PRINTER'S NO. 2111
No. 1432 Session of 1984
INTRODUCED BY JUBELIRER, ZEMPRELLI, MOORE, SCANLON, HOPPER,
HOWARD, KRATZER, LINCOLN, LLOYD, LOEPER, LYNCH, MELLOW,
MUSTO, O'CONNELL, O'PAKE, ANDREZESKI, BODACK, CORMAN, FISHER,
HANKINS, HELFRICK, HESS, REIBMAN, RHOADES, ROCKS, ROMANELLI,
ROSS, SHAFFER, SHUMAKER, SINGEL, STAPLETON, STOUT, STREET,
WILLIAMS, WILT AND HAGER, JUNE 15, 1984
REFERRED TO APPROPRIATIONS, JUNE 15, 1984
AN ACT
1 Implementing the provisions of the referendum, approved by the
2 electors, for the incurrence of indebtedness of $190,000,000
3 for the economic redevelopment of the Commonwealth through
4 grants and loans for industrial and business development,
5 including small business and minority business development,
6 training and retraining programs including the acquisition of
7 computer equipment for local school districts and teacher
8 training in the use of such equipment, economic development
9 in distressed areas and job creation programs.
10 TABLE OF CONTENTS
11 Section 1. Short title.
12 Section 2. Legislative findings and declaration of purpose.
13 Section 3. Pennsylvania Economic Revitalization Fund.
14 Section 4. Borrowing authorized.
15 Section 5. Sale of bonds.
16 Section 6. Temporary financing authorization.
17 Section 7. Debt retirement.
18 Section 8. Disposition and use of proceeds.
19 Section 9. Repeals.
1 Section 10. Effective date.
2 The General Assembly of the Commonwealth of Pennsylvania
3 hereby enacts as follows:
4 Section 1. Short title.
5 This act shall be known and may be cited as the Pennsylvania
6 Economic Revitalization Act.
7 Section 2. Legislative findings and declaration of purpose.
8 (a) Industrial and business development.--The General
9 Assembly finds that pursuant to the provisions of section
10 7(a)(3) of Article VIII of the Constitution of Pennsylvania, the
11 voters of the Commonwealth approved by referendum of April 10,
12 1984, the incurring of indebtedness of $190,000,000 to promote
13 economic redevelopment throughout Pennsylvania through job
14 producing programs; grants and loans for industrial and small
15 business development; acquisition of equipment for vocational
16 programs in secondary schools, community colleges and
17 engineering degree-granting schools; agricultural development;
18 and the acquisition, rehabilitation or development of facilities
19 for community services and public recreation purposes, by
20 providing for grants and loans to promote the economic
21 redevelopment of the Commonwealth and to implement the approved
22 referendum.
23 (b) Purpose of act.--It is the purpose of this act to
24 implement section 5 of the act of February 24, 1984 (P.L.99,
25 No.19), entitled "An act authorizing the indebtedness, with the
26 approval of the electors, of $190,000,000 to promote economic
27 redevelopment throughout Pennsylvania through job producing
28 programs; grants and loans for industrial and small business
29 development; acquisition of equipment for vocational programs in
30 secondary schools, community colleges and engineering degree-
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1 granting schools; agricultural development; and the acquisition,
2 rehabilitation or development of facilities for community
3 services and public recreation purposes," by providing for
4 grants and loans to promote the economic redevelopment of the
5 Commonwealth and to implement the approved referendum.
6 Section 3. Pennsylvania Economic Revitalization Fund.
7 (a) Creation.--There is hereby created a special fund in the
8 State Treasury to be known as the Pennsylvania Economic
9 Revitalization Fund dedicated to the purposes specified in the
10 act of February 24, 1984 (P.L.99, No.19), entitled "An act
11 authorizing the indebtedness, with the approval of the electors,
12 of $190,000,000 to promote economic redevelopment throughout
13 Pennsylvania through job producing programs; grants and loans
14 for industrial and small business development; acquisition of
15 equipment for vocational programs in secondary schools,
16 community colleges and engineering degree-granting schools;
17 agricultural development; and the acquisition, rehabilitation or
18 development of facilities for community services and public
19 recreation purposes," and as the General Assembly shall, by law,
20 provide.
21 (b) Operation of fund.--The Pennsylvania Economic
22 Revitalization Fund shall be the fund from which all moneys are
23 appropriated to carry out the purposes specified in the act of
24 February 24, 1984 (P.L.99, No.19), and such other purposes as
25 the General Assembly shall, by law, provide. Any moneys, repaid
26 to the Commonwealth from programs funded through the
27 Pennsylvania Economic Revitalization Fund shall, be deposited in
28 a restricted receipt account and shall remain in such account
29 until the General Assembly, by law, provides for their
30 utilization and expenditure. All funds required after enactment
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1 of this act to retire bonds issued as the result of the act of
2 February 24, 1984 (P.L.99, No.19), shall be appropriated from
3 the General Fund.
4 Section 4. Borrowing authorized.
5 (a) Authority to borrow.--Pursuant to the provisions of
6 section 7(a)(3) of Article VIII of the Constitution of
7 Pennsylvania and the referendum approved by the electorate, the
8 issuing officials are authorized and directed to borrow, on the
9 credit of the Commonwealth, money not exceeding in the aggregate
10 the sum of $190,000,000 not including money borrowed to refund
11 outstanding bonds, notes or replacement notes, as may be found
12 necessary to carry out the purposes of this act.
13 (b) Issuance of general obligation bonds.--As evidence of
14 the indebtedness authorized in this act, general obligation
15 bonds of the Commonwealth shall be issued, from time to time, to
16 provide moneys necessary to carry out the purposes of this act
17 for such total amounts, in such form, in such denominations and
18 subject to such terms and conditions of issue, redemption and
19 maturity, rate of interest and time of payment of interest as
20 the issuing officials direct, except that the latest stated
21 maturity date shall not exceed 30 years from the date of the
22 first obligation issued to evidence the debt.
23 (c) Execution of bonds.--All bonds and notes issued under
24 the authority of this act shall bear facsimile signatures of the
25 issuing officials and a facsimile of the Great Seal of the
26 Commonwealth and shall be countersigned by a duly authorized
27 officer of a duly authorized loan and transfer agent of the
28 Commonwealth.
29 (d) Direct obligation of Commonwealth.--All bonds and notes
30 issued in accordance with the provisions of this section shall
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1 be direct obligations of the Commonwealth and the full faith and
2 credit of the Commonwealth are hereby pledged for the payment of
3 the interest thereon, as it becomes due, and the payment of the
4 principal at maturity. The principal of and interest on the
5 bonds and notes shall be payable in lawful money of the United
6 States.
7 (e) Exemption from taxation.--All bonds and notes issued
8 under the provisions of this section shall be exempt from
9 taxation for State and local purposes except as may be provided
10 under Article XVI of the act of March 4, 1971 (P.L.6, No.2),
11 known as the Tax Reform Code of 1971.
12 (f) Form of bonds.--The bonds may be issued as coupon bonds
13 or registered as to both principal and interest as the issuing
14 officials may determine. If interest coupons are attached, they
15 shall contain the facsimile signature of the State Treasurer.
16 (g) Bond amortization.--The issuing officials shall provide
17 for the amortization of the bonds in substantial and regular
18 amounts over the term of the debt. The fist retirement of
19 principal shall be stated to mature prior to the expiration of a
20 period of time equal to one-tenth of the time from the date of
21 the first obligation issued to evidence the debt to the date of
22 the expiration of the term of the debt. Retirements of principal
23 shall be regular and substantial if made in annual or semiannual
24 amounts whether by stated serial maturities or by mandatory
25 sinking fund retirements.
26 (h) Refunding bonds.--The issuing officials are authorized
27 to provide, by resolution, for the issuance of refunding bonds
28 for the purpose of refunding any debt issued under the
29 provisions of this act and then outstanding, either by voluntary
30 exchange with the holders of the outstanding debt or to provide
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1 funds to redeem and retire the outstanding debt with accrued
2 interest, and premium payable thereon and the costs of issuance
3 and retirement of the debt, at maturity or at any call date. The
4 issuance of the refunding bonds, the maturities and other
5 details thereof, the rights of the holders thereof and the
6 duties of the issuing officials in respect to the same shall be
7 governed by the provisions of this section, insofar as they may
8 be applicable. Refunding bonds, which are not subject to the
9 aggregate limitation of $190,000,000 of debt to be issued
10 pursuant to this act, may be issued by the issuing officials to
11 refund debt originally issued or to refund bonds previously
12 issued for refunding purposes.
13 (i) Quorum.--Whenever any action is to be taken or decision
14 made by the Governor, the Auditor General and the State
15 Treasurer acting as issuing officials and the three officers are
16 not able unanimously to agree, the action or decision of the
17 Governor and either the Auditor General or the State Treasurer
18 shall be binding and final.
19 Section 5. Sale of bonds.
20 (a) Public sale.--Whenever bonds are issued, they shall be
21 offered for sale at not less than 98% of the principal amount
22 and accrued interest and shall be sold by the issuing officials
23 to the highest and best bidder or bidders after due public
24 advertisement on the terms and conditions and upon the open
25 competitive bidding as the issuing officials shall direct. The
26 manner and character of the advertisement and the time of
27 advertising shall be prescribed by the issuing officials. No
28 commission shall be allowed or paid for the sale of any bonds
29 issued under the authority of this act.
30 (b) Private sale.--Any portion of any bond issue so offered
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1 and not sold or subscribed for at public sale may be disposed of
2 by private sale by the issuing officials in such manner and at
3 such prices, not less than 98% of the principal amount and
4 accrued interest, as the Governor shall direct. No commission
5 shall be allowed or paid for the sale of any bonds issued under
6 the authority of this act.
7 (c) Bond series.--When bonds are issued from time to time,
8 the bonds of each issue shall constitute a separate series to be
9 designated by the issuing officials or may be combined for sale
10 as one series with other general obligation bonds of the
11 Commonwealth.
12 (d) Temporary bonds.--Until permanent bonds can be prepared,
13 the issuing officials may in their discretion issue, in lieu of
14 permanent bonds, temporary bonds in such form and with such
15 privileges as to registration and exchange for permanent bonds
16 as may be determined by the issuing officials.
17 (e) Investment of funds.--Pending their application to the
18 purposes authorized, moneys held or deposited by the State
19 Treasurer may be invested or reinvested as are other funds in
20 the custody of the State Treasurer in the manner provided by
21 law. All earnings received from the investment or deposit of
22 such funds shall be paid into the State Treasury to the credit
23 of the Pennsylvania Economic Revitalization Fund. Such earnings
24 in excess of bond discounts allowed and expenses paid for the
25 issuance of bonds and notes shall be transferred annually to the
26 Pennsylvania Economic Revitalization Sinking Fund.
27 (f) Registration of bonds.--The Auditor General shall
28 prepare the necessary registry book to be kept in the office of
29 the duly authorized loan and transfer agent of the Commonwealth
30 for the registration of any bonds, at the request of owners
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1 thereof, according to the terms and conditions of issue directed
2 by the issuing officials.
3 (g) Expenses of preparation for issue and sale of bonds and
4 notes.--There is hereby appropriated to the State Treasurer from
5 the proceeds of the bonds and notes issued as much money as may
6 be necessary for all costs and expenses in connection with the
7 issue of and sale and registration of the bonds and notes in
8 connection with this act.
9 Section 6. Temporary financing authorization.
10 (a) Authority.--Pending the issuance of bonds of the
11 Commonwealth as authorized, the issuing officials are hereby
12 authorized in accordance with the provisions of this act and on
13 the credit of the Commonwealth to make temporary borrowings not
14 to exceed three years in anticipation to the issue of bonds in
15 order to provide funds in such amounts as may from time to time
16 be deemed advisable prior to the issue of bonds. In order to
17 provide for and in connection with such temporary borrowings,
18 the issuing officials are hereby authorized in the name and on
19 behalf of the Commonwealth to enter into any purchase, loan or
20 credit agreement, or agreements, or other agreement or
21 agreements with any banks or trust companies or other lending
22 institutions, investment banking firms or persons in the United
23 States having power to enter into the same, which agreements may
24 contain such provisions, not inconsistent with the provisions of
25 this act as may be authorized by the issuing officials.
26 (b) Evidence of temporary borrowings.--All temporary
27 borrowings made under the authorization of this section shall be
28 evidenced by notes of the Commonwealth, which shall be issued
29 from time to time for such amounts not exceeding in the
30 aggregate the applicable statutory and constitutional debt
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1 limitation, in such form and in such denominations, and subject
2 to terms and condition of sale and issue, prepayment or
3 redemption and maturity, rate or rates of interest, and time of
4 payment of interest as the issuing officials shall authorize and
5 direct and in accordance with this act. Such authorization and
6 direction may provide for the subsequent issuance of replacement
7 notes, to refund outstanding notes or replacement notes which
8 replacement notes shall upon issuance thereof, evidence such
9 borrowing, and may specify such other terms and conditions with
10 respect to the notes and replacement notes thereby authorized
11 for issuance as the issuing officials may determine and direct.
12 (c) Other agreements.--When the authorization and direction
13 of the issuing officials provide for the issuance of replacement
14 notes, the issuing officials are hereby authorized in the name
15 and on behalf of the Commonwealth to issue, enter into, or
16 authorize and direct the State Treasurer to enter into
17 agreements with any banks, trust companies, investment banking
18 firms or other institutions or persons in the United States
19 having the power to enter the same:
20 (1) To purchase or underwrite an issue or series of
21 issues of notes.
22 (2) To credit, to enter into any purchase, loan or
23 credit agreements, draw moneys pursuant to any such
24 agreements on the terms and conditions set forth therein, and
25 to issue notes as evidence of borrowings made under any such
26 agreements.
27 (3) To appoint as issuing and paying agent or agents
28 with respect to notes.
29 (4) To do such other acts as may be necessary or
30 appropriate to provide for the payment when due, of the
19840S1432B2111 - 9 -
1 interest on and the principal of such notes.
2 Such agreements may provide for the compensation of any
3 purchasers or underwriters of notes or replacement notes, by
4 discounting the purchase price of the notes or by payment of a
5 fixed fee or commission at the time of issuance thereof, and all
6 other costs and expenses, including fees for agreements related
7 to the notes, issuing and paying agent costs and costs and
8 expenses of issuance may be paid from the proceeds of the notes.
9 (d) Duty of State Treasurer.--When the authorization and
10 direction of the issuing officials provide for the issuance of
11 replacement notes, the State Treasurer shall, at or prior to the
12 time of delivery of these notes or replacement notes, determine
13 the principal amounts, dates of issue, interest rate or rates
14 (or procedures for establishing such rates from time to time),
15 rates of discount, denominations and all other terms and
16 conditions relating to the issuance and shall perform all acts
17 and things necessary to pay or cause to be paid when due, all
18 principal of and interest on the notes being refunded by
19 replacement notes, and to assure that the same may draw upon any
20 moneys available for the purpose pursuant to any purchase, loan
21 or credit agreements established with respect thereto, all
22 subject to the authorization and direction of the issuing
23 officials.
24 (e) Funding and retirement.--Outstanding notes evidencing
25 such borrowings may be funded and retired by the issuance and
26 sale of the bonds of the Commonwealth as hereinafter authorized.
27 The refunding bonds must be issued and sold not later than a
28 date three years after the date of issuance of the first notes
29 evidencing such borrowings to the extent that payment of such
30 notes has not otherwise been made or provided for by sources
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1 other than proceeds of replacement notes.
2 (f) Proceeds.--The proceeds of all such temporary borrowing
3 shall be paid to the State Treasurer to be held and disposed of
4 in accordance with the provisions of section 7.
5 Section 7. Debt retirement.
6 (a) Pennsylvania Economic Revitalization Sinking Fund.--All
7 bonds issued under the authority of this act shall be redeemed
8 at maturity and all interest due, from time to time, on the
9 bonds shall be paid from the Pennsylvania Economic
10 Revitalization Sinking Fund which is hereby created. For the
11 specific purpose of redeeming the bonds at maturity and paying
12 all interest thereon in accordance with the information received
13 from the Governor, the General Assembly shall appropriate moneys
14 to the Pennsylvania Economic Revitalization Sinking Fund for the
15 payment of interest on the bonds and notes and the principal
16 thereof at maturity. All moneys paid into the Pennsylvania
17 Economic Revitalization Sinking Fund and all of the moneys not
18 necessary to pay accruing interest shall be invested by the
19 State Treasurer in such securities as are provided by law for
20 the investment of the sinking funds of the Commonwealth.
21 (b) Purchase of bonds.--In the event that all or any part of
22 the bonds and notes are purchased, they shall be canceled and
23 returned to the loan and transfer agent as canceled and paid
24 bonds and notes and thereafter all payments of interest thereon
25 shall cease and the canceled bonds, notes and coupons together
26 with any other canceled bonds, notes and coupons shall be
27 destroyed as promptly as possible after cancellation but not
28 later than two years after cancellation. A certificate
29 evidencing the destruction of the canceled bonds, notes and
30 coupons shall be provided by the loan and transfer agent to the
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1 issuing officials. All canceled bonds, notes and coupons shall
2 be so marked as to make the canceled bonds, notes and coupons
3 nonnegotiable.
4 (c) Reporting requirements.--The State Treasurer shall
5 determine and report to the Secretary of the Budget by November
6 of each year the amount of money necessary for the payment of
7 interest on outstanding obligations and the principal of the
8 obligations, if any, for the following fiscal year and the times
9 and amounts of the payments. It shall be the duty of the
10 Governor to include in every budget submitted to the General
11 Assembly full information relating to the issuance of bonds and
12 notes under the provisions of this act and the status of the
13 Pennsylvania Economic Revitalization Sinking Fund of the
14 Commonwealth for the payment of interest on the bonds and notes
15 and the principal thereof at maturity.
16 (d) Debt service appropriations.--The General Assembly shall
17 appropriate an amount equal to such sums as may be necessary to
18 meet repayment obligations for principal and interest for
19 deposit into the Pennsylvania Economic Revitalization Sinking
20 Fund.
21 (e) Interest rate on loans.--Except for the Pennsylvania
22 Capital Loan Fund, the rate of interest on any loan made
23 pursuant to this act be less than the rate of interest paid by
24 the Commonwealth on the general obligation bonds or notes issued
25 pursuant to this act from which funds were obtained for the loan
26 except when that rate of interest would exceed the maximum
27 permissible rate of interest under the Internal Revenue Code of
28 1954 and the regulations promulgated thereunder so as to cause
29 the general obligation bonds issued pursuant to this act to be
30 deemed arbitrage bonds pursuant to section 103(c) of the
19840S1432B2111 - 12 -
1 Internal Revenue Code of 1954 and the regulation promulgated
2 thereunder. In such case, the rate of interest on a loan shall
3 be equal to the maximum rate of interest calculable under the
4 Internal Revenue Code of 1954 and regulations promulgated
5 thereunder which will not cause the general obligation bonds and
6 notes issued pursuant to this act to be deemed arbitrage bonds
7 under the provisions of section 103(c) of the Internal Revenue
8 Code of 1954 and all regulations promulgated thereunder. In the
9 case of loans initially funded from the proceeds of notes and
10 subsequently funded from renewal bonds and notes, the interest
11 rate to be charged on the loans shall be established in
12 accordance with this subsection upon the sale of bonds or notes,
13 as the case may be, for the loans.
14 Section 8. Disposition and use of proceeds.
15 (a) Deposit of sale proceeds.--The proceeds realized from
16 the sale of bonds and notes, under this act, other than
17 refunding bonds and replacement notes, shall be paid to the
18 State Treasurer and deposited into the Pennsylvania Economic
19 Revitalization Fund and are specifically dedicated to the
20 purposes enumerated in the act of February 24, 1984 (P.L.99,
21 No.19), known as "An act authorizing the indebtedness, with the
22 approval of the electors, of $190,000,000 to promote economic
23 redevelopment throughout Pennsylvania through job producing
24 programs; grants and loans for industrial and small business
25 development; acquisition of equipment for vocational programs in
26 secondary schools, community colleges and engineering degree-
27 granting schools; agricultural development; and the acquisition,
28 rehabilitation or development of facilities for community
29 services and public recreation purposes," and as the General
30 Assembly shall, by law, provide.
19840S1432B2111 - 13 -
1 (b) Other funds.--All non-Federal funds which may become
2 available for the purposes of this act shall be deposited in the
3 Pennsylvania Economic Revitalization Fund. Such funds, together
4 with the proceeds realized from the sale of bonds and notes, are
5 hereby appropriated from the Pennsylvania Economic
6 Revitalization Fund and, upon approval by the Governor, shall be
7 allocated for the purposes of this act.
8 (c) Proceeds of refunding or replacement bonds or notes.--
9 The proceeds of the sale of refunding bonds and replacement
10 notes are hereby appropriated to the State Treasurer and shall
11 be applied to the payment of principal of, the accrued interest
12 and premium, if any, and costs of redemption of the bonds and
13 notes for which such obligations have been issued.
14 Section 9. Repeals.
15 All acts and parts of acts are repealed insofar as they are
16 inconsistent with this act.
17 Section 10. Effective date.
18 This act shall take effect immediately.
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