
    State Authority Bonds
    
      November 22, 1937.—
   Margiotti, Attorney General,

We have your request to be advised whether bonds which the General State Authority expects to issue to secure loans made to it for the financing of the construction of its various projects, pursuant to the provisions of the Act of June 28,1935, P. L. 452, as amended, are proper securities for the investment of trust funds by fiduciaries.

The Constitution of Pennsylvania makes general provision with regard to investments for trust funds. Article III, sec. 22, thereof, as amended on November 7, 1933, P. L. 1558, provides:

“The General Assembly may, from time to time, bylaw, prescribe the nature and kind of investments for trust funds to be made by executors, administrators, trustees, guardians and other fiduciaries.”

In exercise of the authority granted by this section of the Constitution, the General Assembly has specifically prescribed bonds of the General State Authority to be proper investments for trust funds.

The Act of May 28,1937, P. L. 1037, amends the Fiduciaries Act of June 7, 1917, P. L. 447, adding to the list of investments in which fiduciaries might legally invest trust funds:

“Subsection (18). Obligations of the General State Authority and Housing Authorities. — Bonds of General State Authority, issued pursuant to the provisions of the act, approved the twenty-eighth day of June, one thousand nine hundred and thirty-five (Pamphlet Laws, four hundred fifty-two), its amendments and supplements, and bonds of any housing authority, issued pursuant to the provisions of the laws of this Commonwealth relating to the creation or operation of such housing authorities.”

In addition to the foregoing, the General Assembly by the Act of July 1, 1937, P. L. 2687, specifically provided that the investment of trust and other funds in bonds of the General State Authority should be deemed legal investments. The material portion of this act is as follows:

“That any fiduciary, insurance company, State bank, trust company, bank and trust company, and any departmental administrative board and commission or other agency of the Commonwealth, shall have power to invest funds and moneys in his or its possession and control in bonds issued by the General State Authority in which the full faith and credit of the Authority is pledged, and such bonds shall be deemed legal investments for all such purposes.”

We are, therefore, of the opinion and, accordingly, advise you that bonds which the General State Authority expects to issue to secure loans made to it for the financing of the construction of its various projects, pursuant to the provisions of the Act of June 28, 1935, supra, as amended, are proper securities for the investment of trust funds by fiduciaries.  