PRINTER'S NO. 2430
No. 1973 Session of 1995
INTRODUCED BY NICKOL, SEPTEMBER 1, 1995
REFERRED TO COMMITTEE ON FINANCE, SEPTEMBER 1, 1995
AN ACT
1 Amending the act of July 12, 1972 (P.L.781, No.185), entitled,
2 as amended, "An act providing debt limits for local
3 government units, including municipalities and school
4 districts; providing the methods of incurring, evidencing,
5 securing and collecting debt; defining the powers and duties
6 of the Department of Community Affairs and certain other
7 public officers and agencies with respect thereto; exercising
8 the inherent legislative authority of the General Assembly by
9 providing additional over-all limitations on the incurring of
10 lease rental and other obligations for the acquisition of
11 capital assets to be repaid from the general tax revenues of
12 such local government units; imposing penalties for filing
13 false or untrue statements or refusing to give information
14 with respect to proceedings for the incurring of debt; and
15 conferring jurisdiction on the Commonwealth Court with
16 respect to certain proceedings relating to the incurring of
17 debt," further providing for the authorization to pledge the
18 proceeds of certain bonds or notes.
19 The General Assembly of the Commonwealth of Pennsylvania
20 hereby enacts as follows:
21 Section 1. Section 417 of the act of July 12, 1972 (P.L.781,
22 No.185), known as the Local Government Unit Debt Act, reenacted
23 and amended April 28, 1978 (P.L.124, No.52), added December 28,
24 1994 (P.L.1436, No.169), is amended to read:
25 [Section 417. Pledge of Proceeds of Certain Bonds or Notes
1 Authorized.--A local government unit may pledge to the holders
2 of its bonds or notes issued to fund an unfunded actuarial
3 accrued liability or to a trustee or paying agent acting on
4 behalf of the holders, as security for the payment of the bonds
5 or notes, the proceeds of such bonds or notes, and investment
6 income on such proceeds, notwithstanding that such proceeds have
7 become assets of the local government unit's retirement system,
8 pension plan or pension trust fund. The pledge shall be valid
9 and binding from the time the pledge is made, and the lien of
10 the pledge is valid and binding as against all persons having
11 claims of any kind in tort, contract or otherwise against the
12 local government unit or the retirement system, pension plan or
13 pension trust fund, whether or not the persons have notice.
14 Except as provided in section 416, neither the proceedings of
15 the local government unit relating to the bonds or notes nor any
16 other instrument by which a pledge is made nor any financing
17 statement in respect thereof need be recorded or filed. The
18 local government unit shall cause the proceeds of bonds or
19 notes, and investment earnings thereon, that are subject to the
20 pledge to be segregated from other assets of the retirement
21 system, pension plan or pension trust fund so that such proceeds
22 will be identifiable.]
23 Section 2. This act shall take effect immediately.
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