PRINTER'S NO. 1458
No. 1276 Session of 1987
INTRODUCED BY SWEET, FLICK, GAMBLE, LaGROTTA, TIGUE, HAYDEN,
LLOYD, McHALE, KUKOVICH, SHOWERS, BELFANTI, BALDWIN, DALEY,
PICCOLA, RYBAK, PISTELLA, DeLUCA, TRELLO, BUNT, LESCOVITZ,
E. Z. TAYLOR, BATTISTO, LEVDANSKY, LIVENGOOD, VAN HORNE,
CAPPABIANCA, MORRIS, JOSEPHS, RAYMOND, SEMMEL, MELIO, BARLEY,
LUCYK, VEON, PETRARCA, MERRY, RITTER, JOHNSON, MICHLOVIC AND
BELARDI, MAY 4, 1987
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, MAY 4, 1987
AN ACT
1 Amending the act of May 2, 1945 (P.L.382, No.164), entitled "An
2 act providing for the incorporation as bodies corporate and
3 politic of 'Authorities' for municipalities, counties and
4 townships; prescribing the rights, powers and duties of such
5 Authorities heretofore or hereafter incorporated; authorizing
6 such Authorities to acquire, construct, improve, maintain and
7 operate projects, and to borrow money and issue bonds
8 therefor; providing for the payment of such bonds, and
9 prescribing the rights of the holders thereof; conferring the
10 right of eminent domain on such Authorities; authorizing such
11 Authorities to enter into contracts with and to accept grants
12 from the Federal Government or any agency thereof; and
13 conferring exclusive jurisdiction on certain courts over
14 rates," further defining "local government unit" and "provide
15 financing for insurance reserves"; and providing for
16 financing of insurance reserves.
17 The General Assembly of the Commonwealth of Pennsylvania
18 hereby enacts as follows:
19 Section 1. Section 2(j) of the act of May 2, 1945 (P.L.382,
20 No.164), known as the Municipality Authorities Act of 1945,
21 amended July 10, 1981 (P.L.221, No.70), is amended and the
22 section is amended by adding definitions to read:
1 Section 2. Definitions.--The following terms whenever used
2 or referred to in this act shall have the following meanings,
3 except in those instances where the context clearly indicates
4 otherwise:
5 * * *
6 (j) The term "project" shall mean equipment to be leased by
7 an Authority to the municipality or municipalities that
8 organized it or to any municipality or school district located
9 wholly or partially within the boundaries of the municipality or
10 municipalities that organized it, or any structure, facility or
11 undertaking which an Authority is authorized to acquire,
12 construct, improve, maintain or operate, or provide financing
13 for insurance reserves under the provisions of this act.
14 * * *
15 (n) The term "local government unit" shall have the same
16 meaning as that provided in section 102(c)(10) of the act of
17 July 12, 1972 (P.L.781, No.185), known as the "Local Government
18 Unit Debt Act."
19 (o) The term "provide financing for insurance reserves"
20 shall mean the lending of funds to a local government unit or
21 any authority for the purpose of funding of all, or any portion
22 of, a reserve, or a contribution toward a combined reserve, pool
23 or other arrangement, relating to self-insurance, which has been
24 established by one or more local government units, pursuant to
25 42 Pa.C.S. § 8564 (relating to liability insurance and self-
26 insurance) up to, but not exceeding, the amount provided in
27 section 107 of the "Local Government Unit Debt Act."
28 Section 2. The introductory paragraph of clause (a) and
29 clause (b) of subsection A of section 4 of the act, amended
30 December 21, 1984 (P.L.1246, No.236), are amended to read:
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1 Section 4. Purposes and Powers; General.--A. Every
2 Authority incorporated under this act shall be a body corporate
3 and politic, and shall be for the purpose of acquiring, holding,
4 constructing, improving, maintaining, and operating, owning,
5 leasing, either in the capacity of lessor or lessee, projects of
6 the following kind and character and providing financing for
7 insurance reserves.
8 (a) The Authority shall be for the purpose of acquiring,
9 holding, constructing, improving, maintaining and operating,
10 owning, leasing, either in the capacity of lessor or lessee,
11 projects of the following kind and character and providing
12 financing for insurance reserves:
13 * * *
14 (b) This section is subject to the following limitations:
15 (1) An Authority created by a school district or school
16 districts shall have the power only to acquire, hold, construct,
17 improve, maintain, operate and lease public school buildings and
18 other school projects acquired, constructed or improved for
19 public school purposes.
20 (2) The purpose and intent of this act being to benefit the
21 people of the Commonwealth by, among other things, increasing
22 their commerce, health, safety and prosperity, and not to
23 unnecessarily burden or interfere with existing business by the
24 establishment of competitive enterprises, none of the powers
25 granted by this act shall be exercised in the construction,
26 improvement, maintenance, extension or operation of any project
27 or projects or providing financing for insurance reserves which
28 in whole or in part shall duplicate or compete with existing
29 enterprises serving substantially the same purposes. This
30 limitation shall not apply to the exercise of the powers granted
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1 hereunder:
2 (i) for facilities and equipment for the collection, removal
3 or disposal of ashes, garbage, rubbish and other refuse
4 materials by incineration, land fill or other methods, if each
5 municipality organizing or intending to use the facilities of an
6 Authority having such powers shall declare by resolution or
7 ordinance that it is desirable for the health and safety of the
8 people of such municipality that it use the facilities of the
9 Authority, and if any contract between such municipality and any
10 other person, firm or corporation for the collection, removal or
11 disposal of ashes, garbage, rubbish and other refuse material
12 has by its terms expired or is terminable at the option of the
13 municipality or will expire within six months from the date such
14 ordinance becomes effective; nor
15 (ii) for industrial development projects if the Authority
16 does not develop industrial projects which will compete with
17 existing industries; nor
18 (iii) for Authorities created for the purpose of providing
19 business improvements and administrative services if each
20 municipality organizing an Authority for such a project shall
21 declare by resolution or ordinance that it is desirable for the
22 entire municipality to improve the business district; nor
23 (iv) to hospital projects to be leased to public hospitals
24 or nonprofit hospital corporations serving the public or to
25 school building projects and facilities to be leased to private,
26 nonprofit, nonsectarian colleges and universities, State-related
27 universities and community colleges, or to facilities, limited
28 as described above, to produce steam or to generate electric
29 power, if each municipality organizing an Authority for such a
30 project shall declare by resolution or ordinance that it is
19870H1276B1458 - 4 -
1 desirable for the health, safety and welfare of the people in
2 the area served by such facilities to have such facilities
3 provided by an Authority[.]; nor
4 (v) to provide financing for insurance reserves, if each
5 municipality or Authority intending to use any proceeds thereof
6 shall declare by resolution or ordinance that it is desirable
7 for the health, safety and welfare of the people in such
8 municipality or served by such Authority.
9 * * *
10 Section 3. Subsection B of section 4 of the act is amended
11 by adding a clause to read:
12 Section 4. Purposes and Powers; General.--* * *
13 B. Every Authority is hereby granted, and shall have and may
14 exercise all powers necessary or convenient for the carrying out
15 of the aforesaid purposes, including but without limiting the
16 generality of the foregoing, the following rights and powers:
17 * * *
18 (y) To provide financing for insurance reserves by making
19 loans, which may be evidenced by, and secured as may be provided
20 in, loan agreements, security agreements or any other
21 instruments or agreements, which instruments or agreements may
22 contain such provisions as the Authority shall deem necessary or
23 desirable for the security or protection of the Authority or its
24 bondholders.
25 * * *
26 Section 4. Subsections B and C of section 5 of the act are
27 amended to read:
28 Section 5. Purposes and Powers; Bonds.--* * *
29 B. Any resolution or resolutions authorizing any bonds may
30 contain provisions which shall be part of the contract with the
19870H1276B1458 - 5 -
1 holders thereof, as to (a) pledging the full faith and credit of
2 the Authority (but not of the Commonwealth of Pennsylvania or
3 any political subdivision thereof) for such obligations, or
4 restricting the same to all or any of the revenues of the
5 Authority from all or any projects or properties, (b) the
6 construction, improvement, operation, extension, enlargement,
7 maintenance and repair of the project, and providing financing
8 for insurance reserves and the duties of the Authority with
9 reference thereto, (c) the terms and provisions of the bonds,
10 (d) limitations on the purposes to which the proceeds of the
11 bonds then or thereafter to be issued, or of any loan or grant
12 by the United States may be applied, (e) the rate of tolls and
13 other charges for use of the facilities of or for the services
14 rendered by the Authority, (f) the setting aside of reserves or
15 sinking funds and the regulation and disposition thereof, (g)
16 limitations on the issuance of additional bonds, (h) the terms
17 and provisions of any deed of trust or indenture securing the
18 bonds, or under which the same may be issued, and (i) any other
19 or additional agreements with the holders of the bonds.
20 C. Any Authority may enter into any deeds of trust,
21 indentures or other agreements, with any bank or trust company,
22 or other person or persons in the United States having power to
23 enter into the same, including any Federal agency, as security
24 for such bonds, and may assign and pledge all or any of the
25 revenues or receipts of the Authority thereunder. Such deed of
26 trust, indenture or other agreement, may contain such provisions
27 as may be customary in such instruments, or as the Authority may
28 authorize, including (but without limitation) provisions as to
29 (1) the construction, improvement, operation, maintenance and
30 repair of any project, and providing financing for insurance
19870H1276B1458 - 6 -
1 reserves and the duties of the Authority with reference thereto,
2 (2) the application of funds and the safeguarding of funds on
3 hand or on deposit, (3) the rights and remedies of said trustee
4 and the holders of the bonds, (which may include restrictions
5 upon the individual right of action of such bondholders) and (4)
6 the terms and provisions of the bonds or the resolutions
7 authorizing the issuance of the same.
8 Said bonds shall have all the qualities of negotiable
9 instruments under the law merchant and the negotiable
10 instruments law of the Commonwealth of Pennsylvania.
11 Section 5. This act shall take effect in 60 days.
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