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                                                       PRINTER'S NO. 186

THE GENERAL ASSEMBLY OF PENNSYLVANIA


SENATE BILL

No. 10 Session of 1999


        INTRODUCED BY JUBELIRER, LOEPER AND MELLOW, JANUARY 22, 1999

        REFERRED TO FINANCE, JANUARY 22, 1999

                                     AN ACT

     1  Providing for borrowing for capital facilities; conferring
     2     powers and duties on various administrative agencies and
     3     officers; making appropriations; and making repeals.

     4                         TABLE OF CONTENTS
     5  Section 1.  Short title.
     6  Section 2.  Definitions.
     7  Section 3.  Procedures for capital budget bill and debt
     8                 authorizing legislation.
     9  Section 4.  Certificates of the Auditor General.
    10  Section 5.  Constitutional limitations, authorizations,
    11                 issuing officials.
    12  Section 6.  Temporary financing authorizing.
    13  Section 7.  Bonds, issue of bonds and notes, maturity,
    14                 interest.
    15  Section 8.  Direct obligations, exemptions from taxation,
    16                 means of payment.
    17  Section 9.  Sale of bonds.
    18  Section 10.  Disposition and use of proceeds.


     1  Section 11.  Capital Debt Fund; investments; redemption of
     2                 bonds.
     3  Section 12.  Funding bonds.
     4  Section 13.  Reporting requirements.
     5  Section 14.  Registration of bonds.
     6  Section 15.  Voting requirements.
     7  Section 16.  Appropriation.
     8  Section 17.  Appropriation for and limitation on redevelopment
     9                 assistance capital projects.
    10  Section 18.  Funding and administration of redevelopment
    11                 assistance capital projects.
    12  Section 19.  Repeals.
    13  Section 20.  Recodification.
    14  Section 21.  Effective date.
    15     The General Assembly of the Commonwealth of Pennsylvania
    16  hereby enacts as follows:
    17  Section 1.  Short title.
    18     This act shall be known and may be cited as the Capital
    19  Facilities Debt Enabling Act.
    20  Section 2.  Definitions.
    21     The following words and phrases when used in this act shall
    22  have the meanings given to them in this section unless the
    23  context clearly indicates otherwise:
    24     "Acquisition cost."  Includes the cost of acquiring:
    25         (1)  buildings;
    26         (2)  structures;
    27         (3)  facilities;
    28         (4)  property, real, personal or mixed, tangible or
    29     intangible; or
    30         (5)  any other interest;
    19990S0010B0186                  - 2 -

     1  necessary or desirable in connection with a capital project,
     2  whether the acquisition be by purchase or by condemnation,
     3  including the amount of an award or final judgment in a
     4  proceeding to acquire by condemnation lands, rights-of-way,
     5  rights-of-slope, property rights, franchises, easements or other
     6  interests as deemed necessary or convenient in connection with
     7  the acquisition or construction of a project, and costs of
     8  options and partial payments on and under options.
     9     "Capital project."  Includes all of the following:
    10         (1)  Any:
    11             (i) building, structure, facility or physical public
    12         betterment or improvement;
    13             (ii) land or rights in land;
    14             (iii)  furnishings, machinery, apparatus or
    15         equipment, for a public betterment or improvement; or
    16             (iv)  undertaking to construct, repair, renovate,
    17         improve, equip, furnish or acquire any of the items
    18         listed in subparagraphs (i) through (iii): provided that
    19         the project is designated in a capital budget as a
    20         capital project; has an estimated useful life in excess
    21         of five years; and has an estimated financial cost in
    22         excess of $100,000, excluding original equipment and
    23         furnishings for previously authorized public improvement
    24         projects.
    25         (2)  A project to be financed by the incurring of debt.
    26     Projects under this paragraph are categorized as:
    27             (i)  Community college projects.
    28             (ii)  Flood control projects.
    29             (iii)  Highway projects.
    30             (iv)  Other capital projects.
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     1             (v)  PIDA projects.
     2             (vi)  Public improvement projects.
     3             (vii)  Redevelopment assistance projects.
     4             (viii)  Site development projects.
     5             (ix)  Transportation assistance projects.
     6     "Commonwealth agency or authority."  Excludes an agency or
     7  authority organized by action of a political subdivision.
     8     "Community college projects."  Include projects for a
     9  community college of a type which the State Public School
    10  Building Authority is authorized to undertake under the
    11  provisions of the act of July 5, 1947 (P.L.1217, No.498), known
    12  as the State Public School Building Authority Act, to the extent
    13  that obligations issued to finance these projects are debt
    14  within the meaning of this act.
    15     "Construction cost."  Includes obligations incurred:
    16         (1)  for labor and to contractors, builders and
    17     materialmen in connection with the construction, fabrication
    18     or assembly of a capital project;
    19         (2)  for machinery and equipment required for
    20     construction under paragraph (1);
    21         (3) for the restoration of property damaged or destroyed
    22     in connection with construction under paragraph (1); and
    23         (4)  for the payment of damages incurred by others
    24     incident to or consequent upon construction under paragraph
    25     (1), which the Commonwealth or its agency or authority is
    26     under legal obligation to pay or desires to pay in settlement
    27     of a disputed claim of liability.
    28     "Debt"  The issued and outstanding obligations of the
    29  Commonwealth incurred without a vote of the electorate or
    30  incurred with such vote under a law making such debt subject to
    19990S0010B0186                  - 4 -

     1  the provisions of section 7(a)(4) of Article VIII of the
     2  Constitution of Pennsylvania. The term includes obligations of
     3  Commonwealth agencies and authorities to the extent that such
     4  obligations are to be repaid from lease rentals or other charges
     5  payable directly or indirectly from revenues of the
     6  Commonwealth. The term does not include:
     7         (1)  that portion of debt which is to be repaid from
     8     charges made to the public for the use of the capital
     9     projects financed, as such portion of debt may be determined
    10     by the Auditor General;
    11         (2)  obligations to be repaid from lease rentals or other
    12     charges payable by a school district or other local taxing
    13     authority; or
    14         (3)  obligations to be repaid by agencies or authorities
    15     created for the joint benefit of the Commonwealth and one or
    16     more other state governments.
    17     "Financial cost."  Includes acquisition cost and construction
    18  cost, where applicable, and an allocated portion of all of the
    19  following:
    20         (1)  Fees, expenses and costs of issuing obligations the
    21     proceeds of which are used to finance the project.
    22         (2)  Fees, expenses and costs of issuing and selling
    23     notes or replacement notes issued under this act.
    24         (3)  Establishing and maintaining any purchase, loan or
    25     credit agreements in connection with an issue or series of
    26     issues of notes, and the fees and expenses of any fiscal or
    27     loan and transfer agent and bond counsel incurred in
    28     connection with the issue of the obligations.
    29         (4)  Premiums on insurance in connection with a project
    30     during construction.
    19990S0010B0186                  - 5 -

     1         (5)  Taxes and other municipal or governmental charges,
     2     lawfully levied or assessed during construction.
     3         (6)  Fees and expenses of architects, engineers and other
     4     professionals for:
     5             (i)  making preliminary studies, reports or estimates
     6         of costs;
     7             (ii)  preparing plans and specifications and
     8         inspecting and reviewing the progress of construction;
     9         and
    10             (iii)  obtaining abstracts of title, title insurance
    11         or title opinions.
    12         (7)  Costs and expenses of preliminary investigations,
    13     preplanning, surveys and reports to determine the proper
    14     scope, feasibility and probable costs of capital projects to
    15     be included in future capital budgets.
    16         (8)  Costs of administration, including the salaries and
    17     expenses of administrators, reviewing architects and
    18     engineers, construction inspectors, accountants and legal
    19     counsel of the Commonwealth and its agencies or authorities,
    20     incurred for the proper planning and supervision of the
    21     capital projects program.
    22     "Flood control projects."  Include projects of the type which
    23  the Water and Power Resources Board is authorized to construct,
    24  improve, equip, maintain, acquire or operate under the
    25  provisions of the act of August 7, 1936 (1st Sp.Sess., P.L.106,
    26  No.46), referred to as the Flood Control Law.
    27     "Fund."  Excludes any fund, or account in a fund, established
    28  by this act.
    29     "Funding bonds."  General obligation bonds used to provide
    30  funds for and towards the payment of outstanding notes or to
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     1  refund other outstanding bonds prior to or at or after the
     2  stated maturity date of the bonds being refunded or of the notes
     3  being funded.
     4     "Highway projects."  Include projects of a type which the
     5  Department of Transportation is authorized to construct,
     6  improve, equip, maintain, acquire or operate.
     7     "Issuing officials."  The Governor, the Auditor General and
     8  the State Treasurer.
     9     "Net debt."
    10         (1)  The aggregate principal amount of all debt; plus
    11         (2)   the amount of any past due and unpaid interest on
    12     that debt; minus
    13         (3)  all funds held exclusively for the payment of that
    14     principal and past due interest.
    15  Neither accrued but not yet past due interest nor funds held for
    16  the payment of the interest next falling due, up to the amount
    17  of such interest, shall be included in such computations.
    18     "Notes."  Include temporary obligations and replacement notes
    19  issued by the Commonwealth pursuant to this act in anticipation
    20  of bonds.
    21     "Obligations."  Notes or bonds of the Commonwealth, its
    22  agencies or authorities, issued pursuant to any debt authorizing
    23  act.
    24     "Other capital projects."  Only that undertaking to equip and
    25  furnish those public improvement projects which are specifically
    26  enumerated under the heading of "Other Capital Projects" in
    27  section 3(d) of the act of July 20, 1968 (P.L.560, No.218),
    28  known as the Capital Budget Act for the 1968-1969 Fiscal Year.
    29  Upon final completion of the undertakings authorized by section
    30  3(d) of that act, no equipment or furnishing undertaking or any
    19990S0010B0186                  - 7 -

     1  other undertaking or project shall be listed in any capital
     2  budget act for the fiscal year 1969-1970 or any fiscal year
     3  thereafter under the heading of "Other Capital Projects"; but if
     4  the undertaking or project comes within the meaning of a capital
     5  project, it shall be listed in future capital budget acts as a
     6  capital project under one of the categories enumerated in
     7  paragraph (2) of the definition of "capital project."
     8     "PIDA projects."  Include projects of the type which the
     9  Pennsylvania Industrial Development Authority is authorized to
    10  finance under the provisions of the act of May 17, 1956 (1955
    11  P.L.1609, No.537), known as the Pennsylvania Industrial
    12  Development Authority Act.
    13     "Public improvement projects."  Include projects of a type
    14  which the General State Authority is authorized to construct,
    15  improve, equip, furnish, maintain, acquire or operate under the
    16  provisions of the act of March 31, 1949 (P.L.372, No.34), known
    17  as The General State Authority Act of one thousand nine hundred
    18  forty-nine, and projects which the Department of General
    19  Services is authorized to construct, improve, equip, furnish,
    20  maintain, acquire or operate.
    21     "Redevelopment assistance capital project."  The design and
    22  construction of facilities which meet any of the following:
    23         (1)  Are facilities, other than housing units, highways,
    24     bridges, waste disposal facilities, sewage systems or
    25     facilities or water systems or facilities, which cannot
    26     obtain funding under other Federal or State programs;
    27         (2)  Are economic development projects which generate
    28     substantial increases in employment, tax revenues or other
    29     measures of economic activity. This paragraph includes
    30     projects with cultural, historical or civic significance.
    19990S0010B0186                  - 8 -

     1         (3)  Are facilities which have a regional or
     2     multijurisdictional impact.
     3         (4)  Are eligible for tax-exempt bond funding under
     4     existing Federal law and regulations.
     5         (5)  Have a 50% non-State participation documented at the
     6     time of application, including a portion of any funds
     7     reserved for future physical maintenance and operation of the
     8     facilities:
     9             (i)  at least half of which is secured funding;
    10             (ii)  in which the only noncash non-State
    11         participation permitted is land donation; and
    12             (iii)  toward which State funds from other programs
    13         may not be used.
    14         (6)  Have a total project cost as follows:
    15             (i)  At least $5,000,000 for projects in:
    16                 (A)  counties of the first class; or
    17                 (B)  counties of the second class.
    18             (ii)  At least $2,000,000 for projects in counties of
    19         the second class A through eighth class.
    20             (iii)  At least $1,000,000 for projects in:
    21                 (A) municipalities designated as financially
    22             distressed municipalities under the act of July 10,
    23             1987 (P.L.246, No.47), known as the Municipalities
    24             Financial Recovery Act;
    25                 (B)  municipalities which are identified at the
    26             time of application by the Department of Community
    27             and Economic Development, under the department's
    28             early warning system, as scoring at least one-half
    29             standard deviation above the mean score; or
    30                 (C)  municipalities which have part or all of an
    19990S0010B0186                  - 9 -

     1             enterprise zone within the municipal boundaries.
     2         (7)  Have a cooperation agreement between the applicant
     3     and a redevelopment authority or industrial development
     4     authority or general purpose unit of local government if the
     5     applicant does not administer the grant. Applicants can be
     6     redevelopment authorities, industrial development authorities
     7     or general purpose units of local government.
     8     "Redevelopment assistance projects."  Include projects of the
     9  type which the Department of Community and Economic Development
    10  is authorized to finance by capital grants under the act of May
    11  20, 1949 (P.L.1633, No.493), known as the Housing and
    12  Redevelopment Assistance Law, and Reorganization Plan No.2 of
    13  1966.
    14     "Replacement notes."  Notes:
    15         (1)  the net proceeds of which are used to pay principal,
    16     accrued interest and premium of previously issued notes or
    17     replacement notes; and
    18         (2)  which evidence the same temporary borrowing of the
    19     Commonwealth as the notes or replacement notes replaced.
    20     "Site development projects."  Include projects of the type
    21  which the Department of Community and Economic Development is
    22  authorized to finance by site development grants under the act
    23  of July 11, 1996 (P.L.677, No.116), known as the "Infrastructure
    24  Development Act."
    25     "Tax revenues."  All revenues from Commonwealth imposed
    26  taxes, regardless of the fund to which they are deposited,
    27  including revenues from motor vehicle licenses, which are
    28  declared to be taxes for purposes of this act. The term does not
    29  include revenues from any other licenses or from interest, fees,
    30  fines or penalties.
    19990S0010B0186                 - 10 -

     1     "Transportation assistance projects."  Include projects of a
     2  type which the Department of Transportation is authorized to
     3  construct, improve, equip, furnish, maintain, acquire or operate
     4  under 74 Pa.C.S. Pt. II (relating to public transportation) and
     5  capital projects which the Department of Transportation is
     6  authorized to construct, improve, equip or furnish under the
     7  provisions of the act of February 11, 1976 (P.L.14, No.10),
     8  known as the Pennsylvania Rural and Intercity Common Carrier
     9  Surface Transportation Assistance Act, including the acquisition
    10  of property authorized in those statutes.
    11  Section 3.  Procedures for capital budget bill and debt
    12                 authorizing legislation.
    13     (a)  Legislative process.--A capital budget prepared in
    14  accordance with this act shall be submitted for each fiscal year
    15  by the Governor to the General Assembly and shall be considered
    16  in the form of a bill as provided in Article III of the
    17  Constitution of Pennsylvania.
    18     (b)  Itemization.--The capital budget bill must specifically
    19  itemize, by brief identifying description and estimated
    20  financial cost, the capital projects to be financed from the
    21  proceeds of obligations of the Commonwealth except where such
    22  itemization is contained in or approved by prior legislation
    23  referred to in the capital budget bill or except where such
    24  itemization is included in one or more supplemental capital
    25  budget bills. Projects must be listed in separate categories, as
    26  well as according to the fund to be charged with the repayment
    27  of the obligations to be incurred. The capital budget bill must
    28  state the maximum amount of such obligations which may be
    29  incurred in the ensuing fiscal year to provide funds for and
    30  towards the financial costs of each category of capital
    19990S0010B0186                 - 11 -

     1  projects, which shall be by the issue of general obligations of
     2  the Commonwealth.
     3     (c)  Timing.--Each year, the Governor shall submit a capital
     4  budget bill for the ensuing fiscal year.
     5     (d)  Additional bills.--At the time the Governor submits the
     6  capital budget or a supplement, the Governor shall, to the
     7  extent the debt to be incurred is not within the limits of
     8  legislation then in force authorizing the incurring of debt,
     9  submit additional bills for each category of capital projects,
    10  authorizing the incurring of debt to provide funds for and
    11  towards the payment of the financial costs of capital projects
    12  in such category which have been specifically itemized in a
    13  capital budget for the same or any prior year.
    14     (e)  Categories.--Each debt authorizing bill must do all of
    15  the following:
    16         (1)  State the category of capital projects to be
    17     financed by the debt so authorized but need not enumerate the
    18     capital projects to be financed.
    19         (2)  Authorize the incurring of debt in not less than the
    20     amount of the financial cost of all capital projects in such
    21     category not covered by a previous debt authorization,
    22     including any overall allowance for contingencies.
    23         (3)  State the estimated useful lives of the capital
    24     projects to be financed in such detail as may be requisite if
    25     capital projects of varying useful lives are to be combined
    26     for financing purposes.
    27         (4)  State the maximum term of the debt to be incurred.
    28  Section 4.  Certificates of the Auditor General.
    29     (a)  Requirement.--By March 1 and September 1, the Auditor
    30  General shall certify to the Governor and the General Assembly
    19990S0010B0186                 - 12 -

     1  the average annual tax revenues deposited in all funds in the
     2  five fiscal years ended next preceding the date of the
     3  certificate, determined by adding the total of such revenues so
     4  deposited and dividing the sum by five. At the time of each
     5  certification, the Auditor General shall also certify as
     6  separate items:
     7         (1)  the amount of outstanding net debt as of the end of
     8     the preceding fiscal year;
     9         (2)  the amount of outstanding net debt as of the date of
    10     the certificate;
    11         (3)  the difference between the limitation upon all
    12     outstanding net debt as provided in section 7(a)(4) of
    13     Article VIII of the Constitution of Pennsylvania and
    14     paragraph (2);
    15         (4)  the amount of outstanding net debt scheduled to be
    16     repaid during the remainder of the fiscal year in which the
    17     certificate is issued;
    18         (5)  the amount of debt authorized by law to be issued
    19     but not yet incurred; and
    20         (6)  the amount of outstanding obligations excluded from
    21     outstanding debt as self-sustaining pursuant to section
    22     7(c)(1), (2) and (3) of Article VIII of the Constitution of
    23     Pennsylvania.
    24     (b)  Additional certificates.--As required in connection with
    25  the sale of or settlement for obligations of the Commonwealth,
    26  the Auditor General shall issue certificates containing items
    27  listed in subsection (a)(2) and (3) as of the dates determined
    28  by the Governor to be relevant to such sales or settlements.
    29     (c)  Auditor General.--In making certificates, the Auditor
    30  General shall be entitled to rely, as to any of items listed in
    19990S0010B0186                 - 13 -

     1  subsection (a)(1) through (6), upon:
     2         (1)   any certificate furnished by the State Treasurer
     3     with respect to outstanding Commonwealth general obligation
     4     bonds; and
     5         (2)  any certificate furnished by the Department of
     6     Revenue or by the appropriate bank or trust company acting as
     7     fiscal agent or trustee, with respect to the outstanding
     8     obligations of any authority.
     9  Section 5.  Constitutional limitations, authorizations, issuing
    10                 officials.
    11     Within the limitation set forth in section 7(a)(4) of Article
    12  VIII of the Constitution of Pennsylvania, the issuing officials
    13  are authorized and directed to borrow, on the credit of the
    14  Commonwealth and subject to the conditions and limitations of
    15  the act of April 9, 1929 (P.L.343, No.176), known as The Fiscal
    16  Code, money necessary to carry out the purposes of debt
    17  authorizing acts passed in accordance with the provisions of
    18  this act.
    19  Section 6.  Temporary financing authorizing.
    20     (a)  Authorization.--Pending the issuance of bonds of the
    21  Commonwealth as authorized in section 7, the issuing officials
    22  are authorized, in accordance with the provisions of this act
    23  and on the credit of the Commonwealth, to make temporary
    24  borrowings not to exceed three years in anticipation of the
    25  issue of bonds in order to provide funds in such amounts as
    26  deemed advisable to carry out the purposes of any debt
    27  authorizing acts prior to the issue of bonds. In order to
    28  provide for and in connection with the temporary borrowings, the
    29  issuing officials are authorized in the name and on behalf of
    30  the Commonwealth to enter into any purchase, loan or credit
    19990S0010B0186                 - 14 -

     1  agreement or other agreement with banks, trust companies,
     2  lending institutions, investment banking firms or persons in the
     3  United States having the appropriate power. Agreements may
     4  contain provisions not inconsistent with the provisions of this
     5  act, as authorized by the issuing officials.
     6     (b)  Evidence.--All temporary borrowings made under the
     7  authorization of this section shall be evidenced by notes of the
     8  Commonwealth, which shall be issued for such amounts not
     9  exceeding in the aggregate the applicable statutory and
    10  constitutional debt limitation, in form and denominations and
    11  subject to terms and conditions of sale and issue, prepayment or
    12  redemption and maturity, rate of interest and time of payment of
    13  interests, as the issuing officials authorize and direct and in
    14  accordance with the applicable debt authorizing act.
    15  Authorization and direction may provide for the subsequent
    16  issuance of replacement notes to refund outstanding notes or
    17  replacement notes. Replacement notes shall, upon  issuance,
    18  evidence the borrowing and may specify other terms and
    19  conditions with respect to the notes and replacement notes
    20  authorized for issuance as the issuing officials may determine
    21  and direct.
    22     (c)  Replacement notice.--
    23         (1)  If the authorization and direction of the Governor,
    24     the Auditor General and the State Treasurer provide for the
    25     issuance of replacement notes, the Governor, the Auditor
    26     General and the State Treasurer are authorized, in the name
    27     and on behalf of the Commonwealth, to issue, enter into or
    28     authorize and direct the State Treasurer to enter into
    29     agreements with banks, trust companies, investment banking
    30     firms or other institutions or persons in the United States
    19990S0010B0186                 - 15 -

     1     having appropriate power to do all of the following:
     2             (i)  Purchase or underwrite an issue or series of
     3         issues of notes.
     4             (ii)  Credit.
     5             (iii)  Enter into a purchase, loan or credit
     6         agreement.
     7             (iv)  Draw money pursuant to a purchase, loan or
     8         credit agreement on the terms and conditions set forth in
     9         the agreement.
    10             (v)  Issue notes as evidence of borrowings made under
    11         a purchase, loan or credit agreement.
    12             (vi)  Appoint an issuing and paying agent or agents
    13         with respect to notes.
    14             (vii)  Perform acts necessary or appropriate to
    15         provide for the payment, when due, of the interest on and
    16         principal of notes.
    17         (2)  Agreements under paragraph (1) may provide that the
    18     compensation of purchasers or underwriters of notes or
    19     replacement notes, by discount in the purchase price of the
    20     notes or by payment of a fixed fee or commission at the time
    21     of issuance the notes and that all other costs and expenses,
    22     including fees for agreements related to the notes, issuing
    23     and payment agent costs, and costs and expenses of issuance,
    24     may be paid from the proceeds of the notes.
    25     (d)  State Treasurer.--If the authorization and direction of
    26  the Governor, the Auditor General and the State Treasurer
    27  provide for the issuance of replacement notes, the State
    28  Treasurer shall, by the time of delivery of these notes or
    29  replacement notes, determine the principal amounts, dates of
    30  issuance, interest rates or procedures for establishing interest
    19990S0010B0186                 - 16 -

     1  rates, rates of discount, denominations and all other terms and
     2  conditions relating to the issuance and shall perform all acts
     3  necessary to pay, or cause to be paid, when due, all principal
     4  of and interest on the notes being refunded by replacement notes
     5  and to assure that payment may draw upon any money available for
     6  that purpose pursuant to any purchase, loan or credit agreements
     7  established with respect to the notes, subject to the
     8  authorization and direction of the Governor, the Auditor General
     9  and the State Treasurer.
    10     (e)  Funding and retirement.--Outstanding notes evidencing
    11  borrowings may be funded and retired by the issuance and sale of
    12  the bonds of the Commonwealth under sections 7 and 9. Funding
    13  bonds must be issued and sold not later than a date three years
    14  after the date of issuance of the first notes evidencing the
    15  borrowings, to the extent that payment of the notes has not
    16  otherwise been made or provided for by sources other than
    17  proceeds of replacement notes.
    18     (f)  Proceeds.--The proceeds of temporary borrowings, except
    19  those evidenced by replacement notes, shall be paid to the State
    20  Treasurer to be held and disposed of under section 10. The
    21  proceeds of temporary borrowings evidenced by replacement notes
    22  shall be paid to the State Treasurer to be held and disposed of
    23  under subsection (d).
    24  Section 7.  Bonds, issue of bonds and notes, maturity, interest.
    25     (a)  Issue.--As evidence of indebtedness as authorized,
    26  funding bonds, which may be for one or more purposes, shall be
    27  issued under this act for all of the following purposes:
    28         (1)  To fund or retire notes issued under section 6.
    29         (2)  To provide money necessary to carry out the purposes
    30     of a debt authorizing statute.
    19990S0010B0186                 - 17 -

     1     (b)  Series.--The bonds of each issued shall constitute a
     2  separate series to be designated by the issuing officials or may
     3  be combined for sale as one series with other general obligation
     4  bonds of the Commonwealth. Each series of bonds shall bear such
     5  rate of interest as determined by the issuing officials. Bonds
     6  shall be issued in denominations and in form, whether coupon or
     7  registered as to both principal and interest, and with or
     8  without such provisions of interchangeability, as the issuing
     9  officials determine. If interest coupons are attached, they
    10  shall, unless the debt authorizing act provides otherwise,
    11  contain the facsimile signature of the State Treasurer.
    12     (c)  Terms and conditions.--
    13         (1)  Except as set forth in subsection (a) or (b), the
    14     terms and conditions of issue, redemption and maturity and
    15     time of payment of interest shall be as the issuing officials
    16     shall specify. Bonds of any series shall mature within a
    17     period not to exceed the estimated useful lives of the
    18     capital facilities projects as stated in the debt authorizing
    19     act but not later than 30 years from the date of issuance.
    20         (2)  The issuing officials shall provide for the
    21     amortization of the bonds in substantial and regular amounts
    22     over the term of the debt, but the first retirement of
    23     principal shall be stated to mature prior to the expiration
    24     of a period of time equal to one-tenth of the time from the
    25     date of the first obligation issued to evidence the debt to
    26     the date of the expiration of the term of the debt.
    27         (3)  Retirements of principal shall be regular and
    28     substantial if made in annual or semiannual amounts whether
    29     by stated serial maturities or by mandatory sinking fund
    30     retirements computed in accordance with either a level annual
    19990S0010B0186                 - 18 -

     1     debt service plan, as nearly as may be, or upon the equal
     2     annual maturities plan.
     3         (4)  If debt is incurred in one issue of bonds to provide
     4     funds for and towards the financial cost of capital projects
     5     having estimated useful lives of varying length, the
     6     following shall apply:
     7             (i)  The aggregate of the financial costs shall be
     8         considered as the debt to be incurred for the purpose of
     9         fixing the regular and substantial amounts of principal
    10         to be retired.
    11             (ii)  The term of the debt shall be to the end of the
    12         longest estimated useful life for the purpose of
    13         determining the first date for the retirement of
    14         principal. At the end of the estimated useful life of
    15         each project, the aggregate principal retirements
    16         required to be made at or before that date shall exceed:
    17                 (A)  the aggregate financial cost of all capital
    18             projects having the same or shorter estimated useful
    19             lives; or
    20                 (B)  if bonds are issued for less than the full
    21             financial cost of all projects being financed in the
    22             same category, a proportionate amount in each case.
    23         (5)  The issuing officials are authorized to carry out
    24     the provisions of this act relating to the issuance of bonds
    25     and shall determine all matters in connection with the
    26     issuance of bonds subject to the provisions hereof.
    27     (d)  Verification.--
    28         (1)  Bonds issued under the authority of this act, unless
    29     the debt authorizing acts provides another method of
    30     signature, shall bear the facsimile signatures of the issuing
    19990S0010B0186                 - 19 -

     1     officials and a facsimile of the Great Seal of the
     2     Commonwealth of Pennsylvania and shall be countersigned by an
     3     officer of an authorized loan and transfer agent of the
     4     Commonwealth.
     5         (2)  The action taken by the issuing officials
     6     authorizing the issuance of bonds or notes shall set forth
     7     the title and citation of the debt authorizing acts.
     8         (3)  Notes and bonds issued under the authority of this
     9         act shall:
    10             (i)  either contain a similar recital or refer to the
    11         recital of titles and citations set forth in the action
    12         authorizing issuance; and
    13             (ii)  state that the bonds or notes are issued in
    14         accordance with the provisions of this act. In any action
    15         or proceeding involving the validity or enforceability of
    16         bonds or notes under this act, a recital under paragraph
    17         (3) shall be conclusive as to their authorization.
    18  Section 8.  Direct obligations, exemption from taxation, means
    19             of payment.
    20     (a)  Direct obligation.--Notes and bonds issued under this
    21  act shall be direct obligations at the Commonwealth, and the
    22  full faith and credit of the Commonwealth are pledged for the
    23  payment of the interest as it becomes due and the payment of the
    24  principal at maturity.
    25     (b)  Exemptions.--Notes and bonds issued under this act shall
    26  be exempt from taxation for State and local purposes.
    27     (c)  Payment.--The principal of and interest on notes and
    28  bonds issued under this act shall be payable in lawful money of
    29  the United States of America.
    30  Section 9.  Sale of bonds.
    19990S0010B0186                 - 20 -

     1     (a)  Public sale.--When bonds are issued under this act, they
     2  shall be offered for sale at not less than 98% of the principal
     3  amount and accrued interest and shall be sold by the issuing
     4  officials to the highest and best bidder after public
     5  advertisement on terms and conditions and upon open competitive
     6  bidding as the issuing officials direct. The manner and times of
     7  advertising shall be prescribed by the issuing officials.
     8     (b)  Private sale.--Any portion of a bond issue offered under
     9  subsection (a) and not sold or subscribed to may be disposed of
    10  by private sale by the issuing officials in a manner and at
    11  prices, not less than 98% of the principal amount and accrued
    12  interest, as the Governor directs. No commission shall be
    13  allowed or paid for the sale of bonds issued under this act.
    14     (c)  Temporary bonds.--Until permanent bonds can be prepared,
    15  the issuing officials may issue, in lieu of permanent bonds,
    16  temporary bonds in form and with privileges as to the
    17  registration and exchange for permanent bonds as may be
    18  determined by the issuing officials.
    19  Section 10.  Disposition and use of proceeds.
    20     (a)  General rule.--The proceeds of temporary borrowings made
    21  under section 6, other than the proceeds of replacement notes,
    22  and the proceeds from the sale of bonds, other than funding
    23  bonds, shall be paid to the State Treasurer and be held by the
    24  State Treasurer in a separate fund and shall be deposited in
    25  depositories as selected by the State Treasurer to the credit of
    26  the Capital Facilities Fund, which shall have such separate
    27  accounts as may be deemed desirable by the issuing officials,
    28  but not less than one separate account for each category of
    29  capital projects. The proceeds of replacement notes shall be
    30  deposited and applied as provided in section 6(d).
    19990S0010B0186                 - 21 -

     1     (b)  Dedication.--The money in the Capital Facilities Fund is
     2  specifically dedicated to meeting the financial costs of capital
     3  projects. The money shall be paid by the State Treasurer to
     4  those departments, agencies or authorities authorized to expend
     5  it as required by them to pay financial costs at the time the
     6  department, agency or authority certifies the payment to be due
     7  and payable.
     8     (c)  Investment.--Pending their application to the purposes
     9  authorized, money held or deposited by the State Treasurer may
    10  be invested and reinvested as are other funds in the custody of
    11  the State Treasurer in the manner provided by law. Earnings
    12  received from the investment or deposit of the funds shall be
    13  paid into the State Treasury to the credit of the account in the
    14  Capital Facilities Fund to which the funds were originally
    15  deposited.
    16  Section 11.  Capital Debt Fund; investments; redemption of
    17                 bonds.
    18     (a)  Capital Debt Fund.--Bonds issued under this act shall be
    19  paid at maturity. Interest due, after July 1, 1968, on bonds and
    20  on notes, issued under this act, shall be paid by the Board of
    21  Finance and Revenue from the Capital Debt Fund. The General
    22  Assembly shall appropriate annually the money necessary to pay
    23  the interest on the bonds and notes and the principal of the
    24  bonds and notes at maturity if no other provision is made. Money
    25  appropriated shall be paid into the Capital Debt Fund by the
    26  State Treasurer.
    27     (b)  Investment.--Money received under subsection (a) prior
    28  to the date for disbursement shall be invested by the board
    29  pending disbursement in securities as are provided by law for
    30  the investment of surplus money of the Commonwealth. The
    19990S0010B0186                 - 22 -

     1  investment and the accumulations in the Capital Debt Fund shall
     2  be devoted to and be used exclusively for the payment of the
     3  interest accruing on the bonds and notes and for the redemption
     4  of the bonds and notes at maturity or upon the redemption date,
     5  if called for prior redemption. The board is authorized to use
     6  such funds for the purchase and retirement of all or any part of
     7  the bonds issued under this act; but no purchase may be made
     8  which will reduce the money in the Capital Debt Fund below the
     9  amount necessary to pay all principal and interest still to
    10  become due in the fiscal year of the purchase. If all or any
    11  part of any bonds issued under this act are purchased by the
    12  Commonwealth, they shall be canceled and returned to the State
    13  Treasurer as canceled and paid bonds. Thereafter, all payment of
    14  interest on the bonds shall cease; and the canceled bonds and
    15  coupons shall be destroyed, within two years after cancellation,
    16  in the presence of the issuing officials or their authorized
    17  representatives. A certificate evidencing the destruction,
    18  satisfactory to the authorized loan and transfer agent of the
    19  Commonwealth, shall be furnished to it. Canceled bonds and
    20  coupons shall be mutilated as to make the canceled bonds and
    21  coupons nonnegotiable.
    22  Section 12.  Funding bonds.
    23     The issuing officials, subject to the provisions of a bond
    24  resolution or trust indenture are authorized to issue funding
    25  bonds for the purpose of refunding obligations then outstanding,
    26  to provide funds to redeem and retire such outstanding
    27  obligations with accrued interest and any premium payable
    28  thereon, at maturity or any call date. The issuance of funding
    29  bonds, the maturities and other details, the rights of the
    30  holders and the duties of the issuing officials shall be
    19990S0010B0186                 - 23 -

     1  governed by the applicable provisions of sections 3 through 11.
     2  Funding bonds may be issued to refund bonds previously issued
     3  for refunding purposes. The proceeds of the sale of funding
     4  bonds shall be paid to the State Treasurer and applied to the
     5  payment of the principal of, and any accrued interest and
     6  premium on, the bonds or notes for the refunding of which
     7  funding bonds have been issued. No funding bonds shall be issued
     8  having a stated maturity date later than the expiration of the
     9  useful life of the capital projects constructed or acquired from
    10  the proceeds of the debt originally incurred in respect of the
    11  bonds or notes being refunded, nor shall funding bonds be issued
    12  to refund beyond the same fiscal year any portion of debt
    13  required by this act and the Constitution of Pennsylvania to be
    14  retired in the year of issue of the funding bonds in order to
    15  comply with the retirement in substantial and regular amounts as
    16  provided in section 7(d).
    17  Section 13.  Reporting requirements.
    18     The State Treasurer shall determine and report to the Budget
    19  Secretary by January 1 of each year the amount of money
    20  necessary for the payment of interest on outstanding obligations
    21  and the principal of the obligations, for the following fiscal
    22  year and the time and amounts of payments.
    23  Section 14.  Registration of bonds.
    24     The Auditor General shall prepare the necessary registry
    25  books to be kept in the office of the authorized loan and
    26  transfer agent of the Commonwealth for the registration of any
    27  bonds of the Commonwealth according to the terms and conditions
    28  of issue specified by the issuing officials under section 7(d).
    29  Bonds issued without interest coupons attached shall be
    30  registered in the registry books kept by the authorized loan and
    19990S0010B0186                 - 24 -

     1  transfer agent of the Commonwealth.
     2  Section 15.  Voting requirements.
     3     If this act requires an action to be taken or a decision to
     4  be made by the issuing officials and the three officers shall
     5  not be able to agree unanimously, the action or decision of the
     6  Governor and either the Auditor General or State Treasurer shall
     7  be binding and final.
     8  Section 16.  Appropriation.
     9     The money received by the Commonwealth from the issuance and
    10  sale of bonds and notes pursuant to this act and any debt
    11  authorizing act adopted after July 23, 1984, shall be
    12  appropriated by the General Assembly from the Capital Facilities
    13  Fund in the debt authorizing acts for the purposes set forth in
    14  those acts.
    15  Section 17.  Appropriation for and limitation on redevelopment
    16                 assistance capital projects.
    17     (a)  Appropriation.--The amount necessary to pay principal of
    18  and interest on all obligations issued to provide funds for
    19  redevelopment assistance capital projects is hereby appropriated
    20  from the General Fund and shall be transferred to the Capital
    21  Debt Fund upon authorization by the Governor.
    22     (b)  Limitation.--The maximum amount of redevelopment
    23  assistance capital projects undertaken by the Commonwealth for
    24  which obligations are to be issued shall not exceed, in
    25  aggregate, $850,000,000.
    26  Section 18.  Funding and administration of redevelopment
    27                 assistance capital projects.
    28     (a)  Officers.--The Secretary of the Budget, in consultation
    29  with the Secretary of Community and Economic Development, shall
    30  approve or disapprove redevelopment assistance capital projects.
    19990S0010B0186                 - 25 -

     1     (b)  Time period.--State funding for approved redevelopment
     2  assistance capital projects shall be paid over not less than a
     3  36-month period, unless the Secretary of the Budget authorizes a
     4  shorter period.
     5     (c)  Costs.--Fees for professional services incurred for the
     6  design and construction of redevelopment assistance capital
     7  projects shall be paid from non-State funds. Land acquisition is
     8  a permissible State-funded expenditure if the acquisition cost
     9  is supported by an appraisal done by a member of the Master
    10  Appraisal Institute.
    11     (d)  Proportion.--Expenditure of State and non-State funds
    12  shall be made on a proportional basis for construction expenses.
    13     (e)  Verification.--Redevelopment assistance capital project
    14  cost estimates must be verified by the Office of the Budget or
    15  its designated agent before final approval is given to a project
    16  application. Cost estimates include total project cost,
    17  projected use for State and non-State funds and a year-by-year
    18  schedule of costs for the entire project construction phase.
    19     (f)  Bids.--The solicitation of a minimum of three written
    20  bids is required for all general contracted work in
    21  redevelopment assistance projects.
    22     (g)  Review and audit.--Redevelopment assistance capital
    23  projects shall be reviewed at regular intervals by the Office of
    24  the Budget or its designated agent during the funding phase to
    25  ensure financial and program compliance. A final close-out audit
    26  shall be performed by the Office of the Budget or its designated
    27  agent for all projects.
    28     (h)  Fee.--To pay for administrative expenses related to
    29  redevelopment assistance capital projects funded by Commonwealth
    30  general obligation bonds, the Office of the Budget shall charge
    19990S0010B0186                 - 26 -

     1  a fee against proceeds from bonds which were sold to finance
     2  construction or acquisition costs of projects.
     3  Section 19.  Repeals.
     4     (a)  Absolute.--Article XVI-B of the act of April 9, 1929
     5  (P.L.343, No.176), known as The Fiscal Code, is repealed.
     6     (b)  General.--All other acts and parts of acts are repealed
     7  insofar as they are inconsistent with this act.
     8  Section 20.  Recodification.
     9     This act is a recodification of Article XVI-B of the act of
    10  April 9, 1929 (P.L.343, No.176), known as The Fiscal Code. This
    11  act is a continuation of, and is not intended to make any
    12  changes in, Article XVI-B of The Fiscal Code except for
    13  paragraph (6)(ii) of the definition of "redevelopment assistance
    14  capital project" in section 2.
    15  Section 21.  Effective date.
    16     This act shall take effect immediately.










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