THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY GORDNER, BAKER, BLAKE, YAW, YUDICHAK, PILEGGI, COSTA, ARGALL, BOSCOLA, ERICKSON, FARNESE, FONTANA, GREENLEAF, PIPPY, MENSCH, RAFFERTY, SCHWANK, SMUCKER, TARTAGLIONE, BREWSTER, DINNIMAN, FERLO, HUGHES, KASUNIC, KITCHEN, LEACH, SOLOBAY, STACK, WASHINGTON, WILLIAMS AND WOZNIAK, SEPTEMBER 28, 2011

REFERRED TO APPROPRIATIONS, SEPTEMBER 28, 2011  

AN ACT

Implementing the provisions of clause (1) of subsection (a) of

section 7 of Article VIII of the Constitution of the

Commonwealth of Pennsylvania authorizing the incurring of

debt for the rehabilitation of areas affected by Hurricane

Irene and Tropical Storm Lee; imposing duties upon the

Governor, the Auditor General and the State Treasurer;

prescribing the procedures for the issuance, sale and payment

of general obligations bonds, the funding of debt and

refunding of bonds; exempting said bonds from State and local

taxation; creating certain funds; providing for allocation of

proceeds and for a legislative disaster oversight committee;

and making appropriations.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Borrowing of money authorized.

Pursuant to the provisions of clause (1) of subsection (a) of

section 7 of Article VIII of the Constitution of Pennsylvania,

the Commonwealth is hereby authorized and directed to borrow

from time to time money not exceeding in the aggregate the sum

of $250,000,000, not including money borrowed to refund

outstanding bonds, notes or replacement notes, as may be found

necessary to carry out the rehabilitation of areas affected by

Hurricane Irene and Tropical Storm Lee.

Section 2.  General obligation bonds authorized.

The indebtedness herein authorized shall be incurred from

time to time and shall be evidenced by one or more series of

general obligation bonds or notes of the Commonwealth in such

aggregate principal amount for each series as the Governor,

Auditor General and State Treasurer shall determine, but the

latest stated maturity date shall not exceed 20 years from the

date of the bond first issued for each such series.

Section 3.  Disposition and use of proceeds.

(a)  Deposit.--The proceeds from the sale of bonds and notes,

except refunding bonds and replacement notes, issued pursuant to

the provisions of this act shall be paid to the State Treasurer

and be held in a separate fund to be known as the Disaster

Relief Fund.

(b)  Dedication of funds.--The moneys in the Disaster Relief

Fund are hereby specifically dedicated to meeting the costs of

the rehabilitation of areas affected by Hurricane Irene and

Tropical Storm Lee, including, but not limited to, public

assistance and disaster mitigation as defined in or authorized

by The Robert T. Stafford Disaster Relief and Emergency

Assistance Act (Public Law 93-288, 88 Stat. 143) and paying the

costs and expenses of issuing bonds and notes.

(c)  Interest earnings.--Pending their application to the

purposes authorized, moneys held or deposited by the State

Treasurer may be invested and reinvested as are other funds in

the custody of the State Treasurer in the manner provided by

law. All earnings received from the investment or deposit of

such funds shall be paid into the State Treasury to the credit

of the Disaster Relief Fund.

(d)  Allocation of proceeds.--Subject to the total limit of

$250,000,000, the funds authorized to be borrowed by section 1

shall be allocated as follows:

(1)  No more than $237,500,000 of the funds authorized to

be borrowed under this act shall be used to provide for the

State's share of all public assistance costs, including costs

for highways and bridges, except State-designated highways

and bridges, and disaster mitigation costs provided by the

Federal Government under The Robert T. Stafford Disaster

Relief and Emergency Assistance Act (Public Law 93-288, 88

Stat. 143).

(2)  (i)  No more than 5% of the funds borrowed under

this act shall be used for the cost of the following

projects pursuant to the disaster proclamation:

(A)  Public assistance projects for the

rehabilitation, construction, reconstruction, repair,

other than normal maintenance, or the replacement of

any public facility of a political subdivision in

counties declared as disaster areas which are not

funded by the Federal Government or which are funded

by the Federal Government at a level insufficient to

meet current codes and standards.

(B)  Public assistance projects for the

rehabilitation, construction, reconstruction, repair,

other than normal maintenance, or the replacement of

any nonprofit facility owned and operated by a

nonprofit organization in counties declared as

disaster areas which are not funded by the Federal

Government or which are funded at a level

insufficient to meet current codes and standards.

(C)  Public assistance projects for the

rehabilitation, construction, reconstruction, repair,

other than normal maintenance, or the replacement of

a public facility or nonprofit facility in counties

not declared as disaster areas by the Federal

Government.

(D)  Hazard mitigation projects in counties not

declared as disaster areas by the Federal Government.

(ii)  If the funding for projects under this

paragraph is insufficient to provide assistance for all

eligible projects, the Commonwealth shall prioritize

projects by considering the following factors:

(A)  The severity of disaster-related damages to

be rectified by the project.

(B)  Whether the project will improve the health,

safety and welfare of the affected population.

(C)  Whether the project will lead to an

effective solution to the problem to be addressed.

(D)  The consistency of the project with other

State and regional resource management and economic

development plans.

(E)  The financial condition of the applicant,

including revenues, expenses, debt structure, equity

position and available collateral.

(F)  The economic and financial condition of the

community to be served, including the tax base,

annual budget and percentage of low-income and

moderate-income residents.

(G)  The inability of the applicant to secure

funding from other sources.

(iii)  Any remaining funds under this paragraph shall

be transferred to the Pennsylvania Infrastructure

Investment Authority established under the act of March

1, 1988 (P.L.82, No.16), known as the Pennsylvania

Infrastructure Investment Authority Act, to provide funds

for authority projects which were damaged by Hurricane

Irene and Tropical Storm Lee.

(iv)  No project shall receive more than $250,000 of

the total funds available under this paragraph, except as

defined in section 14(b)(2).

(v)  No project shall be funded under subparagraph

(i)(A) or (B) unless the Commonwealth determines that

there was an adequate appeal of the denial of Federal

funding or of the inadequate level of Federal funding.

(e)  Transfer of unused funds.--Moneys in the Disaster Relief

Fund not necessary to pay unexpired contracts or to pay

potential legal obligations shall be transferred by the State

Treasurer, with the approval of the Governor, to the Disaster

Relief Redemption Fund and shall be used to pay debt service on

the existing disaster relief bonds.

Section 4.  Issuance of bonds; interest; maturity.

(a)  Series and issues.--When bonds are issued from time to

time, the bonds of each issue shall constitute a separate series

to be designated by the issuing officials or may be combined for

sale as one series with other general obligation bonds of the

Commonwealth. Each series of bonds shall bear such rate or rates

of interest as may be determined by the issuing officials. The

bonds shall be issued in such denominations and in such form or

forms, whether coupon or registered as to both principal and

interest, and with or without such provisions for

interchangeability as the issuing officials may determine. In

case interest coupons are attached, they shall contain the

facsimile signature of the State Treasurer.

(b)  Terms.--Except as otherwise set forth in this act, the

terms and conditions of issue, redemption and maturity and time

of payment of interest shall be as the issuing officials shall

specify. The issuing officials shall provide for the

amortization of the bonds in substantial and regular amounts

over the term of the debt. The first retirement of principal

shall be stated to mature prior to the expiration of a period of

time equal to one-tenth of the time from the date of the first

obligation issued to evidence the debt to the date of the

expiration of the term of the debt. Retirements of principal

shall be regular and substantial if made in annual or semiannual

amounts whether by stated serial maturities or by mandatory

sinking fund retirements computed in accordance with either a

level annual debt service plan, as nearly as may be, or upon the

equal annual maturities plan. The issuing officials are hereby

authorized to carry out the provisions of this act relating to

the issuance of bonds and shall determine all matters in

connection with the bonds subject to the provisions of this act.

(c)  Signatures.--All bonds issued under the authority of

this act shall bear the facsimile signatures of the issuing

officials and a facsimile of the Great Seal of the Commonwealth

of Pennsylvania and shall be countersigned by a duly authorized

officer of a duly authorized loan and transfer agent of the

Commonwealth.

Section 5.  Direct obligations; exemption from taxation; means

of payment.

All bonds issued in accordance with this act shall be direct

obligations of the Commonwealth, and the full faith and credit

of the Commonwealth are hereby pledged for the payment of the

interest on the bonds as the interest becomes due and the

payment of the principal of the bonds at maturity. All bonds

issued under the provisions of this act shall be exempt from

taxation for State and local purposes, except as provided under

Article XXIX of the act of March 4, 1971 (P.L.6, No.2), known as

the Tax Reform Code of 1971. The principal of and interest on

the bonds shall be payable in lawful money of the United States.

Section 6.  Sale of bonds.

(a)  Requirements.--Whenever bonds are issued in accordance

with this act, they shall be offered for sale at not less than

98% of the principal amount of the bonds and accrued interest

and shall be sold by the issuing officials to the highest and

best bidder or bidders after public advertisement on such terms

and conditions and upon such open competitive bidding as the

issuing officials shall direct. The manner and times of

advertising shall be prescribed by the issuing officials.

(b)  Private sale.--Any portion of a bond issue so offered

and not sold or subscribed for may be disposed of by private

sale by the issuing officials in such manner and at such prices,

not less than 98% of the principal amount of the bonds and

accrued interest, as the Governor shall direct. No commission

may be allowed or paid for the sale of any bonds issued under

the authority of this act.

(c)  Temporary bonds.--Until permanent bonds can be prepared,

the issuing officials may in their discretion issue in lieu of

the permanent bonds, temporary bonds in such form and with such

privileges as to registration and exchange for permanent bonds

as may be determined by the issuing officials.

Section 7.  Temporary financing authorization.

(a)  Temporary borrowing.--Pending the issuance of bonds of

the Commonwealth as authorized, the issuing officials are hereby

authorized, in accordance with the provisions of this act and on

the credit of the Commonwealth, to make temporary borrowings,

through public or private sale, not to exceed three years in

anticipation to the issue of bonds in order to provide funds in

such amounts as may from time to time be deemed advisable prior

to the issue of bonds. In order to provide for and in connection

with the temporary borrowings, the issuing officials are hereby

authorized in the name and on behalf of the Commonwealth to

enter into purchase, loan or credit agreements or other

agreements with banks or trust companies or other lending

institutions, investment banking firms or persons in the United

States having power to enter into the same, which agreements may

contain such provisions not inconsistent with this act as may be

authorized by the issuing officials.

(b)  Evidence of debt.--All temporary borrowings made under

the authorization of this section shall be evidenced by notes of

the Commonwealth, which shall be issued from time to time for

amounts not exceeding in the aggregate the applicable statutory

and constitutional debt limitation, in a form and in

denominations and subject to terms and condition of sale and

issue, prepayment or redemption and maturity, rate or rates of

interest and time of payment of interest that the issuing

officials authorize and direct and in accordance with this act.

The authorization and direction may provide for the subsequent

issuance of replacement notes to refund outstanding notes or

replacement notes, which replacement notes shall, upon issuance,

evidence the borrowing, and may specify other terms and

conditions with respect to the notes and replacement notes

thereby authorized for issuance that the issuing officials may

determine and direct.

(c)  Replacement notes.--When the authorization and direction

of the issuing officials provide for the issuance of replacement

notes, the issuing officials are hereby authorized in the name

and on behalf of the Commonwealth to issue, enter into or

authorize and direct the State Treasurer to enter into

agreements with any banks, trust companies, investment banking

firms or other institutions or persons in the United States

having the power to enter the same:

(1)  To purchase or underwrite an issue or series of

issues of notes.

(2)  To credit, to enter into purchase, loan or credit

agreements, to draw moneys pursuant to the agreement on the

terms and conditions set forth in the agreement and to issue

notes as evidence of borrowings made under the agreement.

(3)  To appoint an issuing and paying agent or agents

with respect to notes.

(4)  To do such other acts as may be necessary or

appropriate to provide for the payment, when due, of the

interest on and the principal of the notes.

An agreement may provide for the compensation of any purchasers

or underwriters of notes or replacement notes by discounting the

purchase price of the notes or by payment of a fixed fee or

commission at the time of issuance of the notes, and all other

costs and expenses, including fees for agreements related to the

notes, issuing and paying agent costs and costs and expenses of

issuance, may be paid from the proceeds of the notes.

(d)  Duties of State Treasurer.--When the authorization and

direction of the issuing officials provide for the issuance of

replacement notes, the State Treasurer shall, at or prior to the

time of delivery of these notes or replacement notes, determine

the principal amounts, dates of issue, interest rate or rates or

procedures for establishing interest rates from time to time,

rates of discount, denominations and all other terms and

conditions relating to the issuance and shall perform all acts

and things necessary to pay or cause to be paid, when due, all

principal of and interest on the notes being refunded by

replacement notes and to assure that the replacement notes may

draw upon any moneys available for that purpose pursuant to any

purchase, loan or credit agreements established with respect to

the replacement notes, all subject to the authorization and

direction of the issuing officials.

(e)  Retirement of outstanding notes.--Outstanding notes

evidencing the borrowings may be funded and retired by the

issuance and sale of the bonds of the Commonwealth as authorized

under this act. The refunding bonds must be issued and sold not

later than a date three years after the date of issuance of the

first notes evidencing the borrowings to the extent that payment

of the notes has not otherwise been made or provided for by

sources other than proceeds of replacement notes.

(f)  Disposition of proceeds.--The proceeds of all the

temporary borrowing shall be paid to the State Treasurer to be

held and disposed of in accordance with this act.

Section 8.  Disaster Relief Redemption Fund.

(a)  Establishment.--All bonds issued under the authority of

this act shall be paid at maturity and all interest due from

time to time on the bonds and on all notes issued under this act

shall be paid from the Disaster Relief Redemption Fund. The

General Assembly shall appropriate annually the moneys necessary

to pay the interest on the bonds and notes and the principal of

the bonds and notes at maturity for which other provision is not

made. All moneys so appropriated shall be paid into the Disaster

Relief Redemption Fund by the State Treasurer. All of the moneys

so received prior to the date for disbursement of the moneys

shall be invested by the State Treasurer pending disbursement in

such securities as are provided by law for the investment of

surplus moneys of the Commonwealth.

(b)  Use of fund.--The investment of the moneys and the

accumulations on the moneys in the Disaster Relief Redemption

Fund shall be devoted to and be used exclusively for the payment

of the interest accruing on the bonds and notes and for the

redemption of the bonds and notes at maturity or upon the

redemption date, if called for prior redemption. The State

Treasurer, with the approval of the Governor, is authorized at

any time to use any of those funds for the purchase and

retirement of all or any part of the bonds issued under this

act. No purchase may be made that will reduce the moneys in the

Disaster Relief Redemption Fund below the amount necessary to

pay all principal and interest still to become due in the fiscal

year of the purchase. In the event that all or any part of the

bonds shall be purchased by the Commonwealth, they shall be

canceled and returned to the State Treasurer as canceled and

paid bonds and thereafter all payments of interest on the bonds

shall cease and the canceled bonds and coupons shall be

destroyed as promptly as possible after cancellation but not

later than two years after cancellation. A certificate

evidencing the destruction of the canceled bonds, notes and

coupons shall be provided by the loan and transfer agent to the

issuing officials. All canceled bonds, notes and coupons shall

be so mutilated as to make the canceled bonds, notes and coupons

nonnegotiable.

Section 9.  Refunding bonds.

The issuing officials are authorized to provide by resolution

for the issuance of refunding bonds for the purpose of refunding

any debt issued under this act and then outstanding, either by

voluntary exchange with the holders of the outstanding debt or

to provide funds to redeem and retire the outstanding debt with

accrued interest, any premium payable thereon and the costs of

issuance and retirement of the debt, at maturity or at any call

date. The issuance of the refunding bonds, the maturities and

other details of the refunding bonds, the rights of the holders

of the refunding bonds and the duties of the issuing officials

in respect to the refunding bonds shall be governed by the

provisions of this section insofar as they may be applicable.

Refunding bonds that are not subject to the aggregate limitation

of $250,000,000 of debt to be issued pursuant to this act may be

issued by the issuing officials to refund debt originally issued

or to refund bonds previously issued for refunding purposes.

Section 10.  Reporting requirements.

The State Treasurer shall determine and report to the

Secretary of the Budget by November of each year the amount of

money necessary for the payment of interest on outstanding

obligations and the principal of the obligations, if any, for

the following fiscal year and the times and amounts of those

payments.

Section 11.  Registration of bonds.

The Auditor General shall prepare the necessary registry

books to be kept in the office of the duly authorized loan and

transfer agent of the Commonwealth for the registration of any

bonds of the Commonwealth at the request of the owner of the

bonds according to the terms and conditions of issue specified

by the issuing officials. All bonds that are issued without

interest coupons attached shall be registered in the registry

books kept by the duly authorized loan and transfer agent of the

Commonwealth.

Section 12.  Voting requirements.

Whenever in this act any action is to be taken or decision

made by the issuing officials, and the three officers shall not

be able to agree unanimously, the action or decision of the

Governor and either the Auditor General or State Treasurer shall

be binding and final.

Section 13.  Appropriation.

(a)  Appropriation to Governor.--The net proceeds, less the

costs and expenses of issuing the obligations, of the sale of

the $250,000,000 of obligations authorized under this act are

hereby appropriated from the Disaster Relief Fund to the

Governor for allocation by the Secretary of the Budget as

provided in section 3(d) to the Pennsylvania Emergency

Management Agency for public assistance to non-State and other

eligible entities and to the Pennsylvania Emergency Management

Agency and to other State agencies for public assistance costs

incurred by those agencies and to the Department of

Environmental Protection or other State agencies as deemed

appropriate for hazard mitigation.

(b)  Appropriation to State Treasurer.--There is hereby

appropriated to the State Treasurer from the fund as much money

as may be necessary for all costs and expenses in connection

with the issue of and sale and registration of the bonds and

notes in connection with this act and the payment of interest

arbitrage rebates on proceeds of the bonds and notes.

Section 14.  State and local participation levels.

(a)  Public assistance.--The required non-Federal

contribution of 25% necessary to secure Federal public

assistance funding, including costs for highways and bridges,

except State-designated highways and bridges, shall be divided

between the State and the affected local political subdivision

or nonprofit organization where applicable. The State share will

be 22% and the political subdivision or nonprofit organization

share will be 3%.

(b)  Additional public assistance.--The State contribution to

any political subdivision or nonprofit organization seeking

additional public assistance for projects qualifying under

section 3(d)(2)(i) shall be as follows:

(1)  If the project is located in a county that was

declared as a disaster area by the Federal Government and the

project is not eligible for Federal funding or receives

funding at an inadequate level, the Commonwealth shall

contribute 22% of the amount not eligible for Federal

funding, and the political subdivision or nonprofit

organization shall contribute 78% of the amount not eligible

for Federal funding.

(2)  If the project is located in a county that was not

declared as a disaster area by the Federal Government and the

project would have been eligible for Federal funding if

located in a county declared as a disaster area by the

Federal Government, the Commonwealth shall contribute 22% of

the cost of the project, and the political subdivision or

nonprofit organization shall contribute 78% of the cost of

the project.

(3)  If the project is located in a county that was not

declared as a disaster area by the Federal Government and the

project would not have been eligible for Federal funding or

would have received funding at an inadequate level if located

in a county declared as a disaster area by the Federal

Government, the Commonwealth shall contribute 22% of the

amount not eligible for Federal funding, and the political

subdivision or nonprofit organization shall contribute 78% of

the amount not eligible for Federal funding.

(c)  Local waiver.--The Commonwealth may reduce the share of

an affected political subdivision if the tax base of that

political subdivision was substantially reduced as a direct

result of Hurricane Irene and Tropical Storm Lee or if payment

of the local share exceeds 40% of the most recently adopted

annual budget of the political subdivision. The Commonwealth may

require the adoption of appropriate flood control or storm water

management plans as a condition of the waiver if the adoption of

the plan does not present additional financial hardship.

(d)  Definition.--As used in this act, the term "political

subdivision" means any county, city, borough, incorporated town,

township, school district, vocational school district, county

institution district or municipal authority.

Section 15.  Legislative Disaster Oversight Committee.

(a)  Establishment.--There is hereby created a special

legislative committee to be known as the Legislative Disaster

Oversight Committee that shall be composed of the following:

(1)  The Majority Leader of the Senate.

(2)  The Majority Leader of the House of Representatives.

(3)  The Minority Leader of the Senate.

(4)  The Minority Leader of the House of Representatives.

(5)  The Executive Director of the Pennsylvania Emergency

Management Agency.

(b)  Powers and duties.--The Legislative Disaster Oversight

Committee may recommend policies for implementation of this act

to the Pennsylvania Emergency Management Agency and may inquire

into delays and issues related to distribution of public

assistance and other grants authorized under this act.

Section 16.  Constitutional construction.

The provisions of this act shall be severable and, if any of

the provisions thereof shall be held unconstitutional, such

decisions shall not affect the validity of any of the remaining

provisions of this act. It is hereby declared as the legislative

intent that this act would have been adopted had such

unconstitutional provisions not been included therein.

Section 17.  Effective date.

This act shall take effect immediately.