THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY WHITE, BELFANTI, BROWN, CALTAGIRONE, HORNAMAN, JOSEPHS, W. KELLER, ROCK, SIPTROTH, SWANGER, THOMAS AND KORTZ, APRIL 19, 2010

REFERRED TO COMMITTEE ON COMMERCE, APRIL 19, 2010  

AN ACT

Amending the act of April 9, 1929 (P.L.343, No.176), entitled,

as amended, "An act relating to the finances of the State

government; providing for the settlement, assessment,

collection, and lien of taxes, bonus, and all other accounts

due the Commonwealth, the collection and recovery of fees and

other money or property due or belonging to the Commonwealth,

or any agency thereof, including escheated property and the

proceeds of its sale, the custody and disbursement or other

disposition of funds and securities belonging to or in the

possession of the Commonwealth, and the settlement of claims

against the Commonwealth, the resettlement of accounts and

appeals to the courts, refunds of moneys erroneously paid to

the Commonwealth, auditing the accounts of the Commonwealth

and all agencies thereof, of all public officers collecting

moneys payable to the Commonwealth, or any agency thereof,

and all receipts of appropriations from the Commonwealth,

authorizing the Commonwealth to issue tax anticipation notes

to defray current expenses, implementing the provisions of

section 7(a) of Article VIII of the Constitution of

Pennsylvania authorizing and restricting the incurring of

certain debt and imposing penalties; affecting every

department, board, commission, and officer of the State

government, every political subdivision of the State, and

certain officers of such subdivisions, every person,

association, and corporation required to pay, assess, or

collect taxes, or to make returns or reports under the laws

imposing taxes for State purposes, or to pay license fees or

other moneys to the Commonwealth, or any agency thereof,

every State depository and every debtor or creditor of the

Commonwealth," further providing for State depositories.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 505(b) of the act of April 9, 1929

(P.L.343, No.176), known as The Fiscal Code, amended June 28,

1951 (P.L.601, No.152), is amended and the section is amended by

adding subsections to read:

Section 505.  State Depositories.--The Board of Finance and

Revenue shall have the power, and its duty shall be,

* * *

(b)  To [select,] give preference to community banks as

depositories for State funds[, private banking institutions

located and doing business in this Commonwealth, if such private

banking institutions] if the community bank shall file a

statement, in writing, with the board and the Department of

Banking, agreeing that they will subject themselves to the same

supervision in all respects, including an examination by the

bank examiners of the Department of Banking at any time as

banks, banking institutions, or trust companies, which are

depositories of State funds, and, if and after, compliance with

the conditions required of any other depository. When bids are

received by a community bank and a nonresident bank, the

contract shall be awarded to the community bank whose bid is

nearest to the bid price of the otherwise low nonresident bank

bidder if the bid price of the community bank is lower than the

bid price of a nonresident bank when multiplied by a factor

of .9.

* * *

(h)  The State Treasurer, with the Board of Finance and

Revenue, shall develop a program to increase State investment in

certificates of deposit at community banks.

1.  The State Treasurer shall promulgate regulations to

determine that portion of the General Fund that is not needed to

meet short-term liquidity needs and, subsequently, create an

investment program for the remainder aimed at increasing

community bank lending to Pennsylvania businesses.

2.  The regulations promulgated under subsection (b) shall

balance the investment priorities, such as the preservation of

the principal balance, the maintenance of liquidity and maximum

return with the need for a program where the Commonwealth

invests in certificates of deposit with maturity terms of at

least one year, thereby providing community banks with

additional reserves to lend to businesses in this Commonwealth.

(i)  Definitions.--As used in this section, the following

words and phrases shall have the meanings given to them in this

subsection unless the context clearly indicates otherwise:

"Community bank"  shall mean a federally insured depository

institution organized under the laws of this Commonwealth, or a

credit union that is insured by the National Credit Union

Administration and is organized under the laws of this

Commonwealth.

"Nonresident bank"  shall mean a federally insured depository

institution organized under the laws of a state other than this

Commonwealth.

Section 2.  This act shall take effect in 60 days.