PRIOR PRINTER'S NO. 186 PRINTER'S NO. 206
No. 10 Session of 1999
INTRODUCED BY JUBELIRER, LOEPER AND MELLOW, JANUARY 22, 1999
SENATOR HART, FINANCE, AS AMENDED, JANUARY 25, 1999
AN ACT 1 Providing for borrowing for capital facilities; conferring 2 powers and duties on various administrative agencies and 3 officers; making appropriations; and making repeals. 4 TABLE OF CONTENTS 5 Section 1. Short title. 6 Section 2. Definitions. 7 Section 3. Procedures for capital budget bill and debt 8 authorizing legislation. 9 Section 4. Certificates of the Auditor General. 10 Section 5. Constitutional limitations, authorizations, 11 issuing officials. 12 Section 6. Temporary financing authorizing. 13 Section 7. Bonds, issue of bonds and notes, maturity, 14 interest. 15 Section 8. Direct obligations, exemptions from taxation, 16 means of payment. 17 Section 9. Sale of bonds. 18 Section 10. Disposition and use of proceeds.
1 Section 11. Capital Debt Fund; investments; redemption of 2 bonds. 3 Section 12. Funding bonds. 4 Section 13. Reporting requirements. 5 Section 14. Registration of bonds. 6 Section 15. Voting requirements. 7 Section 16. Appropriation. 8 Section 17. Appropriation for and limitation on redevelopment 9 assistance capital projects. 10 Section 18. Funding and administration of redevelopment 11 assistance capital projects. 12 Section 19. Repeals. 13 Section 20. Recodification. 14 Section 21. Effective date. 15 The General Assembly of the Commonwealth of Pennsylvania 16 hereby enacts as follows: 17 Section 1. Short title. 18 This act shall be known and may be cited as the Capital 19 Facilities Debt Enabling Act. 20 Section 2. Definitions. 21 The following words and phrases when used in this act shall 22 have the meanings given to them in this section unless the 23 context clearly indicates otherwise: 24 "Acquisition cost." Includes the cost of acquiring: 25 (1) buildings; 26 (2) structures; 27 (3) facilities; 28 (4) property, real, personal or mixed, tangible or 29 intangible; or 30 (5) any other interest; 19990S0010B0206 - 2 -
1 necessary or desirable in connection with a capital project, 2 whether the acquisition be by purchase or by condemnation, 3 including the amount of an award or final judgment in a 4 proceeding to acquire by condemnation lands, rights-of-way, 5 rights-of-slope, property rights, franchises, easements or other 6 interests as deemed necessary or convenient in connection with 7 the acquisition or construction of a project, and costs of 8 options and partial payments on and under options. 9 "Capital project." Includes all of the following: 10 (1) Any: 11 (i) building, structure, facility or physical public 12 betterment or improvement; 13 (ii) land or rights in land; 14 (iii) furnishings, machinery, apparatus or 15 equipment, for a public betterment or improvement; or 16 (iv) undertaking to construct, repair, renovate, 17 improve, equip, furnish or acquire any of the items 18 listed in subparagraphs (i) through (iii): provided that 19 the project is designated in a capital budget as a 20 capital project; has an estimated useful life in excess 21 of five years; and has an estimated financial cost in 22 excess of $100,000, excluding original equipment and 23 furnishings for previously authorized public improvement 24 projects. 25 (2) A project to be financed by the incurring of debt. 26 Projects under this paragraph are categorized as: 27 (i) Community college projects. 28 (ii) Flood control projects. 29 (iii) Highway projects. 30 (iv) Other capital projects. 19990S0010B0206 - 3 -
1 (v) PIDA projects. 2 (vi) Public improvement projects. 3 (vii) Redevelopment assistance projects. 4 (viii) Site development projects. 5 (ix) Transportation assistance projects. 6 "Commonwealth agency or authority." Excludes an agency or 7 authority organized by action of a political subdivision. 8 "Community college projects." Include projects for a 9 community college of a type which the State Public School 10 Building Authority is authorized to undertake under the 11 provisions of the act of July 5, 1947 (P.L.1217, No.498), known 12 as the State Public School Building Authority Act, to the extent 13 that obligations issued to finance these projects are debt 14 within the meaning of this act. 15 "Construction cost." Includes obligations incurred: 16 (1) for labor and to contractors, builders and 17 materialmen in connection with the construction, fabrication 18 or assembly of a capital project; 19 (2) for machinery and equipment required for 20 construction under paragraph (1); 21 (3) for the restoration of property damaged or destroyed 22 in connection with construction under paragraph (1); and 23 (4) for the payment of damages incurred by others 24 incident to or consequent upon construction under paragraph 25 (1), which the Commonwealth or its agency or authority is 26 under legal obligation to pay or desires to pay in settlement 27 of a disputed claim of liability. 28 "Debt" The issued and outstanding obligations of the 29 Commonwealth incurred without a vote of the electorate or 30 incurred with such vote under a law making such debt subject to 19990S0010B0206 - 4 -
1 the provisions of section 7(a)(4) of Article VIII of the 2 Constitution of Pennsylvania. The term includes obligations of 3 Commonwealth agencies and authorities to the extent that such 4 obligations are to be repaid from lease rentals or other charges 5 payable directly or indirectly from revenues of the 6 Commonwealth. The term does not include: 7 (1) that portion of debt which is to be repaid from 8 charges made to the public for the use of the capital 9 projects financed, as such portion of debt may be determined 10 by the Auditor General; 11 (2) obligations to be repaid from lease rentals or other 12 charges payable by a school district or other local taxing 13 authority; or 14 (3) obligations to be repaid by agencies or authorities 15 created for the joint benefit of the Commonwealth and one or 16 more other state governments. 17 "Financial cost." Includes acquisition cost and construction 18 cost, where applicable, and an allocated portion of all of the 19 following: 20 (1) Fees, expenses and costs of issuing obligations the 21 proceeds of which are used to finance the project. 22 (2) Fees, expenses and costs of issuing and selling 23 notes or replacement notes issued under this act. 24 (3) Establishing and maintaining any purchase, loan or 25 credit agreements in connection with an issue or series of 26 issues of notes, and the fees and expenses of any fiscal or 27 loan and transfer agent and bond counsel incurred in 28 connection with the issue of the obligations. 29 (4) Premiums on insurance in connection with a project 30 during construction. 19990S0010B0206 - 5 -
1 (5) Taxes and other municipal or governmental charges, 2 lawfully levied or assessed during construction. 3 (6) Fees and expenses of architects, engineers and other 4 professionals for: 5 (i) making preliminary studies, reports or estimates 6 of costs; 7 (ii) preparing plans and specifications and 8 inspecting and reviewing the progress of construction; 9 and 10 (iii) obtaining abstracts of title, title insurance 11 or title opinions. 12 (7) Costs and expenses of preliminary investigations, 13 preplanning, surveys and reports to determine the proper 14 scope, feasibility and probable costs of capital projects to 15 be included in future capital budgets. 16 (8) Costs of administration, including the salaries and 17 expenses of administrators, reviewing architects and 18 engineers, construction inspectors, accountants and legal 19 counsel of the Commonwealth and its agencies or authorities, 20 incurred for the proper planning and supervision of the 21 capital projects program. 22 "Flood control projects." Include projects of the type which 23 the Water and Power Resources Board is authorized to construct, 24 improve, equip, maintain, acquire or operate under the 25 provisions of the act of August 7, 1936 (1st Sp.Sess., P.L.106, 26 No.46), referred to as the Flood Control Law. 27 "Fund." Excludes any fund, or account in a fund, established 28 by this act. 29 "Funding bonds." General obligation bonds used to provide 30 funds for and towards the payment of outstanding notes or to 19990S0010B0206 - 6 -
1 refund other outstanding bonds prior to or at or after the 2 stated maturity date of the bonds being refunded or of the notes 3 being funded. 4 "Highway projects." Include projects of a type which the 5 Department of Transportation is authorized to construct, 6 improve, equip, maintain, acquire or operate. 7 "Issuing officials." The Governor, the Auditor General and 8 the State Treasurer. 9 "Net debt." 10 (1) The aggregate principal amount of all debt; plus 11 (2) the amount of any past due and unpaid interest on 12 that debt; minus 13 (3) all funds held exclusively for the payment of that 14 principal and past due interest. 15 Neither accrued but not yet past due interest nor funds held for 16 the payment of the interest next falling due, up to the amount 17 of such interest, shall be included in such computations. 18 "Notes." Include temporary obligations and replacement notes 19 issued by the Commonwealth pursuant to this act in anticipation 20 of bonds. 21 "Obligations." Notes or bonds of the Commonwealth, its 22 agencies or authorities, issued pursuant to any debt authorizing 23 act. 24 "Other capital projects." Only that undertaking to equip and 25 furnish those public improvement projects which are specifically 26 enumerated under the heading of "Other Capital Projects" in 27 section 3(d) of the act of July 20, 1968 (P.L.560, No.218), 28 known as the Capital Budget Act for the 1968-1969 Fiscal Year. 29 Upon final completion of the undertakings authorized by section 30 3(d) of that act, no equipment or furnishing undertaking or any 19990S0010B0206 - 7 -
1 other undertaking or project shall be listed in any capital 2 budget act for the fiscal year 1969-1970 or any fiscal year 3 thereafter under the heading of "Other Capital Projects"; but if 4 the undertaking or project comes within the meaning of a capital 5 project, it shall be listed in future capital budget acts as a 6 capital project under one of the categories enumerated in 7 paragraph (2) of the definition of "capital project." 8 "PIDA projects." Include projects of the type which the 9 Pennsylvania Industrial Development Authority is authorized to 10 finance under the provisions of the act of May 17, 1956 (1955 11 P.L.1609, No.537), known as the Pennsylvania Industrial 12 Development Authority Act. 13 "Public improvement projects." Include projects of a type 14 which the General State Authority is authorized to construct, 15 improve, equip, furnish, maintain, acquire or operate under the 16 provisions of the act of March 31, 1949 (P.L.372, No.34), known 17 as The General State Authority Act of one thousand nine hundred 18 forty-nine, and projects which the Department of General 19 Services is authorized to construct, improve, equip, furnish, 20 maintain, acquire or operate. 21 "Redevelopment assistance capital project." The design and 22 construction of facilities which meet any of the following: <-- 23 (1) Are facilities, other than housing units, highways, 24 bridges, waste disposal facilities, sewage systems or 25 facilities or water systems or facilities, which cannot 26 obtain funding under other Federal or State programs;. <-- 27 (2) Are economic development projects which generate 28 substantial increases in employment, tax revenues or other 29 measures of economic activity. This paragraph includes 30 projects with cultural, historical or civic significance. 19990S0010B0206 - 8 -
1 (3) Are facilities which have a regional or 2 multijurisdictional impact. 3 (4) Are eligible for tax-exempt bond funding under 4 existing Federal law and regulations. 5 (5) Have a 50% non-State participation documented at the 6 time of application, including a portion of any funds 7 reserved for future physical maintenance and operation of the 8 facilities: 9 (i) at least half of which is secured funding; 10 (ii) in which the only noncash non-State 11 participation permitted is land donation; and 12 (iii) toward which State funds from other programs 13 may not be used. 14 (6) Have a total project cost as follows: 15 (i) At least $5,000,000 for projects in: 16 (A) counties of the first class; or 17 (B) counties of the second class. 18 (ii) At least $2,000,000 for projects in counties of 19 the second class A through eighth class. 20 (iii) At least $1,000,000 for projects in: 21 (A) municipalities designated as financially 22 distressed municipalities under the act of July 10, 23 1987 (P.L.246, No.47), known as the Municipalities 24 Financial Recovery Act; 25 (B) municipalities which are identified at the 26 time of application by the Department of Community 27 and Economic Development, under the department's 28 early warning system, as scoring at least one-half 29 standard deviation above the mean score; or 30 (C) municipalities which have part or all of an 19990S0010B0206 - 9 -
1 enterprise zone within the municipal boundaries. 2 (7) Have a cooperation agreement between the applicant 3 and a redevelopment authority or industrial development 4 authority or general purpose unit of local government if the 5 applicant does not administer the grant. Applicants can be 6 redevelopment authorities, industrial development authorities 7 or general purpose units of local government. 8 "Redevelopment assistance projects." Include projects of the 9 type which the Department of Community and Economic Development 10 is authorized to finance by capital grants under the act of May 11 20, 1949 (P.L.1633, No.493), known as the Housing and 12 Redevelopment Assistance Law, and Reorganization Plan No.2 of 13 1966. 14 "Replacement notes." Notes: 15 (1) the net proceeds of which are used to pay principal, 16 accrued interest and premium of previously issued notes or 17 replacement notes; and 18 (2) which evidence the same temporary borrowing of the 19 Commonwealth as the notes or replacement notes replaced. 20 "Site development projects." Include projects of the type 21 which the Department of Community and Economic Development is 22 authorized to finance by site development grants under the act 23 of July 11, 1996 (P.L.677, No.116), known as the "Infrastructure 24 Development Act." 25 "Tax revenues." All revenues from Commonwealth imposed 26 taxes, regardless of the fund to which they are deposited, 27 including revenues from motor vehicle licenses, which are 28 declared to be taxes for purposes of this act. The term does not 29 include revenues from any other licenses or from interest, fees, 30 fines or penalties. 19990S0010B0206 - 10 -
1 "Transportation assistance projects." Include projects of a 2 type which the Department of Transportation is authorized to 3 construct, improve, equip, furnish, maintain, acquire or operate 4 under 74 Pa.C.S. Pt. II (relating to public transportation) and 5 capital projects which the Department of Transportation is 6 authorized to construct, improve, equip or furnish under the 7 provisions of the act of February 11, 1976 (P.L.14, No.10), 8 known as the Pennsylvania Rural and Intercity Common Carrier 9 Surface Transportation Assistance Act, including the acquisition 10 of property authorized in those statutes. 11 Section 3. Procedures for capital budget bill and debt 12 authorizing legislation. 13 (a) Legislative process.--A capital budget prepared in 14 accordance with this act shall be submitted for each fiscal year 15 by the Governor to the General Assembly and shall be considered 16 in the form of a bill as provided in Article III of the 17 Constitution of Pennsylvania. 18 (b) Itemization.--The capital budget bill must specifically 19 itemize, by brief identifying description and estimated 20 financial cost, the capital projects to be financed from the 21 proceeds of obligations of the Commonwealth except where such 22 itemization is contained in or approved by prior legislation 23 referred to in the capital budget bill or except where such 24 itemization is included in one or more supplemental capital 25 budget bills. Projects must be listed in separate categories, as 26 well as according to the fund to be charged with the repayment 27 of the obligations to be incurred. The capital budget bill must 28 state the maximum amount of such obligations which may be 29 incurred in the ensuing fiscal year to provide funds for and 30 towards the financial costs of each category of capital 19990S0010B0206 - 11 -
1 projects, which shall be by the issue of general obligations of 2 the Commonwealth. 3 (c) Timing.--Each year, the Governor shall submit a capital 4 budget bill for the ensuing fiscal year. 5 (d) Additional bills.--At the time the Governor submits the 6 capital budget or a supplement, the Governor shall, to the 7 extent the debt to be incurred is not within the limits of 8 legislation then in force authorizing the incurring of debt, 9 submit additional bills for each category of capital projects, 10 authorizing the incurring of debt to provide funds for and 11 towards the payment of the financial costs of capital projects 12 in such category which have been specifically itemized in a 13 capital budget for the same or any prior year. 14 (e) Categories.--Each debt authorizing bill must do all of 15 the following: 16 (1) State the category of capital projects to be 17 financed by the debt so authorized but need not enumerate the 18 capital projects to be financed. 19 (2) Authorize the incurring of debt in not less than the 20 amount of the financial cost of all capital projects in such 21 category not covered by a previous debt authorization, 22 including any overall allowance for contingencies. 23 (3) State the estimated useful lives of the capital 24 projects to be financed in such detail as may be requisite if 25 capital projects of varying useful lives are to be combined 26 for financing purposes. 27 (4) State the maximum term of the debt to be incurred. 28 Section 4. Certificates of the Auditor General. 29 (a) Requirement.--By March 1 and September 1, the Auditor 30 General shall certify to the Governor and the General Assembly 19990S0010B0206 - 12 -
1 the average annual tax revenues deposited in all funds in the 2 five fiscal years ended next preceding the date of the 3 certificate, determined by adding the total of such revenues so 4 deposited and dividing the sum by five. At the time of each 5 certification, the Auditor General shall also certify as 6 separate items: 7 (1) the amount of outstanding net debt as of the end of 8 the preceding fiscal year; 9 (2) the amount of outstanding net debt as of the date of 10 the certificate; 11 (3) the difference between the limitation upon all 12 outstanding net debt as provided in section 7(a)(4) of 13 Article VIII of the Constitution of Pennsylvania and 14 paragraph (2); 15 (4) the amount of outstanding net debt scheduled to be 16 repaid during the remainder of the fiscal year in which the 17 certificate is issued; 18 (5) the amount of debt authorized by law to be issued 19 but not yet incurred; and 20 (6) the amount of outstanding obligations excluded from 21 outstanding debt as self-sustaining pursuant to section 22 7(c)(1), (2) and (3) of Article VIII of the Constitution of 23 Pennsylvania. 24 (b) Additional certificates.--As required in connection with 25 the sale of or settlement for obligations of the Commonwealth, 26 the Auditor General shall issue certificates containing items 27 listed in subsection (a)(2) and (3) as of the dates determined 28 by the Governor to be relevant to such sales or settlements. 29 (c) Auditor General.--In making certificates, the Auditor 30 General shall be entitled to rely, as to any of items listed in 19990S0010B0206 - 13 -
1 subsection (a)(1) through (6) (5), upon: <--
2 (1) any certificate furnished by the State Treasurer
3 with respect to outstanding Commonwealth general obligation
4 bonds; and
5 (2) any certificate furnished by the Department of
6 Revenue or by the appropriate bank or trust company acting as
7 fiscal agent or trustee, with respect to the outstanding
8 obligations of any authority.
9 Section 5. Constitutional limitations, authorizations, issuing
10 officials.
11 Within the limitation set forth in section 7(a)(4) of Article
12 VIII of the Constitution of Pennsylvania, the issuing officials
13 are authorized and directed to borrow, on the credit of the
14 Commonwealth and subject to the conditions and limitations of
15 the act of April 9, 1929 (P.L.343, No.176), known as The Fiscal
16 Code, money necessary to carry out the purposes of debt
17 authorizing acts passed in accordance with the provisions of
18 this act.
19 Section 6. Temporary financing authorizing.
20 (a) Authorization.--Pending the issuance of bonds of the
21 Commonwealth as authorized in section 7, the issuing officials
22 are authorized, in accordance with the provisions of this act
23 and on the credit of the Commonwealth, to make temporary
24 borrowings not to exceed three years in anticipation of the
25 issue of bonds in order to provide funds in such amounts as
26 deemed advisable to carry out the purposes of any debt
27 authorizing acts prior to the issue of bonds. In order to
28 provide for and in connection with the temporary borrowings, the
29 issuing officials are authorized in the name and on behalf of
30 the Commonwealth to enter into any purchase, loan or credit
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1 agreement or other agreement with banks, trust companies, 2 lending institutions, investment banking firms or persons in the 3 United States having the appropriate power. Agreements may 4 contain provisions not inconsistent with the provisions of this 5 act, as authorized by the issuing officials. 6 (b) Evidence.--All temporary borrowings made under the 7 authorization of this section shall be evidenced by notes of the 8 Commonwealth, which shall be issued for such amounts not 9 exceeding in the aggregate the applicable statutory and 10 constitutional debt limitation, in form and denominations and 11 subject to terms and conditions of sale and issue, prepayment or 12 redemption and maturity, rate of interest and time of payment of 13 interests, as the issuing officials authorize and direct and in 14 accordance with the applicable debt authorizing act. 15 Authorization and direction may provide for the subsequent 16 issuance of replacement notes to refund outstanding notes or 17 replacement notes. Replacement notes shall, upon issuance, 18 evidence the borrowing and may specify other terms and 19 conditions with respect to the notes and replacement notes 20 authorized for issuance as the issuing officials may determine 21 and direct. 22 (c) Replacement notice.-- 23 (1) If the authorization and direction of the Governor, 24 the Auditor General and the State Treasurer provide for the 25 issuance of replacement notes, the Governor, the Auditor 26 General and the State Treasurer are authorized, in the name 27 and on behalf of the Commonwealth, to issue, enter into or 28 authorize and direct the State Treasurer to enter into 29 agreements with banks, trust companies, investment banking 30 firms or other institutions or persons in the United States 19990S0010B0206 - 15 -
1 having appropriate power to do all of the following: 2 (i) Purchase or underwrite an issue or series of 3 issues of notes. 4 (ii) Credit. 5 (iii) Enter into a purchase, loan or credit 6 agreement. 7 (iv) Draw money pursuant to a purchase, loan or 8 credit agreement on the terms and conditions set forth in 9 the agreement. 10 (v) Issue notes as evidence of borrowings made under 11 a purchase, loan or credit agreement. 12 (vi) Appoint an issuing and paying agent or agents 13 with respect to notes. 14 (vii) Perform acts necessary or appropriate to 15 provide for the payment, when due, of the interest on and 16 principal of notes. 17 (2) Agreements under paragraph (1) may provide that the 18 compensation of purchasers or underwriters of notes or 19 replacement notes, by discount in the purchase price of the 20 notes or by payment of a fixed fee or commission at the time 21 of issuance OF the notes and that all other costs and <-- 22 expenses, including fees for agreements related to the notes, 23 issuing and payment agent costs, and costs and expenses of 24 issuance, may be paid from the proceeds of the notes. 25 (d) State Treasurer.--If the authorization and direction of 26 the Governor, the Auditor General and the State Treasurer 27 provide for the issuance of replacement notes, the State 28 Treasurer shall, by the time of delivery of these notes or 29 replacement notes, determine the principal amounts, dates of 30 issuance, interest rates or procedures for establishing interest 19990S0010B0206 - 16 -
1 rates, rates of discount, denominations and all other terms and 2 conditions relating to the issuance and shall perform all acts 3 necessary to pay, or cause to be paid, when due, all principal 4 of and interest on the notes being refunded by replacement notes 5 and to assure that payment may draw upon any money available for 6 that purpose pursuant to any purchase, loan or credit agreements 7 established with respect to the notes, subject to the 8 authorization and direction of the Governor, the Auditor General 9 and the State Treasurer. 10 (e) Funding and retirement.--Outstanding notes evidencing 11 borrowings may be funded and retired by the issuance and sale of 12 the bonds of the Commonwealth under sections 7 and 9. Funding 13 bonds must be issued and sold not later than a date three years 14 after the date of issuance of the first notes evidencing the 15 borrowings, to the extent that payment of the notes has not 16 otherwise been made or provided for by sources other than 17 proceeds of replacement notes. 18 (f) Proceeds.--The proceeds of temporary borrowings, except 19 those evidenced by replacement notes, shall be paid to the State 20 Treasurer to be held and disposed of under section 10. The 21 proceeds of temporary borrowings evidenced by replacement notes 22 shall be paid to the State Treasurer to be held and disposed of 23 under subsection (d). 24 Section 7. Bonds, issue of bonds and notes, maturity, interest. 25 (a) Issue.--As evidence of indebtedness as authorized, 26 funding bonds, which may be for one or more purposes, shall be 27 issued under this act for all of the following purposes: 28 (1) To fund or retire notes issued under section 6. 29 (2) To provide money necessary to carry out the purposes 30 of a debt authorizing statute. 19990S0010B0206 - 17 -
1 (b) Series.--The bonds of each issued shall constitute a 2 separate series to be designated by the issuing officials or may 3 be combined for sale as one series with other general obligation 4 bonds of the Commonwealth. Each series of bonds shall bear such 5 rate of interest as determined by the issuing officials. Bonds 6 shall be issued in denominations and in form, whether coupon or 7 registered as to both principal and interest, and with or 8 without such provisions of interchangeability, as the issuing 9 officials determine. If interest coupons are attached, they 10 shall, unless the debt authorizing act provides otherwise, 11 contain the facsimile signature of the State Treasurer. 12 (c) Terms and conditions.-- 13 (1) Except as set forth in subsection (a) or (b), the 14 terms and conditions of issue, redemption and maturity and 15 time of payment of interest shall be as the issuing officials 16 shall specify. Bonds of any series shall mature within a 17 period not to exceed the estimated useful lives of the 18 capital facilities projects as stated in the debt authorizing 19 act but not later than 30 years from the date of issuance. 20 (2) The issuing officials shall provide for the 21 amortization of the bonds in substantial and regular amounts 22 over the term of the debt, but the first retirement of 23 principal shall be stated to mature prior to the expiration 24 of a period of time equal to one-tenth of the time from the 25 date of the first obligation issued to evidence the debt to 26 the date of the expiration of the term of the debt. 27 (3) Retirements of principal shall be regular and 28 substantial if made in annual or semiannual amounts whether 29 by stated serial maturities or by mandatory sinking fund 30 retirements computed in accordance with either a level annual 19990S0010B0206 - 18 -
1 debt service plan, as nearly as may be, or upon the equal 2 annual maturities plan. 3 (4) If debt is incurred in one issue of bonds to provide 4 funds for and towards the financial cost of capital projects 5 having estimated useful lives of varying length, the 6 following shall apply: 7 (i) The aggregate of the financial costs shall be 8 considered as the debt to be incurred for the purpose of 9 fixing the regular and substantial amounts of principal 10 to be retired. 11 (ii) The term of the debt shall be to the end of the 12 longest estimated useful life for the purpose of 13 determining the first date for the retirement of 14 principal. At the end of the estimated useful life of 15 each project, the aggregate principal retirements 16 required to be made at or before that date shall exceed: 17 (A) the aggregate financial cost of all capital 18 projects having the same or shorter estimated useful 19 lives; or 20 (B) if bonds are issued for less than the full 21 financial cost of all projects being financed in the 22 same category, a proportionate amount in each case. 23 (5) The issuing officials are authorized to carry out 24 the provisions of this act relating to the issuance of bonds 25 and shall determine all matters in connection with the 26 issuance of bonds subject to the provisions hereof. 27 (d) Verification.-- 28 (1) Bonds issued under the authority of this act, unless 29 the debt authorizing acts provides another method of 30 signature, shall bear the facsimile signatures of the issuing 19990S0010B0206 - 19 -
1 officials and a facsimile of the Great Seal of the
2 Commonwealth of Pennsylvania and shall be countersigned by an
3 officer of an authorized loan and transfer agent of the
4 Commonwealth.
5 (2) The action taken by the issuing officials
6 authorizing the issuance of bonds or notes shall set forth
7 the title and citation of the debt authorizing acts.
8 (3) Notes and bonds issued under the authority of this
9 act shall:
10 (i) either contain a similar recital or refer to the
11 recital of titles and citations set forth in the action
12 authorizing issuance; and
13 (ii) state that the bonds or notes are issued in
14 accordance with the provisions of this act. In any action
15 or proceeding involving the validity or enforceability of
16 bonds or notes under this act, a recital under paragraph
17 (3) shall be conclusive as to their authorization.
18 Section 8. Direct obligations, exemption from taxation, means
19 of payment.
20 (a) Direct obligation.--Notes and bonds issued under this
21 act shall be direct obligations at OF the Commonwealth, and the <--
22 full faith and credit of the Commonwealth are pledged for the
23 payment of the interest as it becomes due and the payment of the
24 principal at maturity.
25 (b) Exemptions.--Notes and bonds issued under this act shall
26 be exempt from taxation for State and local purposes.
27 (c) Payment.--The principal of and interest on notes and
28 bonds issued under this act shall be payable in lawful money of
29 the United States of America.
30 Section 9. Sale of bonds.
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1 (a) Public sale.--When bonds are issued under this act, they 2 shall be offered for sale at not less than 98% of the principal 3 amount and accrued interest and shall be sold by the issuing 4 officials to the highest and best bidder after public 5 advertisement on terms and conditions and upon open competitive 6 bidding as the issuing officials direct. The manner and times of 7 advertising shall be prescribed by the issuing officials. 8 (b) Private sale.--Any portion of a bond issue offered under 9 subsection (a) and not sold or subscribed to may be disposed of 10 by private sale by the issuing officials in a manner and at 11 prices, not less than 98% of the principal amount and accrued 12 interest, as the Governor directs. No commission shall be 13 allowed or paid for the sale of bonds issued under this act. 14 (c) Temporary bonds.--Until permanent bonds can be prepared, 15 the issuing officials may issue, in lieu of permanent bonds, 16 temporary bonds in form and with privileges as to the 17 registration and exchange for permanent bonds as may be 18 determined by the issuing officials. 19 Section 10. Disposition and use of proceeds. 20 (a) General rule.--The proceeds of temporary borrowings made 21 under section 6, other than the proceeds of replacement notes, 22 and the proceeds from the sale of bonds, other than funding 23 bonds, shall be paid to the State Treasurer and be held by the 24 State Treasurer in a separate fund and shall be deposited in 25 depositories as selected by the State Treasurer to the credit of 26 the Capital Facilities Fund, which shall have such separate 27 accounts as may be deemed desirable by the issuing officials, 28 but not less than one separate account for each category of 29 capital projects. The proceeds of replacement notes shall be 30 deposited and applied as provided in section 6(d). 19990S0010B0206 - 21 -
1 (b) Dedication.--The money in the Capital Facilities Fund is 2 specifically dedicated to meeting the financial costs of capital 3 projects. The money shall be paid by the State Treasurer to 4 those departments, agencies or authorities authorized to expend 5 it as required by them to pay financial costs at the time the 6 department, agency or authority certifies the payment to be due 7 and payable. 8 (c) Investment.--Pending their application to the purposes 9 authorized, money held or deposited by the State Treasurer may 10 be invested and reinvested as are other funds in the custody of 11 the State Treasurer in the manner provided by law. Earnings 12 received from the investment or deposit of the funds shall be 13 paid into the State Treasury to the credit of the account in the 14 Capital Facilities Fund to which the funds were originally 15 deposited. 16 Section 11. Capital Debt Fund; investments; redemption of 17 bonds. 18 (a) Capital Debt Fund.--Bonds issued under this act shall be 19 paid at maturity. Interest due, after July 1, 1968, on bonds and 20 on notes, issued under this act, shall be paid by the Board of 21 Finance and Revenue from the Capital Debt Fund. The General 22 Assembly shall appropriate annually the money necessary to pay 23 the interest on the bonds and notes and the principal of the 24 bonds and notes at maturity if no other provision is made. Money 25 appropriated shall be paid into the Capital Debt Fund by the 26 State Treasurer. 27 (b) Investment.--Money received under subsection (a) prior 28 to the date for disbursement shall be invested by the board 29 pending disbursement in securities as are provided by law for 30 the investment of surplus money of the Commonwealth. The 19990S0010B0206 - 22 -
1 investment and the accumulations in the Capital Debt Fund shall 2 be devoted to and be used exclusively for the payment of the 3 interest accruing on the bonds and notes and for the redemption 4 of the bonds and notes at maturity or upon the redemption date, 5 if called for prior redemption. The board is authorized to use 6 such funds for the purchase and retirement of all or any part of 7 the bonds issued under this act; but no purchase may be made 8 which will reduce the money in the Capital Debt Fund below the 9 amount necessary to pay all principal and interest still to 10 become due in the fiscal year of the purchase. If all or any 11 part of any bonds issued under this act are purchased by the 12 Commonwealth, they shall be canceled and returned to the State 13 Treasurer as canceled and paid bonds. Thereafter, all payment of 14 interest on the bonds shall cease; and the canceled bonds and 15 coupons shall be destroyed, within two years after cancellation, 16 in the presence of the issuing officials or their authorized 17 representatives. A certificate evidencing the destruction, 18 satisfactory to the authorized loan and transfer agent of the 19 Commonwealth, shall be furnished to it. Canceled bonds and 20 coupons shall be mutilated as to make the canceled bonds and 21 coupons nonnegotiable. 22 Section 12. Funding bonds. 23 The issuing officials, subject to the provisions of a bond 24 resolution or trust indenture are authorized to issue funding 25 bonds for the purpose of refunding obligations then outstanding, 26 to provide funds to redeem and retire such outstanding 27 obligations with accrued interest and any premium payable 28 thereon, at maturity or any call date. The issuance of funding 29 bonds, the maturities and other details, the rights of the 30 holders and the duties of the issuing officials shall be 19990S0010B0206 - 23 -
1 governed by the applicable provisions of sections 3 through 11. 2 Funding bonds may be issued to refund bonds previously issued 3 for refunding purposes. The proceeds of the sale of funding 4 bonds shall be paid to the State Treasurer and applied to the 5 payment of the principal of, and any accrued interest and 6 premium on, the bonds or notes for the refunding of which 7 funding bonds have been issued. No funding bonds shall be issued 8 having a stated maturity date later than the expiration of the 9 useful life of the capital projects constructed or acquired from 10 the proceeds of the debt originally incurred in respect of the 11 bonds or notes being refunded, nor shall funding bonds be issued 12 to refund beyond the same fiscal year any portion of debt 13 required by this act and the Constitution of Pennsylvania to be 14 retired in the year of issue of the funding bonds in order to 15 comply with the retirement in substantial and regular amounts as 16 provided in section 7(d). 17 Section 13. Reporting requirements. 18 The State Treasurer shall determine and report to the Budget 19 Secretary by January 1 of each year the amount of money 20 necessary for the payment of interest on outstanding obligations 21 and the principal of the obligations, for the following fiscal 22 year and the time and amounts of payments. 23 Section 14. Registration of bonds. 24 The Auditor General shall prepare the necessary registry 25 books to be kept in the office of the authorized loan and 26 transfer agent of the Commonwealth for the registration of any 27 bonds of the Commonwealth according to the terms and conditions 28 of issue specified by the issuing officials under section 7(d). 29 Bonds issued without interest coupons attached shall be 30 registered in the registry books kept by the authorized loan and 19990S0010B0206 - 24 -
1 transfer agent of the Commonwealth. 2 Section 15. Voting requirements. 3 If this act requires an action to be taken or a decision to 4 be made by the issuing officials and the three officers shall 5 not be able to agree unanimously, the action or decision of the 6 Governor and either the Auditor General or State Treasurer shall 7 be binding and final. 8 Section 16. Appropriation. 9 The money received by the Commonwealth from the issuance and 10 sale of bonds and notes pursuant to this act and any debt 11 authorizing act adopted after July 23, 1984, shall be 12 appropriated by the General Assembly from the Capital Facilities 13 Fund in the debt authorizing acts for the purposes set forth in 14 those acts. 15 Section 17. Appropriation for and limitation on redevelopment 16 assistance capital projects. 17 (a) Appropriation.--The amount necessary to pay principal of 18 and interest on all obligations issued to provide funds for 19 redevelopment assistance capital projects is hereby appropriated 20 from the General Fund and shall be transferred to the Capital 21 Debt Fund upon authorization by the Governor. 22 (b) Limitation.--The maximum amount of redevelopment 23 assistance capital projects undertaken by the Commonwealth for 24 which obligations are to be issued shall not exceed, in 25 aggregate, $850,000,000. 26 Section 18. Funding and administration of redevelopment 27 assistance capital projects. 28 (a) Officers.--The Secretary of the Budget, in consultation 29 with the Secretary of Community and Economic Development, shall 30 approve or disapprove redevelopment assistance capital projects. 19990S0010B0206 - 25 -
1 (b) Time period.--State funding for approved redevelopment 2 assistance capital projects shall be paid over not less than a 3 36-month period, unless the Secretary of the Budget authorizes a 4 shorter period. 5 (c) Costs.--Fees for professional services incurred for the 6 design and construction of redevelopment assistance capital 7 projects shall be paid from non-State funds. Land acquisition is 8 a permissible State-funded expenditure if the acquisition cost 9 is supported by an appraisal done by a member of the Master 10 Appraisal Institute. 11 (d) Proportion.--Expenditure of State and non-State funds 12 shall be made on a proportional basis for construction expenses. 13 (e) Verification.--Redevelopment assistance capital project 14 cost estimates must be verified by the Office of the Budget or 15 its designated agent before final approval is given to a project 16 application. Cost estimates include total project cost, 17 projected use for State and non-State funds and a year-by-year 18 schedule of costs for the entire project construction phase. 19 (f) Bids.--The solicitation of a minimum of three written 20 bids is required for all general contracted work in 21 redevelopment assistance projects. 22 (g) Review and audit.--Redevelopment assistance capital 23 projects shall be reviewed at regular intervals by the Office of 24 the Budget or its designated agent during the funding phase to 25 ensure financial and program compliance. A final close-out audit 26 shall be performed by the Office of the Budget or its designated 27 agent for all projects. 28 (h) Fee.--To pay for administrative expenses related to 29 redevelopment assistance capital projects funded by Commonwealth 30 general obligation bonds, the Office of the Budget shall charge 19990S0010B0206 - 26 -
1 a fee against proceeds from bonds which were sold to finance 2 construction or acquisition costs of projects. 3 Section 19. Repeals. 4 (a) Absolute.--Article XVI-B of the act of April 9, 1929 5 (P.L.343, No.176), known as The Fiscal Code, is repealed. 6 (b) General.--All other acts and parts of acts are repealed 7 insofar as they are inconsistent with this act. 8 Section 20. Recodification. 9 This act is a recodification of Article XVI-B of the act of 10 April 9, 1929 (P.L.343, No.176), known as The Fiscal Code. This 11 act is a continuation of, and is not intended to make any 12 changes in, Article XVI-B of The Fiscal Code except for 13 paragraph (6)(ii) of the definition of "redevelopment assistance 14 capital project" in section 2. 15 Section 21. Effective date. 16 This act shall take effect immediately. A21L72BIL/19990S0010B0206 - 27 -