Section 12720.405 - Security for tax and revenue anticipation notes; sinking fund or trust fund(a)Security.--All tax anticipation notes issued in a single fiscal year shall be equally and ratably secured by the pledge of, security interest in, and a lien and charge on, the taxes or revenues or both of the city specified in the authorizing determination to be collected or received during the period when the notes will be outstanding. Such pledge, lien and charge shall be fully perfected as against the city, all creditors thereof and all third parties in accordance with the terms of such authorizing determination from and after the filing of a financing statement or statements in accordance with 13 Pa.C.S. (relating to commercial code). For the purpose of such filing, the sinking fund depositary or trustee of a trust fund for note payments, if any, otherwise the fiscal agent or paying agent designated in the notes, may act as the representative of noteholders and, in such capacity, execute and file the financing statement and any continuation or termination statements as secured party. The authorizing determination may establish one or more sinking funds or trust funds for payment of notes and provide for periodic or other deposits therein and may contain such covenants or other provisions as the loan committee, by a majority of its members, shall determine. The amount of any tax anticipation notes issued in compliance with this chapter shall be general obligations of the city and, if the same shall not be paid within the fiscal year in which such notes were issued as required by section 403, shall be included in the budget of the city for the ensuing fiscal year and shall be payable from the taxes and revenues of such ensuing year.(b)Enforcement of notes.--The holder of such tax anticipation notes issued by a city or the sinking fund depositary of the applicable sinking fund, or trustee of any trust fund for note payment, if any, shall have the right to enforce such pledge of, security interest in and lien and charge on the pledged taxes and revenues of the city against all governmental agencies in possession of any of such taxes and revenues at any time which taxes and revenues may be collected directly from such officials upon notice by such holder or depositary or trustee for application to the payment thereof as and when due or for deposit in the applicable sinking fund or trust fund at the times and in the amounts specified in such tax anticipation notes. Any government agencies in possession of any of such taxes and revenues shall make payment, against receipt therefor, directly to the holder of such tax anticipation notes or to such depositary or trustee upon such notice and shall thereby be discharged from any further liability or responsibility for such taxes and revenues. If such payment shall be to a holder of tax anticipation notes, it shall be made against surrender of the notes to the payor for delivery to the city in the case of payment in full; otherwise, it shall be made against production of the notes for notation thereon of the amount of the payment. The provisions of this subsection with respect to the enforceability and collection of taxes and revenues which secure tax anticipation notes of a city shall supersede any contrary or inconsistent statutory provision or rule of law. This chapter shall be construed and applied to fulfill the legislative purpose of clarifying and facilitating temporary borrowings by a city by assuring to holders of tax anticipation notes the full and immediate benefit of the security therefor without delay, diminishment or interference based on any statute, decision, ordinance or administrative rule or practice.(c)Limitation on previously pledged security.--Notwithstanding the foregoing, no taxes or revenues pledged to secure bonds of the authority or to secure payments due to the authority from a city pursuant to an agreement with the authority shall be pledged to secure payment of tax anticipation notes unless such pledge is, by its express terms, subordinate in all respects to the pledge of such taxes and revenues to secure the bonds of the authority or payments due to the authority and the written consent of the authority to such subordinated pledge is obtained prior to the issuance of the tax anticipation notes so secured. The holder of such tax anticipation notes so secured by a subordinated pledge described in this subsection shall have no right to enforce such pledge in the manner described in subsection (b) unless all payments due to the authority or due on the bonds of an authority secured by the senior pledge of such taxes and revenues shall have been made or provided for. 1991, June 5, P.L. 9, No. 6, § 405, imd. effective.