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Pennsylvania House of Representatives
06/02/2024 08:22 AM
Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20130&cosponId=13099
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House Co-Sponsorship Memoranda

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House of Representatives
Session of 2013 - 2014 Regular Session

MEMORANDUM

Posted: July 11, 2013 09:29 AM
From: Representative Patrick J. Harkins
To: All House members
Subject: Legislation to Reform the Local Government Unit Debt Act
 


In the near future, I will be introducing legislation that would make much-needed reforms to the Local Government Unit Debt Act. Similar legislation has been introduced in the Senate.

As you may know, the Senate Local Government Committee held hearings in late 2012 to examine the financial situation surrounding the Harrisburg Authority and its relationship to the fiscal distress of the City of Harrisburg. Much of the information presented at the hearings focused on provisions of the Local Government Unit Debt Act. Among other things, this act provides for the review of project financings by the Pennsylvania Department of Community and Economic Development (DCED), defines the different types of debt a municipality may enter into, and sets limits on the amount of debt a municipality can incur without voter approval. The hearings revealed that there are deficiencies in the current statute.

As such, this legislation would:

  • Establish an actual review process by DCED before debt is incurred, and reform the current final approval step into a confirmation that the conditions in the review process have been followed.
  • Eliminate the ability to charge a fee for issuing a guarantee.
  • Limit the ability of municipalities to provide unlimited guarantees of other entities’ debts.
  • Amend the “self-liquidating” and “working capital” definitions to prohibit reimbursements for payments made under a guarantee or other non-project-related costs.
  • Allow DCED to retain the filing fees under the act, earmarked for act-related enforcement.
  • Provide for fiduciary duty of advisers and penalties for false filings.

Please join me in co-sponsoring this important legislation.