PRINTER'S NO. 1251
No. 999 Session of 2001
INTRODUCED BY HUGHES, MELLOW, SCHWARTZ, ERICKSON, WAGNER, COSTA, KUKOVICH, STACK, TARTAGLIONE, MUSTO, LOGAN AND WILLIAMS, JUNE 21, 2001
REFERRED TO EDUCATION, JUNE 21, 2001
AN ACT 1 Amending Title 24 (Education) of the Pennsylvania Consolidated 2 Statutes, establishing the Pennsylvania Public School 3 Construction Authority and the Pennsylvania Public School 4 Construction Task Force; providing for their powers and 5 duties; establishing the Public School Construction Reserve 6 Fund, the Public School Building and Facility Adequacy Grant 7 Program, a direct grant program and an interest subsidy 8 program; and authorizing the issuance of bonds. 9 The General Assembly of the Commonwealth of Pennsylvania 10 hereby enacts as follows: 11 Section 1. Title 24 of the Pennsylvania Consolidated 12 Statutes is amended by adding a chapter to read: 13 CHAPTER 63 14 PENNSYLVANIA STATE OF THE ART 15 SCHOOLS PROGRAM 16 Sec. 17 6301. Short title of chapter. 18 6302. Findings. 19 6303. Purpose. 20 6304. Definitions.
1 6305. School building and facility assessment report. 2 6306. Pennsylvania Public School Construction Task Force. 3 6307. Public school building and facility adequacy standards. 4 6308. Needs assessment report. 5 6309. Pennsylvania Public School Construction Authority. 6 6310. Annual report. 7 6311. School district capital improvement plans. 8 6312. Public School Building and Facility Adequacy Grant 9 Program. 10 6313. Direct grant program. 11 6314. Interest subsidy program. 12 6315. Bond issuance. 13 6316. Public School Construction Reserve Fund. 14 § 6301. Short title of chapter. 15 This chapter shall be known and may be cited as the 16 Pennsylvania State of the Art Schools Act. 17 § 6302. Findings. 18 The General Assembly finds and declares as follows: 19 (1) Quality education for the children of this 20 Commonwealth is essential for the future success of children 21 of this Commonwealth and the county. 22 (2) Essential elements of this Commonwealth's public 23 school system are the school buildings and facilities that 24 ideally provide a safe and secure environment for learning 25 and facilitate educational opportunities for students in this 26 Commonwealth's public schools. 27 (3) Regrettably not all public school buildings and 28 facilities in this Commonwealth are capable of providing this 29 high quality of education due to the physical condition or 30 insufficient capacity of those buildings and facilities. 20010S0999B1251 - 2 -
1 (4) Due to the decreasing percentage of the State 2 funding share for education and an increasing cost burden on 3 local revenue sources, necessary maintenance on needy public 4 school buildings and facilities has been deferred until 5 school district budgets can afford those additional costs and 6 regrettably this burden on school district budgets has not 7 lessened. 8 (5) As a result of these deferrals, certain school 9 buildings and facilities are not in a condition to provide a 10 safe and secure location for schooling of children in this 11 Commonwealth. 12 (6) Several school districts have also experienced 13 difficulty in funding new building and facility construction 14 for various purposes, such as accommodating increases in 15 student population and providing students with access to 16 schools that provide and utilize recent technological 17 advances to educate students. 18 (7) Another essential element of this Commonwealth's 19 public schools is various instructional equipment, which is 20 essential to providing an education for the students of the 21 public schools, including computer and science laboratories. 22 (8) Due to the decreasing percentage in the State 23 funding share, it is increasingly difficult for school 24 districts to purchase and utilize instructional equipment, 25 such as computers and other electronic equipment, that 26 provides students with the means to learn and to succeed in 27 the digital age. 28 § 6303. Purpose. 29 This chapter is intended to: 30 (1) Provide Statewide comparable data on the current 20010S0999B1251 - 3 -
1 physical condition of public school buildings and facilities. 2 (2) Establish minimum adequacy standards for school 3 buildings and facilities, including physical conditions, 4 maintenance, compatibility with educational technology and 5 sufficient building area per student to avoid overcrowding. 6 (3) Determine the cost of essential and deferred 7 maintenance with the goal of improving the current physical 8 condition of existing eligible school buildings and 9 facilities to comply with minimum adequacy standards. 10 (4) Provide State assistance in the school district 11 design of new construction to comply with minimum adequacy 12 standards. 13 (5) Establish a tax-exempt bond program for the funding 14 of new school building and facility construction and the 15 repair and maintenance of eligible school buildings and 16 facilities and the purchase of school building and facility 17 equipment. 18 (6) Establish the Public School Building and Facility 19 Adequacy Grant Program to distribute grants and funding to 20 eligible school districts under two separate funding 21 programs. 22 (7) Establish the Public School Construction Reserve 23 Fund to address the bonds debt service and to fund emergency 24 school maintenance needs. 25 § 6304. Definitions. 26 The following words and phrases when used in this chapter 27 shall have the meanings given to them in this section unless the 28 context clearly indicates otherwise: 29 "Adequacy grant program." The Public School Building and 30 Facility Adequacy Grant Program established by this chapter. 20010S0999B1251 - 4 -
1 "Authority." The Pennsylvania Public School Construction 2 Authority established by this chapter. 3 "Bond." the notes, bond and other evidences of indebtedness 4 or obligations which the Pennsylvania Public School Construction 5 Authority is authorized to issue pursuant to this chapter. 6 "Construction." This term includes acquisition and 7 construction and the term "to construct" shall mean and include 8 to acquire and to construct in such a manner as may be deemed 9 desirable. 10 "Cost of a project." The cost of all real estate, 11 properties, rights and easements acquired, the cost of 12 construction of a school building and facility and the 13 furnishing and equipment thereof, all financing charges, 14 interest prior to and during construction and engineering and 15 legal expenses. 16 "Current physical condition." In reference to a public 17 school building or facility this term shall include the current 18 condition of the heating, cooling, electrical and plumbing 19 systems; the building's exterior, including the roof, windows 20 and exterior doors; the building's interior, including the 21 walls, ceilings, floors, interior doors, lighting, glass, 22 educational equipment, school equipment and rest rooms; 23 gymnasiums and locker rooms; and technological capacity. 24 "Deferred maintenance." All regularly scheduled and 25 unscheduled maintenance required for the proper upkeep of a 26 school building or facility that has not been timely performed 27 but postponed to a later time. 28 "Educational equipment." All furniture, equipment and other 29 appliances for the use of the public schools. This term shall 30 exclude equipment utilizing educational technology. 20010S0999B1251 - 5 -
1 "Educational technology." Any technical or scientific method 2 of sending, receiving, storing, packaging or assimilating audio, 3 video, graphic, data or any combination thereof by means of 4 electromagnetic signal and any equipment, processes and 5 facilities that are used for instruction in the public schools. 6 "Emergency maintenance." The performance of essential 7 maintenance on structurally unsound school buildings and 8 facilities to address the immediate risk to the health and 9 safety of students, employees and the public. 10 "Essential maintenance." The level of deferred maintenance 11 that must be completed for a school building or facility to 12 comply with the requirements of the school building and facility 13 to comply with the requirements of the school building and 14 facility adequacy standards. 15 "Financing." The provision of a grant or funding to a school 16 district for payment of the cost of a project. 17 "Fund." The Public School Construction Reserve Fund 18 established by this chapter. 19 "Man-made disaster." Any industrial, nuclear or 20 transportation accident, explosion, conflagration or other 21 similar condition resulting from man-made causes which threatens 22 or causes substantial damage to property, human suffering, 23 hardship or loss of life. 24 "Natural disaster." Any hurricane, tornado, storm, flood, 25 high water, wind-driven water, tidal wave, earthquake, 26 landslide, snowstorm, drought, fire, explosion or other 27 catastrophe which results in substantial damage to property, 28 hardship, suffering or possible loss of life. 29 "Needs assessment report." The report prepared by the 30 Department of the Auditor General that lists and calculates the 20010S0999B1251 - 6 -
1 total cost for the completion of all deferred maintenance and 2 essential maintenance. This report shall include a copy of the 3 school building and facility assessment report. 4 "School building and facility assessment report." The report 5 compiled and organized by the Department of the Auditor General 6 that lists the current physical condition of every public school 7 in the Commonwealth. This report shall include the data 8 collected and compiled by the contracted private entity. 9 "School buildings and facilities." All buildings and 10 structures used by school districts for the classroom 11 instruction of students. This term shall include gymnasiums and 12 locker rooms but shall exclude stadiums, field houses, swimming 13 pools and practice fields. 14 "School buildings and facilities adequacy standards." The 15 standards proposed by the School Construction Task Force and 16 accepted by the authority, establishing minimum standards for 17 school buildings and facilities. 18 "School equipment." Equipment and machinery that are 19 necessary for the proper and safe operation of a school building 20 or facility. 21 "Structurally unsound buildings and facilities." School 22 buildings and facilities that have extensive problems arising 23 from uncompleted essential maintenance, which also pose a threat 24 to the safety and health of students, employees and the public. 25 "Task force." The Pennsylvania Public School Construction 26 Task Force established by this chapter. 27 "Technological capacity." The ability of a school building 28 or facility to accommodate educational technology. 29 § 6305. School building and facility assessment report. 30 (a) Duty to prepare report.--The Department of the Auditor 20010S0999B1251 - 7 -
1 General shall: 2 (1) Prepare guidelines within two months of the 3 effective date of this chapter for the conduct of a Statewide 4 school building and facility assessment to collect data on 5 the current physical condition of all public school buildings 6 and facilities in every school district in this Commonwealth 7 and shall submit the guidelines and requirements for the 8 conduct of the school building and facility assessment by a 9 private entity to competitive bidding, as provided under 62 10 Pa.C.S. Pt. I (relating to Commonwealth procurement code). 11 (2) Enter into a contract with a private entity as soon 12 as practicable for the purpose of conducting the school 13 building and facility assessment. 14 (3) Prepare a school building and facility assessment 15 report that presents the Statewide data in a uniform manner 16 within nine months of the effective date of this chapter. 17 (4) Transmit the school building and facility assessment 18 report upon completion to the Pennsylvania Public School 19 Construction Task Force. 20 (b) Contents of report.--The school building and facility 21 assessment report shall provide uniform Statewide data regarding 22 the current condition of public school buildings and facilities 23 in this Commonwealth and shall include: 24 (1) The current condition of school buildings and 25 facilities on a Statewide basis, a school district basis and 26 an individual public school basis. 27 (2) Expected longevity of each school building and 28 facility. 29 (3) Calculations of current school building and facility 30 student capacity and space requirements necessary to 20010S0999B1251 - 8 -
1 accommodate expected fluctuations in future student 2 population for a period of five years. 3 (4) Each school building's and facility's compliance or 4 noncompliance with safety requirements, including any local 5 building or construction codes. 6 (5) The ability of each school building and facility to 7 accommodate educational technology. 8 (c) Governmental assistance.--For the purposes of preparing 9 guidelines for the conduct of the building and facility 10 assessments and preparing the school building and facility 11 assessment report, the Department of the Auditor General may 12 request the assistance of local school districts, the Division 13 of Facilities Management of the Department of Education and 14 other departments, agencies and entities of the Commonwealth as 15 deemed necessary by the Department of the Auditor General. 16 (d) Timing for preparation of report.--At the completion of 17 the private entity's assessment data compilation, the Department 18 of the Auditor General shall prepare the Statewide school 19 building and facility assessment report. 20 § 6306. Pennsylvania Public School Construction Task Force. 21 (a) Establishment.--There is hereby established the 22 Pennsylvania Public School Construction Task Force. 23 (b) Membership.--The authority shall appoint 19 members to 24 the task force, which shall be comprised as follows: 25 (1) Three school directors, provided that no two or more 26 school directors shall serve on the same board of school 27 directors. 28 (2) Three school district superintendents. 29 (3) Three principals of public elementary or secondary 30 school buildings. 20010S0999B1251 - 9 -
1 (4) Three teachers employed by a public school district. 2 (5) Three parents of a public elementary or secondary 3 school student. 4 (6) Four representatives of the private sector 5 architectural and construction management industries. 6 (c) Duties.--The task force shall have the duty to: 7 (1) Review and utilize the data contained in the school 8 building and facility assessment report and draft the 9 proposed public school building and facility adequacy 10 standards within three months of the receipt of the school 11 building and facility assessment report. 12 (2) Transmit the completed proposed public school 13 building and facility adequacy standards to the authority for 14 approval. 15 (3) Transmit a copy of the approved public school 16 building and facility adequacy standards to the Department of 17 the Auditor General for utilization in calculating the cost 18 for compliance with the minimum standards, following an 19 approval of the proposed standards by the authority. 20 (4) Review and incorporate any changes, revisions or 21 suggestions that the authority provides to the task force 22 into the proposed adequacy standards and to resubmit the 23 revised proposed adequacy standards to the authority 24 following a provisional approval of the adequacy standards by 25 the authority. 26 (5) Review and redraft the proposed adequacy standards 27 incorporating any suggestions and criticisms provided by the 28 authority following a rejection of the proposed adequacy 29 standards by the authority. 30 § 6307. Public school building and facility adequacy standards. 20010S0999B1251 - 10 -
1 (a) Proposal of standards.--The task force shall utilize the 2 uniform data contained in the school building and facility 3 assessment report to propose adequacy standards to the authority 4 for public school buildings and facilities that require a 5 minimum level of: 6 (1) Essential maintenance. 7 (2) Structural and building integrity. 8 (3) Instructional area for education on a per student 9 basis. 10 (4) Technological capacity in school buildings and 11 facilities. 12 (b) Uniformity required.--The proposed adequacy standards 13 shall be uniform and have uniform Statewide application to all 14 public school buildings and facilities of the Commonwealth. 15 § 6308. Needs assessment report. 16 (a) Duty to prepare.--The Department of the Auditor General 17 shall prepare a needs assessment report for all public school 18 buildings and facilities which shall: 19 (1) Identify all deferred maintenance in each school 20 building and facility. 21 (2) Identify the essential maintenance required for each 22 school building and facility to comply with the school 23 building and facility adequacy standards. 24 (3) Calculate the total cost for the completion of all 25 deferred maintenance for each school building and facility. 26 (4) Calculate the total cost for the completion of 27 essential maintenance that is required for each school 28 building and facility to comply with the school building and 29 facility adequacy standards. 30 (b) Submission to authority.--The Department of the Auditor 20010S0999B1251 - 11 -
1 General shall submit the needs assessment report to the 2 authority within two months of receiving a copy of the adequacy 3 standards from the task force. The needs assessment report shall 4 be presented in a uniform manner. 5 (c) Governmental assistance.--For the purposes of preparing 6 the needs assessment report for school buildings and facilities, 7 the Department of the Auditor General may request the assistance 8 of local school districts, the Division of Facilities Management 9 of the Department of Education, and other departments, agencies 10 and entities of the Commonwealth as deemed necessary by the 11 Department of the Auditor General. 12 § 6309. Pennsylvania Public School Construction Authority. 13 (a) Establishment.--There is hereby established a 14 Pennsylvania Public School Construction Authority. 15 (b) Membership.--The authority shall be comprised of 14 16 members as follows: 17 (1) The Governor or his designee. 18 (2) The Auditor General or his designee. 19 (3) The State Treasurer or his designee. 20 (4) The Secretary of Education or his designee. 21 (5) The Secretary of the Budget or his designee. 22 (6) The Secretary of General Services or his designee. 23 (7) The President pro tempore of the Senate or his 24 designee, the Minority Leader of the Senate or his designee, 25 the Speaker of the House of Representatives or his designee, 26 and the Minority Leader of the House of Representatives or 27 his designee. 28 (8) Four representatives of the private sector 29 architectural and construction management industries, who 30 shall be appointed by the Governor. 20010S0999B1251 - 12 -
1 (c) Term.--The term of the members of the authority shall be 2 as follows: 3 (1) The Governor, Auditor General, State Treasurer, 4 Secretary of Education, Secretary of the Budget, Secretary of 5 General Services and the members of the General Assembly 6 shall serve concurrently with their position and a designee 7 of one of these officials shall serve the same term as the 8 appointing official. 9 (2) The four representatives of the private sector 10 architectural and construction management industries shall 11 serve for a term of three years. Upon the end of their terms, 12 the Governor may reappoint them to the authority or may 13 appoint other representatives of the private sector 14 architectural and construction management industries. 15 (d) Reimbursement for expenses.--Each member of the 16 authority shall serve without compensation for the performance 17 of official duties but may be reimbursed for actual and 18 necessary expenses reasonably incurred in the performance of the 19 duties of the authority. 20 (e) Duties.--The authority shall have the following powers 21 and duties: 22 (1) Appoint the initial members of the task force within 23 two months of the effective date of this chapter. 24 (2) Review and approve, conditionally approve or reject 25 the proposed public school building and facility adequacy 26 standards submitted by the task force within 30 days of the 27 receipt of the proposed standards. 28 (3) Establish guidelines for the operation and 29 administration of the grant program, including criteria, 30 eligibility and funding for emergency public school 20010S0999B1251 - 13 -
1 infrastructure needs, within three months of the effective 2 date of this chapter. 3 (4) Create a central depository for information on 4 school building projects through the establishment and 5 maintenance of an electronic data base that contains the 6 condition and needs for every school building and facility. 7 The electronic data base shall be designed so that 8 information can be easily collected, stored, amended, 9 reviewed and disseminated. The information contained in this 10 data base shall be available for public inspection. 11 (5) Serve the school districts as a resource in 12 designing and constructing school buildings and facilities 13 that comply with the school building and facility adequacy 14 standards established by this chapter and to assist the 15 districts in best utilizing their funding from the program, 16 including the provision and utilization of existing model 17 plans of school buildings or the development of new model 18 plans for school buildings. 19 (6) Operate and administer the fund and adequacy 20 program. 21 (7) Prepare an annual report on the operation and 22 administration of the adequacy program and fund, which shall 23 be submitted to the chairman of the Education Committee of 24 the Senate and the chairman of the Education committee of the 25 House of Representatives within three months of the end of 26 the fiscal year. 27 (8) Have continuing succession. 28 (9) Sue and be sued, implead and be impleaded, complain 29 and defend in all courts. 30 (10) Adopt, use and alter at will a corporate seal. 20010S0999B1251 - 14 -
1 (11) Acquire, purchase, hold, lease as lessee and use 2 any property real, personal or mixed, tangible or intangible, 3 or any interest therein, necessary or desirable, for carrying 4 out the purposes of the authority, and to sell, lease as 5 lessor, transfer and dispose of any property or any interest 6 therein at any time acquired by it. 7 (12) Make bylaws for the management and regulation of 8 its affairs. 9 (13) Appoint officers, agents, employees and servants, 10 to prescribe their duties and to fix their compensation. 11 (14) Finance projects by making grants to any eligible 12 school district. 13 (15) Borrow money for the purpose of financing or 14 refinancing the cost of any project, make and issue 15 negotiable notes, bonds and other evidences of indebtedness 16 or obligations of the authority to the extent authorized 17 under this chapter and to secure the payment of such bonds, 18 or any part thereof, by pledge or deed of trust of all or any 19 of its revenues and receipts, and to make such agreements 20 with the purchasers or holders of such bonds or with others 21 in connection with such bonds when issued or to be issued as 22 the authority shall deem advisable, and in general to provide 23 for the security of said bonds and the rights of the holder 24 thereof. 25 (16) Make contracts of every name and nature and to 26 execute all instruments necessary or convenient for the 27 carrying of its business. 28 (17) Borrow money and accept grants from and enter into 29 contracts or other transaction with any Federal agency, 30 without limitation of the other powers and duties specified 20010S0999B1251 - 15 -
1 in this subsection. 2 (18) Pledge, hypothecate or otherwise encumber all or 3 any of the revenues or receipts of the authority as security 4 for all or any of the obligations of the authority. 5 (19) Do all acts and things necessary or convenient to 6 carry out the powers granted to it by this chapter. 7 (f) Exercise of powers and duties.-- 8 (1) The powers and duties of the authority shall be 9 exercised by a governing body consisting of the members of 10 the authority acting as a board. Within 30 days after the 11 effective date of this chapter, the board shall meet and 12 organize by electing from their number a president, treasurer 13 and secretary. At the first regular meeting in each year 14 thereafter they shall elect from their number a president and 15 a secretary. 16 (2) Nine members shall constitute a quorum of the board 17 for the purpose of organizing the authority and conducting 18 the business thereof and for all other purposes, and all 19 action shall only be taken by a vote of a majority of the 20 members of the authority unless the bylaws shall require a 21 larger number. The board shall have 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 and embodied. The board shall fix and determine the 27 number of officers, agents and employees of the authority and 28 their respective compensation and duties and may delegate to 29 one or more of their number or to one or more of said 30 officers, agents or employees such powers and duties as it 20010S0999B1251 - 16 -
1 may deem proper. 2 (g) Limitation.--The authority shall have no power at any 3 time or in any manner to pledge the credit or taxing power of 4 the Commonwealth or any of its school districts, nor shall any 5 of its debts or obligations be deemed to be obligations of the 6 Commonwealth or any of its school districts, nor shall the 7 Commonwealth or any of its school districts be liable for the 8 payment of principal or interest on such obligations. 9 § 6310. Annual report. 10 The authority shall submit an annual report to the chairman 11 of the Education Committee of the Senate and the chairman of the 12 Education Committee of the House of Representatives regarding 13 the administration and operation of the fund and adequacy grant 14 program. 15 § 6311. School district capital improvement plans. 16 (a) Plan necessary for program funding.--Following 17 completion of the school building and facility assessment, the 18 adequacy standards, needs assessment and the adequacy grant 19 program guidelines, any school district that submits an 20 application for funding under the program shall prepare and 21 retain on file an annual and a five-year capital improvement 22 plan. The five-year capital improvement plan shall be updated 23 annually. 24 (b) Contents of plan.--The capital improvement plan shall: 25 (1) Address the deficiencies in the school district's 26 school buildings and facilities as listed in the school 27 building and facility assessment, needs assessment, and 28 authority report. 29 (2) Comply with the school building and facility 30 adequacy standards. 20010S0999B1251 - 17 -
1 (3) Include all of the following: 2 (i) The project descriptions and rationale for 3 repair, maintenance and construction of school buildings 4 or facilities. 5 (ii) The project floor plans or a copy of project 6 blueprints. 7 (iii) The student and school district employee 8 capacity of each school building or facility in the 9 capital improvement plan. 10 (iv) The current and projected student enrollment 11 for a five-year period. 12 (v) The funding sources and cost estimates including 13 applicable cost estimates contained in the needs 14 assessment and authority report. 15 (vi) The school district efforts to comply with the 16 requirements of the school building and facility adequacy 17 standards. 18 (vii) The calculations of the average useful life 19 for each project financed under the adequacy grant 20 program. 21 § 6312. Public School Building and Facility Adequacy Grant 22 Program. 23 (a) Establishment.--The Public School Building and Facility 24 Adequacy Grant Program is hereby established and shall be 25 administered by the authority. 26 (b) Components of program.--The adequacy grant program shall 27 consist of two separate components which shall be known as the 28 direct grant program and the interest subsidy program. The 29 adequacy grant program shall be funded by moneys generated from 30 the issuance of bonds and deposited in the fund. Fifty percent 20010S0999B1251 - 18 -
1 of those funds in the fund generated from bond proceeds shall 2 fund the direct grant program, and the remaining 50% shall fund 3 the interest subsidy program. 4 § 6313. Direct grant program. 5 (a) Grants to be provided.--The direct grant program shall 6 provide direct grants to eligible school districts for 100% of 7 the cost of a project, including the performance of essential 8 maintenance on or construction of a public school building or 9 facility and educational equipment. 10 (b) Applications.--School districts eligible under this 11 program may submit an annual application to the authority. The 12 authority shall establish procedures and guidelines regarding 13 the application for and award of direct grants under this 14 program. The procedures and guidelines shall include: 15 (1) Provisions for accountability to ensure that the 16 direct grants are used in accordance with this chapter. 17 (2) The following project priority list for the award of 18 grants under the program: 19 (i) To replace or reconstruct school buildings and 20 facilities destroyed or damaged by man-made or natural 21 disasters. 22 (ii) To perform essential maintenance on the most 23 deficient school buildings and facilities. 24 (iii) To replace school buildings and facilities 25 that no longer are structurally sound or have components 26 that are no longer structurally sound. 27 (iv) To construct new school buildings and 28 facilities to alleviate the overcrowding caused by 29 population growth. 30 (v) To purchase educational equipment. 20010S0999B1251 - 19 -
1 (c) Eligibility criteria.--The authority shall establish 2 eligibility criteria for grant recipients, in which eligibility 3 shall be based on at least one of the following: 4 (1) The school district has at least 50% of its students 5 eligible for free or reduced-cost lunches under the National 6 School Lunch Act (60 Stat. 230, 42 U.S.C. § 1751 et seq.). 7 (2) The school district receives a poverty supplement in 8 its basic education funding. 9 (3) The school district has a market value income aid 10 ratio of .8000 or higher. 11 Any school district meets the eligibility criteria under this 12 subsection, classified as a "special need district." 13 § 6314. Interest subsidy program. 14 (a) Funding to be provided.-- 15 (1) The interest subsidy program shall provide funding 16 in the form of a reimbursement to a school district that is 17 not classified as a "special need district" for a specific 18 percentage of the total costs of a project for the 19 performance of essential maintenance on or the construction 20 of school buildings and facilities. 21 (2) The authority shall establish a formula for the 22 calculation of the percentage of the total project costs 23 which may be reimbursed to the school district. 24 (b) Eligibility criteria.--The authority shall establish 25 eligibility criteria for the award of the funding under this 26 program which shall incorporate the following project priority 27 list: 28 (1) To replace or reconstruct school buildings and 29 facilities destroyed or damaged by man-made or natural 30 disasters. 20010S0999B1251 - 20 -
1 (2) To alleviate the overcrowding caused by population 2 growth or to replace school buildings and facilities that no 3 longer are structurally sound or have components that are no 4 longer structurally sound. 5 (3) To replace or reconstruct school buildings and 6 facilities that pose a risk to the health and safety of 7 students, employees and the public. 8 (4) To alter facilities to provide accessibility for 9 qualified individuals with disabilities, as defined under the 10 Americans with Disabilities Act of 1990 (Public Law 101-336, 11 42 U.S.C. § 12101 et seq.) 12 (5) To purchase educational equipment. 13 (c) Prerequisite for eligibility.--In order for a school 14 district to be eligible under the interest subsidy program, the 15 school district must obtain financing for a project at the 16 lowest available interest rate. The guidelines for the program 17 established by the authority shall address sufficient 18 documentation of such lowest available interest rate. 19 § 6315. Bond issuance. 20 (a) Amount authorized.--The authority is authorized to issue 21 a maximum of $2,400,000,000 in negotiable bonds in six 22 individual series of $400,000,000 over the course of two years 23 for the purpose of funding the adequacy grant program to provide 24 grants and reimbursements for the construction, maintenance and 25 equipping of public schools in this Commonwealth. The term of 26 each series of bonds shall be based on the average useful life 27 of the projects financed. 28 (b) Terms.-- 29 (1) The bonds of the authority shall be of such series, 30 bear such date or dates, mature at such time or times, not 20010S0999B1251 - 21 -
1 exceeding 30 years from their respective dates, bear such 2 interest at such rate or rates payable semi-annually, be in 3 such denominations, be in such form, either coupon or fully 4 registered without coupons, carry such registration, 5 exchangeability and interchangeability privileges, be payable 6 in such medium of payment and at such place or places, be 7 subject to such terms of redemption at such prices not 8 exceeding 105% of the principal amount thereof, and be 9 entitled to such priorities in the revenues and receipts of 10 the authority as such resolution or resolutions may provide. 11 The interest on bonds issued shall be paid during the term 12 for which the bonds were issued. The bonds shall be signed by 13 such officers, either manually or by facsimile as the 14 authority shall determine and shall have imprinted thereon a 15 facsimile of the corporate seal, attested by the facsimile 16 signature of the treasurer of the authority, all as may be 17 prescribed in such resolution or resolutions. Any of the 18 bonds may be issued and delivered notwithstanding that any of 19 the authorized persons signing the bonds or whose facsimile 20 signature shall be upon the bonds shall have ceased to hold 21 their respective offices at the time when the bonds shall 22 actually be delivered. 23 (2) The bonds shall be sold as the authority shall 24 determine, at private sale or to the highest responsible 25 bidder or bidders after public notice by advertisement. The 26 notice shall contain a general description of the bonds, the 27 manner, place and time of the sale or time limit for the 28 receipt of proposals, the name of the officer to whom the 29 bids or proposals shall be delivered and a statement of the 30 terms and conditions of the sale, which shall include a 20010S0999B1251 - 22 -
1 statement of the highest net interest cost or highest 2 interest cost computed by the Present Worth Method, whichever 3 is specified, acceptable to the authority. For the purposes 4 of this section, net interest cost shall be determined by 5 ascertaining the total amount of interest payable with 6 respect to the bonds, computed from the date of the bonds to 7 the stated maturity dates thereof, plus the amount of any 8 discount from the principal amount of the bond or less the 9 amount of any premium in excess of the principal amount of 10 the bonds. Pending the preparation of the definitive bonds, 11 interim receipts may be issued to the purchaser or purchasers 12 of such bonds, and may contain such terms and conditions as 13 the authority may determine. 14 (3) The bonds are hereby made securities in which all 15 officers of the Commonwealth and its political subdivisions 16 and municipal officers and administrative departments, boards 17 and commissions of the Commonwealth, all banks, bankers, 18 savings banks, trust companies, savings and loan 19 associations, investment companies and other persons carrying 20 on a banking business, all insurance companies, insurance 21 associations and other persons carrying on an insurance 22 business and all administrators, executors, guardians, 23 trustees and other fiduciaries, and all other persons 24 whatsoever who now or may hereafter be authorized to invest 25 in bonds or other obligations of the Commonwealth, may 26 properly and legally invest any funds, including capital, 27 belonging to them or within their control, and said bonds or 28 other securities or other obligations are hereby made 29 securities which may properly and legally be deposited with 30 and received by any State or municipal officers or agency of 20010S0999B1251 - 23 -
1 the Commonwealth for any purpose for which the deposit of 2 bonds or other obligations of the Commonwealth is now or may 3 hereafter be authorized by law. 4 (c) Contents of resolution.--Any resolution authorizing the 5 bonds may contain provisions which shall be a part of the 6 contract with the holders thereof as to: 7 (1) Pledging the full faith and credit of the authority, 8 but not of the Commonwealth or any county or other political 9 subdivision thereof, for such obligations, or restricting the 10 same to all or any of the revenues or receipts of the 11 authority from all or any projects. 12 (2) The financing and the duties of the authority with 13 reference thereto. 14 (3) The terms and provisions of the bonds. 15 (4) Limitations on the purposes to which the proceeds of 16 the bonds, then or to be later issued, or of any loan or 17 grant by the United States may be applied. 18 (5) The setting aside of reserves or sinking funds and 19 the regulation and disposition thereof. 20 (6) 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 (7) Any other or additional agreements with the holders 24 of the bonds. 25 (d) Documents.--The authority may enter into any deeds of 26 trust, indentures or other agreements with any bank or trust 27 company or other person or persons in the United States having 28 power to enter into the same, including any Federal agency, as 29 security for such bonds and may assign and pledge all or any of 30 the revenues or receipts of the authority thereunder. Such deed 20010S0999B1251 - 24 -
1 of trust, indenture or other agreement may contain such 2 provisions as may be customary in such instruments or as the 3 authority may authorize, including, but without limitation, 4 provisions as to: 5 (1) The construction, improvement, financing, operation, 6 maintenance and repair of any project or projects and the 7 duties of the authority with reference thereto. 8 (2) The application of funds and the safeguarding of 9 funds on hand or on deposit. 10 (3) The rights and remedies of said trustee and the 11 holders of the bonds, which may include restrictions upon the 12 individual right of action of such bondholders. 13 (4) The terms and provisions of the bonds or the 14 resolutions authorizing the issuance of the same. 15 (e) Bonds as negotiable instruments.--Bonds of the authority 16 shall have the qualities of negotiable instruments under 13 17 Pa.C.S. (relating to commercial code). 18 (f) Rights and remedies of bondholders.-- 19 (1) The rights and remedies herein conferred upon or 20 granted to the bondholders shall be in addition to, and not 21 in limitation of, any rights and remedies lawfully granted to 22 such bondholders by the resolution or resolutions providing 23 for the issuance of bonds or by any deed of trust, indenture 24 or other agreement under which the same may be issued or 25 secured. In the event that the authority shall default in the 26 payment of principal of or interest on any of the bonds after 27 said principal or interest shall become due, whether at 28 maturity or upon call for redemption, and such default shall 29 continue for a period of 30 days, or in the event that the 30 authority shall fail or refuse to comply with the provisions 20010S0999B1251 - 25 -
1 of this chapter or shall default in any agreement made with 2 the holders of the bonds, the holders of 25% in aggregate 3 principal amount of the bonds then outstanding, by instrument 4 or instruments filed in the office of the recorder of deeds 5 of the county, and proved or acknowledged in the same manner 6 as a deed to be recorded may, except as such right may be 7 limited under the provisions of any deed of trust, indenture 8 or other agreement as provided earlier, appoint a trustee to 9 represent the bondholders for the purposes provided in this 10 section. Such trustee and any trustee under any deed of 11 trust, indenture or other agreement may, and upon written 12 request of the holders of 25%, or such other percentage as 13 may be specified in any deed of trust, indenture or other 14 agreement aforesaid, in principal amount of the bonds then 15 outstanding, shall in his or its own name: 16 (i) by mandamus or other suit, action or proceeding 17 at law or in equity to enforce all rights of the 18 bondholders, including the right to require the authority 19 to collect rates and other charges adequate to carry out 20 any agreement as to, or pledge of the revenues or 21 receipts thereof, the authority, and to require the 22 authority to carry out any other agreements with or for 23 the benefit of the bondholders, and to perform its and 24 their duties under this chapter; 25 (ii) bring suit upon the bonds; 26 (iii) by action or suit in equity to require the 27 authority to account as if it were the trustee of an 28 express trust for the bondholders; 29 (iv) by an action or suit in equity to enjoin any 30 acts or things which may be unlawful or in violation of 20010S0999B1251 - 26 -
1 the rights of the bondholders; or 2 (v) by notice in writing to the authority to declare 3 all bonds due and payable and if all defaults shall be 4 made good, then with the consent of the holders of 25%, 5 or such other percentage as may be specified in any deed 6 of trust, indenture or other agreement aforesaid, of the 7 principal amount of the bonds then outstanding, to annul 8 such declaration and its consequences. 9 (2) Any trustee, whether appointed as aforesaid or 10 acting under a deed of trust, indenture or other agreement, 11 and whether or not all bonds have been declared due and 12 payable, shall be entitled as of right to the appointment of 13 a receiver, who may, to the same extent that the authority 14 itself could do so, enter and take possession of the 15 facilities of the authority or any parts thereof, the 16 revenues or receipts from which are or may be applicable to 17 the payment of the bonds so in default, and operate and 18 maintain the same and collect and receive other revenues 19 thereafter rising therefrom in the same manner as the 20 authority might do, and shall deposit all such moneys in a 21 separate account and apply the same in such manner as the 22 court shall direct. In any suit, action or proceeding by the 23 trustees, the fees, counsel fees and expenses of the trustee 24 and of the receiver, if any, and all costs and disbursements 25 allowed by the court shall be a first charge on any revenues 26 and receipts from which are or may be applicable to the 27 payment of the bonds so in default. Said trustee shall in 28 addition to the foregoing have and possess all of the powers 29 necessary or appropriate for the exercise of any functions 30 specifically set forth in this section or incident to the 20010S0999B1251 - 27 -
1 general representation of the bondholders in the enforcement 2 and protection of their rights. 3 (3) In addition to all other rights and all other 4 remedies, any holder of bonds of the authority shall have the 5 right by mandamus or other suit, action or proceeding at law 6 or in equity to enforce his rights against the authority to 7 collect his fees, rentals and other such charges adequate to 8 carry out any agreement as to, or pledge of, such fees, 9 rentals or other charges or income, revenues and receipts and 10 to require the authority to carry out any of its covenants 11 and agreements with the bondholders and to perform its and 12 their duties under this chapter. 13 (g) Sinking fund.--The bonds of the authority shall be 14 issued pursuant to one or more resolutions or one or more trust 15 indentures and, as provided in such resolution or trust 16 indenture, the moneys set aside in any sinking fund pledged for 17 any particular bonds or series of bonds shall be held for the 18 sole benefit of such bonds, separate and apart from the moneys 19 pledged for any other bonds of the authority issued under any 20 other resolution or trust indenture. 21 (h) Commonwealth pledge.--The Commonwealth does hereby 22 pledge to and agree with any person, firm or corporation or 23 Federal agency subscribing to or acquiring the bonds to be 24 issued by the authority for the construction, financing, 25 extension, improvement or enlargement of any project or part 26 thereof that the Commonwealth will not limit or alter the rights 27 hereby vested in the authority or limit or alter any provisions 28 for the security and protection of the authority and its 29 bondholders contained in this act or as now provided by law 30 until all bonds at any time issued, together with the interest 20010S0999B1251 - 28 -
1 thereon, are fully met and discharged. The Commonwealth does 2 further pledge to and agree with the United States and any other 3 Federal agency that in the event that any Federal agency shall 4 construct or contribute any funds for the construction, 5 financing, extension improvement or enlargement of any project 6 or any portion thereof the Commonwealth will not alter or limit 7 the rights and powers of the authority in any manner which would 8 be inconsistent with the continued maintenance and operation of 9 the project or the improvement thereof, or which would be 10 inconsistent with the due performance of any agreements between 11 the authority and any such Federal agency, and the authority 12 shall continue to have and may exercise all powers herein 13 carrying out of the purposes of this chapter and the purposes of 14 the United States in the construction or improvement or 15 enlargement of any project or such portion thereof. 16 (i) Tax exemption for authority.--The effectuation of the 17 authorized purposes of the authority established under this 18 chapter shall and will be in all respects for the benefit of the 19 people of the Commonwealth, for the increase of their welfare 20 and prosperity, and for the improvement of their education and 21 educational facilities, and since the authority will be 22 performing essential governmental functions in effectuating such 23 purposes, the authority shall be exempt from payment of any 24 taxes or assessments on any property acquired, held, owned, 25 leased or used by it for such purposes, and the bonds issued by 26 the authority, their transfer and the income therefrom, 27 including any profits made on the sale thereof, shall at all 28 times be free from taxation, other than inheritance and estate 29 taxation within this Commonwealth. 30 § 6316. Public School Construction Reserve Fund. 20010S0999B1251 - 29 -
1 (a) Establishment.--The Public School Construction Reserve 2 Fund is hereby established in the State Treasury. The board of 3 the authority shall operate and administer the fund, and shall 4 establish guidelines for the administration and operation of the 5 fund. 6 (b) Use of moneys.--Moneys in the fund shall be used by the 7 authority as follows: 8 (1) Proceeds raised from the sale of the bonds shall be 9 used to fund the adequacy grant program of which 50% of the 10 proceeds shall fund the direct grant program and the 11 remaining 50% shall fund the interest subsidy program. 12 (2) Funds transferred by the State Treasurer into the 13 fund under subsection (c) shall be used as follows: 14 (i) First to alleviate existing debt service. 15 (ii) After the annual debt service payment has been 16 made, the remaining funds shall be used for funding 17 emergency maintenance for structurally unsound school 18 buildings and facilities. 19 (c) Required transfer of other funds.-- 20 (1) The State Treasurer shall transfer to the fund 21 within 30 days following the end of each fiscal year up to 22 the sum of 15% of the General Fund's fiscal year ending 23 surplus. 24 (2) If the amount of the General Fund surplus transfer 25 is insufficient to fully fund the annual debt service for 26 that year, the State Treasurer shall transfer funds, as 27 necessary, to fully fund the annual debt service up to the 28 sum of 100% of the revenues generated by the malt beverage 29 tax imposed by Article XX of the act of March 4, 1971 (P.L.6, 30 No.2), known as the Tax Reform Code of 1971, and the 20010S0999B1251 - 30 -
1 spirituous and vinous liquors tax imposed by the act of 2 December 5, 1933 (Sp.Sess., P.L.38, No.6), known as the 3 Spirituous and Vinous Liquor Tax Law. 4 (3) If the sum of the transfers from the General Fund 5 surplus and the malt beverage tax and the spirituous and 6 vinous liquor tax are insufficient to fully fund the annual 7 debt service for that year, the State Treasurer shall 8 transfer funds as necessary to fully fund the annual debt 9 service up to the sum of 85% of the revenues generated by the 10 State portion of the realty transfer tax. 11 (d) Other funding sources.--The authority shall deposit any 12 other moneys made available to the authority from any source for 13 such purposes into the fund. 14 (e) Use of remaining funds.--The fund shall have the 15 priority of alleviating existing debt service arising from the 16 bond issuance. When the annual debt service payment has been 17 paid, any remaining funds shall be used for emergency public 18 school maintenance needs in this Commonwealth in accordance with 19 guidelines established by the authority for emergency school 20 construction and maintenance funding. 21 Section 2. This act shall take effect immediately. F19L24RZ/20010S0999B1251 - 31 -