Bill Text: PA HB2124 | 2009-2010 | Regular Session | Introduced

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Bill Title: Establishing the Pennsylvania Public School Construction Authority and the Pennsylvania Public School Construction Task Force; providing for their powers and duties; establishing the Public School Construction Reserve Fund, the Public School Building and Facility Adequacy Grant Program, a direct grant program and an interest subsidy program; and authorizing the issuance of bonds.

Spectrum: Partisan Bill (Democrat 7-0)

Status: (Introduced - Dead) 2010-09-29 - Referred to EDUCATION [HB2124 Detail]

Download: Pennsylvania-2009-HB2124-Introduced.html

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PRINTER'S NO. 4405
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2124 Session of2010
INTRODUCED BY PAYTON, BRIGGS, CALTAGIRONE, COHEN, JOSEPHS, STURLA AND YOUNGBLOOD, SEPTEMBER 29, 2010
REFERRED TO COMMITTEE ON EDUCATION, SEPTEMBER 29, 2010
AN ACT
Amending Title 24 (Education) of the Pennsylvania Consolidated
Statutes, establishing the Pennsylvania Public School
Construction Authority and the Pennsylvania Public School
Construction Task Force; providing for their powers and
duties; establishing the Public School Construction Reserve
Fund, the Public School Building and Facility Adequacy Grant
Program, a direct grant program and an interest subsidy
program; and authorizing the issuance of bonds.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 24 of the Pennsylvania Consolidated
Statutes is amended by adding a part to read:
PART II
BASIC EDUCATION
Chapter
33. Pennsylvania State of the Art Schools Program
CHAPTER 33
PENNSYLVANIA STATE OF THE ART
SCHOOLS PROGRAM
Sec.
3301. Short title of chapter.
3302. Findings.
3303. Purpose of chapter.
3304. Definitions.
3305. School building and facility assessment report.
3306. Pennsylvania Public School Construction Task Force.
3307. Public school building and facility adequacy standards.
3308. Needs assessment report.
3309. Pennsylvania Public School Construction Authority.
3310. Annual report.
3311. School district capital improvement plans.
3312. Public School Building and Facility Adequacy Grant
Program.
3313. Direct grant program.
3314. Interest subsidy program.
3315. Bond issuance.
3316. Public School Construction Reserve Fund.
§ 3301. Short title of chapter.
This chapter shall be known and may be cited as the
Pennsylvania State of the Art Schools Act.
§ 3302. Findings.
The General Assembly finds and declares as follows:
(1) Quality education for the children of this
Commonwealth is essential for the future success of children
of this Commonwealth and the country.
(2) Essential elements of this Commonwealth's public
school system are the school buildings and facilities that
ideally provide a safe and secure environment for learning
and facilitate educational opportunities for students in this
Commonwealth's public schools.
(3) Regrettably not all public school buildings and
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facilities in this Commonwealth are capable of providing this
high quality of education due to the physical condition or
insufficient capacity of those buildings and facilities.
(4) Due to the decreasing percentage of the State
funding share for education and an increasing cost burden on
local revenue sources, necessary maintenance on needy public
school buildings and facilities has been deferred until
school district budgets can afford those additional costs,
and regrettably this burden on school district budgets has
not lessened.
(5) As a result of these deferrals, certain school
buildings and facilities are not in a condition to provide a
safe and secure location for schooling of children in this
Commonwealth.
(6) Several school districts have also experienced
difficulty in funding new building and facility construction
for various purposes, such as accommodating increases in
student population and providing students with access to
schools that provide and utilize recent technological
advances to educate students.
(7) Another essential element of this Commonwealth's
public schools is various instructional equipment, which is
essential to providing an education for the students of the
public schools, including computer and science laboratories.
(8) Due to the decreasing percentage in the State
funding share, it is increasingly difficult for school
districts to purchase and utilize instructional equipment,
such as computers and other electronic equipment, that
provides students with the means to learn and to succeed in
the digital age.
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§ 3303. Purpose of chapter.
This chapter is intended to:
(1) Provide Statewide comparable data on the current
physical condition of public school buildings and facilities.
(2) Establish minimum adequacy standards for school
buildings and facilities, including physical conditions,
maintenance, compatibility with educational technology and
sufficient building area per student to avoid overcrowding.
(3) Determine the cost of essential and deferred
maintenance with the goal of improving the current physical
condition of existing eligible school buildings and
facilities to comply with minimum adequacy standards.
(4) Provide State assistance in the school district
design of new construction to comply with minimum adequacy
standards.
(5) Establish a tax-exempt bond program for the funding
of new school building and facility construction and the
repair and maintenance of eligible school buildings and
facilities and the purchase of school building and facility
equipment.
(6) Establish the Public School Building and Facility
Adequacy Grant Program to distribute grants and funding to
eligible school districts under two separate funding
programs.
(7) Establish the Public School Construction Reserve
Fund to address the bonds debt service and to fund emergency
school maintenance needs.
§ 3304. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
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context clearly indicates otherwise:
"Adequacy grant program." The Public School Building and
Facility Adequacy Grant Program established by this chapter.
"Authority." The Pennsylvania Public School Construction
Authority established by this chapter.
"Bond." The notes, bonds and other evidences of indebtedness
or obligations which the Pennsylvania Public School Construction
Authority is authorized to issue under this chapter.
"Construction." This term includes acquisition and
construction, and the term "to construct" shall mean and include
to acquire and to construct in such a manner as may be deemed
desirable.
"Cost of project." The cost of all real estate, properties,
rights and easements acquired, the cost of construction of a
school building and facility and the furnishing and equipment
thereof, all financing charges, interest prior to and during
construction and engineering and legal expenses.
"Current physical condition." In reference to a public
school building or facility, this term shall include the current
condition of the heating, cooling, electrical and plumbing
systems; the building's exterior, including the roof, windows
and exterior doors; the building's interior, including the
walls, ceilings, floors, interior doors, lighting, glass,
educational equipment, school equipment and rest rooms;
gymnasiums and locker rooms; and technological capacity.
"Deferred maintenance." All regularly scheduled and
unscheduled maintenance required for the proper upkeep of a
school building or facility that has not been timely performed
but postponed to a later time.
"Educational equipment." All furniture, equipment and other
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appliances for the use of the public schools. This term shall
exclude equipment utilizing educational technology.
"Educational technology." Any technical or scientific method
of sending, receiving, storing, packaging or assimilating audio,
video, graphic, data or any combination thereof by means of
electromagnetic signal and any equipment, processes and
facilities that are used for instruction in the public schools.
"Emergency maintenance." The performance of essential
maintenance on structurally unsound school buildings and
facilities to address the immediate risk to the health and
safety of students, employees and the public.
"Essential maintenance." The level of deferred maintenance
that must be completed for a school building or facility to
comply with the requirements of the school building and facility
adequacy standards.
"Financing." The provision of a grant or funding to a school
district for payment of the cost of a project.
"Fund." The Public School Construction Reserve Fund
established by this chapter.
"Manmade disaster." Any industrial, nuclear or
transportation accident, explosion, conflagration or other
similar condition resulting from manmade causes which threatens
or causes substantial damage to property, human suffering,
hardship or loss of life.
"Natural disaster." Any hurricane, tornado, storm, flood,
high water, wind-driven water, tidal wave, earthquake,
landslide, snowstorm, drought, fire, explosion or other
catastrophe which results in substantial damage to property,
hardship, suffering or possible loss of life.
"Needs assessment report." The report prepared by the
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Department of the Auditor General that lists and calculates the
total cost for the completion of all deferred maintenance and
essential maintenance. This report shall include a copy of the
school building and facility assessment report.
"School building and facility assessment report." The report
compiled and organized by the Department of the Auditor General
that lists the current physical condition of every public school
in the Commonwealth. This report shall include the data
collected and compiled by the contracted private entity.
"School buildings and facilities." All buildings and
structures used by school districts for the classroom
instruction of students. This term shall include gymnasiums and
locker rooms but shall exclude stadiums, field houses, swimming
pools and practice fields.
"School buildings and facilities adequacy standards." The
standards proposed by the School Construction Task Force and
accepted by the authority, establishing minimum standards for
school buildings and facilities.
"School equipment." Equipment and machinery that are
necessary for the proper and safe operation of a school building
or facility.
"Structurally unsound buildings and facilities." School
buildings and facilities that have extensive problems arising
from uncompleted essential maintenance, which also pose a threat
to the safety and health of students, employees and the public.
"Task force." The Pennsylvania Public School Construction
Task Force established by this chapter.
"Technological capacity." The ability of a school building
or facility to accommodate educational technology.
§ 3305. School building and facility assessment report.
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(a) Duty to prepare report.--The Department of the Auditor
General shall:
(1) Prepare guidelines within two months of the
effective date of this chapter for the conduct of a Statewide
school building and facility assessment to collect data on
the current physical condition of all public school buildings
and facilities in every school district in this Commonwealth
and shall submit the guidelines and requirements for the
conduct of the school building and facility assessment by a
private entity to competitive bidding, as provided under 62
Pa.C.S. Pt. I (relating to Commonwealth procurement code).
(2) Enter into a contract with a private entity as soon
as practicable for the purpose of conducting the school
building and facility assessment.
(3) Prepare a school building and facility assessment
report that presents the Statewide data in a uniform manner
within nine months of the effective date of this chapter.
(4) Transmit the school building and facility assessment
report upon completion to the Pennsylvania Public School
Construction Task Force.
(b) Contents of report.--The school building and facility
assessment report shall provide uniform Statewide data regarding
the current condition of public school buildings and facilities
in this Commonwealth and shall include:
(1) The current condition of school buildings and
facilities on a Statewide basis, a school district basis and
an individual public school basis.
(2) Expected longevity of each school building and
facility.
(3) Calculations of current school building and facility
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student capacity and space requirements necessary to
accommodate expected fluctuations in future student
population for a period of five years.
(4) Each school building's and facility's compliance or
noncompliance with safety requirements, including any local
building or construction codes.
(5) The ability of each school building and facility to
accommodate educational technology.
(c) Governmental assistance.--For the purposes of preparing
guidelines for the conduct of the building and facility
assessments and preparing the school building and facility
assessment report, the Department of the Auditor General may
request the assistance of local school districts, the Division
of Facilities Management of the Department of Education and
other departments, agencies and entities of the Commonwealth as
deemed necessary by the Department of the Auditor General.
(d) Timing for preparation of report.--At the completion of
the private entity's assessment data compilation, the Department
of the Auditor General shall prepare the Statewide school
building and facility assessment report.
§ 3306. Pennsylvania Public School Construction Task Force.
(a) Establishment.--There is hereby established the
Pennsylvania Public School Construction Task Force.
(b) Membership.--The authority shall appoint 19 members to
the task force, which shall be comprised as follows:
(1) Three school directors, provided that no two or more
school directors shall serve on the same board of school
directors.
(2) Three school district superintendents.
(3) Three principals of public elementary or secondary
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school buildings.
(4) Three teachers employed by a public school district.
(5) Three parents of a public elementary or secondary
school student.
(6) Four representatives of the private sector
architectural and construction management industries.
(c) Duties.--The task force shall have the duty to:
(1) Review and utilize the data contained in the school
building and facility assessment report and draft the
proposed public school building and facility adequacy
standards within three months of the receipt of the school
building and facility assessment report.
(2) Transmit the completed proposed public school
building and facility adequacy standards to the authority for
approval.
(3) Transmit a copy of the approved public school
building and facility adequacy standards to the Department of
the Auditor General for utilization in calculating the cost
for compliance with the minimum standards, following an
approval of the proposed standards by the authority.
(4) Review and incorporate any changes, revisions or
suggestions that the authority provides to the task force
into the proposed adequacy standards and to resubmit the
revised proposed adequacy standards to the authority
following a provisional approval of the adequacy standards by
the authority.
(5) Review and redraft the proposed adequacy standards
incorporating any suggestions and criticisms provided by the
authority following a rejection of the proposed adequacy
standards by the authority.
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§ 3307. Public school building and facility adequacy standards.
(a) Proposal of standards.--The task force shall utilize the
uniform data contained in the school building and facility
assessment report to propose adequacy standards to the authority
for public school buildings and facilities that require a
minimum level of:
(1) Essential maintenance.
(2) Structural and building integrity.
(3) Instructional area for education on a per student
basis.
(4) Technological capacity in school buildings and
facilities.
(b) Uniformity required.--The proposed adequacy standards
shall be uniform and have uniform Statewide application to all
public school buildings and facilities of this Commonwealth.
§ 3308. Needs assessment report.
(a) Duty to prepare.--The Department of the Auditor General
shall prepare a needs assessment report for all public school
buildings and facilities which shall:
(1) Identify all deferred maintenance in each school
building and facility.
(2) Identify the essential maintenance required for each
school building and facility to comply with the school
building and facility adequacy standards.
(3) Calculate the total cost for the completion of all
deferred maintenance for each school building and facility.
(4) Calculate the total cost for the completion of
essential maintenance that is required for each school
building and facility to comply with the school building and
facility adequacy standards.
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(b) Submission to authority.--The Department of the Auditor
General shall submit the needs assessment report to the
authority within two months of receiving a copy of the adequacy
standards from the task force. The needs assessment report shall
be presented in a uniform manner.
(c) Governmental assistance.--For the purposes of preparing
the needs assessment report for school buildings and facilities,
the Department of the Auditor General may request the assistance
of local school districts, the Division of Facilities Management
of the Department of Education, and other departments, agencies
and entities of the Commonwealth as deemed necessary by the
Department of the Auditor General.
§ 3309. Pennsylvania Public School Construction Authority.
(a) Establishment.--There is hereby established a
Pennsylvania Public School Construction Authority.
(b) Membership.--The authority shall be comprised of 14
members as follows:
(1) The Governor or his designee.
(2) The Auditor General or his designee.
(3) The State Treasurer or his designee.
(4) The Secretary of Education or his designee.
(5) The Secretary of the Budget or his designee.
(6) The Secretary of General Services or his designee.
(7) The President pro tempore of the Senate or his
designee, the Minority Leader of the Senate or his designee,
the Speaker of the House of Representatives or his designee,
and the Minority Leader of the House of Representatives or
his designee.
(8) Four representatives of the private sector
architectural and construction management industries, who
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shall be appointed by the Governor.
(c) Term.--The term of the members of the authority shall be
as follows:
(1) The Governor, Auditor General, State Treasurer,
Secretary of Education, Secretary of the Budget, Secretary of
General Services and the members of the General Assembly
shall serve concurrently with their positions, and a designee
of one of these officials shall serve the same term as the
appointing official.
(2) The four representatives of the private sector
architectural and construction management industries shall
serve for terms of three years. Upon the end of their terms,
the Governor may reappoint them to the authority or may
appoint other representatives of the private sector
architectural and construction management industries.
(d) Reimbursement for expenses.--Each member of the
authority shall serve without compensation for the performance
of official duties but may be reimbursed for actual and
necessary expenses reasonably incurred in the performance of the
duties of the authority.
(e) Duties.--The authority shall have the following powers
and duties:
(1) Appoint the initial members of the task force within
two months of the effective date of this chapter.
(2) Review and approve, conditionally approve or reject
the proposed public school building and facility adequacy
standards submitted by the task force within 30 days of the
receipt of the proposed standards.
(3) Establish guidelines for the operation and
administration of the grant program, including criteria,
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eligibility and funding for emergency public school
infrastructure needs, within three months of the effective
date of this chapter.
(4) Create a central depository for information on
school building projects through the establishment and
maintenance of an electronic database that contains the
condition and needs for every school building and facility.
The electronic database shall be designed so that information
can be easily collected, stored, amended, reviewed and
disseminated. The information contained in this database
shall be available for public inspection.
(5) Serve the school districts as a resource in
designing and constructing school buildings and facilities
that comply with the school building and facility adequacy
standards established by this chapter and to assist the
districts in best utilizing their funding from the program,
including the provision and utilization of existing model
plans of school buildings or the development of new model
plans for school buildings.
(6) Operate and administer the fund and adequacy
program.
(7) Prepare an annual report on the operation and
administration of the adequacy program and fund, which shall
be submitted to the chairman of the Committee on Education of
the Senate and the chairman of the Committee on Education of
the House of Representatives within three months of the end
of the fiscal year.
(8) Have continuing succession.
(9) Sue and be sued, implead and be impleaded, complain
and defend in all courts.
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(10) Adopt, use and alter at will a corporate seal.
(11) Acquire, purchase, hold, lease as lessee and use
any property real, personal or mixed, tangible or intangible,
or any interest therein, necessary or desirable, for carrying
out the purposes of the authority and to sell, lease as
lessor, transfer and dispose of any property or any interest
therein at any time acquired by it.
(12) Make bylaws for the management and regulation of
its affairs.
(13) Appoint officers, agents, employees and servants,
to prescribe their duties and to fix their compensation.
(14) Finance projects by making grants to any eligible
school district.
(15) Borrow money for the purpose of financing or
refinancing the cost of any project, make and issue
negotiable notes, bonds and other evidences of indebtedness
or obligations of the authority to the extent authorized
under this chapter and to secure the payment of such bonds,
or any part thereof, by pledge or deed of trust of all or any
of its revenues and receipts, and to make such agreements
with the purchasers or holders of such bonds or with others
in connection with such bonds when issued or to be issued as
the authority shall deem advisable, and in general to provide
for the security of the bonds and the rights of the holder
thereof.
(16) Make contracts of every name and nature and to
execute all instruments necessary or convenient for the
carrying of its business.
(17) Borrow money and accept grants from and enter into
contracts or other transaction with any Federal agency,
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without limitation of the other powers and duties specified
in this subsection.
(18) Pledge, hypothecate or otherwise encumber all or
any of the revenues or receipts of the authority as security
for all or any of the obligations of the authority.
(19) Do all acts and things necessary or convenient to
carry out the powers granted to it by this chapter.
(f) Exercise of powers and duties.--
(1) The powers and duties of the authority shall be
exercised by a governing body consisting of the members of
the authority acting as a board. Within 30 days after the
effective date of this chapter, the board shall meet and
organize by electing from their number a president, treasurer
and secretary. At the first regular meeting in each year
thereafter, they shall elect from their number a president
and a secretary.
(2) Nine members shall constitute a quorum of the board
for the purpose of organizing the authority and conducting
the business thereof and for all other purposes, and all
action shall only be taken by a vote of a majority of the
members of the authority unless the bylaws shall require a
larger number. The board shall have full authority to manage
the properties and business of the authority and to
prescribe, amend and repeal bylaws, rules and regulations
governing the manner in which the business of the authority
may be conducted and the powers granted to it may be
exercised and embodied. The board shall fix and determine the
number of officers, agents and employees of the authority and
their respective compensation and duties and may delegate to
one or more of their number or to one or more of the
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officers, agents or employees such powers and duties as it
may deem proper.
(g) Limitation.--The authority shall have no power at any
time or in any manner to pledge the credit or taxing power of
the Commonwealth or any of its school districts, nor shall any
of its debts or obligations be deemed to be obligations of the
Commonwealth or any of its school districts, nor shall the
Commonwealth or any of its school districts be liable for the
payment of principal or interest on such obligations.
§ 3310. Annual report.
The authority shall submit an annual report to the chairman
of the Committee on Education of the Senate and the chairman of
the Committee on Education of the House of Representatives
regarding the administration and operation of the fund and
adequacy grant program.
§ 3311. School district capital improvement plans.
(a) Plan necessary for program funding.--Following
completion of the school building and facility assessment, the
adequacy standards, needs assessment and the adequacy grant
program guidelines, any school district that submits an
application for funding under the program shall prepare and
retain on file an annual and a five-year capital improvement
plan. The five-year capital improvement plan shall be updated
annually.
(b) Contents of plan.--The capital improvement plan shall:
(1) Address the deficiencies in the school district's
school buildings and facilities as listed in the school
building and facility assessment, needs assessment and
authority report.
(2) Comply with the school building and facility
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adequacy standards.
(3) Include all of the following:
(i) The project descriptions and rationale for
repair, maintenance and construction of school buildings
or facilities.
(ii) The project floor plans or a copy of project
blueprints.
(iii) The student and school district employee
capacity of each school building or facility in the
capital improvement plan.
(iv) The current and projected student enrollment
for a five-year period.
(v) The funding sources and cost estimates,
including applicable cost estimates contained in the
needs assessment and authority report.
(vi) The school district efforts to comply with the
requirements of the school building and facility adequacy
standards.
(vii) The calculations of the average useful life
for each project financed under the adequacy grant
program.
§ 3312. Public School Building and Facility Adequacy Grant
Program.
(a) Establishment.--The Public School Building and Facility
Adequacy Grant Program is hereby established and shall be
administered by the authority.
(b) Components of program.--The adequacy grant program shall
consist of two separate components which shall be known as the
direct grant program and the interest subsidy program. The
adequacy grant program shall be funded by moneys generated from
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the issuance of bonds and deposited in the fund. Fifty percent
of those funds in the fund generated from bond proceeds shall
fund the direct grant program, and the remaining 50% shall fund
the interest subsidy program.
§ 3313. Direct grant program.
(a) Grants to be provided.--The direct grant program shall
provide direct grants to eligible school districts for 100% of
the cost of a project, including the performance of essential
maintenance on or construction of a public school building or
facility and educational equipment.
(b) Applications.--School districts eligible under this
program may submit an annual application to the authority. The
authority shall establish procedures and guidelines regarding
the application for and award of direct grants under this
program. The procedures and guidelines shall include:
(1) Provisions for accountability to ensure that the
direct grants are used in accordance with this chapter.
(2) The following project priority list for the award of
grants under the program:
(i) To replace or reconstruct school buildings and
facilities destroyed or damaged by manmade or natural
disasters.
(ii) To perform essential maintenance on the most
deficient school buildings and facilities.
(iii) To replace school buildings and facilities
that no longer are structurally sound or have components
that are no longer structurally sound.
(iv) To construct new school buildings and
facilities to alleviate the overcrowding caused by
population growth.
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(v) To purchase educational equipment.
(c) Eligibility criteria.--The authority shall establish
eligibility criteria for grant recipients, in which eligibility
shall be based on at least one of the following:
(1) The school district has at least 50% of its students
eligible for free or reduced-cost lunches under the National
School Lunch Act (60 Stat. 230, 42 U.S.C. § 1751 et seq.).
(2) The school district receives a poverty supplement in
its basic education funding.
(3) The school district has a market value income aid
ratio of 0.8000 or higher.
Any school district that meets the eligibility criteria under
this subsection shall be classified as a special need district.
§ 3314. Interest subsidy program.
(a) Funding to be provided.--
(1) The interest subsidy program shall provide funding
in the form of a reimbursement to a school district that is
not classified as a special need district for a specific
percentage of the total costs of a project for the
performance of essential maintenance on or the construction
of school buildings and facilities.
(2) The authority shall establish a formula for the
calculation of the percentage of the total project costs
which may be reimbursed to the school district.
(b) Eligibility criteria.--The authority shall establish
eligibility criteria for the award of the funding under this
program which shall incorporate the following project priority
list:
(1) To replace or reconstruct school buildings and
facilities destroyed or damaged by manmade or natural
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disasters.
(2) To alleviate the overcrowding caused by population
growth or to replace school buildings and facilities that no
longer are structurally sound or have components that are no
longer structurally sound.
(3) To replace or reconstruct school buildings and
facilities that pose a risk to the health and safety of
students, employees and the public.
(4) To alter facilities to provide accessibility for
qualified individuals with disabilities, as defined under the
Americans with Disabilities Act of 1990 (Public Law 101-336,
42 U.S.C. § 12101 et seq.)
(5) To purchase educational equipment.
(c) Prerequisite for eligibility.--In order for a school
district to be eligible under the interest subsidy program, the
school district must obtain financing for a project at the
lowest available interest rate. The guidelines for the program
established by the authority shall address sufficient
documentation of such lowest available interest rate.
§ 3315. Bond issuance.
(a) Amount authorized.--The authority is authorized to issue
a maximum of $3,000,000,000 in negotiable bonds in four
individual series of $750,000,000 over the course of two years
for the purpose of funding the adequacy grant program to provide
grants and reimbursements for the construction, maintenance and
equipping of public schools in this Commonwealth. The term of
each series of bonds shall be based on the average useful life
of the projects financed.
(b) Terms.--
(1) The bonds of the authority shall be of such series,
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bear such date or dates, mature at such time or times, not
exceeding 30 years from their respective dates, bear such
interest at such rate or rates payable semiannually, be in
such denominations, be in such form, either coupon or fully
registered without coupons, carry such registration,
exchangeability and interchangeability privileges, be payable
in such medium of payment and at such place or places, be
subject to such terms of redemption at such prices not
exceeding 105% of the principal amount thereof and be
entitled to such priorities in the revenues and receipts of
the authority as such resolution or resolutions may provide.
The interest on bonds issued shall be paid during the term
for which the bonds were issued. The bonds shall be signed by
such officers, either manually or by facsimile as the
authority shall determine, and shall have imprinted thereon a
facsimile of the corporate seal, attested by the facsimile
signature of the treasurer of the authority, all as may be
prescribed in such resolution or resolutions. Any of the
bonds may be issued and delivered notwithstanding that any of
the authorized persons signing the bonds or whose facsimile
signature shall be upon the bonds shall have ceased to hold
their respective offices at the time when the bonds shall
actually be delivered.
(2) The bonds shall be sold as the authority shall
determine at private sale or to the highest responsible
bidder or bidders after public notice by advertisement. The
notice shall contain a general description of the bonds, the
manner, place and time of the sale or time limit for the
receipt of proposals, the name of the officer to whom the
bids or proposals shall be delivered and a statement of the
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terms and conditions of the sale, which shall include a
statement of the highest net interest cost or highest
interest cost computed by the Present Worth Method, whichever
is specified, acceptable to the authority. For the purposes
of this section, net interest cost shall be determined by
ascertaining the total amount of interest payable with
respect to the bonds, computed from the date of the bonds to
the stated maturity dates thereof, plus the amount of any
discount from the principal amount of the bond or less the
amount of any premium in excess of the principal amount of
the bonds. Pending the preparation of the definitive bonds,
interim receipts may be issued to the purchaser or purchasers
of such bonds and may contain such terms and conditions as
the authority may determine.
(3) The bonds are hereby made securities in which all
officers of the Commonwealth and its political subdivisions
and municipal officers and administrative departments, boards
and commissions of the Commonwealth, all banks, bankers,
savings banks, trust companies, savings and loan
associations, investment companies and other persons carrying
on a banking business, all insurance companies, insurance
associations and other persons carrying on an insurance
business and all administrators, executors, guardians,
trustees and other fiduciaries, and all other persons
whatsoever who now or may hereafter be authorized to invest
in bonds or other obligations of the Commonwealth, may
properly and legally invest any funds, including capital,
belonging to them or within their control, and the bonds or
other securities or other obligations are hereby made
securities which may properly and legally be deposited with
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and received by any State or municipal officers or agency of
the Commonwealth for any purpose for which the deposit of
bonds or other obligations of the Commonwealth is now or may
hereafter be authorized by law.
(c) Contents of resolution.--Any resolution authorizing the
bonds may contain provisions which shall be a part of the
contract with the holders thereof as to:
(1) Pledging the full faith and credit of the authority,
but not of the Commonwealth or any county or other political
subdivision thereof, for such obligations or restricting the
same to all or any of the revenues or receipts of the
authority from all or any projects.
(2) The financing and the duties of the authority with
reference thereto.
(3) The terms and provisions of the bonds.
(4) Limitations on the purposes to which the proceeds of
the bonds, then or to be later issued, or of any loan or
grant by the United States may be applied.
(5) The setting aside of reserves or sinking funds and
the regulation and disposition thereof.
(6) The terms and provisions of any deed of trust or
indenture securing the bonds or under which the same may be
issued.
(7) Any other or additional agreements with the holders
of the bonds.
(d) Documents.--The authority may enter into any deeds of
trust, indentures or other agreements with any bank or trust
company or other person or persons in the United States having
power to enter into the same, including any Federal agency, as
security for such bonds and may assign and pledge all or any of
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the revenues or receipts of the authority thereunder. Such deed
of trust, indenture or other agreement may contain such
provisions as may be customary in such instruments or as the
authority may authorize, including, but without limitation,
provisions as to:
(1) The construction, improvement, financing, operation,
maintenance and repair of any project or projects and the
duties of the authority with reference thereto.
(2) The application of funds and the safeguarding of
funds on hand or on deposit.
(3) The rights and remedies of the trustee and the
holders of the bonds, which may include restrictions upon the
individual right of action of such bondholders.
(4) The terms and provisions of the bonds or the
resolutions authorizing the issuance of the same.
(e) Bonds as negotiable instruments.--Bonds of the authority
shall have the qualities of negotiable instruments under 13
Pa.C.S. (relating to commercial code).
(f) Rights and remedies of bondholders.--
(1) The rights and remedies conferred in this section
upon or granted to the bondholders shall be in addition to
and not in limitation of any rights and remedies lawfully
granted to such bondholders by the resolution or resolutions
providing for the issuance of bonds or by any deed of trust,
indenture or other agreement under which the same may be
issued or secured. In the event that the authority shall
default in the payment of principal of or interest on any of
the bonds after the principal or interest shall become due,
whether at maturity or upon call for redemption, and such
default shall continue for a period of 30 days, or in the
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event that the authority shall fail or refuse to comply with
the provisions of this chapter or shall default in any
agreement made with the holders of the bonds, the holders of
25% in aggregate principal amount of the bonds then
outstanding, by instrument or instruments filed in the office
of the recorder of deeds of the county, and proved or
acknowledged in the same manner as a deed to be recorded may,
except as such right may be limited under the provisions of
any deed of trust, indenture or other agreement as provided
earlier, appoint a trustee to represent the bondholders for
the purposes provided in this section. Such trustee and any
trustee under any deed of trust, indenture or other agreement
may, and, upon written request of the holders of 25%, or such
other percentage as may be specified in any deed of trust,
indenture or other agreement as provided in this section, in
principal amount of the bonds then outstanding, shall in his
or its own name:
(i) by mandamus or other suit, action or proceeding
at law or in equity to enforce all rights of the
bondholders, including the right to require the authority
to collect rates and other charges adequate to carry out
any agreement as to, or pledge of the revenues or
receipts thereof, the authority, and to require the
authority to carry out any other agreements with or for
the benefit of the bondholders, and to perform its and
their duties under this chapter;
(ii) bring suit upon the bonds;
(iii) by action or suit in equity to require the
authority to account as if it were the trustee of an
express trust for the bondholders;
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(iv) by an action or suit in equity to enjoin any
acts or things which may be unlawful or in violation of
the rights of the bondholders; or
(v) by notice in writing to the authority to declare
all bonds due and payable and if all defaults shall be
made good, then with the consent of the holders of 25%,
or such other percentage as may be specified in any deed
of trust, indenture or other agreement as provided in
this section, of the principal amount of the bonds then
outstanding, to annul such declaration and its
consequences.
(2) Any trustee, whether appointed as aforesaid or
acting under a deed of trust, indenture or other agreement,
and whether or not all bonds have been declared due and
payable, shall be entitled as of right to the appointment of
a receiver, who may, to the same extent that the authority
itself could do so, enter and take possession of the
facilities of the authority or any parts thereof, the
revenues or receipts from which are or may be applicable to
the payment of the bonds so in default, and operate and
maintain the same and collect and receive other revenues
thereafter rising therefrom in the same manner as the
authority might do and shall deposit all such moneys in a
separate account and apply the same in such manner as the
court shall direct. In any suit, action or proceeding by the
trustees, the fees, counsel fees and expenses of the trustee
and of the receiver, if any, and all costs and disbursements
allowed by the court shall be a first charge on any revenues
and receipts from which are or may be applicable to the
payment of the bonds so in default. The trustee shall, in
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addition to the foregoing, have and possess all of the powers
necessary or appropriate for the exercise of any functions
specifically set forth in this section or incident to the
general representation of the bondholders in the enforcement
and protection of their rights.
(3) In addition to all other rights and all other
remedies, any holder of bonds of the authority shall have the
right by mandamus or other suit, action or proceeding at law
or in equity to enforce his rights against the authority to
collect his fees, rentals and other such charges adequate to
carry out any agreement as to, or pledge of, such fees,
rentals or other charges or income, revenues and receipts and
to require the authority to carry out any of its covenants
and agreements with the bondholders and to perform its and
their duties under this chapter.
(g) Sinking fund.--The bonds of the authority shall be
issued under one or more resolutions or one or more trust
indentures and, as provided in such resolution or trust
indenture, the moneys set aside in any sinking fund pledged for
any particular bonds or series of bonds shall be held for the
sole benefit of such bonds, separate and apart from the moneys
pledged for any other bonds of the authority issued under any
other resolution or trust indenture.
(h) Commonwealth pledge.--The Commonwealth does hereby
pledge to and agree with any person, firm or corporation or
Federal agency subscribing to or acquiring the bonds to be
issued by the authority for the construction, financing,
extension, improvement or enlargement of any project or part
thereof that the Commonwealth will not limit or alter the rights
hereby vested in the authority or limit or alter any provisions
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for the security and protection of the authority and its
bondholders contained in this act or as now provided by law
until all bonds at any time issued, together with the interest
thereon, are fully met and discharged. The Commonwealth does
further pledge to and agree with the United States and any other
Federal agency that, in the event that any Federal agency shall
construct or contribute any funds for the construction,
financing, extension improvement or enlargement of any project
or any portion thereof, the Commonwealth will not alter or limit
the rights and powers of the authority in any manner which would
be inconsistent with the continued maintenance and operation of
the project or the improvement thereof, or which would be
inconsistent with the due performance of any agreements between
the authority and any such Federal agency, and the authority
shall continue to have and may exercise all powers in this
section for carrying out of the purposes of this chapter and the
purposes of the United States in the construction or improvement
or enlargement of any project or such portion thereof.
(i) Tax exemption for authority.--The effectuation of the
authorized purposes of the authority established under this
chapter shall and will be in all respects for the benefit of the
people of this Commonwealth, for the increase of their welfare
and prosperity and for the improvement of their education and
educational facilities, and, since the authority will be
performing essential governmental functions in effectuating such
purposes, the authority shall be exempt from payment of any
taxes or assessments on any property acquired, held, owned,
leased or used by it for such purposes, and the bonds issued by
the authority, their transfer and the income therefrom,
including any profits made on the sale thereof, shall at all
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times be free from taxation, other than inheritance and estate
taxation within this Commonwealth.
§ 3316. Public School Construction Reserve Fund.
(a) Establishment.--The Public School Construction Reserve
Fund is hereby established in the State Treasury. The board of
the authority shall operate and administer the fund and shall
establish guidelines for the administration and operation of the
fund.
(b) Use of moneys.--Moneys in the fund shall be used by the
authority as follows:
(1) Proceeds raised from the sale of the bonds shall be
used to fund the adequacy grant program of which 50% of the
proceeds shall fund the direct grant program and the
remaining 50% shall fund the interest subsidy program.
(2) Funds transferred by the State Treasurer into the
fund under subsection (c) shall be used as follows:
(i) First to alleviate existing debt service.
(ii) After the annual debt service payment has been
made, the remaining funds shall be used for funding
emergency maintenance for structurally unsound school
buildings and facilities.
(c) Primary funding source.--To fully fund the annual debt
service, up to the sum of 100% of the amount allocated for
school construction and modernization under the Department of
Education's "PlanCon" program may be used, and at least one-half
of the allocation shall be used, with any amount unused and
remaining from this allocation being returned to the General
Fund annually.
(d) Other funding sources.--The authority shall deposit any
other moneys made available to the authority from any source for
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such purposes into the fund.
(e) Use of remaining funds.--The fund shall have the
priority of alleviating existing debt service arising from the
bond issuance. When the annual debt service payment has been
paid, any remaining funds shall be used for emergency public
school maintenance needs in this Commonwealth in accordance with
guidelines established by the authority for emergency school
construction and maintenance funding.
Section 2. This act shall take effect immediately.
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