PRINTER'S NO. 964
No. 858 Session of 1989
INTRODUCED BY MADIGAN, CORMAN, BRIGHTBILL, LOEPER, REIBMAN,
SHAFFER, SALVATORE, ROCKS, PUNT, GREENWOOD, STEWART, STOUT,
BELL, WILT, WENGER, LINCOLN, REGOLI, LEMMOND, SHUMAKER,
STAPLETON, PETERSON, MUSTO, ROSS, O'PAKE, LEWIS, BELAN,
AFFLERBACH, PORTERFIELD AND MELLOW, APRIL 25, 1989
REFERRED TO LOCAL GOVERNMENT, APRIL 25, 1989
AN ACT
1 Amending the act of May 2, 1945 (P.L.382, No.164), entitled "An
2 act providing for the incorporation as bodies corporate and
3 politic of 'Authorities' for municipalities, counties and
4 townships; prescribing the rights, powers and duties of such
5 Authorities heretofore or hereafter incorporated; authorizing
6 such Authorities to acquire, construct, improve, maintain and
7 operate projects, and to borrow money and issue bonds
8 therefor; providing for the payment of such bonds, and
9 prescribing the rights of the holders thereof; conferring the
10 right of eminent domain on such Authorities; authorizing such
11 Authorities to enter into contracts with and to accept grants
12 from the Federal Government or any agency thereof; and
13 conferring exclusive jurisdiction on certain courts over
14 rates," further defining "project"; defining "local
15 government unit" and "provide financing for insurance
16 reserves"; and providing for financing of insurance reserves.
17 The General Assembly of the Commonwealth of Pennsylvania
18 hereby enacts as follows:
19 Section 1. Section 2(j) of the act of May 2, 1945 (P.L.382,
20 No.164), known as the Municipality Authorities Act of 1945,
21 amended October 21, 1988 (P.L.1041, No.117), is amended and the
22 section is amended by adding definitions to read:
23 Section 2. Definitions.--The following terms whenever used
1 or referred to in this act shall have the following meanings,
2 except in those instances where the context clearly indicates
3 otherwise:
4 * * *
5 (j) The term "project" shall mean equipment to be leased by
6 an Authority to the municipality or municipalities that
7 organized it or to any municipality or school district located
8 wholly or partially within the boundaries of the municipality or
9 municipalities that organized it, or any structure, facility or
10 undertaking which an Authority is authorized to acquire,
11 construct, finance, improve, maintain or operate, or provide
12 financing for insurance reserves under the provisions of this
13 act.
14 * * *
15 (p) The term "local government unit" shall have the same
16 meaning as that provided in section 102(c)(10) of the act of
17 July 12, 1972 (P.L.781, No.185), known as the "Local Government
18 Unit Debt Act."
19 (q) The term "provide financing for insurance reserves"
20 shall mean financing, on behalf of one or more local government
21 units or authorities, all or any portion of a reserve, or a
22 contribution toward a combined reserve, pool or other
23 arrangement, relating to self-insurance, which has been
24 established by one or more local government units pursuant to 42
25 Pa.C.S. § 8564 (relating to liability insurance and self-
26 insurance) up to, but not exceeding, the amount provided in
27 section 107 of the "Local Government Unit Debt Act."
28 Section 2. The introductory paragraph of subsection A, the
29 introductory paragraph of clause (a) and clause (b) of
30 subsection A of section 4 of the act, amended October 21, 1988
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1 (P.L.1041, No.117), are amended to read:
2 Section 4. Purposes and Powers; General.--A. Every
3 Authority incorporated under this act shall be a body corporate
4 and politic, and shall be for the purpose of acquiring, holding,
5 constructing, improving, maintaining, and operating, owning,
6 leasing, either in the capacity of lessor or lessee, projects of
7 the following kind and character and providing financing for
8 insurance reserves.
9 (a) The Authority shall be for the purpose of acquiring,
10 holding, constructing, improving, maintaining and operating,
11 owning, leasing, either in the capacity of lessor or lessee,
12 projects of the [following] kind and character described in the
13 following subclauses and for the purpose of providing financing
14 for insurance reserves:
15 * * *
16 (b) This section is subject to the following limitations:
17 (1) An Authority created by a school district or school
18 districts shall have the power only to acquire, hold, construct,
19 improve, maintain, operate and lease public school buildings and
20 other school projects acquired, constructed or improved for
21 public school purposes.
22 (2) The purpose and intent of this act being to benefit the
23 people of the Commonwealth by, among other things, increasing
24 their commerce, health, safety and prosperity, and not to
25 unnecessarily burden or interfere with existing business by the
26 establishment of competitive enterprises, none of the powers
27 granted by this act shall be exercised in the construction,
28 improvement, maintenance, extension or operation of any project
29 or projects or providing financing for insurance reserves which
30 in whole or in part shall duplicate or compete with existing
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1 enterprises serving substantially the same purposes. This
2 limitation shall not apply to the exercise of the powers granted
3 hereunder:
4 (i) for facilities and equipment for the collection, removal
5 or disposal of ashes, garbage, rubbish and other refuse
6 materials by incineration, land fill or other methods, if each
7 municipality organizing or intending to use the facilities of an
8 Authority having such powers shall declare by resolution or
9 ordinance that it is desirable for the health and safety of the
10 people of such municipality that it use the facilities of the
11 Authority, and if any contract between such municipality and any
12 other person, firm or corporation for the collection, removal or
13 disposal of ashes, garbage, rubbish and other refuse material
14 has by its terms expired or is terminable at the option of the
15 municipality or will expire within six months from the date such
16 ordinance becomes effective; nor
17 (ii) for industrial development projects if the Authority
18 does not develop industrial projects which will compete with
19 existing industries; nor
20 (iii) for Authorities created for the purpose of providing
21 business improvements and administrative services if each
22 municipality organizing an Authority for such a project shall
23 declare by resolution or ordinance that it is desirable for the
24 entire [municipality] local government unit to improve the
25 business district; nor
26 (iv) to hospital projects to be leased to public hospitals
27 or nonprofit hospital corporations serving the public or to
28 school building projects and facilities to be leased to private,
29 nonprofit, nonsectarian colleges and universities, State-related
30 universities and community colleges, or to facilities, limited
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1 as described above, to produce steam or to generate electric
2 power, if each municipality organizing an Authority for such a
3 project shall declare by resolution or ordinance that it is
4 desirable for the health, safety and welfare of the people in
5 the area served by such facilities to have such facilities
6 provided by an Authority[.]; nor
7 (v) to provide financing for insurance reserves, if each
8 municipality or Authority intending to use any proceeds thereof
9 shall declare by resolution or ordinance that it is desirable
10 for the health, safety and welfare of the people in such local
11 government unit or served by such Authority.
12 * * *
13 Section 3. Subsection B of section 4 of the act is amended
14 by adding a clause to read:
15 Section 4. Purposes and Powers; General.--* * *
16 B. Every Authority is hereby granted, and shall have and may
17 exercise all powers necessary or convenient for the carrying out
18 of the aforesaid purposes, including but without limiting the
19 generality of the foregoing, the following rights and powers:
20 * * *
21 (y) To provide financing for insurance reserves by making
22 loans, which may be evidenced by, and secured as may be provided
23 in, loan agreements, security agreements or any other
24 instruments or agreements, which instruments or agreements may
25 contain such provisions as the Authority shall deem necessary or
26 desirable for the security or protection of the Authority or its
27 bondholders.
28 * * *
29 Section 4. Subsections B and C of section 5 of the act,
30 amended October 21, 1988 (P.L.1041, No.117), are amended to
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1 read:
2 Section 5. Purposes and Powers; Bonds.--* * *
3 B. Any resolution or resolutions authorizing any bonds may
4 contain provisions which shall be part of the contract with the
5 holders thereof, as to (a) pledging the full faith and credit of
6 the Authority (but not of the Commonwealth of Pennsylvania or
7 any political subdivision thereof) for such obligations, or
8 restricting the same to all or any of the revenues of the
9 Authority from all or any projects or properties, (b) the
10 construction, improvement, operation, extension, enlargement,
11 maintenance and repair of the project, and providing financing
12 for insurance reserves and the duties of the Authority with
13 reference thereto, (c) the terms and provisions of the bonds,
14 (d) limitations on the purposes to which the proceeds of the
15 bonds then or thereafter to be issued, or of any loan or grant
16 by the United States may be applied, (e) the rate of tolls and
17 other charges for use of the facilities of or for the services
18 rendered by the Authority, (f) the setting aside of reserves or
19 sinking funds and the regulation and disposition thereof, (g)
20 limitations on the issuance of additional bonds, (h) the terms
21 and provisions of any deed of trust or indenture securing the
22 bonds, or under which the same may be issued, and (i) any other
23 or additional agreements with the holders of the bonds.
24 C. Any Authority may enter into any deeds of trust,
25 indentures or other agreements, with any bank or trust company,
26 or other person or persons in the United States having power to
27 enter into the same, including any Federal agency, as security
28 for such bonds, and may assign and pledge all or any of the
29 revenues or receipts of the Authority thereunder. Such deed of
30 trust, indenture or other agreement, may contain such provisions
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1 as may be customary in such instruments, or as the Authority may
2 authorize, including (but without limitation) provisions as to
3 (1) the construction, improvement, operation, maintenance and
4 repair of any project, and providing financing for insurance
5 reserves and the duties of the Authority with reference thereto,
6 (2) the application of funds and the safeguarding of funds on
7 hand or on deposit, (3) the rights and remedies of said trustee
8 and the holders of the bonds, (which may include restrictions
9 upon the individual right of action of such bondholders) and (4)
10 the terms and provisions of the bonds or the resolutions
11 authorizing the issuance of the same.
12 Said bonds shall have all the qualities of negotiable
13 instruments under the law merchant and the negotiable
14 instruments law of the Commonwealth of Pennsylvania.
15 Section 5. This act shall take effect immediately.
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