PRINTER'S NO. 4139
No. 3012 Session of 1994
INTRODUCED BY TANGRETTI, ITKIN, STURLA, YANDRISEVITS, MARKOSEK, MIHALICH, STISH, SAYLOR, CURRY, TIGUE, KAISER, GORDNER, FAIRCHILD, GIGLIOTTI, MELIO, BELARDI, VAN HORNE, COY, STEELMAN, CESSAR, COLAFELLA, CAWLEY, CAPPABIANCA, BUNT, PESCI, BAKER, JOSEPHS, MICOZZIE, FAJT, HANNA, VANCE, FICHTER, HENNESSEY, TRICH, McCALL, CORRIGAN, STABACK, BELFANTI, PISTELLA, KING, MERRY, ARGALL, STERN, SCRIMENTI, NAILOR, TULLI, PETRARCA AND COLAIZZO, SEPTEMBER 27, 1994
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, SEPTEMBER 27, 1994
AN ACT 1 Providing for a loan program for local police agencies funded by 2 a bond issuance; and conferring powers and duties on the 3 Pennsylvania Emergency Management Agency, the Secretary of 4 the Commonwealth and the Legislative Reference Bureau. 5 TABLE OF CONTENTS 6 Chapter 1. Preliminary Provisions 7 Section 101. Short title. 8 Section 102. Definitions. 9 Chapter 3. Administration 10 Section 301. Agency. 11 Section 302. Fund. 12 Chapter 5. Loan Program 13 Section 501. Authority. 14 Section 502. Loans. 15 Chapter 7. Debt 16 Section 701. Authority to borrow.
1 Section 702. Bonds. 2 Section 703. Sale of bonds. 3 Section 704. Refunding bonds. 4 Section 705. Registration of bonds. 5 Section 706. Proceeds. 6 Section 707. Sinking fund. 7 Section 708. Referendum. 8 Chapter 31. Miscellaneous Provisions 9 Section 3101. Effective date. 10 The General Assembly of the Commonwealth of Pennsylvania 11 hereby enacts as follows: 12 CHAPTER 1 13 PRELIMINARY PROVISIONS 14 Section 101. Short title. 15 This act shall be known and may be cited as the Police Agency 16 Loan Act. 17 Section 102. Definitions. 18 The following words and phrases when used in this act shall 19 have the meanings given to them in this section unless the 20 context clearly indicates otherwise: 21 "Agency." The Pennsylvania Emergency Management Agency. 22 "Fund." The Police Agency Loan Fund established in section 23 302. 24 "Police agency." A municipal police department. The term 25 includes an office of county detectives working for a district 26 attorney. 27 "Secretary." The Secretary of the Commonwealth. 28 "Sinking fund." The Police Agency Loan Sinking Fund 29 established in section 707. 30 CHAPTER 3 19940H3012B4139 - 2 -
1 ADMINISTRATION 2 Section 301. Agency. 3 The agency has the following powers and duties: 4 (1) To administer the fund as set forth in section 5 702(c). 6 (2) To administer Chapter 5. 7 (3) To collect loans made under section 502(c). This 8 paragraph includes the power to institute actions for legal 9 or equitable relief. 10 (4) To promulgate regulations to implement this act. 11 Section 302. Fund. 12 (a) Establishment.--The Police Agency Loan Fund is 13 established as a separate fund in the State Treasury. 14 (b) Source.--The following are the sources of the fund: 15 (1) The proceeds from the sale of bonds under section 16 706. 17 (2) The proceeds from the repayment of principal and 18 interest of loans under section 502(c). 19 (c) Purpose.--The agency shall administer the fund to do all 20 of the following: 21 (1) Make annual payments into the sinking fund in 22 accordance with section 707(b)(2). 23 (2) Repay the State Treasurer for the cost of the bond 24 issue under sections 703, 704 and 705. 25 (3) Make loans under section 502(c). 26 (4) Collect loans under section 301(3). 27 CHAPTER 5 28 LOAN PROGRAM 29 Section 501. Authority. 30 (a) Authorization.--The agency may make a loan to a 19940H3012B4139 - 3 -
1 political subdivision for a police agency of the political 2 subdivision to purchase, maintain or repair buildings, equipment 3 or vehicles, as necessary for the proper performance of the 4 police agency's duties. 5 (b) Amount.--A loan under subsection (a) for the purchase, 6 maintenance or repair of buildings shall be for not less than 7 $5,000 nor more than $200,000. A loan under subsection (a) for 8 the purchase, maintenance or repair of vehicles or equipment 9 shall be for not less than $5,000 nor more than $100,000. No 10 political subdivision may receive loans totaling more than 11 $300,000 in a five-year period. 12 (c) Terms.--A loan must be at an interest rate of 2% with 13 repayment periods as follows: 14 (1) For a loan of not more than $15,000, a period of 15 five years. 16 (2) For a loan of more than $15,000 but not more than 17 $100,000, a period of ten years. 18 (3) For a loan of more than $100,000, a period of 15 19 years. 20 Section 502. Loans. 21 (a) Application.--A political subdivision may apply for a 22 loan under section 501 by submitting to the agency all of the 23 following: 24 (1) Name of police agency. 25 (2) Proposed use of loan. 26 (3) Need for use under paragraph (2). 27 (4) Documented ability to repay principal and interest 28 of loan. 29 (b) Determination.-- 30 (1) Within 60 days of receipt of an application under 19940H3012B4139 - 4 -
1 subsection (a), the agency must make a decision and notify 2 the political subdivision of the decision. 3 (2) Failure to issue timely notice under paragraph (1) 4 shall be deemed a denial of the application. 5 (3) The provisions of 2 Pa.C.S. Ch. 7 Subch. A (relating 6 to judicial review of Commonwealth agency action) shall apply 7 to determinations under this subsection. 8 (c) Contracts.--Upon determination of eligibility under 9 subsection (b), the agency shall enter into a loan contract with 10 the political subdivision. 11 CHAPTER 7 12 DEBT 13 Section 701. Authority to borrow. 14 Pursuant to section 7(a)(3) of Article VIII of the 15 Constitution of Pennsylvania and the referendum approved by the 16 electorate under section 708, the Governor, Auditor General and 17 State Treasurer are authorized and directed to borrow, on the 18 credit of the Commonwealth, money not exceeding in the aggregate 19 the sum of $20,000,000 to implement Chapter 5. 20 Section 702. Bonds. 21 (a) General rule.--As evidence of the indebtedness 22 authorized under section 701, general obligation bonds of the 23 Commonwealth shall be issued. The Governor, Auditor General and 24 State Treasurer shall direct for each bond the total amount; the 25 form; the denomination; the terms and conditions of issue, 26 redemption and maturity, rate of interest, and time of payment 27 of interest. The latest stated maturity date shall not exceed 30 28 years from the date of the bond first issued for each series. 29 (b) Signature.--Bonds issued under subsection (a) shall bear 30 facsimile signatures of the Governor, Auditor General and State 19940H3012B4139 - 5 -
1 Treasurer and a facsimile of the Great Seal of the Commonwealth 2 of Pennsylvania and shall be countersigned by two authorized 3 officers of the authorized loan and transfer agents of the 4 Commonwealth. 5 (c) Status.--Bonds issued under subsection (a) shall be 6 direct obligations of the Commonwealth, and the full faith and 7 credit of the Commonwealth are pledged for the payment of the 8 interest on the bonds as it becomes due and the payment of the 9 principal of the bonds at maturity. Bonds issued under 10 subsection (a) shall be exempt from taxation for State and local 11 purposes. The principal of and interest on such bonds shall be 12 payable in lawful money of the United States of America. 13 (d) Format.--Bonds issued under subsection (a) may be issued 14 as coupon bonds or registered as to both principal and interest 15 as the issuing officials may determine. If interest coupons are 16 attached, they shall contain the facsimile signature of the 17 State Treasurer. 18 (e) Amortization.--The issuing officials shall provide for 19 the amortization of the bonds in substantial and regular amounts 20 over the term of the debt as follows: 21 (1) The first retirement of principal shall be stated to 22 mature prior to the expiration of a period of time equal to 23 one-tenth of the time from the date of the first obligation 24 issue to evidence the debt to the date of the expiration of 25 the term of the debt. 26 (2) Retirements of principal shall be regular and 27 substantial if made in annual or semiannual amounts, whether 28 by stated serial maturities or by mandatory sinking fund 29 retirements, computed either in accordance with a level 30 annual debt service plan, as nearly as may be, or upon the 19940H3012B4139 - 6 -
1 equal annual maturities plan. 2 (f) Processing.--The Governor, the Auditor General and the 3 State Treasurer shall proceed to have the necessary bonds 4 prepared and printed. The bonds, as soon as they are prepared 5 and printed, shall be deposited with the authorized loan and 6 transfer agent of the Commonwealth, there to remain until sold 7 under section 703. 8 Section 703. Sale of bonds. 9 (a) Public sale.--Bonds issued under section 702(a) shall be 10 offered for sale at not less than 98% of the principal amount 11 and accrued interest and shall be sold by the Governor, Auditor 12 General and State Treasurer to the highest and best bidder or 13 bidders after public advertisement, on terms and conditions and 14 upon open competitive bidding, as the Governor, Auditor General 15 and State Treasurer shall direct. 16 (b) Private sale.--Any portion of a bond issue offered under 17 subsection (a) but not sold or subscribed for may be disposed of 18 by private sale by the Governor, Auditor General and State 19 Treasurer, in a manner and at a price not less than 98% of the 20 principal amount and accrued interest, as the Governor shall 21 direct. No commission shall be allowed or paid for the sale of 22 bonds issued under section 702(a). 23 (c) Series.--When bonds are issued, the bonds of each issue 24 shall constitute a separate series to be designated by the 25 issuing officials or may be combined for sale as one series with 26 other general obligation bonds of the Commonwealth. 27 Section 704. Refunding bonds. 28 The Governor, Auditor General and State Treasurer are 29 authorized to provide, by resolution, for the issuance of 30 refunding bonds for the purpose of refunding bonds issued under 19940H3012B4139 - 7 -
1 section 702(a) and outstanding, either by voluntary exchange 2 with the holders of the outstanding bonds or by providing funds 3 to redeem and retire the outstanding bonds with accrued interest 4 and premium payable on the bonds, at maturity or at a call date. 5 Refunding bonds may be issued by the Governor, Auditor General 6 and State Treasurer to refund bonds previously issued under this 7 section for refunding purposes. Sections 701 through 703 shall 8 apply to bonds under this section. 9 Section 705. Registration of bonds. 10 The Auditor General shall prepare the necessary registry book 11 to be kept in the office of the authorized loan and transfer 12 agent of the Commonwealth for the registration of bonds issued 13 under subsection 702(a), at the request of bond owners, 14 according to the terms and conditions of issue directed by the 15 Governor, Auditor General and State Treasurer. Bonds which are 16 issued without interest coupons attached shall be registered in 17 the registry books kept by the authorized loan and transfer 18 agent of the Commonwealth. 19 Section 706. Proceeds. 20 The proceeds realized from the sale of bonds under section 21 702(a) shall be paid into the fund. The money shall be paid by 22 the State Treasurer into the fund. 23 Section 707. Sinking fund. 24 (a) Establishment.--The Police Agency Loan Sinking Fund is 25 established as a separate fund in the State Treasury. 26 (b) Source.-- 27 (1) At the end of each fiscal year, the State Treasurer 28 shall notify the agency of the amount necessary for the 29 ensuing fiscal year to redeem, with interest, bonds issued 30 under section 702(a). 19940H3012B4139 - 8 -
1 (2) Within 30 days of notice under paragraph (1), the 2 agency shall pay from the fund to the sinking fund the amount 3 set forth in the notice. 4 Section 708. Referendum. 5 (a) Question.-- 6 (1) The question of incurring indebtedness of 7 $20,000,000 for loans to police agencies for the purpose of 8 purchasing, maintaining and repairing buildings, equipment 9 and vehicles, as necessary for the proper performance of the 10 police agencies' duties, shall be submitted to the electors 11 at the next primary, municipal or general election following 12 the effective date of this section. 13 (2) The secretary shall certify the question to the 14 county boards of election to implement paragraph (1). 15 (b) Form.--The question shall be in substantially the 16 following form: 17 Do you favor the incurring of indebtedness of $20,000,000 18 for loans to police agencies for the purpose of purchasing, 19 maintaining and repairing buildings, equipment and vehicles, 20 as necessary for the proper performance of the police 21 agencies' duties? 22 (c) Election.--The election shall be conducted in accordance 23 with the act of June 3, 1937 (P.L.1333, No.320), known as the 24 Pennsylvania Election Code, except that the time limits for 25 advertisement of notice of the election may be waived as to the 26 question. 27 (d) Notice.--If a majority of the electors voting in the 28 election under subsection (c) vote in the affirmative, the 29 secretary shall send notice of the vote to the Legislative 30 Reference Bureau for publication in the Pennsylvania Bulletin. 19940H3012B4139 - 9 -
1 CHAPTER 31 2 MISCELLANEOUS PROVISIONS 3 Section 3101. Effective date. 4 This act shall take effect as follows: 5 (1) Section 708 and this section shall take effect 6 immediately. 7 (2) The remainder of this act shall take effect on the 8 date of publication of the notice under section 708(d). I22L44VDL/19940H3012B4139 - 10 -