Court Opinions

State Laws

US Code

US Constitution

Management of funds - 74 Pa. Cons. Stat. § 1761

Legal Research Home > Pennsylvania Statutes

                               SUBCHAPTER D
                      FUNDS AND BONDS OF AUTHORITIES

     Sec.
     1761.  Management of funds.
     1762.  Special funds.
     1763.  Bonds.
     1764.  Contracts with obligees of an authority.
     1765.  Commonwealth pledges.
     1766.  Provisions of bonds and trust indentures.
     1767.  Bonds to be legal investments.
     1768.  Rights and remedies.
     1769.  Additional remedies conferrable by an authority.
     1770.  Validity of pledge.
     1771.  Security interest in funds and accounts.
     1772.  Payment of proceeds of tax levied for authority
            purposes.
     1773.  Limitation on authority under Federal bankruptcy code.
     § 1761.  Management of funds.
        (a)  General rule.--All funds of an authority received from
     any source shall be delivered to the treasurer of the authority
     or to such other agent of the authority as the board may
     designate. The funds shall be promptly deposited in the name of
     the authority in a bank or banks, bank and trust company or bank
     and trust companies, trust company or trust companies in this
     Commonwealth chosen by the authority. The moneys in the account
     or accounts may be withdrawn or paid out only by check or draft
     upon the bank, bank and trust company or trust company, signed
     by the treasurer or other designated agent of the authority on
     warrant of the treasurer of the authority and countersigned by
     the chairman of the board or by such persons as the board may
     authorize. Moneys in the account or accounts may be withdrawn or
     paid out by electronic funds transfer on instructions signed and
     countersigned in the manner provided for checks or drafts. The
     board may designate any of its members or any officer or
     employee of the authority to affix the signature of the chairman
     to any check or draft for payment of salaries or wages and for
     the payment of any other obligation of not more than $100,000.
     The general manager may designate any officer or employee of the
     authority to affix the signature of the treasurer to any check
     or draft for payment of salaries or wages and for the payment of
     any other obligation of not more than $100,000.
        (b)  Management of funds.--
            (1)  All bank, bank and trust company or trust company
        balances of the authority, to the extent the same are not
        insured, shall be continuously secured by a pledge of direct
        obligations of the United States, of the Commonwealth or of
        any municipality or municipalities in the metropolitan area
        having an aggregate market value exclusive of accrued
        interest at all times at least equal to the balance on
        deposit in such bank, bank and trust company or trust
        company. The securities shall either be deposited with the
        treasurer of the authority or be held by a trustee or agent
        satisfactory to the authority. All depository institutions
        are authorized to give security for the deposits.
            (2)  Subject to the provisions of any agreements with
        obligees of the authority, all funds of the authority,
        including, but not limited to, the proceeds of bonds that are
        not required for immediate use may be invested by the board
        consistent with sound business practice. The board shall
        provide for an investment program subject to restrictions
        contained in this chapter and in any other applicable statute
        and any resolutions on this subject adopted by the board.
        (c)  Authorized investments.--The authorized types of
     investments for authority funds shall be any of the following:
            (1)  Government obligations.
            (2)  Debt obligations issued by any of the following
        Federal agencies or such other like Federal agencies which
        may be designated by the board: Bank for Cooperatives,
        Federal Farm Credit Banks, Federal Financing Bank, Federal
        Home Loan Bank System, Federal National Mortgage Association,
        Export-Import Bank of the United States, Farmers Home
        Administration, Resolution Funding Corporation, Small
        Business Administration, Student Loan Marketing Association,
        Inter-American Development Bank, International Bank for
        Reconstruction and Development, Federal Land Banks or
        Government National Mortgage Association, and their
        predecessor or successor agencies.
            (3)  Short-term or long-term debt obligations of any
        state or political subdivision thereof or any agency or
        instrumentality of such a state or political subdivision or
        of any municipal corporation, provided that the obligations
        are rated by a rating agency in any of the three highest
        rating categories (without reference to subcategories)
        assigned by the rating agency.
            (4)  Rights to receive the principal of or the interest
        on obligations of states, political subdivisions, agencies or
        instrumentalities meeting the requirements set forth in
        paragraphs (2) and (3), whether through direct ownership as
        evidenced by physical possession of the obligations or
        unmatured interest coupons or by registration as to ownership
        on the books of the issuer or its duly authorized paying
        agent or transfer agent or through the purchase of
        certificates or other instruments evidencing an undivided
        ownership interest in payments of the principal of or
        interest on the obligations.
            (5)  Negotiable and nonnegotiable certificates of
        deposit, time deposits or other similar banking arrangements
        which are issued by banks, bank and trust companies, trust
        companies or savings and loan associations, provided that,
        unless issued by a qualified financial institution, any such
        certificate, deposit or other arrangement shall be
        continuously secured as to principal in the manner and to the
        extent provided in subsection (d).
            (6)  Repurchase agreements for investment securities
        described in paragraph (1) or (2) with a qualified financial
        institution or with dealers in government bonds which report
        to, trade with and are recognized as primary dealers by a
        Federal Reserve Bank and are members of the Securities
        Investors Protection Corporation, provided that the
        repurchase price payable under any agreement shall be
        continuously secured in the manner and to the extent provided
        in subsection (d).
            (7)  Investment agreements with qualified financial
        institutions.
            (8)  Commercial paper rated in the highest rating
        category, without reference to subcategories, by a rating
        agency.
            (9)  Shares or certificates in any short-term investment
        fund rated in the highest rating category (without reference
        to subcategories) by a rating agency, which short-term
        investment fund invests solely in obligations described in
        paragraphs (1) and (2).
            (10)  Debt obligations of any foreign government or
        political subdivision thereof or any agency or
        instrumentality of foreign government or political
        subdivision, provided that the obligations are rated by a
        rating agency, without reference to subcategories, in the
        highest rating category assigned by the rating agency.
            (11)  Such other investments which at the time of the
        acquisition thereof shall be listed as permissible
        investments for trust funds in an indenture or resolution
        with respect to indebtedness which is incurred under this
        chapter.
        (d)  Security for investment securities.--Any security
     required to be maintained as collateral for investment
     securities in the form of certificates of deposit, time
     deposits, other similar banking arrangements and repurchase
     agreements described in subsection (c)(5) and (6) shall be
     subject to the following requirements:
            (1)  The collateral shall be in the form of obligations
        described in subsection (c)(1) and (2), except that the
        security for certificates of deposit, time deposits or other
        similar banking arrangements may include other marketable
        securities which are eligible as security for trust funds
        under applicable regulations of the Comptroller of the
        Currency of the United States of America or under applicable
        state laws and regulations.
            (2)  The collateral shall have an aggregate market value,
        calculated not less frequently than monthly, at least equal
        to the principal amount (less any portion insured by the
        Federal Deposit Insurance Corporation or any comparable
        insurance corporation chartered by the United States of
        America) or the repurchase price secured thereby, as the case
        may be. The instruments governing the issuance of and
        security for the Investment Securities shall designate the
        person responsible for making the foregoing calculations.
            (3)  The authority shall have a perfected security
        interest in the collateral securing certificates of deposit,
        time deposits or other similar banking arrangements, and the
        collateral shall be held free and clear of the claims of
        third parties. The collateral shall be deposited with the
        authority, with a Federal Reserve Bank for the account of the
        authority or with a bank, bank and trust company or trust
        company (other than the obligor) which is acting solely as
        agent for the authority and has a combined net capital and
        surplus equal to at least $100,000,000.
            (4)  Collateral for repurchase agreements shall be held
        free and clear of the claims of third parties by the
        authority, or by a Federal Reserve Bank for the account of
        the authority, or by a bank, bank and trust company or trust
        company which is acting solely as agent for the authority and
        has a combined net capital and surplus at least equal to
        $100,000,000. A perfected first priority security interest
        for the benefit of the authority shall be created in the
        collateral under Title 13 (relating to commercial code) or
        book entry procedures prescribed by applicable Federal
        regulations.

        Cross References.  Section 1761 is referred to in section
     1741 of this title.

Last modified: November 27, 2007