5510.3 - Bonds in cities of the first class.
§ 5510.3. Bonds in cities of the first class. (a) General rule.-- (1) The bonds of the authority shall be authorized by resolution of the board. The resolution shall specify all of the following: (i) Series. (ii) Date or dates of maturity. (iii) Interest at such rate or rates, fixed or variable, as shall be determined by the board as necessary to issue and sell the authorized bonds. (iv) Denominations. (v) Form, either coupon or fully registered without coupons. (vi) Certificated or book-entry-only form. (vii) Registration and exchangeability and interchangeability privileges. (viii) Medium of payment and place of payment. (ix) Terms of redemption. (x) Priorities of payment in the revenues or receipts of the authority as the resolution or trust indenture adopted or approved by the authority may provide. (2) The bonds shall be signed by or shall bear the facsimile signatures of such officers as the board shall determine, and coupon bonds shall have attached thereto interest coupons bearing the facsimile signature of the treasurer of the authority, and all bonds shall be authenticated by an authenticating agent, fiscal agent or trustee, all as may be prescribed in the resolution or trust indenture. (3) Any such bonds may be issued and delivered notwithstanding that one or more of the officers signing bonds or the treasurer whose facsimile signature shall be upon the coupon, or any thereof, shall have ceased to be an officer or officers at the time when the bonds shall actually be delivered. (4) The proceeds of an issue of bonds may be used to pay the costs of a project, subject to the limitations of subsection (b), to finance any cash flow deficit of the authority, to reimburse any costs of a project initially paid by the authority or any person, to fund any required reserves, to capitalize interest or to pay costs of issuance, including, but not limited to, costs of obtaining credit enhancement for the bonds. (b) Maturity.--Bonds issued to finance the costs of a project shall mature at such time or times not exceeding 40 years from their respective dates of original issue as the authority shall by resolution determine. Bonds issued in anticipation of income of the authority shall mature within one fiscal year after the fiscal year of the date of issuance thereof except for bonds issued in anticipation of grants with respect to the cost of a project, which bonds shall mature no later than six months beyond the time of anticipated receipt of the final payment of the grant. (c) Sale.-- (1) Bonds may be sold at public sale or invited sale for such price or prices and at such rate or rates of interest as the authority shall determine. Bonds may be sold at private sale by negotiation at such price or prices and at such rate or rates of interest as the authority shall determine, but only if the authority makes a written public explanation of the circumstances and justification for the private sale by negotiation. (2) 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. (d) Negotiable instruments.--Bonds of an authority shall have the qualities of negotiable instruments under Title 13 (relating to commercial code). (e) Refunding.-- (1) Subject to the provisions of the outstanding bonds, notes or other obligations issued under this chapter or prior acts and subject to the provisions of this chapter, the authority shall have the right and power to refund any outstanding debt, whether the debt represents principal or interest, in whole or in part, at any time. (2) As used in this subsection, "refund" and its variations shall mean the issuance and sale of obligations the proceeds of which are used or are to be used for the payment or redemption of outstanding obligations upon or prior to maturity. Refunding bonds shall mature at such time or times not exceeding 40 years from their dates of original issuance as the authority shall determine by resolution. (f) Credit of Commonwealth and political subdivisions not pledged.--Under no circumstances shall any bonds issued by the authority or any other obligation of the authority be or become an indebtedness or liability of the Commonwealth or of any government agency, provided that any government agency may guarantee bonds of an authority to the extent and for the purposes for which the government agency may make loans or grants to an authority. (g) Nonliability.--Neither the board members, any employees of the authority nor any person executing the bonds shall be liable personally on any bonds by reason of the issuance thereof. Bonds of an authority shall contain a statement of the limitation set forth in this subsection. (h) Bonds deemed valid.--Any bond reciting in substance that it has been issued by the authority to accomplish the public purposes of this chapter shall be conclusively deemed in any suit, action or proceeding involving the validity or enforceability of the bonds or security therefor to have been issued for such purpose. (i) Notice and challenges.-- (1) The authority may cause a copy of any resolution authorizing the issuance of bonds adopted by it to be filed for public inspection in its office and in the office of the clerk of the governing body of each county and the governing body of a city of the first class and may thereupon cause to be published in a newspaper published or circulating in its service area a notice stating the fact and date of the adoption, the places where the resolution has been so filed for public inspection, the date of publication of the notice and that any action or proceeding of any kind or nature in any court questioning the validity or proper authorization of bonds provided for by the resolution or the validity of any covenants, agreements or contract provided for by such resolution shall be commenced within 20 days after the publication of the notice. (2) If any notice shall at any time be published and if no action or proceeding questioning the validity or proper authorization of bonds provided for by the resolution or the validity of any covenants, agreements or contract provided for by such resolution shall be commenced within 20 days after the publication of the notice, then all residents, taxpayers and owners of property in a city of the first class and all other persons whatsoever shall be forever barred and foreclosed from instituting or commencing any action or proceeding in any court or pleading any defense to any action or proceedings questioning the validity or proper authorization of such bonds or the validity of any such covenants, agreements or contracts, and said bonds, covenants, agreements and contracts shall be conclusively deemed to be valid and binding obligations in accordance with their terms and tenor. (3) After issuance of bonds, all bonds shall be conclusively presumed to be fully authorized and issued by all the laws of this Commonwealth, and any person shall be estopped from questioning their sale, execution or delivery by the authority. (j) Applicability.--This section shall only apply to authorities in cities of the first class. (Dec. 30, 2002, P.L.2001, No.230, eff. 60 days; July 16, 2004, P.L.758, No.94, eff. imd.) 2004 Amendment. Act 94 reenacted section 5510.3. See sections 20(3) and 21(3) of Act 94 in the appendix to this title for special provisions relating to Pennsylvania Public Utility Commission contracts and preservation of rights, obligations, duties and remedies. 2002 Amendment. See sections 11(3) and 12(2) of Act 230 in the appendix to this title for special provisions relating to Pennsylvania Public Utility Commission contracts and preservation of rights, obligations, duties and remedies.