Pennsylvania Act 1951-237 — ALLOWING CITIES SERVING AS TRUSTEES-INVEST TRUST FUNDS

Act text

ALLOWING CITIES SERVING AS TRUSTEES-INVEST TRUST FUNDS
                 Act of Jul. 19, 1951, P.L. 1084, No. 237             Cl. 11
                                  AN ACT

     Authorizing cities to establish and maintain common trust funds
        for the investment and reinvestment of the moneys of
        charitable uses or trusts, the charge or administration of
        which has been committed to their care, or of the estates of
        minors of which they may be guardians; providing for the
        administration of funds so established; and prescribing the
        nature and kinds of investments which may be made therein.

        The General Assembly of the Commonwealth of Pennsylvania
     hereby enacts as follows:

        Section 1.  Any city of this Commonwealth, now or hereafter
     charged with the administration of any charitable use or trust
     or of the estate of any minor of which it may be guardian, may
     establish and maintain one or more common trust funds for the
     collective investment and reinvestment of the moneys of any such
     charitable use or trust or any such estate.
        Section 2.  Such city may invest the moneys of the estate of
     any minor of which it is now or may hereafter become guardian in
     any common trust fund maintained by it, provided the assets
     comprising such common trust fund consist solely of assets of
     the class authorized by law as legal investments for funds held
     by fiduciaries.
        Section 3.  If the instrument under which any real and
     personal property were or are given, granted, conveyed,
     bequeathed, devised to, or otherwise vested in, confided to, or
     warded to, the city upon charitable use or trust shall limit or
     restrict the investment of such property or the proceeds thereof
     to assets of the class authorized by law as legal investments,
     the city may invest and reinvest moneys of the use or trust in
     any such common trust fund maintained by the city, provided the
     assets composing such fund consist solely of assets of the class
     authorized as legal investments for funds held by fiduciaries.
        Section 4.  If the instrument under which any real and
     personal property were or are given, granted, conveyed,
     bequeathed, devised to, or otherwise vested in, confided to, or
     awarded to, the city upon charitable use or trust shall
     authorize or permit the investment of such property or the
     proceeds thereof in assets of the class other than authorized by
     law as legal investments, the city may invest and reinvest
     moneys of the use or trust in any such common trust fund
     maintained by the city composed of such investments as in the
     honest exercise of the judgment of the officers of the city
     charged with the administration of the charitable uses or trusts
     may, after investigation, be determined to be safe and proper
     investments; otherwise, such assets shall be invested and
     reinvested in a common trust fund consisting solely of assets of
     a class authorized as legal investments for funds held by
     fiduciaries.
        Section 5.  The city shall invest the moneys of any
     charitable use or trust or of the estate of any minor of which
     it may be guardian in such common trust fund by adding the same
     thereto and by apportioning a participation therein to such use
     or trust or the estate of any minor of which it maybe guardian
     in the proportion that the moneys of the use, trust or estate
     added thereto bears to the aggregate value of all the assets of
     such common trust fund at the time of such investment, including
     in such assets the moneys of the use, trust or estate so added.
     The withdrawal of a participation from such common trust fund
     shall be on a basis of its proportionate interest in the
     aggregate value of all the assets of such common trust fund at
     the time of such withdrawal. The participating interest of any
     use, trust or estate in such common trust funds may from time to
     time be withdrawn in whole or in part by the city. Upon such
     withdrawals the city may make distribution in cash or ratably in
     kind, or partly in cash and partly in kind. Participations in
     such common trust funds shall not be sold to any other
     corporation or person, except a non-profit corporation organized
     and existing for a public charitable purpose.
        Section 6.  If a bond or other obligation for the payment of
     money is acquired as an investment for any such common trust
     fund at a cost in excess of the par or maturity value thereof,
     the city may during but not beyond the period that such
     obligation is held as an investment in such fund, amortize such
     excess cost out of the income on such obligation by deducting
     from each payment of income and adding to principal an amount
     equal to the sum obtained by dividing such excess cost by the
     number of periodic payments of income to accrue on such
     obligation from the date of such acquisition until its maturity
     date.
        Section 7.  The city shall designate clearly upon its records
     the names of the charitable uses or trust or of the estate of a
     minor on behalf of which such city as fiduciary owns a
     participation in any such common trust fund and the extent of
     the interest of the charitable use, trust or minor estate
     therein. No such use, trust or estate shall be deemed to have
     individual ownership of any assets in such common trust fund but
     shall be deemed to have the proportionate undivided interest in
     the common trust fund. The ownership of the individual assets
     comprising any such common trust fund shall be solely in the
     city as fiduciary.
        Section 8.  Nothing contained in this act shall be construed
     to authorize the city to invest moneys of a charitable use or
     trust in any such common trust fund contrary to any specific
     limitation or restriction contained in the will, deed or other
     instrument by which any real and personal property are given,
     granted, conveyed, bequeathed, devised to, or otherwise vested
     in, the city upon charitable use or trust, nor to limit or
     restrict the authority conferred upon the city with respect to
     investments by any such instrument.
        Section 9.  No mistakes made in good faith and in the
     exercise of due care and prudence in connection with the
     administration of any such common trust fund shall be held to
     exceed any power granted to, or violate any duty imposed upon,
     the city, if promptly after the discovery of the mistake the
     city takes whatever action that may be practicable under the
     circumstances to remedy the mistake.
        Section 10.  The provisions of this act shall become
     effective immediately upon final enactment.