PRINTER'S NO. 1408
No. 1255 Session of 1997
INTRODUCED BY GEIST, FAIRCHILD, HESS, ZUG, MARSICO, LEH, BROWN,
BARD, PLATTS, BATTISTO, McCALL, DALEY, LAUGHLIN, MARKOSEK,
SANTONI, MELIO, GIGLIOTTI, MIHALICH, SCHULER, TIGUE, RUBLEY,
STURLA, BEBKO-JONES, MUNDY, BAKER, TRICH, LYNCH, SATHER,
TULLI, CAPPABIANCA, SERAFINI, STEELMAN, WAUGH, YOUNGBLOOD,
B. SMITH, COLAIZZO, READSHAW, TRELLO, FARGO, TRAVAGLIO,
TANGRETTI, ROONEY, ROEBUCK, SHANER, GORDNER, WALKO, NICKOL,
BELARDI, ROSS, SAINATO, DRUCE, COLAFELLA, OLASZ, BOSCOLA,
STERN, PETTIT, L. I. COHEN, BENNINGHOFF AND RAMOS,
APRIL 8, 1997
REFERRED TO COMMITTEE ON TRANSPORTATION, APRIL 8, 1997
AN ACT
1 Amending Title 74 (Transportation) of the Pennsylvania
2 Consolidated Statutes, authorizing the incurring of
3 indebtedness, with the approval of the electorate, for loans
4 to owners of public airports for capital improvements,
5 facilities and equipment; providing for the creation of the
6 Pennsylvania Airport Capital Loan Fund; adding provisions
7 relating to rail freight preservation and improvement;
8 establishing the Pennsylvania Railroad Authority; providing
9 for the creation of the Pennsylvania Railway Capital Loan
10 Fund; creating the Rail Freight Infrastructure Fund; and
11 making repeals.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. The heading of Subchapter E of Chapter 61 of
15 Title 74 of the Pennsylvania Consolidated Statutes is amended
16 and the chapter is amended by adding a subchapter to read:
17 SUBCHAPTER E
18 [BOND ISSUANCE]
1 ISSUANCE OF LIMITED OBLIGATION BONDS
2 * * *
3 SUBCHAPTER F
4 ISSUANCE OF GENERAL OBLIGATION BONDS
5 Sec.
6 6181. Referendum.
7 6182. Bonds.
8 6183. Loans for project funding.
9 6184. Department funds.
10 § 6181. Referendum.
11 (a) General rule.--Pursuant to the provisions of section
12 7(a)(3) of Article VIII of the Constitution of Pennsylvania, the
13 question of incurring indebtedness of $50,000,000 for loans to
14 owners of public airports and airport facilities and development
15 corporations for capital improvements, acquisition of land
16 contiguous to existing airport property and development of same
17 for industrial development purposes, construction of facilities
18 and acquisition of equipment, subject to implementation through
19 this subchapter, shall be submitted to the electors at the next
20 primary election following the effective date of this
21 subchapter.
22 (b) Certification.--The Secretary of the Commonwealth shall
23 forthwith certify the question to the county boards of
24 elections.
25 (c) Form of question.--The question shall be in
26 substantially the following form:
27 Do you favor the incurring of indebtedness by the
28 Commonwealth of $50,000,000 for use as loans to owners of
29 public airports and airport facilities and development
30 corporations to improve airports and airport facilities
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1 and to purchase property and equipment and develop land?
2 § 6182. Bonds.
3 (a) Issuance of general obligation bonds.--As evidence of
4 the indebtedness if authorized under section 6181 (relating to
5 referendum), general obligation bonds of the Commonwealth shall
6 be issued from time to time to fund or retire notes issued under
7 section 6181 to carry out the purposes of this subchapter, or
8 both, for total amounts, in the form, in the denominations and
9 subject to the terms and conditions of issue, redemption and
10 maturity, rate of interest and time of payment of interest as
11 the issuing officials direct, except that the latest stated
12 maturity date shall not exceed 35 years from the date of the
13 debt first issued for each series.
14 (b) Execution of bonds.--All bonds and notes issued under
15 the authority of section 6181 shall bear facsimile signatures of
16 the issuing officials and a facsimile of the Great Seal of the
17 Commonwealth and shall be countersigned by a duly authorized
18 loan and transfer agent of the Commonwealth.
19 (c) Direct obligation of Commonwealth.--All bonds and notes
20 issued in accordance with section 6181 shall be direct
21 obligations of the Commonwealth, and the full faith and credit
22 of the Commonwealth are hereby pledged for the payment of the
23 interest thereon as it becomes due and the payment of the
24 principal at maturity. The principal of and interest on the
25 bonds and notes shall be payable in lawful money of the United
26 States.
27 (d) Exemption from taxation.--All bonds and notes issued
28 under the provisions of this section shall be exempt from
29 taxation for State and local purposes.
30 (e) Form of bonds.--The bonds may be issued as coupon bonds
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1 or registered as to both principal and interest as the issuing
2 officials may determine. If interest coupons are attached, they
3 shall contain the facsimile signature of the State Treasurer.
4 (f) Bond amortization.--The issuing officials shall provide
5 for the amortization of the bonds in substantial and regular
6 amounts over the term of the debt. The first retirement of
7 principal shall be stated to mature prior to the expiration of a
8 period of time equal to one-tenth of the time from the date of
9 the first obligation issued to evidence the debt to the date of
10 the expiration of the term of the debt. Retirements of principal
11 shall be regular and substantial if made in annual or semiannual
12 amounts, whether by stated serial maturities or by mandatory
13 sinking fund retirements.
14 (g) Refunding bonds.--The issuing officials are authorized
15 to provide for the issuance of refunding bonds for the purpose
16 of refunding any bonds issued under this section and then
17 outstanding, either by voluntary exchange with the holders of
18 the outstanding bonds, or to provide funds to redeem and retire
19 the outstanding bonds with accrued interest, any premium payable
20 thereon and the costs of issuance and retirement of bonds, at
21 maturity or at any call date. The issuance of the refunding
22 bonds, the maturities and other details thereof, the rights of
23 the holders thereof and the duties of the issuing officials in
24 respect to the same shall be governed by the provisions of this
25 section, insofar as they may be applicable. Refunding bonds may
26 be issued by the issuing officials to refund bonds originally
27 issued or to refund bonds previously issued for refunding
28 purposes.
29 (h) Quorum.--Whenever any action is to be taken or decision
30 made by the Governor, the Auditor General and the State
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1 Treasurer acting as issuing officials and the three officers are
2 not able unanimously to agree, the action or decision of the
3 Governor and either the Auditor General or the State Treasurer
4 shall be binding and final.
5 (i) Public sale.--Whenever bonds are issued, they shall be
6 offered for sale at not less than 98% of the principal amount
7 and accrued interest and shall be sold by the issuing officials
8 to the highest and best bidder or bidders after due public
9 advertisement on the terms and conditions and upon open
10 competitive bidding as the issuing officials shall direct. The
11 manner and character of the advertisement and the time of
12 advertising shall be prescribed by the issuing officials.
13 (j) Private sale.--Any portion of any bond issue so offered
14 and not sold or subscribed for may be disposed of by private
15 sale by the issuing officials in the manner and at the prices,
16 not less than 98% of the principal amount and accrued interest,
17 as the issuing officials shall direct. No commission shall be
18 allowed or paid for the sale of any bonds issued under the
19 authority of this section.
20 (k) Bond series.--When bonds are issued from time to time,
21 the bonds of each issue shall constitute a separate series to be
22 designated by the issuing officials or may be combined for sale
23 as one series with other general obligation bonds of the
24 Commonwealth.
25 (l) Temporary bonds.--Until permanent bonds can be prepared,
26 the issuing officials may in their discretion issue, in lieu of
27 permanent bonds, temporary bonds in the form and with the
28 privileges as to registration and exchange for permanent bonds
29 as may be determined by the issuing officials.
30 (m) Disposition and use of proceeds.--The proceeds realized
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1 from the sale of bonds and notes, except funding bonds,
2 refunding bonds and renewal notes, under the provisions of this
3 section are specifically dedicated to the purposes of the
4 referendum to be implemented by this subchapter and shall be
5 paid into the Pennsylvania Airport Capital Loan Fund created
6 under section 6184(a) (relating to department funds) in the
7 State Treasury in amounts as may be specified by the department.
8 The proceeds shall be paid by the State Treasurer periodically
9 to the department to expend them at the times and in the amounts
10 as may be necessary to satisfy the funding needs of the
11 department. The proceeds of the sale of funding bonds, refunding
12 bonds and renewal notes shall be paid to the State Treasurer and
13 applied to the payment of principal, the accrued interest and
14 premium, if any, and costs of redemption of the bonds and notes
15 for which the obligations shall have been issued.
16 (n) Investment of funds.--Pending their application to the
17 purposes authorized, moneys held or deposited by the State
18 Treasurer may be invested or reinvested as are other funds in
19 the custody of the State Treasurer in the manner provided by
20 law. All earnings received from the investment or deposit of
21 such funds shall be paid into the State Treasury to the credit
22 of the Pennsylvania Airport Capital Loan Fund created by the
23 department in section 6184(a) in the amounts as may be specified
24 by the department under that section.
25 (o) Registration of bonds.--The Auditor General shall
26 prepare the necessary registry book to be kept in the office of
27 the authorized loan and transfer agent of the Commonwealth for
28 the registration of any bonds, at the request of owners thereof,
29 according to the terms and conditions of issue directed by the
30 issuing officials.
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1 (p) Expenses of preparation for issue and sale of bonds and
2 notes.--There is hereby appropriated to the State Treasurer from
3 the proceeds of the bonds and notes issued as much money as may
4 be necessary for all costs and expenses in connection with the
5 issue of and sale and registration of the bonds and notes in
6 connection with this subchapter.
7 (q) Expenses of department.--There is hereby appropriated to
8 the department from the proceeds of the bonds and notes issued
9 as much money as may be necessary for all costs and expenses in
10 connection with the administration of this subchapter.
11 (r) Negotiable instrument designation.--Whether or not the
12 bonds are of a form and character as to be negotiable
13 instruments under the terms of Title 13 (relating to commercial
14 code), the bonds are made negotiable instruments within the
15 meaning of and for the purposes of Title 13, subject only to the
16 provisions of the bonds for registration.
17 § 6183. Loans for project funding.
18 (a) General rule.--Loans under this subchapter may be made
19 for the following purposes:
20 (1) For capital improvements and construction or
21 acquisition of facilities undertaken by public airports.
22 (2) For acquisition of equipment by owners of public
23 airports.
24 (b) Limits on loans.--Any loan made under this subchapter
25 shall be subject to the following:
26 (1) Loan funds may be used to finance no more than 85%
27 of project costs.
28 (2) The original principal amount of a loan and the
29 total of the principal balances of all loans to one borrower
30 outstanding at any time shall not be more than $10,000,000.
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1 (3) The term of a loan may not be more than 20 years
2 calculated from the time of making the loan.
3 (4) Security for a loan may be required by the
4 department.
5 (c) Administration of loans.--Loans made under this
6 subchapter shall be administered by the Bureau of Aviation
7 within the department.
8 § 6184. Department funds.
9 (a) Pennsylvania Airport Capital Loan Fund.--The department
10 shall create the Pennsylvania Airport Capital Loan Fund in the
11 State Treasury for the purpose of depositing:
12 (1) Proceeds from sale of Commonwealth general
13 obligation bonds issued under this subchapter.
14 (2) Payments from outstanding loans.
15 (3) Federal and State appropriations made under this
16 subchapter.
17 (b) Other funds.--The department may also create
18 nonrevolving funds and accounts as it deems necessary and
19 convenient to carry out the purposes of this subchapter.
20 Section 2. Title 74 is amended by adding a part to read:
21 PART V
22 RAILROADS
23 Chapter
24 95. Rail Freight Preservation and Improvement
25 97. Rail Freight Infrastructure Improvement Fund
26 CHAPTER 95
27 RAIL FREIGHT PRESERVATION AND IMPROVEMENT
28 Sec.
29 9501. Definitions.
30 9502. Rail Freight Advisory Committee.
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1 9503. Comprehensive rail freight study.
2 9504. Program authority.
3 9505. Contracts.
4 9506. Cooperation with other governments and private
5 interests.
6 9507. Rules and regulations of department.
7 9508. Grants and loans by transportation organizations or
8 municipalities.
9 9509. Rental schedule for occupations of rail property.
10 9510. Pennsylvania Railroad Authority.
11 9511. Referendum.
12 9512. Bonds.
13 9513. Limits on loans for project funding.
14 9514. Department funds.
15 9515. Limitation on decisions, findings and regulations of
16 secretary.
17 § 9501. Definitions.
18 The following words and phrases when used in this chapter
19 shall have the meanings given to them in this section unless the
20 context clearly indicates otherwise:
21 "Authority." The Pennsylvania Railroad Authority established
22 under section 9510 (relating to Pennsylvania Railroad
23 Authority).
24 "Board." The governing body of the Pennsylvania Railroad
25 Authority.
26 "Capital project." Includes any of the following:
27 (1) Any building, structure, facility or physical public
28 betterment or improvement.
29 (2) Any land or rights in land.
30 (3) Any furnishings, machinery, apparatus or equipment
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1 for any public betterment or improvement.
2 (4) Any undertaking to construct, repair, renovate,
3 improve, equip, furnish or acquire any of the foregoing if
4 the project is designated in a capital budget as a capital
5 project, has an estimated useful life in excess of five years
6 and an estimated financial cost in excess of the threshold
7 amount set forth in Article XVI-B of the act of April 9, 1929
8 (P.L.343, No.176), known as The Fiscal Code. The term shall
9 exclude maintenance rehabilitation.
10 "Committee." The Rail Freight Advisory Committee established
11 under this chapter.
12 "Competitive threshold." The threshold amount established in
13 section 10 of the act of May 2, 1945 (P.L.382, No.164), known as
14 the Municipality Authorities Act of 1945.
15 "Department." The Department of Transportation of the
16 Commonwealth.
17 "Emergency maintenance." Maintenance necessary to return
18 rail property to the condition in which it existed prior to an
19 event which makes a line unsafe or impassable. The term shall
20 include snow removal, washout repair and repair of damage caused
21 by derailment or external sources.
22 "Intermodal facilities." Facilities where rail freight
23 carloadings may be transferred from one mode of transportation
24 to another.
25 "Issuing officials." As defined in section 1602-B of the act
26 of April 9, 1929 (P.L.343, No.176), known as The Fiscal Code.
27 "Loan." Except for those funds under section 9504(c)
28 (relating to program authority), the term refers to the
29 Department of Transportation loans authorized by this chapter.
30 "Maintenance/rehabilitation." The replacing of ties, rail
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1 plates, turnouts and other track and structural materials and
2 addition of ballast sufficient functionally to restore, improve
3 or maintain rail structures or facilities or intermodal
4 facilities to the level necessary for safe operations or use,
5 with an estimated useful life in excess of five years, and
6 excluding materials used to repair or construct a building.
7 "Municipality." Any county, city, borough, incorporated
8 town, township, home rule municipality, optional plan
9 municipality, optional form municipality or similar general
10 purpose unit of government, which may hereafter be established
11 by law and any local development district.
12 "Optional form municipality." A city which has adopted an
13 optional form of government under the act of July 15, 1957
14 (P.L.901, No.399), known as the Optional Third Class City
15 Charter Law.
16 "Optional plan municipality." A city, borough, incorporated
17 town or township which has adopted an optional plan of
18 government under the act of April 13, 1972 (P.L.184, No.62),
19 known as the Home Rule Charter and Optional Plans Law.
20 "Rail Freight Assistance Program." A program administered by
21 the Department of Transportation to provide financial assistance
22 for investment in rail infrastructure to:
23 (1) Preserve essential rail freight service where
24 economically viable.
25 (2) Stimulate economic growth through generation of new
26 or expanded rail freight service.
27 "Rail freight transportation facilities." Items necessary
28 for the provision of rail freight transportation services,
29 including, but not limited to, freight cars, locomotives, wires,
30 poles and equipment for electrification of rail lines, rails,
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1 tracks, railroad beds, elevated structures, bridges, intermodal
2 facilities, buildings, structures, parking areas and tunnels.
3 "Rail freight transportation services." Transportation of
4 property by rail, for compensation, by any and all persons or
5 corporations holding out, offering or undertaking, directly or
6 indirectly, such service.
7 "Rail freight transportation systems." Systems necessary to
8 provide rail freight transportation services, including, but not
9 limited to, any properties, easements or other rights-of-way,
10 rail lines and rail corridors.
11 "Railroad company." Any person, firm or corporation
12 rendering common carrier rail freight transportation service in
13 this Commonwealth, under authorization from the Pennsylvania
14 Public Utility Commission or the Interstate Commerce Commission,
15 where authorization is required by law.
16 "Secretary." The Secretary of Transportation of the
17 Commonwealth.
18 "State Transportation Commission." The commission under
19 section 2011 of the act of April 9, 1929 (P.L.177, No.175),
20 known as The Administrative Code of 1929, or any successor
21 organization.
22 "Transportation organization." Any municipal authority, mass
23 transportation, port or other authority, or any combination of
24 two or more such entities, now existing or hereafter organized
25 under the laws of this Commonwealth, or under an interstate
26 compact, empowered to render rail freight transportation service
27 or assist in rendering rail freight transportation service in
28 this Commonwealth, even though it may also render rail freight
29 transportation service in adjacent states.
30 § 9502. Rail Freight Advisory Committee.
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1 (a) Establishment.--There is hereby established the Rail
2 Freight Advisory Committee, which shall consist of 28 members.
3 The members shall be as follows:
4 (1) The Secretary of Transportation, ex officio.
5 (2) The Secretary of Commerce, ex officio.
6 (3) The Chairman of the Pennsylvania Public Utility
7 Commission, ex officio.
8 (4) The chairman and minority chairman of the
9 Transportation Committee of the Senate.
10 (5) The chairman and minority chairman of the
11 Transportation Committee of the House of Representatives.
12 (6) Twenty-one members of the public representing the
13 areas of concern specified who shall have extensive
14 experience and knowledge of rail freight transportation
15 activities throughout this Commonwealth, to be appointed by
16 the Governor as follows:
17 (i) Three representatives of Class I railroad
18 companies.
19 (ii) Three representatives of regional
20 railroad/short line operation.
21 (iii) Six representative rail shippers, each to
22 represent one of the following areas:
23 (A) Coal.
24 (B) Steel.
25 (C) Lumber.
26 (D) Intermodal.
27 (E) Chemical.
28 (F) Food products/agriculture.
29 (iv) Three representatives of organized labor, each
30 to represent one of the following areas:
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1 (A) Steel labor.
2 (B) Coal labor.
3 (C) Railway labor.
4 (v) One representative from the Pennsylvania Chamber
5 of Commerce.
6 (vi) Two representatives of regional/local economic
7 development groups.
8 (vii) Two representatives of the Metropolitan
9 Planning Organization (MPO).
10 (viii) One representative of rail
11 contractors/suppliers.
12 Each member shall designate a representative to serve in his
13 stead. A member shall notify the chairman in writing of the
14 designation.
15 (b) Terms of appointees.--The term of all members of the
16 committee appointed by the Governor shall be for three years.
17 Any member of the committee may be reappointed for an additional
18 term or terms. An individual appointed to fill a vacancy shall
19 serve only for the unexpired term.
20 (c) Meetings and expenses.--The committee shall meet at
21 least four times every 12 months, but may hold additional
22 meetings as are called by the chairman or by petition of at
23 least seven committee members. A public member, including a
24 designee, who misses three consecutive meetings without good
25 cause acceptable to the chairman shall be replaced by the
26 chairman, who shall have the power to make a temporary
27 appointment pending approval or replacement by the Governor. The
28 public members of the committee shall be allowed per diem
29 expenses to be set by the committee, but not to exceed the
30 amount deductible from taxable income allowed under the Internal
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1 Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.).
2 The department shall provide appropriate staff support to enable
3 the committee to properly carry out its functions.
4 (d) Powers and duties.--The powers and duties of the
5 committee shall be to advise and comment on a comprehensive rail
6 freight study, to advise and comment on all phases of the rail
7 freight transportation program activities being undertaken or
8 financially assisted by the department and to propose methods,
9 strategies or technologies for improving rail freight
10 transportation services systems or facilities within this
11 Commonwealth. The committee shall annually submit reports of its
12 general deliberations and conclusions, as well as any specific
13 issue report completed at the committee's discretion, to the
14 Governor, members of the General Assembly and the State
15 Transportation Commission.
16 (e) Officers.--The members of the committee shall annually
17 elect a chairperson, a vice chairperson and a secretary from
18 among the public members appointed to the committee.
19 § 9503. Comprehensive rail freight study.
20 (a) Initiation of study.--The department shall undertake,
21 either through its own staff or through the use of a consultant
22 or consultants, or both, a comprehensive study of rail freight
23 transportation services, systems and facilities within this
24 Commonwealth and recommendations for their preservation and
25 improvement. This study shall:
26 (1) Include an assessment of this Commonwealth's rail
27 freight transportation system from an intermodal, multimodal
28 and economic development perspective.
29 (2) Comply with Federal regulations for the requirements
30 of a State rail plan.
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1 (b) Study update.--The comprehensive rail freight study
2 shall be performed every five years or at intervals as deemed
3 necessary by the department or committee.
4 (c) Utilization of study.--The department shall consider the
5 conclusions of the comprehensive rail freight study in the
6 implementation of its programs designed to preserve and improve
7 the rail freight transportation services, systems and facilities
8 within this Commonwealth, including the development of new
9 initiatives, where required.
10 (d) Appropriation.--The General Assembly shall annually
11 appropriate funds to the department for the exclusive purpose of
12 carrying out the comprehensive rail freight study or updating a
13 previous rail freight study, including department administrative
14 expenses.
15 § 9504. Program authority.
16 (a) Authority.--The department is hereby authorized, within
17 the limitations provided in this chapter, to:
18 (1) Provide operating subsidy grants and loans to
19 railroad companies, transportation organizations or
20 municipalities to defray or assist in defraying the net
21 deficit incurred by these entities in providing essential
22 rail freight transportation services within this
23 Commonwealth.
24 (2) Provide grants and loans to railroad companies,
25 transportation organizations or municipalities to defray or
26 assist in defraying the cost of maintenance/rehabilitation
27 projects performed on rail lines within this Commonwealth.
28 (3) Undertake capital projects and provide capital
29 project grants and loans to railroad companies,
30 transportation organizations or municipalities, including
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1 acquisition of rail lines. The department shall not directly
2 operate or provide rail freight transportation services on
3 its own rail lines or on lines owned by others, nor shall a
4 capital project be undertaken in order to enable the
5 department to directly provide rail freight transportation
6 services. Projects may include, but are not limited to,
7 industrial development at industrial or business parks
8 adjacent to rail lines.
9 (4) Acquire by purchase, lease, eminent domain
10 proceedings, gift or otherwise all and any property, in such
11 estate as determined by the secretary, for promoting the
12 purposes of this chapter, including the property of a public
13 utility. All municipalities and corporations are hereby
14 authorized to donate property to the department. Eminent
15 domain proceedings shall be in accordance with the act of
16 June 22, 1964 (Sp.Sess., P.L.84, No.6), known as the Eminent
17 Domain Code, and the department is empowered to join with any
18 municipality or transportation organization in obtaining any
19 property through the eminent domain proceedings.
20 (5) Undertake research, studies, analysis and planning
21 and make grants and loans to railroad companies,
22 transportation organizations and municipalities for research,
23 studies, analysis and planning relating to any phase of rail
24 freight transportation services, systems and facilities,
25 including the management, operation, capital requirements and
26 economic feasibility thereof, and any preparation of
27 engineering and architectural surveys, plans and
28 specifications and other similar activities preliminary to
29 and in preparation for construction, acquisition or improved
30 operation of rail transportation services, systems and
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1 facilities within this Commonwealth.
2 (6) Undertake demonstration projects and make grants and
3 loans to railroad companies, transportation organizations and
4 municipalities for demonstration projects, including the
5 development, testing and demonstration of new facilities,
6 equipment, techniques and methods of providing rail
7 transportation services, systems and facilities within this
8 Commonwealth.
9 (7) Undertake marketing activities and make grants and
10 loans to railroad companies, transportation organizations and
11 municipalities for marketing activities designed to foster
12 the fullest and most efficient utilization of rail freight
13 transportation services, systems and facilities within this
14 Commonwealth. Marketing activities may be undertaken by
15 contract with the department or by subcontract with a grantee
16 or loan recipient of the department, upon approval of the
17 subcontract by the secretary.
18 (8) Undertake audits of any project being financially
19 assisted by the department. The department may hire outside
20 auditors to perform audits or may direct its grantees or loan
21 recipients to engage auditors and include the expense thereof
22 as an eligible program cost.
23 (9) Provide for strategic management of this
24 Commonwealth's rail resources and programs of assistance
25 designed to preserve and enhance rail infrastructure and
26 services.
27 (10) Review and approve applications for financial
28 assistance from the Pennsylvania Railway Capital Loan Fund as
29 to conformance with the department's strategic management
30 plan, contribution toward economic development objectives and
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1 enhanced customer service.
2 (b) Guidelines for grants and loans.--The following shall
3 govern all grants and loans made under the authority of
4 subsection (a):
5 (1) A responsible level of local financial
6 participation, to be determined by the department, shall be
7 required for each category of project authorized by this
8 section.
9 (2) A grant or loan shall be made only upon application
10 filed by an applicant and reviewed and approved by the
11 department. No grant or loan shall exceed the amount
12 requested by an applicant. An amended grant or loan request
13 need not be filed by an applicant where a proposed contract
14 amendment does not exceed the amount previously requested.
15 (3) A grant or loan, with department approval, may be
16 made with reference to any appropriate project regardless of
17 when it was first commenced or considered and regardless of
18 whether the costs with respect thereto shall have been
19 incurred prior to the time the project is undertaken or the
20 project grant or loan is applied for or made. In the case of
21 a project involving maintenance/rehabilitation, grants and
22 loans shall be made by the department only after
23 documentation to the department's satisfaction of the
24 condition of the rail facilities involved before and after
25 the maintenance/rehabilitation. Where the department
26 contracts for a grant or loan based upon estimated costs,
27 payments may be made thereunder prior to the time costs are
28 actually incurred. However, the department shall adjust the
29 payments under any agreement before closing out the contract
30 involved, based upon the most recent available actual data.
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1 (4) Any grant made for purposes of
2 maintenance/rehabilitation projects or capital projects shall
3 continue for two fiscal years or three calendar years and
4 shall not lapse at the end of the fiscal year in which that
5 grant was awarded.
6 (5) No agreement shall impair, suspend, contract,
7 enlarge or extend or affect in any manner the powers of the
8 Pennsylvania Public Utility Commission, the Interstate
9 Commerce Commission or any other regulatory agency having
10 jurisdiction over rail freight transportation services,
11 systems and facilities.
12 (6) The use of consultants by a grantee for preparation
13 of design drawings, specifications and bid packages,
14 solicitation of bids or proposals, contract management and
15 project inspection shall be eligible expenses chargeable to
16 the cost of a project. However, internal administrative costs
17 of a grantee are not eligible for grant reimbursement.
18 (7) Any grant or loan for acquisition of real property
19 under this chapter shall be based upon an appraisal as
20 approved by the department.
21 (c) Federal funds.--The department is hereby authorized to
22 make loans of Federal funds to railroad companies,
23 transportation organizations or municipalities, in accordance
24 with the requirements of any Federal law establishing a loan
25 program, for the purchase of real property or easements and for
26 the rehabilitation and improvement of rail freight
27 transportation systems and facilities.
28 (d) Loans.--Subject to any agreements with the holders of
29 bonds, the department shall have the power to set terms
30 applicable to loans in any manner it deems appropriate, subject
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1 to the provisions of this subsection. The department may
2 consider factors it deems relevant, including current market
3 interest rates, the financial and economic distress of the area
4 which the project serves and the necessity to maintain the
5 department funds in a financially sound manner. Loans may be
6 made based on the ability to repay the loan from future revenue
7 to be derived from the project, by a mortgage or other property
8 lien or on any other fiscal matters which the department deems
9 appropriate. The department shall have the power to defer
10 principal on loans for up to seven years. In the event of a
11 default on the repayment of a loan, the department may apply to
12 the court of common pleas of the county where the project is
13 located for the appointment of a receiver to assume operation
14 and supervision of the facility under the supervision of the
15 court. The rate of interest to be paid on any loan made under
16 this chapter shall be no more than a rate fixed annually by the
17 Office of the Budget based upon then-current economic
18 indicators.
19 § 9505. Contracts.
20 (a) Contractual authority.--
21 (1) The department shall have the power and authority to
22 enter into contracts and to make joint contracts of purchase
23 with any railroad company, transportation organization or
24 municipality in any manner complying with the law applicable
25 to the entity. The department shall have power and authority
26 to make contracts for the improvement of any rights-of-way,
27 roadbeds or rolling stock, electrification systems, other
28 transportation systems, or any parts thereof, constituting a
29 project without advertisement for competitive bids, where the
30 work is to be done at cost by the personnel and with the
19970H1255B1408 - 21 -
1 facilities of the railroad company, local transportation
2 organization or municipality on whose system the property is
3 to be used.
4 (2) Any other provision of law to the contrary
5 notwithstanding, the department may sell, transfer, lease or
6 grant any license to, easement over or any other interest in
7 all or any part of the rail properties and other property
8 acquired under the provisions of this chapter or any other
9 rail-related act to any responsible person, firm,
10 corporation, municipality or instrumentality thereof,
11 municipal authority, transportation authority, the Federal
12 Government or any branch or agency thereof for continued
13 operation or other use compatible with the operation of a
14 railroad or any public purpose, when approval for the
15 continued operation or other public purpose is granted by the
16 Interstate Commerce Commission, when approval is required.
17 Competitive procurement may be used when deemed appropriate
18 in the discretion of the department. For continued rail
19 operations or other public purpose, competitive procurement
20 shall be used when unsatisfactory performance by the existing
21 rail operator exists, other viable parties propose to
22 purchase the State-owned rail line or lines or other criteria
23 exists as outlined in the department's disposition policy
24 document. If during the first five years after the sale,
25 transfer, lease or grant of a license or easement the
26 property or property right is used for any purpose other than
27 that which is compatible with the operation of a railroad or
28 any public purpose, the property or property right shall
29 revert to the Commonwealth.
30 (3) In the event the department determines that there is
19970H1255B1408 - 22 -
1 no need for continued operation of a railroad on any rail
2 properties or other properties acquired under the provisions
3 of this chapter or any other rail-related act and that the
4 properties are not needed for any other public purpose, the
5 department may sell, under a system of public competitive
6 bidding, transfer, lease or grant any license to, easement
7 over or any other interest in all or any part of the
8 properties to any responsible person, firm, corporation,
9 municipality or instrumentality thereof, municipal authority,
10 transportation authority or to the Federal Government or any
11 branch or agency thereof for any worthwhile purpose, as
12 determined by the department. In the event properties which
13 are located outside the normal right-of-way limits of the
14 adjacent railroad are not required for continued provision of
15 rail service and, due to a landlocked state or other factors,
16 are inaccessible to the general public, the department may,
17 in its sole discretion, in consultation with the Federal
18 Railroad Administration where required, offer to sell such
19 property to the adjoining landowner at its fair market value
20 as determined by a professional appraisal. If the adjoining
21 landowner agrees to pay the fair market value price as
22 determined by such appraisal, public competitive bidding
23 shall not be required.
24 (4) In the event the department, through the exchange of
25 property acquired under this chapter, can foster or enhance
26 economic development, the creation of housing, safety,
27 environmental concerns or other activities consistent with
28 the betterment of this Commonwealth, the department shall
29 have, with the concurrence of the Federal Railroad
30 Administration where required, the power and authority to
19970H1255B1408 - 23 -
1 exchange property acquired under this chapter with any
2 responsible person, firm, corporation, municipality or
3 instrumentality thereof, municipal authority, transportation
4 authority or the Federal Government or any branch or agency
5 thereof in its sole discretion. Exchanges of property shall
6 be conducted in a manner so as not to interfere with the
7 continued provision of rail service. Any property acquired
8 under any exchange conducted under this paragraph, combined
9 with any improvements located or constructed thereon, shall
10 have an appraisal value at least equivalent to the value of
11 the property conveyed in exchange by the department.
12 (5) At least 60 days prior to the sale of any property
13 as authorized by paragraph (2) or (3), the department shall
14 provide written notice thereof to the chairman of the
15 Transportation Committee of the Senate and the chairman of
16 the Transportation Committee of the House of Representatives.
17 (b) Competitive bids.--Except in the purchase of unique
18 articles or articles which for any other reason cannot be
19 obtained in the open market and except as otherwise provided,
20 competitive bids shall be secured before any purchase or sale,
21 by contract or otherwise, is made or before any contract is
22 awarded for construction, alterations, supplies, equipment,
23 repairs or maintenance or for rendering any services to the
24 department other than professional services. The purchase shall
25 be made from or the contract shall be awarded to the lowest
26 responsible bidder or a sale to the highest responsible bidder.
27 No purchase of any unique article or other articles which cannot
28 be obtained in the open market shall be made without express
29 approval of the secretary where the amount involved is in excess
30 of the competitive threshold amount.
19970H1255B1408 - 24 -
1 (c) Advertisement.--Except as otherwise provided in this
2 chapter, all purchases and sales in excess of the competitive
3 threshold amount shall be awarded after advertising in a
4 newspaper of general circulation in the area where the property
5 is to be used not less than two weeks prior to the bid opening.
6 Bids shall be publicly opened and read aloud at a date, time and
7 place designated in the invitation to bid. In all cases of
8 purchases or sales in excess of the competitive threshold amount
9 authorized under this section to be made without competitive
10 bidding, except purchases from or sales to a transportation
11 organization or contracts with a transportation company under
12 subsection (a), invitations to bid shall be sent not less than
13 one week prior to the bid opening to at least three potential
14 bidders who are qualified technically and financially to submit
15 bids, or in lieu thereof a memorandum shall be kept on file
16 showing that less than three potential bidders so qualified
17 exist in the market area within which it is practicable to
18 obtain bids.
19 (d) Negotiation of certain contracts.--Purchases or sales
20 under the competitive threshold amount may be negotiated with or
21 without competitive bidding under sound procurement procedures
22 as promulgated and established by the secretary.
23 (e) Waiver of competitive bid requirements.--Competitive
24 bidding requirements may be waived if it is determined by the
25 secretary that an emergency directly and immediately affecting
26 customer service, public health, safety or welfare requires
27 immediate delivery of supplies, materials or equipment. A record
28 of circumstances explaining the emergency shall be submitted to
29 the secretary and kept on file.
30 (f) Restriction.--Requirements shall not be split into parts
19970H1255B1408 - 25 -
1 for the purpose of avoiding the provisions of this section.
2 (g) Rejection of bids.--The department shall have the right
3 to reject any or all bids or parts of any or all bids, whenever,
4 in the opinion of the secretary, the rejection is necessary for
5 the protection of the interest of the Commonwealth. In every
6 case, a record shall be made setting forth the reason for the
7 rejection, which record shall thereafter be kept on file.
8 (h) Rules and regulations.--The secretary may adopt rules
9 and regulations to effectuate the provisions of this section.
10 (i) Assignments.--The secretary shall have the power to
11 accept the assignment from any railroad company, transportation
12 organization or municipality of all or any interest in any
13 lawfully made contract for the procurement and purchase of any
14 asset deemed necessary or desirable by the secretary in
15 connection with any project.
16 § 9506. Cooperation with other governments and private
17 interests.
18 (a) Cooperation.--The department is directed to administer
19 all projects under this chapter with flexibility to promote and
20 encourage full cooperation and financial participation of
21 Federal, State and local governments, agencies and
22 instrumentalities, as well as private interests, so as to result
23 in as effective and economical a program as possible. The
24 department shall respond to the requirements of any Federal rail
25 freight transportation legislation now existing or enacted into
26 law in the future, to the extent permitted under the laws of
27 this Commonwealth, in order to enhance rail freight
28 transportation services, systems and facilities within this
29 Commonwealth.
30 (b) Agreements.--The department is hereby authorized to
19970H1255B1408 - 26 -
1 enter into agreements providing for mutual cooperation among it
2 and any Federal agency and any transportation organization, or
3 transportation company, or one or more of them, in any or all
4 projects, including joint applications for Federal grants.
5 (c) Purpose of chapter.--It is the purpose and intent of
6 this chapter to authorize the department to do any and all other
7 things necessary or desirable to secure the financial aid or
8 cooperation of any Federal agency in any of the department's
9 projects and to do and perform all things which may be required
10 by any Federal statute or by the lawful requirements of any
11 Federal agency authorized to administer any program of Federal
12 aid to transportation.
13 § 9507. Rules and regulations of department.
14 In order to effectuate and enforce the provisions of this
15 chapter, the department is authorized to promulgate necessary
16 rules and regulations and prescribe conditions and procedures in
17 order to assure compliance in carrying out the purposes for
18 which grants and loans may be made under this chapter. The rules
19 and regulations shall also provide for the observance of the
20 relevant safety standards of any regulatory body having
21 jurisdiction to promulgate safety standards, but the department
22 shall not be authorized to do anything or suffer or permit any
23 action which will violate any agreement with a transportation
24 organization, transportation company or any Federal agency or
25 impair, suspend, contract, enlarge or extend or affect in any
26 manner the powers of the Pennsylvania Public Utility Commission
27 or the Interstate Commerce Commission, which by law are
28 applicable to the railroad company, transportation organization
29 or municipality involved.
30 § 9508. Grants and loans by transportation organizations or
19970H1255B1408 - 27 -
1 municipalities.
2 Any transportation organization or municipality shall be and
3 is hereby authorized to make annual grants and loans from
4 current revenues in order to participate in the rail freight
5 transportation projects and to enter into long-term agreements
6 providing for the payment of the same.
7 § 9509. Rental schedule for occupations of rail property.
8 The department shall publish a uniform schedule of rentals
9 and fees for occupations of property acquired by the department
10 under this chapter. The schedule shall cover all licenses,
11 easements, leases or other interests in such property. The fees
12 and rentals shall be revised and updated from time to time at
13 the discretion of the department.
14 § 9510. Pennsylvania Railroad Authority.
15 (a) Authority established.--A body corporate and politic, to
16 be known as the Pennsylvania Railroad Authority, is hereby
17 established as a public authority and instrumentality of the
18 Commonwealth.
19 (b) Board.--
20 (1) The powers of the authority shall be exercised by
21 its board, a governing body having full authority to manage
22 the properties and business of the authority and to
23 prescribe, amend and repeal bylaws, rules and regulations
24 governing the manner in which the business of the authority
25 may be conducted and the powers granted to it may be
26 exercised. All bylaws, rules and regulations, and amendments
27 thereto, shall be filed with the secretary of the authority.
28 (2) The board shall be composed of seven members who
29 shall be residents of this Commonwealth, who shall not be
30 elected public officials and who shall serve at the pleasure
19970H1255B1408 - 28 -
1 of the respective appointing authority as follows:
2 (i) The Secretary of Transportation or a designee.
3 (ii) The Secretary of Commerce or a designee.
4 (iii) One public member appointed by the Governor
5 for a term of four years.
6 (iv) One member appointed by the President pro
7 tempore of the Senate for a term concurrent with the term
8 of the appointing authority.
9 (v) One member appointed by the Minority Leader of
10 the Senate for a term concurrent with the term of the
11 appointing authority.
12 (vi) One member appointed by the Speaker of the
13 House of Representatives for a term concurrent with the
14 term of the appointing authority.
15 (vii) One member appointed by the Minority Leader of
16 the House of Representatives for a term concurrent with
17 the term of the appointing authority.
18 (3) The term of a member shall begin on the date of
19 appointment. A member may continue to serve as a member until
20 a successor has been appointed and may serve more than one
21 term.
22 (4) Within 30 days of the occurrence of a vacancy, the
23 original appointing authority designated in paragraph (2)
24 shall appoint a successor member for the remainder of the
25 unexpired term of the member for which the vacancy exists. A
26 vacancy shall occur upon the death, resignation,
27 disqualification or removal of a member.
28 (5) The Governor shall set a date, time and place for
29 the initial organizational meeting of the board. Prior to the
30 organizational meeting, the Governor shall select one member
19970H1255B1408 - 29 -
1 as a chairman of the board for a term of two years. A
2 majority of the board shall constitute a quorum for the
3 conduct of business at the organizational meeting of the
4 board. All action shall be taken at the organizational
5 meeting by a majority of the board. The members shall elect
6 from among themselves a vice chairman, secretary, treasurer
7 and other officers as they may determine.
8 (6) The board shall reorganize annually at its first
9 regular meeting occurring after the expiration of 365 days
10 immediately following its initial organizational meeting or
11 prior reorganization, as the case may be, in the manner
12 provided for its initial organization. Prior to the
13 reorganizational meeting, the Governor shall select one
14 member as chairman of the board for a term of two years
15 whenever the office of chairman is vacant by reason of
16 expiration of the term of the office of chairman or
17 otherwise.
18 (7) The board shall meet at least bimonthly. A majority
19 of the board shall constitute a quorum for the purpose of
20 conducting the business of the board and for all other
21 purposes. All actions of the board shall be taken by a
22 majority of the board.
23 (8) A member shall not receive compensation or
24 remuneration, but shall be entitled to actual reimbursement
25 or the amount deductible from taxable income allowed under
26 the Internal Revenue Code of 1986 (Public Law 99-514, 26
27 U.S.C. § 1 et seq.) for all reasonable and necessary actual
28 expenses.
29 (9) A member shall not be liable personally on any
30 obligation of the authority, and the rights of creditors
19970H1255B1408 - 30 -
1 shall be solely against the authority.
2 (10) The board shall fix and determine the number of
3 officers, agents and employees of the authority and their
4 respective compensation and duties. The board shall, upon the
5 approval of a majority, delegate to the executive director
6 the powers of the board as the board shall deem necessary to
7 carry out the purposes of the authority, subject in every
8 case to the supervision and control of the board.
9 (11) A member shall be removed from the board for
10 neglect or refusal to attend three successive regular
11 meetings of the board, unless detained by a sickness or the
12 death of a family member.
13 (c) General powers.--
14 (1) The authority is established for the purpose of
15 acquiring, operating, maintaining and leasing locomotives and
16 rolling stock to be used on new or existing:
17 (i) Intercity railroad passenger service providers,
18 including, but not limited to, an intercity railroad
19 passenger service operated by or on license to the
20 National Railroad Passenger Corporation (AMTRAK) or its
21 successor.
22 (ii) Rail freight systems in this Commonwealth.
23 (2) The authority may fund these acquisitions of
24 locomotives and rolling stock through any of the following:
25 (i) Loans under this chapter.
26 (ii) Except for rail freight systems under paragraph
27 (1)(ii), department-initiated program grants under
28 Chapter 13 (relating to public transportation
29 assistance).
30 (iii) Appropriations by the General Assembly which
19970H1255B1408 - 31 -
1 shall be nonlapsing.
2 (d) Specific powers.--The authority is granted and shall
3 have and may exercise all powers necessary or convenient for
4 performing or carrying out the purposes under subsection (c),
5 including the following rights and powers:
6 (1) To have perpetual existence and continuing
7 succession.
8 (2) To sue and be sued, implead and be impleaded,
9 complain and defend in all courts, to petition the Interstate
10 Commerce Commission or any other regulatory body, either
11 Federal or State, and to join in any proceeding before any
12 court or the Interstate Commerce Commission or other
13 regulatory body in any matter affecting the operation of the
14 authority.
15 (3) To adopt and use and alter at will a corporate seal.
16 (4) To establish a principal office and any other office
17 or offices as may be necessary for the purpose of performing
18 its duties and functions.
19 (5) To acquire real property.
20 (6) To acquire, by gift or otherwise, purchase, hold,
21 receive, lease, sublease and use any franchise, license,
22 personal property, tangible or intangible, or any interest
23 therein, necessary or desirable for carrying out the purposes
24 of the authority.
25 (7) To sell, transfer, convey and dispose of any
26 personal property, tangible or intangible, or any interest
27 therein, at any time acquired by the authority.
28 (8) To make and, from time to time, amend and repeal
29 bylaws, rules, regulations and resolutions for the management
30 and regulation of the affairs of the authority and the
19970H1255B1408 - 32 -
1 performance of the functions and duties of the authority.
2 (9) To appoint officers, agents, employees and servants,
3 and to prescribe their duties and fix their compensation,
4 provided that the appointment of a full-time executive
5 director shall be made by a majority vote of the board and
6 that staff support for the authority shall be furnished by
7 the department.
8 (10) To make and execute contracts and other instruments
9 necessary or convenient for the conduct of its business and
10 the exercise of the powers of the authority.
11 (11) To apply for and to accept appropriations, grants,
12 loans and other assistance from, and to enter into contracts,
13 agreements, leases, subleases, licenses or other transactions
14 with, the Federal Government, the Commonwealth, political
15 subdivisions, persons, associations, partnerships or
16 corporations for any of the purposes of the authority,
17 provided that these contracts or agreements do not conflict
18 with any of the provisions of any trust agreement.
19 (12) To pledge, hypothecate or otherwise encumber all or
20 any of the revenues or receipts of the authority as security
21 for all or any of the obligations of the authority.
22 (13) To provide for self-insurance or to procure from
23 insurers insurance containing coverages which the authority
24 may determine to be necessary or desirable for its purposes,
25 including, without limitation, insurance covering the
26 property or operation of the authority against any risks or
27 hazards.
28 (14) (i) To enter into contracts of group insurance for
29 the benefit of its employees.
30 (ii) To enroll its employees in the Commonwealth
19970H1255B1408 - 33 -
1 retirement system established under 71 Pa.C.S. Pt. XXV
2 (relating to retirement for State employees and
3 officers).
4 (15) To establish an executive committee and other
5 standing and special committees that are deemed necessary in
6 the furtherance of authority business.
7 (16) To fix, alter, charge and collect lease rental
8 fees.
9 (17) To do all acts and things necessary for the
10 promotion of its business and the general welfare of the
11 authority to carry out the powers granted to it by this
12 chapter or any other statute.
13 (e) Prohibition.--Notwithstanding any general or specific
14 powers granted to the authority or the board by this section,
15 whether express or implied:
16 (1) The authority shall have no power, at any time or in
17 any manner, to pledge the credit or taxing power of the
18 Commonwealth or any political subdivision.
19 (2) The authority shall have no power, at any time or in
20 any manner, to issue negotiable notes, bonds, refunding bonds
21 and other evidences of indebtedness or obligations of the
22 authority.
23 (3) No obligations of the authority shall be deemed to
24 be obligations of the Commonwealth or of any of its political
25 subdivisions.
26 (4) The Commonwealth or any political subdivision
27 thereof shall not be liable for the payment of principal or
28 interest on obligations of the authority, excluding payments
29 for lease agreements regarding the property of the authority.
30 (5) The authority shall be deemed an independent agency
19970H1255B1408 - 34 -
1 for the purposes of and within the meaning of the act of
2 October 15, 1980 (P.L.950, No.164), known as the Commonwealth
3 Attorneys Act, and shall not exercise any power or authority
4 under this chapter which is inconsistent therewith.
5 (6) A comptroller shall be appointed in accordance with
6 the provisions of section 214 of the act of April 9, 1929
7 (P.L.177, No.175), known as The Administrative Code of 1929.
8 (f) Rights and remedies of obligees.--Subject to any
9 contractual provisions or restrictions, an obligee shall have
10 the following rights, in addition to any rights and remedies
11 lawfully granted to such obligee:
12 (1) The right, by mandamus, suit, action or proceeding
13 at law or in equity, to compel the authority and the members,
14 officers, agents or employees thereof, to perform each and
15 every term, provision and covenant contained in any contract
16 of the authority with or for the benefit of the obligee and
17 to require the carrying out of any or all such covenants and
18 agreements of the authority and the fulfillment of all duties
19 imposed upon the authority by this chapter.
20 (2) The right, by proceeding in equity, to obtain an
21 injunction against any acts or things which may be unlawful
22 or in violation of the rights of the obligee of the
23 authority.
24 (g) Audits and financial reports.--The books, accounts,
25 records, operations and assets and liabilities of the authority
26 shall be audited annually in accordance with generally accepted
27 auditing standards and principles by an independent certified
28 public accountant. As soon after the end of each fiscal year and
29 the completion of the audit as may be expedient, the authority
30 shall file an annual report and financial statement, which shall
19970H1255B1408 - 35 -
1 include a certified copy of the audit report of the independent
2 certified public accountant, with the department. A condensed
3 and concise version of the annual financial report shall be
4 published once in the Pennsylvania Bulletin. The Secretary of
5 the Budget, the Auditor General, the majority and minority
6 chairmen of the Appropriations Committee of the Senate and the
7 majority and minority chairmen of the Appropriations Committee
8 of the House of Representatives shall have the right to examine,
9 from time to time and at any time, the books, accounts and
10 records of the authority, including, but not limited to, its
11 receipts, disbursements, contracts, leases, sinking funds,
12 investments and other matters relating to the finances,
13 operations and affairs of the authority.
14 (h) Supplies and materials.--All supplies and materials
15 costing the competitive threshold amount or more which are to be
16 acquired directly by the authority shall not be purchased unless
17 the authority has published notice, at least ten days before the
18 award of any contract or the making of any purchase, in the
19 Pennsylvania Bulletin. The authority shall accept the lowest bid
20 or bids from a responsible bidder, provided that the kind and
21 quality of materials are equal. The authority shall have the
22 right to reject any or all bids or select a single item from any
23 bid. The provisions of this subsection shall not apply to the
24 purchase of any supplies and materials which are unique and
25 which cannot be obtained in the open market.
26 (i) Use and operation of facilities.--The acquisition,
27 operation, maintenance and lease of locomotives or rolling stock
28 under subsection (c) shall be subject to the rules and
29 regulations adopted from time to time by the board, provided
30 that the authority shall not be authorized to do anything which
19970H1255B1408 - 36 -
1 will violate any contracts, leases or other agreements awarded,
2 made or entered into by the authority.
3 (j) Exemption from taxes and assessments.--The effectuation
4 of the authorized purposes of the authority established under
5 this section shall and will be in all respects for the benefit
6 of the people of this Commonwealth, for the increase of their
7 commerce and prosperity and for the improvement of their health
8 and living conditions and, since the authority will be
9 performing essential government functions in effectuating these
10 purposes, the authority shall not be required to pay any taxes
11 or assessments upon any property acquired or used by it for
12 these purposes, or fees or other charges imposed or authorized
13 to be imposed by virtue of any law of this Commonwealth, except
14 vehicle registration fees, liquid fuels taxes, fuel use taxes,
15 gross receipts taxes imposed as an excise on the use of public
16 highways and tolls imposed by the Pennsylvania Turnpike
17 Commission. The authority shall have the power to make payments
18 in lieu of taxes or special assessments.
19 (k) Interest of officers and employees.--
20 (1) No person convicted of an infamous crime shall be
21 employed as a management-level employee by the authority.
22 (2) The provisions of the act of July 19, 1957
23 (P.L.1017, No.451), known as the State Adverse Interest Act,
24 and the act of October 4, 1978 (P.L.883, No.170), referred to
25 as the Public Official and Employee Ethics Law, are hereby
26 made specifically applicable to members and officers and
27 employees of the authority. For the purposes of application
28 of these acts, employees of the authority shall be regarded
29 as public employees of the Commonwealth, and members and
30 officers of the authority shall be regarded as public
19970H1255B1408 - 37 -
1 officials of the Commonwealth, whether or not they receive
2 compensation.
3 (3) The employment of any person who violates the
4 provisions of this subsection shall be terminated immediately
5 by the appropriate person having the power to terminate
6 employment. A person whose employment has been terminated
7 under this provision shall be liable to the authority to
8 reimburse the authority for all compensation received from
9 the authority while employed in violation of this subsection.
10 (4) As used in this subsection, the following words and
11 phrases shall have the meanings given to them in this
12 paragraph:
13 "Infamous crime." Any violation and conviction for an
14 offense which would disqualify an individual from holding
15 public office pursuant to section 6 of Article II of the
16 Constitution of Pennsylvania, or any conviction for a
17 violation of this section or 18 Pa.C.S. § 4113 (relating to
18 misapplication of entrusted property and property of
19 government or financial institutions) or Ch. 47 (relating to
20 bribery and corrupt influence), 49 (relating to falsification
21 and intimidation), 51 (relating to obstructing governmental
22 operations) or 53 (relating to abuse of office) or any other
23 violation of the laws of this Commonwealth for which an
24 individual has been convicted within the preceding ten years
25 and which is classified as a felony, and any similar
26 violations of the laws of the Federal Government or any other
27 state.
28 "Management-level employee." The chairman of the
29 authority, members, legal counsel employed by the authority,
30 the executive director of the authority and any authority
19970H1255B1408 - 38 -
1 employee with discretionary powers which may affect the
2 outcome of a decision of the authority in relation to a
3 private corporation or business or any employee who by virtue
4 of job function could influence the outcome of such a
5 decision.
6 "Person." An individual, union, committee, club,
7 corporation, partnership, sole proprietorship, firm,
8 enterprise, franchise, association, organization, self-
9 employed individual, holding company, joint-stock company,
10 receivership, trust or any legal entity organized for profit
11 or as a not-for-profit corporation or organization, or other
12 organization or group of persons.
13 (l) Nondiscrimination.--The authority shall comply in all
14 regards with the nondiscrimination and contract compliance plans
15 used by the Department of General Services to assure that all
16 persons are accorded equality of opportunity in employment and
17 contracting by the authority and its contractors,
18 subcontractors, assignees, lessees, agents, vendors and
19 suppliers.
20 (m) Public meetings and records.--The authority shall be
21 subject to the act of June 21, 1957 (P.L.390, No.212), referred
22 to as the Right-to-Know Law, and the act of July 3, 1986
23 (P.L.388, No.84), known as the Sunshine Act, inasmuch as they
24 relate to the inspection and copying of public records.
25 (n) Sovereign immunity.--It is hereby declared to be the
26 intent of the General Assembly that the authority established by
27 this section and its members, officers, officials and employees
28 shall enjoy sovereign and official immunity, as provided in 1
29 Pa.C.S. § 2310 (relating to sovereign immunity reaffirmed;
30 specific waiver), and shall remain immune from suit except as
19970H1255B1408 - 39 -
1 provided by and subject to the provisions of 42 Pa.C.S. Ch. 85
2 Subchs. A (relating to general provisions) and B (relating to
3 actions against Commonwealth parties). Notwithstanding the
4 provisions of 42 Pa.C.S. § 8525 (relating to legal assistance),
5 the authority, through its legal counsel, shall defend actions
6 brought against the authority or its members, officers,
7 officials and employees when acting within the scope of their
8 official duties.
9 § 9511. Referendum.
10 (a) General rule.--Pursuant to the provisions of section
11 7(a)(3) of Article VIII of the Constitution of Pennsylvania, the
12 question of incurring indebtedness of $50,000,000 for loans for
13 the maintenance, acquisition, equipping, furnishing,
14 constructing, reconstructing, rehabilitating and improving rail
15 transportation systems and other industrial development
16 facilities, subject to implementation through this chapter,
17 shall be submitted to the electors at the next primary election
18 following the effective date of this chapter.
19 (b) Certification.--The Secretary of the Commonwealth shall
20 forthwith certify the question to the county boards of
21 elections.
22 (c) Form of question.--The question shall be in
23 substantially the following form:
24 Do you favor the incurring of indebtedness by the
25 Commonwealth of $50,000,000 for use as loans to maintain,
26 acquire, equip, furnish, construct, reconstruct,
27 rehabilitate and improve railroad transportation systems
28 and facilities?
29 § 9512. Bonds.
30 (a) Issuance of general obligation bonds.--As evidence of
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1 the indebtedness if authorized under section 9511 (relating to
2 referendum), general obligation bonds of the Commonwealth shall
3 be issued from time to time to fund or retire notes issued under
4 section 9511 to carry out the purposes of this chapter, or both,
5 for total amounts, in the form, in the denominations and subject
6 to the terms and conditions of issue, redemption and maturity,
7 rate of interest and time of payment of interest as the issuing
8 officials direct, except that the latest stated maturity date
9 shall not exceed 35 years from the date of the debt first issued
10 for each series.
11 (b) Execution of bonds.--All bonds and notes issued under
12 the authority of section 9511 shall bear facsimile signatures of
13 the issuing officials and a facsimile of the Great Seal of the
14 Commonwealth and shall be countersigned by a duly authorized
15 loan and transfer agent of the Commonwealth.
16 (c) Direct obligation of Commonwealth.--All bonds and notes
17 issued in accordance with section 9511 shall be direct
18 obligations of the Commonwealth, and the full faith and credit
19 of the Commonwealth are hereby pledged for the payment of the
20 interest thereon as it becomes due and the payment of the
21 principal at maturity. The principal of and interest on the
22 bonds and notes shall be payable in lawful money of the United
23 States.
24 (d) Exemption from taxation.--All bonds and notes issued
25 under the provisions of this section shall be exempt from
26 taxation for State and local purposes.
27 (e) Form of bonds.--The bonds may be issued as coupon bonds
28 or registered as to both principal and interest as the issuing
29 officials may determine. If interest coupons are attached, they
30 shall contain the facsimile signature of the State Treasurer.
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1 (f) Bond amortization.--The issuing officials shall provide
2 for the amortization of the bonds in substantial and regular
3 amounts over the term of the debt. The first retirement of
4 principal shall be stated to mature prior to the expiration of a
5 period of time equal to one-tenth of the time from the date of
6 the first obligation issued to evidence the debt to the date of
7 the expiration of the term of the debt. Retirements of principal
8 shall be regular and substantial if made in annual or semiannual
9 amounts, whether by stated serial maturities or by mandatory
10 sinking fund retirements.
11 (g) Refunding bonds.--The issuing officials are authorized
12 to provide for the issuance of refunding bonds for the purpose
13 of refunding any bonds issued under this section and then
14 outstanding, either by voluntary exchange with the holders of
15 the outstanding bonds, or to provide funds to redeem and retire
16 the outstanding bonds with accrued interest, any premium payable
17 thereon and the costs of issuance and retirement of bonds, at
18 maturity or at any call date. The issuance of the refunding
19 bonds, the maturities and other details thereof, the rights of
20 the holders thereof and the duties of the issuing officials in
21 respect to the same shall be governed by the provisions of this
22 section, insofar as they may be applicable. Refunding bonds may
23 be issued by the issuing officials to refund bonds originally
24 issued or to refund bonds previously issued for refunding
25 purposes.
26 (h) Quorum.--Whenever any action is to be taken or decision
27 made by the Governor, the Auditor General and the State
28 Treasurer acting as issuing officials and the three officers are
29 not able unanimously to agree, the action or decision of the
30 Governor and either the Auditor General or the State Treasurer
19970H1255B1408 - 42 -
1 shall be binding and final.
2 (i) Public sale.--Whenever bonds are issued, they shall be
3 offered for sale at not less than 98% of the principal amount
4 and accrued interest and shall be sold by the issuing officials
5 to the highest and best bidder or bidders after due public
6 advertisement on the terms and conditions and upon open
7 competitive bidding as the issuing officials shall direct. The
8 manner and character of the advertisement and the time of
9 advertising shall be prescribed by the issuing officials.
10 (j) Private sale.--Any portion of any bond issue so offered
11 and not sold or subscribed for may be disposed of by private
12 sale by the issuing officials in the manner and at the prices,
13 not less than 98% of the principal amount and accrued interest,
14 as the issuing officials shall direct. No commission shall be
15 allowed or paid for the sale of any bonds issued under the
16 authority of this section.
17 (k) Bond series.--When bonds are issued from time to time,
18 the bonds of each issue shall constitute a separate series to be
19 designated by the issuing officials or may be combined for sale
20 as one series with other general obligation bonds of the
21 Commonwealth.
22 (l) Temporary bonds.--Until permanent bonds can be prepared,
23 the issuing officials may in their discretion issue, in lieu of
24 permanent bonds, temporary bonds in the form and with the
25 privileges as to registration and exchange for permanent bonds
26 as may be determined by the issuing officials.
27 (m) Disposition and use of proceeds.--The proceeds realized
28 from the sale of bonds and notes, except funding bonds,
29 refunding bonds and renewal notes, under the provisions of this
30 section are specifically dedicated to the purposes of the
19970H1255B1408 - 43 -
1 referendum to be implemented by this chapter and shall be paid
2 into the Pennsylvania Railway Capital Loan Fund created under
3 section 9514(a) (relating to department funds) in the State
4 Treasury in amounts as may be specified by the department. The
5 proceeds shall be paid by the State Treasurer periodically to
6 the department to expend them at the times and in the amounts as
7 may be necessary to satisfy the funding needs of the department.
8 The proceeds of the sale of funding bonds, refunding bonds and
9 renewal notes shall be paid to the State Treasurer and applied
10 to the payment of principal, the accrued interest and premium,
11 if any, and costs of redemption of the bonds and notes for which
12 the obligations shall have been issued.
13 (n) Investment of funds.--Pending their application to the
14 purposes authorized, moneys held or deposited by the State
15 Treasurer may be invested or reinvested as are other funds in
16 the custody of the State Treasurer in the manner provided by
17 law. All earnings received from the investment or deposit of
18 such funds shall be paid into the State Treasury to the credit
19 of the Pennsylvania Railway Capital Loan Fund created by the
20 department in section 9514(a) in the amounts as may be specified
21 by the department under that section.
22 (o) Registration of bonds.--The Auditor General shall
23 prepare the necessary registry book to be kept in the office of
24 the authorized loan and transfer agent of the Commonwealth for
25 the registration of any bonds, at the request of owners thereof,
26 according to the terms and conditions of issue directed by the
27 issuing officials.
28 (p) Expenses of preparation for issue and sale of bonds and
29 notes.--There is hereby appropriated to the State Treasurer from
30 the proceeds of the bonds and notes issued as much money as may
19970H1255B1408 - 44 -
1 be necessary for all costs and expenses in connection with the
2 issue of and sale and registration of the bonds and notes in
3 connection with this chapter.
4 (q) Expenses of department.--There is hereby appropriated to
5 the department from the proceeds of the bonds and notes issued
6 as much money as may be necessary for all costs and expenses in
7 connection with the administration of this chapter.
8 (r) Negotiable instrument designation.--Whether or not the
9 bonds are of a form and character as to be negotiable
10 instruments under the terms of Title 13 (relating to commercial
11 code), the bonds are made negotiable instruments within the
12 meaning of and for the purposes of Title 13, subject only to the
13 provisions of the bonds for registration.
14 § 9513. Limits on loans for project funding.
15 Any loan made under this chapter shall be subject to the
16 following:
17 (1) Loan funds may be used to finance no more than 85%
18 of project costs.
19 (2) The original principal amount of a loan and the
20 total of the principal balances of all loans to one borrower
21 outstanding at any time shall not be more than $10,000,000.
22 (3) The term of a loan may not be more than 20 years
23 calculated from the time of making the loan.
24 (4) Security for a loan may be required by the
25 department.
26 (5) Not less than $20,000,000 of all loan funds
27 available under this chapter shall be reserved and used for
28 the upgrade, improvement, rehabilitation or construction of
29 infrastructure or improvements to rail infrastructure for
30 rail freight operations.
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1 (6) Loans for freight infrastructure upgrade,
2 improvement, rehabilitation or new construction shall be for
3 a term equivalent to the useful life of project improvements
4 but no more than 20 years.
5 (7) Loans for projects under this chapter may be repaid
6 pursuant to contracts with various parties which identify
7 specific incremental rates for retirement of the loans for
8 such improvements.
9 § 9514. Department funds.
10 (a) Pennsylvania Railway Capital Loan Fund.--The department
11 shall create the Pennsylvania Railway Capital Loan Fund in the
12 State Treasury for the purpose of depositing:
13 (1) Proceeds from sale of Commonwealth general
14 obligation bonds issued under this chapter.
15 (2) Proceeds from sale of railroad real property.
16 (3) Payments from outstanding loans.
17 (4) Federal and State appropriations made under this
18 chapter.
19 (b) Other funds.--The department may also create
20 nonrevolving funds and accounts as it deems necessary and
21 convenient to carry out the purposes of this chapter.
22 § 9515. Limitation on decisions, findings and regulations of
23 secretary.
24 All decisions, findings and regulations made by the secretary
25 under this chapter shall be for the purpose of this chapter only
26 and shall not constitute evidence before any regulatory body of
27 the Commonwealth or any other jurisdiction.
28 CHAPTER 97
29 RAIL FREIGHT INFRASTRUCTURE
30 IMPROVEMENT FUND
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1 Sec.
2 9701. Definitions.
3 9702. Rail Freight Infrastructure Improvement Fund.
4 9703. Moneys deposited into fund.
5 9704. Allocation of available funds.
6 9705. Grant eligibility.
7 9706. Term of grant.
8 9707. Jurisdiction not affected.
9 9708. Exclusion of real property.
10 9709. Appropriations.
11 § 9701. Definitions.
12 The following words and phrases when used in this chapter
13 shall have the meanings given to them in this section unless the
14 context clearly indicates otherwise:
15 "Capital stock and franchise tax." The tax imposed under
16 Article VI of the act of March 4, 1971 (P.L.6, No.2), known as
17 the Tax Reform Code of 1971.
18 "Department." The Department of Transportation of the
19 Commonwealth.
20 "Fund." The Rail Freight Infrastructure Improvement Fund
21 created in section 9702.
22 "Railroad company." Any person, firm, public entity or
23 corporation rendering common carrier rail freight transportation
24 service in this Commonwealth, pursuant to authorization of the
25 Pennsylvania Public Utility Commission or Surface Transportation
26 Board of the United States Department of Transportation, where
27 such authorization is required by law.
28 "Railroad user." Any person, firm or corporation which is a
29 direct user of any rail freight transportation system, facility
30 or service in this Commonwealth.
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1 § 9702. Rail Freight Infrastructure Improvement Fund.
2 There is hereby created a special fund in the State Treasury
3 to be known as the Rail Freight Infrastructure Improvement Fund.
4 § 9703. Moneys deposited into fund.
5 Moneys deposited into the fund and interest which accrues
6 from those funds shall be used for the purposes delineated in
7 this chapter. The proceeds resulting from the capital stock and
8 franchise tax on any railroad company, as determined by the
9 Secretary of Revenue, shall be transferred into the fund. The
10 transfers required by this chapter shall be made by June 15 and
11 December 15 of each calendar year. The transfers required by
12 this chapter shall apply to tax years beginning in 1997 and each
13 year thereafter.
14 § 9704. Allocation of available funds.
15 (a) Marketing efforts.--The department may utilize, on an
16 annual basis, up to 2% of the moneys anticipated to be available
17 in the fund in that year for the marketing of rail freight
18 services as part of the economic development strategy of this
19 Commonwealth to attract and expand industrial warehousing or
20 other such businesses in this Commonwealth.
21 (b) Use of funds.--All moneys in the fund shall be used
22 solely for the department's annual rail freight infrastructure
23 grant program.
24 (c) Grant purposes.--The department shall be authorized to
25 make grants to railroad companies, railroad authorities and
26 railroad users under this chapter. Grants may be made for
27 projects to include, but not be limited to:
28 (1) Track construction, maintenance or rehabilitation.
29 (2) Maintenance, rehabilitation or construction of rail
30 sidings.
19970H1255B1408 - 48 -
1 (3) The marketing efforts described in this chapter.
2 The total of all grants made for construction or improvement of
3 rail sidings or spurs used to ship or receive freight shall not
4 exceed 15% of the total fund balance in any given year.
5 (d) Administrative costs.--The costs of administering the
6 grant program under this chapter shall be paid out of the
7 revenues described in this chapter. The costs of administering
8 this program shall not exceed 5% of such revenues collected for
9 that year.
10 § 9705. Grant eligibility.
11 The department shall, in consultation with the Rail Freight
12 Advisory Committee, establish criteria to be considered in
13 determining the distribution of funds through grants made to
14 railroad companies and railroad users under this chapter. The
15 following shall serve as minimum criteria to be used in this
16 determination:
17 (1) A responsible level of local financial
18 participation, to be determined by the department, shall be
19 required for each category of project authorized by this
20 chapter.
21 (2) A grant shall be made only upon application filed by
22 a railroad company, railroad authority or railroad user in a
23 form prescribed by and reviewed and approved by the
24 department. No grant shall exceed the amount requested by an
25 applicant.
26 (3) Railroad companies, railroad authorities and
27 railroad users shall file applications for funding with the
28 department and shall include, at a minimum, the following:
29 (i) Description of specific improvements to be made
30 with approximate cost estimates.
19970H1255B1408 - 49 -
1 (ii) A time line for the improvement project.
2 (iii) Statistical data which reflects existing
3 freight traffic as well as any incremental increased
4 anticipated as a result of the rail infrastructure
5 improvements or traffic which would otherwise be at risk.
6 (iv) Listing of specific customers served or to be
7 served who will benefit from the rail infrastructure
8 improvements.
9 (4) No distribution to any grantee for rail
10 infrastructure improvements shall exceed $2.5 million for any
11 given fiscal year nor more than $5 million for any single
12 project.
13 § 9706. Term of grant.
14 Any grant made for the purposes of maintenance projects or
15 construction projects may be made for a term spanning two fiscal
16 years or three calendar years.
17 § 9707. Jurisdiction not affected.
18 No agreement shall impair, suspend, contract, enlarge or
19 extend or affect in any manner the powers of the Pennsylvania
20 Public Utility Commission, the Surface Transportation Board or
21 any other regulatory agency having jurisdiction over rail
22 freight transportation services, systems and facilities.
23 § 9708. Exclusion of real property.
24 No grant for the acquisition of real property will be
25 approved under this section.
26 § 9709. Appropriations.
27 All moneys in the fund are hereby appropriated to the
28 department to preserve and improve rail freight service in this
29 Commonwealth by making infrastructure grants to railroad
30 companies and railroad users. Any moneys in the fund, including
19970H1255B1408 - 50 -
1 accrued interest, not expended in any fiscal year in which they
2 are made available shall not lapse and shall be available for
3 use pursuant to this chapter in the next and succeeding fiscal
4 years.
5 Section 3. Those members currently serving on the Rail
6 Freight Advisory Committee shall continue to serve until the
7 expiration of their terms or until successors have been
8 appointed and qualified, but no longer than six months beyond
9 the expiration of their terms. This section shall not prohibit
10 the reappointment of existing members in accordance with 74
11 Pa.C.S. § 9502(b).
12 Section 4. (a) The act of July 5, 1984 (P.L.587, No.119),
13 known as the Rail Freight Preservation and Improvement Act, is
14 repealed.
15 (b) All other acts and parts of acts are repealed insofar as
16 they are inconsistent with this act.
17 Section 5. This act shall take effect immediately.
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