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                                                       PRINTER'S NO. 915



No. 785 Session of 2003



                                     AN ACT

     1  Amending the act of August 23, 1967 (P.L.251, No.102), entitled,
     2     as amended, "An act providing for the incorporation as public
     3     instrumentalities of the Commonwealth and as bodies corporate
     4     and politic of industrial and commercial development
     5     authorities for municipalities, counties and townships;
     6     prescribing the rights, powers and duties of such authorities
     7     hereafter incorporated; authorizing such authorities to
     8     acquire, by gift or purchase, to construct, improve and
     9     maintain industrial, specialized, or commercial development
    10     projects including projects for the elimination or prevention
    11     of blight and the control of air and water pollution, and to
    12     borrow money and issue bonds therefor; providing for the
    13     payment of such bonds and giving security therefor, and
    14     prescribing the rights of the holders of such bonds;
    15     authorizing the lease or sale of industrial, specialized, or
    16     commercial development projects to industrial, specialized,
    17     or commercial enterprises; authorizing any county,
    18     municipality or township to transfer or convey to such
    19     authorities, any facilities or property available for
    20     industrial, specialized, or commercial development projects;
    21     exempting the property and securities of such authorities
    22     from taxation; authorizing such authorities to enter into
    23     contracts with and to accept grants from the Federal
    24     Government or any agency thereof; and providing for approval
    25     by the Secretary of Commerce of the proceedings relating to
    26     industrial, specialized, or commercial development projects
    27     of such authorities," further providing for definitions, for
    28     financing authority indebtedness, for financing authority
    29     loans or financing and for prohibitions; establishing the
    30     Pennsylvania Opportunity Fund Program and the Pennsylvania
    31     Opportunity Fund Oversight Committee with powers and duties;
    32     and making an appropriation.

     1     The General Assembly of the Commonwealth of Pennsylvania
     2  hereby enacts as follows:
     3     Section 1.  The definitions of "department" and "secretary"
     4  in section 3 of the act of August 23, 1967 (P.L.251, No.102),
     5  known as the Economic Development Financing Law, are amended and
     6  the section is amended by adding definitions to read:
     7     Section 3.  Definitions.--As used in this act:
     8     * * *
     9     "Department" means the Department of [Commerce] Community and
    10  Economic Development of the Commonwealth.
    11     * * *
    12     "Oversight committee" means the Pennsylvania Opportunity Fund
    13  Oversight Committee established in section 15.4.
    14     * * *
    15     "Program" means the Pennsylvania Opportunity Fund Program
    16  established in section 15.3.
    17     * * *
    18     "Secretary" means the Secretary of [Commerce] Community and
    19  Economic Development of the Commonwealth.
    20     * * *
    21     Section 2.  Sections 6.3(a), 6.4 and 15.2(a) of the act,
    22  amended or added December 17, 1993 (P.L.490, No.74), are amended
    23  to read:
    24     Section 6.3.  Financing Authority Indebtedness.--(a)  The
    25  financing authority shall have the power and is hereby
    26  authorized to issue its limited obligation revenue bonds and
    27  other types of financing as in the judgment of the financing
    28  authority shall be necessary to provide sufficient funds for any
    29  related or unrelated projects: (i) provided that the issuance by
    30  the financing authority of taxable or tax-exempt bonds on behalf
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     1  of projects comprising industrial facilities, commercial
     2  facilities, pollution control facilities, energy conversion
     3  facilities, energy producing facilities and disaster relief
     4  project facilities other than projects to be funded by the
     5  oversight committee shall have been authorized by an industrial
     6  and commercial development authority or a group of industrial
     7  and commercial development authorities or by an industrial
     8  development agency or a group of industrial and development
     9  agencies; (ii) further provided that the financing authority may
    10  issue taxable or tax-exempt bonds on behalf of interagency
    11  projects other than projects to be funded by the oversight
    12  committee only if the applicant has first applied to the
    13  Pennsylvania Infrastructure Investment Authority for financing
    14  under the provisions of the act of March 1, 1988 (P.L.82,
    15  No.16), known as the "Pennsylvania Infrastructure Investment
    16  Authority Act," and the Pennsylvania Infrastructure Investment
    17  Authority in writing refers the applicant to the financing
    18  authority to finance all or part of the interagency project in
    19  accordance with this act; and (iii) further provided that the
    20  issuance by the financing authority of taxable or tax-exempt
    21  bonds for a public facility other than interagency projects and
    22  projects for roads and transportation facilities and
    23  transportation systems of every kind and projects to be funded
    24  by the oversight committee shall have been authorized by a
    25  municipality, municipal authority or Commonwealth agency and
    26  only if both the applicant and the financing authority have
    27  determined that the cost of obtaining the financing for the
    28  public facility will be reduced through the issuance of bonds
    29  through the financing authority. For purposes of the
    30  determination required in this subsection, any financing for a
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     1  public facility that the financing authority reasonably believes
     2  could have received a rating of "A" or better from either
     3  Moody's Investors Service or Standard & Poor's Corporation shall
     4  be presumed not to be eligible for financing by the financing
     5  authority. The financing authority is authorized and empowered
     6  to use the proceeds of any bonds issued for the making of loans,
     7  purchasing loans, mortgages, security interests or loan
     8  participations and paying all incidental expenses in connection
     9  therewith, paying expenses of authorizing and issuing the bonds,
    10  paying interest on the bonds until revenues thereof are
    11  available in sufficient amounts and funding the reserves as the
    12  financing authority deems necessary and desirable.
    13     * * *
    14     Section 6.4.  Financing Authority [Loans] Financing.--(a)
    15  The financing authority shall ascertain to its satisfaction
    16  that:
    17     (1)  Firm commitments satisfactory to the financing authority
    18  have been obtained from responsible financial sources, which may
    19  include a Federal agency, project applicant or the project user,
    20  for the portion of project costs in excess of any loan or other
    21  financing requested from the financing authority.
    22     (2)  [A] Except for projects to be funded by the oversight
    23  committee, a firm commitment satisfactory to the financing
    24  authority from the project applicant or project user has been
    25  obtained to lease or use the project after acquisition is
    26  completed.
    27     (3)  The project user may reasonably be expected to comply
    28  with the terms of such lease or use.
    29     (4)  The project complies with all rules and regulations of
    30  the financing authority, if any.
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     1     (b)  In addition to other provisions of this section limiting
     2  the power of the financing authority to make loans or provide
     3  other financing in respect to a particular project, no funds of
     4  the financing authority shall be used in respect of any project
     5  if the financing authority would be required to operate, service
     6  or maintain the project pursuant to any lease or other agreement
     7  except upon foreclosure or except upon the occurrence of a
     8  default in the payment or terms of any loan made. Nothing shall
     9  prevent the financing authority from transferring such property
    10  to the project applicant, project user or either of their
    11  designees at the end of the term of such financing.
    12     Section 15.2.  Prohibition.--(a)  Except as provided herein,
    13  no Commonwealth agency under the control of the executive branch
    14  shall be a project applicant under this act, except that the
    15  department may be a project applicant for projects funded by the
    16  oversight committee. [Operating expenses of any Commonwealth
    17  agency under the control of the executive branch are not an
    18  eligible project cost.]
    19     * * *
    20     Section 3.  The act is amended by adding sections to read:
    21     Section 15.3.  Pennsylvania Opportunity Fund Program.--There
    22  is hereby established within the financing authority a program
    23  to be known as the Pennsylvania Opportunity Fund Program, to be
    24  administered in accordance with this act.
    25     Section 15.4.  Pennsylvania Opportunity Fund Oversight
    26  Committee.--(a)  There is hereby established a committee of the
    27  financing board consisting of not more than 13 members which
    28  shall have the delegated powers of the financing authority to
    29  operate the program. The committee shall consist of the
    30  following:
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     1     (1)  The Governor or his designee.
     2     (2)  The State Treasurer or his designee.
     3     (3)  The Secretary of the Budget or his designee.
     4     (4)  The secretary or his designee.
     5     (5)  The Secretary of Banking or his designee.
     6     (6)  Four members of the General Assembly appointed as
     7  follows:
     8     (i)  One member appointed by the President pro tempore of the
     9  Senate.
    10     (ii)  One member appointed by the Minority Leader of the
    11  Senate.
    12     (iii)  One member appointed by the Speaker of the House of
    13  Representatives.
    14     (iv)  One member appointed by the Minority Leader of the
    15  House of Representatives.
    16     (7)  Four members appointed by the Governor.
    17     (b)  (1)  The members appointed by the General Assembly shall
    18  serve at the pleasure of the appointing authority.
    19     (2)  Gubernatorial appointments shall serve for a term of
    20  four years from appointment and until a successor is appointed,
    21  except that two of the gubernatorial members shall be appointed
    22  to terms of only two years and their successors shall be
    23  appointed to terms of four years.
    24     (c)  Members of the oversight committee shall serve without
    25  compensation but shall be reimbursed for actual and reasonable
    26  expenses incurred in the performance of their official duties.
    27     (d)  The Governor shall serve as chairperson of the oversight
    28  committee or the Governor may designate another member to serve
    29  as chairperson, and the members of the oversight committee shall
    30  select one member to serve as secretary.
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     1     (e)  A designee may lawfully vote and otherwise act on behalf
     2  of the member of the oversight committee. The designation shall
     3  be in writing, delivered to the oversight committee and continue
     4  in effect until revoked or amended in writing. Members of the
     5  oversight committee who are legislators may appoint designees to
     6  represent them at meetings of the oversight committee.
     7     (f)  A majority of the members of the oversight committee
     8  then serving shall constitute a quorum of the oversight
     9  committee for the purposes of conducting business. Only members
    10  or their designees who are physically present at a meeting or
    11  able to participate fully in the deliberations by appropriate
    12  telecommunications means shall count toward a quorum of the
    13  oversight committee.
    14     Section 15.5.  Additional Powers and Duties of the Oversight
    15  Committee.--(a)  In addition to the delegated powers of the
    16  financing authority, the oversight committee shall have the
    17  following additional powers and duties:
    18     (1)  To authorize and direct the issuance of bonds by the
    19  financing authority, which, upon authorization by the oversight
    20  committee, shall be deemed for all purposes to have been issued
    21  by resolution of the financing authority.
    22     (2)  To control and manage, invest and reinvest money
    23  received from such bond financing, from repayments and
    24  redeposits or from any other source derived and dedicated for
    25  use in the program and for all expenses associated with the
    26  program. Such funds may be deposited by the oversight committee
    27  in banks or trust companies in special accounts for use by the
    28  oversight committee as set forth above, including the use of
    29  interest earned on such accounts. Moneys in such accounts shall
    30  be paid out on order of the oversight committee.
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     1     (3)  To hold, purchase, sell, lend, assign, transfer or
     2  dispose of any category of securities and investments, in which
     3  money dedicated for use in the program has been invested and the
     4  proceeds of such investments.
     5     (4)  To make loans or to guarantee loans to promote
     6  agriculture and tourism in the Commonwealth. Such loans or loan
     7  guarantees may be made by providing funds to the department to
     8  administer on behalf of the oversight committee.
     9     (b)  Funds deposited by the oversight committee in special
    10  accounts in banks or trust companies may be prudently invested
    11  in:
    12     (1)  Obligations of the United States government, its
    13  agencies and instrumentalities, which have a liquid market with
    14  a readily determinable market value.
    15     (2)  Certificates of deposit and other evidences of deposit
    16  at financial institutions, bankers' acceptances and commercial
    17  paper rated in the highest tier, for example, A1, P1, F1 or D1
    18  or higher, by a nationally recognized rating agency.
    19     (3)  Obligations of State and local governments, and of
    20  public authorities, which obligations are rated in one of the
    21  top three rating categories by a nationally recognized rating
    22  agency.
    23     (4)  Repurchase agreements whose underlying purchased
    24  securities consist of the foregoing.
    25     (5)  Money market funds regulated by the Securities and
    26  Exchange Commission having aggregate assets of at least fifty
    27  million dollars ($50,000,000) on the date of investment and
    28  whose portfolio may consist only of dollar-denominated
    29  securities.
    30     (c)  Actions taken by the oversight committee shall not be
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     1  subject to review by the financing board.
     2     (d)  In the exercise of its powers, the oversight committee
     3  must exercise that degree of judgment, skill and care under the
     4  circumstances then prevailing that persons of prudence,
     5  discretion and intelligence, who are familiar with investment
     6  matters, exercise in the management of their own affairs, not in
     7  regard to speculation but in regard to permanent disposition of
     8  the funds, considering the probable income to be derived from
     9  the investments and the probable safety of their capital.
    10     (e)  The members of the oversight committee and their
    11  professional personnel shall stand in a fiduciary relationship
    12  to the Commonwealth and its citizens regarding the investments
    13  of the money of the fund and shall not profit, either directly
    14  or indirectly, with respect thereto.
    15     Section 15.6.  Pennsylvania Opportunity Fund Program.--The
    16  Pennsylvania Opportunity Fund Program shall consist of a program
    17  that will provide loan financing or loan guarantees to owners of
    18  businesses engaged in tourism-related activities or to farmers
    19  engaged in production agriculture. The oversight committee may
    20  establish a loan and loan guarantee program for this purpose, or
    21  it may contribute such moneys to the department for the use by
    22  the department under one or more programs administered by the
    23  department which are consistent with the purpose of this
    24  program. The oversight committee may commit up to one hundred
    25  million dollars ($100,000,000) in first-round funds to this
    26  program. Before any projects are approved under this program,
    27  the oversight committee or the department, as appropriate, must
    28  develop written guidelines. With regard to this program, there
    29  is no limit on the amount of second-round or subsequent-round
    30  funding that may be provided to the program by the oversight
    20030S0785B0915                  - 9 -     

     1  committee, provided such second-round or subsequent-round
     2  funding comes from sources other than bond proceeds.
     3     Section 15.7.  Annual Report.--By November 30, 2004, and
     4  annually thereafter, the oversight committee shall submit a
     5  report to the Governor and to the chair and minority chair of
     6  the Appropriations Committee of the Senate and the chair and
     7  minority chair of the Appropriations Committee of the House of
     8  Representatives. The report shall provide an analysis of the
     9  status of the current investments and transactions made by the
    10  oversight committee or the department over the previous fiscal
    11  year for the program.
    12     Section 15.8.  Reporting of Tax Increment Financing
    13  Projects.--The department is hereby authorized to gather
    14  information relating to the issuance of tax increment financing
    15  bonds within the Commonwealth, for projects that are in
    16  existence at the time of the effective date of this section and
    17  for projects that come into existence thereafter. Issuers of tax
    18  increment financing bonds are hereby directed to provide such
    19  information to the department upon request. The department is
    20  authorized to take whatever steps are necessary to obtain such
    21  information. The department will provide the information it has
    22  collected to the oversight committee for inclusion in its annual
    23  report to the General Assembly.
    24     Section 4.  The sum of $12,000,000 is hereby appropriated to
    25  the financing authority for the purposes set forth in this act.
    26     Section 5.  This act shall take effect July 1, 2003, or
    27  immediately, whichever is later.

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