Bill Text: PA HB2124 | 2011-2012 | Regular Session | Introduced

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Bill Title: Establishing municipal connection funding programs; making an appropriation; and making editorial changes.

Spectrum: Moderate Partisan Bill (Democrat 12-2)

Status: (Introduced - Dead) 2012-01-17 - Referred to APPROPRIATIONS [HB2124 Detail]

Download: Pennsylvania-2011-HB2124-Introduced.html

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PRINTER'S NO. 2954
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2124 Session of2012
INTRODUCED BY PRESTON, CALTAGIRONE, D. COSTA, CARROLL, DALEY, FREEMAN, HORNAMAN, MULLERY, READSHAW, TRUITT AND YOUNGBLOOD, JANUARY 17, 2012
REFERRED TO COMMITTEE ON APPROPRIATIONS, JANUARY 17, 2012
AN ACT
Amending the act of March 1, 1988 (P.L.82, No.16), entitled "An
act providing for the establishment, implementation and
administration of the Pennsylvania Infrastructure Investment
Authority; imposing powers and duties on a board of trustees;
transferring the rights, powers, duties and obligations of
the Water Facilities Loan Board to the Pennsylvania
Infrastructure Investment Authority; providing for the
issuance of notes and bonds; providing for financial
assistance and for a comprehensive water facilities plan;
authorizing a referendum to incur indebtedness; making an
appropriation; and making repeals," establishing municipal
connection funding programs; making an appropriation; and
making editorial changes.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of March 1, 1988 (P.L.82, No.16), known
as the Pennsylvania Infrastructure Investment Authority Act, is
amended by adding a chapter heading to read:
CHAPTER 1
PRELIMINARY PROVISIONS
Section 2. Section 1 of the act is renumbered to read:
Section [1] 101. Short title.
* * *
Section 3. Section 2 of the act, amended December 16, 1992
(P.L.1137, No.149), is renumbered to read:
Section [2] 102. Legislative intent.
* * *
Section 4. Section 3 of the act, amended December 16, 1992
(P.L.1137, No.149) and July 14, 2005 (P.L.299, No.51), is
renumbered and amended to read:
Section [3] 103. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Authority." The Pennsylvania Infrastructure Investment
Authority.
"Board." The board of directors of the authority.
"Bonds." Bonds, notes or other evidences of indebtedness
issued by the authority pursuant to this act.
"Borrower." An individual owner of a housing unit.
"Department." The Department of Environmental [Resources]
Protection of the Commonwealth.
"Eligible cost." The cost of all labor, materials, machinery
and equipment, lands, property, rights and easements, plans and
specifications, surveys or estimates of costs and revenues, pre-
feasibility studies, engineering and legal services, and all
other expenses necessary or incident to the acquisition,
construction, improvement, expansion, extension, repair or
rehabilitation of all or part of a project.
"Federal poverty guidelines." The poverty measure issued
annually by the United State Department of Health and Human
Services as published in the Federal Register based on family
size and household income.
20120HB2124PN2954 - 2 -
"Governmental unit." Any agency of the Commonwealth or any
county, municipality or school district, or any agency,
instrumentality, authority or corporation thereof, or any public
body having local or regional jurisdiction or power.
"Housing unit." A detached or attached single-family
residential structure, including, but not limited to, a
manufactured home on a permanent foundation, which is a
permanent residence and is owned and occupied by one or more
individuals.
"Loan origination fees." Fees paid by a borrower to a local
lending institution for originating the borrower's loan.
"Loan servicing fees." Fees paid to a local lending
institution.
"Local lending institution." A bank, savings and loan or
other financial institution authorized to extend financial
assistance under the Municipal Connection Funding Program.
"Manufactured home." A movable, single-family dwelling unit
designed for long-term occupancy, built on a chassis at a
factory, not less than eight feet wide and 32 feet long, with or
without a permanent foundation, and consisting of a complete
package with major appliances, plumbing and electrical
facilities prepared for appropriate connections.
"Program." The Municipal Connection Funding Program
established under section 501.
"Project." The eligible costs associated with the
acquisition, construction, improvement, expansion, extension,
repair, rehabilitation or security measures of all or part of
any facility or system, whether publicly or, in the case of
paragraph (1) or (2), privately owned:
(1) for the collection, treatment or disposal of
20120HB2124PN2954 - 3 -
wastewater, including industrial waste;
(2) for the supply, treatment, storage or distribution
of drinking water;
(3) for the control of storm water, which may include,
but need not be limited to, the transport, storage and the
infiltration of storm water; or
(4) for the best management practices to address point
or nonpoint source pollution associated with storm water
runoff or any other innovative techniques identified in the
county-prepared watershed plans pursuant to the act of
October 4, 1978 (P.L.864, No.167), known as the Storm Water
Management Act.
"Property lateral." The pipe connecting a housing unit to
the street lateral.
"Secretary." The Secretary of Environmental [Resources]
Protection of the Commonwealth.
"Security measures." Infrastructure improvements to publicly
or privately owned water or wastewater systems designed in whole
or in part for the protection of the collection, treatment and
distribution of potable water and treatment of wastewater from
threats and vulnerabilities to ensure the public health of the
systems' customers in accordance with the Environmental
Protection Agency's Drinking Water State Revolving Fund Program
and the Clean Water State Revolving Fund Program established
under section 1452 of the Safe Drinking Water Act (Public Law
93-523, 42 U.S.C. § 300j-12) and Title VI of the Federal Water
Pollution Control Act (62 Stat. 1155, 33 U.S.C. §§ 1381-1387),
respectively, and any other program for which there are funds or
accounts administered by the authority.
"Statewide median household income." The median household
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income reported for Pennsylvania in the most recently available
Census of Population and Housing, as conducted and reported by
the United States Bureau of the Census. This amount shall be
adjusted on the first working day of each calendar year by
multiplying median household income by the following factor:
CPI-U(1)/CPI-U(2), where CPI-U refers to the Consumer Price
Index for all Urban Consumers, as computed and reported by the
United States Bureau of Labor Statistics. The designation (1)
refers to the CPI-U for the year in which the median household
income is calculated and reported and the designation (2) refers
to the most recent CPI-U reported as of December 15 of the year
immediately preceding the year when the adjustment is made.
"Storm water." Drainage runoff from the surface of the land
resulting from precipitation or snow or ice melt.
"Water Facilities Loan Board." The board established under
32 Pa.C.S. § 7504 (relating to Water Facilities Loan Board).
Section 5. The act is amended by adding a chapter heading to
read:
CHAPTER 3
PENNSYLVANIA INFRASTRUCTURE INVESTMENT
AUTHORITY
Section 6. Section 4 of the act is renumbered to read:
Section [4] 301. Pennsylvania Infrastructure Investment
Authority; board of directors.
* * *
Section 7. Section 5 and subsection (a) of the act, amended
December 16, 1992 (P.L.1137, No.149), are renumbered and amended
to read:
Section [5] 302. Revenues of authority.
(a) Sources of revenues.--The authority may receive money
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from sources of revenue, including, but not limited to, the
following:
(1) State funds appropriated to the authority.
(2) Federal funds appropriated to or granted to the
authority.
(3) Proceeds from the sale of bonds of the authority
authorized under section [7] 304.
(4) Proceeds from the sale of bonds issued on or after
the effective date of this act from the remaining unused
authorization in addition to any other funds that remain
unencumbered on the effective date of this act from the act
of July 12, 1981 (P.L.263, No.88), entitled "An act
authorizing the incurring of indebtedness, with approval of
the electors, of $300,000,000 for the repair, construction,
reconstruction, rehabilitation, extension and improvement of
community water supply systems, and for the repair,
reconstruction or rehabilitation of flood control facilities,
dams and port facilities and providing the allotment of
proceeds from borrowing hereunder," approved by the
electorate on November 3, 1981.
(5) Proceeds from the sale of bonds not to exceed a
total sum of $150,000,000 issued for site development under
the provisions of Article XVI-B of the act of April 9, 1929
(P.L.343, No.176), known as The Fiscal Code. This paragraph
shall expire on December 31, 1989, except that the board may
fund projects approved prior to December 31, 1989.
(6) Proceeds from the sale of any Commonwealth general
obligation bonds issued under sections [16 and 17] 313 and
314.
(7) Proceeds from the sale of any Commonwealth general
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obligation bonds issued under section 12 of the act of March
16, 1992 (P.L.10, No.5), known as the Small Water Systems
Assistance Act.
(8) Proceeds from the sale of authority assets.
(9) Repayment of loan principal.
(10) Payment of interest on loans made by the authority.
(11) Interest earned on the investments of authority
moneys.
* * *
Section 8. Sections 6, 7, 8 and 9 of the act are renumbered
to read:
Section [6] 303. Powers and duties of authority.
* * *
Section [7] 304. Specific power to issue bonds.
* * *
Section [8] 305. Covenants and express conditions on
obligations.
* * *
Section [9] 306. Nature and effect of pledges.
* * *
Section 9. Section 10 and subsection (f) of the act are
renumbered and amended to read:
Section [10] 307. Financial assistance.
* * *
(f) Loans.--Subject to any agreements with the holders of
bonds, the board shall have the power to set terms applicable to
loans in any manner it deems appropriate, subject to the
provisions of this subsection. The board may consider such
factors as it deems relevant, including current market interest
rates, the financial and economic distress of the area which the
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project serves, and the necessity to maintain the authority
funds in a financially sound manner. Loans may be made based on
the ability to repay the loan from future revenue to be derived
from the project, by a mortgage or other property lien, or on
any other fiscal matters which the authority deems appropriate.
The board shall have the power to defer principal on loans for
up to five years. In the event of a default on the repayment of
a loan, the board may apply to the court of common pleas of the
county where the project is located for the appointment of a
receiver to assume operation and supervision of the facility
under the supervision of the court. The minimum rate of interest
to be paid on any loan made pursuant to this act shall be 1%.
The maximum rate of interest shall not exceed the following:
(1) For projects in counties whose unemployment rate
exceeds the Statewide unemployment rate by 40% or more, 1%
for the first five years and 25% of the bond issue rate for
the remainder of the loan.
(2) For projects in counties whose unemployment rate
exceeds the Statewide unemployment rate, but exceeds it by
less than 40%, 30% of the bond issue rate for the first five
years and 60% of the bond issue rate for the remainder of the
loan.
(3) For all other projects, 60% of the bond issue rate
for the first five years and 75% of the bond issue rate for
the remainder of the loan.
(4) For projects located within municipalities for which
unemployment rates exist which would qualify the project for
lower interest rates than if the relevant county unemployment
rate were used, the unemployment rate of that municipality
may be used in determining the interest rate on the loan.
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For purposes of this subsection, the phrase "unemployment rate
of the county" shall mean the average unemployment rate for the
county in the most recent calendar year for which data has been
finalized. For the projects which serve multiple counties, the
highest unemployment rate of the counties involved shall be
used. The unemployment data utilized shall be data reported by
the Department of Labor and Industry. For purposes of this
subsection, the phrase "bond interest rate" shall be the rate of
interest paid by the Commonwealth immediately preceding the date
of the loan for the bonds issued under sections [16 and 17] 313
and 314.
* * *
Section 10. Sections 11 and 12 of the act are renumbered to
read:
Section [11] 308. Comprehensive water facilities plan.
* * *
Section [12] 309. Audits.
* * *
Section 11. Section 13 of the act is renumbered and amended
to read:
Section [13] 310. Annual report.
The board shall provide the General Assembly with an annual
report detailing all projects funded under section [10] 307.
Section 12. Section 14 of the act is renumbered to read:
Section [14] 311. Expedited approval of rate relief.
* * *
Section 13. Section 15 of the act is renumbered and amended
to read:
Section [15] 312. Transfer of Water Facilities Loan Board.
(a) Removal of members.--All existing members of the Water
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Facilities Loan Board shall cease to hold office on the day that
the Governor certifies by publication in the Pennsylvania
Bulletin the existence of a quorum on the board created under
section [4] 301.
(b) Board of directors to serve as Water Facilities Loan
Board.--For purposes of satisfying all outstanding obligations
of the Water Facilities Loan Board and for purposes of
collecting loan and interest repayments, the board established
in section [4] 301 shall constitute the membership of the Water
Facilities Loan Board.
(c) Transfer of function.--All remaining unencumbered funds,
rights, powers, duties, obligations, liabilities, records and
equipment of the Water Facilities Loan Board are transferred to
the authority.
Section 14. Section 16 of the act is renumbered to read:
Section [16] 313. Referendum.
* * *
Section 15. Section 17 of the act is renumbered and amended
to read:
Section [17] 314. Bonds.
(a) Issuance of general obligation bonds.--As evidence of
the indebtedness if authorized under section [16] 313, general
obligation bonds of the Commonwealth shall be issued from time
to time to fund and retire notes issued pursuant to section [16]
313 to carry out the purposes of this act, or both, for such
total amounts, in such form, in such denominations and subject
to such terms and conditions of issue, redemption and maturity,
rate of interest and time of payment of interest as the issuing
officials direct except that the latest stated maturity date
shall not exceed 30 years from the date of the debt first issued
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for each series.
(b) Execution of bonds.--All bonds and notes issued under
the authority of section [16] 313 shall bear facsimile
signatures of the issuing officials and a facsimile of the great
seal of the Commonwealth and shall be countersigned by a duly
authorized loan and transfer agent of the Commonwealth.
(c) Direct obligation of Commonwealth.--All bonds and notes
issued in accordance with section [16] 313 shall be direct
obligations of the Commonwealth, and the full faith and credit
of the Commonwealth are hereby pledged for the payment of the
interest thereon as it becomes due and the payment of the
principal at maturity. The principal of and interest on the
bonds and notes shall be payable in lawful money of the United
States of America.
(d) Exemption from taxation.--All bonds and notes issued
under the provisions of this section shall be exempt from
taxation for State and local purposes.
(e) Form of bonds.--The bonds may be issued as coupon bonds
or registered as to both principal and interest as the issuing
officials may determine. If interest coupons are attached, they
shall contain the facsimile signature of the State Treasurer.
(f) Bond amortization.--The issuing officials shall provide
for the amortization of the bonds in substantial and regular
amounts over the term of the debt. The first retirement of
principal shall be stated to mature prior to the expiration of a
period of time equal to one-tenth of the time from the date of
the first obligation issued to evidence the debt to the date of
the expiration of the term of the debt. Retirements of principal
shall be regular and substantial if made in annual or semiannual
amounts, whether by stated serial maturities or by mandatory
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sinking fund retirements.
(g) Refunding bonds.--The issuing officials are authorized
to provide, by resolution, for the issuance of refunding bonds
for the purpose of refunding any bonds issued under this section
and then outstanding, either by voluntary exchange with the
holders of the outstanding bonds, or to provide funds to redeem
and retire the outstanding bonds with accrued interest, any
premium payable thereon and the costs of issuance and retirement
of bonds, at maturity or at any call date. The issuance of the
refunding bonds, the maturities and other details thereof, the
rights of the holders thereof and the duties of the issuing
officials in respect to the same shall be governed by the
provisions of this section, insofar as they may be applicable.
Refunding bonds may be issued by the issuing officials to refund
bonds originally issued or to refund bonds previously issued for
refunding purposes.
(h) Quorum.--Whenever any action is to be taken or decision
made by the Governor, the Auditor General and the State
Treasurer acting as issuing officials and the three officers are
not able unanimously to agree, the action or decision of the
Governor and either the Auditor General or State Treasurer shall
be binding and final.
(i) Public sale.--Whenever bonds are issued, they shall be
offered for sale at not less than 98% of the principal amount
and accrued interest and shall be sold by the issuing officials
to the highest and best bidder or bidders after due public
advertisement on such terms and conditions and upon such open
competitive bidding as the issuing officials shall direct. The
manner and character of the advertisement and the time of
advertising shall be prescribed by the issuing officials.
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(j) Private sale.--Any portion of any bond issue so offered
and not sold or subscribed for may be disposed of by private
sale by the issuing officials in such manner and at such prices,
not less than 98% of the principal amount and accrued interest,
as the issuing officials shall direct. No commission shall be
allowed or paid for the sale of any bonds issued under the
authority of this section.
(k) Bond series.--When bonds are issued from time to time,
the bonds of each issue shall constitute a separate series to be
designated by the issuing officials or may be combined for sale
as one series with other general obligation bonds of the
Commonwealth.
(l) Temporary bonds.--Until permanent bonds can be prepared,
the issuing officials may in their discretion issue, in lieu of
permanent bonds, temporary bonds in such form and with such
privileges as to registration and exchange for permanent bonds
as may be determined by the issuing officials.
(m) Disposition and use of proceeds.--The proceeds realized
from the sale of bonds and notes, except funding bonds,
refunding bonds and renewal notes, under the provisions of this
section are specifically dedicated to the purposes of the
referendum to be implemented by this act and shall be paid into
the special funds established in the State Treasury in such
amounts as may be specified by the board pursuant to section
[5(c)] 302(c). The proceeds shall be paid by the State Treasurer
periodically to the board to expend them at such times and in
such amounts as may be necessary to satisfy the funding needs of
the board. The proceeds of the sale of funding bonds, refunding
bonds and renewal notes shall be paid to the State Treasurer and
applied to the payment of principal, the accrued interest and
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premium, if any, and costs of redemption of the bonds and notes
for which such obligations shall have been issued.
(n) Investment of funds.--Pending their application to the
purposes authorized, moneys held or deposited by the State
Treasurer may be invested or reinvested as are other funds in
the custody of the State Treasurer in the manner provided by
law. All earnings received from the investment or deposit of
such funds shall be paid into the State Treasury to the credit
of the funds established by the board in section [5(c)] 302(c)
in such amounts as may be specified by the board pursuant to
that section.
(o) Registration of bonds.--The Auditor General shall
prepare the necessary registry book to be kept in the office of
the duly authorized loan and transfer agent of the Commonwealth
for the registration of any bonds, at the request of owners
thereof, according to the terms and conditions of issue directed
by the issuing officials.
(p) Expenses of preparation for issue and sale of bonds and
notes.--There is hereby appropriated to the State Treasurer from
the proceeds of the bonds and notes issued as much money as may
be necessary for all costs and expenses in connection with the
issue of and sale and registration of the bonds and notes in
connection with this act.
Section 16. The act is amended by adding a chapter to read:
CHAPTER 5
MUNICIPAL CONNECTION FUNDING PROGRAMS
Section 501. Establishment of programs.
(a) Municipal Connection Funding Program.--There is hereby
established the Municipal Connection Funding Program for the
purpose of authorizing financial assistance in the form of
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guaranteed low-interest loans to homeowners for tapping fees and
eligible costs relating to the installation of a water or sewage
lateral for homes constructed prior to the installation of a
public water distribution system or a public sewage collection
system servicing the property or relating to the replacement of
water or sewage laterals to housing units as part of an
upgrading or reconstruction of a public water distribution
system or public sewage collection system.
(b) Municipal Connection Funding Loan Guarantee Program.--In
addition to the program established under subsection (a), the
Municipal Connection Funding Loan Guarantee Program is hereby
established for the purpose of authorizing financial assistance
in the form of guaranteed low-interest loans to homeowners for
tapping fees and eligible costs relating to the installation of
a water or sewage lateral for homes constructed prior to the
installation of a public water distribution system or a public
sewage collection system servicing the property or relating to
the replacement of water or sewage laterals to housing units as
part of an upgrading or reconstruction of a public water
distribution system or public sewage collection system.
(c) Regulations.--
(1) The authority shall develop regulations as may be
necessary for the application for and approval of program
funds for loan recipients which at a minimum shall be
required to repay program loans to the local lending
institution within 15 years from the date of the loan at an
annual interest rate not to exceed 1%. The authority shall
develop regulations for the implementation of the guaranteed
loan program, which shall include, but not be limited to,
procedures for local lending institutions participating in
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the program under section 507(m) to qualify for reimbursement
from the Municipal Connection Funding Guarantee Program when
the residential borrower defaults on the loan.
(2) The authority may promulgate any additional
regulations that it deems as necessary for carrying out the
provisions of this chapter.
Section 502. Scope.
This chapter applies to financial assistance provided to
owners of a housing unit.
Section 503. Applicant eligibility.
(a) Owner occupancy required.--An applicant is eligible if
he is an owner-occupier of a housing unit and either of the
following conditions exists:
(1) The housing unit is served or is to be served by a
public water distribution system or public sewage collection
system owned by a municipality or municipal authority.
(2) The owner-occupier is required to replace private
water or sewage laterals as part of an upgrading or
reconstruction of a public water distribution system or
public sewage collection system.
(b) Maximum income allowable.--Loans may be provided under
this program if the applicant's household income does not exceed
150% of the Statewide median household income. Local lending
institutions shall comply with regulations of the authority if
they seek to participate in the Municipal Connection Funding
Loan Guarantee Program pursuant to section 507(m).
Section 504. Project eligibility.
The following conditions shall be satisfied for an eligible
project:
(1) The owner of the real property into which the
20120HB2124PN2954 - 16 -
lateral is to be installed or replaced must also be the owner
and occupant of the housing unit located thereon.
(2) The property lateral is located in an area that is
served by a public water distribution system or public sewage
collection system and the property lateral is required by the
municipality or municipal authority to connect to the system.
(3) The municipality or municipal authority has
established a tapping fee in accordance with 53 Pa.C.S. Ch.
56 (relating to municipal authorities).
(4) The inspector employed by the municipality or
municipal authority which will operate the water distribution
or sewage collection system to which the lateral is connected
has certified that the property lateral meets all permit
requirements under applicable State and municipal laws and
regulations.
(5) The construction activity to be financed by a loan
under the program has not commenced and the tapping fee has
not been paid prior to the time of application approval by
the local lending institution.
(6) The project must be approved by a local planning
commission, zoning board or zoning officer.
Section 505. Eligible costs.
Eligible costs shall include:
(1) All testing, design, materials and construction
costs associated with the property lateral, including a
grinder pump, if required.
(2) Permit and inspection fees.
(3) Interest during construction or financing of the
project and allowance for funds used during construction.
(4) Costs relating to the closing of an applicant's
20120HB2124PN2954 - 17 -
loan, such as legal fees, credit reports, title reports,
insurance, judgment reports, lien certificates, appraisal
fees and loan origination fees.
(5) Tapping fees.
Section 506. Ineligible costs.
Loans awarded under the program may not be used for the costs
of acquisition of land or right-of-way for a project.
Section 507. Financial assistance terms and conditions.
(a) Financial assistance.--Financial assistance under the
program shall be in the form of guaranteed loans as further
specified in this chapter. The Municipal Connection Funding Loan
Guarantee Program shall provide loan guarantees to local lending
institutions that make loans for projects consistent with the
requirements of this chapter.
(1) The maximum amount of a loan shall not be greater
than 90% of eligible costs and in no case may exceed $20,000.
(2) The minimum amount of a loan shall be $2,500.
(3) The maximum term of a loan shall be 10 years.
(4) Loan repayment shall commence not later than 60 days
after the date of loan closing.
(b) Collateral.--Collateral shall be determined by the local
lending institution under regulations established by the
authority and may include, but are not limited to, a mortgage on
the borrower's property subordinate only to the debt outstanding
at the time of loan approval by the local lending institution.
(c) Repayment.--A loan shall be repaid in full if the
property to which it applies is either sold or transferred to
other than an immediate family member.
(d) Fees.--The borrower may be charged fees for delinquent
payment of either principal or interest on a loan if fees are
20120HB2124PN2954 - 18 -
described in the loan agreement entered into and agreed to by
the borrower and the local lending institution.
(e) Documentation.--An applicant shall apply for funding to
a local lending institution by submitting documentation as may
be required to demonstrate compliance with standards of the
local lending institution.
(f) Local lending institution.--Upon receipt of a funding
application, the local lending institution shall:
(1) Verify that the applicant meets the eligibility
criteria of section 503.
(2) Verify that the application is valid and contains
all required documentation.
(3) Verify through the authority that sufficient funds
are available to approve the application.
(4) Perform credit and security checks needed to ensure
that the applicant meets the collateral requirements of the
authority.
(g) Approval.--A local lending institution may approve an
application for funding under the program only if the conditions
under subsection (k) are satisfied.
(h) Completion of review.--Upon completion of its
application review, a local lending institution shall notify the
applicant of the following:
(1) The outcome of its review.
(2) Whether the applicant is eligible for a grant.
(3) Whether the applicant's loan is approved.
(4) The amount and terms of the loan.
(i) Funds.--Funds shall be disbursed to the contractor on
behalf of the borrower or to the borrower upon completion of
construction and final inspection and certification from the
20120HB2124PN2954 - 19 -
municipality or municipal authority that the project has been
completed in accordance with all permit requirements and is
operable as designed and intended.
(j) Changes.--A change to an approved project which is
inconsistent with the approved design for which the permit was
issued may not be made unless the municipality or municipal
authority gives prior approval to the change.
(k) Recordkeeping.--
(1) A borrower shall maintain financial records to
substantiate expenditures on an approved project.
(2) A local lending institution shall maintain financial
and activity records on a loan application and approved loan
and shall report this information to the authority in a form
and at those times as may be requested.
(l) Financial assistance documents.--The authority shall
develop and adopt financial assistance documents which, among
other things, define the terms and conditions under which
financial assistance must be offered under the program. These
documents shall be used by local lending institutions
participating in the program without change, except as approved
by the authority.
(m) Application.--A local lending institution may
participate in the Municipal Connection Funding Loan Guarantee
Program by submitting an application to the authority on behalf
of a borrower.
(1) The application shall be in the form prescribed by
regulations adopted by the authority, and shall include all
of the following:
(i) The name and the address of the borrower.
(ii) Certification that the borrower is the owner-
20120HB2124PN2954 - 20 -
occupier of a housing unit, and that either: the housing
unit is served or is to be served by a public water
distribution system or public sewage collection system
owned by a municipality or a municipal authority; or, the
owner-occupier is required to replace private water or
sewage laterals as part of the upgrading or
reconstruction of a public water distribution system or
public sewage collection system.
(iii) A copy of the borrower's last two years of
Federal and State tax returns.
(iv) A statement describing the amount of the loan,
a copy of the local lending institution's commitment
letter and applicable credit underwriting that supports
the repayment of the loan, and the collateral and
guarantees offered to support the loan.
(v) Any other information required by regulations
adopted by the authority.
(2) The authority shall review the application to
determine that:
(i) The borrower's factual circumstances meet the
minimum criteria for qualification under the program.
(ii) The loan guarantee to be offered is consistent
with the goals of the program as established by this
chapter and the regulations adopted by the authority.
(iii) The project site is located within the local
lending institution's service area and within this
Commonwealth.
(iv) The local lending institution will register the
loan with the authority and will comply with the terms
and conditions of the regulations adopted by the
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authority.
(v) The borrower and the local lending institution
have met all other program requirements established by
the authority.
(3) Upon being satisfied that all requirements have been
met, the authority will notify the local lending institution
of its action.
(4) In the administration of this program, the authority
may establish a subcommittee composed of members of the
authority and department staff to review and approve
applications for loan guarantees.
(5) After approval of the application, a master
guarantee agreement will be executed between the local
lending institution and the authority and a subaccount for
the local lending institution will be established within the
Municipal Connection Funding Loan Guarantee Program Account.
A guarantee certificate will be issued by the authority to
the local lending institution for each loan approved by the
authority to be covered by the master guarantee agreement
stating the terms and amounts of the guarantee. A reserve in
the amount of the guarantee or a portion thereof will be made
against the local lending institution's subaccount for each
loan that has been issued a guarantee certificate.
(6) (i) The master guarantee agreement executed by the
local lending institution and the authority shall
establish a procedure for making a claim against the
guarantee.
(ii) Prior to making a request for payment of funds
from its subaccount on account of a claim against the
guarantee, the local lending institution shall first
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exhaust all of its remedies against the borrower of the
loan.
(iii) If a claim is made during the first two years
of the term of a loan covered by the guarantee, the local
lending institution shall be entitled to a payment from
its subaccount in an amount not to exceed 50% of the
outstanding principal amount of the loan at the time the
claim is made, after taking into account any recovery
first made by the local lending institution. If a claim
is made at any time after the end of the first two years
of the term of the loan, but prior to the end of the
seventh year of the loan, the local lending institution
shall be entitled to a payment from its subaccount in an
amount not to exceed 25% of the outstanding principal
amount of the loan at the time the claim is made, again
taking into account any recovery first made by the local
lending institution. No claims may be made against the
guarantee for a loan after the expiration of the seventh
year of the term of the loan.
(iv) If a local lending institution recovers any
payments on account of a loan after it has made a claim
against the master guarantee agreement and after it has
received payment on account of the claim from its
subaccount, the local lending institution shall repay to
the authority, for deposit into the local lending
institution's subaccount, a percentage of the amount of
the recovery equal to the percentage of the guarantee of
the loan.
(v) Within 30 days following the second anniversary
of the issuance of a guarantee certificate for a loan
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covered by a master guarantee agreement, the local
lending institution shall provide the authority with a
written status report of the loan, including the then-
current principal balance of the loan, and an assessment
of the continued economic viability of the borrower.
Section 508. Funds and accounts.
(a) Establishment of funds.--The authority may establish
separate funds, accounts or other financial structures as may be
needed to implement and operate the program.
(b) Approval.--The authority shall from time to time approve
such funding, including the pledging of the authority's
revenues, to finance the program.
(c) Liability.--The authority shall not be held liable for
loan offers or approvals made by a local lending institution in
the absence of prior authority-approved funding.
Section 509. Loan servicing.
(a) Monitoring.--The authority shall monitor the program and
process established by a local lending institution.
(b) Loan servicing fee.--The local lending institution may
charge a loan servicing fee to defray the costs that it incurs
to service loans under the program. These loan servicing fees
shall be charged to and shall be the sole responsibility of
program borrowers.
Section 510. Program monitoring.
The borrower shall submit to the local lending institution
receipts for the project in accordance with the schedule and
requirements contained in the loan agreement. Failure to provide
the receipts in accordance with the schedule shall constitute a
violation of the loan agreement.
Section 511. Transfer of moneys.
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The sum of at least $5,000,000 shall be transferred annually
from the PENNVEST Bond Authorization Fund to the Municipal
Connection Funding Program to carry out the provisions of this
act.
Section 17. Sections 18, 19, 20 and 21 of the act are
repealed:
[Section 18. Appropriations.
(a) Appropriation.--The sum of $500,000, or as much thereof
as may be necessary, is hereby appropriated from the General
Fund to the Pennsylvania Infrastructure Investment Authority as
a continuing appropriation to carry out the provisions of this
act. This appropriation shall lapse June 30, 1989.
(b) Continuing appropriation.--The General Assembly hereby
appropriates on a continuing basis to the authority funds as
authorized by section 5 in order to carry out the purposes of
this act, including the payment of the administrative expenses
of the authority.
Section 19. Severability.
The provisions of this act are severable. If any provision of
this act or its application to any person or circumstance is
held invalid, the invalidity shall not affect other provisions
or applications of this act which can be given effect without
the invalid provision or application.
Section 20. Repeals.
(a) Absolute.--On the date that the Governor certifies by
publication in the Pennsylvania Bulletin the existence of a
quorum on the board created under section 4, the following acts
or parts of acts are repealed:
The definitions of "community water supply system,"
"department," "flood control facility," "port facility,"
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"project" and "water facility" in section 7502 and sections
7503, 7504(b), (d) and (e), 7506, 7510, 7511, 7512, 7513, 7514,
7515 and 7516 of Title 32 of the Pennsylvania Consolidated
Statutes (relating to forests, waters and State parks).
(b) Limited.--The following acts or parts of acts are
repealed:
(1) Any project itemized in a capital budget which was
funded by current revenues without the use of bond
obligations.
(2) Sections 1, 1.1, 2 and 3 of the act of August 20,
1953 (P.L.1217, No.339), entitled "An act providing for
payments by the Commonwealth to municipalities which have
expended money to acquire and construct sewage treatment
plants in accordance with the Clean Streams Program and the
act, approved the twenty-second day of June, one thousand
nine hundred thirty-seven (Pamphlet Laws 1987), and making an
appropriation," as applied to projects funded under the
provisions of this act.
(c) Inconsistent.--All other acts and parts of acts are
repealed insofar as they are inconsistent with this act.
Section 21. Effective date.
This act shall take effect immediately.]
Section 18. The act is amended by adding a chapter to read:
CHAPTER 9
MISCELLANEOUS PROVISIONS
Section 901. Appropriation.
The sum of $10,000,000, or as much as may be necessary, is
hereby appropriated to the Pennsylvania Infrastructure Authority
for the fiscal year July 1, 2011, to June 30, 2012, to carry out
the provisions of Chapter 5.
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Section 902. Repeal.
All acts and parts of acts are repealed insofar as they are
inconsistent with this act.
Section 19. This act shall take effect in 90 days.
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