PRINTER'S NO. 2492
No. 1934 Session of 1989
INTRODUCED BY SCHULER, FARGO, COY, BARLEY, CARLSON, BATTISTO,
NAILOR, NOYE, DIETTERICK, LANGTRY, MILLER, DALEY, JACKSON,
HERSHEY, COLAFELLA AND E. Z. TAYLOR, OCTOBER 3, 1989
REFERRED TO COMMITTEE ON EDUCATION, OCTOBER 3, 1989
AN ACT
1 Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An
2 act relating to the public school system, including certain
3 provisions applicable as well to private and parochial
4 schools; amending, revising, consolidating and changing the
5 laws relating thereto," providing for the issuance of bonds
6 by the Board of Governors of the State System of Higher
7 Education.
8 The General Assembly of the Commonwealth of Pennsylvania
9 hereby enacts as follows:
10 Section 1. Section 2003-A(b) of the act of March 10, 1949
11 (P.L.30, No.14), known as the Public School Code of 1949, is
12 amended by adding a clause to read:
13 Section 2003-A. Purposes and General Powers.--* * *
14 (b) The system is hereby granted and shall have and may
15 exercise all the powers necessary or convenient for the carrying
16 out of the aforesaid purposes, including, but without limiting
17 the generality of the foregoing, the following rights and
18 powers:
19 * * *
20 (4) To borrow money, make and issue negotiable notes, bonds,
1 refunding bonds and other evidences of indebtedness or
2 obligations (herein called "bonds") of the system, subject to
3 all of the following conditions and limitations:
4 (i) The bonds shall have a maturity date not longer than
5 forty (40) years from the date of issue.
6 (ii) The system, by pledge or deed of trust of all or any of
7 its revenues and receipts, may secure the payment of such bonds
8 or any part thereof.
9 (iii) The system may make such agreements with the
10 purchasers or holders of such bonds, or with others in
11 connection with any such bonds, whether issued or to be issued,
12 as the system shall deem advisable.
13 (iv) The system shall provide for the security for the bonds
14 and the rights of the holders thereof.
15 (v) The system shall not issue bonds if, on the date of
16 issuance, the aggregate principal amount of bonds to be
17 outstanding shall exceed one hundred per centum (100%) of the
18 system's average gross revenues for the three (3) fiscal years
19 preceding the fiscal year in which bonds are proposed to be
20 issued, except that leases, capitalized or otherwise, entered
21 into by the system, as lessee, in connection with the
22 acquisition of real and personal property shall not be
23 considered bonds for the purposes of these limitations.
24 (vi) The system shall have no power, at any time or in any
25 manner, to pledge the credit or taxing power of the
26 Commonwealth, nor shall any of the bonds or debts of the system
27 be deemed to be obligations of the Commonwealth, nor shall the
28 Commonwealth be liable for the payment of principal or interest
29 on such bonds or other obligations.
30 * * *
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1 Section 2. The act is amended by adding a section to read:
2 Section 2006.1-A. Powers and Duties Relating to Bonds.--(a)
3 The bonds of the system authorized to be issued shall:
4 (1) Be authorized by resolution of the Board of Governors of
5 the system.
6 (2) Be of such series, bear such date or dates, mature at
7 such time or times, not exceeding forty (40) years from their
8 respective dates.
9 (3) Bear interest at such rate or rates, as shall be
10 determined by the board as necessary to issue and sell the
11 authorized bonds.
12 (4) Be in such denominations, in such form, either coupon or
13 fully registered without coupons, and carry such registration,
14 exchangeability and interchangeability privileges as the board
15 shall determine.
16 (5) Be payable in such medium of payment and at such place
17 or places as the system shall determine.
18 (6) Be subject to such terms of redemption and be entitled
19 to such priorities in the revenues or receipts of the system as
20 such resolution or resolutions may provide.
21 (b) The bonds shall be signed by or shall bear the facsimile
22 signature of such officers as the board shall determine. Coupons
23 bonds shall have attached thereto interest coupons bearing the
24 facsimile signature of the Chief Fiscal Officer of the system.
25 All bonds shall be authenticated by an authenticating agent,
26 fiscal agent or trustee, as may be prescribed in such resolution
27 or resolutions.
28 (c) Any such bonds may be issued and delivered,
29 notwithstanding that one or more of the officers signing such
30 bonds or the facsimile or whose signature shall be upon such
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1 bonds, the coupons, or any thereof, shall have ceased to be such
2 officer or officers at the time when such bonds shall actually
3 be delivered.
4 (d) The bonds may be sold at public or private sale for such
5 price or prices and at such rate of interest as the board shall
6 determine.
7 (e) Pending the preparation of the definitive bonds, interim
8 receipts may be issued to the purchaser of such bonds and may
9 contain such terms and conditions as the system may determine.
10 (f) Any resolution or resolutions authorizing any bonds may
11 contain provisions which shall be part of the contract with the
12 holders thereof as to:
13 (1) The terms and provisions of the bonds.
14 (2) Limitations on the purposes to which the proceeds of the
15 bonds then or thereafter to be issued, or of any loan or grant
16 by the United States, may be applied.
17 (3) The setting aside of reserves or sinking funds and the
18 regulation and disposition thereof.
19 (4) Limitations on the issuance of additional bonds.
20 (5) The terms and provisions of any deed of trust or
21 indenture securing the bonds, or under which the same may be
22 issued.
23 (6) Any other or additional agreements with the holder of
24 the bonds.
25 (g) The system may enter into any deeds of trust indentures
26 or other agreements, with any bank or trust company, or other
27 person or persons in the United States having power to enter
28 into the same, including any Federal agency, as security for
29 such bonds, and may assign and pledge all or any of the revenues
30 or receipts of the system thereunder. The deed of trust,
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1 indenture or other agreement may contain such provisions as may
2 be customary in such instruments, or as the system may
3 authorize, including, but without limitation, provisions as to:
4 (1) The construction, improvement, operation, maintenance
5 and repair of any project, and the duties of the system with
6 reference thereto.
7 (2) The application of funds and the safeguarding of funds
8 on hand or on deposit.
9 (3) The rights and remedies of said trustee and the holders
10 of the bonds, (which may include restrictions upon the
11 individual right of action of such bondholders).
12 (4) The terms and provisions of the bonds or the resolutions
13 authorizing the issuance of the same.
14 (h) Except to the extent that the rights herein given may be
15 restricted by resolution passed before the issuance of the
16 bonds, or by the trust indenture, any holder of bonds issued
17 under the provisions of this section, or any of the coupons
18 attached thereto, and the trustee under the trust indenture, if
19 any, may either at law or in equity, by suit, action, mandamus
20 or other proceedings, protect and enforce any and all rights
21 granted hereunder or under such resolution or trust indenture
22 and may enforce and compel performance of all duties required by
23 this act or by such resolution or trust indenture to be
24 performed by the system or any officer thereof.
25 (i) All system bonds shall have all the qualities of
26 negotiable instruments under the law merchant and the negotiable
27 instruments law of the Commonwealth of Pennsylvania.
28 (j) The accomplishment by the system of the authorized
29 purposes stated in this article being for the benefit of the
30 people of the Commonwealth and for the improvement of their
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1 education and prosperity, in which accomplishment the system
2 will be performing essential governmental functions, the system
3 shall not be required to pay any taxes or assessments on any
4 property acquired or used by it for the purposes provided in
5 this article, and the bonds, notes or other obligations issued
6 by the system, their transfer and the income therefrom,
7 including any profits made on the sale thereof, shall at all
8 times be free from taxation within the Commonwealth.
9 Section 3. This act shall take effect in 60 days.
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