 -