PRINTER'S NO. 1073
No. 935 Session of 1983
INTRODUCED BY CALTAGIRONE, KOSINSKI, VAN HORNE, KUKOVICH AND LASHINGER, MAY 3, 1983
REFERRED TO COMMITTEE ON FINANCE, MAY 3, 1983
AN ACT 1 Providing for the establishment and incorporation as bodies 2 corporate and politic of "Regional Off-Track Betting 3 Authorities" for certain regions of counties and cities 4 located therein; prescribing the rights, powers and duties of 5 the authorities; authorizing the authorities to acquire, 6 maintain and operate off-track betting facilities and to 7 borrow money and issue bonds therefor; providing for payment 8 of the bonds and prescribing the rights of holders thereof; 9 conferring the right of eminent domain on the authorities; 10 and providing for disposition of moneys of the authority and 11 for reports. 12 TABLE OF CONTENTS 13 Section 1. Short title. 14 Section 2. Definitions. 15 Section 3. Establishment of regional off-track betting 16 authorities. 17 Section 4. Powers of regional authorities. 18 Section 5. Policing off-track betting. 19 Section 6. Acquisition or leasing of property. 20 Section 7. Loans and contributions by a participating county 21 to an authority. 22 Section 8. Contracts of authorities.
1 Section 9. Issuance of bonds and notes by an authority. 2 Section 10. Capital Reserve Fund. 3 Section 11. Commonwealth and participating counties not liable 4 on bonds and notes. 5 Section 12. Commonwealth's right to require redemption of 6 bonds. 7 Section 13. Remedies of holders of bonds and notes. 8 Section 14. Exemption from taxation. 9 Section 15. Notice of claim; action against authority. 10 Section 16. Bonds and notes as legal investments. 11 Section 17. Moneys of authority; disposition of net revenues. 12 Section 18. Annual reports. 13 Section 19. Effective date. 14 The General Assembly of the Commonwealth of Pennsylvania 15 hereby enacts as follows: 16 Section 1. Short title. 17 This act shall be known and may be cited as the Regional Off- 18 Track Betting Authority Law. 19 Section 2. Definitions. 20 The following words and phrases when used in this act shall 21 have the meanings given to them in this section unless the 22 context clearly indicates otherwise: 23 "Authority." Each regional off-track betting authority, as 24 created by this act. 25 "Board of directors." The board of directors of an authority 26 as the board is constituted under section 3. 27 "Bonds and notes." Bonds and notes, respectively, authorized 28 and issued by the authority, under this act. 29 "Branch office." An establishment maintained and operated by 30 the authority, where off-track, pari-mutuel betting on horse 19830H0935B1073 - 2 -
1 races may be placed in accordance with the terms and conditions 2 of this act and the regulations issued under this act. 3 "Cost of authority's functions." All costs and expenses 4 incurred by the authority in connection with carrying out the 5 functions as described by this act, including but not limited 6 to, operating expenses of the authority; costs of acquisition, 7 construction or equipment of branch offices and other facilities 8 of the authority; and interest and principal on bonds, notes or 9 other obligations of the authority issued to finance the 10 acquisition, construction or equipment of such offices, 11 facilities or premises. 12 "Enabling legislation." A local law, ordinance or 13 resolution. 14 "Fund." The Capital Reserve Fund established in this act. 15 "Governing body." The appropriate county legislative body. 16 "Participating county." Any of the counties in a region 17 which have elected to join an authority in the manner provided 18 for in section 3. 19 "Region." Any of the following regions together with the 20 counties composing them and their populations: 21 (1) Eastern Region 22 Bradford 59,500 23 Susquehanna 36,300 24 Wayne 35,300 25 Pike 14,700 26 Monroe 59,300 27 Carbon 52,400 28 Northampton 225,600 29 Bucks 471,800 30 Montgomery 627,600 19830H0935B1073 - 3 -
1 Philadelphia 1,760,200 2 Delaware 573,700 3 Total population 3,916,400 4 (2) Central Region 5 Potter 16,900 6 Tioga 41,300 7 Clinton 37,800 8 Lycoming 113,300 9 Sullivan 5,800 10 Luzerne 337,800 11 Lackawanna 232,200 12 Wyoming 23,800 13 Columbia 59,700 14 Montour 16,600 15 Union 31,200 16 Centre 109,700 17 Clearfield 79,600 18 Snyder 31,400 19 Northumberland 99,200 20 Schuylkill 157,100 21 Lehigh 263,800 22 Berks 305,500 23 Dauphin 222,100 24 Perry 33,800 25 Lebanon 106,500 26 Juniata 18,600 27 Mifflin 44,000 28 Huntington 39,200 29 Blair 134,100 30 Bedford 44,000 19830H0935B1073 - 4 -
1 Fulton 12,100 2 Franklin 107,200 3 Cumberland 173,900 4 Adams 63,300 5 York 292,300 6 Lancaster 351,200 7 Chester 301,900 8 Total population 3,906,900 9 (3) Western Region 10 Erie 269,400 11 Crawford 85,300 12 Warren 45,800 13 McKean 50,700 14 Cameron 6,700 15 Elk 36,200 16 Forest 5,300 17 Venango 62,400 18 Mercer 125,100 19 Lawrence 105,500 20 Butler 143,100 21 Beaver 207,700 22 Clarion 41,800 23 Armstrong 76,600 24 Indiana 88,100 25 Jefferson 47,200 26 Cambria 185,000 27 Somerset 79,900 28 Westmoreland 380,300 29 Allegheny 1,476,800 30 Washington 212,400 19830H0935B1073 - 5 -
1 Greene 39,400 2 Fayette 155,900 3 Total population 3,926,600 4 "State board." The Racing and Wagering Board of the 5 Commonwealth. 6 "Track." The grounds or enclosure within which horse races 7 are conducted by person, association or corporation lawfully 8 authorized to conduct the races. 9 Section 3. Establishment of regional off-track betting 10 authorities. 11 (a) General rule.--A regional off-track betting authority is 12 hereby established for each region. Each regional authority 13 shall be a body corporate and politic. Each authority shall be 14 administered by a board of directors consisting of two members 15 from each participating county containing a city of over 75,000 16 in population, according to the last Federal census, and one 17 member from each other participating county. The members shall 18 be appointed by the county governing body. The mayor of a city 19 with a population of over 75,000 that has elected to participate 20 in the management of an authority under subsection (b) shall, 21 with the approval of the city's legislative body, appoint one of 22 the members to which the county containing the city is entitled. 23 Each director shall serve at the pleasure of the governing body 24 or mayor appointing him, as the case may be. A chairman shall be 25 elected by the members to serve a term of one year. 26 (b) Option to certain cities.--A city with a population of 27 over 75,000, according to the last Federal census, may elect to 28 participate in the management and revenues of a regional 29 authority if the county in which the city is located has elected 30 to become a participating county. The election shall be by 19830H0935B1073 - 6 -
1 enabling legislation. Upon election, the city shall participate 2 in the amount of any loans or contributions made or to be made 3 by the participating county containing the city to the authority 4 under the act of 1983 (P.L , No. ), known as 5 the Off-Track Pari-mutuel Betting Law, in the proportion that 6 such city will participate in net revenues payable to such 7 county or such other equitable arrangement as shall be approved 8 by the board. 9 (c) Enabling legislation.--Upon the passage of enabling 10 legislation by the governing body of not less than five counties 11 within a region representing not less than 10% of the population 12 of the region, as determined by the last Federal census, and 13 following the appointment of members of the board of directors, 14 the authority shall file with the Secretary of the Commonwealth 15 and with the State board a certificate setting forth the 16 articles of incorporation as follows: 17 (1) The date of passage of the enabling legislation. 18 (2) The name of the agency, which shall be the name of 19 the region followed by the words "Regional Off-Track Betting 20 Authority." 21 (3) The names of the members of the board of directors 22 and the chairman. 23 (4) The names of the incorporating counties and cities 24 and the names and addresses of the municipal authorities. 25 (5) A statement that the authority is formed under this 26 act. 27 (d) Enabling legislation.--Each of the counties of the 28 region that have not become participating counties at the time 29 of filing of the certificate may do so by enacting enabling 30 legislation, a duly certified copy of which must be filed with 19830H0935B1073 - 7 -
1 the board of directors, the State board, the Secretary of the 2 Commonwealth and the prothonotary of each participating county. 3 If, at the time of the election, the State board has approved a 4 plan of operation for the authority, a county may not become a 5 participating county without approval by the State board of a 6 modified feasibility study and amended plan of operation which 7 shall be submitted by the authority to the board under the Off- 8 Track Pari-mutuel Betting Law. If the participating counties in 9 the region have contributed or loaned funds or other 10 consideration to the authority, the board of directors may 11 require that any county subsequently electing to become a 12 participating county make contributions in the same proportion, 13 if any, as may have governed the contributions or loans by 14 participating counties. Any dispute as to the value of 15 consideration or as to a contribution required by the board of 16 directors shall be resolved by the State board. 17 (e) Termination.--If the certificate and articles of 18 incorporation required by subsection (c) are not filed by 19 December 31, 1987, the corporate existence of an authority shall 20 terminate, but otherwise, each authority and its corporate 21 existence shall continue until terminated by statute. No 22 terminating statute shall take effect as long as the authority 23 has bonds, notes or other obligations outstanding. Upon 24 termination of the existence of an authority, all of its rights, 25 property, assets and funds shall thereupon vest in and be 26 possessed by the participating counties: 27 (1) in the same proportion property, assets and funds 28 may have been contributed by each county; 29 (2) according to the manner in which the revenues of the 30 authority are distributed under section 17; or 19830H0935B1073 - 8 -
1 (3) by any combination of paragraphs (1) and (2) as the 2 State board shall determine. 3 (f) Length of service.--Each director shall continue to 4 serve until the appointment and qualification of a successor. 5 (g) Removal for cause.--The directors shall be removable for 6 cause by the State board upon charges and after a hearing. 7 (h) Powers vested in board.--The powers of the authority 8 shall be vested in and exercised by the board of directors at a 9 meeting held at a time fixed by any bylaw adopted by the board, 10 at any adjourned meeting of such meeting, at any meeting held 11 upon reasonable notice to all of the directors or upon written 12 waiver thereof. A majority of the whole number of directors 13 shall constitute a quorum. Neither the business nor the powers 14 of the authority shall be transacted or exercised except upon 15 the favorable vote of at least a majority of the directors 16 present at a meeting at which a quorum is in attendance. 17 (i) Delegation of duties.--The board of directors may 18 delegate to one or more of the directors, officers, agents or 19 employees of the authority the powers and duties as it may deem 20 proper. 21 (j) Compensation and expenses.--The directors may receive a 22 sum of $100 for each day or part thereof spent in attendance at 23 meetings or otherwise in the work of the authority, not to 24 exceed $1,200 during any one year. They shall be reimbursed for 25 their actual and necessary expenses incurred in the performance 26 of their official duties. 27 (k) Outside employment.--The directors may engage in outside 28 employment or in a profession or business unless otherwise 29 prohibited from doing so by virtue of holding another public 30 office. 19830H0935B1073 - 9 -
1 (l) Annual meeting.--The board of directors shall hold an 2 annual meeting. 3 (m) Fiscal year.--The fiscal year of the authority shall be 4 the calendar year. 5 (n) General manager.--A general manager, who shall be the 6 chief executive officer of the authority, shall be in charge of 7 the administration of its affairs. This individual shall perform 8 duties as chief executive officer, together with any other 9 duties assigned by the authority under its direct supervision 10 and control and shall give full time to such duties. 11 (o) Waiver of compensation permitted.--Any person prohibited 12 by any law or rule from accepting compensation described in 13 subsection (j) shall be permitted to serve as a director if the 14 person waives compensation. 15 Section 4. Powers of regional authorities. 16 Subject to the general and specific limitations of this act 17 and the authority of the State board under the act of 18 , 1983 (P.L. , No. ), known as the Racing and 19 Wagering Board Law, each authority shall have the following 20 powers: 21 (1) To sue and be sued. 22 (2) To have a seal and alter the same at pleasure. 23 (3) To acquire, hold, lease and dispose of personal 24 property for its corporate purposes. 25 (4) To acquire, in the name of the authority, and to use 26 real property which is necessary or convenient for carrying 27 out its corporate purposes. The authority shall not condemn 28 any real property without first having obtained the consent 29 of the chief elected official in the jurisdiction in which 30 the real property is located. All real property acquired by 19830H0935B1073 - 10 -
1 the authority by condemnation shall be acquired in the manner 2 provided by law for the condemnation of real property in the 3 jurisdiction in which the real property is located. 4 (5) To make bylaws for the management and regulation of 5 its affairs. 6 (6) To appoint officers, agents and employees, prescribe 7 their qualifications and to fix their compensation. 8 (7) To make contracts and leases and execute all 9 instruments necessary or convenient to accomplish its 10 corporate purposes. 11 (8) To construct the buildings, structures and 12 facilities as may be necessary. 13 (9) To accept grants, loans and contributions, including 14 gifts or transfers, from the United States and the 15 Commonwealth, or any agency or instrumentality of either of 16 them, participating county, a city or person and to use the 17 grants, loans and contributions for its corporate purposes. 18 (10) In accordance with this act and regulations of the 19 State board, to establish and conduct within the region a 20 system of off-track pari-mutuel betting on horse races. 21 (11) To promulgate, amend and repeal such rules and 22 regulations consistent with this act as it may deem necessary 23 or desirable to carry out the purposes of this act. 24 (i) The rules and regulations shall have the force 25 and effect of law. 26 (ii) No rule or regulation promulgated by an 27 authority under this paragraph shall be effective until a 28 copy thereof is filed with the clerk of each 29 participating county. 30 (iii) A person who violates a rule or regulation 19830H0935B1073 - 11 -
1 filed with the county clerk of each county in which a 2 corporation operates and designated by the letter "R" by 3 resolution of the board of directors of the authority and 4 shall, upon conviction, be sentenced to pay a fine of not 5 more than $300 or to serve a term of imprisonment of not 6 more than three months, or both. All fines collected 7 shall be payable to the county treasurer in the county in 8 which the violation occurred and shall be paid by the 9 treasurer into the general fund of the county. 10 (iv) The rule or regulation shall be effective 11 notwithstanding that any act or omission punishable by 12 the rule or regulation may be a crime or punishable under 13 any other provision of law. 14 (12) To perform other acts and engage in other 15 activities as may be necessary and proper for exercising its 16 powers and performing its duties under this act. 17 Section 5. Policing off-track betting. 18 (a) Appointment of special police.-- 19 (1) For the purpose of preserving order and preventing 20 offenses against the laws prohibiting gambling and the 21 regulations promulgated under this act, the officers or 22 directors of each authority subject to the provisions of this 23 act are hereby authorized to appoint from time to time and to 24 remove at pleasure special policemen. When appointed, the 25 special policemen shall within any office of an authority and 26 within 500 feet thereof be vested with the powers of peace 27 officers and with the following duties: 28 (i) To preserve order with and around the offices of 29 the authority. 30 (ii) To protect the property of the authority. 19830H0935B1073 - 12 -
1 (iii) To eject or arrest persons who are improperly 2 within the office of the authority, who engage in 3 disorderly conduct or who refuse to observe the rules 4 prescribed by the authority. 5 (iv) To prevent all violations of law with reference 6 to pool-selling, bookmaking and other gambling and all 7 violations of the rules and regulations promulgated under 8 section 4(11). 9 (v) To arrest persons committing the violations and 10 to convey persons so arrested, with a statement of the 11 cause of the arrest, before a district justice having 12 jurisdiction of the offense, to be dealt with according 13 to law. 14 (2) The appointment of special policemen under this 15 subsection shall not be deemed to supersede the authority of 16 peace officers or police officers of the jurisdiction within 17 which the offices of the authority are located. 18 (b) Approval of board.--Any appointment of a special 19 policeman under subsection (a) shall only be made with the 20 approval of the State board. Application for approval shall be 21 in a form as may be prescribed by the board and shall contain 22 other information or material or evidence as it shall require. 23 In acting on an application for approval, the board shall 24 consider the background, experience, integrity and competence of 25 the candidate for appointment; the public interest, convenience 26 or necessity; and the interests of legalized wagering generally. 27 The board in its discretion may set the term of any appointment, 28 terminate any existing appointment at any time and prescribe 29 conditions and rules for the conduct of the office. 30 Section 6. Acquisition or leasing of property. 19830H0935B1073 - 13 -
1 (a) Real property.--A participating county may, in 2 accordance with the provisions of law governing the acquisition 3 or leasing of real property by the county, acquire real property 4 in the name of the county by purchase or condemnation for use by 5 the authority or lease real property from other owners for that 6 purpose and, by resolution of the governing body of the county, 7 may by contract or gift made upon terms and conditions and for a 8 period of time as may be agreed upon by the county and the 9 corporation, authorize the use or occupancy of real property by 10 the authority for the carrying out of its corporate purpose. 11 (b) Personal property.--The county may, in accordance with 12 the provisions of law governing the acquisition or leasing of 13 personal property by the county, acquire or lease personal 14 property for use by the authority and, acting by the governing 15 body of the county, may by contract or gift made upon terms and 16 conditions and for a period of time as may be agreed upon by the 17 county and the authority authorize the use of personal property 18 by the authority or transfer title to personal property to it, 19 for the carrying out of its corporate purpose. 20 (c) Use of county property.--The county may, by resolution 21 of the governing body of the county or by an instrument 22 authorized by a resolution, authorize the authority to use or 23 occupy for its corporate purpose any real property then owned by 24 or under lease to the county upon terms and conditions, with or 25 without consideration, and for the period of time as may be 26 agreed upon by the county and the authority. In the case of 27 property then under lease to the county, the authorization 28 granted by the county to the authority shall be consistent with 29 the rights of the county as lessee of the property. 30 (d) Acquisition by authority.--Each authority for the 19830H0935B1073 - 14 -
1 carrying out of its corporate purpose may itself acquire real 2 property in the name of the participating counties at the cost 3 and expense of the authority by purchase or condemnation under 4 the laws governing the condemnation of real property by each 5 county. The authority shall have the use and occupancy of the 6 real property as long as its corporate existence continues. 7 (e) Contracts.-- 8 (1) Contracts may be entered into by a participating 9 county and the authority containing the following 10 undertakings by a participating county: 11 (i) To acquire or lease property and authorize the 12 use or occupancy of property by the authority. 13 (ii) To authorize the authority to use or occupy 14 property then owned by or under lease to a participating 15 county. 16 (iii) To perform any other acts on the part of the 17 county authorized by subsections (a), (b) and (c) if the 18 acts of the county called for by the undertakings are in 19 conformity with the provisions of subsections (a), (b) 20 and (c). 21 (2) The making of a contract shall be authorized on 22 behalf of the county by the governing body in the same manner 23 as the acts of the county called for by the undertakings in 24 the contract are required to be authorized under the 25 applicable provisions of subsections (a), (b) and (c). 26 (3) A contract between a county and the authority may be 27 pledged by the authority to secure its bonds or notes and may 28 not be modified thereafter except as provided by the terms of 29 the pledge. 30 (f) Surrender of property.--In case the authority has the 19830H0935B1073 - 15 -
1 use or occupancy of any real property which it determines is no 2 longer required for the carrying out of its corporate purpose 3 the following apply: 4 (1) If the real property was acquired at the cost and 5 expense of a county, the authority shall have power to 6 surrender its use or occupancy to the county. 7 (2) If the real property was acquired at the cost and 8 expense of the authority, the authority shall have the power 9 to sell, lease or otherwise dispose of the real property at 10 public or private sale and shall retain and have the power to 11 use the proceeds of sale, rentals or other moneys derived 12 from the disposition for its corporate purpose. 13 (g) Purchases.--Notwithstanding the provisions of general, 14 special or local law to the contrary, each authority may make 15 purchases of materials, equipment or supplies, when available, 16 through a participating county subject to procedures or rules 17 established by the participating county prescribing the 18 conditions under which and the manner in which purchases may be 19 made. All purchases shall be subject to audit and inspection by 20 the authority, and the authority shall accept sole 21 responsibility for any payment due the vendor. The authority 22 shall make no purchase through the participating county when 23 bids have been received for purchase by the authority unless the 24 purchase may be made upon the same terms, conditions and 25 specifications at a lower price through the participating 26 county. 27 Section 7. Loans and contributions by a participating county to 28 an authority. 29 (a) Loans.--A participating county shall have power to loan 30 money to an authority in amounts, upon terms and conditions and 19830H0935B1073 - 16 -
1 for a period of time as in the judgment of the county are 2 necessary or appropriate for the accomplishment of the corporate 3 purpose of the authority. 4 (b) Lien.--Subject to any prior pledge of or lien upon the 5 revenues or moneys of the authority, the county shall have a 6 first lien upon the revenues or moneys for the repayment of the 7 loan, which lien shall do the following: 8 (1) Attach upon receipt of the revenues or moneys by the 9 authority, without physical delivery of the revenue or moneys 10 or further act. 11 (2) Have priority over any other claim or lien against 12 such revenues or moneys. 13 (3) Be valid and binding as against all parties having 14 claims in tort, contract or otherwise against the authority, 15 irrespective of whether the parties have notice of the lien. 16 (c) Contributions.--A participating county shall have power 17 to contribute money or personal property to an authority in 18 amounts, for a period of time and upon terms and conditions as 19 in the judgment of the county are necessary or appropriate for 20 the accomplishment of the corporate purpose of the authority. 21 Section 8. Contracts of authorities. 22 (a) Contracting.--Each authority shall let contracts for 23 construction or other work, including the furnishing of 24 materials or supplies incident thereto, and contracts for the 25 purchase or procurement of equipment, materials or supplies in 26 the manner provided by law with respect to the letting of 27 contracts by counties. Where the estimated expense of a contract 28 does not exceed $10,000, a contract may be entered into without 29 public letting. If the authority determines with respect to any 30 contract that it would not be in the public interest to comply 19830H0935B1073 - 17 -
1 with this section and if the governing body of each county, by 2 resolution, rule or regulation adopted by the vote of two-thirds 3 of the whole number of votes authorized to be cast by all of the 4 members of a body, concurs in their determination, then it may 5 enter into the contract without public letting as authorized by 6 the resolution, rules and regulations. 7 (b) Bidder qualification.--The authority may make rules and 8 regulations governing the qualifications of bidders entering 9 into a contract where the cost of the contract exceeds $10,000. 10 The bidding may be restricted to those who shall have qualified 11 prior to the receipt of bids according to standards fixed by the 12 authority. Notice for the submission of qualifications shall be 13 published in a newspaper of general circulation in the region at 14 least once, not less than ten days prior to the date fixed for 15 the filing of qualifications. 16 (c) Penalty.--A director of the authority or an officer, 17 agent, executive or other employee retained, employed or 18 appointed by the authority who is interested in a contract the 19 expense or consideration of which is payable out of funds of the 20 corporation commits a misdemeanor. 21 Section 9. Issuance of bonds and notes by an authority. 22 (a) General rule.--Each authority is hereby authorized, 23 subject to the approval of the board, to issue negotiable bonds 24 and notes in aggregate principal amounts as shall, in the 25 opinion of the authority, be necessary together with other 26 moneys or funds as may be available to the authority to provide 27 funds sufficient to enable the authority to carry out its 28 corporate purposes, including the acquisition, construction, 29 maintenance and repair of property, the payment of interest on 30 and amortization of or payment of bonds and notes, the 19830H0935B1073 - 18 -
1 establishment of reserves or sinking funds to secure such bonds 2 and notes, and all other expenditures of the authority incident 3 to and necessary or desirable for the carrying out of its 4 corporate purposes and the exercise of its powers. Except as may 5 otherwise be expressly provided by the authority, every issue of 6 its bonds and notes shall be general obligations of the 7 authority payable out of any revenues or moneys of the 8 authority, subject only to any agreements with the holders of 9 particular bonds or notes pledging any particular revenues or 10 moneys. 11 (b) Renewals and refunds.--The authority is hereby 12 authorized to issue renewal notes, to refund any bonds by the 13 issuance of new bonds whether or not the bonds to be refunded 14 have matured, and to issue bonds to pay notes or to refund 15 partly bonds then outstanding. 16 (c) Procedure.--The bonds and notes shall be authorized by 17 resolution of the board of directors and shall mature as the 18 resolution may provide. Bonds and notes shall bear interest at a 19 rate; be in denominations; be in a form, either coupon or 20 registered; carry registration privileges; be executed in a 21 manner; be payable in a medium of payment, be payable at place; 22 and be subject to terms of redemption as the resolution may 23 provide. Bonds and notes may be sold by the authority at public 24 or private sale at a price as the authority shall determine; 25 however, no bonds or notes may be sold at a private sale unless 26 the sale and the terms of the sale have been approved by the 27 Auditor General in writing. 28 (d) Resolution provision.--Any resolution authorizing any 29 bonds or notes may contain provisions, which shall be a part of 30 the contract with the holders, as to the following: 19830H0935B1073 - 19 -
1 (1) Pledging all or any part of the moneys or revenues 2 or other assets of the authority to secure the payment of the 3 bonds or notes. 4 (2) Setting aside of reserves or sinking funds and 5 regulation or disposition thereof. 6 (3) Limitations on the purposes to which the proceeds of 7 the sale of any issue of bonds or notes may be applied and 8 pledging the proceeds to secure the payment of the bonds or 9 notes. 10 (4) Limitations on the issuance of additional bonds or 11 notes, the terms upon which additional bonds or notes may be 12 issued and secured and the refunding of outstanding bonds or 13 notes. 14 (5) The procedures, if any, by which the terms of any 15 contract with the holders of bonds or notes may be extended 16 or abrogated, the amount of bonds or notes the holders of 17 which must consent to and the manner in which the consent may 18 be given. 19 (6) The creation of special funds into which any moneys 20 or revenues of the authority may be deposited. 21 (7) Limitations on the amounts that the authority may 22 expend for administrative or other expenses. 23 (8) Vesting in a trustee properties, rights, powers and 24 duties in trust as the authority may determine which may 25 include rights, powers and duties of the trustees appointed 26 by the holders of the bonds or notes under section 13 and 27 limiting or abrogating the right of the holders of the bonds 28 or notes to appoint a trustee under section 13. 29 (9) Defining the acts or omissions which shall 30 constitute a default in the obligations and duties of the 19830H0935B1073 - 20 -
1 authority to the holders of the bonds or notes and providing 2 for the rights and remedies of the holders of the bonds or 3 notes in the event of default, including as a matter of right 4 the appointment of a receiver. Rights and remedies shall not 5 be inconsistent with the law of the Commonwealth and the 6 other provisions of this act. 7 (10) Any other matters which affect the security or 8 protection of the holders of the bonds or notes. 9 (e) Validity.--Any pledge of revenues, moneys or property 10 made by the authority shall be valid from the time when the 11 pledge is made. The revenues, moneys or property so pledged and 12 thereafter received by the authority shall immediately be 13 subject to the lien of the pledge without any physical delivery 14 or further act. The lien of the pledge shall be valid against 15 all parties having claims of any kind in tort, contract or 16 otherwise against the authority irrespective of whether the 17 parties have notice thereof. Neither the resolution nor any 18 other instrument by which a pledge is created need to be 19 recorded. 20 (f) Release of liability.--Neither the directors of the 21 authority nor any other person executing bonds or notes shall be 22 subject to any personal liability or accountability by reason of 23 the issuance of the bonds or notes. 24 (g) Purchase by authority.-- 25 (1) The authority, subject to agreements with the 26 holders of bonds or notes as may then exist, shall have the 27 power out of any funds available to purchase any bonds or 28 notes issued by it at a price not exceeding the redemption 29 price thereof, which price shall be: 30 (i) if the bonds or notes are then redeemable, the 19830H0935B1073 - 21 -
1 redemption price then applicable plus accrued interest to 2 the next interest payment date thereon; or 3 (ii) if the bonds or notes are not then redeemable, 4 the redemption price applicable on the first date after 5 purchase upon which bonds or notes become subject to 6 redemption plus accrued interest to such date. 7 (2) All bonds or notes so purchased shall be cancelled. 8 Section 10. Capital Reserve Fund. 9 (a) Establishment.--The authority shall establish the 10 Capital Reserve Fund and shall pay into the fund the following: 11 (1) Any moneys appropriated and made available by 12 participating counties for the purpose of the fund. 13 (2) Any proceeds of sale of bonds or notes to the extent 14 provided in the resolution of the authority authorizing the 15 issuance. 16 (3) Any other moneys which may be made available to the 17 authority for the purpose of the fund from any source. 18 (b) Use.-- 19 (1) All moneys held in the fund, except as provided in 20 paragraph (2), shall be used solely for the payment of the 21 principal of bonds of the authority, the payment of interest 22 on the bonds and the payment of any redemption premium 23 required to be paid when the bonds are redeemed prior to 24 maturity. 25 (2) Moneys in the fund shall not be withdrawn therefrom 26 at any time in the amount as would reduce the amount of the 27 fund to less than the maximum amount of principal and 28 interest maturing and becoming due in any succeeding fiscal 29 year of the authority on all bonds of the authority then 30 outstanding except for the purpose of paying principal of and 19830H0935B1073 - 22 -
1 interest on bonds of the authority maturing and becoming due 2 and for the payment of which other moneys of the authority 3 are not available. 4 (3) Any income to the fund due to the investment thereof 5 may be transferred to other funds or accounts to the extent 6 it does not reduce the amount of the fund below the maximum 7 amount of principal and interest maturing and becoming due in 8 any succeeding fiscal year on all bonds of the corporation 9 then outstanding. 10 (b) Debt limitation.--The authority shall not issue bonds at 11 any time if the maximum amount of principal and interest 12 maturing and becoming due in a succeeding fiscal year of the 13 authority on bonds then to be issued and on all other bonds of 14 the authority then outstanding will exceed the amount of the 15 fund at the time of issuance of the bonds unless the authority 16 at the time of issuance of the bonds deposits in the fund from 17 the proceeds of the bonds so to be issued or otherwise an amount 18 which, together with the amount then in the fund, will not be 19 less than the maximum amount of principal and interest maturing 20 and becoming due in any succeeding fiscal year on bonds then to 21 be issued and on all other bonds of the corporation then 22 outstanding. 23 (c) Stock valuation.--For the purposes of computing the 24 amount of the fund, any securities in which any portion of the 25 fund is invested shall be valued at the par value thereof or at 26 the cost thereof to the corporation if that cost was less than 27 the par value. 28 Section 11. Commonwealth and participating counties not liable 29 on bonds and notes. 30 The bonds, notes or other obligations of an authority shall 19830H0935B1073 - 23 -
1 not be a debt of either the Commonwealth or of any participating 2 county. Neither the Commonwealth nor any county shall be liable 3 on the bonds, notes or other obligations, nor shall they be 4 payable out of any funds other than those of the authority. 5 Section 12. Commonwealth's right to require redemption of 6 bonds. 7 Notwithstanding and in addition to provisions for the 8 redemption of bonds which may be contained in any contract with 9 the holders of the bonds, the Commonwealth may, upon furnishing 10 sufficient funds therefor, require an authority to redeem prior 11 to maturity, as a whole, any issue of bonds on any interest 12 payment date not less than 20 years after the date of the bonds 13 at 105% of their face value and accrued interest or at a lower 14 redemption price as may be provided in the bonds in case of the 15 redemption thereof as a whole on the redemption date. Notice of 16 this redemption shall be published in at least two newspapers 17 published and circulating in the participating counties at least 18 twice, the first publication to be at least 30 days before the 19 date of redemption. 20 Section 13. Remedies of holders of bonds and notes. 21 (a) Appointment of trustee.--In the event that an authority 22 shall default in the payment of the principal of or interest on 23 any issue of bonds or notes after they become due, whether at 24 maturity or upon call for redemption, and that the default 25 continues for a period of 30 days or that an authority shall 26 default in any agreement made with the holders of any issue of 27 the bonds or notes, the holders of 25% in aggregate principal 28 amount of the bonds or notes of the issue then outstanding, by 29 instrument filed in the office of the clerk of the court of 30 common pleas of any county in which the authority operates and 19830H0935B1073 - 24 -
1 approved or acknowledged in the same manner as a deed to be 2 recorded, may appoint a trustee to represent the holders of the 3 bonds or notes for the purposes provided in this section. 4 (b) Powers of trustee.--The trustee may and, upon written 5 request of the holders of 25% in principal amount of the bonds 6 or notes then outstanding, shall in the trustee's name do the 7 following: 8 (1) By action enforce all rights of the holders of the 9 bonds or notes, including the right to require the authority 10 to carry out any agreements with the holders and to perform 11 its duties under this act. 12 (2) Bring suit upon the bonds or notes. 13 (3) By action require the authority to account as if it 14 were the trustee of an express trust for the holders of the 15 bonds or notes. 16 (4) By action enjoin any acts which may be unlawful or 17 in violation of the rights of the holders of the bonds or 18 notes. 19 (5) Declare all bonds or notes due and payable and, if 20 all defaults shall be made good, then, with the consent of 21 the holders of 25% of the principal amount of the bonds or 22 notes then outstanding, annul this declaration and its 23 consequences. 24 (c) Jurisdiction and venue.--The court of common pleas shall 25 have jurisdiction of any action by the trustee on behalf of the 26 holders of bonds or notes. The venue of the action shall be in 27 the judicial district in which the principal office of the 28 authority is located. 29 (d) Notice.--Before declaring the principal of bonds or 30 notes due and payable, the trustee shall first give 30 days 19830H0935B1073 - 25 -
1 notice in writing to the authority, the Governor, the Auditor 2 General and the Attorney General of the Commonwealth. 3 (e) Receiver.--Any trustee, whether or not the issue of 4 bonds represented by trustee has been declared due and payable, 5 shall be entitled as of right to the appointment of a receiver 6 of the revenues which are pledged for the security of the bonds 7 of the issue. The receiver may enter and take possession of the 8 premises, equipment and property which the authority is 9 operating or is entitled to use or occupy; shall take possession 10 of all revenues of the authority and other moneys to which the 11 authority is entitled; shall proceed to conduct pari-mutuel, 12 off-track betting under this act in the place of the authority; 13 and shall perform the public duties and carry out the agreements 14 and obligations of the authority under the direction of the 15 court. In any action by the trustee, the fees, counsel fees and 16 expenses of the trustee and of the receiver shall constitute 17 taxable disbursements allowed by the court and shall be a first 18 charge on any revenues of the corporation. 19 (f) Additional powers of trustee.--The trustee shall have 20 all the powers necessary or appropriate for the exercise of any 21 function specifically set forth in this section or incident to 22 the general representation of the holders of the bonds or notes 23 in the enforcement and protection of their rights. 24 Section 14. Exemption from taxation. 25 (a) Rule.--The moneys and property of each authority and any 26 property under its jurisdiction, control or supervision and all 27 of its activities and operations shall be exempt from taxation; 28 however, no exemption is granted from the taxes imposed under 29 the act of 1983 (P.L. , No. ), known 30 as the Off-Track Pari-mutuel Betting Law. 19830H0935B1073 - 26 -
1 (b) Covenant.--The Commonwealth covenants with the 2 purchasers and with all subsequent holders and transferees of 3 bonds and notes issued by an authority under this act, in 4 consideration of the acceptance of and payment for the bonds and 5 notes, that the bonds and notes and the income therefrom and all 6 moneys, funds and revenue pledged to pay or secure the payment 7 of the bonds and notes shall at all times be free from taxation, 8 except for estate and gift taxes and taxes on transfers. 9 Section 15. Notice of claim; action against authority. 10 (a) Notice.--In every action against an authority for 11 damages for injuries to property or for the destruction thereof 12 or for personal injuries, the complaint shall contain an 13 allegation that at least 30 days have elapsed since notice of 14 claim was presented to the authority and that the authority has 15 neglected or refused to make an adjustment or payment thereof 16 for 30 days after the presentment. 17 (b) Action form.--The notice of claim shall be in writing, 18 sworn to by or on behalf of the claimant, and shall set forth 19 the following: 20 (1) The name and post office address of each claimant, 21 and of his attorney, if any. 22 (2) The nature of the claim. 23 (3) The time when, the place where and the manner in 24 which the claim arose. 25 (4) The items of damage or injuries claimed to have been 26 sustained so far as then practicable to determine. 27 (c) Service.--The notice shall be served on the authority by 28 delivering a copy thereof, in duplicate, personally or by 29 registered mail, to an officer, director or to any other agent 30 authorized by appointment to receive such service. 19830H0935B1073 - 27 -
1 (d) Testimony.--The authority may require any person 2 presenting a claim to be sworn or to make an affirmation before 3 a person authorized by statute to administer oaths and to answer 4 orally as to any facts relative to the claim. 5 (e) Limitation of action.--An action against an authority 6 shall not be commenced more than one year and 90 days after the 7 cause of action shall have accrued nor unless a notice of claim 8 as required in subsections (a) and (b) shall have been served 9 upon the authority under subsection (c) within 90 days after the 10 cause of action shall have accrued. 11 (f) Venue.--All actions against the authority of whatever 12 nature shall be brought and the place of trial shall be in the 13 county in which the cause of action arose. 14 Section 16. Bonds and notes as legal investments. 15 The bonds and notes of an authority are hereby made 16 securities in which all public officers and bodies of the 17 Commonwealth, all municipalities, persons carrying on insurance 18 business, fiduciaries and other persons authorized to invest in 19 bonds or in other obligations of the Commonwealth, may invest 20 funds, including capital, in their control or belonging to them. 21 Section 17. Moneys of authority; disposition of net revenues. 22 (a) Supervision.--The monetary transactions of the authority 23 and the keeping of its books and accounts shall be under the 24 supervision of the board of directors who shall be subject to 25 the general and specific jurisdiction of the State board and to 26 audit by the Auditor General. The Auditor General and his 27 legally authorized representative are authorized to and shall at 28 least once annually examine the accounts and books of the 29 authority, including its receipts, disbursements, contracts, 30 leases, sinking funds, investments and any other records and 19830H0935B1073 - 28 -
1 papers relating to its financial standing. 2 (b) Disposition.--After payment of all of the costs of the 3 authority's functions, net revenue remaining to the authority 4 shall be divided, quarterly, not more than 30 days after the 5 close of the calendar quarter, among the participating counties 6 in accordance with the following: 7 (1) Fifty percent of the revenue shall be distributed on 8 the basis of the proportion of the total off-track pari- 9 mutuel wagering accepted by the authority during the previous 10 calendar quarter that originated in the branch offices 11 located in each participating county; 12 (2) Fifty percent of the revenue shall be distributed on 13 the basis of population, as defined as the total population 14 in each participating county shown by the latest decennial 15 Federal census completed and published as a final population 16 count by the United States Bureau of the Census prior to the 17 commencement of the calendar year in which the distribution 18 is to be made. 19 (3) A participating county containing a city electing to 20 participate in the management and revenues of a corporation 21 under section 3 shall distribute revenue received under 22 paragraphs (1) and (2) to the city according to the 23 proportion the city's population bears to the county's 24 population. 25 (c) Contracts.--The authority shall have power, 26 notwithstanding the provisions of this section, to contract with 27 the holders of any of its bonds as to the custody, collection, 28 securing, investment and payment of any moneys of the authority 29 or any moneys held in trust or otherwise for the payment of 30 bonds and to carry out the contract. 19830H0935B1073 - 29 -
1 (e) Security for deposits.--Moneys held in trust or 2 otherwise for the payment of bonds and deposits of moneys may be 3 secured in the same manner as moneys of the authority, and all 4 banks and trust companies are authorized to give security for 5 these deposits. 6 Section 18. Annual reports. 7 In addition to the reports required by the act of 8 1983 (P.L. , No. ), known as the Off-Track 9 Pari-mutuel Betting Law, within 120 days after the end of the 10 fiscal year of the authority, the directors shall submit to the 11 participating counties, the State board, and the Auditor General 12 a complete and detailed audited report setting forth the 13 following: 14 (1) Its operations and accomplishments during the fiscal 15 year. 16 (2) Its receipts and expenditures during the fiscal year 17 in accordance with categories or classifications established 18 by the authority for its own operating and capital outlay 19 purposes. 20 (3) Its assets and liabilities at the end of the fiscal 21 year including a schedule of its bonds, notes or other 22 obligations and the status of reserves, depreciations and 23 funds. 24 (4) Details of branch offices being planned or in the 25 process of being constructed or established and branch 26 offices that have been constructed or established. 27 (5) Such other information relating to the operations of 28 the authority as shall be deemed pertinent by the directors, 29 the participating counties, the State board and the Auditor 30 General. 19830H0935B1073 - 30 -
1 Section 19. Effective date. 2 This act shall take effect in 60 days. C29L64VDL/19830H0935B1073 - 31 -