Section 3603 - Investments of funds, except sinking fundAny administrative department, board, commission, or officer of the State Government, authorized by law to make investments of funds in the custody or under the control of such department, board, commission, or officer, excepting only the moneys in the State Sinking Fund, may lawfully invest such funds in any of the following securities:
(1) United States. Obligations of the United States or the United States treasury or those for the payment of which the faith and credit of the United States is pledged, including obligations of the District of Columbia;(2) Pennsylvania. Obligations of the Commonwealth of Pennsylvania or those for the payment of which the faith and credit of the Commonwealth is pledged;(3) State and local government. Obligations of any commonwealth or state of the United States or any county, city, borough, town, township, school district, institution district, or other political subdivision having the power to levy taxes of any such commonwealth or state: Provided, That the faith and credit of such commonwealth, state or political subdivision thereof is pledged for the payment of said obligations: And provided further, That at the date of the investment in such obligations, such commonwealth, state or political subdivision is not in default in the payment of any part of the principal or interest owing by it upon any part of its funded indebtedness;(4) National housing administration. Obligations issued pursuant to any housing act of the United States heretofore or hereafter enacted, but only if fully and unconditionally guaranteed as to principal and interest by the United States;(5) General State Authority and other State Authorities. Obligations issued by the General State Authority and other authorities created by the General Assembly of the Commonwealth of Pennsylvania for the payment of which the faith and credit of the authority is pledged;(6) Housing Authorities. Obligations of any Pennsylvania housing authority issued pursuant to the laws of the Commonwealth relating to the creation or operation of housing authorities;(7) Redevelopment Authorities. Obligations of any redevelopment authority issued pursuant to the laws of the Commonwealth relating to the creation or operation of redevelopment authorities;(8) Municipality Authorities.(i) Obligations of any Pennsylvania municipality authority other than obligations issued for school purposes, as hereinafter provided, issued pursuant to the laws of the Commonwealth relating to the creation or operation of municipality authorities, if the obligations are not in default in the payment of the principal or interest owing by it upon any part of its funded debt, and if, for the period of five fiscal years next preceding the date of acquisition, the income of such authority available for fixed charges has averaged not less than one and one-fifth times its average annual fixed charges of such obligations over the life of such obligations. As used in this clause, the term "income available for fixed charges" shall mean income after deducting operating and maintenance expenses, and, unless the obligations are payable in serial annual maturities or are supported by annual sinking fund payments, depreciation, but excluding extraordinary non-recurring items of income or expenses, and the term "fixed charges" shall include principal, both maturity and sinking fund, and interest on bonded debt. In computing such income available for fixed charges for the purposes of this section, the income so available of any corporation acquired by any municipality authority may be included, such income to be calculated as though such corporation had been operated by a municipality authority and an equivalent amount of bonded debt were outstanding. The eligibility for investment purposes of obligations of each project of a municipality authority shall be separately considered hereunder; and(ii) Obligations of any Pennsylvania municipality authority issued pursuant to the laws of the Commonwealth relating to the creation or operation of municipality authorities for the purposes of acquiring, holding, constructing, improving or operating public school buildings and other school projects acquired, constructed or improved for public school purposes, if the obligations are not in default, and if the said school buildings or school project has been leased to a school district or school districts under an agreement of lease by the terms of which the lessee school district or districts is or are obligated to pay to the authority regular annual net rentals available for fixed charges in an amount that will average not less than one and one-fifth times the authority's average annual fixed charges of such obligations over the life of such obligation. The term "fixed charges" shall include principal and interest on bonded debt;(9) Delaware River Joint Commission. Obligations of the Delaware River Joint Commission issued pursuant to the act, approved the twelfth day of June, one thousand nine hundred thirty-one (Pamphlet Laws 575), and its amendments and supplements heretofore or hereafter enacted; (10) Delaware River Joint Toll Bridge Commission. Obligations of the Delaware River Joint Toll Bridge Commission issued pursuant to the act, approved the twenty-fifth day of June, one thousand nine hundred thirty-one (Pamphlet Laws 1352), and its amendments and supplements heretofore or hereafter enacted; (11) Delaware Tunnel Board. Obligations issued by or with the approval of the Delaware Tunnel Board pursuant to the act, approved the eighth day of July, one thousand nine hundred forty-seven (Pamphlet Laws 1452), and its amendments and supplements heretofore or hereafter enacted; (12) Pennsylvania Turnpike Commission. All revenue bonds, notes or other obligations of the Commonwealth payable solely from revenues or other funds of the Pennsylvania Turnpike Commission and issued by the Pennsylvania Turnpike Commission pursuant to the laws of the Commonwealth;(13) Corporate Bonds. Any fixed interest-bearing obligation, including bonds, notes, debentures and equipment obligations, including equipment trust certificates, conditional sale agreements or assignments of conditional sale agreements and participations therein issued, guaranteed or assumed by a corporation organized under the laws of the United States or any commonwealth or state thereof, or the District of Columbia, shall be an authorized investment, if-- (i) Purchased in the exercise of that degree of judgment and care under the circumstances then prevailing which men of prudence, discretion and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income to be derived therefrom as well as the probable safety of their capital;(ii) Either the issuing corporation or a guaranteeing or assuming corporation has earned a net profit in eight of the preceding ten fiscal years, as reflected in its statements; and(iii) Either the issuing corporation or an assuming corporation has not defaulted in the payment of principal or interest on any of its outstanding funded indebtedness during the preceding ten fiscal years. When a corporation has acquired a substantial part of its property within ten years immediately preceding such investment by consolidation or merger or by the purchase of a substantial part of the property of any other corporation or corporations, the earnings of the predecessor or constituent corporations shall be consolidated so as to ascertain whether the requirements of this section have been satisfied.
"Corporation", as used in this cause, shall include a voluntary association, a joint-stock association or company, a business trust, a Massachusetts trust, a common-law trust, and any other organization organized and existing for any lawful purpose and which, like a corporation, continues to exist notwithstanding changes in the personnel of its members or participants, and conducts its affairs through a committee, a board, or some other group acting in a representative capacity; and
(14) Other First Mortgages and Bonds or Other Obligations. Mortgages on or bonds of individuals secured by mortgages on Pennsylvania real estate and also mortgages or bonds of individuals or corporations secured by insurance of the Veterans Administration under the provisions of the Servicemen's Readjustment Act of one thousand nine hundred forty-four, as amended, and the Federal Housing Administration under the provisions of the Housing Administration Act, approved the twenty-seventh day of June, one thousand nine hundred thirty-four, as amended, and also bonds or other obligations in connection with which the obligor gives one or more mortgages on Pennsylvania real estate to indemnify the Farmers Home Administration, United States Department of Agriculture, the insurer of the obligations pursuant to the Bankhead-Jones Farm Tenant Act of July twenty-second, one thousand nine hundred thirty-seven (50 Stat. 522), and its amendments and supplements heretofore or hereafter enacted, or pursuant to the act of August twenty-eighth, one thousand nine hundred thirty-seven (50 Stat. 869), and its amendments and supplements heretofore or hereafter enacted. (15) Bonds, notes or other obligations issued, assumed or guaranteed by the International Bank for Reconstruction and Development, which contain an unconditional promise to pay by the International Bank for Reconstruction and Development or an unconditional guarantee by the International Bank for Reconstruction and Development of the payment of the interest thereon regularly, and the principal thereof on or before a specified date, in lawful currency of the United States. Not more than two per cent of the funds in the custody or under the control of the department, board, commission, or officer, shall be invested in such bonds, notes or obligations. The principal office of the obligor shall be located within the United States at the time the investment is made.(16) Any fixed interest bearing obligation, including bonds, notes and debentures, secured by mortgages or deeds of trust on improved real estate, which shall constitute a first lien on such real estate in fee simple, located within the United States, its territories or possessions, and further secured by the perfected assignment of all rentals and other moneys due under leases to, or guaranteed by, corporations that satisfy the requirements for corporations established by clause 13 hereof, or to the United States: Provided further, That such corporations or the United States have accepted occupancy under the terms of such leases and the rentals and other moneys payable thereunder by such corporations or by the United States are equal to or exceed the sums payable under such fixed interest bearing obligation and are adequate to service the obligation and to pay the principal obligation in full by its maturity.(17) Bonds, notes or other obligations issued, assumed or guaranteed by the Inter-American Development Bank which contain an unconditional promise to pay by the Inter-American Development Bank or an unconditional guarantee by the Inter-American Development Bank of the payment of the interest thereon regularly and the principal thereof on or before a specified date in lawful currency of the United States. Not more than two percent of the funds in the custody or under the control of the department, board, commission, or officer shall be invested in such bonds, notes or obligations. The principal office of the obligor shall be located within the United States at the time the investment is made.(18) Short term discount notes of the Federal National Mortgage Association.1929, April 25, P.L. 723, § 1. Amended 1939, June 9, P.L. 274, No. 149, § 1; 1953, Aug. 26, P.L. 1459, § 1; 1955, Dec. 22, P.L. 892, § 1; 1956, Feb. 28, P.L. (1955) 1180, § 1; 1959, Aug. 28, P.L. 766, § 1; 1959, Sept. 17, P.L. 917, § 1; 1961, June 14, P.L. 347, § 1; 1967, Nov. 30, P.L. 642, No. 297, § 1.