PRIOR PRINTER'S NOS. 1241, 1648, 1859, PRINTER'S NO. 2918
2393, 2779
No. 1100 Session of 1987
Report of the Committee of Conference
To the Members of the House of Representatives and Senate:
We, the undersigned, Committee of Conference on the part of
the House of Representatives and Senate for the purpose of
considering House Bill No. 1100, entitled:
"An act Providing for the establishment, implementation and
administration of the Pennsylvania Infrastructure Investment
Authority; imposing powers and duties on a board of trustees;
transferring the rights, powers, duties and obligations of the
Water Facilities Loan Board to the Pennsylvania Infrastructure
Investment Authority; providing for the issuance of notes and
bonds; providing for financial assistance and for a
comprehensive water facilities plan; and making repeals,"
respectfully submit the following bill as our report:
MAX PIEVSKY
JAMES J. MANDERINO
JOSEPH A. LASHINGER, JR.
(Committee on the part of the House of Representatives.)
F. JOSEPH LOEPER
D. MICHAEL FISHER
J. WILLIAM LINCOLN
(Committee on the part of the Senate.)
AN ACT
1 Providing for the establishment, implementation and
2 administration of the Pennsylvania Infrastructure Investment
3 Authority; imposing powers and duties on a board of trustees;
4 transferring the rights, powers, duties and obligations of
5 the Water Facilities Loan Board to the Pennsylvania
6 Infrastructure Investment Authority; providing for the
7 issuance of notes and bonds; providing for financial
8 assistance and for a comprehensive water facilities plan;
9 authorizing a referendum to incur indebtedness; making an
10 appropriation; and making repeals.
11 TABLE OF CONTENTS
12 Section 1. Short title.
13 Section 2. Legislative intent.
14 Section 3. Definitions.
15 Section 4. Pennsylvania Infrastructure Investment Authority;
16 board of directors.
17 Section 5. Revenues of authority.
18 Section 6. Powers and duties of authority.
19 Section 7. Specific power to issue bonds.
20 Section 8. Covenants and express conditions on obligations.
21 Section 9. Nature and effect of pledges.
22 Section 10. Financial assistance.
23 Section 11. Comprehensive water facilities plan.
24 Section 12. Audits.
25 Section 13. Annual report.
26 Section 14. Expedited approval of rate relief.
27 Section 15. Transfer of Water Facilities Loan Board.
28 Section 16. Referendum.
29 Section 17. Bonds.
30 Section 18. Appropriation.
31 Section 19. Severability.
32 Section 20. Repeals.
33 Section 21. Effective date.
1 The General Assembly of the Commonwealth of Pennsylvania
2 hereby enacts as follows:
3 Section 1. Short title.
4 This act shall be known and may be cited as the Pennsylvania
5 Infrastructure Investment Authority Act.
6 Section 2. Legislative intent.
7 The General Assembly finds and declares that:
8 (1) The health of millions of citizens of this
9 Commonwealth is at risk due to substandard and deteriorated
10 water supply and sewage disposal systems.
11 (2) Many water and sewage systems in this Commonwealth
12 are aging, outmoded, inadequate, deteriorating and operating
13 above capacity, and many areas have to limit their growth
14 solely due to lack of proper water supply and sewage
15 disposal.
16 (3) The economic revitalization of this Commonwealth is
17 being stifled by a lack of clean water and adequate sewage
18 facilities.
19 (4) Financing of water and sewage projects at affordable
20 cost is not currently available in many areas of this
21 Commonwealth.
22 (5) In order to assist in financing projects to protect
23 the health and safety of the citizens of this Commonwealth
24 and to promote the economic development of Pennsylvania, the
25 General Assembly has determined that it is necessary to
26 establish the Pennsylvania Infrastructure Investment
27 Authority and to provide funding of the authority programs.
28 Section 3. Definitions.
29 The following words and phrases when used in this act shall
30 have the meanings given to them in this section unless the
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1 context clearly indicates otherwise:
2 "Authority." The Pennsylvania Infrastructure Investment
3 Authority.
4 "Board." The board of directors of the authority.
5 "Bonds." Bonds, notes or other evidences of indebtedness
6 issued by the authority pursuant to this act.
7 "Department." The Department of Environmental Resources of
8 the Commonwealth.
9 "Eligible cost." The cost of all labor, materials, machinery
10 and equipment, lands, property, rights and easements, plans and
11 specifications, surveys or estimates of costs and revenues, pre-
12 feasibility studies, engineering and legal services, and all
13 other expenses necessary or incident to the acquisition,
14 construction, improvement, expansion, extension, repair or
15 rehabilitation of all or part of a project.
16 "Governmental unit." Any agency of the Commonwealth or any
17 county, municipality or school district, or any agency,
18 instrumentality, authority or corporation thereof, or any public
19 body having local or regional jurisdiction or power.
20 "Project." The eligible costs associated with the
21 acquisition, construction, improvement, expansion, extension,
22 repair or rehabilitation of all or part of any facility or
23 system, whether publicly or privately owned, for the collection,
24 treatment or disposal of wastewater, including industrial waste,
25 or for the supply, treatment, storage or distribution of
26 drinking water.
27 "Secretary." The Secretary of Environmental Resources of the
28 Commonwealth.
29 "Water Facilities Loan Board." The board established under
30 32 Pa.C.S. § 7504 (relating to Water Facilities Loan Board).
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1 Section 4. Pennsylvania Infrastructure Investment Authority;
2 board of directors.
3 (a) Establishment.--There is hereby established a body
4 corporate and politic, with corporate succession, to be known as
5 the Pennsylvania Infrastructure Investment Authority. The
6 authority is constituted an instrumentality of the Commonwealth,
7 and the exercise by the authority of the powers conferred by
8 this act shall be deemed and held to be a public and essential
9 governmental function.
10 (b) Membership.--The authority shall consist of a 13-member
11 board of directors composed of the Governor; the Secretary of
12 Environmental Resources; the Secretary of Commerce; the
13 Secretary of Community Affairs; the Secretary of General
14 Services; the Secretary of the Budget; two Senators, one each to
15 be appointed by the President pro tempore of the Senate and the
16 Minority Leader of the Senate; two members of the House of
17 Representatives, one each to be appointed by the Speaker of the
18 House of Representatives and the Minority Leader of the House of
19 Representatives; and three persons to be appointed by the
20 Governor, one of whom shall be a registered engineer in this
21 Commonwealth, one of whom shall be a representative of water
22 supply and sewage treatment system industries, and one of whom
23 shall be a representative of a State local government
24 association. The three members appointed by the Governor shall
25 serve for a term of two years and shall be eligible for
26 reappointment.
27 (c) Officers.--The Governor shall be the chairman and chief
28 executive officer of the authority. The board shall biannually
29 elect a vice-chairman. The board shall select a secretary and
30 treasurer who need not be members of the board, and the same
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1 person may be selected to serve as both secretary and treasurer.
2 (d) Vesting of powers.--The powers of the authority shall be
3 vested in the board in office from time to time, and eight
4 members of the board shall constitute a quorum at any meeting.
5 Action may be taken and motions and resolutions adopted by the
6 authority by the affirmative vote of at least seven members of
7 the board. No vacancy on the board shall impair the right of a
8 quorum of the members of the board to exercise the powers and
9 perform the duties of the authority.
10 (e) Designees.--Each public officer member of the board may
11 designate an officer or employee of the Commonwealth to
12 represent him at meetings of the board. Each designee may
13 lawfully vote and otherwise act on behalf of the member of the
14 board for whom he constitutes the designee. The designation
15 shall be in writing delivered to the authority and shall
16 continue in effect until revoked or amended in writing delivered
17 to the authority.
18 (f) Services.--Research, investigation and other services
19 necessary for the operation of the board shall be carried out
20 from resources and by employees from the various executive
21 departments represented on the board. All applicable
22 Commonwealth departments and agencies shall cooperate with, and
23 provide assistance to, the board, which may, at its discretion,
24 provide financial reimbursement.
25 (g) Dissolution.--The authority may be dissolved by law,
26 provided that the authority has no bonds or other debts or
27 obligations outstanding or that provision has been made for the
28 payment or retirement of all such bonds, debts and obligations.
29 Upon any dissolution of the authority, all property, funds and
30 assets of the authority shall be vested in the Commonwealth.
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1 Section 5. Revenues of authority.
2 (a) Sources of revenues.--The authority may receive money
3 from sources of revenue, including, but not limited to, the
4 following:
5 (1) State funds appropriated to the authority.
6 (2) Federal funds appropriated to or granted to the
7 authority.
8 (3) Proceeds from the sale of bonds of the authority
9 authorized under section 7.
10 (4) Proceeds from the sale of bonds issued on or after
11 the effective date of this act from the remaining unused
12 authorization in addition to any other funds that remain
13 unencumbered on the effective date of this act from the act
14 of July 12, 1981 (P.L.263, No.88), entitled "An act
15 authorizing the incurring of indebtedness, with approval of
16 the electors, of $300,000,000 for the repair, construction,
17 reconstruction, rehabilitation, extension and improvement of
18 community water supply systems, and for the repair,
19 reconstruction or rehabilitation of flood control facilities,
20 dams and port facilities and providing the allotment of
21 proceeds from borrowing hereunder," approved by the
22 electorate on November 3, 1981.
23 (5) Proceeds from the sale of bonds not to exceed a
24 total sum of $150,000,000 issued for site development under
25 the provisions of Article XVI-B of the act of April 9, 1929
26 (P.L.343, No.176), known as The Fiscal Code. This paragraph
27 shall expire on December 31, 1989, except that the board may
28 fund projects approved prior to December 31, 1989.
29 (6) Proceeds from the sale of any Commonwealth general
30 obligation bonds issued under sections 16 and 17.
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1 (7) Proceeds from the sale of authority assets.
2 (8) Repayment of loan principal.
3 (9) Payment of interest on loans made by the authority.
4 (10) Interest earned on the investments of authority
5 moneys.
6 (b) Control of revenues; investment of funds.--The board
7 shall have exclusive control and management of all moneys of the
8 authority and full power to invest moneys not required for
9 immediate use in any securities or other investments in which
10 funds of the Commonwealth are authorized to be invested and in
11 any other type of security or investment if, prior to the
12 acquisition of the securities or investments, the board
13 determines by resolution that such type of security or
14 investment is in the best interests of the authority and the
15 State Treasurer approves of such type of security or other
16 investment.
17 (c) General fund and other separate funds or accounts.--
18 (1) The board shall establish a general fund from which
19 it may authorize expenditures for any of the purposes of this
20 act.
21 (2) The board shall establish a Water Pollution Control
22 Revolving Fund administered in accordance with the
23 requirements of section 212 of the Water Quality Act of 1987
24 (Public Law 100-4, 101 Stat. 21), and may establish such
25 other separate revolving funds and accounts when determined
26 by the board to be necessary or convenient. The board may
27 deposit no more than $375,000,000 in funds and accounts
28 established under this paragraph from the sources specified
29 in subsection (a)(4), (5) and (6). This limitation shall not
30 apply to any Federal funds.
19870H1100B2918 - 7 -
1 (3) The board may also establish such nonrevolving funds
2 and accounts as it deems necessary or convenient. Any funds
3 from sources specified in subsection (a)(4), (5) and (6)
4 which are not deposited in the board's revolving funds and
5 accounts shall be deposited into these nonrevolving funds and
6 accounts.
7 (d) Loan repayment.--Subject to any agreement with the
8 holders of bonds, repayments of loan principal, together with
9 any interest thereon, shall be deposited with the authority.
10 Repayments from loans made from revolving funds and accounts may
11 be deposited in such funds and accounts as the board shall
12 determine. Repayments from other loans shall be deposited in
13 nonrevolving funds and accounts for the purpose of repayment of
14 general obligation bonds of the Commonwealth issued under the
15 authority of this act. Loans made by the Water Facilities Loan
16 Board prior to the effective date of this act and repayment of
17 the principal of and interest on those loans shall be controlled
18 by the provisions of Title 32 of the Pennsylvania Consolidated
19 Statutes (relating to forests, waters and State parks) and the
20 regulations promulgated thereunder. The board shall maintain
21 such separate funds and accounts as may be necessary for the
22 deposit of payments made under authority or requirement of State
23 or Federal law.
24 Section 6. Powers and duties of authority.
25 The authority shall have and may exercise all powers
26 necessary or appropriate to carry out and effectuate the
27 purposes of this act, including, but not limited to, the
28 following:
29 (1) Conduct examinations and investigations and take
30 testimony, under oath or affirmation, on any matter necessary
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1 to the determination and approval of project applications.
2 (2) Sue and be sued, implead and be impleaded, complain
3 and defend in all courts.
4 (3) Adopt, use and alter at will a corporate seal.
5 (4) (i) Make bylaws for the management and regulation
6 of its affairs, and make and, from time to time, adopt,
7 amend and repeal rules and regulations governing the
8 administrative procedures and business of the authority.
9 (ii) Notwithstanding (i), and in order to facilitate
10 the speedy implementation of this program, the board
11 shall have the power and authority to promulgate, adopt
12 and use guidelines which shall be published in the
13 Pennsylvania Bulletin. The guidelines shall be subject to
14 review pursuant to section 205 of the act of October 15,
15 1980 (P.L.950, No.164), known as the Commonwealth
16 Attorneys Act, and shall not be subject to review
17 pursuant to the act of June 25, 1982 (P.L.633, No.181),
18 known as the Regulatory Review Act, and shall be
19 effective for a period not to exceed one year from the
20 effective date of this chapter.
21 (iii) After the expiration of the one-year period,
22 all guidelines shall expire and shall be replaced by
23 regulations which shall have been promulgated, adopted
24 and published as provided by law.
25 (5) Make contracts of every name and nature and execute
26 all instruments necessary or convenient for the carrying on
27 of its business.
28 (6) Accept grants from and enter into contracts or other
29 transactions with any Federal, State or local agency.
30 (7) Take title by foreclosure or otherwise to any
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1 project or other property pledged, mortgaged, encumbered or
2 otherwise available as security for a project financed in
3 whole or in part by the board, whether by loan, loan
4 guarantee or otherwise, where such acquisition is necessary
5 to protect the interests of the board with respect to a
6 project; pay all costs arising out of such acquisition from
7 moneys held in the trust fund; and sell, transfer and convey
8 all or any portion of any such project to any responsible
9 buyer. The board may require a dedicated source of revenue to
10 be available for repayment of any loan.
11 (8) Provide financial assistance, including, but not
12 limited to, loans, loan guarantees, bond guarantees and
13 grants for projects fulfilling the purposes of this act.
14 (9) Collect fees and charges relating to projects funded
15 under this act, as the board determines to be reasonable,
16 relating to activities undertaken in furtherance of the
17 purposes of this act.
18 (10) Borrow money and issue bonds and provide for the
19 right of holders thereof in accordance with the provisions of
20 this act.
21 (11) Pledge, hypothecate or otherwise encumber all or
22 any of the revenues or receipts of the authority as security
23 for all or any of the bonds of the authority.
24 (12) Receive appropriations and apply for and accept
25 grants, gifts, donations, bequests and settlements from any
26 public or private source.
27 (13) Acquire, own, hold, construct, improve,
28 rehabilitate, renovate, operate, maintain, sell, assign,
29 exchange, lease, mortgage or otherwise dispose of real and
30 personal property or any interest therein in the exercise of
19870H1100B2918 - 10 -
1 its powers and the performance of its duties under this act.
2 (14) Procure insurance against any loss in connection
3 with its property and other assets and operations in any
4 amounts and from any insurers as it deems desirable.
5 (15) Contract for the services of attorneys, accountants
6 and financial experts and any other advisors, consultants and
7 agents as may be necessary in its judgment, subject to the
8 requirement that the chairman shall ensure that minority-
9 owned or minority-controlled firms shall have an opportunity
10 to participate to a significant degree in the provision of
11 any contractual services purchased by the authority.
12 (16) Subject to any agreement with holders of its bonds,
13 notes or other obligations, purchase bonds, notes and other
14 obligations of the authority.
15 (17) Subject to any agreement with holders of its bonds,
16 notes or other obligations, obtain as security for payment of
17 all or any part of the principal of and interest and premium
18 on the bonds, notes and other obligations of the authority,
19 lines of credit and letters of credit in any amounts and upon
20 any terms as the authority may determine, and pay any fees
21 and expenses required in connection therewith.
22 (18) Do any act necessary or convenient to the exercise
23 of the powers enumerated in this section or reasonably
24 implied therefrom.
25 (19) Serve as the Water Facilities Loan Board to satisfy
26 any outstanding bond obligation and loan liabilities.
27 (20) Assume all the rights, powers, duties, obligations
28 and liabilities of the Water Facilities Loan Board.
29 (21) Repay the General Fund any or all debt service due
30 to be paid in any fiscal year from bonds used to fund
19870H1100B2918 - 11 -
1 projects under this act.
2 (22) Prepare plans and reports and provide for public
3 participation as deemed appropriate.
4 (23) Fund prefeasibility studies from any of its sources
5 of revenue.
6 Section 7. Specific power to issue bonds.
7 (a) Principal amounts.--The authority may issue its bonds,
8 notes or other obligations in principal amounts as in the
9 judgment of the authority shall be necessary to provide
10 sufficient funds for any of its corporate purposes. Corporate
11 purposes shall be deemed to include:
12 (1) The payment, funding or refunding of the principal
13 of, or interest or redemption premiums on, any bonds issued
14 by it, whether the bonds to be funded or refunded have or
15 have not become due.
16 (2) The establishment or increase of reserves to secure
17 or to pay the bonds or interest thereon.
18 (3) All other costs or expenses of the authority
19 incident to and necessary to carry out its corporate purposes
20 and powers.
21 (b) Negotiable instrument designation.--Whether or not the
22 bonds are of a form and character as to be negotiable
23 instruments under the terms of Title 13 of the Pennsylvania
24 Consolidated Statutes (relating to commercial code), the bonds
25 are made negotiable instruments within the meaning of and for
26 the purposes of Title 13, subject only to the provisions of the
27 bonds for registration.
28 (c) Resolution; terms of bonds.--Bonds shall be authorized
29 by resolution of the board, may be issued in one or more series
30 and shall bear any date or dates, mature at any time or times
19870H1100B2918 - 12 -
1 not later than 35 years from the date of issuance thereof, bear
2 interest at any rate or rates or at variable rates, be in any
3 denomination or denominations, be in any form, either coupon or
4 registered, carry any conversion or registration privileges,
5 have any rank or priority, be executed in any manner, be payable
6 from such sources in any medium of payment at any place or
7 places within or without this Commonwealth, and be subject to
8 any terms of redemption, purchase or tender by the authority or
9 the holders thereof, with or without premium, as the resolution
10 or resolutions may provide. A resolution of the authority
11 authorizing the issuance of bonds may provide that the bonds be
12 secured by a trust indenture between the authority and a
13 trustee, vesting in the trustee any property, rights, powers and
14 duties in trust consistent with the provisions of this act as
15 the authority may determine. Such resolution may further provide
16 for the acquisition of credit enhancement devices such as bond
17 insurance, letters of credit or any other instruments to carry
18 out the provisions of this section.
19 (d) Public or private sale.--Bonds shall be sold initially
20 at public sale at any price or prices and in any manner as the
21 authority may determine, subject to the requirement that the
22 chairman shall ensure that minority-owned or minority-controlled
23 firms shall have an opportunity to participate to a significant
24 degree in any bond sale activities. Any portion of any bond
25 issue so offered and not sold or subscribed for may be disposed
26 of by private sale by the authority in such manner and at such
27 prices as the authority shall direct.
28 (e) No prior preconditions on bond issuance.--Bonds may be
29 issued under the provisions of this act without obtaining the
30 consent of any department, division, board, bureau or agency of
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1 the Commonwealth and without any other proceeding or the
2 happening of any other conditions or other things than those
3 proceedings, conditions or things which are specifically
4 required by this act.
5 (f) Limitation on obligations.--Bonds issued under the
6 provisions of this act shall not be a debt or liability of the
7 Commonwealth or of any of its political subdivisions other than
8 the authority and shall not create or constitute any
9 indebtedness, liability or obligation of the Commonwealth or of
10 any political subdivision. All bonds shall be payable solely
11 from revenues or funds pledged or available for their payment as
12 authorized in this act, including the proceeds of any issue of
13 bonds. Each bond shall contain on its face a statement to the
14 effect that the authority is obligated to pay the principal
15 thereof or the interest thereon only from its revenues, receipts
16 or funds pledged or available for their payment as authorized in
17 this act, that neither the Commonwealth nor any political
18 subdivisions are obligated to pay the principal or interest, and
19 that neither the faith and credit nor the taxing power of the
20 Commonwealth or any political subdivision is pledged to the
21 payment of the principal of or the interest on the bonds.
22 (g) Nature of obligation and payment.--Each issue of bonds
23 may, if it is determined by the authority, be general
24 obligations of the authority payable out of any revenues,
25 receipts or funds of the authority, or special obligations
26 payable out of particular revenues, receipts or funds, subject
27 only to agreements with the holders of the bonds. Bonds may be
28 secured by one or more of the following:
29 (1) Pledges of revenues and other receipts to be derived
30 from the payment of the interest on and any principal of
19870H1100B2918 - 14 -
1 notes and bonds issued by one or more governmental units and
2 purchased by the authority, and any other payment made to the
3 authority pursuant to agreements with any governmental unit
4 or a pledge or assignment of any notes and bonds of any
5 governmental units, and the rights and interests of the
6 authority therein.
7 (2) Pledges of loan payments, rentals, other revenues to
8 be derived from loan agreements, leases or other contractual
9 arrangements with any person or entity, public or private, or
10 a pledge or assignment of any such loan agreements, leases or
11 other contractual arrangements, and the rights and interests
12 of the authority therein.
13 (3) Pledges of grants, subsidies, contributions,
14 appropriations or other payments to be received from the
15 Federal Government or any instrumentality thereof or from the
16 Commonwealth, any Commonwealth agency or other governmental
17 unit.
18 (4) Pledges of all moneys, funds, accounts, securities
19 and other funds, including the proceeds of the bonds.
20 (5) Mortgages and security interests covering all or
21 part of any project or other property of any person or
22 entity, real or personal, then owned or thereafter to be
23 acquired, or a pledge or assignment of mortgages and security
24 interests made or granted to the authority by any person or
25 entity, and the rights and interests of the authority
26 therein.
27 (h) Exemption from taxation.--All bonds and notes issued
28 under the provisions of this section shall be exempt from
29 taxation for State and local purposes.
30 Section 8. Covenants and express conditions on obligations.
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1 In any resolution of the authority authorizing or relating to
2 the issuance of bonds, the authority, in order to secure payment
3 of the bonds, and, in addition to its other powers, may, by
4 provisions in the resolution which shall constitute covenants by
5 the authority and contracts with the holders of the bonds, do
6 the following:
7 (1) Secure the bonds.
8 (2) Make covenants against pledging all or part of its
9 revenues or receipts to other parties.
10 (3) Make covenants limiting its right to sell, pledge or
11 otherwise dispose of notes and bonds of governmental units,
12 loan agreements of public or private persons or entities, or
13 other property of any kind.
14 (4) Make covenants as to additional bonds to be issued,
15 the limitations thereon, the terms and conditions thereof,
16 and the custody, application, investment and disposition of
17 the proceeds thereof.
18 (5) Make covenants as to the incurring of other debts by
19 it.
20 (6) Make covenants as to the payment of principal of or
21 interest on bonds, the sources and methods of the payment,
22 the rank or priority of bonds with respect to liens or
23 security interests or the acceleration of maturity of bonds.
24 (7) Provide for replacement of lost, stolen, destroyed
25 or mutilated bonds.
26 (8) Make covenants as to the redemption, purchase or
27 tender of bonds by the authority, or the holders thereof, and
28 the privileges of exchanging them for other bonds.
29 (9) Make covenants to create or authorize the creation
30 of special funds or accounts to be held in trust or otherwise
19870H1100B2918 - 16 -
1 for the benefit of holders of bonds, or of reserves for other
2 purposes and as to the use, investment and disposition of
3 moneys held in those funds, accounts or reserves.
4 (10) Provide for the rights, liabilities, powers and
5 duties arising upon the breach of a covenant, condition or
6 obligation and prescribe the events of default and the terms
7 and conditions upon which any or all of the bonds shall
8 become or may be declared due and payable before maturity and
9 the terms and conditions upon which the declaration and its
10 consequences may be waived.
11 (11) Vest in a trustee or trustees within or without
12 this Commonwealth in trust any property, rights, powers and
13 duties as the authority may determine. These may include any
14 or all of the rights, powers and duties of any trustee
15 appointed by the holders of bonds or notes, including rights
16 with respect to the sale or other disposition of notes and
17 bonds of governmental units and other instruments and
18 security pledged pursuant to a resolution or trust indenture
19 for the benefit of the holders of bonds and the right, by
20 suit or action, to foreclose any mortgage pledged pursuant to
21 the resolution of trust indenture for the benefit of the
22 holders of the bonds, notes or other obligations, and to
23 limit the right of the holders of any bonds to appoint a
24 trustee under this act and to limit the rights, powers and
25 duties of the trustee.
26 (12) Pay the costs or expenses incident to the
27 enforcement of the bonds or the provisions of the resolution
28 authorizing the issuance of those bonds, or the trust
29 indenture securing the bonds or any covenant or agreement of
30 the authority with the holders of the bonds, notes or other
19870H1100B2918 - 17 -
1 obligations.
2 (13) Limit the rights of the holders of any bonds to
3 enforce any pledge or covenant securing bonds.
4 (14) Make covenants other than or in addition to the
5 covenants authorized by this act of like or different
6 character and make covenants to do or refrain from doing any
7 acts and things as may be necessary, or convenient and
8 desirable, in order to better secure bonds or which, in the
9 absolute discretion of the authority, will tend to make bonds
10 more marketable, notwithstanding that the covenants, acts or
11 things may not be enumerated herein.
12 Section 9. Nature and effect of pledges.
13 A pledge of revenues, receipts, moneys, funds or other
14 property or instruments made by the authority shall be valid and
15 binding from the time when the pledge is made. The revenues,
16 receipts, moneys, funds or other property pledged and thereafter
17 received by the authority shall be immediately subject to the
18 lien of the pledge without its physical delivery or further act,
19 and the lien of any pledge shall be valid and binding as against
20 all parties having claims of any kind in tort, contract or
21 otherwise against the authority irrespective of whether the
22 parties have notice of the lien. Neither the resolution nor any
23 other instrument by which a pledge under this section is created
24 or evidenced need be filed or recorded except in the records of
25 the authority.
26 Section 10. Financial assistance.
27 (a) Criteria for obtaining assistance.--In reviewing
28 applications for financial assistance, the authority shall
29 consider:
30 (1) Whether the project will improve the health, safety,
19870H1100B2918 - 18 -
1 welfare or economic well-being of the people of this
2 Commonwealth.
3 (2) Whether the proposed project will lead to an
4 effective or complete solution to the problems experienced
5 with the water supply or sewage treatment system to be aided,
6 including compliance with State and Federal laws, regulations
7 or standards.
8 (3) The cost-effectiveness of the proposed project in
9 comparison with other alternatives, including other
10 institutional, financial and physical alternatives.
11 (4) The consistency of the proposed project with other
12 State and regional resource management and economic
13 development plans.
14 (5) Whether the applicant has demonstrated its ability
15 to operate and maintain the project in a proper manner.
16 (6) Whether the project encourages consolidation of
17 water or sewer systems, where such consolidation would enable
18 the customers of the systems to be more effectively and
19 efficiently served.
20 (7) The availability of other sources of funds at
21 reasonable rates to finance all or a portion of the project
22 and the need for authority assistance to finance the project
23 or to attract the other sources of funding.
24 (b) Financing priorities.--In assigning priorities for
25 projects, the board shall consult with the Department of
26 Commerce and the department. In addition to any requirements of
27 Federal law imposed on the use of Federal funds, the board shall
28 determine priorities based on factors which include, but are not
29 limited to:
30 (1) Benefits to public health.
19870H1100B2918 - 19 -
1 (2) The contribution to and impact of the project on
2 economic development as well as social and environmental
3 values.
4 (3) Benefits to public safety or welfare.
5 (4) Improvement in the ability of an applicant to come
6 into compliance with State and Federal statutes, regulations
7 and standards.
8 (5) Improvement in the adequacy or efficiency of the
9 water supply or sewage treatment system.
10 (6) The cost-effectiveness of the project.
11 (7) Whether the governmental unit to be served by a
12 sewage treatment system is subject to construction or
13 connection limitations issued by the department and the date
14 that any such limitation was issued.
15 (8) Whether the project encourages consolidation of
16 water or sewer systems, where such consolidation would enable
17 the customers of the systems to be more effectively and
18 efficiently served.
19 (c) Decision of board.--Establishment of priority for
20 financial assistance under subsection (b) shall not be deemed to
21 be a final action under 2 Pa.C.S. (relating to administrative
22 law and procedure), nor shall it confer a right or duty upon the
23 board or any other person. A decision as to an applicant's
24 eligibility under subsection (a) may be appealed pursuant to 2
25 Pa.C.S., but the priority assigned the project may not be raised
26 in that appeal.
27 (d) Small projects.--The board shall establish a program of
28 assistance to water supply and sewage disposal systems serving
29 communities with a population of 12,000 people, or less, or
30 systems having hookups of 1,000 or less.
19870H1100B2918 - 20 -
1 (e) Grants.--Grants shall be made only when the board, in
2 its sole discretion, determines that the financial condition of
3 the recipient is such that repayment of a loan is unlikely and
4 that the recipient will not be able to proceed with the project
5 without a grant. In considering grant applications, the
6 authority may recommend, either before or after the
7 determination of the board, that the recipient pursue other
8 State grant programs, including, but not limited to, the Site
9 Development program, the Federal Small Communities Block Grant
10 program and the Federal Urban Development Action Grant program.
11 Should the board determine that a grant is necessary from the
12 authority, the board shall attempt to mix the grant funds with
13 loan funds, if financially possible.
14 (f) Loans.--Subject to any agreements with the holders of
15 bonds, the board shall have the power to set terms applicable to
16 loans in any manner it deems appropriate, subject to the
17 provisions of this subsection. The board may consider such
18 factors as it deems relevant, including current market interest
19 rates, the financial and economic distress of the area which the
20 project serves, and the necessity to maintain the authority
21 funds in a financially sound manner. Loans may be made based on
22 the ability to repay the loan from future revenue to be derived
23 from the project, by a mortgage or other property lien, or on
24 any other fiscal matters which the authority deems appropriate.
25 The board shall have the power to defer principal on loans for
26 up to five years. In the event of a default on the repayment of
27 a loan, the board may apply to the court of common pleas of the
28 county where the project is located for the appointment of a
29 receiver to assume operation and supervision of the facility
30 under the supervision of the court. The minimum rate of interest
19870H1100B2918 - 21 -
1 to be paid on any loan made pursuant to this act shall be 1%.
2 The maximum rate of interest shall not exceed the following:
3 (1) For projects in counties whose unemployment rate
4 exceeds the Statewide unemployment rate by 40% or more, 1%
5 for the first five years and 25% of the bond issue rate for
6 the remainder of the loan.
7 (2) For projects in counties whose unemployment rate
8 exceeds the Statewide unemployment rate, but exceeds it by
9 less than 40%, 30% of the bond issue rate for the first five
10 years and 60% of the bond issue rate for the remainder of the
11 loan.
12 (3) For all other projects, 60% of the bond issue rate
13 for the first five years and 75% of the bond issue rate for
14 the remainder of the loan.
15 (4) For projects located within municipalities for which
16 unemployment rates exist which would qualify the project for
17 lower interest rates than if the relevant county unemployment
18 rate were used, the unemployment rate of that municipality
19 may be used in determining the interest rate on the loan.
20 For purposes of this subsection, the phrase "unemployment rate
21 of the county" shall mean the average unemployment rate for the
22 county in the most recent calendar year for which data has been
23 finalized. For the projects which serve multiple counties, the
24 highest unemployment rate of the counties involved shall be
25 used. The unemployment data utilized shall be data reported by
26 the Department of Labor and Industry. For purposes of this
27 subsection, the phrase "bond interest rate" shall be the rate of
28 interest paid by the Commonwealth immediately preceding the date
29 of the loan for the bonds issued under sections 16 and 17.
30 (g) Limitation on annual assistance.--The amount of
19870H1100B2918 - 22 -
1 assistance approved by the board under subsection (e) shall not
2 in any fiscal year exceed the amount of interest earnings, State
3 appropriations and any funds received specifically for grants
4 which are deposited into the accounts of the authority. This
5 limitation shall not apply to projects funded prior to January
6 1, 1989, but the total amount of assistance under subsection (e)
7 prior to January 1, 1989, shall not exceed $15,000,000,
8 excluding moneys specifically appropriated by the General
9 Assembly for grants.
10 (h) Other assistance.--The board shall provide by regulation
11 for the use of other methods of financial assistance, including,
12 but not limited to, bond and loan guarantees, and purchase or
13 insurance of bonds if the board deems this to be an appropriate
14 method to accomplish the purposes of this act.
15 (i) Limitation.--The provisions of other law
16 notwithstanding, all projects eligible for assistance under this
17 act shall be determined to be site development projects as
18 referenced in the act of April 9, 1929 (P.L.343, No.176), known
19 as The Fiscal Code. In no case shall total assistance to any
20 single project total more than $11,000,000, or $20,000,000 if a
21 project serves more than one municipality, except that the board
22 by a vote of at least nine members may authorize loans in excess
23 of $20,000,000 to comprehensive projects providing or proposing
24 consolidated service to a region encompassing all or parts of
25 four or more municipalities.
26 (j) Continuing education of operators.--No agreement with
27 individuals or entities shall be valid in the absence of an
28 agreement by the individuals or entities seeking assistance
29 under this act to assure that the system operators are
30 participating or will participate in continuing education
19870H1100B2918 - 23 -
1 programs developed by the Department of Environmental Resources.
2 If the board determines that the system operator of a system
3 receiving assistance is not participating in continuing
4 education programs, the board shall take all steps necessary to
5 cease all financial assistance and recover all prior payments,
6 including, but not limited to, the immediate repayment of any
7 outstanding loans and interest and any grants.
8 (k) Inspection of project and records.--
9 (1) The applicant shall allow the authority and its
10 successors, agents and representatives the right, at all
11 reasonable times during construction and after completion of
12 the project, to enter upon and inspect the project and to
13 examine and make copies of the applicant's books, records,
14 accounting data and other documents pertaining to the project
15 and the financial condition of the applicant.
16 (2) The applicant may be required by the board or its
17 agent to have prepared independent audits of its financial
18 documents and conditions and submit a certified copy of the
19 audits to the board.
20 (l) Financial analysis.--The financial analysis used by the
21 board to determine the need of all applicants for financial
22 assistance shall include, but not be limited to, the following:
23 (1) Fair and reasonable costs of wastewater treatment or
24 of supplying drinking water incurred by comparable systems.
25 (2) The incomes of affected ratepayers and their ability
26 to pay increased rates necessary to complete the proposed
27 projects.
28 (3) Other sources of financing available to individuals
29 or entities seeking assistance under this act.
30 (4) A determination that any financial assistance
19870H1100B2918 - 24 -
1 provided by this act will not be used to supplant financial
2 resources already available to the applicant.
3 (m) Refinancing limitation.--Financial assistance shall not
4 be available under this act for refinancing of any project
5 except that the Water Pollution Control Revolving Fund may be
6 used to the extent authorized by the Water Quality Act of 1987
7 (Public Law 100-4, 101 Stat. 7) for projects commenced after
8 March 7, 1985.
9 (n) Steel procurement.--Every application shall contain a
10 certification that the applicant shall, in every contract for
11 the acquisition, repair, construction, reconstruction,
12 rehabilitation, extension, expansion, improvement, alteration or
13 maintenance of any water supply or sewage treatment system,
14 comply with the provisions of the act of March 3, 1978 (P.L.6,
15 No.3), known as the Steel Products Procurement Act.
16 Section 11. Comprehensive water facilities plan.
17 Not later than December 31, 1990, the department shall submit
18 to the authority a comprehensive plan for wastewater disposal
19 and piped drinking water facilities in this Commonwealth. In
20 preparing the plan, the department shall consult with county
21 commissioners, multicounty planning agencies and other
22 applicable local officials and agencies. The plan should
23 include, but not be limited to:
24 (1) An inventory of the existing facilities located
25 within this Commonwealth, including, but not limited to,
26 identification of the type, capacity, location, current
27 condition and year constructed.
28 (2) An inventory of drinking water and sewage
29 construction needs.
30 (3) Identification of the major issues and problems that
19870H1100B2918 - 25 -
1 the Commonwealth must deal with in order to address its water
2 infrastructure needs, including financial as well as
3 nonfinancial issues.
4 (4) Recommendations for programs to encourage the
5 construction of drinking water and sewage treatment
6 facilities. This may include innovative financing mechanisms,
7 alternative technology and ownership structures, and
8 technical assistance.
9 (5) Identification of emerging issues, trends and
10 problems that might affect these facilities.
11 The plan shall be updated at least every five years. The board
12 shall consider the plan as a guide when evaluating applications
13 considered for approval after the completion of the plan.
14 Section 12. Audits.
15 The accounts and books of the authority, including its
16 receipts, disbursements, contracts, mortgages, investments and
17 other matters relating to its finances, operation and affairs,
18 shall be examined and audited by the Auditor General.
19 Section 13. Annual report.
20 The board shall provide the General Assembly with an annual
21 report detailing all projects funded under section 10 of this
22 act.
23 Section 14. Expedited approval of rate relief.
24 For the limited and special purpose of ensuring repayment of
25 principal and interest on loans made pursuant to this act, the
26 Pennsylvania Public Utility Commission shall approve such
27 security issues, affiliated interest agreements and rate
28 increase requests by applicants that are regulated utilities as
29 are necessary and appropriate. For this purpose, the
30 Pennsylvania Public Utility Commission shall establish such
19870H1100B2918 - 26 -
1 expedited practices, procedures and policies as necessary to
2 facilitate and accomplish repayment of the loans. Nothing in
3 this act shall be construed as to require approval of rate
4 increases greater than that necessary to accomplish the
5 repayment of loans made pursuant to this act.
6 Section 15. Transfer of Water Facilities Loan Board.
7 (a) Removal of members.--All existing members of the Water
8 Facilities Loan Board shall cease to hold office on the day that
9 the Governor certifies by publication in the Pennsylvania
10 Bulletin the existence of a quorum on the board created under
11 section 4.
12 (b) Board of directors to serve as Water Facilities Loan
13 Board.--For purposes of satisfying all outstanding obligations
14 of the Water Facilities Loan Board and for purposes of
15 collecting loan and interest repayments, the board established
16 in section 4 shall constitute the membership of the Water
17 Facilities Loan Board.
18 (c) Transfer of function.--All remaining unencumbered funds,
19 rights, powers, duties, obligations, liabilities, records and
20 equipment of the Water Facilities Loan Board are transferred to
21 the authority.
22 Section 16. Referendum.
23 (a) General rule.--Pursuant to the provisions of section
24 7(a)(3) of Article VIII of the Constitution of Pennsylvania, the
25 question of incurring indebtedness of $300,000,000 for loans for
26 the acquisition, repair, construction, reconstruction,
27 rehabilitation, extension, expansion and improvement of water
28 supply and sewage treatment systems, subject to implementation
29 through this act, shall be submitted to the electors at the next
30 primary, municipal or general election following the effective
19870H1100B2918 - 27 -
1 date of this act.
2 (b) Certification.--The Secretary of the Commonwealth shall
3 forthwith certify the question to the county boards of
4 elections.
5 (c) Form of question.--The question shall be in
6 substantially the following form:
7 Do you favor the incurring of indebtedness by the
8 Commonwealth of $300,000,000 for use as loans to acquire,
9 repair, construct, reconstruct, rehabilitate, extend,
10 expand and improve water supply and sewage treatment
11 systems?
12 Section 17. Bonds.
13 (a) Issuance of general obligation bonds.--As evidence of
14 the indebtedness if authorized under section 16, general
15 obligation bonds of the Commonwealth shall be issued from time
16 to time to fund and retire notes issued pursuant to section 16
17 to carry out the purposes of this act, or both, for such total
18 amounts, in such form, in such denominations and subject to such
19 terms and conditions of issue, redemption and maturity, rate of
20 interest and time of payment of interest as the issuing
21 officials direct except that the latest stated maturity date
22 shall not exceed 30 years from the date of the debt first issued
23 for each series.
24 (b) Execution of bonds.--All bonds and notes issued under
25 the authority of section 16 shall bear facsimile signatures of
26 the issuing officials and a facsimile of the great seal of the
27 Commonwealth and shall be countersigned by a duly authorized
28 loan and transfer agent of the Commonwealth.
29 (c) Direct obligation of Commonwealth.--All bonds and notes
30 issued in accordance with section 16 shall be direct obligations
19870H1100B2918 - 28 -
1 of the Commonwealth, and the full faith and credit of the
2 Commonwealth are hereby pledged for the payment of the interest
3 thereon as it becomes due and the payment of the principal at
4 maturity. The principal of and interest on the bonds and notes
5 shall be payable in lawful money of the United States of
6 America.
7 (d) 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.
10 (e) Form of bonds.--The bonds may be issued as coupon bonds
11 or registered as to both principal and interest as the issuing
12 officials may determine. If interest coupons are attached, they
13 shall contain the facsimile signature of the State Treasurer.
14 (f) Bond amortization.--The issuing officials shall provide
15 for the amortization of the bonds in substantial and regular
16 amounts over the term of the debt. The first retirement of
17 principal shall be stated to mature prior to the expiration of a
18 period of time equal to one-tenth of the time from the date of
19 the first obligation issued to evidence the debt to the date of
20 the expiration of the term of the debt. Retirements of principal
21 shall be regular and substantial if made in annual or semiannual
22 amounts, whether by stated serial maturities or by mandatory
23 sinking fund retirements.
24 (g) Refunding bonds.--The issuing officials are authorized
25 to provide, by resolution, for the issuance of refunding bonds
26 for the purpose of refunding any bonds issued under this section
27 and then outstanding, either by voluntary exchange with the
28 holders of the outstanding bonds, or to provide funds to redeem
29 and retire the outstanding bonds with accrued interest, any
30 premium payable thereon and the costs of issuance and retirement
19870H1100B2918 - 29 -
1 of bonds, at maturity or at any call date. The issuance of the
2 refunding bonds, the maturities and other details thereof, the
3 rights of the holders thereof and the duties of the issuing
4 officials in respect to the same shall be governed by the
5 provisions of this section, insofar as they may be applicable.
6 Refunding bonds may be issued by the issuing officials to refund
7 bonds originally issued or to refund bonds previously issued for
8 refunding purposes.
9 (h) Quorum.--Whenever any action is to be taken or decision
10 made by the Governor, the Auditor General and the State
11 Treasurer acting as issuing officials and the three officers are
12 not able unanimously to agree, the action or decision of the
13 Governor and either the Auditor General or State Treasurer shall
14 be binding and final.
15 (i) Public sale.--Whenever bonds are issued, they shall be
16 offered for sale at not less than 98% of the principal amount
17 and accrued interest and shall be sold by the issuing officials
18 to the highest and best bidder or bidders after due public
19 advertisement on such terms and conditions and upon such open
20 competitive bidding as the issuing officials shall direct. The
21 manner and character of the advertisement and the time of
22 advertising shall be prescribed by the issuing officials.
23 (j) Private sale.--Any portion of any bond issue so offered
24 and not sold or subscribed for may be disposed of by private
25 sale by the issuing officials in such manner and at such prices,
26 not less than 98% of the principal amount and accrued interest,
27 as the issuing officials shall direct. No commission shall be
28 allowed or paid for the sale of any bonds issued under the
29 authority of this section.
30 (k) Bond series.--When bonds are issued from time to time,
19870H1100B2918 - 30 -
1 the bonds of each issue shall constitute a separate series to be
2 designated by the issuing officials or may be combined for sale
3 as one series with other general obligation bonds of the
4 Commonwealth.
5 (l) Temporary bonds.--Until permanent bonds can be prepared,
6 the issuing officials may in their discretion issue, in lieu of
7 permanent bonds, temporary bonds in such form and with such
8 privileges as to registration and exchange for permanent bonds
9 as may be determined by the issuing officials.
10 (m) Disposition and use of proceeds.--The proceeds realized
11 from the sale of bonds and notes, except funding bonds,
12 refunding bonds and renewal notes, under the provisions of this
13 section are specifically dedicated to the purposes of the
14 referendum to be implemented by this act and shall be paid into
15 the special funds established in the State Treasury in such
16 amounts as may be specified by the board pursuant to section
17 5(c). The proceeds shall be paid by the State Treasurer
18 periodically to the board to expend them at such times and in
19 such amounts as may be necessary to satisfy the funding needs of
20 the board. The proceeds of the sale of funding bonds, refunding
21 bonds and renewal notes shall be paid to the State Treasurer and
22 applied to the payment of principal, the accrued interest and
23 premium, if any, and costs of redemption of the bonds and notes
24 for which such obligations shall have been issued.
25 (n) Investment of funds.--Pending their application to the
26 purposes authorized, moneys held or deposited by the State
27 Treasurer may be invested or reinvested as are other funds in
28 the custody of the State Treasurer in the manner provided by
29 law. All earnings received from the investment or deposit of
30 such funds shall be paid into the State Treasury to the credit
19870H1100B2918 - 31 -
1 of the funds established by the board in section 5(c) in such
2 amounts as may be specified by the board pursuant to that
3 section.
4 (o) Registration of bonds.--The Auditor General shall
5 prepare the necessary registry book to be kept in the office of
6 the duly authorized loan and transfer agent of the Commonwealth
7 for the registration of any bonds, at the request of owners
8 thereof, according to the terms and conditions of issue directed
9 by the issuing officials.
10 (p) Expenses of preparation for issue and sale of bonds and
11 notes.--There is hereby appropriated to the State Treasurer from
12 the proceeds of the bonds and notes issued as much money as may
13 be necessary for all costs and expenses in connection with the
14 issue of and sale and registration of the bonds and notes in
15 connection with this act.
16 Section 18. Appropriations.
17 (a) Appropriation.--The sum of $500,000, or as much thereof
18 as may be necessary, is hereby appropriated from the General
19 Fund to the Pennsylvania Infrastructure Investment Authority as
20 a continuing appropriation to carry out the provisions of this
21 act. This appropriation shall lapse June 30, 1989.
22 (b) Continuing appropriation.--The General Assembly hereby
23 appropriates on a continuing basis to the Authority funds as
24 authorized by section 5 of this act in order to carry out the
25 purposes of this act, including the payment of the
26 administrative expenses of the authority.
27 Section 19. Severability.
28 The provisions of this act are severable. If any provision of
29 this act or its application to any person or circumstance is
30 held invalid, the invalidity shall not affect other provisions
19870H1100B2918 - 32 -
1 or applications of this act which can be given effect without
2 the invalid provision or application.
3 Section 20. Repeals.
4 (a) Absolute.--On the date that the Governor certifies by
5 publication in the Pennsylvania Bulletin the existence of a
6 quorum on the board created under section 4 of this act, the
7 following acts or parts of acts are repealed:
8 The definitions of "community water supply system,"
9 "department," "flood control facility," "port facility,"
10 "project" and "water facility" in section 7502 and sections
11 7503, 7504(b), (d) and (e), 7506, 7510, 7511, 7512, 7513, 7514,
12 7515 and 7516 of Title 32 of the Pennsylvania Consolidated
13 Statutes (relating to forests, waters and State parks).
14 (b) Limited.--The following acts or parts of acts are
15 repealed:
16 (1) Any project itemized in a capital budget which was
17 funded by current revenues without the use of bond
18 obligations.
19 (2) Sections 1, 1.1, 2 and 3 of the act of August 20,
20 1953 (P.L.1217, No.339), entitled "An act providing for
21 payments by the Commonwealth to municipalities which have
22 expended money to acquire and construct sewage treatment
23 plants in accordance with the Clean Streams Program and the
24 act, approved the twenty-second day of June, one thousand
25 nine hundred thirty-seven (Pamphlet Laws 1987), and making an
26 appropriation," as applied to projects funded under the
27 provisions of this act.
28 (c) Inconsistent.--All other acts and parts of acts are
29 repealed insofar as they are inconsistent with this act.
30 Section 21. Effective date.
19870H1100B2918 - 33 -
1 This act shall take effect immediately.
D15L64RZ/19870H1100B2918 - 34 -