PENNSYLVANIA INDUSTRIAL DEVELOPMENT AUTHORITY ACT Act of May. 17, (1956) 1955, P.L. 1609, No. 537 Cl. 64 AN ACT To promote the welfare of the people

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1 PENNSYLVANIA INDUSTRIAL DEVELOPMENT AUTHORITY ACT Act of May. 17, (1956) 1955, P.L. 1609, No. 537 Cl. 64 AN ACT To promote the welfare of the people of the Commonwealth by the reduction of unemployment in certain areas of the Commonwealth determined to be critical economic areas; providing for the establishment of industrial development projects in such areas; creating The Pennsylvania Industrial Development Authority as a body corporate and politic with power to allocate funds for and make secured loans to industrial development agencies for the payment of a part of the cost of industrial development projects in critical economic areas; authorizing the Authority to enter into agreements with the Government of the United States or any Federal agency or industrial development agency; empowering the Authority to take title to, sell, convey and lease industrial development projects where necessary to protect loans made by the Pennsylvania Industrial Development Authority on industrial development projects; providing that no debt of the Commonwealth, its municipalities or political subdivisions shall be incurred in the exercise of any powers granted by this act; and providing for the examination of the accounts and affairs of the Authority; and making an appropriation. TABLE OF CONTENTS Section 1. Short title. Section 2. Findings and Declaration of Policy. Section 2.1. Further Findings and Declaration of Policy. Section 3. Definitions. Section 4. The Pennsylvania Industrial Development Authority. Section 5. Powers of the Authority; General. Section 5.1. Powers of the Authority; Bonds. Section 5.2. Powers of the Authority; Certification of Industrial Development Agencies. Section 6. Powers of the Authority; Loans to Industrial Development Agencies (Repealed). Section 7. Loan Application Requirements (Repealed). Section 7.1. Employment Projection Audits (Repealed). Section 8. Appropriation; Industrial Development Fund. Section 9. Governing Body. Section 10. Moneys of the Authority. Section Exemption from Taxation. Section 11. No heading. Section 12. Limitation of Powers. Section 13. Examination and Audit of Authority Affairs. Section Annual Report. Section Regulations. Section 14. Constitutional Construction. Section 15. Effective Date. The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows: Section 1. Short Title.--This act shall be known and may be cited as the "Pennsylvania Industrial Development Authority Act." Section 2. Findings and Declaration of Policy.--It is hereby determined and declared as a matter of legislative finding--

2 (a) That there currently exists in certain areas of the Commonwealth a critical condition of unemployment and that such condition may well exist, from time to time, in other areas of the Commonwealth; (b) That in some areas of the Commonwealth such conditions are chronic and of long standing and that, without remedial measures, they may become so in other areas of the Commonwealth; (c) That economic insecurity due to unemployment is a serious menace to the health, safety, morals and general welfare of not only the people of the affected areas but of the people of the entire Commonwealth; (d) That involuntary unemployment and its resulting burden of indigency falls with crushing force upon the unemployed worker and ultimately upon the Commonwealth in the form of public assistance and unemployment compensation; (e) That the absence of employment and business opportunities for the youth of such areas is a threat to the strength and permanence of their faith in our American political and economic institutions and the philosophy of freedom on which those institutions are based; (f) That unemployment and the absence of new economic opportunities in such areas has caused thousands of workers and their families to migrate elsewhere to find work and establish homes, and that this exodus has tended to reduce the tax base of counties, cities, boroughs and other local governmental jurisdictions, and impair their financial ability to support education and other local governmental services; (g) That security against unemployment and the resulting spread of indigency and economic stagnation in the areas affected can best be provided by the promotion, attraction, stimulation, rehabilitation and revitalization of commerce, industry and manufacturing in such areas; (h) That the present and prospective health, safety, morals, right to gainful employment and general welfare of the people of the Commonwealth requires as a public purpose the promotion and development within areas of critical unemployment of new and expanded industrial and manufacturing enterprises; (i) That the device under which private community industrial development organizations in Pennsylvania acquire or build industrial buildings with funds raised through popular subscription, mortgage borrowing or otherwise, for lease and sale to expanding industries has proven effective in creating new employment and business opportunities locally, is in accord with the American tradition of community initiative and enterprise, and requires and deserves encouragement and support from the Commonwealth, as a means toward alleviation of unemployment and chronic economic distress; (j) That community industrial development corporations in Pennsylvania have themselves invested substantial funds in successful industrial development projects and experience difficulty in undertaking additional such projects by reason of the partial inadequacy of their own funds or funds potentially available from local subscription sources and by reason of limitations of local financial institutions in providing additional and sufficiently sizeable first mortgage loans; (k) That there is a need to stimulate a larger flow of private investment funds from banks, investment houses, insurance companies and other financial institutions into such community industrial building programs in areas of chronic economic distress;

3 (l) That by increasing the number of community industrial building projects presenting attractive opportunities for private investment in such areas, a larger portion of the private capital available in Pennsylvania for investment can be put to use in the general economic development of the Commonwealth. Therefore, it is hereby declared to be the policy of the Commonwealth of Pennsylvania to promote the health, safety, morals, right to gainful employment, business opportunities and general welfare of the inhabitants thereof by the creation of a body corporate and politic to be known as "The Pennsylvania Industrial Development Authority" which shall exist and operate for the public purpose of alleviating unemployment with its resulting spread of indigency and economic stagnation by the promotion and development of industrial and manufacturing enterprises and research and development facilities in those areas of the Commonwealth in which conditions of critical unemployment currently or may from time to time exist. Such purposes are hereby declared to be public purposes for which public money may be spent. (Par. amended July 10, 1963, P.L.221, No.125) Section 2.1. Further Findings and Declaration of Policy.--It is hereby further determined and declared as a matter of legislative finding: (a) That as a result of the activity of the Pennsylvania Industrial Development Authority in making available financial assistance to local industrial development agencies and as a result of the recent high level of the national economy, unemployment has been greatly reduced in the Commonwealth, the rate of migration from the Commonwealth has been slowed and the general welfare of the people of the Commonwealth has been improved. (b) That the problem of unemployment and its resulting indigency has not been eliminated because the high level of the economy has not equally benefited all areas of the Commonwealth so that critical conditions of unemployment continue to exist, and because the improvements achieved in the remaining areas of the Commonwealth may be only temporary, due to the cyclical nature of the economy. (c) That for the Commonwealth to continue to be successful in its efforts to alleviate unemployment, it is recognized that a goal of an unemployment rate of 6% of the labor force is no longer acceptable or meaningful; that a period of three years upon which to average the rate of unemployment is not sufficiently long to reflect the cyclical changes in the economy; and that the statutory requirements for financial assistance by the Commonwealth must be enlarged so as to permit industrial development agencies to continue to be eligible for such assistance until an unemployment rate of 4% is achieved for any five years of the preceding ten years. ((c) amended Oct. 5, 1967, P.L.323, No.142) (d) That if the Commonwealth is to keep pace with the national economy, to eliminate unemployment to a rate of 4% of the labor force, and to maintain said rate, to prevent further migration from the Commonwealth, and to maintain the rate of growth of the employment opportunities in the Commonwealth, it is deemed essential that the Pennsylvania Industrial Development Authority be authorized to make loans to industrial development agencies in an amount not in excess of 40% of a project cost in areas of the Commonwealth having an average rate of unemployment of 6% or higher for any five years of the preceding ten years and to make loans not in excess of 30% of a project

4 cost in areas having an average rate of unemployment of between 4% and 6% for any five years of the preceding ten years. Therefore, it is hereby declared to be the policy of the Commonwealth of Pennsylvania for the promotion of the health, safety, morals, right to gainful employment, business opportunities and general welfare of the inhabitants thereof and to more fully achieve the public purposes set forth in section 2 of this act, that the Pennsylvania Industrial Development Authority shall continue to exist and operate for the public purpose of alleviating unemployment throughout the Commonwealth to an average rate over a ten year period of not in excess of 4% of the labor force. Such purpose is hereby declared to be a public purpose for which public money may be spent. ((d) amended Oct. 5, 1967, P.L.323, No.142) (2.1 added May 5, 1965, P.L.42, No.37) Section 3. Definitions.--The following terms, whenever used or referred to in this act, shall have the following meanings, except in those instances where the context clearly indicates otherwise: (a) The term "Authority" shall mean the public body corporate and politic created by this act. (b) The term "board" shall mean the governing body of the Authority. (c) The term "county" shall mean any county of this Commonwealth. ((c) amended May 5, 1965, P.L.42, No.37) (d) ((d) repealed Oct. 22, 2014, P.L.2569, No.161) (e) The term "Federal agency" shall mean and include the United States of America, The President of the United States of America, and any department of, or corporation, agency or instrumentality heretofore or hereafter created, designated or established by the United States of America. (f) The term "government" shall mean the State and Federal governments, or any political subdivision, agency or instrumentality, corporate or otherwise, or either of them. (g) The term "industrial development agency" shall mean a nonprofit corporation or a foundation or association organized and existing under the laws of this Commonwealth, regardless of the particular name, to whose members or shareholders no profit shall enure and which shall have as a purpose the promotion, encouragement, construction, development and expansion of new or existing industrial development projects in a critical economic area. ((g) amended July 10, 1963, P.L.221, No.125) (h) The term "Industrial Development Fund" shall mean the account created by section eight of this act. ((h) amended May 15, 1980, P.L.131, No.49) (i) The term "industrial development project" shall mean any land, site, structure, facility or undertaking comprising or being connected with or being a part of (i) an industrial enterprise, (ii) a manufacturing enterprise, (iii) a research and development enterprise, or (iv) an agricultural enterprise, established or to be established by an industrial development agency in a critical economic area. ((i) amended June 16, 1972, P.L.475, No.153) (j) The term "municipality" shall mean any city, borough, town or township of the Commonwealth of Pennsylvania, each of which political subdivisions are separate incorporated municipalities of the Commonwealth for the purposes of this act. ((j) amended Dec. 19, 1975, P.L.591, No.166) (k) The term "responsible buyer" shall mean any person, partnership, or corporation deemed by the Authority, after

5 investigation, to be financially responsible to assume all obligations prescribed by the Authority in the acquisition and operation of an industrial development project. ((k) amended July 10, 1963, P.L.221, No.125) (l) The term "responsible tenant" shall mean any person, partnership, or corporation deemed by the Authority, after investigation, to be financially responsible to assume all rental and all other obligations prescribed by the Authority in the leasing and operation of an industrial development project. ((l) amended July 10, 1963, P.L.221, No.125) (m) The words "cost of establishing an industrial development project" shall embrace any or all of the following: The cost of construction, the cost of all lands, property, rights, easements and franchises acquired, which are deemed necessary for such construction, financing charges, interest prior to and during construction, cost of engineering and legal expense, plans, specifications, surveys, estimates of costs and other expenses necessary or incident to determining the feasibility or practicability of any industrial development project together with such other expenses as may be necessary or incident to the financing and the construction of the industrial development project and the placing of the same in operation; the cost of all machinery and equipment and its installation and maintenance shall not be included in the "cost of establishing an industrial development project," but shall be provided by the responsible tenant or responsible buyer. (n) The term "industrial enterprise" shall mean an enterprise other than a mercantile, commercial or retail enterprise, which by virtue of its size requires substantial capital and which by its nature and size has created or will create substantial employment opportunities. The term "industrial enterprise" may include warehouse and terminal facilities, and office buildings utilized as National or regional headquarters or computer or clerical operations centers, provided they require substantial capital and have or will create substantial employment opportunities. ((n) amended May 15, 1980, P.L.131, No.49) (o) The term "manufacturing enterprise" shall mean an enterprise which is engaged in the giving of new shapes, new qualities or new combinations to matter by the application of skill and labor thereto. ((o) added July 10, 1963, P.L.221, No.125) (p) The term "research and development enterprise" shall mean an enterprise for the discovery of new and the refinement of known substances, processes, products, theories and ideas, but shall not include activities directed primarily to the accumulation or analysis of commercial, financial or mercantile data. ((p) added July 10, 1963, P.L.221, No.125) (q) The term "mortgage" shall mean (i) a freehold mortgage on an industrial development project where the industrial development project is owned in fee by an industrial development agency and (ii) a leasehold mortgage on an industrial development project where the industrial development project is leased by an industrial development agency from the Commonwealth of Pennsylvania. ((q) added Oct. 5, 1967, P.L.323, No.142) (r) The term "agricultural enterprise" shall mean an enterprise which is engaged in business related to farming, agricultural endeavors or other related businesses and services supporting the development of agriculture; which by virtue of its size required substantial capital and which by its nature

6 and size has created or will create substantial employment opportunities. ((r) added June 16, 1972, P.L.475, No.153) (s) The term "small business" shall mean and refer to respective responsible buyers or tenants occupying and operating an industrial enterprise, a manufacturing enterprise, a research and development enterprise or an agricultural enterprise and who, or which, together with parents, subsidiaries or affiliated corporations or other related business entities employ, in the aggregate, less than fifty full time employes on an annual basis. ((s) added May 15, 1980, P.L.131, No.49) (t) The term "industrial parks" shall mean land areas acquired, including existing buildings previously erected thereon, said land areas, excluding existing buildings, if any, improved and prepared by industrial development agencies in accordance with plans and specifications as approved by the Authority as sites for the establishment thereon of two or more industrial development projects by industrial development agencies in a redevelopment area or a critical economic area. ((t) added July 13, 1988, P.L.534, No.95) (u) The term "multiple-tenancy building project" shall mean any land, site, structure, facility or undertaking acquired or constructed for occupancy by two or more industrial enterprises, manufacturing enterprises or research and development enterprises, as those terms are defined in this act, established or to be established by an industrial development agency in a critical economic area. ((u) added July 13, 1988, P.L.534, No.95) Section 4. The Pennsylvania Industrial Development Authority.--There is hereby created a body corporate and politic, constituting a public corporation and government instrumentality by the name of "The Pennsylvania Industrial Development Authority," the board of members of which shall be composed of the following: The Secretary of Commerce or his or her named designee, who will serve as Chairman, the Secretary of Labor and Industry or his or her named designee, the Secretary of Community Affairs or his or her named designee, the Secretary of Agriculture or his or her named designee and the Secretary of Banking or his or her named designee and their respective successors in office and seven additional members who shall be appointed by the Governor with the advice and consent of the Senate who shall represent the general public and the public interest and whose terms shall be for seven years and until their respective successors shall be duly appointed and qualified, the term of each appointed member to be designated by the Governor at the time of his appointment, except that any person appointed to fill a vacancy shall serve only for the unexpired term, and any appointed member of the Authority shall be eligible for re-appointment. Said members of the Authority shall be entitled to no compensation for their services as members, but shall be entitled to receive the amount of reasonable traveling, hotel and other expenses incurred in the performance of their duties in accordance with Commonwealth regulations. An appointed member of the board who fails to attend three consecutive meetings shall forfeit his or her seat unless the chairman, upon written request of the member, finds that the member should be excused from attending a meeting because of illness or the death of an immediate family member. (4 amended July 13, 1988, P.L.534, No.95) Compiler's Note: Section 1102 of Act 58 of 1996, which created the Department of Community and Economic Development and abolished the Department of Community

7 Affairs, provided that, in place of the membership of the Secretary of Community Affairs on the board of The Pennsylvania Industrial Development Authority under this section, the Governor shall make an additional appointment under this section. The Secretary of Commerce, referred to in this section, was renamed the Secretary of Community and Economic Development by Act 58 of Section 5. Powers of the Authority; General.--The Authority, as a public corporation and governmental instrumentality exercising public powers of the Commonwealth, is hereby granted and shall have and may exercise all powers necessary or appropriate to carry out and effectuate the purposes of this act, including the following powers, in addition to others herein granted: (a) To make determination and designation of critical economic areas; (b) To co-operate with industrial development agencies in their efforts to promote the expansion of industrial, manufacturing and research and development activity in critical economic areas; ((b) amended July 10, 1963, P.L.221, No.125) (c) To determine, upon proper application of industrial development agencies, whether the declared public purpose of this act has been accomplished or will be accomplished by the establishment by such industrial development agencies of an industrial development project in a critical economic area; (d) To conduct examinations and investigations and to hear testimony and take proof, under oath or affirmation, at public or private hearings, on any matter material for its information and necessary to the determination and designation of critical economic areas and the establishment of industrial development projects therein; (e) To issue subpoenas requiring the attendance of witnesses and the production of books and papers pertinent to any hearing before such Authority, or before one or more members of the Authority appointed by it to conduct such hearing; (f) To apply to any court, having territorial jurisdiction of the offense, to have punished for contempt any witness who refuses to obey a subpoena, or who refuses to be sworn or affirmed or to testify, or who is guilty of any contempt after summons to appear; (g) To authorize any member or members of such Authority to conduct hearings and to administer oaths, take affidavits and issue subpoenas; (h) To make, upon proper application of industrial development agencies, loans to such industrial development agencies of moneys held in the Industrial Development Fund or other accounts of the Authority for industrial development projects in critical economic areas and to provide for the repayment and redeposit of such allocations and loans in the manner hereinafter provided; ((h) amended July 13, 1988, P.L.534, No.95) (i) To have existence for a term of fifty years from July 1, 1980; ((i) amended May 15, 1980, P.L.131, No.49) (j) To sue and be sued, implead and be impleaded, complain and defend in all courts; (k) To adopt, use and alter at will a corporate seal; (l) To make by-laws for the management and regulation of its affairs; (m) To appoint officers, agents, employes and servants; and to prescribe their duties and to fix their compensation, within the limitations provided by law;

8 (n) To make contracts of every name and nature and to execute all instruments necessary or convenient for the carrying on of its business; (o) Without limitation of the foregoing, accept grants from, and to enter into contracts or other transactions with any Federal agency; (p) To take title by foreclosure to any industrial development project where such acquisition is necessary to protect any loan previously made therefor by the Authority and to pay all costs arising out of such foreclosure and acquisition from moneys held in the Industrial Development Fund or other accounts of the Authority and to sell, transfer and convey any such industrial development project to any responsible buyer; in the event such sale, transfer and conveyance cannot be effected with reasonable promptness, the Authority may, in order to minimize financial losses and sustain employment, lease such industrial development project to a responsible tenant or tenants; the Authority shall not lease industrial development projects except under the conditions and for the purposes cited in this section. ((p) amended July 13, 1988, P.L.534, No.95) (q) To purchase first mortgages and to make payments on first mortgages on any industrial development project where such purchase or payment is necessary to protect any loan previously made therefor by the Authority, and to sell, transfer, convey and assign any such first mortgage. Moneys so used by the Authority in the purchase of any first mortgages, or any payments thereon, shall be withdrawn from the Industrial Development Fund, and any moneys derived from the sale of any first mortgages shall be deposited by the Authority in the Industrial Development Fund. ((q) added July 18, 1961, P.L.793, No.350) (r) To borrow money and to issue notes, bonds or other evidences of the indebtedness created thereby and to secure the payment of such notes, bonds or other evidences of the indebtedness or any part thereof by pledge or assignment of all or any of the mortgages of the Authority, its revenues and receipts therefrom or its revenues generally, and to make such agreements with the lenders or with purchasers or holders of bonds or with others in connection with any such borrowings as the Authority shall deem advisable. ((r) added Sept. 27, 1973, P.L.257, No.73) Provided, however, That the Authority shall have no power at any time to pledge the credit or taxing power of the Commonwealth or any of its municipalities or political subdivisions, nor shall any of its obligations be deemed to be obligations of the Commonwealth or any of its political subdivisions. (Par. amended Sept. 27, 1973, P.L.257, No.73) Section 5.1. Powers of the Authority; Bonds.-- (a) The Authority shall have the power to issue bonds for any of its corporate purposes: Provided, however, That the principal, interest and other charges thereon are payable solely and exclusively (i) from the income and revenues from mortgages the Authority owns and holds on industrial development projects; or (ii) from its revenues generally. (b) The bonds of the Authority shall be authorized by resolution of the board, shall be of such series, bear such date or dates, mature at such time or times, not exceeding twenty (20) years from their respective date, bear interest at such rate or rates, payable at least 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

9 in medium of payment and at such place or places, 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 resolutions may provide. The bonds shall be signed by or shall bear the facsimile signature of such officers 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 coupon, shall have ceased to be such officer or officers at the time when such bonds shall actually be delivered. Said bonds may be sold at public or private sale for such price or prices as the Authority shall determine. 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. Any bond reciting in substance that it has been issued by the Authority to aid in the financing of industrial development projects to accomplish the public purposes of this act shall be conclusively deemed in proceedings involving the validity or enforceability of such bond or security therefor, to have been issued for such purpose. (c) Any resolution or resolutions authorizing any bonds may contain provisions which shall be part of the contract with the holders thereof, as to (i) pledging the full faith and credit of the Authority (but not of the Commonwealth or any 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 of the mortgages of the Authority; (ii) the terms and provisions of the bonds; (iii) limitations on the purposes to which the proceeds of the bonds then or thereafter to be issued may be applied; (iv) the setting aside of reserves or sinking funds and the regulation and disposition thereof; (v) limitations on the issuance of additional bonds; (vi) the terms and provisions of any indenture under which the same may be issued; and (vii) any other or additional agreements with the holders of the bonds. (d) The Authority may enter into any indentures or other agreements, with any bank or trust company, including any Federal agency and may assign and pledge all or any of the revenues or receipts of the Authority. Such 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 application of funds and the safeguarding of funds on hand or on deposit; and (ii) 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); and (iii) the terms and provisions of the bonds or the resolutions authorizing the issuance of the same. (e) Said bonds shall have all the qualities of negotiable instruments under the law merchant and the Uniform Commercial Code of the Commonwealth of Pennsylvania. (f) The rights and remedies herein conferred 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 indenture or other agreement under which the same may be issued. In the event that the Authority shall default in the payment of principal of or interest on any

10 of the bonds after the said principal or interest shall become due, whether at maturity or upon call for redemption and such default shall continue for a period of thirty (30) days or in the event that the Authority shall fail or refuse to comply with the provisions of this act 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 Dauphin County and proved or acknowledged in the same manner as a deed to be recorded, may appoint a trustee to represent the bondholders for the purpose herein provided. Such trustee and any trustee under any indenture or other agreement, may, and upon written request of the holders of (25%) (or such other percentage as may be specified in any indenture or other agreement aforesaid) in principal amount of the bonds then outstanding, shall be in his or its own name: (1) By mandamus or other suit, action or proceeding at law, or in equity, enforce all rights of the bondholders, including the right to require the Authority to carry out any agreement as to or pledge of the revenues or receipts of 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 act. (2) Bring suit upon the bonds. (3) By action or suit in equity require the Authority to account as if it were the trustee of an express trust for the bondholders. (4) By action or suit in equity enjoin any acts or things which may be unlawful or in violation of the rights of the bondholders. (5) By notice in writing to the Authority, 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 indenture or other agreement aforesaid) of the principal amount of the bonds then outstanding, to annul such declaration and its consequences. The Commonwealth Court shall have jurisdiction of any suit, action or proceedings, by the trustee on behalf of the bondholders. Any trustee appointed by the court or a trustee acting under an 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 exercise dominion over the mortgages of the Authority or any part thereof, the revenues or receipts from which are or may be applicable to the payment of the bonds so in default and collect and receive all revenues thereafter arising therefrom in the same manner as the Authority or the board 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 a trustee, the fees, counsel fees and expenses of such 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 derived from the mortgages of the Authority, the revenues or receipts from which are or may be applicable to the payment of the bonds so in default. A trustee shall, in addition to the foregoing, have and possess all of the powers necessary or appropriate for the exercise of any functions specifically set forth herein or in any indenture or other agreement or incident to the general representation of the bondholders in the enforcement and protection of their rights.

11 (5.1 added Sept. 27, 1973, P.L.257, No.73) Section 5.2. Powers of the Authority; Certification of Industrial Development Agencies.--(a) The Authority shall have the power to review and certify all applications for industrial development agencies. The standards for certification shall be developed by regulation. (b) Any agency that has been certified by the Authority shall be required to file an annual financial statement. After reviewing the financial statement, the Authority shall have the power to request an independent audit of the agency's records. (5.2 added July 13, 1988, P.L.534, No.95) Compiler's Note: Section 5107(b) of Act 67 of 1996 provided that the second sentence of section 5.2(a) is repealed insofar as it is inconsistent with Act 67. Section 6. Powers of the Authority; Loans to Industrial Development Agencies.--(6 repealed Oct. 22, 2014, P.L.2569, No.161) Compiler's Note: The Department of Environmental Resources, referred to in this section, was abolished by Act 18 of Its functions were transferred to the Department of Conservation and Natural Resources and the Department of Environmental Protection. Section 7. Loan Application Requirements.--(7 repealed Oct. 22, 2014, P.L.2569, No.161) Section 7.1. Employment Projection Audits.--(7.1 repealed Oct. 22, 2014, P.L.2569, No.161) Section 8. Appropriation; Industrial Development Fund.--The sum of five million dollars ($5,000,000) is hereby specifically appropriated to the Authority for the purposes set forth in this act. There is hereby created a special account in the Treasury of the Commonwealth to be known as the Industrial Development Fund to which shall be accredited the above provided appropriation and any subsequent appropriations made by the Legislature to the Authority, as well as such other deposits as in this section provided. As often as may be necessary, the Authority shall requisition from the Industrial Development Fund such amounts as may be necessary to provide adequate funds for the payment of the administration of the purpose of this act. The Authority shall also requisition, from time to time, from the Industrial Development Fund such amounts as shall be allocated and appropriated by the Authority for loans to industrial development agencies for industrial development projects. Subject to the provisions of sections 5 and 5.1 of this act and subject to the provisions of any agreements to the contrary entered into with lenders or trustees pursuant to the Authority granted in said sections 5 and 5.1, when and as the amounts so allocated and appropriated by the Authority as loans to industrial development agencies are repaid to the Authority pursuant to the terms of the mortgages and other agreements made and entered into by the Authority, the Authority shall pay such amounts into the Industrial Development Fund, it being the intent of this act that the Industrial Development Fund shall operate as a revolving fund whereby all appropriations and payments made thereto may be applied and reapplied to the purposes of this act. (Par. amended Sept. 27, 1973, P.L.257, No.73) At any time that the Authority shall determine that funds held for the credit of the Industrial Development Fund are in

12 excess of the amount needed by the Authority to carry out the purposes of this act, the Authority shall take such action as shall be required to release such excess from the Industrial Development Fund and transfer the same to the General Fund of the State Treasury. Section 9. Governing Body.--The powers of the Authority shall be exercised by a governing body consisting of the members of the Authority acting as a board. Within ninety (90) days after this act shall become effective, the board shall meet and organize. The Secretary of Commerce and his successor in office shall be the chairman and chief executive officer and the Board shall elect a secretary and treasurer from their number. At the first meeting in each year thereafter, they shall elect from their number a secretary and treasurer. A majority of the members shall constitute a quorum of the board for the purpose of organizing the Authority and conducting the business thereof, and, except in the instance of loan applications, all action may be taken by a vote of a majority of the members present, unless in any case the by-laws shall require a larger number; approval or rejection of loan applications shall be by a majority vote of the full membership of the board. The board shall have full authority to manage the properties and business of the Authority, and to prescribe, amend and repeal by-laws, 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 Department of Commerce shall provide staff services to the Authority for its administration of the act, including liaison between the Authority and industrial development agencies and related organizations, and between the Authority and other agencies of the Commonwealth whose facilities and services may be useful to the Authority in its work. The Authority is authorized to make reimbursement to any agency of the Commonwealth for such special expenses as may be incurred in the provision of any services or the use of any facilities required by the Authority. In addition, the Authority may employ an executive director, appoint, subject to the Administrative Code, its own counsel and legal staff, and, as required for special studies and surveys, retain such temporary engineering, finance and other consultants and technicians as it may require. Compiler's Note: The Department of Commerce, referred to in this section, was renamed the Department of Community and Economic Development by Act 58 of The Secretary of Commerce, referred to in this section, was renamed the Secretary of Community and Economic Development by Act 58 of Section 10. Moneys of the Authority.--Subject to the provisions of sections 5 and 5.1 of this act and subject to the provisions of any agreements to the contrary entered into with lenders or trustees pursuant to the Authority granted in said sections 5 and 5.1, all moneys of the Authority from whatever source derived shall be paid to the treasurer of the Authority. Said moneys shall be deposited in the first instance by the treasurer in one or more banks or bank and trust companies, in one or more special accounts or under savings contracts in savings associations in one or more special accounts, and each of such special accounts to the extent the same is not insured shall be continuously secured by a pledge of direct obligations of the United States of America or of the Commonwealth, having

13 an aggregate market value, exclusive of accrued interest, at all times at least equal to the balance on deposit in such account. Such securities shall either be deposited with the treasurer or be held by a trustee or agent satisfactory to the Authority. All banks, bank and trust companies and saving associations are authorized to give such security for such deposits. The moneys in said accounts shall be paid out on the warrant or other order of the treasurer of the Authority, or of such other person or persons as the Authority may authorize to execute such warrants or orders. (10 amended July 16, 1975, P.L.58, No.35) Section Exemption from Taxation.--The effectuation of the authorized purpose of the Authority shall and will be in all respects for the benefit of the people of the Commonwealth of Pennsylvania, for the increase of their commerce and prosperity, and for the improvement of their health and living conditions; and, since it will as a government instrumentality of the Commonwealth be performing essential governmental functions in effectuating such purposes, the bonds or other evidences of indebtedness issued by the Authority, their transfer and the income therefrom, (including any profits made on the sale thereof) shall at all times be free from taxation within the Commonwealth of Pennsylvania. (10.1 added Sept. 27, 1973, P.L.257, No.73) Section 11. No member of the Authority or officer or employe thereof shall either directly or indirectly be a party to or be in any manner interested in any contract or agreement with the Authority for any matter, cause or thing whatsoever by reason whereof any liability or indebtedness shall in any way be created against such Authority. If any contract or agreement shall be made in violation of the provisions of this section the same shall be null and void and no action shall be maintained thereon against such Authority. Section 12. Limitation of Powers.--The Commonwealth does hereby pledge to and agree with the United States and any other Federal agency that in the event that any Federal agency shall construct or loan or contribute any funds for the construction, extension, improvement or enlargement of any industrial development 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 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 herein granted, so long as the same shall be necessary or desirable for the carrying out of the purposes of this act. Section 13. Examination and Audit of Authority Affairs.--The accounts and books of the Authority, including its receipts, disbursements, contracts, mortgages, investments and other matters relating to its finances, operation and affairs shall be examined and audited from time to time by the Auditor General as provided in the Administrative Code. Section Annual Report.--Prior to July 1 of each year, the Authority shall provide a report on its operation for the previous calendar year to the House Business and Commerce Committee and the Senate Community and Economic Development Committee. Such report may be a separate report or part of any other report prepared by the Authority or the Department of Commerce provided that any such report include the steps taken by the Authority to comply with the recommendations set forth in the final report of the House Business and Commerce Committee

14 on the Sunset Evaluation and Review of the Pennsylvania Industrial Development Authority (September 28, 1987). (13.1 added July 13, 1988, P.L.534, No.95) Compiler's Note: The Department of Commerce, referred to in this section, was renamed the Department of Community and Economic Development by Act 58 of Compiler's Note: Section 5107(b) of Act 67 of 1996 provided that section 13.1 is repealed insofar as it is inconsistent with Act 67. Section Regulations.--By December 31, 1988, the Authority shall promulgate regulations necessary to effectuate the purposes of the act, including, if necessary and where appropriate, flexible provisions concerning changes in items subject to frequent variance, including, but not limited to, interest rates or other economic development factors. (13.2 added July 13, 1988, P.L.534, No.95) Section 14. Constitutional Construction.--The provisions of this act shall be severable, and if any of the provisions thereof shall be held unconstitutional, such decisions shall not affect the validity of any of the remaining provisions of this act. It is hereby declared as the legislative intent that this act would have been adopted had such unconstitutional provision not been included therein. Section 15. The provisions of this act shall become effective immediately upon enactment.