PRINTER'S NO. 1131
No. 984 Session of 1989
INTRODUCED BY SHUMAKER, SALVATORE, PUNT, ROCKS, HELFRICK AND RHOADES, MAY 31, 1989
REFERRED TO EDUCATION, MAY 31, 1989
AN ACT 1 Amending the act of July 12, 1972 (P.L.781, No.185), entitled, 2 as amended, "An act providing debt limits for local 3 government units, including municipalities and school 4 districts; providing the methods of incurring, evidencing, 5 securing and collecting debt; defining the powers and duties 6 of the Department of Community Affairs and certain other 7 public officers and agencies with respect thereto; exercising 8 the inherent legislative authority of the General Assembly by 9 providing additional over-all limitations on the incurring of 10 lease rental and other obligations for the acquisition of 11 capital assets to be repaid from the general tax revenues of 12 such local government units; imposing penalties for filing 13 false or untrue statements or refusing to give information 14 with respect to proceedings for the incurring of debt; and 15 conferring jurisdiction on the Commonwealth Court with 16 respect to certain proceedings relating to the incurring of 17 debt," further providing for the limitations on debt of 18 school districts. 19 The General Assembly of the Commonwealth of Pennsylvania 20 hereby enacts as follows: 21 Section 1. Section 202 of the act of July 12, 1972 (P.L.781, 22 No.185), known as the Local Government Unit Debt Act, reenacted 23 and amended April 28, 1978 (P.L.124, No.52), repealed in part 24 October 5, 1980 (P.L.693, No.142) and amended May 22, 1981 25 (P.L.54, No.19), is amended to read:
1 Section 202. Limitations on the Incurring of Other Debt.-- 2 (a) Except as provided in subsections (c), (d) and (e) of this 3 section and as otherwise specifically provided in this act, no 4 local government unit shall incur any new nonelectoral debt, if 5 the aggregate net principal amount of such new nonelectoral debt 6 together with all other net nonelectoral debt outstanding would 7 cause the total net nonelectoral debt of such local government 8 unit to exceed: 9 (i) one hundred per cent of its borrowing base in the case 10 of a school district of the first class; 11 (i.1) ten per cent of its borrowing base in the case of any 12 school district of the second through fourth classes; 13 (ii) three hundred per cent of its borrowing base in the 14 case of a county; or 15 (iii) two hundred fifty per cent of its borrowing base in 16 the case of any other local government unit. 17 (b) Except as provided in subsections (c), (d) and (e) of 18 this section or as otherwise specifically provided in this act, 19 in the exercise of legislative control over the budgets and 20 expenditures of local government units and of the purposes for 21 which tax moneys and general revenues of local government units 22 may be expended, the General Assembly determines that no local 23 government unit shall incur any new lease rental debt or 24 nonelectoral debt, if the aggregate net principal amount of such 25 new debt together with any other net nonelectoral debt and net 26 lease rental debt then outstanding would cause the outstanding 27 total of net nonelectoral debt plus net lease rental debt of 28 such local government unit to exceed: 29 (i) two hundred per cent of the borrowing base in the case 30 of a school district of the first class; 19890S0984B1131 - 2 -
1 (i.1) ten per cent of its borrowing base in the case of any 2 school district of the second through fourth classes; 3 (ii) four hundred per cent of its borrowing base in the case 4 of a county; or 5 (iii) three hundred fifty per cent of its borrowing base in 6 the case of all other local government units. 7 (c) The limitations and prohibitions of the preceding 8 subsections (hereinafter called the "regular debt limits") shall 9 not apply to electoral debt, nor to debt excluded in computing 10 net amounts of nonelectoral debt or of lease rental debt, as 11 self-liquidating or because subsidized, when such exclusion is 12 made pursuant to sections 204, 205 and 206 of this act. 13 (d) Additional nonelectoral or additional lease rental debt 14 or both in the aggregate amount of one hundred per cent of the 15 borrowing base may be incurred: 16 (i) by a county which has assumed, either before or after 17 the effective date of this act, county-wide responsibility for; 18 or 19 (ii) where the county has not assumed county-wide 20 responsibility, by a local government unit which has, either 21 before or after the effective date of this act, assumed 22 responsibility for its and its adjacent areas; for hospitals and 23 other public health services, air and water pollution control, 24 flood control, environmental protection, water distribution and 25 supply systems, sewage and refuse collection and disposal 26 systems, education at any level, highways, public transportation 27 or port operations, but such additional debt limit may be so 28 utilized only to provide funds for and towards the cost of 29 capital facilities for any or any combination of the foregoing 30 purposes. Debt, other than electoral debt, at any time incurred 19890S0984B1131 - 3 -
1 for such purposes or any of them, may be assigned by ordinance 2 to this additional debt limit, if the remaining borrowing 3 capacity within the regular limits is insufficient to finance 4 other projects deemed necessary by the governing body of the 5 local government unit. 6 (e) If replacement of assets is required as a result of 7 fire, flood, storm, war, riot, civil commotion or other 8 catastrophe, or such replacement or any improvements are 9 required for the prevention of dangers to health or safety, or 10 if funds are required for the payment of tort liability not 11 covered by insurance, or if funds are required to be used for 12 and towards the costs of mandated installations of health, 13 safety, anti-pollution, environmental protection and control 14 facilities or of complying with other mandated Federal or 15 Commonwealth programs, a local government unit not having 16 sufficient remaining borrowing capacity as nonelectoral or lease 17 rental debt or being otherwise prohibited by section 305 from 18 incurring debt for the purpose, upon petition to the court of 19 common pleas alleging the catastrophe, or the danger to health 20 and safety, or the mandated nature of the program and the 21 estimated costs of the proposed facilities, and upon proof 22 thereof to the satisfaction of the court, shall be authorized, 23 notwithstanding section 305 or the insufficiency of nonelectoral 24 or lease rental borrowing capacity, to incur debt, as either 25 lease rental or nonelectoral debt, up to an additional fifty per 26 cent of its borrowing base, if such increase is found by the 27 court to have been made necessary under this subsection by 28 reason of the causes set forth in the petition. The increase 29 together with all outstanding other additional emergency debt 30 which may have been previously authorized under this subsection 19890S0984B1131 - 4 -
1 (excluding any allocated to the additional debt limit under 2 subsection (d) of this section) shall not exceed fifty per cent 3 of the borrowing base. Public notice of the intention to file 4 such a petition and of the purpose for which the additional 5 emergency debt is to be incurred shall be given by advertisement 6 in at least one and not more than two papers of general 7 circulation and in the legal journal not less than five nor more 8 than twenty days before the filing thereof. Such additional 9 emergency debt may be incurred only for the purposes and upon 10 the terms approved by the court. The amount of such debt 11 initially in excess of the regular debt limits shall not 12 thereafter be included in computing net amounts of nonelectoral 13 or lease rental debt. 14 Section 2. This act shall take effect in 60 days. A17L53WMB/19890S0984B1131 - 5 -