PRINTER'S NO. 1237
No. 940 Session of 2003
INTRODUCED BY ORIE, WAGNER, LOGAN, BRIGHTBILL, KITCHEN, EARLL,
CORMAN, D. WHITE, CONTI AND RAFFERTY, OCTOBER 23, 2003
REFERRED TO FINANCE, OCTOBER 23, 2003
AN ACT
1 Providing for intergovernmental cooperation in cities of the
2 second class; establishing an intergovernmental authority;
3 providing for financing, for bankruptcy and for sovereign
4 immunity; and making an appropriation.
5 TABLE OF CONTENTS
6 Chapter 1. General Provisions
7 Section 101. Short title.
8 Section 102. Purpose and legislative intent.
9 Section 103. Legislative findings.
10 Section 104. Definitions.
11 Chapter 2. Intergovernmental Cooperation Authority for Cities
12 of the Second Class
13 Section 201. Authority established.
14 Section 202. Governing board.
15 Section 203. Powers and duties.
16 Section 204. Term of existence.
17 Section 205. Fiscal year.
18 Section 206. Annual budget of authority.
19 Section 207. Annual report to be filed; annual audits.
1 Section 208. Limit on city borrowing.
2 Section 209. Financial plan of an assisted city.
3 Section 210. Powers and duties of authority with respect to
4 financial plans.
5 Section 211. Limitation on authority and on assisted cities to
6 file petition for relief under Federal
7 bankruptcy law.
8 Section 212. Investment of funds.
9 Section 213. Sovereign immunity.
10 Chapter 7. Miscellaneous Provisions
11 Section 701. Appropriation.
12 Section 702. General rights and prohibitions.
13 Section 703. Nondiscrimination.
14 Section 704. Construction of act.
15 Section 705. Limitation of authority powers.
16 Section 706. Suspension and repeal.
17 Section 707. Effective date.
18 The General Assembly of the Commonwealth of Pennsylvania
19 hereby enacts as follows:
20 CHAPTER 1
21 GENERAL PROVISIONS
22 Section 101. Short title.
23 This act shall be known and may be cited as the
24 Intergovernmental Cooperation Authority Act for Cities of the
25 Second Class.
26 Section 102. Purpose and legislative intent.
27 (a) Policy.--It is hereby declared to be a public policy of
28 the Commonwealth to exercise its retained sovereign powers with
29 regard to taxation and matters of Statewide concern in a manner
30 calculated to foster the fiscal integrity of cities of the
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1 second class to assure that these cities provide for the health,
2 safety and welfare of their citizens; pay principal and interest
3 owed on their debt obligations when due; meet financial
4 obligations to their employees, vendors and suppliers; and
5 provide for proper financial planning procedures and budgeting
6 practices. The inability of a city of the second class to
7 provide essential services to its citizens as a result of a
8 fiscal emergency is hereby determined to affect adversely the
9 health, safety and welfare not only of the citizens of that
10 municipality but also of other citizens in this Commonwealth.
11 (b) Legislative intent.--
12 (1) It is the intent of the General Assembly to:
13 (i) provide cities of the second class with the
14 legal tools with which such cities can perform essential
15 municipal services; and
16 (ii) foster sound financial planning and budgetary
17 practices for cities of the second class, which cities
18 shall be charged with the responsibility to exercise
19 efficient and accountable fiscal practices, such as:
20 (A) increased managerial accountability;
21 (B) consolidation or elimination of inefficient
22 city programs and authorities;
23 (C) reevaluation of tax-exemption policies with
24 regard to real property taxes;
25 (D) increased collection of existing tax
26 revenues;
27 (E) privatization of appropriate city services;
28 (F) sale of city assets as appropriate;
29 (G) improvement of procurement practices,
30 including competitive bidding procedures; and
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1 (H) review of compensation and benefits of city
2 employees; and
3 (iv) exercise its powers consistent with the rights
4 of citizens to home rule and self-government.
5 (2) The General Assembly further declares that this
6 legislation is intended to remedy the apparent fiscal
7 emergency confronting cities of the second class through the
8 implementation of sovereign powers of the Commonwealth. To
9 safeguard the rights of the citizens to the electoral process
10 and home rule, the General Assembly intends to exercise its
11 power in an appropriate manner with the elected officers of
12 cities of the second class.
13 Section 103. Legislative findings.
14 It is hereby determined and declared as a matter of
15 legislative finding that:
16 (1) Cities of the second class have encountered
17 recurring financial difficulties which may affect the
18 performance of necessary municipal services to the detriment
19 of the health, safety and general welfare of residents of
20 such cities.
21 (2) It is critically important that cities of the second
22 class maintain their creditworthiness.
23 (3) Due to the economic and social interrelationship
24 among all citizens in our economy, the fiscal integrity of
25 cities of the second class is a matter of concern to
26 residents of the entire Commonwealth, and the financial
27 problems of such cities have a direct and negative effect on
28 the entire Commonwealth.
29 (4) Because cities of the second class consume a
30 substantial proportion of the products of Pennsylvania's
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1 farms, factories, manufacturing plants and service
2 enterprises, economic difficulties confronting cities of the
3 second class detrimentally affect the economy of the
4 Commonwealth as a whole and become a matter of Statewide
5 concern.
6 (5) Because residents of cities of the second class
7 contribute a substantial proportion of all Commonwealth tax
8 revenues, a disruption of the economic and social life of
9 such cities may have a significant detrimental effect upon
10 Commonwealth revenues.
11 (6) The financial difficulties of cities of the second
12 class can best be addressed and resolved by cooperation
13 between governmental entities.
14 (7) The Constitution of Pennsylvania grants
15 municipalities authority to cooperate with other governmental
16 entities in the exercise of any function or responsibility.
17 (8) The Commonwealth retains certain sovereign powers
18 with respect to cities of the second class, among them the
19 powers to authorize and levy taxes, to authorize the
20 incurring of indebtedness and to provide financial assistance
21 that may be necessary to assist cities in solving their
22 financial problems.
23 (9) The Commonwealth may attach conditions to grants of
24 authority to incur indebtedness or assistance to cities of
25 the second class in order to ensure that deficits are
26 eliminated and access to capital markets is achieved and
27 maintained.
28 (10) Such conditions shall be incorporated into
29 intergovernmental cooperation agreements between the
30 Commonwealth or its instrumentalities and cities of the
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1 second class.
2 (11) Cities of the second class and the Commonwealth
3 will benefit from the creation of an independent authority
4 composed of members experienced in finance and management
5 which may advise such cities, the General Assembly and the
6 Governor concerning solutions to fiscal problems cities of
7 the second class may face.
8 (12) The creation of such an authority will allow such
9 cities to continue to provide the necessary municipal
10 services for their residents and to contribute to the economy
11 of the Commonwealth.
12 (13) Several task forces have studied the fiscal
13 condition of a city of the second class and have published
14 findings and suggestions regarding the fiscal structure of
15 the city and actions that could be taken concerning
16 preservation of the financial viability of the city into the
17 future. Those reports, widely known as the Competitive
18 Pittsburgh report, the PGH 21 report and the Governor's
19 Pittsburgh Economic Improvement Task Force report should be
20 evaluated by the authority in making its recommendations to
21 the city.
22 Section 104. Definitions.
23 The following words and phrases when used in this act shall
24 have the meanings given to them in this section unless the
25 context clearly indicates otherwise:
26 "Assisted city." A city of the second class which receives
27 assistance from the Intergovernmental Cooperation Authority for
28 Cities of the Second Class. The term includes any municipal
29 authority, other authority or other corporate entity which
30 performs a governmental function on behalf of the city or to
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1 which the city has power of appointment or has pledged or
2 designated revenues.
3 "Authority." The Intergovernmental Cooperation Authority for
4 Cities of the Second Class established in section 201.
5 "Board." The governing board of the Intergovernmental
6 Cooperation Authority for Cities of the Second Class.
7 "City." A city of the second class.
8 "City account." A trust fund held for the exclusive benefit
9 of an assisted city.
10 "Corporate entity." A municipal authority, other authority
11 or other corporate entity which performs a governmental function
12 on behalf of the city or to which the city has power of
13 appointment or has pledged or designated revenues.
14 "Deficit." Such negative fund balance in any principal
15 operating fund or funds of a city or corporate entity existing
16 or projected to exist as of the close of a fiscal year, as may
17 be more specifically identified, calculated and set forth in an
18 intergovernmental cooperation agreement or financial plan of an
19 assisted city described in section 209.
20 "Federal agency." The United States, the President of the
21 United States and any department or corporation, agency or
22 instrumentality created, designated or established by the United
23 States.
24 "Governing body." The legislative body of a city.
25 "Government agency." The Governor, departments, boards,
26 commissions, authorities and other officers and agencies of
27 State government, including those which are not subject to the
28 policy supervision and control of the Governor, any political
29 subdivision, municipal or other local authority, and any officer
30 or agency of any such political subdivision or local authority,
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1 but the term does not include any court or other officer or
2 agency of the unified judicial system or the General Assembly or
3 its officers and agencies.
4 "Intergovernmental cooperation agreement." Any agreement
5 made by the authority and a city under the provisions of section
6 203(d).
7 "Party officer." The following members or officers of any
8 political party:
9 (1) a member of a national committee;
10 (2) a chairman, vice chairman, secretary, treasurer or
11 counsel of a State committee or member of the executive
12 committee of a State committee;
13 (3) a county chairman, vice chairman, counsel, secretary
14 or treasurer of a county committee; or
15 (4) a chairman, vice chairman, counsel, secretary,
16 treasurer or ward leader of a city or municipal committee.
17 "Public official." Any elected or appointed official or
18 employee in the executive, legislative or judicial branch of the
19 Commonwealth or any political subdivision thereof, provided that
20 it shall not include members of advisory boards that have no
21 authority to expend public funds other than reimbursement for
22 personal expense or to otherwise exercise the power of the
23 Commonwealth or any political subdivision thereof. The term
24 shall not include any appointed official who receives no
25 compensation other than reimbursement for actual expenses.
26 CHAPTER 2
27 INTERGOVERNMENTAL COOPERATION AUTHORITY FOR
28 CITIES OF THE SECOND CLASS
29 Section 201. Authority established.
30 A body corporate and politic to be known as the
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1 Intergovernmental Cooperation Authority for Cities of the Second
2 Class is established as a public authority and instrumentality
3 of the Commonwealth, exercising public powers of the
4 Commonwealth as an agency and instrumentality thereof. The
5 exercise by the authority of the powers conferred by this act is
6 hereby declared to be and shall for all purposes be deemed and
7 held to be the performance of an essential public function.
8 Section 202. Governing board.
9 (a) Composition of board.--
10 (1) The powers and duties of the authority shall be
11 exercised by a governing board composed of five members:
12 (i) One member shall be appointed by the President
13 pro tempore of the Senate.
14 (ii) One member shall be appointed by the Minority
15 Leader of the Senate.
16 (iii) One member shall be appointed by the Speaker
17 of the House of Representatives.
18 (iv) One member shall be appointed by the Minority
19 Leader of the House of Representatives.
20 (v) One member shall be selected by majority vote of
21 the members appointed under subparagraphs (i) through
22 (iv).
23 (vi) The Secretary of the Budget and the director of
24 finance of each assisted city shall serve as ex officio
25 members of the board. The ex officio members may not
26 vote, shall not be counted for purposes of establishing a
27 quorum and may designate in writing a representative of
28 their respective offices to attend meetings of the board
29 on their behalf.
30 (2) All members and designees must have substantial
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1 experience in finance or management.
2 (3) All members of the board must be residents of this
3 Commonwealth and, except the Secretary of the Budget, must
4 either be residents of the assisted city or have their
5 primary places of business or employment in that city.
6 (b) Term.--Appointing authorities shall appoint the initial
7 members of the board within ten days of the effective date of
8 this act, and the appointed members shall select a member under
9 subsection (a)(1)(v) at the initial organizational meeting of
10 the board. The term of a board member shall begin on the date of
11 the appointment or selection. A member's term shall be
12 coterminous with that of the appointing authority. However, the
13 term of the member selected under subsection (a)(1)(v) shall be
14 two years from the date of selection, provided that the
15 chairperson's term shall continue if reappointed for another
16 term or until a replacement is appointed or selected. An
17 appointed board member shall serve at the pleasure of the
18 member's appointing authority, and the member selected under
19 subsection (a)(1)(v) may be removed upon a majority vote of the
20 appointed members. Whenever a vacancy occurs among the appointed
21 members on the board, whether prior to or on the expiration of a
22 term, the appointing authority who originally appointed the
23 board member whose seat has become vacant shall appoint a
24 successor member within 30 days of the vacancy. If a vacancy
25 occurs with respect to the board member selected under
26 subsection (a)(1)(v), the appointing members of the board shall
27 select a successor member within 30 days of the vacancy. A
28 member appointed by an appointing authority, or selected under
29 subsection (a)(1)(v), to fill a vacancy occurring prior to the
30 expiration of a term shall serve the unexpired term.
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1 (c) Organization.--The appointees of the President pro
2 tempore of the Senate and the Speaker of the House of
3 Representatives shall set a date, time and place for the initial
4 organizational meeting of the board within five days of the
5 appointment of the initial members of the board. The initial
6 organizational meeting shall be held within 20 days of the
7 effective date of this act. The member selected under subsection
8 (a)(1)(v) shall serve as chairperson. The members shall elect
9 such other officers as they may determine. A member may hold
10 more than one office of the board at any time.
11 (d) Meetings.--After the initial organizational meeting, the
12 board shall meet as frequently as it deems appropriate but at
13 least once during each quarter of the fiscal year. In addition,
14 a meeting of the board shall be called by the chairperson if a
15 request for a meeting is submitted to the chairperson by at
16 least two members of the board. A majority of the board shall
17 constitute a quorum for the purpose of conducting the business
18 of the board and for all other purposes. All actions of the
19 board shall be taken by a majority of the board. The provisions
20 of 65 Pa.C.S. Ch. 7 (relating to open meetings) shall apply to
21 the board.
22 (e) Expenses.--A member shall not receive compensation or
23 remuneration, but shall be entitled to reimbursement for all
24 reasonable and necessary actual expenses.
25 (f) Employees and agents.--The board shall fix and determine
26 the number of employees of the authority and their respective
27 compensation and duties. The board may contract for or receive
28 the loan of services of persons in the employ of other
29 government agencies, and other government agencies shall be
30 authorized to make such employees available. The board may
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1 retain an executive director upon a majority vote. The board
2 may, by a majority vote, hire an independent general counsel to
3 the authority and may engage consultants and contract for other
4 professional services upon a majority vote. The board may, upon
5 the approval of a majority, delegate to the executive director
6 such powers of the board as the board deems necessary to carry
7 out the purposes of the authority, subject in every case to the
8 supervision and control of the board.
9 (g) Public officials and party officers.--
10 (1) Except for the Secretary of the Budget and the
11 director of finance of an assisted city, neither members of
12 the board nor the executive director shall seek or hold a
13 position as any other public official within this
14 Commonwealth or as a party officer while in the service of
15 the authority. Members of the board and the executive
16 director shall not seek election as public officials or party
17 officers for one year after their service with the authority.
18 Members of the board and the executive director may serve as
19 appointive public officials any time after their periods of
20 service with the authority.
21 (2) Employees and agents of the authority shall not seek
22 or hold other positions as public officials or party officers
23 while in the employ of the authority. The authority may
24 receive the loan of services of persons in other government
25 agencies in accordance with subsection (f), notwithstanding
26 that such persons are public officials. Employees of the
27 authority shall not seek election as public officials or
28 party officers for one year after leaving the employ of the
29 authority.
30 (h) Statutes applying to authority.--
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1 (1) The provisions of the following acts shall apply to
2 the authority:
3 (i) 65 Pa.C.S. Ch. 7 (relating to open meetings).
4 (ii) The act of June 21, 1957 (P.L.390, No.212),
5 referred to as the Right-to-Know Law.
6 (iii) Except as set forth in paragraph (2), the act
7 of July 19, 1957 (P.L.1017, No.451), known as the State
8 Adverse Interest Act.
9 (iv) The act of October 4, 1978 (P.L.883, No.170),
10 referred to as the Public Official and Employee Ethics
11 Law.
12 (2) Notwithstanding the provisions of the State Adverse
13 Interest Act, the Secretary of the Budget and the director of
14 finance of each assisted city shall, while serving as ex
15 officio members of the board, also serve in their official
16 capacities with respect to the negotiation and execution of
17 intergovernmental cooperation agreements and other agreements
18 between an assisted city and the authority.
19 (i) Advisory committees.--
20 (1) The board may appoint by majority vote an advisory
21 committee comprised of professionals engaged in municipal
22 management and finance or other experts as it may deem
23 necessary. The members of an advisory committee shall reside
24 within an assisted city or a county within the statistical
25 metropolitan area in which the assisted city is located.
26 (2) The provisions of subsection (g) shall be applicable
27 to members of an advisory committee; however, the board may
28 allow city council to designate a liaison from city council
29 to serve on an advisory committee.
30 (3) An advisory committee shall consist of no more than
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1 six members, excluding any council liaison.
2 Section 203. Powers and duties.
3 (a) General powers and duties.--The authority is established
4 for the purposes, without limitation, by itself or by agreement
5 in cooperation with others, of assisting cities in solving their
6 budgetary and financial problems.
7 (b) Specific duties.--The authority shall have the powers
8 and its duties shall be:
9 (1) To assist cities in achieving financial stability in
10 any manner consistent with the purposes and powers described
11 by this act.
12 (2) To assist cities in avoiding defaults, eliminating
13 and financing deficits, maintaining sound budgetary practices
14 and avoiding the interruption of municipal services.
15 (3) To negotiate intergovernmental cooperation
16 agreements with cities containing such terms and conditions
17 as will enable such cities to eliminate and avoid deficits,
18 maintain sound budgetary practices and avoid interruption of
19 municipal services.
20 (4) To make annual reports within 120 days after the
21 close of the assisted city's fiscal year, commencing with the
22 fiscal year ending December 31, 2003, to the Governor and the
23 General Assembly describing the city's financial condition
24 and the authority's progress with respect to restoring the
25 financial stability of assisted cities and achieving balanced
26 budgets for assisted cities. Such reports shall be filed with
27 the Governor, with the presiding officers of the Senate and
28 the House of Representatives, with the chairperson and
29 minority chairperson of the Appropriations Committee of the
30 Senate and the chairperson and the minority chairperson of
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1 the Appropriations Committee of the House of Representatives
2 and with the governing body, mayor and controller of the
3 assisted city.
4 (c) Specific powers.--In addition to the powers and duties
5 set forth elsewhere in this act, the authority shall have the
6 specific powers:
7 (1) To obtain copies of all reports regarding the
8 revenues, expenditures, budgets, deficits, costs, plans,
9 operations, estimates and any other financial or budgetary
10 matters of an assisted city.
11 (2) To obtain additional reports on the above matters in
12 such form as are deemed necessary by the authority.
13 (3) To make factual findings concerning an assisted
14 city's budgetary and fiscal affairs.
15 (4) To make recommendations to an assisted city
16 concerning its budgetary and fiscal affairs. Recommendations
17 under this paragraph may include:
18 (i) Consolidation or merger of services performed by
19 an assisted city, school, county or other surrounding
20 municipality.
21 (ii) Consolidation of public safety services.
22 (iii) Appropriate staffing levels of city
23 departments and corporate entities.
24 (iv) Cooperative agreements or contractual
25 arrangements between health care facilities licensed by
26 the Department of Health.
27 (v) Financial or contractual obligations of the
28 assisted city.
29 (vi) Contributions of nonprofit or charitable
30 organizations which receive the benefit of municipal
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1 services provided by the assisted city.
2 (vii) Reduction or restructuring of debt
3 obligations.
4 (viii) Cooperative agreements between the assisted
5 city and the county in which it is located or
6 municipalities which border the assisted city.
7 (ix) Cooperative agreements between the assisted
8 city and the school district in which it is located.
9 (x) Collective bargaining agreements and other
10 contracts of the assisted city.
11 (xi) Elimination, sale or transfer of assisted city
12 services or property.
13 (xii) Implementation of cost-saving measures by the
14 assisted city.
15 (xiii) Increased managerial accountability.
16 (xiv) Performance of government operations and
17 delivery of municipal services.
18 (xv) Reevaluation of tax-exemption policies and
19 practices with regard to real property taxation within
20 the assisted city.
21 (xvi) Improvements in procurement practices.
22 (xvii) Implementation of user fees for services,
23 including sewage, water treatment and refuse collection.
24 (xviii) Privatization and competitive bidding of
25 appropriate assisted city services.
26 (xix) Increased collection of fines and costs
27 relating to parking violations or violations of other
28 city ordinances.
29 (xx) When appropriate, filing for bankruptcy under
30 11 U.S.C. Ch. 9 (relating to adjustment of debts of a
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1 municipality).
2 (xxi) Prior suggestions published by others prior to
3 the enactment of this act with regard to the assisted
4 city.
5 (5) To make recommendations to the Governor and the
6 General Assembly regarding legislation or resolutions which
7 relate to an assisted city's fiscal stability.
8 (6) To exercise powers of review concerning the
9 budgetary and fiscal affairs of the assisted city consistent
10 with this act and the city's home rule charter or other
11 optional plan of government.
12 (7) To receive revenues from any source, directly or by
13 assignment, pledge or otherwise.
14 (8) To sue and be sued, implead and be impleaded,
15 interplead, complain and defend in all courts.
16 (9) To adopt, use and alter at will a corporate seal.
17 (10) To make bylaws for the management and regulation of
18 its affairs and adopt rules, regulations and policies in
19 connection with the performance of its functions and duties
20 which, notwithstanding any other provision of law to the
21 contrary, shall not be subject to review pursuant to the act
22 of June 25, 1982 (P.L.633, No.181), known as the Regulatory
23 Review Act.
24 (11) To make and enter into contracts and other
25 instruments necessary or convenient for the conduct of its
26 business and the exercise of the powers of the authority.
27 (12) To appoint officers, agents, employees and servants
28 and to prescribe their duties and to fix their compensation
29 as set forth in section 202(f).
30 (13) To retain counsel and auditors to render such
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1 professional services as the authority deems appropriate. The
2 authority shall not be considered either an executive agency
3 or an independent agency for the purpose of the act of
4 October 15, 1980 (P.L.950, No.164), known as the Commonwealth
5 Attorneys Act, but shall possess the same status for such
6 purpose as the Auditor General, State Treasurer and the
7 Pennsylvania Public Utility Commission, except that the
8 provisions of section 204(b) and (f) of the Commonwealth
9 Attorneys Act shall not apply to the authority;
10 notwithstanding 42 Pa.C.S. Ch. 85 (relating to matters
11 affecting government units), the authority, through its legal
12 counsel, shall defend actions brought against the authority
13 or its members, officers, officials and employees when acting
14 within the scope of their official duties.
15 (14) To cooperate with any Federal agency or government
16 agency.
17 (15) To acquire, by gift or otherwise, purchase, hold,
18 receive, lease, sublease and use any franchise, license,
19 property, real, personal or mixed, tangible or intangible or
20 any interest therein. However, the authority shall be
21 absolutely limited in its power to acquire real property
22 under this act to real property that will be used only for
23 the office space in which the authority will conduct its
24 daily business if necessary. If possible, an assisted city
25 shall provide office space to the authority at no cost to the
26 authority as part of an intergovernmental cooperation
27 agreement.
28 (16) To sell, transfer, convey and dispose of any
29 property, real, personal or mixed, tangible or intangible or
30 any interest therein.
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1 (17) To enter into contracts for group insurance and to
2 contribute to retirement plans for the benefit of its
3 employees and to enroll its employees in an existing
4 retirement system of a government agency.
5 (18) To accept, purchase or borrow equipment, supplies,
6 services or other things necessary or convenient to the work
7 of the authority from other government agencies, and all
8 government agencies are authorized to sell, lend or grant to
9 the authority such equipment, supplies, services or other
10 things necessary or convenient to the work of the authority.
11 (19) To invest any funds held by the authority as set
12 forth in section 212.
13 (20) To receive and hold assets, moneys and funds from
14 any source, including, but not limited to, appropriations,
15 grants, gifts.
16 (21) To procure insurance, guarantees and sureties the
17 authority determines necessary or desirable for its purposes.
18 (22) To pledge the credit of the authority as the
19 authority determines necessary or desirable for its purposes.
20 (23) To do all acts and things necessary or convenient
21 for the promotion of its purposes and the general welfare of
22 the authority and to carry out the powers granted to it by
23 this act or any other acts.
24 (d) Intergovernmental cooperation agreements.--The authority
25 shall have the power and its duty shall be to enter into and to
26 implement fully such intergovernmental cooperation agreements
27 with cities as are approved by a majority of the board. The
28 following shall apply:
29 (1) A city may enter into an intergovernmental
30 cooperation agreement in which it, consistent with this act,
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1 covenants to cooperate or agree in the exercise of any
2 function, power or responsibility with, or delegate or
3 transfer any function, power or responsibility to, the
4 authority upon the adoption by the governing body of such
5 city of an ordinance authorizing and approving the
6 intergovernmental cooperation agreement.
7 (2) An ordinance that authorizes a city to enter into an
8 intergovernmental cooperation agreement with the authority
9 shall specify:
10 (i) the purpose and objectives of the agreement;
11 (ii) the conditions of the agreement; and
12 (iii) the term of the agreement, including
13 provisions relating to its termination.
14 (e) Limitation.--Notwithstanding any purpose or general or
15 specific power granted by this act or any other act, whether
16 express or implied, the authority shall have no power to pledge
17 the credit or taxing powers of the Commonwealth.
18 Section 204. Term of existence.
19 The authority shall exist for a term of at least seven years.
20 If, after seven years, an assisted city has had annual operating
21 budgets and five-year financial plans approved by the board for
22 at least the three immediately preceding years, the Secretary of
23 Community and Economic Development shall certify that the
24 authority is no longer needed; and the provisions of this
25 chapter will no longer be in effect 90 days following that
26 certification. Upon termination of the authority, records and
27 documents of the authority shall be transferred to the director
28 of finance of the assisted city. The authority shall submit a
29 final report on its activities and the city's fiscal condition
30 to the Governor and the General Assembly within 60 days of its
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1 termination.
2 Section 205. Fiscal year.
3 The fiscal year of the authority shall be the same as the
4 fiscal year of the Commonwealth.
5 Section 206. Annual budget of authority.
6 (a) Budget.--Before March 1 of each year, the authority
7 shall adopt a budget by a majority of the board setting forth in
8 reasonable detail the projected expenses of operation of the
9 authority for the ensuing fiscal year, including the salary and
10 benefits of the executive director and any other employees of
11 the authority, and the projected revenues of the authority to be
12 derived from investment earnings and any other moneys of the
13 authority which are estimated to be available to pay the
14 operating expenses set forth in the budget. A copy of the
15 authority's budget shall be submitted to the Governor and to the
16 General Assembly. The authority or its designated
17 representatives may be afforded an opportunity to appear before
18 the Governor and the Appropriations Committee of the Senate and
19 the Appropriations Committee of the House of Representatives
20 regarding the authority's budget.
21 (b) Limit on operating expenses.--Following the submission
22 of the authority's budget to the Governor and the General
23 Assembly and any hearing held by an appropriations committee
24 under subsection (a), the General Assembly, by concurrent
25 resolution with presentment to the Governor, in accordance with
26 section 9 of Article III of the Constitution of Pennsylvania,
27 may limit the operating expenses of the authority. In that
28 event, it shall be unlawful for the authority to spend more for
29 operating expenses than the limit established for that fiscal
30 year by the concurrent resolution. If the General Assembly does
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1 not adopt a concurrent resolution prior to May 30, the
2 authority's budget shall be deemed approved for that fiscal
3 year.
4 (c) Funding.--After July 1, 2005, upon request of the
5 authority and pursuant to the limits established in subsection
6 (b), the city shall annually fund any portion of the budget of
7 the authority which exceeds the authority's State appropriation,
8 including its reasonable and necessary expenses and costs
9 incurred for consultants engaged by the board to carry out its
10 duties.
11 (d) Examination of books.--The chairperson and minority
12 chairperson of the Appropriations Committee of the Senate and
13 the chairperson and minority chairperson of the Appropriations
14 Committee of the House of Representatives shall have the right
15 at any time to examine the books, accounts and records of the
16 authority.
17 Section 207. Annual report to be filed; annual audits.
18 The authority shall file an annual report with the
19 chairperson and the minority chairperson of the Appropriations
20 Committee of the Senate and chairperson and the minority
21 chairperson of the Appropriations Committee of the House of
22 Representatives, which shall make provisions for the accounting
23 of revenues and expenses. The authority shall have its books,
24 accounts and records audited annually in accordance with
25 generally accepted auditing standards by an independent auditor
26 who shall be a certified public accountant, and a copy of his
27 audit report shall be attached to and be made a part of the
28 authority's annual report. A concise financial statement shall
29 be published annually in the Pennsylvania Bulletin.
30 Section 208. Limit on city borrowing.
20030S0940B1237 - 22 -
1 A city and its corporate entities may not borrow or receive
2 funds for any lawful purpose unless the city has entered into an
3 intergovernmental cooperation agreement with the authority and
4 there is an approved financial plan in effect.
5 Section 209. Financial plan of an assisted city.
6 (a) Requirement of a financial plan.--An assisted city shall
7 develop, implement and periodically revise a financial plan as
8 described in this section.
9 (b) Elements of plan.--The financial plan shall include:
10 (1) Projected revenues and expenditures of the principal
11 operating fund or funds of the assisted city for five fiscal
12 years consisting of the current fiscal year and the next four
13 fiscal years.
14 (2) Plan components that will:
15 (i) eliminate any projected deficit for the current
16 fiscal year and for subsequent fiscal years;
17 (ii) restore to special fund accounts money from
18 those accounts used for purposes other than those
19 specifically authorized;
20 (iii) balance the current fiscal year budget and
21 subsequent budgets in the financial plan through sound
22 budgetary practices, including, but not limited to,
23 reductions in expenditures, improvements in productivity,
24 increases in revenues or a combination of these steps;
25 (iv) provide procedures to avoid a fiscal emergency
26 condition in the future; and
27 (v) enhance the ability of the assisted city to
28 access short-term and long-term credit markets.
29 (c) Standards for formulation of plan.--
30 (1) All projections of revenues and expenditures in a
20030S0940B1237 - 23 -
1 financial plan shall be based on reasonable and appropriate
2 assumptions and methods of estimation, all such assumptions
3 and methods to be consistently applied. The financial plan of
4 an assisted city shall not include projected revenue that in
5 order to be collected requires the enactment by the General
6 Assembly of new taxing powers.
7 (2) All revenue and appropriation estimates shall be on
8 a modified accrual basis in accordance with generally
9 accepted standards agreed to by the authority such as those
10 promulgated by the Governmental Accounting Standards Board.
11 Revenue estimates shall recognize revenues in the accounting
12 period in which they become both measurable and available.
13 Estimates of city-generated revenues shall be based on
14 current or proposed tax rates, historical collection patterns
15 and generally recognized econometric models. Estimates of
16 revenues to be received from the State government shall be
17 based on historical patterns, currently available levels or
18 on levels proposed in a budget by the Governor. Estimates of
19 revenues to be received from the Federal Government shall be
20 based on historical patterns, currently available levels or
21 on levels proposed in a budget by the President or in a
22 congressional budget resolution. Nontax revenues shall be
23 based on current or proposed rates, charges or fees,
24 historical patterns and generally recognized econometric
25 models. Appropriation estimates shall include, at a minimum,
26 all obligations incurred during the fiscal year and estimated
27 to be payable during the fiscal year or in the 24-month
28 period following the close of the current fiscal year and all
29 obligations of prior fiscal years not covered by encumbered
30 funds from prior fiscal years. Any deviations from these
20030S0940B1237 - 24 -
1 standards of estimating revenues and appropriations proposed
2 to be used by an assisted city shall be specifically
3 disclosed and shall be approved by a majority of the board.
4 (3) All cash flow projections shall be based upon
5 reasonable and appropriate assumptions as to sources and uses
6 of cash, including, but not limited to, reasonable and
7 appropriate assumptions as to the timing of receipt and
8 expenditure thereof, and shall provide for operations of the
9 assisted city to be conducted within the resources so
10 projected. All estimates shall take due account of the past
11 and anticipated collection, expenditure and service demand
12 experience of the assisted city and of current and projected
13 economic conditions.
14 (d) Form of plan.--Each financial plan shall, consistent
15 with the requirements of an assisted city's home rule charter or
16 optional plan of government:
17 (1) be in such form and shall contain:
18 (i) for each of the first two fiscal years covered
19 by the financial plan, such information as shall reflect
20 an assisted city's total expenditures by fund and by lump
21 sum amount for each board, commission, department or
22 office of an assisted city; and
23 (ii) for the remaining three fiscal years of the
24 financial plan, such information as shall reflect an
25 assisted city's total expenditures by fund and by lump
26 sum amount for major object classification;
27 (2) include projections of all revenues and expenditures
28 for five fiscal years, including, but not limited to,
29 projected capital expenditures and short-term and long-term
30 debt incurrence and cash flow forecasts by fund for the first
20030S0940B1237 - 25 -
1 year of the financial plan;
2 (3) include a schedule of projected capital commitments
3 of the assisted city and proposed sources of funding for such
4 commitments; and
5 (4) be accompanied by a statement describing, in
6 reasonable detail, the significant assumptions and methods of
7 estimation used in arriving at the projections contained in
8 such plan.
9 (e) Annual submission of plan.--On or before November 30,
10 2003, an assisted city shall develop, and the authority shall
11 review and act upon, an initial five-year financial plan which
12 includes a report on the status of implementation of prior
13 published suggestions regarding consolidation and cost savings.
14 During each subsequent fiscal year, the mayor or chief executive
15 officer of each assisted city shall, at least 100 days prior to
16 the beginning of its fiscal year or on such other date as the
17 authority may approve upon the request of the assisted city,
18 prepare and submit its proposed five-year plan. At the same time
19 the plan is submitted, the mayor or chief executive officer
20 shall also submit to the authority:
21 (1) the mayor's or chief executive officer's proposed
22 annual operating budget and capital budget which shall be
23 consistent with the first year of the financial plan and
24 which shall be prepared in accordance with the assisted
25 city's home rule charter or other optional plan of
26 government; and
27 (2) a statement by the mayor or chief executive officer
28 that such budget:
29 (i) is consistent with the financial plan;
30 (ii) contains funding adequate for debt service
20030S0940B1237 - 26 -
1 payments, legally mandated services and lease payments
2 securing bonds of other government agencies; and
3 (iii) is based upon reasonable and appropriate
4 assumptions and methods of estimation.
5 (f) Authority review and approval of plan.--
6 (1) The authority shall promptly review each financial
7 plan, proposed operating budget and capital budget submitted
8 by the assisted city. In conducting such review, the
9 authority shall request from the city controller of the
10 assisted city an opinion or certification prepared in
11 accordance with generally accepted auditing standards, with
12 respect to the reasonableness of the assumptions and
13 estimates in the financial plan. The city controller and
14 other elected officials shall comply with any such request
15 from the authority. Not more than 30 days after submission of
16 a financial plan and proposed operating budget, the authority
17 shall determine whether:
18 (i) the financial plan projects balanced budgets,
19 based upon reasonable assumptions as described in this
20 section, for each year of the plan; and
21 (ii) the proposed operating budget and capital
22 budget are consistent with the proposed financial plan.
23 If the authority determines that these criteria are
24 satisfied, the authority shall approve such financial plan by
25 a majority vote.
26 (2) The authority shall not be bound by any opinions or
27 certifications of the city controller of the assisted city
28 issued pursuant to this subsection.
29 (3) If the authority fails to take any action within 30
30 days on a financial plan, the financial plan as submitted
20030S0940B1237 - 27 -
1 shall be deemed approved. However, if during the 30 days a
2 written request by two members of the authority board for a
3 meeting and vote on the question of approval of the financial
4 plan has been submitted to the chairperson and a meeting and
5 vote do not take place, the financial plan shall be deemed
6 disapproved.
7 (g) Authority disapproval of plan.--
8 (1) If the authority disapproves the proposed financial
9 plan, the authority shall, when it notifies an assisted city
10 of its decision, state in writing in reasonable detail the
11 reasons for such disapproval, including the amount of any
12 estimated budget imbalance.
13 (2) The assisted city shall submit a revised financial
14 plan to the authority within 15 days of such disapproval,
15 which revised plan eliminates the budget imbalance. Not more
16 than 15 days after the submission of such revised financial
17 plan, the authority shall determine whether the revised plan
18 satisfies the criteria set forth in subsection (f)(1). If the
19 authority determines that these criteria are satisfied, the
20 authority shall approve such financial plan by a majority
21 vote. If the authority shall not so approve the financial
22 plan, then the authority shall, in accordance with section
23 210(e), certify the assisted city's noncompliance with the
24 financial plan to the Secretary of the Budget, the President
25 pro tempore of the Senate and the Speaker of the House of
26 Representatives.
27 (h) Revisions to plan.--
28 (1) The plan shall be revised on an annual basis to
29 include the operating budget for the next fiscal year and to
30 extend the plan for an additional fiscal year. In addition,
20030S0940B1237 - 28 -
1 the mayor or chief executive officer of a city shall, within
2 90 days of assuming office, propose revisions to the
3 financial plan or certify to the authority that he or she
4 adopts the existing plan. An assisted city may, during the
5 course of a fiscal year, submit proposed revisions to the
6 financial plan and shall submit a proposed revision for any
7 amendment to the city's operating or capital budget.
8 (2) The authority shall review each proposed revision
9 within 20 days of its submission. The authority shall approve
10 the revision if it will not, based on reasonable assumptions,
11 cause the plan to become imbalanced. Proposed revisions shall
12 become part of the financial plan upon the approval of a
13 majority of the authority board, unless some other method of
14 approval is permitted by authority rules and regulations
15 approved by a majority or pursuant to an agreement with the
16 city contained in an intergovernmental cooperation agreement.
17 If the authority fails to take action within 20 days on a
18 proposed revision, such submission shall be deemed approved
19 unless a written request for a meeting and vote has been made
20 in accordance with subsection (f)(3) in which event, if a
21 meeting and vote does not take place, the proposed revision
22 shall be deemed disapproved.
23 (3) If the governing body of a city adopts a budget
24 inconsistent with an approved financial plan, the assisted
25 city shall submit the enacted budget to the authority as a
26 proposed revision to the plan. The authority shall review the
27 proposed revision within 30 days of its submission, in
28 accordance with the criteria set forth in subsection (f) and
29 the approval process set forth in paragraph (2).
30 (i) Supplemental reports.--Within 45 days of the end of each
20030S0940B1237 - 29 -
1 fiscal quarter, or monthly if a variation from the financial
2 plan has been determined in accordance with section 210(c), the
3 mayor or chief executive officer of an assisted city shall
4 provide the authority with reports describing actual or current
5 estimates of revenues and expenditures compared to budgeted
6 revenues and expenditures for such period reflected in its cash
7 flow forecast. Each report required under this section shall
8 indicate any variance between actual or current estimates and
9 budgeted revenues, expenditures and cash for the period covered
10 by such report. An assisted city shall also provide periodic
11 reports on debt service requirements in conformity with section
12 210(b).
13 (j) Effect of plan upon contracts and collective bargaining
14 agreements.--
15 (1) A contract or collective bargaining agreement in
16 existence in an assisted city prior to the approval by the
17 authority of a financial plan submitted pursuant to this
18 section shall remain effective after approval of such plan
19 until such contract or agreement expires.
20 (2) After the approval by the authority of a financial
21 plan submitted pursuant to this section, an assisted city
22 shall execute contracts and collective bargaining agreements
23 in compliance with such plan. If an assisted city executes a
24 contract or a collective bargaining agreement which is not in
25 compliance with the plan, the contract or agreement shall not
26 be void or voidable solely by reason of such noncompliance,
27 but the assisted city shall submit to the authority a
28 proposed revision to the plan which demonstrates that
29 revenues sufficient to pay the costs of the contract or
30 collective bargaining agreement will be available in the
20030S0940B1237 - 30 -
1 affected fiscal years of the plan.
2 (k) Effect of plan upon certain arbitration awards.--
3 (1) After the approval by the authority of a financial
4 plan submitted pursuant to this section, any determination of
5 a board of arbitration established pursuant to the provisions
6 of the act of June 24, 1968 (P.L.237, No.111), referred to as
7 the Policemen and Firemen Collective Bargaining Act,
8 providing for an increase in wages or fringe benefits of any
9 employee of an assisted city under the plan, in addition to
10 considering any standard or factor required to be considered
11 by applicable law, shall take into consideration and accord
12 substantial weight to:
13 (i) the approved financial plan; and
14 (ii) relevant market factors, such as the financial
15 situation of the assisted city, inflation, productivity,
16 size of work force and pay and benefit levels in
17 economically and demographically comparable political
18 subdivisions.
19 (2) Such determination shall be in writing and a copy
20 thereof shall be forwarded to each party to the dispute and
21 the authority. Any determination of the board of arbitration
22 which provides for an increase in wages or fringe benefits of
23 any employee of an assisted city shall state with specificity
24 in writing all factors which the board of arbitration took
25 into account in considering and giving substantial weight to
26 the factors referred to in paragraph (1).
27 (3) Any party to a proceeding before a board of
28 arbitration may appeal to the court of common pleas to
29 review:
30 (i) consideration under paragraph (1); or
20030S0940B1237 - 31 -
1 (ii) failure of the board of arbitration to issue a
2 determination under paragraph (2).
3 (4) An appeal under paragraph (3) must be commenced not
4 later than 30 days after the issuance of a final
5 determination by the board of arbitration.
6 (5) The decision of the board of arbitration shall be
7 vacated and remanded to the board of arbitration if the court
8 finds:
9 (i) that the board of arbitration failed to take
10 into consideration and accord substantial weight to the
11 factors referred to in paragraph (1); or
12 (ii) that the board of arbitration has failed to
13 issue a determination under paragraph (2).
14 (6) If, after the exhaustion of all appeals, the final
15 arbitration award is not in compliance with the approved
16 financial plan, the award shall not be void or voidable
17 solely by reason of such noncompliance, but the assisted city
18 shall submit to the authority a proposed revision to the plan
19 which demonstrates that revenues sufficient to pay the costs
20 of the award will be available in the affected fiscal years
21 of the plan.
22 Section 210. Powers and duties of authority with respect to
23 financial plans.
24 (a) Formulation and approval of plan.--To advance the
25 financial recovery of each assisted city, the authority shall
26 require the assisted city to submit a five-year financial plan
27 in accordance with section 209. With regard to the formulation
28 of such plan, the authority shall:
29 (1) Consult with an assisted city as it prepares the
30 financial plan.
20030S0940B1237 - 32 -
1 (2) Prescribe the form of the financial plan.
2 (3) Prescribe the supporting information required in
3 connection with such plan, such information to include at a
4 minimum:
5 (i) debt service payments due or projected to be due
6 during the relevant fiscal years;
7 (ii) payments for legally mandated services included
8 in the plan and due or projected to be due during the
9 relevant fiscal years; and
10 (iii) a statement in reasonable detail of the
11 significant assumptions and methods of estimation used in
12 arriving at the projections in the plan.
13 (4) Exercise any rights of approval or disapproval and
14 issue such recommendations as are authorized by this act in
15 accordance with the standards for formulation of the plan set
16 forth in section 209(c).
17 (b) Authority functions after plan is approved.--After a
18 financial plan has been approved, the authority shall:
19 (1) Receive and review:
20 (i) the financial reports submitted by the mayor or
21 chief executive officer of a city under section 209(i);
22 (ii) reports concerning the debt service
23 requirements on all bonds, notes of the assisted city and
24 lease payments of the assisted city securing bonds or
25 other government agencies for the following quarter,
26 which reports shall be in such form and contain such
27 information as the authority shall determine, and which
28 shall be issued no later than 60 days prior to the
29 beginning of the quarter to which they pertain, and shall
30 be updated immediately upon each issuance of bonds or
20030S0940B1237 - 33 -
1 notes, by the assisted city or execution of a lease
2 securing bonds of another government agency, after the
3 date of such report to reflect any change in debt service
4 requirements as a result of such issuance; and
5 (iii) any additional information provided by the
6 assisted city concerning changed conditions or unexpected
7 events which may affect the assisted city's adherence to
8 the financial plan. The reports described in subparagraph
9 (ii) shall be certified by the city controller.
10 (2) Determine, on the basis of information and reports
11 described in paragraph (1), whether an assisted city has
12 adhered to the financial plan.
13 (c) Variation from the plan.--If the authority determines,
14 based upon reports submitted by an assisted city under
15 subsection (b) or independent audits, examinations or studies of
16 the assisted city's finances obtained under subsection (i)(3),
17 that an assisted city's actual revenues and expenditures vary
18 from those estimated in the financial plan, the authority shall
19 require the city to provide such additional information as the
20 authority deems necessary to explain the variation. The
21 authority shall take no action with respect to an assisted city
22 for departures from the financial plan in a fiscal quarter if:
23 (1) the city provides a written explanation for the
24 variation that the authority deems reasonable;
25 (2) the city proposes remedial action which the
26 authority believes will restore the assisted city's overall
27 compliance with the financial plan;
28 (3) information provided by the city in the immediately
29 succeeding quarterly financial report demonstrates that the
30 assisted city is taking such remedial action and otherwise
20030S0940B1237 - 34 -
1 complying with the plan; and
2 (4) the assisted city submits monthly supplemental
3 reports in accordance with section 209(i) until it regains
4 compliance with the financial plan.
5 (d) Authority may make recommendations.--The authority may
6 at any time issue recommendations as to how an assisted city may
7 achieve compliance with the financial plan and shall provide
8 copies of such recommendations to the mayor or chief executive
9 officer and the governing body of the city and to the officials
10 named in section 203(b)(5).
11 (e) When Commonwealth shall withhold funds.--
12 (1) The authority shall certify to the Secretary of the
13 Budget an assisted city's noncompliance with the financial
14 plan during any period when the authority has determined by
15 the vote of a majority that the assisted city has not adhered
16 to the plan and has not taken acceptable remedial action
17 during the next quarter following such departure from the
18 plan.
19 (2) The authority shall certify to the Secretary of the
20 Budget that an assisted city is not in compliance with the
21 plan if the assisted city:
22 (i) has no financial plan approved by the authority,
23 has failed to provide requested documents or has failed
24 to file a financial plan with the authority;
25 (ii) has failed to file mandatory revisions to the
26 plan or reports as required by section 209(h), (i), (j)
27 or (k); or
28 (iii) has not been compelled to file a financial
29 plan, a mandatory revision to the plan or a report
30 through a mandamus action authorized under subsection
20030S0940B1237 - 35 -
1 (j).
2 (3) If the authority certifies that an assisted city is
3 not in compliance with the financial plan under paragraph (1)
4 or (2), the Secretary of the Budget shall notify the city
5 that such certification has been made and that each grant,
6 loan, entitlement or payment to the assisted city by the
7 Commonwealth shall be suspended pending compliance with the
8 financial plan. Funds withheld shall be held in escrow by the
9 Commonwealth until compliance with the plan is restored as
10 set forth in paragraph (4). Funds held in escrow pursuant to
11 this subsection shall not lapse pursuant to section 621 of
12 the act of April 9, 1929 (P.L.177, No.175), known as The
13 Administrative Code of 1929, or any other law.
14 (4) The authority shall, by majority vote, determine
15 when the conditions which caused an assisted city to be
16 certified as not in compliance with the financial plan have
17 ceased to exist and shall promptly notify the Secretary of
18 the Budget of such vote. The Secretary of the Budget shall
19 thereupon release all funds held in escrow, together with all
20 interest and income earned thereon during the period held in
21 escrow, and the disbursements of amounts in the city account
22 shall resume.
23 (f) Exemptions.--Notwithstanding the provisions of
24 subsection (e), the following shall not be withheld from an
25 assisted city:
26 (1) funds granted or allocated to an assisted city
27 directly from an agency of the Commonwealth or from the
28 Federal Government for distribution by the Commonwealth after
29 the declaration of a disaster resulting from a catastrophe;
30 (2) funds for capital projects under contract in
20030S0940B1237 - 36 -
1 progress;
2 (3) pension fund payments required by law; and
3 (4) funds the assisted city has pledged to repay bonds
4 or notes.
5 (g) Effect of Commonwealth's failure to disburse funds.--The
6 provisions of subsection (e) shall not apply and an assisted
7 city shall not be found to have departed from the financial plan
8 due to the Commonwealth's failure to pay any money, including
9 payment of Federal funds distributed by or through the
10 Commonwealth, due to the assisted city from moneys appropriated
11 by the General Assembly.
12 (h) Assisted city to determine expenditure of available
13 funds.--Nothing in this act shall be construed to limit the
14 power of an assisted city to determine, from time to time,
15 within available funds of the assisted city, the purposes for
16 which expenditures are to be made by the assisted city and the
17 amounts of such expenditures then permitted under the financial
18 plan of the assisted city.
19 (i) Documents and examinations to be reviewed or undertaken
20 by the authority.--The authority shall:
21 (1) receive from an assisted city and review the
22 reports, documents, budgetary and financial planning data and
23 other information prepared by or on behalf of such assisted
24 city and which are to be made available to the authority
25 under this act;
26 (2) inspect and copy such books, records and information
27 of an assisted city as the authority deems necessary to
28 accomplish the purposes of this act; and
29 (3) conduct or cause to be conducted such independent
30 audits, examinations or studies of an assisted city's
20030S0940B1237 - 37 -
1 finances as the authority deems appropriate.
2 (j) Remedies of authority for failure of an assisted city to
3 file financial plans and reports.--In the event that an assisted
4 city shall fail to file with the authority any financial plan,
5 revision to a financial plan, report or other information
6 required to be filed with the authority pursuant to this act,
7 the authority, in addition to all other rights which the
8 authority may have at law or in equity, shall have the right by
9 mandamus to compel the assisted city and the officers, employees
10 and agents thereof to file with the authority the financial
11 plan, revision to a financial plan, report or other information
12 which the assisted city has failed to file. The authority shall
13 give the assisted city written notice of the failure of the
14 assisted city to file and of the authority's intention to
15 initiate an action under this subsection and shall not initiate
16 such an action earlier than ten days after the giving of such
17 notice.
18 Section 211. Limitation on authority and on assisted cities to
19 file petition for relief under Federal bankruptcy
20 law.
21 (a) Limitation on bankruptcy filing.--Notwithstanding any
22 other provision of law, the authority and any assisted city
23 shall not be authorized to file a petition for relief under 11
24 U.S.C. Ch. 9 (relating to adjustments of debts of a
25 municipality) or any successor Federal bankruptcy law, and no
26 government agency shall authorize the authority or such city to
27 become a debtor under 11 U.S.C. Ch. 9 or any successor Federal
28 bankruptcy law.
29 (b) Bankruptcy filing approval.--In addition to the
30 limitation set forth in subsection (a), and notwithstanding any
20030S0940B1237 - 38 -
1 other provision of law, no city shall be authorized to file a
2 petition for relief under 11 U.S.C. Ch. 9 or any successor
3 Federal bankruptcy law, unless such petition has been submitted
4 to, and the filing thereof has been approved in writing by the
5 Governor. The Governor is designated, in accordance with 11
6 U.S.C. § 109(c)(2) (relating to who may be a debtor), as the
7 organization of the Commonwealth which shall have power to
8 approve or disapprove the filing of any such petition of a
9 political subdivision, and to approve or disapprove any plan of
10 readjustment of the debts of any such political subdivision
11 prepared, filed and submitted with the petition to the court, as
12 provided under 11 U.S.C. Ch. 9.
13 (c) Review of bankruptcy petition.--
14 (1) When any such petition shall be submitted to the
15 Governor for approval, accompanied with a proposed plan of
16 readjustment of the debts of a city, the Governor shall make
17 a careful and thorough investigation of the financial
18 condition of such city, of its assets and liabilities, of its
19 sinking fund, and whether the affairs thereof are managed in
20 a careful, prudent and economic manner in order to ascertain
21 whether the presentation of such petition is justified, or
22 represents an unjust attempt by such city to evade payment of
23 some of its contractual obligations, and, if the Governor
24 believes that such petition should be approved, whether the
25 plan of readjustment submitted will be helpful to the
26 financial condition of the city and is feasible and, at the
27 same time, fair and equitable to all creditors.
28 (2) The Governor shall also, prior to giving his
29 approval, ascertain the amount, if any, of the obligations of
30 any such petitioning city which is held by any agency or
20030S0940B1237 - 39 -
1 agencies of the State government as trust funds and shall,
2 before approving any such petition and plan of readjustment,
3 consult with and give every such agency an opportunity to be
4 heard and the privilege to examine the findings of the
5 Governor resulting from the investigation required to be made
6 under this act, and shall likewise hear any other creditor of
7 such city, whether resident in or outside this Commonwealth,
8 who shall apply therefor.
9 (3) The Governor, if he approves a petition, shall,
10 before giving his approval, require such modification in the
11 proposed plan for readjusting the debts as to him appears
12 proper.
13 Section 212. Investment of funds.
14 Funds of the authority which are not required for immediate
15 use may be invested in obligations of an assisted city or in
16 obligations of the Federal Government or of the Commonwealth or
17 obligations which are legal investments for Commonwealth funds.
18 However, no money may be invested in obligations issued by or
19 obligations guaranteed by an assisted city without the approval
20 of a majority of the board.
21 Section 213. Sovereign immunity.
22 Members of the board shall not be liable personally for any
23 obligations of the authority. It is hereby declared to be the
24 intent of the General Assembly that the authority created by
25 this act and its members, officers, officials and employees
26 shall enjoy sovereign and official immunity, as provided in 1
27 Pa.C.S. § 2310 (relating to sovereign immunity reaffirmed;
28 specific waiver), and shall remain immune from suit except as
29 provided by and subject to the provisions of 42 Pa.C.S. §§ 8501
30 (relating to definitions) through 8528 (relating to limitations
20030S0940B1237 - 40 -
1 on damages).
2 CHAPTER 7
3 MISCELLANEOUS PROVISIONS
4 Section 701. Appropriation.
5 The sum of $200,000 is hereby appropriated from the General
6 Fund to the Intergovernmental Cooperation Authority for Cities
7 of the Second Class as a continuing appropriation for the
8 purpose of providing operating funds for the Intergovernmental
9 Cooperation Authority for Cities of the Second Class. This
10 appropriation shall lapse June 30, 2005.
11 Section 702. General rights and prohibitions.
12 Nothing in this act shall limit the rights or impair the
13 obligations of any assisted city to comply with the provisions
14 of any contract in effect on the effective date of this act or
15 shall in any way impair the rights of the obligees of any
16 assisted city with respect to any such contract.
17 Section 703. Nondiscrimination.
18 The authority shall comply in all respects with the
19 nondiscrimination and contract compliance plans used by the
20 Department of General Services to assure that all persons are
21 accorded equality of opportunity in employment and contracting
22 by the authority and its contractors, subcontractors, assignees,
23 lessees, agents, vendors and suppliers.
24 Section 704. Construction of act.
25 (a) Liberal construction.--The provisions of this act
26 providing for security for and rights and remedies of obligees
27 of the authority shall be liberally construed to achieve the
28 purposes stated and provided for by this act.
29 (b) Severability.--If any provision of the title or any
30 chapter, section or clause of this act, or the application
20030S0940B1237 - 41 -
1 thereof to any person, party, corporation, public or private,
2 shall be judged invalid by a court of competent jurisdiction,
3 such order or judgment shall be confined in its operation to the
4 controversy in which it was rendered and shall not affect or
5 invalidate the remainder of any provision of the title or any
6 chapter or any section or clause of this act, or the application
7 of any part thereof to any other person, party, corporation,
8 public or private, or circumstance, and, to this end, the
9 provisions of the title or any chapter, section or clause of
10 this act hereby are declared to be severable. It is hereby
11 declared as the legislative intent that this act would have been
12 adopted had any provision declared unconstitutional not been
13 included herein.
14 Section 705. Limitation of authority powers.
15 Except as provided in section 210(i), nothing contained in
16 this act shall be construed to confer upon the authority any
17 powers with respect to a school district.
18 Section 706. Suspension and repeal.
19 (a) Suspension.--The provisions of the act of July 10, 1987
20 (P.L.246, No.47), known as the Municipalities Financial Recovery
21 Act, are suspended as to cities of the second class until the
22 termination of the authority established by this act.
23 (b) General.--All other acts or parts of acts are repealed
24 insofar as they are inconsistent with this act.
25 Section 707. Effective date.
26 This act shall take effect immediately.
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