§ 4905. Investment of township funds.

821 words·~4 min read·/pa/title-73/chapter-49/4905

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)General rule.-- The board of commissioners shall have power to provide for the investment of money in the general township fund or in special funds.

(b)Sinking funds.-- The board of commissioners shall have power to invest township sinking funds as authorized under 53 Pa.C.S. Pt. VII Subpt. B (relating to indebtedness and borrowing).

(c)Investment standard.-- The board of commissioners shall invest township funds consistent with sound business practices.

(d)Restrictions.-- The board of commissioners shall provide for an investment program subject to restrictions contained in this chapter and in any other applicable statute and any rules and regulations adopted by the board of commissioners.

(e)Authorized investments.-- In addition to investments authorized under the act of July 25, 1973 (P.L.217, No.53), entitled "An act authorizing cities of the first class and second class to invest all funds received and deposited with the city treasurer in certain commercial paper under certain terms and conditions; and providing for investment of public corporation or municipal authority funds," a township may invest in:

(1)United States Treasury bills.

(2)Short-term obligations of the United States Government or its agencies or instrumentalities.

(3)Deposits in savings accounts or time deposits, other than certificates of deposit, or share accounts of institutions insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund to the extent that the accounts are insured, and, for any amounts above the insured maximum, provided that approved collateral as provided by law shall be pledged by the depository. Those deposits are differentiated from savings or demand deposits as authorized by the act of July 25, 1973 (P.L.217, No.53).

(4)Obligations of any of the following:

(i)the United States of America or any of its agencies or instrumentalities backed by the full faith and credit of the United States of America;

(ii)the Commonwealth of Pennsylvania or any of its agencies or instrumentalities backed by the full faith and credit of the Commonwealth; or

(iii)a political subdivision of the Commonwealth of Pennsylvania or any of its agencies or instrumentalities backed by the full faith and credit of the political subdivision.

(5)Shares of an investment company registered under the Investment Company Act of 1940 (54 Stat. 789, 15 U.S.C. § 80a-1 et seq.), whose shares are registered under the Securities Act of 1933 (48 Stat. 74, 15 U.S.C. § 77a et seq.), provided that the only investments of that company are in the authorized investments for township funds listed in paragraphs (1), (2),

(3)and (4), and both of the following conditions are met:

(i)The investment company is managed in accordance with 17 CFR 270.2a-7 (relating to money market funds).

(ii)The investment company is rated in the highest category by a nationally recognized rating agency.

(6)Certificates of deposit purchased from institutions insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund to the extent that the accounts are insured, and, for any amounts above the insured maximum, provided that approved collateral as provided by law shall be pledged by the depository. Certificates of deposit purchased from commercial banks shall be limited to an amount equal to 20% of a bank's total capital and surplus. Certificates of deposit purchased from savings and loan associations or savings banks shall be limited to an amount equal to 20% of an institution's assets minus liabilities.

(7)An investment authorized under 20 Pa.C.S. Ch. 73 (relating to municipalities investments) shall be an authorized investment for a pension or retirement fund.

(f)Powers of board of commissioners.-- In making investments of township funds, the board of commissioners shall have authority to:

(1)Permit assets pledged as collateral under subsection (e)(3), to be pooled in accordance with the act of August 6, 1971 (P.L.281, No.72), entitled "An act standardizing the procedures for pledges of assets to secure deposits of public funds with banking institutions pursuant to other laws; establishing a standard rule for the types, amounts and valuations of assets eligible to be used as collateral for deposits of public funds; permitting assets to be pledged against deposits on a pooled basis; and authorizing the appointment of custodians to act as pledgees of assets."

(2)Combine money from more than one fund under township control for the purchase of a single investment if:

(i)each of the funds combined for the purpose shall be accounted for separately; and

(ii)the earnings from the investment are separately and individually computed and recorded and credited to the accounts from which the investment was purchased.

(3)Join with one or more other political subdivisions and municipal authorities in accordance with 53 Pa.C.S. Ch. 23 Subch. A (relating to intergovernmental cooperation) in the purchase of a single investment, provided that the requirements of paragraph

(2)are met.

73c4905v

Cross References. Section 4905 is referred to in section 4341 of this title.

73c4906s