Turnpike Revenue Bonds

33 Pa. D. & C. 623

• Court: Pennsylvania Department of Justice
• Decided: October 5, 1938
• Docket: No. 2
• Status: Published

Opinion

Bard, Attorney General,

We have your request to be advised concerning whether turnpike revenue bonds of the Commonwealth to be issued by the Pennsylvania Turnpike Commission pursuant to the Act of May 21,1937, P. L. 774, may be used by Pennsylvania banks and trust companies in lieu of surety bonds to be filed with the State Treasurer as security for deposits of State funds.

Section 8 of the act provides in part as follows concerning the bonds to be issued by the commission:

. . and said bonds or other securities or obligations are hereby made securities which may properly and legally be deposited with and received by any State or municipal officers or agency of the Commonwealth for any purpose for which the deposit of bonds or other obligations of the Commonwealth is now or may hereafter be authorized by law .” (Italics supplied.)

By this provision the legislature has specifically placed the bonds to be issued by the Pennsylvania Turnpike Commission on a par with Commonwealth bonds insofar as they are legal security for deposits of public funds. Therefore, if the State Treasurer may accept bonds of this Commonwealth in lieu of surety bonds as security for State funds, it follows that he may also accept bonds of the Pennsylvania Turnpike Commission.

Section 7 of the Act of February 17, 1906, P. L. 45, permitted a deposit of “United States, municipal, or county bonds,” properly approved, with the State Treasurer in lieu of surety bonds as security for a deposit of State moneys. Substantially the same provision was adopted in section 505 (a) 2 of The Fiscal Code of April 9,1929, P. L. 343, as amended by the Act of May 22,1935, P. L. 230. Neither statute expressly referred to bonds of the Commonwealth.

However, since the amendatory Act of June 7, 1935, P. L. 283, section 505 (a) 2 of The Fiscal Code reads in part as follows:

“. . . in lieu of the surety bonds of surety companies or of individuals as aforesaid, the deposit of State moneys may be secured by the deposit with the State Treasurer of bonds of the United States, bonds of the Delaware River Joint Commission, bonds of this Commonwealth, or any municipal subdivision or county thereof, to be approved by the board [Board of Finance and Revenue], in an amount measured by their actual market value equal to the amount of deposit so secured and twenty per centum in addition thereto.” (Italics supplied.)

Since this section is the latest legislative expression on this subject, and is thus determinative of the question here being decided, we are of the opinion that the State Treasurer now has the statutory authority to accept bonds of the Commonwealth as security for State deposits.

Banks and trust companies are given the power to make deposits by section 1004 of the Banking Code of May 15,1933, P. L. 624, as amended by the Act of June 21, 1935, P. L. 369.

Since banks and trust companies have the power to deposit bonds of the Commonwealth with the State Treasurer as security for State deposits, and since the State Treasurer is empowered to accept such bonds as security in lieu of surety bonds, we are of the opinion that the State Treasurer has authority to accept bonds to be issued by the Pennsylvania Turnpike Commission as security for State deposits in banks and trust companies throughout the Commonwealth in lieu of surety bonds.