PRIOR PRINTER'S NO. 1864 PRINTER'S NO. 1923
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 1307
Session of
2024
INTRODUCED BY ARGALL, STREET, PENNYCUICK, COSTA, MILLER AND
KANE, SEPTEMBER 10, 2024
SENATOR HUTCHINSON, FINANCE, AS AMENDED, OCTOBER 1, 2024
AN ACT
1 Amending Title 64 (Public Authorities and Quasi-Public
2 Corporations) of the Pennsylvania Consolidated Statutes, in
3 economic development financing, providing for Keystone
4 National Finance Authority.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Part II of Title 64 of the Pennsylvania
8 Consolidated Statutes is amended by adding a chapter to read:
9 CHAPTER 17
10 KEYSTONE NATIONAL FINANCE AUTHORITY
11 Subchapter
12 A. General Provisions
13 B. Structure and Powers
14 C. Bonds
15 SUBCHAPTER A
16 GENERAL PROVISIONS
17 Sec.
18 1701. Scope of chapter.
19 1702. Findings and declaration of policy.
 1 1703. Definitions.
2 § 1701. Scope of chapter.
3 This chapter relates to the Keystone National Finance
4 Authority.
5 § 1702. Findings and declaration of policy.
6 The General Assembly finds and declares as follows:
7 (1) Activities which lead to the creation and retention
8 of jobs in this Commonwealth and throughout the United
9 States, the establishment of economically viable communities,
10 the reuse of abandoned industrial, commercial and other
11 previously utilized sites and the investment of private
12 capital in enterprises improve the health, safety and general
13 welfare of the people of this Commonwealth and the United
14 States by increasing employment, revitalizing communities by
15 reducing, eliminating and preventing blight and providing a
16 source of additional revenue to the Commonwealth.
17 (2) Many existing industrial, commercial and other
18 economic activities throughout this Commonwealth and the
19 United States could become more competitive and could expand
20 more rapidly if additional means of financing were available.
21 Additional activities could be attracted to this Commonwealth
22 and other states if additional means of financing were
23 available to acquire, construct, rehabilitate and expand
24 facilities. Financing for cost-saving activities related to
25 buildings, plants, machinery and equipment and other
26 facilities would further the purposes specified under this
27 paragraph.
28 (3) A minimum level of unemployment and a maximum level
29 of business opportunity can best be provided by the
30 promotion, attraction, stimulation, rehabilitation and
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 1 revitalization of industrial, commercial, technological,
2 tourist, agricultural and other economic activities in this
3 Commonwealth and throughout the United States.
4 (4) Industrial, commercial and residential facilities
5 should be promoted by the financing of the facilities which
6 will eliminate blight or otherwise improve an area for
7 industrial, commercial or other economic activity.
8 (5) Housing and affordable housing are scarce in many
9 areas of the nation and could be advanced by mixed-use and
10 transit-oriented development. Transit expansion, including
11 passenger rail expansion, throughout the nation will create
12 opportunities for the growth of adjacent commercial,
13 residential and mixed-use development in nearby communities.
14 (6) To further encourage economic development and
15 efficiency within this Commonwealth and the United States by
16 providing basic services and facilities, it is necessary to
17 provide additional or alternative means of financing
18 infrastructure facilities, transportation systems, industrial
19 parks, energy conversion facilities, facilities for the
20 furnishing of energy, water and telecommunications,
21 facilities for the collection or treatment of wastewater and
22 storm water, tourism, parking facilities, health care
23 facilities and other basic service and related facilities
24 which are conducive to economic activity within this
25 Commonwealth and the United States and which are consistent
26 with the purposes of this chapter.
27 (7) It is the policy of this Commonwealth to promote the
28 health, safety, employment, business opportunities, economic
29 activity and general welfare of the people by establishing an
30 authority to exist and operate as a public instrumentality of
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 1 the Commonwealth, which is not intended to compete with any
2 Commonwealth agency or any other authority created under the
3 laws of this Commonwealth.
4 § 1703. Definitions.
5 The following words and phrases when used in this chapter
6 shall have the meanings given to them in this section unless the
7 context clearly indicates otherwise:
8 "Administrator." The person contracted by the authority
9 under section 1713(a)(10) (relating to powers) to operate the
10 authority, which person or the leadership of the person shall be
11 a registered municipal advisor that has significant experience
12 operating a governmental entity or authority that issues bonds
13 for projects throughout the United States.
14 "Authority." The Keystone National Finance Authority
15 established in section 1711 (relating to authority).
16 "Board." The board of the authority established in section
17 1712 (relating to board).
18 "Bonds." Bonds, notes, instruments, refunding notes and
19 bonds and other evidences of indebtedness or obligations which
20 the authority is authorized to issue under this chapter.
21 "Commonwealth agency." An agency, authority or other
22 instrumentality of the Commonwealth.
23 "Conduit borrower." The borrower of the proceeds of the
24 bonds issued by the authority.
25 "Conduit financing." The financing of the costs of a project
26 in which the authority is only obligated to repay bonds from
27 revenues received from a conduit borrower.
28 "Conduit revenue bonds." Bonds or other evidence of
29 indebtedness of the authority.
30 "Cost of the project" or "cost." Any of the following:
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 1 (1) Costs and expenses of acquisition of interests in
2 land, infrastructure, buildings, structures, equipment,
3 furnishings, fixtures and other tangible or intangible
4 property, which comprise the project.
5 (2) Costs and expenses of construction, reconstruction,
6 erection, equipping, expansion, extension, improvement,
7 installation, rehabilitation, renovation or repair of the
8 buildings, structures and equipment, which comprise the
9 project.
10 (3) Costs and expenses of demolishing, removing or
11 relocating buildings or structures on lands acquired or to be
12 acquired and the expense of acquiring land to which the
13 buildings or structures may be moved or relocated.
14 (4) Costs and expenses of preparing land for
15 development.
16 (5) Costs and expenses of engineering services,
17 financial services, accounting services and legal services,
18 plans, specifications, studies and surveys necessary or
19 incidental to determining the feasibility or practicability
20 of the project.
21 (6) Working capital or other capital needs related to
22 the project.
23 (7) Other costs and expenses deemed necessary by the
24 authority.
25 "Finance." Providing funding to pay for costs of a project.
26 "Government agency." The following:
27 (1) A State agency.
28 (2) The Unified Judicial System and its courts, officers
29 and agencies.
30 (3) The General Assembly or its officers and agencies.
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 1 (4) A political subdivision.
2 (5) A municipal authority or other local authority.
3 (6) A local, regional or metropolitan transportation
4 authority.
5 (7) A board, commission or other agency or
6 instrumentality of a political subdivision, a municipal
7 authority or other local authority.
8 "Independent agency." A board, commission or other agency or
9 officer of the Commonwealth which is not subject to the policy,
10 supervision and control of the Governor. The term does not
11 include a State-affiliated entity, a court or other officer or
12 agency of the Unified Judicial System, the General Assembly and
13 its officers and agencies, a State-related institution, a
14 political subdivision or a local, regional or metropolitan
15 transportation authority.
16 "Municipal authority." A public authority created under the
17 governing laws of any state.
18 "Obligee of the authority." Any of the following:
19 (1) A holder or owner of bonds of the authority.
20 (2) A trustee or other fiduciary for any holder or owner
21 of bonds of the authority.
22 (3) A provider of a letter of credit, policy of
23 municipal bond insurance or other credit enhancement or
24 liquidity facility for bonds of the authority.
25 (4) A lessor or installment seller demising property to
26 the authority in connection with a project.
27 (5) A provider of an interest rate exchange agreement or
28 other agreement or arrangement authorized under section
29 1713(a)(28).
30 "Project." A capital improvement, purchase of receivables,
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 1 property, assets, commodities, bonds or other revenue streams or
2 related assets, working capital program or any activity that
3 promotes economic development or opportunities within any state
4 or territory of the United States.
5 "Project user." A person, political subdivision, municipal
6 authority, state or other entity that owns, leases, uses or
7 occupies all or any part of a project.
8 "Registered municipal advisor." A person that is registered
9 as a municipal advisor under rules promulgated by the Securities
10 and Exchange Commission.
11 "Tax-exempt bonds." Bonds or other evidence of indebtedness,
12 the interest on which is excludable from gross income for
13 Federal income taxation purposes.
14 "Taxable bonds." Bonds or other evidence of indebtedness,
15 the interest on which is includable in gross income for Federal
16 income taxation purposes.
17 SUBCHAPTER B
18 STRUCTURE AND POWERS
19 Sec.
20 1711. Authority.
21 1712. Board.
22 1713. Powers.
23 § 1711. Authority.
24 (a) Establishment.--The Keystone National Finance Authority
25 is established as an independent authority. The authority is an
26 instrumentality of the Commonwealth and a body corporate and
27 politic, with corporate succession.
28 (b) Governance.--The authority shall be governed by the
29 board. The powers of the authority shall be exercised by the
30 board.
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 1 (c) Expenses.--Expenses of the authority shall be paid from
2 assets or income of the authority. The Commonwealth shall not be
3 responsible for funding the expenses of the authority.
4 (d) Fiscal year.--The fiscal year of the authority shall end
5 on June 30.
6 (e) Audit.--
7 (1) The accounts and books of the authority shall be
8 examined and audited annually by an independent certified <--
9 public accounting firm. ACCOUNTANT IN ACCORDANCE WITH <--
10 GENERALLY ACCEPTED AUDITING STANDARDS.
11 (2) The authority shall, by December 31 of each year,
12 file a copy of the audit required under paragraph (1) with
13 the Secretary of the Senate and the Chief Clerk of the House
14 of Representatives.
15 (f) Publication.--The authority shall annually transmit a <--
16 financial statement AUDITED FINANCIAL STATEMENTS to the <--
17 Legislative Reference Bureau for publication in the next
18 available issue of the Pennsylvania Bulletin.
19 (g) Cooperation.--Executive agencies shall cooperate with
20 and provide assistance to the authority without financial
21 reimbursement.
22 (h) Existence and dissolution.--The authority may be
23 dissolved by law if all outstanding liabilities of the
24 authority, including bonds and other contractual obligations,
25 have been fully paid, retired, satisfied or discharged or
26 provision has been made for payment of all outstanding
27 liabilities of the authority, including bonds and other
28 contractual obligations. Upon the dissolution of the authority,
29 all money, assets and other property of the authority shall vest
30 in the Commonwealth.
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 1 (i) Procurement.--The authority shall be exempt from the
2 provisions of 62 Pa.C.S. (relating to procurement) relating to
3 operations of Commonwealth agencies. The authority shall adopt
4 policies and procedures for procurement in a manner that the
5 board determines best balances efficiency, effectiveness and
6 transparency, which may include delegation of certain tasks to
7 the Department of Community and Economic Development or the
8 Department of General Services and which may incorporate by
9 reference elements of 62 Pa.C.S. The board shall publish the
10 policies and procedures within 180 days of the effective date of
11 this subsection, subject to further adjustment by the board, on
12 the authority's publicly accessible Internet website.
13 (j) Limitation on action.--
14 (1) If any provision of this section or section 1712
15 (relating to board) is held invalid by a court of competent
16 jurisdiction, the authority shall not thereafter:
17 (i) borrow additional money;
18 (ii) issue additional bonds; or
19 (iii) disburse proceeds of any issue of bonds
20 previously authorized.
21 (2) All provisions of outstanding bonds of the authority
22 and all rights and remedies of obligees of the authority
23 under this chapter shall be and shall remain valid and
24 enforceable.
25 (k) Administrator.--The administrator shall operate the
26 authority. The cost of the administrator shall be payable from
27 fees generated by the authority. Neither the Commonwealth nor
28 the authority shall be responsible for the cost of the
29 administrator. The following apply:
30 (1) The administrator shall provide administrative
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 1 services and staff to the authority and the board.
2 (2) The authority may enter into agreements with the
3 administrator specifying the rights and obligations the
4 parties have to each other in carrying out their respective
5 responsibilities under and to further the intent of this
6 chapter.
7 (l) Applicability.--The following acts shall apply to the
8 authority and the board relating to notice and open meetings:
9 (1) The act of July 19, 1957 (P.L.1017, No.451), known
10 as the State Adverse Interest Act.
11 (2) The act of February 14, 2008 (P.L.6, No.3), known as
12 the Right-to-Know Law.
13 (3) The provisions of 65 Pa.C.S. Chs. 7 (relating to
14 open meetings) and 11 (relating to ethics standards and
15 financial disclosure).
16 § 1712. Board.
17 (a) Composition.--The board shall be comprised as follows:
18 (1) An individual with large-scale construction
19 experience appointed by the Governor, who shall serve at the
20 pleasure of the Governor.
21 (2) An individual with public finance or project finance
22 experience appointed by the Governor, who shall serve at the
23 pleasure of the Governor.
24 (3) An individual appointed by the State Treasurer, who
25 shall serve at the pleasure of the State Treasurer.
26 (4) An individual appointed by the Auditor General, who
27 shall serve at the pleasure of the Auditor General.
28 (5) Four legislative appointees:
29 (i) Appointments under this paragraph shall be as
30 follows:
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 1 (A) One individual appointed by the President
2 pro tempore of the Senate.
3 (B) One individual appointed by the Speaker of
4 the House of Representatives.
5 (C) One individual appointed by the Minority
6 Leader of the Senate.
7 (D) One individual appointed by the Minority
8 Leader of the House of Representatives.
9 (ii) Legislative appointees shall serve at the
10 pleasure of the appointing authority.
11 (iii) An individual appointed to the board under
12 subparagraph (i) may not be a member of the Ge