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§ 5506. Purposes and powers; bonds and revenue anticipation notes

Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 24 P.S. Education

Purdon's Pennsylvania Statutes and Consolidated Statutes
Title 24 P.S. Education
Chapter 28. The Pennsylvania Higher Educational Facilities Authority Act of 1967 (Refs & Annos)
24 P.S. § 5506
§ 5506. Purposes and powers; bonds and revenue anticipation notes
(a)(1) The bonds of the authority hereinabove referred to and authorized to be issued to pay the cost of a project under section 5(9) hereof,1 shall be authorized by resolution of the board thereof or by the terms of a trust indenture authorized by such board, and shall be of such series, shall bear such date or dates, shall mature at such time or times, not exceeding forty years from their respective dates, shall bear interest at such rate or rates, shall be in such denominations, shall be in such form, either coupon or fully registered without coupons, shall carry such registration, exchangeability and interchangeability privileges, shall be payable in such medium of payment and at such place or places, shall be subject to such terms of redemption, not exceeding one hundred five percent of the principal amount thereof and shall be entitled to such priorities in the revenues, rentals or receipts of the authority as such trust, indenture, resolution or resolutions may provide. The bonds shall be signed by such officers, either manually or by facsimile as the authority shall determine, and coupon bonds shall have attached thereto interest coupons bearing the facsimile signature of the treasurer of the authority, all as may be prescribed in such resolution or resolutions. Any such bonds may be issued and delivered, notwithstanding that one or more of the officers signing such bonds or the treasurer whose facsimile signature shall be upon the coupons or any thereof, shall have ceased to be such officer or officers at the time when such bonds actually shall be delivered. Said bonds may be sold at public or private sale for such price or prices as the authority shall determine, with the approval of the college for whose use the project is being constructed. The net interest cost to maturity of the money received for any issue of bonds, whether sold at public or private sale, shall not exceed six percent per annum, except that for a period of one year following the effective date of this act, the net interest may exceed six percent per annum but shall not exceed seven percent per annum. The interest on bonds issued with an interest rate of between six and seven percent shall be paid during the term for which the bonds were issued.2
(2) 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 bonds 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 revenue anticipation notes of the authority authorized to be issued to fund the working capital requirements of colleges under section 5(9.1)3 shall be authorized by resolution of the board of the authority or by the terms of a trust indenture authorized by such board, and shall be of such series, shall bear such date or dates, shall mature at such time or times, but not more than thirteen months from the date on which they were issued, shall bear interest at such rate or rates, payable at maturity or at such other specified times, shall be in such denominations, shall be in such form, shall carry such registration, exchangeability and interchangeability privileges, shall be payable in such medium of payment and at such place or places, shall be subject to such terms of redemption, with or without premium and be entitled to such priorities in the revenues or receipts of the authority as such resolution or indenture may provide. The revenue anticipation notes shall be signed by such officers, either manually or by facsimile as the authority shall determine, all as may be prescribed in such resolution or indenture. The revenue anticipation notes may be issued and delivered, notwithstanding that one or more of the officers signing such revenue anticipation notes shall have ceased to be an officer or officers at the time when such revenue anticipation notes actually shall be delivered. The revenue anticipation notes may be sold at public or private sale for such price or prices as the authority shall determine.
(b) Bonds and revenue anticipation notes issued under this act are hereby made securities in which all officers of the State and its political subdivisions and municipal officers and administrative departments, boards and commissions of the Commonwealth, all banks, bankers, savings banks, trust companies, saving 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 hereafter may be authorized to invest in bonds or other obligations of the Commonwealth, properly and legally may invest any funds, including capital, belonging to them or within their control, and said bonds and revenue anticipation notes or other securities or obligations hereby are made securities which properly and legally may be deposited with, 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 now is or hereafter may be authorized by law.
(c) Any trust indenture, resolution or resolutions authorizing any bonds or revenue anticipation notes may contain provisions which shall be part of the contract with the holders thereof as to (i) pledging all or any of the revenues, rentals or receipts and contract rights of the authority from such projects or properties, as the college or colleges owning, using or leasing the same may approve or pledging revenues receivable by the authority under loan agreements or similar instruments entered into by the authority and a college; (ii) the acquisition, construction, financing, improvement, operation, extension, enlargement, maintenance and repair, of any project or projects, and the duties of the authority with reference thereto; (iii) the terms and provisions of the bonds or revenue anticipation notes; (iv) limitations on the purposes to which the proceeds of the bonds or revenue anticipation notes, then or thereafter to be issued, under such indenture or resolution, or of any loan or grant by the United States may be applied; (v) the rate of rentals and other charges for use of any educational facility of, or for the services rendered by the authority, including limitations upon the power of the authority to modify any leases or other agreements, pursuant to which any rentals or other charges are payable; (vi) the setting aside of reserves or sinking funds and the regulation and disposition thereof, provided that any income received from the investment of such reserves or sinking funds shall be applied in reduction of the rentals or other charges payable by the college for whose project or working capital requirements such reserves or sinking fund are created; (vii) limitations on the issuance of additional bonds or revenue anticipation notes; (viii) the terms and provisions of any deed of trust or indenture securing the bonds or revenue anticipation notes, or under which the same may be issued; and (ix) any other or additional agreements with the holders of the bonds or revenue anticipation notes.
(d)(1) 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 or other governmental agency, as security for such bonds or revenue anticipation notes, and may assign and pledge all or any of the revenues, rentals, receipts, and contract rights 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 (i) the acquisition, construction, financing, improvement, operation, maintenance, and repair of any project or projects or the provision of working capital requirements for colleges, and the duties of the authority with reference thereto; (ii) the application of funds and the safeguarding of funds on hand or on deposit; (iii) the rights and remedies of said trustee and the holders of the bonds or revenue anticipation notes (which may include restrictions upon the individual right of action of such bondholders or noteholders); and (iv) the terms and provisions of the bonds or revenue anticipation notes, or the resolutions authorizing the issuance of the same: Provided further, That nothing in this act shall prevent the authority from obtaining temporary financing where necessary or desirable for any project by issuance of negotiable notes or other obligations, the maturity of which shall not exceed five years from the date of issue, and which shall be paid, as to both principal and interest, from proceeds of sale of bonds of the authority, in anticipation of which such notes or obligations were issued.
(2) Said bonds and revenue anticipation notes shall have all the qualities of negotiable instruments under the law merchant, and the negotiable instruments law of the Commonwealth of Pennsylvania.

Credits

1967, Dec. 6, P.L. 678, § 6. Amended 1969, Oct. 16, P.L. 257, § 1; 1984, March 23, P.L. 145, No. 27, § 3, imd. effective; 1984, Oct. 12, P.L. 948, No. 185, § 4, imd. effective.

Footnotes

24 P.S. § 5505(9).
Limits imposed by this section upon rates of interest and interest costs permitted to be paid upon bonds, obligations and indebtedness issued by the Commonwealth or its agencies or instrumentalities or authorities, and by local political subdivisions or their agencies or authorities, were removed for such bonds, obligations or indebtedness by 1970, July 14, P.L. 485, No. 165, § 1, as amended [72 P.S. § 4051].
24 P.S. § 5505(9.1).
24 P.S. § 5506, PA ST 24 P.S. § 5506
Current through 2022 Regular Session Act 29. Some statute sections may be more current, see credits for details.
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