§ 2112 — Borrowing and issuance of bonds

(a) Authority.--

(1) A land bank may issue a bond for any of its corporate purposes.

(2) The principal and interest of a bond shall be payable from the land bank's general revenue.

(3) The bond may be secured by any of the following:

(i) A pledge of revenue. This subparagraph includes a grant or contribution from:

(A) The Federal Government or a Federal agency or instrumentality.

(B) The Commonwealth, a Commonwealth agency or an instrumentality of the Commonwealth.

(ii) A mortgage of property of the land bank.

(b) Nature.--The bond must meet the requirements of 13 Pa.C.S. § 3104 (relating to negotiable instrument).

(c) Tax exempt.--A bond and the income from the bond is exempt from taxation by:

(1) the Commonwealth; or

(2) a political subdivision.

(d) Procedure.--

(1) A bond must be authorized by resolution of the board and shall be a limited obligation of the land bank.

(2) The principal and interest, costs of issuance and other costs incidental to the bond shall be payable solely from the income and revenue derived from the sale, lease or other disposition of the assets of the land bank. The land bank may secure the bond by a mortgage or other security device covering all or part of the project from which the pledged revenues may be derived.

(3) A refunding bond issued under this section:

(i) shall be payable from:

(A) a source described in this chapter; or

(B) the investment of the proceeds of the refunding bonds; and

(ii) shall not constitute an indebtedness or pledge of the general credit of a political subdivision within the meaning of a constitutional or statutory limitation of indebtedness and shall contain a recital to that effect.

(4) A bond must comply with the authorizing resolution as to:

(i) form;

(ii) denomination;

(iii) interest rate;

(iv) maturity; and

(v) execution.

(5) A bond may be subject to redemption at the option of and in the manner determined by the board in the authorizing resolution.

(e) Powers of municipalities.--A municipality may elect to guarantee, insure or otherwise become primarily or secondarily obligated on the indebtedness of a land bank, subject, however, to all other provisions of law of this Commonwealth applicable to municipal indebtedness.

(f) Sale.--

(1) A bond shall be issued, sold and delivered in accordance with the terms and provisions of the authorizing resolution. The board, to effectuate its best interest, may determine the manner of sale, public or private, and the price of the bond.

(2) The resolution issuing a bond must be published in a newspaper of general circulation within the jurisdiction in which the land bank is located.

(g) Liability.--

(1) Neither the members of a land bank nor a person executing the bond shall be liable personally on the bonds by reason of the issuance of the bond.

(2) The bond or other obligation of a land bank related to a bond shall not be a debt of a municipality or of the Commonwealth. A statement to this effect shall appear on the face of the bond or obligation.

(3) On the bond or other obligation of a land bank related to a bond, all of the following apply:

(i) The Commonwealth has no liability. This subparagraph applies to the revenue and property of the Commonwealth.

(ii) A municipality has no liability. This subparagraph applies to the revenue and property of a municipality.