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                                                      PRINTER'S NO. 1251

THE GENERAL ASSEMBLY OF PENNSYLVANIA


SENATE BILL

No. 999 Session of 2001


        INTRODUCED BY HUGHES, MELLOW, SCHWARTZ, ERICKSON, WAGNER, COSTA,
           KUKOVICH, STACK, TARTAGLIONE, MUSTO, LOGAN AND WILLIAMS,
           JUNE 21, 2001

        REFERRED TO EDUCATION, JUNE 21, 2001

                                     AN ACT

     1  Amending Title 24 (Education) of the Pennsylvania Consolidated
     2     Statutes, establishing the Pennsylvania Public School
     3     Construction Authority and the Pennsylvania Public School
     4     Construction Task Force; providing for their powers and
     5     duties; establishing the Public School Construction Reserve
     6     Fund, the Public School Building and Facility Adequacy Grant
     7     Program, a direct grant program and an interest subsidy
     8     program; and authorizing the issuance of bonds.

     9     The General Assembly of the Commonwealth of Pennsylvania
    10  hereby enacts as follows:
    11     Section 1.  Title 24 of the Pennsylvania Consolidated
    12  Statutes is amended by adding a chapter to read:
    13                             CHAPTER 63
    14                   PENNSYLVANIA STATE OF THE ART
    15                          SCHOOLS PROGRAM
    16  Sec.
    17  6301.  Short title of chapter.
    18  6302.  Findings.
    19  6303.  Purpose.
    20  6304.  Definitions.


     1  6305.  School building and facility assessment report.
     2  6306.  Pennsylvania Public School Construction Task Force.
     3  6307.  Public school building and facility adequacy standards.
     4  6308.  Needs assessment report.
     5  6309.  Pennsylvania Public School Construction Authority.
     6  6310.  Annual report.
     7  6311.  School district capital improvement plans.
     8  6312.  Public School Building and Facility Adequacy Grant
     9                 Program.
    10  6313.  Direct grant program.
    11  6314.  Interest subsidy program.
    12  6315.  Bond issuance.
    13  6316.  Public School Construction Reserve Fund.
    14  § 6301.  Short title of chapter.
    15     This chapter shall be known and may be cited as the
    16  Pennsylvania State of the Art Schools Act.
    17  § 6302.  Findings.
    18     The General Assembly finds and declares as follows:
    19         (1)  Quality education for the children of this
    20     Commonwealth is essential for the future success of children
    21     of this Commonwealth and the county.
    22         (2)  Essential elements of this Commonwealth's public
    23     school system are the school buildings and facilities that
    24     ideally provide a safe and secure environment for learning
    25     and facilitate educational opportunities for students in this
    26     Commonwealth's public schools.
    27         (3)  Regrettably not all public school buildings and
    28     facilities in this Commonwealth are capable of providing this
    29     high quality of education due to the physical condition or
    30     insufficient capacity of those buildings and facilities.
    20010S0999B1251                  - 2 -

     1         (4)  Due to the decreasing percentage of the State
     2     funding share for education and an increasing cost burden on
     3     local revenue sources, necessary maintenance on needy public
     4     school buildings and facilities has been deferred until
     5     school district budgets can afford those additional costs and
     6     regrettably this burden on school district budgets has not
     7     lessened.
     8         (5)  As a result of these deferrals, certain school
     9     buildings and facilities are not in a condition to provide a
    10     safe and secure location for schooling of children in this
    11     Commonwealth.
    12         (6)  Several school districts have also experienced
    13     difficulty in funding new building and facility construction
    14     for various purposes, such as accommodating increases in
    15     student population and providing students with access to
    16     schools that provide and utilize recent technological
    17     advances to educate students.
    18         (7)  Another essential element of this Commonwealth's
    19     public schools is various instructional equipment, which is
    20     essential to providing an education for the students of the
    21     public schools, including computer and science laboratories.
    22         (8)  Due to the decreasing percentage in the State
    23     funding share, it is increasingly difficult for school
    24     districts to purchase and utilize instructional equipment,
    25     such as computers and other electronic equipment, that
    26     provides students with the means to learn and to succeed in
    27     the digital age.
    28  § 6303.  Purpose.
    29     This chapter is intended to:
    30         (1)  Provide Statewide comparable data on the current
    20010S0999B1251                  - 3 -

     1     physical condition of public school buildings and facilities.
     2         (2)  Establish minimum adequacy standards for school
     3     buildings and facilities, including physical conditions,
     4     maintenance, compatibility with educational technology and
     5     sufficient building area per student to avoid overcrowding.
     6         (3)  Determine the cost of essential and deferred
     7     maintenance with the goal of improving the current physical
     8     condition of existing eligible school buildings and
     9     facilities to comply with minimum adequacy standards.
    10         (4)  Provide State assistance in the school district
    11     design of new construction to comply with minimum adequacy
    12     standards.
    13         (5)  Establish a tax-exempt bond program for the funding
    14     of new school building and facility construction and the
    15     repair and maintenance of eligible school buildings and
    16     facilities and the purchase of school building and facility
    17     equipment.
    18         (6)  Establish the Public School Building and Facility
    19     Adequacy Grant Program to distribute grants and funding to
    20     eligible school districts under two separate funding
    21     programs.
    22         (7)  Establish the Public School Construction Reserve
    23     Fund to address the bonds debt service and to fund emergency
    24     school maintenance needs.
    25  § 6304.  Definitions.
    26     The following words and phrases when used in this chapter
    27  shall have the meanings given to them in this section unless the
    28  context clearly indicates otherwise:
    29     "Adequacy grant program."  The Public School Building and
    30  Facility Adequacy Grant Program established by this chapter.
    20010S0999B1251                  - 4 -

     1     "Authority."  The Pennsylvania Public School Construction
     2  Authority established by this chapter.
     3     "Bond."  the notes, bond and other evidences of indebtedness
     4  or obligations which the Pennsylvania Public School Construction
     5  Authority is authorized to issue pursuant to this chapter.
     6     "Construction."  This term includes acquisition and
     7  construction and the term "to construct" shall mean and include
     8  to acquire and to construct in such a manner as may be deemed
     9  desirable.
    10     "Cost of a project."  The cost of all real estate,
    11  properties, rights and easements acquired, the cost of
    12  construction of a school building and facility and the
    13  furnishing and equipment thereof, all financing charges,
    14  interest prior to and during construction and engineering and
    15  legal expenses.
    16     "Current physical condition."  In reference to a public
    17  school building or facility this term shall include the current
    18  condition of the heating, cooling, electrical and plumbing
    19  systems; the building's exterior, including the roof, windows
    20  and exterior doors; the building's interior, including the
    21  walls, ceilings, floors, interior doors, lighting, glass,
    22  educational equipment, school equipment and rest rooms;
    23  gymnasiums and locker rooms; and technological capacity.
    24     "Deferred maintenance."  All regularly scheduled and
    25  unscheduled maintenance required for the proper upkeep of a
    26  school building or facility that has not been timely performed
    27  but postponed to a later time.
    28     "Educational equipment."  All furniture, equipment and other
    29  appliances for the use of the public schools. This term shall
    30  exclude equipment utilizing educational technology.
    20010S0999B1251                  - 5 -

     1     "Educational technology."  Any technical or scientific method
     2  of sending, receiving, storing, packaging or assimilating audio,
     3  video, graphic, data or any combination thereof by means of
     4  electromagnetic signal and any equipment, processes and
     5  facilities that are used for instruction in the public schools.
     6     "Emergency maintenance."  The performance of essential
     7  maintenance on structurally unsound school buildings and
     8  facilities to address the immediate risk to the health and
     9  safety of students, employees and the public.
    10     "Essential maintenance."  The level of deferred maintenance
    11  that must be completed for a school building or facility to
    12  comply with the requirements of the school building and facility
    13  to comply with the requirements of the school building and
    14  facility adequacy standards.
    15     "Financing."  The provision of a grant or funding to a school
    16  district for payment of the cost of a project.
    17     "Fund."  The Public School Construction Reserve Fund
    18  established by this chapter.
    19     "Man-made disaster."  Any industrial, nuclear or
    20  transportation accident, explosion, conflagration or other
    21  similar condition resulting from man-made causes which threatens
    22  or causes substantial damage to property, human suffering,
    23  hardship or loss of life.
    24     "Natural disaster."  Any hurricane, tornado, storm, flood,
    25  high water, wind-driven water, tidal wave, earthquake,
    26  landslide, snowstorm, drought, fire, explosion or other
    27  catastrophe which results in substantial damage to property,
    28  hardship, suffering or possible loss of life.
    29     "Needs assessment report."  The report prepared by the
    30  Department of the Auditor General that lists and calculates the
    20010S0999B1251                  - 6 -

     1  total cost for the completion of all deferred maintenance and
     2  essential maintenance. This report shall include a copy of the
     3  school building and facility assessment report.
     4     "School building and facility assessment report."  The report
     5  compiled and organized by the Department of the Auditor General
     6  that lists the current physical condition of every public school
     7  in the Commonwealth. This report shall include the data
     8  collected and compiled by the contracted private entity.
     9     "School buildings and facilities."  All buildings and
    10  structures used by school districts for the classroom
    11  instruction of students. This term shall include gymnasiums and
    12  locker rooms but shall exclude stadiums, field houses, swimming
    13  pools and practice fields.
    14     "School buildings and facilities adequacy standards."  The
    15  standards proposed by the School Construction Task Force and
    16  accepted by the authority, establishing minimum standards for
    17  school buildings and facilities.
    18     "School equipment."  Equipment and machinery that are
    19  necessary for the proper and safe operation of a school building
    20  or facility.
    21     "Structurally unsound buildings and facilities."  School
    22  buildings and facilities that have extensive problems arising
    23  from uncompleted essential maintenance, which also pose a threat
    24  to the safety and health of students, employees and the public.
    25     "Task force."  The Pennsylvania Public School Construction
    26  Task Force established by this chapter.
    27     "Technological capacity."  The ability of a school building
    28  or facility to accommodate educational technology.
    29  § 6305.  School building and facility assessment report.
    30     (a)  Duty to prepare report.--The Department of the Auditor
    20010S0999B1251                  - 7 -

     1  General shall:
     2         (1)  Prepare guidelines within two months of the
     3     effective date of this chapter for the conduct of a Statewide
     4     school building and facility assessment to collect data on
     5     the current physical condition of all public school buildings
     6     and facilities in every school district in this Commonwealth
     7     and shall submit the guidelines and requirements for the
     8     conduct of the school building and facility assessment by a
     9     private entity to competitive bidding, as provided under 62
    10     Pa.C.S. Pt. I (relating to Commonwealth procurement code).
    11         (2)  Enter into a contract with a private entity as soon
    12     as practicable for the purpose of conducting the school
    13     building and facility assessment.
    14         (3)  Prepare a school building and facility assessment
    15     report that presents the Statewide data in a uniform manner
    16     within nine months of the effective date of this chapter.
    17         (4)  Transmit the school building and facility assessment
    18     report upon completion to the Pennsylvania Public School
    19     Construction Task Force.
    20     (b)  Contents of report.--The school building and facility
    21  assessment report shall provide uniform Statewide data regarding
    22  the current condition of public school buildings and facilities
    23  in this Commonwealth and shall include:
    24         (1)  The current condition of school buildings and
    25     facilities on a Statewide basis, a school district basis and
    26     an individual public school basis.
    27         (2)  Expected longevity of each school building and
    28     facility.
    29         (3)  Calculations of current school building and facility
    30     student capacity and space requirements necessary to
    20010S0999B1251                  - 8 -

     1     accommodate expected fluctuations in future student
     2     population for a period of five years.
     3         (4)  Each school building's and facility's compliance or
     4     noncompliance with safety requirements, including any local
     5     building or construction codes.
     6         (5)  The ability of each school building and facility to
     7     accommodate educational technology.
     8     (c)  Governmental assistance.--For the purposes of preparing
     9  guidelines for the conduct of the building and facility
    10  assessments and preparing the school building and facility
    11  assessment report, the Department of the Auditor General may
    12  request the assistance of local school districts, the Division
    13  of Facilities Management of the Department of Education and
    14  other departments, agencies and entities of the Commonwealth as
    15  deemed necessary by the Department of the Auditor General.
    16     (d)  Timing for preparation of report.--At the completion of
    17  the private entity's assessment data compilation, the Department
    18  of the Auditor General shall prepare the Statewide school
    19  building and facility assessment report.
    20  § 6306.  Pennsylvania Public School Construction Task Force.
    21     (a)  Establishment.--There is hereby established the
    22  Pennsylvania Public School Construction Task Force.
    23     (b)  Membership.--The authority shall appoint 19 members to
    24  the task force, which shall be comprised as follows:
    25         (1)  Three school directors, provided that no two or more
    26     school directors shall serve on the same board of school
    27     directors.
    28         (2)  Three school district superintendents.
    29         (3)  Three principals of public elementary or secondary
    30     school buildings.
    20010S0999B1251                  - 9 -

     1         (4)  Three teachers employed by a public school district.
     2         (5)  Three parents of a public elementary or secondary
     3     school student.
     4         (6)  Four representatives of the private sector
     5     architectural and construction management industries.
     6     (c)  Duties.--The task force shall have the duty to:
     7         (1)  Review and utilize the data contained in the school
     8     building and facility assessment report and draft the
     9     proposed public school building and facility adequacy
    10     standards within three months of the receipt of the school
    11     building and facility assessment report.
    12         (2)  Transmit the completed proposed public school
    13     building and facility adequacy standards to the authority for
    14     approval.
    15         (3)  Transmit a copy of the approved public school
    16     building and facility adequacy standards to the Department of
    17     the Auditor General for utilization in calculating the cost
    18     for compliance with the minimum standards, following an
    19     approval of the proposed standards by the authority.
    20         (4)  Review and incorporate any changes, revisions or
    21     suggestions that the authority provides to the task force
    22     into the proposed adequacy standards and to resubmit the
    23     revised proposed adequacy standards to the authority
    24     following a provisional approval of the adequacy standards by
    25     the authority.
    26         (5)  Review and redraft the proposed adequacy standards
    27     incorporating any suggestions and criticisms provided by the
    28     authority following a rejection of the proposed adequacy
    29     standards by the authority.
    30  § 6307.  Public school building and facility adequacy standards.
    20010S0999B1251                 - 10 -

     1     (a)  Proposal of standards.--The task force shall utilize the
     2  uniform data contained in the school building and facility
     3  assessment report to propose adequacy standards to the authority
     4  for public school buildings and facilities that require a
     5  minimum level of:
     6         (1)  Essential maintenance.
     7         (2)  Structural and building integrity.
     8         (3)  Instructional area for education on a per student
     9     basis.
    10         (4)  Technological capacity in school buildings and
    11     facilities.
    12     (b)  Uniformity required.--The proposed adequacy standards
    13  shall be uniform and have uniform Statewide application to all
    14  public school buildings and facilities of the Commonwealth.
    15  § 6308.  Needs assessment report.
    16     (a)  Duty to prepare.--The Department of the Auditor General
    17  shall prepare a needs assessment report for all public school
    18  buildings and facilities which shall:
    19         (1)  Identify all deferred maintenance in each school
    20     building and facility.
    21         (2)  Identify the essential maintenance required for each
    22     school building and facility to comply with the school
    23     building and facility adequacy standards.
    24         (3)  Calculate the total cost for the completion of all
    25     deferred maintenance for each school building and facility.
    26         (4)  Calculate the total cost for the completion of
    27     essential maintenance that is required for each school
    28     building and facility to comply with the school building and
    29     facility adequacy standards.
    30     (b)  Submission to authority.--The Department of the Auditor
    20010S0999B1251                 - 11 -

     1  General shall submit the needs assessment report to the
     2  authority within two months of receiving a copy of the adequacy
     3  standards from the task force. The needs assessment report shall
     4  be presented in a uniform manner.
     5     (c)  Governmental assistance.--For the purposes of preparing
     6  the needs assessment report for school buildings and facilities,
     7  the Department of the Auditor General may request the assistance
     8  of local school districts, the Division of Facilities Management
     9  of the Department of Education, and other departments, agencies
    10  and entities of the Commonwealth as deemed necessary by the
    11  Department of the Auditor General.
    12  § 6309.  Pennsylvania Public School Construction Authority.
    13     (a)  Establishment.--There is hereby established a
    14  Pennsylvania Public School Construction Authority.
    15     (b)  Membership.--The authority shall be comprised of 14
    16  members as follows:
    17         (1)  The Governor or his designee.
    18         (2)  The Auditor General or his designee.
    19         (3)  The State Treasurer or his designee.
    20         (4)  The Secretary of Education or his designee.
    21         (5)  The Secretary of the Budget or his designee.
    22         (6)  The Secretary of General Services or his designee.
    23         (7)  The President pro tempore of the Senate or his
    24     designee, the Minority Leader of the Senate or his designee,
    25     the Speaker of the House of Representatives or his designee,
    26     and the Minority Leader of the House of Representatives or
    27     his designee.
    28         (8)  Four representatives of the private sector
    29     architectural and construction management industries, who
    30     shall be appointed by the Governor.
    20010S0999B1251                 - 12 -

     1     (c)  Term.--The term of the members of the authority shall be
     2  as follows:
     3         (1)  The Governor, Auditor General, State Treasurer,
     4     Secretary of Education, Secretary of the Budget, Secretary of
     5     General Services and the members of the General Assembly
     6     shall serve concurrently with their position and a designee
     7     of one of these officials shall serve the same term as the
     8     appointing official.
     9         (2)  The four representatives of the private sector
    10     architectural and construction management industries shall
    11     serve for a term of three years. Upon the end of their terms,
    12     the Governor may reappoint them to the authority or may
    13     appoint other representatives of the private sector
    14     architectural and construction management industries.
    15     (d)  Reimbursement for expenses.--Each member of the
    16  authority shall serve without compensation for the performance
    17  of official duties but may be reimbursed for actual and
    18  necessary expenses reasonably incurred in the performance of the
    19  duties of the authority.
    20     (e)  Duties.--The authority shall have the following powers
    21  and duties:
    22         (1)  Appoint the initial members of the task force within
    23     two months of the effective date of this chapter.
    24         (2)  Review and approve, conditionally approve or reject
    25     the proposed public school building and facility adequacy
    26     standards submitted by the task force within 30 days of the
    27     receipt of the proposed standards.
    28         (3)  Establish guidelines for the operation and
    29     administration of the grant program, including criteria,
    30     eligibility and funding for emergency public school
    20010S0999B1251                 - 13 -

     1     infrastructure needs, within three months of the effective
     2     date of this chapter.
     3         (4)  Create a central depository for information on
     4     school building projects through the establishment and
     5     maintenance of an electronic data base that contains the
     6     condition and needs for every school building and facility.
     7     The electronic data base shall be designed so that
     8     information can be easily collected, stored, amended,
     9     reviewed and disseminated. The information contained in this
    10     data base shall be available for public inspection.
    11         (5)  Serve the school districts as a resource in
    12     designing and constructing school buildings and facilities
    13     that comply with the school building and facility adequacy
    14     standards established by this chapter and to assist the
    15     districts in best utilizing their funding from the program,
    16     including the provision and utilization of existing model
    17     plans of school buildings or the development of new model
    18     plans for school buildings.
    19         (6)  Operate and administer the fund and adequacy
    20     program.
    21         (7)  Prepare an annual report on the operation and
    22     administration of the adequacy program and fund, which shall
    23     be submitted to the chairman of the Education Committee of
    24     the Senate and the chairman of the Education committee of the
    25     House of Representatives within three months of the end of
    26     the fiscal year.
    27         (8)  Have continuing succession.
    28         (9)  Sue and be sued, implead and be impleaded, complain
    29     and defend in all courts.
    30         (10)  Adopt, use and alter at will a corporate seal.
    20010S0999B1251                 - 14 -

     1         (11)  Acquire, purchase, hold, lease as lessee and use
     2     any property real, personal or mixed, tangible or intangible,
     3     or any interest therein, necessary or desirable, for carrying
     4     out the purposes of the authority, and to sell, lease as
     5     lessor, transfer and dispose of any property or any interest
     6     therein at any time acquired by it.
     7         (12)  Make bylaws for the management and regulation of
     8     its affairs.
     9         (13)  Appoint officers, agents, employees and servants,
    10     to prescribe their duties and to fix their compensation.
    11         (14)  Finance projects by making grants to any eligible
    12     school district.
    13         (15)  Borrow money for the purpose of financing or
    14     refinancing the cost of any project, make and issue
    15     negotiable notes, bonds and other evidences of indebtedness
    16     or obligations of the authority to the extent authorized
    17     under this chapter and to secure the payment of such bonds,
    18     or any part thereof, by pledge or deed of trust of all or any
    19     of its revenues and receipts, and to make such agreements
    20     with the purchasers or holders of such bonds or with others
    21     in connection with such bonds when issued or to be issued as
    22     the authority shall deem advisable, and in general to provide
    23     for the security of said bonds and the rights of the holder
    24     thereof.
    25         (16)  Make contracts of every name and nature and to
    26     execute all instruments necessary or convenient for the
    27     carrying of its business.
    28         (17)  Borrow money and accept grants from and enter into
    29     contracts or other transaction with any Federal agency,
    30     without limitation of the other powers and duties specified
    20010S0999B1251                 - 15 -

     1     in this subsection.
     2         (18)  Pledge, hypothecate or otherwise encumber all or
     3     any of the revenues or receipts of the authority as security
     4     for all or any of the obligations of the authority.
     5         (19)  Do all acts and things necessary or convenient to
     6     carry out the powers granted to it by this chapter.
     7     (f)  Exercise of powers and duties.--
     8         (1)  The powers and duties of the authority shall be
     9     exercised by a governing body consisting of the members of
    10     the authority acting as a board. Within 30 days after the
    11     effective date of this chapter, the board shall meet and
    12     organize by electing from their number a president, treasurer
    13     and secretary. At the first regular meeting in each year
    14     thereafter they shall elect from their number a president and
    15     a secretary.
    16         (2)  Nine members shall constitute a quorum of the board
    17     for the purpose of organizing the authority and conducting
    18     the business thereof and for all other purposes, and all
    19     action shall only be taken by a vote of a majority of the
    20     members of the authority unless the bylaws shall require a
    21     larger number. The board shall have full authority to manage
    22     the properties and business of the authority and to
    23     prescribe, amend and repeal bylaws, rules and regulations
    24     governing the manner in which the business of the authority
    25     may be conducted and the powers granted to it may be
    26     exercised and embodied. The board shall fix and determine the
    27     number of officers, agents and employees of the authority and
    28     their respective compensation and duties and may delegate to
    29     one or more of their number or to one or more of said
    30     officers, agents or employees such powers and duties as it
    20010S0999B1251                 - 16 -

     1     may deem proper.
     2     (g)  Limitation.--The authority shall have no power at any
     3  time or in any manner to pledge the credit or taxing power of
     4  the Commonwealth or any of its school districts, nor shall any
     5  of its debts or obligations be deemed to be obligations of the
     6  Commonwealth or any of its school districts, nor shall the
     7  Commonwealth or any of its school districts be liable for the
     8  payment of principal or interest on such obligations.
     9  § 6310.  Annual report.
    10     The authority shall submit an annual report to the chairman
    11  of the Education Committee of the Senate and the chairman of the
    12  Education Committee of the House of Representatives regarding
    13  the administration and operation of the fund and adequacy grant
    14  program.
    15  § 6311.  School district capital improvement plans.
    16     (a)  Plan necessary for program funding.--Following
    17  completion of the school building and facility assessment, the
    18  adequacy standards, needs assessment and the adequacy grant
    19  program guidelines, any school district that submits an
    20  application for funding under the program shall prepare and
    21  retain on file an annual and a five-year capital improvement
    22  plan. The five-year capital improvement plan shall be updated
    23  annually.
    24     (b)  Contents of plan.--The capital improvement plan shall:
    25         (1)  Address the deficiencies in the school district's
    26     school buildings and facilities as listed in the school
    27     building and facility assessment, needs assessment, and
    28     authority report.
    29         (2)  Comply with the school building and facility
    30     adequacy standards.
    20010S0999B1251                 - 17 -

     1         (3)  Include all of the following:
     2             (i)  The project descriptions and rationale for
     3         repair, maintenance and construction of school buildings
     4         or facilities.
     5             (ii)  The project floor plans or a copy of project
     6         blueprints.
     7             (iii)  The student and school district employee
     8         capacity of each school building or facility in the
     9         capital improvement plan.
    10             (iv)  The current and projected student enrollment
    11         for a five-year period.
    12             (v)  The funding sources and cost estimates including
    13         applicable cost estimates contained in the needs
    14         assessment and authority report.
    15             (vi)  The school district efforts to comply with the
    16         requirements of the school building and facility adequacy
    17         standards.
    18             (vii)  The calculations of the average useful life
    19         for each project financed under the adequacy grant
    20         program.
    21  § 6312.  Public School Building and Facility Adequacy Grant
    22             Program.
    23     (a)  Establishment.--The Public School Building and Facility
    24  Adequacy Grant Program is hereby established and shall be
    25  administered by the authority.
    26     (b)  Components of program.--The adequacy grant program shall
    27  consist of two separate components which shall be known as the
    28  direct grant program and the interest subsidy program. The
    29  adequacy grant program shall be funded by moneys generated from
    30  the issuance of bonds and deposited in the fund. Fifty percent
    20010S0999B1251                 - 18 -

     1  of those funds in the fund generated from bond proceeds shall
     2  fund the direct grant program, and the remaining 50% shall fund
     3  the interest subsidy program.
     4  § 6313.  Direct grant program.
     5     (a)  Grants to be provided.--The direct grant program shall
     6  provide direct grants to eligible school districts for 100% of
     7  the cost of a project, including the performance of essential
     8  maintenance on or construction of a public school building or
     9  facility and educational equipment.
    10     (b)  Applications.--School districts eligible under this
    11  program may submit an annual application to the authority. The
    12  authority shall establish procedures and guidelines regarding
    13  the application for and award of direct grants under this
    14  program. The procedures and guidelines shall include:
    15         (1)  Provisions for accountability to ensure that the
    16     direct grants are used in accordance with this chapter.
    17         (2)  The following project priority list for the award of
    18     grants under the program:
    19             (i)  To replace or reconstruct school buildings and
    20         facilities destroyed or damaged by man-made or natural
    21         disasters.
    22             (ii)  To perform essential maintenance on the most
    23         deficient school buildings and facilities.
    24             (iii)  To replace school buildings and facilities
    25         that no longer are structurally sound or have components
    26         that are no longer structurally sound.
    27             (iv)  To construct new school buildings and
    28         facilities to alleviate the overcrowding caused by
    29         population growth.
    30             (v)  To purchase educational equipment.
    20010S0999B1251                 - 19 -

     1     (c)  Eligibility criteria.--The authority shall establish
     2  eligibility criteria for grant recipients, in which eligibility
     3  shall be based on at least one of the following:
     4         (1)  The school district has at least 50% of its students
     5     eligible for free or reduced-cost lunches under the National
     6     School Lunch Act (60 Stat. 230, 42 U.S.C. § 1751 et seq.).
     7         (2)  The school district receives a poverty supplement in
     8     its basic education funding.
     9         (3)  The school district has a market value income aid
    10     ratio of .8000 or higher.
    11  Any school district meets the eligibility criteria under this
    12  subsection, classified as a "special need district."
    13  § 6314.  Interest subsidy program.
    14     (a)  Funding to be provided.--
    15         (1)  The interest subsidy program shall provide funding
    16     in the form of a reimbursement to a school district that is
    17     not classified as a "special need district" for a specific
    18     percentage of the total costs of a project for the
    19     performance of essential maintenance on or the construction
    20     of school buildings and facilities.
    21         (2)  The authority shall establish a formula for the
    22     calculation of the percentage of the total project costs
    23     which may be reimbursed to the school district.
    24     (b)  Eligibility criteria.--The authority shall establish
    25  eligibility criteria for the award of the funding under this
    26  program which shall incorporate the following project priority
    27  list:
    28         (1)  To replace or reconstruct school buildings and
    29     facilities destroyed or damaged by man-made or natural
    30     disasters.
    20010S0999B1251                 - 20 -

     1         (2)  To alleviate the overcrowding caused by population
     2     growth or to replace school buildings and facilities that no
     3     longer are structurally sound or have components that are no
     4     longer structurally sound.
     5         (3)  To replace or reconstruct school buildings and
     6     facilities that pose a risk to the health and safety of
     7     students, employees and the public.
     8         (4)  To alter facilities to provide accessibility for
     9     qualified individuals with disabilities, as defined under the
    10     Americans with Disabilities Act of 1990 (Public Law 101-336,
    11     42 U.S.C. § 12101 et seq.)
    12         (5)  To purchase educational equipment.
    13     (c)  Prerequisite for eligibility.--In order for a school
    14  district to be eligible under the interest subsidy program, the
    15  school district must obtain financing for a project at the
    16  lowest available interest rate. The guidelines for the program
    17  established by the authority shall address sufficient
    18  documentation of such lowest available interest rate.
    19  § 6315.  Bond issuance.
    20     (a)  Amount authorized.--The authority is authorized to issue
    21  a maximum of $2,400,000,000 in negotiable bonds in six
    22  individual series of $400,000,000 over the course of two years
    23  for the purpose of funding the adequacy grant program to provide
    24  grants and reimbursements for the construction, maintenance and
    25  equipping of public schools in this Commonwealth. The term of
    26  each series of bonds shall be based on the average useful life
    27  of the projects financed.
    28     (b)  Terms.--
    29         (1)  The bonds of the authority shall be of such series,
    30     bear such date or dates, mature at such time or times, not
    20010S0999B1251                 - 21 -

     1     exceeding 30 years from their respective dates, bear such
     2     interest at such rate or rates payable semi-annually, be in
     3     such denominations, be in such form, either coupon or fully
     4     registered without coupons, carry such registration,
     5     exchangeability and interchangeability privileges, be payable
     6     in such medium of payment and at such place or places, be
     7     subject to such terms of redemption at such prices not
     8     exceeding 105% of the principal amount thereof, and be
     9     entitled to such priorities in the revenues and receipts of
    10     the authority as such resolution or resolutions may provide.
    11     The interest on bonds issued shall be paid during the term
    12     for which the bonds were issued. The bonds shall be signed by
    13     such officers, either manually or by facsimile as the
    14     authority shall determine and shall have imprinted thereon a
    15     facsimile of the corporate seal, attested by the facsimile
    16     signature of the treasurer of the authority, all as may be
    17     prescribed in such resolution or resolutions. Any of the
    18     bonds may be issued and delivered notwithstanding that any of
    19     the authorized persons signing the bonds or whose facsimile
    20     signature shall be upon the bonds shall have ceased to hold
    21     their respective offices at the time when the bonds shall
    22     actually be delivered.
    23         (2)  The bonds shall be sold as the authority shall
    24     determine, at private sale or to the highest responsible
    25     bidder or bidders after public notice by advertisement. The
    26     notice shall contain a general description of the bonds, the
    27     manner, place and time of the sale or time limit for the
    28     receipt of proposals, the name of the officer to whom the
    29     bids or proposals shall be delivered and a statement of the
    30     terms and conditions of the sale, which shall include a
    20010S0999B1251                 - 22 -

     1     statement of the highest net interest cost or highest
     2     interest cost computed by the Present Worth Method, whichever
     3     is specified, acceptable to the authority. For the purposes
     4     of this section, net interest cost shall be determined by
     5     ascertaining the total amount of interest payable with
     6     respect to the bonds, computed from the date of the bonds to
     7     the stated maturity dates thereof, plus the amount of any
     8     discount from the principal amount of the bond or less the
     9     amount of any premium in excess of the principal amount of
    10     the bonds. Pending the preparation of the definitive bonds,
    11     interim receipts may be issued to the purchaser or purchasers
    12     of such bonds, and may contain such terms and conditions as
    13     the authority may determine.
    14         (3)  The bonds are hereby made securities in which all
    15     officers of the Commonwealth and its political subdivisions
    16     and municipal officers and administrative departments, boards
    17     and commissions of the Commonwealth, all banks, bankers,
    18     savings banks, trust companies, savings and loan
    19     associations, investment companies and other persons carrying
    20     on a banking business, all insurance companies, insurance
    21     associations and other persons carrying on an insurance
    22     business and all administrators, executors, guardians,
    23     trustees and other fiduciaries, and all other persons
    24     whatsoever who now or may hereafter be authorized to invest
    25     in bonds or other obligations of the Commonwealth, may
    26     properly and legally invest any funds, including capital,
    27     belonging to them or within their control, and said bonds or
    28     other securities or other obligations are hereby made
    29     securities which may properly and legally be deposited with
    30     and received by any State or municipal officers or agency of
    20010S0999B1251                 - 23 -

     1     the Commonwealth for any purpose for which the deposit of
     2     bonds or other obligations of the Commonwealth is now or may
     3     hereafter be authorized by law.
     4     (c)  Contents of resolution.--Any resolution authorizing the
     5  bonds may contain provisions which shall be a part of the
     6  contract with the holders thereof as to:
     7         (1)  Pledging the full faith and credit of the authority,
     8     but not of the Commonwealth or any county or other political
     9     subdivision thereof, for such obligations, or restricting the
    10     same to all or any of the revenues or receipts of the
    11     authority from all or any projects.
    12         (2)  The financing and the duties of the authority with
    13     reference thereto.
    14         (3)  The terms and provisions of the bonds.
    15         (4)  Limitations on the purposes to which the proceeds of
    16     the bonds, then or to be later issued, or of any loan or
    17     grant by the United States may be applied.
    18         (5)  The setting aside of reserves or sinking funds and
    19     the regulation and disposition thereof.
    20         (6)  The terms and provisions of any deed of trust or
    21     indenture securing the bonds or under which the same may be
    22     issued.
    23         (7)  Any other or additional agreements with the holders
    24     of the bonds.
    25     (d)  Documents.--The authority may enter into any deeds of
    26  trust, indentures or other agreements with any bank or trust
    27  company or other person or persons in the United States having
    28  power to enter into the same, including any Federal agency, as
    29  security for such bonds and may assign and pledge all or any of
    30  the revenues or receipts of the authority thereunder. Such deed
    20010S0999B1251                 - 24 -

     1  of trust, indenture or other agreement may contain such
     2  provisions as may be customary in such instruments or as the
     3  authority may authorize, including, but without limitation,
     4  provisions as to:
     5         (1)  The construction, improvement, financing, operation,
     6     maintenance and repair of any project or projects and the
     7     duties of the authority with reference thereto.
     8         (2)  The application of funds and the safeguarding of
     9     funds on hand or on deposit.
    10         (3)  The rights and remedies of said trustee and the
    11     holders of the bonds, which may include restrictions upon the
    12     individual right of action of such bondholders.
    13         (4)  The terms and provisions of the bonds or the
    14     resolutions authorizing the issuance of the same.
    15     (e)  Bonds as negotiable instruments.--Bonds of the authority
    16  shall have the qualities of negotiable instruments under 13
    17  Pa.C.S. (relating to commercial code).
    18     (f)  Rights and remedies of bondholders.--
    19         (1)  The rights and remedies herein conferred upon or
    20     granted to the bondholders shall be in addition to, and not
    21     in limitation of, any rights and remedies lawfully granted to
    22     such bondholders by the resolution or resolutions providing
    23     for the issuance of bonds or by any deed of trust, indenture
    24     or other agreement under which the same may be issued or
    25     secured. In the event that the authority shall default in the
    26     payment of principal of or interest on any of the bonds after
    27     said principal or interest shall become due, whether at
    28     maturity or upon call for redemption, and such default shall
    29     continue for a period of 30 days, or in the event that the
    30     authority shall fail or refuse to comply with the provisions
    20010S0999B1251                 - 25 -

     1     of this chapter or shall default in any agreement made with
     2     the holders of the bonds, the holders of 25% in aggregate
     3     principal amount of the bonds then outstanding, by instrument
     4     or instruments filed in the office of the recorder of deeds
     5     of the county, and proved or acknowledged in the same manner
     6     as a deed to be recorded may, except as such right may be
     7     limited under the provisions of any deed of trust, indenture
     8     or other agreement as provided earlier, appoint a trustee to
     9     represent the bondholders for the purposes provided in this
    10     section. Such trustee and any trustee under any deed of
    11     trust, indenture or other agreement may, and upon written
    12     request of the holders of 25%, or such other percentage as
    13     may be specified in any deed of trust, indenture or other
    14     agreement aforesaid, in principal amount of the bonds then
    15     outstanding, shall in his or its own name:
    16             (i)  by mandamus or other suit, action or proceeding
    17         at law or in equity to enforce all rights of the
    18         bondholders, including the right to require the authority
    19         to collect rates and other charges adequate to carry out
    20         any agreement as to, or pledge of the revenues or
    21         receipts thereof, the authority, and to require the
    22         authority to carry out any other agreements with or for
    23         the benefit of the bondholders, and to perform its and
    24         their duties under this chapter;
    25             (ii)  bring suit upon the bonds;
    26             (iii)  by action or suit in equity to require the
    27         authority to account as if it were the trustee of an
    28         express trust for the bondholders;
    29             (iv)  by an action or suit in equity to enjoin any
    30         acts or things which may be unlawful or in violation of
    20010S0999B1251                 - 26 -

     1         the rights of the bondholders; or
     2             (v)  by notice in writing to the authority to declare
     3         all bonds due and payable and if all defaults shall be
     4         made good, then with the consent of the holders of 25%,
     5         or such other percentage as may be specified in any deed
     6         of trust, indenture or other agreement aforesaid, of the
     7         principal amount of the bonds then outstanding, to annul
     8         such declaration and its consequences.
     9         (2)  Any trustee, whether appointed as aforesaid or
    10     acting under a deed of trust, indenture or other agreement,
    11     and whether or not all bonds have been declared due and
    12     payable, shall be entitled as of right to the appointment of
    13     a receiver, who may, to the same extent that the authority
    14     itself could do so, enter and take possession of the
    15     facilities of the authority or any parts thereof, the
    16     revenues or receipts from which are or may be applicable to
    17     the payment of the bonds so in default, and operate and
    18     maintain the same and collect and receive other revenues
    19     thereafter rising therefrom in the same manner as the
    20     authority might do, and shall deposit all such moneys in a
    21     separate account and apply the same in such manner as the
    22     court shall direct. In any suit, action or proceeding by the
    23     trustees, the fees, counsel fees and expenses of the trustee
    24     and of the receiver, if any, and all costs and disbursements
    25     allowed by the court shall be a first charge on any revenues
    26     and receipts from which are or may be applicable to the
    27     payment of the bonds so in default. Said trustee shall in
    28     addition to the foregoing have and possess all of the powers
    29     necessary or appropriate for the exercise of any functions
    30     specifically set forth in this section or incident to the
    20010S0999B1251                 - 27 -

     1     general representation of the bondholders in the enforcement
     2     and protection of their rights.
     3         (3)  In addition to all other rights and all other
     4     remedies, any holder of bonds of the authority shall have the
     5     right by mandamus or other suit, action or proceeding at law
     6     or in equity to enforce his rights against the authority to
     7     collect his fees, rentals and other such charges adequate to
     8     carry out any agreement as to, or pledge of, such fees,
     9     rentals or other charges or income, revenues and receipts and
    10     to require the authority to carry out any of its covenants
    11     and agreements with the bondholders and to perform its and
    12     their duties under this chapter.
    13     (g)  Sinking fund.--The bonds of the authority shall be
    14  issued pursuant to one or more resolutions or one or more trust
    15  indentures and, as provided in such resolution or trust
    16  indenture, the moneys set aside in any sinking fund pledged for
    17  any particular bonds or series of bonds shall be held for the
    18  sole benefit of such bonds, separate and apart from the moneys
    19  pledged for any other bonds of the authority issued under any
    20  other resolution or trust indenture.
    21     (h)  Commonwealth pledge.--The Commonwealth does hereby
    22  pledge to and agree with any person, firm or corporation or
    23  Federal agency subscribing to or acquiring the bonds to be
    24  issued by the authority for the construction, financing,
    25  extension, improvement or enlargement of any project or part
    26  thereof that the Commonwealth will not limit or alter the rights
    27  hereby vested in the authority or limit or alter any provisions
    28  for the security and protection of the authority and its
    29  bondholders contained in this act or as now provided by law
    30  until all bonds at any time issued, together with the interest
    20010S0999B1251                 - 28 -

     1  thereon, are fully met and discharged. The Commonwealth does
     2  further pledge to and agree with the United States and any other
     3  Federal agency that in the event that any Federal agency shall
     4  construct or contribute any funds for the construction,
     5  financing, extension improvement or enlargement of any project
     6  or any portion thereof the Commonwealth will not alter or limit
     7  the rights and powers of the authority in any manner which would
     8  be inconsistent with the continued maintenance and operation of
     9  the project or the improvement thereof, or which would be
    10  inconsistent with the due performance of any agreements between
    11  the authority and any such Federal agency, and the authority
    12  shall continue to have and may exercise all powers herein
    13  carrying out of the purposes of this chapter and the purposes of
    14  the United States in the construction or improvement or
    15  enlargement of any project or such portion thereof.
    16     (i)  Tax exemption for authority.--The effectuation of the
    17  authorized purposes of the authority established under this
    18  chapter shall and will be in all respects for the benefit of the
    19  people of the Commonwealth, for the increase of their welfare
    20  and prosperity, and for the improvement of their education and
    21  educational facilities, and since the authority will be
    22  performing essential governmental functions in effectuating such
    23  purposes, the authority shall be exempt from payment of any
    24  taxes or assessments on any property acquired, held, owned,
    25  leased or used by it for such purposes, and the bonds issued by
    26  the authority, their transfer and the income therefrom,
    27  including any profits made on the sale thereof, shall at all
    28  times be free from taxation, other than inheritance and estate
    29  taxation within this Commonwealth.
    30  § 6316.  Public School Construction Reserve Fund.
    20010S0999B1251                 - 29 -

     1     (a)  Establishment.--The Public School Construction Reserve
     2  Fund is hereby established in the State Treasury. The board of
     3  the authority shall operate and administer the fund, and shall
     4  establish guidelines for the administration and operation of the
     5  fund.
     6     (b)  Use of moneys.--Moneys in the fund shall be used by the
     7  authority as follows:
     8         (1)  Proceeds raised from the sale of the bonds shall be
     9     used to fund the adequacy grant program of which 50% of the
    10     proceeds shall fund the direct grant program and the
    11     remaining 50% shall fund the interest subsidy program.
    12         (2)  Funds transferred by the State Treasurer into the
    13     fund under subsection (c) shall be used as follows:
    14             (i)  First to alleviate existing debt service.
    15             (ii)  After the annual debt service payment has been
    16         made, the remaining funds shall be used for funding
    17         emergency maintenance for structurally unsound school
    18         buildings and facilities.
    19     (c)  Required transfer of other funds.--
    20         (1)  The State Treasurer shall transfer to the fund
    21     within 30 days following the end of each fiscal year up to
    22     the sum of 15% of the General Fund's fiscal year ending
    23     surplus.
    24         (2)  If the amount of the General Fund surplus transfer
    25     is insufficient to fully fund the annual debt service for
    26     that year, the State Treasurer shall transfer funds, as
    27     necessary, to fully fund the annual debt service up to the
    28     sum of 100% of the revenues generated by the malt beverage
    29     tax imposed by Article XX of the act of March 4, 1971 (P.L.6,
    30     No.2), known as the Tax Reform Code of 1971, and the
    20010S0999B1251                 - 30 -

     1     spirituous and vinous liquors tax imposed by the act of
     2     December 5, 1933 (Sp.Sess., P.L.38, No.6), known as the
     3     Spirituous and Vinous Liquor Tax Law.
     4         (3)  If the sum of the transfers from the General Fund
     5     surplus and the malt beverage tax and the spirituous and
     6     vinous liquor tax are insufficient to fully fund the annual
     7     debt service for that year, the State Treasurer shall
     8     transfer funds as necessary to fully fund the annual debt
     9     service up to the sum of 85% of the revenues generated by the
    10     State portion of the realty transfer tax.
    11     (d)  Other funding sources.--The authority shall deposit any
    12  other moneys made available to the authority from any source for
    13  such purposes into the fund.
    14     (e)  Use of remaining funds.--The fund shall have the
    15  priority of alleviating existing debt service arising from the
    16  bond issuance. When the annual debt service payment has been
    17  paid, any remaining funds shall be used for emergency public
    18  school maintenance needs in this Commonwealth in accordance with
    19  guidelines established by the authority for emergency school
    20  construction and maintenance funding.
    21     Section 2.  This act shall take effect immediately.






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