HOUSE AMENDED
PRIOR PRINTER'S NOS. 814, 1659 PRINTER'S NO. 2225
No. 750 Session of 1989
INTRODUCED BY STOUT, CORMAN, STEWART, BRIGHTBILL, PUNT, LEMMOND,
PORTERFIELD, MADIGAN, AFFLERBACH, REIBMAN AND PETERSON,
MARCH 23, 1989
AS REPORTED FROM COMMITTEE ON LOCAL GOVERNMENT, HOUSE OF
REPRESENTATIVES, AS AMENDED, MAY 30, 1990
AN ACT
1 Amending the act of May 2, 1945 (P.L.382, No.164), entitled "An
2 act providing for the incorporation as bodies corporate and
3 politic of 'Authorities' for municipalities, counties and
4 townships; prescribing the rights, powers and duties of such
5 Authorities heretofore or hereafter incorporated; authorizing
6 such Authorities to acquire, construct, improve, maintain and
7 operate projects, and to borrow money and issue bonds
8 therefor; providing for the payment of such bonds, and
9 prescribing the rights of the holders thereof; conferring the
10 right of eminent domain on such Authorities; authorizing such
11 Authorities to enter into contracts with and to accept grants
12 from the Federal Government or any agency thereof; and
13 conferring exclusive jurisdiction on certain courts over
14 rates," FURTHER DEFINING "PROJECT"; ADDING A DEFINITION FOR <--
15 "WORKING CAPITAL"; FURTHER PROVIDING FOR THE GENERAL POWERS
16 AND DUTIES OF AN AUTHORITY; AND further providing for
17 contract procedures, purchases and advertising for bids.
18 The General Assembly of the Commonwealth of Pennsylvania
19 hereby enacts as follows:
20 SECTION 1. SECTION 2(J) OF THE ACT OF MAY 2, 1945 (P.L.382, <--
21 NO.164), KNOWN AS THE MUNICIPALITY AUTHORITIES ACT OF 1945,
22 AMENDED OCTOBER 21, 1988 (P.L.1041, NO.117), IS AMENDED AND THE
23 SECTION IS AMENDED BY ADDING A CLAUSE TO READ:
24 SECTION 2. DEFINITIONS.--THE FOLLOWING TERMS WHENEVER USED
1 OR REFERRED TO IN THIS ACT SHALL HAVE THE FOLLOWING MEANINGS,
2 EXCEPT IN THOSE INSTANCES WHERE THE CONTEXT CLEARLY INDICATES
3 OTHERWISE:
4 * * *
5 (J) THE TERM "PROJECT" SHALL MEAN EQUIPMENT TO BE LEASED BY
6 AN AUTHORITY TO THE MUNICIPALITY OR MUNICIPALITIES THAT
7 ORGANIZED IT OR TO ANY MUNICIPALITY OR SCHOOL DISTRICT LOCATED
8 WHOLLY OR PARTIALLY WITHIN THE BOUNDARIES OF THE MUNICIPALITY OR
9 MUNICIPALITIES THAT ORGANIZED IT, OR ANY STRUCTURE, FACILITY OR
10 UNDERTAKING WHICH AN AUTHORITY IS AUTHORIZED TO ACQUIRE,
11 CONSTRUCT, FINANCE, IMPROVE, MAINTAIN OR OPERATE UNDER THE
12 PROVISIONS OF THIS ACT, OR ANY WORKING CAPITAL WHICH AN
13 AUTHORITY IS AUTHORIZED TO FINANCE UNDER THE PROVISIONS OF THIS
14 ACT.
15 * * *
16 (P) THE TERM "WORKING CAPITAL" SHALL MEAN AND INCLUDE, BUT
17 SHALL NOT BE LIMITED TO, FUNDS FOR SUPPLIES, MATERIALS,
18 SERVICES, SALARIES, PENSIONS AND ANY OTHER PROPER OPERATING
19 EXPENSES; PROVIDED THAT "WORKING CAPITAL" SHALL BE LIMITED
20 SOLELY TO HOSPITALS AND HEALTH CENTERS, AND PRIVATE, NONPROFIT,
21 NONSECTARIAN COLLEGES AND UNIVERSITIES, STATE-RELATED
22 UNIVERSITIES AND COMMUNITY COLLEGES, WHICH ARE DETERMINED BY THE
23 AUTHORITY TO BE ELIGIBLE EDUCATIONAL INSTITUTIONS. NOTHING
24 HEREIN SHALL PROHIBIT THE BORROWING OF WORKING CAPITAL AS MAY BE
25 NECESSARY OR INCIDENTAL TO THE UNDERTAKING OR PLACING IN
26 OPERATION OF ANY PROJECT UNDERTAKEN IN WHOLE OR IN PART PURSUANT
27 TO THIS ACT.
28 SECTION 2. THE INTRODUCTORY PARAGRAPH OF CLAUSE (A) AND
29 CLAUSE (B)(2)(IV) OF SUBSECTION A OF SECTION 4 OF THE ACT,
30 AMENDED OCTOBER 21, 1988 (P.L.1041, NO.117), ARE AMENDED TO
19890S0750B2225 - 2 -
1 READ:
2 SECTION 4. PURPOSES AND POWERS; GENERAL.--A. EVERY
3 AUTHORITY INCORPORATED UNDER THIS ACT SHALL BE A BODY CORPORATE
4 AND POLITIC.
5 (A) THE AUTHORITY SHALL BE FOR THE PURPOSE OF FINANCING
6 WORKING CAPITAL AND OF ACQUIRING, HOLDING, CONSTRUCTING,
7 FINANCING, IMPROVING, MAINTAINING AND OPERATING, OWNING,
8 LEASING, EITHER IN THE CAPACITY OF LESSOR OR LESSEE, PROJECTS OF
9 THE FOLLOWING KIND AND CHARACTER:
10 * * *
11 (B) THIS SECTION IS SUBJECT TO THE FOLLOWING LIMITATIONS:
12 * * *
13 (2) THE PURPOSE AND INTENT OF THIS ACT BEING TO BENEFIT THE
14 PEOPLE OF THE COMMONWEALTH BY, AMONG OTHER THINGS, INCREASING
15 THEIR COMMERCE, HEALTH, SAFETY AND PROSPERITY, AND NOT TO
16 UNNECESSARILY BURDEN OR INTERFERE WITH EXISTING BUSINESS BY THE
17 ESTABLISHMENT OF COMPETITIVE ENTERPRISES, NONE OF THE POWERS
18 GRANTED BY THIS ACT SHALL BE EXERCISED IN THE CONSTRUCTION,
19 FINANCING, IMPROVEMENT, MAINTENANCE, EXTENSION OR OPERATION OF
20 ANY PROJECT OR PROJECTS WHICH IN WHOLE OR IN PART SHALL
21 DUPLICATE OR COMPETE WITH EXISTING ENTERPRISES SERVING
22 SUBSTANTIALLY THE SAME PURPOSES. THIS LIMITATION SHALL NOT APPLY
23 TO THE EXERCISE OF THE POWERS GRANTED HEREUNDER:
24 * * *
25 (IV) TO HOSPITAL PROJECTS OR HEALTH CENTERS TO BE LEASED TO,
26 OR FINANCED WITH LOANS TO, PUBLIC HOSPITALS, NONPROFIT
27 CORPORATION HEALTH CENTERS OR NONPROFIT HOSPITAL CORPORATIONS
28 SERVING THE PUBLIC OR TO SCHOOL BUILDING PROJECTS AND FACILITIES
29 TO BE LEASED TO, OR FINANCED WITH LOANS TO, PRIVATE, NONPROFIT,
30 NONSECTARIAN COLLEGES AND UNIVERSITIES, STATE-RELATED
19890S0750B2225 - 3 -
1 UNIVERSITIES AND COMMUNITY COLLEGES, OR TO FACILITIES, LIMITED
2 AS DESCRIBED ABOVE, TO PRODUCE STEAM OR TO GENERATE ELECTRIC
3 POWER, IF EACH MUNICIPALITY ORGANIZING AN AUTHORITY FOR SUCH A
4 PROJECT SHALL DECLARE BY RESOLUTION OR ORDINANCE THAT IT IS
5 DESIRABLE FOR THE HEALTH, SAFETY AND WELFARE OF THE PEOPLE IN
6 THE AREA SERVED BY SUCH FACILITIES TO HAVE SUCH FACILITIES
7 PROVIDED BY, OR FINANCED THROUGH, AN AUTHORITY[.]; NOR
8 (V) TO PROJECTS FOR FINANCING WORKING CAPITAL.
9 * * *
10 Section 1 3. Section 10 of the act of May 2, 1945 (P.L.382, <--
11 No.164), known as the Municipality Authorities Act of 1945,
12 amended or added June 28, 1979 (P.L.53, No.22) and February 18,
13 1982 (P.L.86, No.31), is amended to read:
14 Section 10. Competition in Award of Contracts.--A. All
15 construction, reconstruction, repairs or work of any nature made
16 by any Authority, where the entire cost, value or amount of such
17 construction, reconstruction, repairs or work, including labor
18 and materials, shall exceed [four thousand dollars ($4,000)] ten <--
19 thousand dollars ($10,000) THE MONETARY THRESHOLD LEVEL FOR THE <--
20 AUTHORITY, except construction, reconstruction, repairs or work
21 done by employes of said Authority, or by labor supplied under
22 agreement with any Federal or State agency, with supplies and
23 materials purchased as hereinafter provided, shall be done only
24 under contract or contracts to be entered into by the Authority
25 with the lowest responsible bidder upon proper terms, after due
26 public notice has been given asking for competitive bids as
27 hereinafter provided. No contract shall be entered into for
28 construction or improvement or repair of any project or portion
29 thereof, unless the contractor shall give an undertaking with a
30 sufficient surety or sureties approved by the Authority, and in
19890S0750B2225 - 4 -
1 an amount fixed by the Authority, for the faithful performance
2 of the contract. All such contracts shall provide among other
3 things that the person or corporation entering into such
4 contract with the Authority will pay for all materials furnished
5 and services rendered for the performance of the contract, and
6 that any person or corporation furnishing such materials or
7 rendering such services may maintain an action to recover for
8 the same against the obligor in the undertaking, as though such
9 person or corporation was named therein, provided the action is
10 brought within one year after the time the cause of action
11 accrued. Nothing in this section shall be construed to limit the
12 power of the Authority to construct, repair or improve any
13 project or portion thereof, or any addition, betterment or
14 extension thereto, directly by the officers, agents and employes
15 of the Authority, or otherwise than by contract.
16 (A.1) THE MONETARY THRESHOLD LEVEL ABOVE WHICH COMPETITIVE <--
17 BIDDING SHALL BE REQUIRED SHALL BE ONE PER CENTUM OF THE TOTAL
18 OF ALL BUDGETS ADMINISTERED BY THE AUTHORITY, BUT IN NO CASE
19 SHALL THE MONETARY THRESHOLD BE LESS THAN FOUR THOUSAND DOLLARS
20 ($4,000), NOR MORE THAN TEN THOUSAND DOLLARS ($10,000).
21 B. All supplies and materials [costing [four thousand <--
22 dollars ($4,000)] ten thousand dollars ($10,000), or more,] <--
23 WHICH COST OR EXCEED THE MONETARY THRESHOLD LEVEL FOR THE <--
24 AUTHORITY shall be purchased only after due advertisement as
25 hereinafter provided. Authority shall accept the lowest bid or
26 bids, kind, quality and material being equal, but the Authority
27 shall have the right to reject any or all bids or select a
28 single item from any bid. The provisions as to bidding shall not
29 apply to the purchase of patented and manufactured products
30 offered for sale in a noncompetitive market or solely by a
19890S0750B2225 - 5 -
1 manufacturer's authorized dealer.
2 (B.1) WRITTEN OR TELEPHONIC PRICE QUOTATIONS FROM AT LEAST <--
3 THREE QUALIFIED AND RESPONSIBLE CONTRACTORS SHALL BE REQUESTED
4 FOR ALL CONTRACTS THAT EXCEED FOUR THOUSAND DOLLARS ($4,000) BUT
5 ARE LESS THAN THE AMOUNT REQUIRING ADVERTISEMENT AND COMPETITIVE
6 BIDDING OR, IN LIEU OF PRICE QUOTATIONS, A MEMORANDUM SHALL BE
7 KEPT ON FILE SHOWING THAT FEWER THAN THREE QUALIFIED CONTRACTORS
8 EXIST IN THE MARKET AREA WITHIN WHICH IT IS PRACTICABLE TO
9 OBTAIN QUOTATIONS. A WRITTEN RECORD OF TELEPHONIC PRICE
10 QUOTATIONS SHALL BE MADE AND SHALL CONTAIN AT LEAST THE DATE OF
11 THE QUOTATION, THE NAME OF THE CONTRACTOR AND THE CONTRACTOR'S
12 REPRESENTATIVE, THE CONSTRUCTION, RECONSTRUCTION, REPAIR,
13 MAINTENANCE OR WORK WHICH WAS THE SUBJECT OF THE QUOTATION AND
14 THE PRICE. WRITTEN PRICE QUOTATIONS, WRITTEN RECORDS OF
15 TELEPHONIC PRICE QUOTATIONS AND MEMORANDA SHALL BE RETAINED FOR
16 A PERIOD OF THREE YEARS.
17 C. The terms advertisement or due public notice wherever
18 used in this section, shall mean a notice published at least ten
19 (10) days before the award of any contract, in a newspaper of
20 general circulation published in the municipality where the
21 Authority has its principal office, and if no newspaper is
22 published therein then by publication in a newspaper in the
23 county where the Authority has its principal office: Provided,
24 That such notice may be waived where the Authority determines an
25 emergency exists, and such supplies and materials must be
26 immediately purchased by the said Authority.
27 D. No member of the Authority or officer or employe thereof
28 shall either directly or indirectly be a party to or be in any
29 manner interested in any contract or agreement with the
30 Authority for any matter, cause or thing whatsoever by reason
19890S0750B2225 - 6 -
1 whereof any liability or indebtedness shall in any way be
2 created against such Authority. If any contract or agreement
3 shall be made in violation of the provisions of this section the
4 same shall be null and void and no action shall be maintained
5 thereon against such Authority.
6 E. Subject to the aforesaid any Authority may (but without
7 intending by this provision to limit any powers of such
8 Authority) enter into and carry out such contracts, or establish
9 or comply with such rules and regulations concerning labor and
10 materials and other related matters in connection with any
11 project or portion thereof, as the Authority may deem desirable,
12 or as may be requested by any Federal agency that may assist in
13 the financing of such project or any part thereof: Provided,
14 however, That the provisions of this section shall not apply to
15 any case in which the Authority has taken over by transfer or
16 assignment any contract authorized to be assigned to it under
17 the provisions of section nine of this act, nor to any contract
18 in connection with the construction of any project which the
19 Authority may have had transferred to it by any person or
20 private corporation.
21 F. Every contract for the construction, reconstruction,
22 repair, improvement or maintenance of public works shall contain
23 a provision that any steel products used or supplied in the
24 performance of the contract or any subcontracts thereunder shall
25 be from steel made in the United States.
26 G. An Authority shall not evade the provisions of this
27 section as to bids or purchasing materials or contracting for
28 services piece-meal, for the purpose of obtaining prices under
29 ten thousand dollars ($10,000) THE MONETARY THRESHOLD LEVEL FOR <--
30 THE AUTHORITY, upon transactions which should in the exercise of
19890S0750B2225 - 7 -
1 reasonable discretion and prudence be conducted as one
2 transaction amounting to more than ten thousand dollars <--
3 ($10,000) THE MONETARY THRESHOLD LEVEL FOR THE AUTHORITY. This <--
4 provision is intended to make unlawful the practice of evading
5 contracting requirements by making a series of purchases or
6 contracts each for less than the advertising requirement price,
7 or by making several simultaneous purchases or contracts each
8 below said price, when in either case the transaction involved
9 should have been made as one transaction for one price.
10 Section 2 4. This act shall take effect in 60 days. <--
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