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FRANK M. TOSTO v. PENNSYLVANIA NURSING HOME LOAN AGENCY AND GRACE M. SLOAN (01/27/75)

decided: January 27, 1975.

FRANK M. TOSTO, A CITIZEN, RESIDENT AND TAXPAYER OF THE COMMONWEALTH OF PENNSYLVANIA, IN HIS OWN RIGHT AND ON BEHALF OF ALL OTHER RESIDENTS AND TAXPAYERS OF THE COMMONWEALTH, PLAINTIFF,
v.
PENNSYLVANIA NURSING HOME LOAN AGENCY AND GRACE M. SLOAN, STATE TREASURER, DEFENDANTS



COUNSEL

Gilbert J. Helwig, Robert L. Potter, Reed, Smith, Shaw & McClay, Pittsburgh, Israel Packel, Atty. Gen., Harrisburg, for Pennsylvania Nursing Home Loan Agency.

Leonard J. Paletta, McArdle, McLaughlin, Paletta & McVay, Pittsburgh, for respondents.

Jones, C. J., and O'Brien, Roberts, Pomeroy and Manderino, JJ. Eagen and Nix, JJ., did not participate in the consideration or decision of this case.

Author: Roberts

[ 460 Pa. Page 6]

OPINION OF THE COURT

This is a taxpayer's suit seeking to enjoin the operation of the recently enacted Nursing Home Loan Agency Law, Act of July 22, 1974, P.L. --, No. 207, Pa.Legis. Serv. 571 (1974) (to be codified as 62 P.S. § 1521.101 et seq.). Plaintiff filed his complaint in the Commonwealth Court alleging a variety of constitutional defects. Defendants petitioned this Court to assume plenary jurisdiction,*fn1 which we did by per curiam order on October 25, 1974. The parties, after stipulating that no issues of fact existed to be tried, have filed motions for judgment on the pleadings. We determine that judgment should be awarded to defendants.

The N.H.L.A.L. stems from legislative concern with the inability of many nursing homes to provide safe and healthy accommodations for their residents.*fn2 Pursuant

[ 460 Pa. Page 7]

    to article VIII, section 7(a)(3) of the Constitution, P.S.,*fn3 the Legislature submitted to the voters the question whether they "favored the incurring of indebtedness by the Commonwealth of $100,000,000 for use as loans to repair, reconstruct and rehabilitate nursing homes in order to meet standards for health and safety?"*fn4 The program was approved by referendum on May 21, 1974.

[ 460 Pa. Page 8]

Section 201 of the Law creates the Pennsylvania Nursing Home Loan Agency composed of six ex officio members from the executive departments and three gubernatorial appointees. § 202. The agency is authorized in § 203(6) "to make loans to nursing homes for repair, reconstruction and rehabilitation . . . in order that such nursing homes may meet State and Federal Safety Standards . . . ." Section 301 provides:

"All nursing homes meeting applicable State and Federal regulations, with the exception of Life Safety Code, for the acceptance of Medicaid patients shall be eligible to apply for loans from the Nursing Home Loan Agency under provisions of this act."*fn5

Funds for the loans are to be provided by a sale by competitive bidding of general obligation bonds (not exceeding $100,000,000) backed by the credit of the Commonwealth. §§ 401, 402(c). The Law creates a sinking fund for payment of interest and principal. § 408(a). The sources of the sinking fund are funds received in ...


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