PRINTER'S NO. 1368
No. 1086 Session of 2001
INTRODUCED BY MOWERY, GERLACH, ERICKSON, COSTA, M. WHITE, STOUT,
MUSTO, EARLL, LEMMOND, O'PAKE, THOMPSON AND RHOADES,
OCTOBER 9, 2001
REFERRED TO ENVIRONMENTAL RESOURCES AND ENERGY, OCTOBER 9, 2001
AN ACT
1 Amending the act of March 1, 1988 (P.L.82, No.16), entitled "An
2 act providing for the establishment, implementation and
3 administration of the Pennsylvania Infrastructure Investment
4 Authority; imposing powers and duties on a board of trustees;
5 transferring the rights, powers, duties and obligations of
6 the Water Facilities Loan Board to the Pennsylvania
7 Infrastructure Investment Authority; providing for the
8 issuance of notes and bonds; providing for financial
9 assistance and for a comprehensive water facilities plan;
10 authorizing a referendum to incur indebtedness; making an
11 appropriation; and making repeals," establishing the
12 Municipal Tapping Fee Funding Program; making an
13 appropriation; and making editorial changes.
14 The General Assembly of the Commonwealth of Pennsylvania
15 hereby enacts as follows:
16 Section 1. The act of March 1, 1988 (P.L.82, No.16), known
17 as the Pennsylvania Infrastructure Investment Authority Act, is
18 amended by adding a chapter heading to read:
19 CHAPTER 1
20 PRELIMINARY PROVISIONS
21 Section 2. Section 1 heading of the act is amended to read:
22 Section [1] 101. Short title.
23 * * *
1 Section 3. Section 2 heading of the act, amended December
2 16, 1992 (P.L.1137, No.149), is amended to read:
3 Section [2] 102. Legislative intent.
4 * * *
5 Section 4. Section 3 of the act, amended December 16, 1992
6 (P.L.1137, No.149), is amended to read:
7 Section [3] 103. Definitions.
8 The following words and phrases when used in this act shall
9 have the meanings given to them in this section unless the
10 context clearly indicates otherwise:
11 "Authority." The Pennsylvania Infrastructure Investment
12 Authority.
13 "Board." The board of directors of the authority.
14 "Bonds." Bonds, notes or other evidences of indebtedness
15 issued by the authority pursuant to this act.
16 "Borrower." An individual owner of a housing unit.
17 "Department." The Department of Environmental [Resources]
18 Protection of the Commonwealth.
19 "Eligible cost." The cost of all labor, materials, machinery
20 and equipment, lands, property, rights and easements, plans and
21 specifications, surveys or estimates of costs and revenues, pre-
22 feasibility studies, engineering and legal services, and all
23 other expenses necessary or incident to the acquisition,
24 construction, improvement, expansion, extension, repair or
25 rehabilitation of all or part of a project.
26 "Federal poverty guidelines." The poverty measure issued
27 annually by the United State Department of Health and Human
28 Services as published in the Federal Register based on family
29 size and household income.
30 "Governmental unit." Any agency of the Commonwealth or any
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1 county, municipality or school district, or any agency,
2 instrumentality, authority or corporation thereof, or any public
3 body having local or regional jurisdiction or power.
4 "Housing unit." A single-family residential structure
5 including a manufactured home on a permanent foundation which is
6 a permanent residence and is owned and occupied by one or more
7 individuals.
8 "Loan origination fees." Fees paid by a borrower to a local
9 lending institution for originating the borrower's loan.
10 "Loan servicing fees." Fees paid to a local lending
11 institution.
12 "Local lending institution." A bank, savings and loan or
13 other financial institution authorized by the authority and a
14 municipality to extend financial assistance under the Municipal
15 Tapping Fee Funding Program.
16 "Manufactured home." A movable, single-family dwelling unit
17 designed for long-term occupancy, built on a chassis at a
18 factory, not less than eight feet wide and 32 feet long, with or
19 without a permanent foundation, and consisting of a complete
20 package with major appliances, plumbing and electrical
21 facilities prepared for appropriate connections.
22 "Program." The Municipal Tapping Fee Funding Program
23 established under section 501.
24 "Project." The eligible costs associated with the
25 acquisition, construction, improvement, expansion, extension,
26 repair or rehabilitation of all or part of any facility or
27 system, whether publicly or, in the case of paragraph (1) or
28 (2), privately owned:
29 (1) for the collection, treatment or disposal of
30 wastewater, including industrial waste;
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1 (2) for the supply, treatment, storage or distribution
2 of drinking water;
3 (3) for the control of storm water, which may include,
4 but need not be limited to, the transport, storage and the
5 infiltration of storm water; or
6 (4) for the best management practices to address point
7 or nonpoint source pollution associated with storm water
8 runoff or any other innovative techniques identified in the
9 county-prepared watershed plans pursuant to the act of
10 October 4, 1978 (P.L.864, No.167), known as the Storm Water
11 Management Act.
12 "Project permitting fees." Fees charged by local
13 governmental units for the processing of property lateral permit
14 applications by a sewer enforcement officer.
15 "Property lateral." The pipe connecting a housing unit to
16 the street lateral.
17 "Secretary." The Secretary of Environmental [Resources]
18 Protection of the Commonwealth.
19 "Sewage Enforcement Officer" or "SEO." An official of a
20 municipality who reviews permit applications, issues permits and
21 conducts investigations and inspections that are necessary to
22 implement the provisions of the act of January 24, 1966 (1965
23 P.L.1535, No.537), known as the Pennsylvania Sewage Facilities
24 Act, and the regulations promulgated thereunder, including the
25 individual designated by a municipality as the code enforcement
26 officer.
27 "Statewide median household income." The median household
28 income reported for Pennsylvania in the most recently available
29 Census of Population and Housing, as conducted and reported by
30 the United States Bureau of the Census. This amount shall be
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1 adjusted on the first working day of each calendar year by
2 multiplying median household income by the following factor:
3 CPI-U(1)/CPI-U(2), where CPI-U refers to the Consumer Price
4 Index for all Urban Consumers, as computed and reported by the
5 United States Bureau of Labor Statistics. The designation (1)
6 refers to the CPI-U for the year in which the median household
7 income is calculated and reported and the designation (2) refers
8 to the most recent CPI-U reported as of December 15 of the year
9 immediately preceding the year when the adjustment is made.
10 "Storm water." Drainage runoff from the surface of the land
11 resulting from precipitation or snow or ice melt.
12 "Water Facilities Loan Board." The board established under
13 32 Pa.C.S. § 7504 (relating to Water Facilities Loan Board).
14 Section 5. The act is amended by adding a chapter heading to
15 read:
16 CHAPTER 3
17 PENNSYLVANIA INFRASTRUCTURE INVESTMENT
18 AUTHORITY
19 Section 6. Section 4 heading of the act is amended to read:
20 Section [4] 301. Pennsylvania Infrastructure Investment
21 Authority; board of directors.
22 * * *
23 Section 7. Section 5 heading and (a), amended December 16,
24 1992 (P.L.1137, No.149), are amended to read:
25 Section [5] 302. Revenues of authority.
26 (a) Sources of revenues.--The authority may receive money
27 from sources of revenue, including, but not limited to, the
28 following:
29 (1) State funds appropriated to the authority.
30 (2) Federal funds appropriated to or granted to the
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1 authority.
2 (3) Proceeds from the sale of bonds of the authority
3 authorized under section [7] 304.
4 (4) Proceeds from the sale of bonds issued on or after
5 the effective date of this act from the remaining unused
6 authorization in addition to any other funds that remain
7 unencumbered on the effective date of this act from the act
8 of July 12, 1981 (P.L.263, No.88), entitled "An act
9 authorizing the incurring of indebtedness, with approval of
10 the electors, of $300,000,000 for the repair, construction,
11 reconstruction, rehabilitation, extension and improvement of
12 community water supply systems, and for the repair,
13 reconstruction or rehabilitation of flood control facilities,
14 dams and port facilities and providing the allotment of
15 proceeds from borrowing hereunder," approved by the
16 electorate on November 3, 1981.
17 (5) Proceeds from the sale of bonds not to exceed a
18 total sum of $150,000,000 issued for site development under
19 the provisions of Article XVI-B of the act of April 9, 1929
20 (P.L.343, No.176), known as The Fiscal Code. This paragraph
21 shall expire on December 31, 1989, except that the board may
22 fund projects approved prior to December 31, 1989.
23 (6) Proceeds from the sale of any Commonwealth general
24 obligation bonds issued under sections [16 and 17] 313 and
25 314.
26 (7) Proceeds from the sale of any Commonwealth general
27 obligation bonds issued under section 12 of the act of March
28 16, 1992 (P.L.10, No.5), known as the Small Water Systems
29 Assistance Act.
30 (8) Proceeds from the sale of authority assets.
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1 (9) Repayment of loan principal.
2 (10) Payment of interest on loans made by the authority.
3 (11) Interest earned on the investments of authority
4 moneys.
5 * * *
6 Section 8. The headings of sections 6, 7, 8 and 9 of the act
7 are amended to read:
8 Section [6] 303. Powers and duties of authority.
9 * * *
10 Section [7] 304. Specific power to issue bonds.
11 * * *
12 Section [8] 305. Covenants and express conditions on
13 obligations.
14 * * *
15 Section [9] 306. Nature and effect of pledges.
16 * * *
17 Section 9. Section 10 heading and (f) of the act are amended
18 to read:
19 Section [10] 307. Financial assistance.
20 * * *
21 (f) Loans.--Subject to any agreements with the holders of
22 bonds, the board shall have the power to set terms applicable to
23 loans in any manner it deems appropriate, subject to the
24 provisions of this subsection. The board may consider such
25 factors as it deems relevant, including current market interest
26 rates, the financial and economic distress of the area which the
27 project serves, and the necessity to maintain the authority
28 funds in a financially sound manner. Loans may be made based on
29 the ability to repay the loan from future revenue to be derived
30 from the project, by a mortgage or other property lien, or on
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1 any other fiscal matters which the authority deems appropriate.
2 The board shall have the power to defer principal on loans for
3 up to five years. In the event of a default on the repayment of
4 a loan, the board may apply to the court of common pleas of the
5 county where the project is located for the appointment of a
6 receiver to assume operation and supervision of the facility
7 under the supervision of the court. The minimum rate of interest
8 to be paid on any loan made pursuant to this act shall be 1%.
9 The maximum rate of interest shall not exceed the following:
10 (1) For projects in counties whose unemployment rate
11 exceeds the Statewide unemployment rate by 40% or more, 1%
12 for the first five years and 25% of the bond issue rate for
13 the remainder of the loan.
14 (2) For projects in counties whose unemployment rate
15 exceeds the Statewide unemployment rate, but exceeds it by
16 less than 40%, 30% of the bond issue rate for the first five
17 years and 60% of the bond issue rate for the remainder of the
18 loan.
19 (3) For all other projects, 60% of the bond issue rate
20 for the first five years and 75% of the bond issue rate for
21 the remainder of the loan.
22 (4) For projects located within municipalities for which
23 unemployment rates exist which would qualify the project for
24 lower interest rates than if the relevant county unemployment
25 rate were used, the unemployment rate of that municipality
26 may be used in determining the interest rate on the loan.
27 For purposes of this subsection, the phrase "unemployment rate
28 of the county" shall mean the average unemployment rate for the
29 county in the most recent calendar year for which data has been
30 finalized. For the projects which serve multiple counties, the
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1 highest unemployment rate of the counties involved shall be
2 used. The unemployment data utilized shall be data reported by
3 the Department of Labor and Industry. For purposes of this
4 subsection, the phrase "bond interest rate" shall be the rate of
5 interest paid by the Commonwealth immediately preceding the date
6 of the loan for the bonds issued under sections [16 and 17] 313
7 and 314.
8 * * *
9 Section 10. The headings of sections 11 and 12 of the act
10 are amended to read:
11 Section [11] 308. Comprehensive water facilities plan.
12 * * *
13 Section [12] 309. Audits.
14 * * *
15 Section 11. Section 13 of the act is amended to read:
16 Section [13] 310. Annual report.
17 The board shall provide the General Assembly with an annual
18 report detailing all projects funded under section [10] 307.
19 Section 12. Section 14 heading of the act is amended to
20 read:
21 Section [14] 311. Expedited approval of rate relief.
22 * * *
23 Section 13. Sections 15, 16 and 17 of the act are amended to
24 read:
25 Section [15] 312. Transfer of Water Facilities Loan Board.
26 (a) Removal of members.--All existing members of the Water
27 Facilities Loan Board shall cease to hold office on the day that
28 the Governor certifies by publication in the Pennsylvania
29 Bulletin the existence of a quorum on the board created under
30 section [4] 301.
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1 (b) Board of directors to serve as Water Facilities Loan
2 Board.--For purposes of satisfying all outstanding obligations
3 of the Water Facilities Loan Board and for purposes of
4 collecting loan and interest repayments, the board established
5 in section [4] 301 shall constitute the membership of the Water
6 Facilities Loan Board.
7 (c) Transfer of function.--All remaining unencumbered funds,
8 rights, powers, duties, obligations, liabilities, records and
9 equipment of the Water Facilities Loan Board are transferred to
10 the authority.
11 Section [16] 313. Referendum.
12 (a) General rule.--Pursuant to the provisions of section
13 7(a)(3) of Article VIII of the Constitution of Pennsylvania, the
14 question of incurring indebtedness of $300,000,000 for loans for
15 the acquisition, repair, construction, reconstruction,
16 rehabilitation, extension, expansion and improvement of water
17 supply and sewage treatment systems, subject to implementation
18 through this act, shall be submitted to the electors at the next
19 primary, municipal or general election following the effective
20 date of this act.
21 (b) Certification.--The Secretary of the Commonwealth shall
22 forthwith certify the question to the county boards of
23 elections.
24 (c) Form of question.--The question shall be in
25 substantially the following form:
26 Do you favor the incurring of indebtedness by the
27 Commonwealth of $300,000,000 for use as loans to acquire,
28 repair, construct, reconstruct, rehabilitate, extend,
29 expand and improve water supply and sewage treatment
30 systems?
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1 Section [17] 314. Bonds.
2 (a) Issuance of general obligation bonds.--As evidence of
3 the indebtedness if authorized under section [16] 313, general
4 obligation bonds of the Commonwealth shall be issued from time
5 to time to fund and retire notes issued pursuant to section [16]
6 313 to carry out the purposes of this act, or both, for such
7 total amounts, in such form, in such denominations and subject
8 to such terms and conditions of issue, redemption and maturity,
9 rate of interest and time of payment of interest as the issuing
10 officials direct except that the latest stated maturity date
11 shall not exceed 30 years from the date of the debt first issued
12 for each series.
13 (b) Execution of bonds.--All bonds and notes issued under
14 the authority of section [16] 313 shall bear facsimile
15 signatures of the issuing officials and a facsimile of the great
16 seal of the Commonwealth and shall be countersigned by a duly
17 authorized loan and transfer agent of the Commonwealth.
18 (c) Direct obligation of Commonwealth.--All bonds and notes
19 issued in accordance with section [16] 313 shall be direct
20 obligations of the Commonwealth, and the full faith and credit
21 of the Commonwealth are hereby pledged for the payment of the
22 interest thereon as it becomes due and the payment of the
23 principal at maturity. The principal of and interest on the
24 bonds and notes shall be payable in lawful money of the United
25 States of America.
26 (d) Exemption from taxation.--All bonds and notes issued
27 under the provisions of this section shall be exempt from
28 taxation for State and local purposes.
29 (e) Form of bonds.--The bonds may be issued as coupon bonds
30 or registered as to both principal and interest as the issuing
20010S1086B1368 - 11 -
1 officials may determine. If interest coupons are attached, they
2 shall contain the facsimile signature of the State Treasurer.
3 (f) Bond amortization.--The issuing officials shall provide
4 for the amortization of the bonds in substantial and regular
5 amounts over the term of the debt. The first retirement of
6 principal shall be stated to mature prior to the expiration of a
7 period of time equal to one-tenth of the time from the date of
8 the first obligation issued to evidence the debt to the date of
9 the expiration of the term of the debt. Retirements of principal
10 shall be regular and substantial if made in annual or semiannual
11 amounts, whether by stated serial maturities or by mandatory
12 sinking fund retirements.
13 (g) Refunding bonds.--The issuing officials are authorized
14 to provide, by resolution, for the issuance of refunding bonds
15 for the purpose of refunding any bonds issued under this section
16 and then outstanding, either by voluntary exchange with the
17 holders of the outstanding bonds, or to provide funds to redeem
18 and retire the outstanding bonds with accrued interest, any
19 premium payable thereon and the costs of issuance and retirement
20 of bonds, at maturity or at any call date. The issuance of the
21 refunding bonds, the maturities and other details thereof, the
22 rights of the holders thereof and the duties of the issuing
23 officials in respect to the same shall be governed by the
24 provisions of this section, insofar as they may be applicable.
25 Refunding bonds may be issued by the issuing officials to refund
26 bonds originally issued or to refund bonds previously issued for
27 refunding purposes.
28 (h) Quorum.--Whenever any action is to be taken or decision
29 made by the Governor, the Auditor General and the State
30 Treasurer acting as issuing officials and the three officers are
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1 not able unanimously to agree, the action or decision of the
2 Governor and either the Auditor General or State Treasurer shall
3 be binding and final.
4 (i) Public sale.--Whenever bonds are issued, they shall be
5 offered for sale at not less than 98% of the principal amount
6 and accrued interest and shall be sold by the issuing officials
7 to the highest and best bidder or bidders after due public
8 advertisement on such terms and conditions and upon such open
9 competitive bidding as the issuing officials shall direct. The
10 manner and character of the advertisement and the time of
11 advertising shall be prescribed by the issuing officials.
12 (j) Private sale.--Any portion of any bond issue so offered
13 and not sold or subscribed for may be disposed of by private
14 sale by the issuing officials in such manner and at such prices,
15 not less than 98% of the principal amount and accrued interest,
16 as the issuing officials shall direct. No commission shall be
17 allowed or paid for the sale of any bonds issued under the
18 authority of this section.
19 (k) Bond series.--When bonds are issued from time to time,
20 the bonds of each issue shall constitute a separate series to be
21 designated by the issuing officials or may be combined for sale
22 as one series with other general obligation bonds of the
23 Commonwealth.
24 (l) Temporary bonds.--Until permanent bonds can be prepared,
25 the issuing officials may in their discretion issue, in lieu of
26 permanent bonds, temporary bonds in such form and with such
27 privileges as to registration and exchange for permanent bonds
28 as may be determined by the issuing officials.
29 (m) Disposition and use of proceeds.--The proceeds realized
30 from the sale of bonds and notes, except funding bonds,
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1 refunding bonds and renewal notes, under the provisions of this
2 section are specifically dedicated to the purposes of the
3 referendum to be implemented by this act and shall be paid into
4 the special funds established in the State Treasury in such
5 amounts as may be specified by the board pursuant to section
6 [5(c)] 302(c). The proceeds shall be paid by the State Treasurer
7 periodically to the board to expend them at such times and in
8 such amounts as may be necessary to satisfy the funding needs of
9 the board. The proceeds of the sale of funding bonds, refunding
10 bonds and renewal notes shall be paid to the State Treasurer and
11 applied to the payment of principal, the accrued interest and
12 premium, if any, and costs of redemption of the bonds and notes
13 for which such obligations shall have been issued.
14 (n) Investment of funds.--Pending their application to the
15 purposes authorized, moneys held or deposited by the State
16 Treasurer may be invested or reinvested as are other funds in
17 the custody of the State Treasurer in the manner provided by
18 law. All earnings received from the investment or deposit of
19 such funds shall be paid into the State Treasury to the credit
20 of the funds established by the board in section [5(c)] 302(c)
21 in such amounts as may be specified by the board pursuant to
22 that section.
23 (o) Registration of bonds.--The Auditor General shall
24 prepare the necessary registry book to be kept in the office of
25 the duly authorized loan and transfer agent of the Commonwealth
26 for the registration of any bonds, at the request of owners
27 thereof, according to the terms and conditions of issue directed
28 by the issuing officials.
29 (p) Expenses of preparation for issue and sale of bonds and
30 notes.--There is hereby appropriated to the State Treasurer from
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1 the proceeds of the bonds and notes issued as much money as may
2 be necessary for all costs and expenses in connection with the
3 issue of and sale and registration of the bonds and notes in
4 connection with this act.
5 Section 14. The act is amended by adding a chapter to read:
6 CHAPTER 5
7 MUNICIPAL TAPPING FEE FUNDING PROGRAM
8 Section 501. Establishment of program.
9 There is hereby established the Municipal Tapping Fee Funding
10 Program for the purpose of authorizing municipalities and
11 municipal authorities to provide financial assistance in the
12 form of grants and low-interest loans to homeowners for tapping
13 fees and eligible costs relating to the installation of a
14 property lateral for homes constructed prior to the effective
15 date of this chapter. The authority shall develop policies and
16 procedures as may be necessary for the application for and
17 approval of program funds for municipalities and municipal
18 authorities which at a minimum shall be required to repay
19 program loans to the authority within 15 years from the date of
20 the loan at an annual interest rate not to exceed 1%.
21 Section 502. Scope.
22 This chapter applies to financial assistance provided by
23 municipalities and municipal authorities to owners of single-
24 family homes, including manufactured homes on a permanent
25 foundation.
26 Section 503. Applicant eligibility.
27 Eligible applicants shall be owners of single-family homes
28 and manufactured homes on a permanent foundation if the owner
29 occupies the home and the home is served by a public sewer
30 system owned by a municipality or municipal authority. Loans may
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1 be provided under this program if the applicant's household
2 income does not exceed 200% of the Statewide median household
3 income. Grants may be provided under this program to applicants
4 whose household income does not exceed the most recent Federal
5 poverty guidelines for the year in which an application is made.
6 Section 504. Project eligibility.
7 The following conditions shall be satisfied for an eligible
8 project:
9 (1) The owner of the real property into which the
10 lateral is to be installed must also be the owner of the
11 housing unit located thereon.
12 (2) The property lateral is located in an area that is
13 served by a sewage collection and treatment system and the
14 property lateral is required by the municipality or municipal
15 authority to connect to the system.
16 (3) The design and installation of the property lateral
17 is the most cost-effective system available to meet the needs
18 of the unit.
19 (4) The municipality or municipal authority has
20 established a tapping fee.
21 (5) The inspector employed by the municipal authority
22 which will operate the collection and treatment system to
23 which the lateral is connected, or the municipal code
24 enforcement officer or the designee of the municipality or
25 the SEO has certified that the property lateral, including
26 piping within the unit, meets all permit requirements under
27 applicable State and municipal laws and regulations.
28 (6) The construction activity to be financed by a loan
29 or grant under the program has not commenced and the tapping
30 fee has not been paid prior to the time of application
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1 approval by the local lending institution.
2 Section 505. Eligible costs.
3 Eligible costs shall include:
4 (1) All testing, design, materials and construction
5 costs associated with the property lateral, including a
6 grinder pump, if required.
7 (2) Permit fees.
8 (3) Interest during construction or financing of the
9 project and allowance for funds used during construction.
10 (4) Costs relating to the closing of an applicant's
11 loan, such as legal fees, credit reports, title reports,
12 insurance, judgment reports, lien certificates, appraisal
13 fees and loan origination fees.
14 (5) Tapping fees.
15 Section 506. Ineligible costs.
16 Grants and loans awarded under the program may not be used
17 for the costs of acquisition of land or right-of-way for a
18 project.
19 Section 507. Financial assistance terms and conditions.
20 (a) Financial assistance.--Financial assistance under the
21 program shall be in the form of loans or grants as follows:
22 (1) The interest rate offered on loans shall be 1% per
23 annum.
24 (2) The maximum amount of a loan shall be no greater
25 than 80% of eligible costs and in no case may exceed $12,000.
26 The maximum amount of a grant shall be $15,000.
27 (3) The minimum amount of a loan shall be $1,500. The
28 minimum amount of a grant shall be $500.
29 (4) The maximum term of a loan shall be 15 years.
30 (5) Loan repayment shall commence no later than 60 days
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1 after the date of loan closing.
2 (b) Collateral.--Collateral shall be determined by the local
3 financial institution under guidance and policies established by
4 the authority and may include, but are not limited to, a
5 mortgage on the borrower's property subordinate only to the debt
6 outstanding at the time of loan approval by the local financial
7 institution.
8 (c) Repayment.--A loan shall be repaid in full if the
9 property to which it applies is either sold or transferred to
10 other than an immediate family member.
11 (d) Fees.--The borrower may be charged fees for delinquent
12 payment of either principal or interest on a loan if the
13 potential fees are described in the loan agreement entered into
14 and agreed to by the borrower and the local lending institution.
15 (e) Documentation.--An applicant shall apply for funding to
16 a local lending institution by submitting documentation as may
17 be required to demonstrate compliance with standards of the
18 local lending institution under guidance and policies of the
19 authority.
20 (f) Local lending institution.--Upon receipt of a funding
21 application, the local lending institution shall:
22 (1) Verify that the applicant meets the eligibility
23 criteria of section 503.
24 (2) Verify that the application is valid and contains
25 all required documentation.
26 (3) Verify through the municipality or municipal
27 authority that sufficient funds are available to approve the
28 application.
29 (4) Perform credit and security checks needed to ensure
30 that the applicant meets the collateral requirements of the
20010S1086B1368 - 18 -
1 authority.
2 (g) Approval.--A local lending institution may approve an
3 application for funding under the program only if the conditions
4 under subsection (k) are satisfied.
5 (h) Completion of review.--Upon completion of its
6 application review, a local lending institution shall notify the
7 applicant and the municipality or municipal authority of the
8 following:
9 (1) The outcome of its review.
10 (2) Whether the applicant is eligible for a grant.
11 (3) Whether the applicant's loan is approved.
12 (4) The amount and terms of the loan.
13 (i) Funds.--Funds shall be disbursed to the contractor on
14 behalf of the borrower or to the borrower upon completion of
15 construction and final inspection and certification from the
16 municipality or municipal authority that the project has been
17 completed in accordance with all permit requirements and is
18 operable as designed and intended.
19 (j) Changes.--A change to an approved project which is
20 inconsistent with the approved design for which the permit was
21 issued may not be made unless the municipality or municipal
22 authority gives prior approval to the change.
23 (k) Recordkeeping.--
24 (1) A borrower shall maintain financial records to
25 substantiate expenditures on an approved project.
26 (2) A local financial institution shall maintain
27 financial and activity records on a loan application and
28 approved loan and shall report this information to the
29 municipality or municipal authority in a form and at those
30 times as may be requested.
20010S1086B1368 - 19 -
1 (l) Financial assistance documents.--The authority and
2 municipalities shall develop and adopt financial assistance
3 documents which, among other things, define the terms and
4 conditions under which financial assistance must be offered
5 under the program. These documents shall be used by local
6 financial institutions participating in the program without
7 change, except as approved by the authority.
8 Section 508. Funds and accounts.
9 (a) Establishment of funds.--The authority may establish
10 separate funds, accounts or other financial structures as may be
11 needed to implement and operate the program.
12 (b) Approval.--The authority may from time to time approve
13 such funding, including the pledging of the authority's
14 revenues, as it deems appropriate to finance the program.
15 (c) Liability.--The authority shall not be held liable for
16 loan offers or approvals made by a local lending institution or
17 a municipality or municipal authority in the absence of prior
18 authority-approved funding.
19 Section 509. Loan servicing.
20 (a) Purchase of loans.--A municipality or municipal
21 authority shall purchase loans originated by a local lending
22 institution on a schedule agreed to by the municipality or
23 municipal authority and the local lending institution.
24 (b) Monitoring.--The municipality or municipal authority
25 shall monitor and service the loans purchased.
26 (c) Loan servicing fee.--The municipality or municipal
27 authority may charge a loan servicing fee to defray the costs
28 that it incurs to service loans under the program. These loan
29 servicing fees shall be charged to and shall be the sole
30 responsibility of program borrowers.
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1 Section 510. Program monitoring.
2 The borrower shall submit to the municipality or municipal
3 authority receipts for the project in accordance with the
4 schedule and requirements contained in the loan agreement.
5 Failure to provide the receipts in accordance with the schedule
6 shall constitute a violation of the loan agreement.
7 Section 15. Sections 18, 19, 20 and 21 of the act are
8 repealed.
9 Section 16. The act is amended by adding a chapter to read:
10 CHAPTER 9
11 MISCELLANEOUS PROVISIONS
12 Section 901. Appropriation.
13 The sum of $5,000,000, or as much as may be necessary, is
14 hereby appropriated to the Pennsylvania Infrastructure Authority
15 for the fiscal year July 1, 2001, to June 30, 2002, to carry out
16 the provisions of chapter 5.
17 Section 902. Repeal.
18 All acts and parts of acts are repealed insofar as they are
19 inconsistent with this act.
20 Section 17. This act shall take effect in 90 days.
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