HOUSE AMENDED

 

PRIOR PRINTER'S NOS. 1372, 1407, 1435, 1447

PRINTER'S NO.  1605

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

SENATE BILL

 

No.

1151

Session of

2011

  

  

INTRODUCED BY PICCOLA, PILEGGI, EARLL, VANCE, GORDNER, WAUGH, ALLOWAY, BAKER, ERICKSON, ORIE, BROWNE AND TOMLINSON, JUNE 17, 2011

  

  

AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES, SEPTEMBER 27, 2011   

  

  

  

AN ACT

  

1

Amending the act of July 10, 1987 (P.L.246, No.47), entitled "An

2

act empowering the Department of Community Affairs to declare

3

certain municipalities as financially distressed; providing

4

for the restructuring of debt of financially distressed

5

municipalities; limiting the ability of financially

6

distressed municipalities to obtain government funding;

7

authorizing municipalities to participate in Federal debt

8

adjustment actions and bankruptcy actions under certain

9

circumstances; and providing for consolidation or merger of

10

contiguous municipalities to relieve financial distress,"

11

further providing for purpose and legislative intent and for

<--

12

Commonwealth agency payments or assistance; providing for 

13

review of coordinator, for the establishment of a management

14

board for distressed third class cities and for powers of

15

management boards; prohibiting distressed third class cities

16

from filing Federal bankruptcy petitions; and making

17

editorial changes. further providing for purpose and

<--

18

legislative intent; providing for fiscal emergencies in third

19

class cities and for receivership for third class cities; and

20

making editorial changes.

21

The General Assembly of the Commonwealth of Pennsylvania

22

hereby enacts as follows:

23

Section 1.  Section 102(b)(1) of the act of July 10, 1987

<--

24

(P.L.246, No.47), known as the Municipalities Financial Recovery

25

Act, is amended and the subsection is amended by adding a

 


1

paragraph to read:

2

Section 102.  Purpose and legislative intent.

3

* * *

4

(b)  Legislative intent.--

5

(1)  It is the intent of the General Assembly to:

6

(i)  Enact procedures and provide powers and

7

guidelines to ensure fiscal integrity of municipalities

8

while leaving principal responsibility for conducting the

9

governmental affairs of a municipality, including

10

choosing the priorities for and manner of expenditures

11

based on available revenues, to the charge of its elected

12

officials, consistent with the public policy set forth in

13

this section.

14

(ii)  Enact procedures for the adjustment of

15

municipal debt by negotiated agreement with creditors.

16

(iii)  Provide for the exercise of the Commonwealth's

17

sovereign and plenary police power in emergency fiscal

18

conditions to protect the health, safety and welfare of a

19

municipality's citizens when local officials are

20

unwilling or unable to accept a solvency plan developed

21

for the benefit of the community.

22

* * *

23

(3)  The General Assembly recognizes that the financial

24

conditions of certain distressed municipalities are so severe

25

and the policies of those municipalities so ineffective that

26

the nonviability of those municipalities threatens the fiscal

27

condition and credit stability of other communities. In such

28

cases, additional methods of protecting citizens must be

29

implemented, including:

30

(i)  Instituting more direct Commonwealth oversight

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1

pursuant to the Commonwealth's power to provide for local

2

government under Article IX of the Constitution of

3

Pennsylvania and through the creation of public

4

authorities as instrumentalities of the Commonwealth.

5

(ii)  Judicial intervention when necessary to ensure

6

the compliance of the distressed municipality with the

7

provisions of this act.

8

Section 1.1.  Section 251(a) of the act is amended and the

9

section is amended by adding a subsection to read:

10

Section 251.  Commonwealth agency payments or assistance.

11

(a)  Withholding of certain Commonwealth funds.--Except as

12

provided in section 302(b), upon certification by the

13

[secretary] department that a financially distressed

14

municipality has failed to adopt a plan or implement an adopted

15

plan as proposed under this act or has adopted a plan which is

16

inadequate to address the municipality's financial distress, the

17

municipality shall not receive a grant, loan, entitlement or

18

payment from the Commonwealth or any of its agencies. Moneys

19

withheld shall be held in escrow by the Commonwealth until the

20

[secretary] department has rescinded the certification.

21

(a.1)  Disposition of assets.--Subsection (a) shall apply to

22

the failure of a distressed city or a management board

23

established under section 603(a) if the city or management board

24

fails to identify, sell, lease or otherwise dispose of assets in

25

accordance with section 605.

26

* * *

27

Section 1.2.  The act is amended by adding a section to read:

28

Section 254.  Review and investigation of coordinators.

29

(a)  Initial review.--The department shall conduct a review

30

of all coordinators appointed or serving during 2010. The review

- 3 -

 


1

under this subsection shall be conducted by October 1, 2011.

2

Within 30 days of the completed review, the department shall

3

determine if the coordinator has failed to develop an adequate

4

plan or to implement the plan in an appropriate or adequate

5

manner. If the coordinator has failed to develop or implement

6

the plan in an appropriate or adequate manner, the department

7

shall remove the coordinator and appoint a new coordinator.

8

(b)  Additional reviews.--The department shall conduct a

9

review of all coordinators appointed for service or serving

10

during 2011 and each year thereafter. The review under this

11

subsection shall be conducted by June 30. Within 30 days of the

12

completed review, the department shall determine if the

13

coordinator has failed to develop an adequate plan or to

14

implement the plan in an appropriate manner. If the coordinator

15

has failed to develop an adequate plan or to implement the plan

16

in an appropriate manner, the department shall remove the

17

coordinator and appoint a new coordinator.

18

(c)  Investigations.--In addition to the review under

19

subsection (a) or (b), the department shall investigate a

20

complaint as to the failure of the coordinator to develop an

21

adequate plan or to implement the plan in an appropriate or

22

adequate manner. The complaint must be brought by:

23

(1)  a petition from at least two members of the

24

governing body of the municipality; or

25

(2)  a petition signed by 30 residents of the

26

municipality.

27

Section 2.  The act is amended by adding a chapter to read:

28

CHAPTER 6

29

CITIES OF THE THIRD CLASS

30

Section 601.  Definitions.

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1

"Business with which he is associated."  The term shall have

2

the same meaning as defined in 65 Pa.C.S. § 1102 (relating to

3

definitions).

4

"City."  A city of the third class.

5

"Controlled authority."  A municipal authority, parking

6

authority or other authority or corporate entity which is

7

directly or indirectly controlled by a distressed city or to

8

which a distressed city has powers of appointment.

9

"County."  The county in which a distressed city is located.

10

"Distressed city."  A city which has been determined to be

11

financially distressed under section 203(f). The term includes

12

any controlled authority which is directly or indirectly

13

controlled by the city or to which the city has direct or

14

indirect power of appointment or has pledged or designated the

15

city's revenues or the city's credit.

16

"Immediate family."  The term shall have the same meaning as

17

defined in 65 Pa.C.S. § 1102 (relating to definitions).

18

"Management board."  The city management board.

19

Section 602.  Applicability.

20

A distressed city shall be subject to the provisions of this

21

chapter and Chapters 2 and 3. If a conflict between this chapter

22

and any other provision of this act occurs, the provisions of

23

this chapter shall prevail.

24

Section 603.  Management board.

25

(a)  Establishment.--A management board shall be established

26

if the secretary determines that a distressed city has either

27

failed to adopt or has not implemented the coordinator's plan in

28

accordance with sections 245 and 247(a). A distressed city shall

29

be deemed to have failed to adopt the coordinator's plan if it

30

takes any action to approve an alternative plan under section

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1

246.

2

(b)  Composition.--A management board established under

3

subsection (a) shall be comprised of the following:

4

(1)  Two members appointed by the Governor, one of whom

5

must be a resident of the distressed city for which the board

6

is being appointed.

7

(2)  One member appointed by the board of commissioners

8

of the county who shall be a resident of the county at the

9

time of appointment and shall maintain county residence while

10

a member of the board.

11

(b.1)  Public officials, political party officers; conflicts

12

of interest prohibited.--

13

(1)  Members of the management board shall not:

14

(i)  Seek or hold a position as any other elected or

15

appointed public official within this Commonwealth or as

16

a political party officer while in the service of the

17

management board.

18

(ii)  Seek election as public officials or political

19

party officers for one year after their service with the

20

management board.

21

(2)  The following apply:

22

(i)  No member of the management board may:

23

(A)  Directly or indirectly be a party to or have

24

an interest in any contract or agreement with the

25

distressed city. The prohibition under this clause

26

shall extend to a member's immediate family or a

27

business with which he or a member of his immediate

28

family is associated.

29

(B)  Use his office or any confidential

30

information received through his office for the

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1

private pecuniary benefit of himself, a member of his

2

immediate family or a business with which he or a

3

member of his immediate family is associated.

4

(ii)  Any member who willfully violates this

5

paragraph shall forfeit his office and shall be subject

6

to any other criminal and civil sanctions as may be

7

imposed by law. Any contract or agreement knowingly made

8

in contravention of this paragraph shall be void.

9

(c)  Experience and residence.--

10

(1)  All members and their designees shall have

11

experience in finance or management.

12

(2)  All members and their designees shall be residents

13

of this Commonwealth.

14

(d)  Term.--Members shall be appointed within seven days of  

15

a determination by the secretary under subsection (a). Members

16

shall select a chairperson who shall serve for a term of two

17

years. Members appointed by the Governor shall have a term

18

coterminous with the appointing authority. A member appointed by

19

the county commissioners shall have a term coterminous with the

20

chairman of the board of commissioners. If a vacancy occurs, the

21

appointing authority who originally appointed the management

22

board member whose seat has become vacant shall appoint a

23

successor member within 30 days of the vacancy. A member

24

appointed to fill a vacancy occurring prior to the expiration of

25

a term shall serve the unexpired term.

26

(e)  Organization.--

27

(1)  The Governor shall set a date, time and place for

28

the initial organizational meeting of the management board

29

within five days of the appointment of the members of the

30

management board. The initial organizational meeting shall be

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1

held within 15 days of the appointment under subsection (d).

2

(2)  Members shall elect other officers as they deem

3

necessary.

4

(f)  Meetings.--Following the initial organizational meeting,

5

the management board shall meet as frequently as it deems

6

appropriate but at least once during each quarter of the fiscal

7

year. A meeting of the management board shall be called by the

8

chairperson if a request for a meeting is submitted by the other

9

two members of the management board. A majority of the

10

management board shall constitute a quorum. All actions of the

11

management board shall be taken by a majority of the management

12

board. The following statutes shall apply to the management

13

board:

14

(1)  65 Pa.C.S. Chs. 7 (relating to open meetings) and 11

15

(relating to ethics standards and financial disclosure).

16

(2)  The act of July 19, 1957 (P.L.1017, No.451), known

17

as the State Adverse Interest Act.

18

(3)  The act of February 14, 2008 (P.L.6, No.3), known as

19

the Right-to-Know Law.

20

(g)  Expenses.--A member shall not receive compensation or

21

remuneration but shall be entitled to reimbursement for all

22

reasonable and necessary expenses.

23

(h)  Employees.--The department shall provide administrative

24

and other support to the management board. The management board

25

may contract for or receive the loan of services of other

26

individuals employed by other government agencies.

27

(i)  Commonwealth agency.--A management board established

28

under this chapter shall constitute a public authority and

29

instrumentality of the Commonwealth, exercising the powers of

30

the Commonwealth. The exercise of the powers of the management

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1

board shall be deemed to be an essential government function.

2

(j)  Sovereign immunity.--Members of the management board

3

shall not be liable personally for any obligations of the

4

management board. It is declared to be the intent of the General

5

Assembly that the management board and its members shall enjoy

6

sovereign and official immunity as provided in 1 Pa.C.S. § 2310

7

(relating to sovereign immunity reaffirmed; specific waiver) and

8

shall remain immune from suit except as provided by and subject

9

to the provisions of 42 Pa.C.S. Ch. 85 Subchs. A (relating to

10

general provisions) and B (relating to actions against

11

Commonwealth parties).

12

(k)  Term of existence.--

13

(1)  The management board shall exist for an initial term

14

of at least seven years. The management board shall be

15

renewed for seven-year terms by the department unless:

16

(i)  the city has maintained a surplus over a three-

17

year period and the city's revenues have exceeded

18

expenditures for a period of at least three-years; or

19

(ii)  the department determines that the city has

20

implemented the coordinator's plan.

21

(2)  Upon termination of the management board, records

22

and documents of the board shall be transferred to the

23

director of finance of the city. Within 60 days of

24

termination, the management board shall submit a final report

25

on its activities and the city's fiscal condition to the

26

Governor, the Secretary of the Senate and the Chief Clerk of

27

the House of Representatives.

28

Section 604.  Powers and duties.

29

Notwithstanding any other provision of law, the management

30

board shall have the following powers and duties:

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1

(1)  To require the distressed city to implement the

2

coordinator's plan.

3

(2)  To require the coordinator to make changes to the

4

coordinator's plan as necessary to achieve financial

5

stability of the distressed city.

6

(3)  To require the distressed city to negotiate

7

intergovernmental cooperation agreements between the

8

distressed city and other political subdivisions in order to

9

eliminate and avoid deficits, maintain sound budgetary

10

practices and avoid interruption of municipal services.

11

(4)  To make annual reports for submission to the

12

department within 120 days after the close of the distressed

13

city's fiscal year.

14

(5)  To require the distressed city to cause the sale,

15

lease or other disposition of the distressed city's assets

16

under section 605.

17

(6)  To approve or disapprove the execution of contracts

18

and agreements by the distressed city.

19

(7)  To direct the distressed city to take any other

20

action to implement the coordinator's plan.

21

Section 605.  Sale of assets.

22

(a)  Authority.--The management board shall have the

23

authority to determine that it is in the best financial

24

interests of the distressed city to sell, lease or dispose of

25

assets determined by the management board to be nonessential and

26

owned by the distressed city.

27

(b)  Sale, lease or other disposition.--The management board

28

shall:

29

(1)  Identify appropriate assets for sale, lease or other

30

disposition and direct the appropriate officials of the

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1

distressed city to take all action necessary or appropriate

2

for the consummation of the sale, lease or other disposition

3

of assets.

4

(2)  Direct the distressed city to sell, lease or

5

otherwise dispose of assets in conformity with all applicable

6

competitive bidding requirements.

7

(3)  Direct the distressed city to undertake a

8

competitive bidding process, determine the winning bidder and

9

enter into an agreement of sale, lease or other disposition

10

with the winning bidder.

11

(4)  Direct the distressed city to take all action

12

necessary to complete the sale, lease or disposition of the

13

assets.

14

(5)  Direct the distressed city to take all action

15

necessary to complete any pending agreement for the sale,

16

lease or disposition of the assets, subject to approval by

17

the management board.

18

(c)  Proceeds.--The proceeds of the sale, lease or other

19

disposition of assets of a distressed city shall be applied to

20

the payment of any unpaid debt obligations owed by the

21

distressed city, as determined by the management board. Any

22

proceeds remaining after the payment of these obligations shall

23

be applied at the discretion of the management board to

24

restructure or to provide escrow for the payment of the

25

distressed city's future debt obligations.

26

(d)  Enforcement.--Notwithstanding any other provision of

27

law, if the distressed city fails to implement the coordinator's

28

plan as directed by the management board, the management board

29

may take any action necessary to implement the coordinator's

30

plan. The management board may issue written directives to the

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1

officials of the distressed city requiring them to perform any

2

act deemed necessary by the management board to properly manage

3

the distressed city's financial affairs and to implement the

4

coordinator's plan. The management board may bring an action in

5

mandamus in the court of common pleas where the distressed city

6

is situated to compel compliance with its directives. The court

7

shall grant the petition for mandamus if the court finds that

8

the distressed city has failed to abide by any of the written

9

directives of the management board.

10

(e)  Removal.--If a management board determines that a

11

controlled authority is not taking the action necessary to sell,

12

lease or dispose of assets, the management board may remove the  

13

board members of the controlled authority and appoint new board 

14

members of the controlled authority.

15

Section 606.  Limitation on bankruptcy.

16

Notwithstanding any other provision of law, including section

17

261, no distressed city may file a petition for relief under 11

18

U.S.C. Ch. 9 (relating to adjustment of debts of a municipality)

19

or any other Federal bankruptcy law, and no government agency

20

may authorize the distressed city to become a debtor under 11

21

U.S.C. Ch. 9 or any other Federal bankruptcy law.

22

Section 3.  The heading of Chapter 6 and section 601 of the

23

act are renumbered to read:

24

CHAPTER [6] 20

25

TECHNICAL PROVISIONS

26

Section [601] 2001.  Repeals.

27

Section 2501-C(e) and (f) of the act of April 9, 1929

28

(P.L.177, No.175), known as The Administrative Code of 1929, are

29

repealed insofar as they are inconsistent with this act.

30

The act of June 11, 1935 (P.L.323, No.146), entitled "An act

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1

designating the Department of Internal Affairs as the agency of

2

the Commonwealth to approve or disapprove petitions to courts,

3

and plans for the readjustment of debts of political

4

subdivisions, under the act of Congress relating to the

5

bankruptcy of political subdivisions; and defining the powers

6

and duties of said department in relation thereto," is repealed

7

insofar as it relates to a municipality as defined in section

8

103 of this act.

9

Section 4.  Section 602 of the act, amended December 19, 1988

10

(P.L.1272, No.157), is renumbered to read:

11

Section [602] 2002.  Expiration.

12

Section 203(a)(5) shall expire upon publication in the

13

Pennsylvania Bulletin of the notice required under section

14

121(f).

15

Section 5.  Section 603 of the act is renumbered to read:

16

Section [603] 2003.  Effective date.

17

This act shall take effect in 60 days.

18

Section 6.  The provisions of this act are severable. If any

19

provision of this act or its application to any person or

20

circumstance is held invalid, the invalidity shall not affect

21

other provisions or applications of this act which can be given

22

effect without the invalid provision or application.

23

Section 7.  This act shall take effect immediately.

24

Section 1.  Section 102 of the act of July 10, 1987 (P.L.246,

<--

25

No.47), known as the Municipalities Financial Recovery Act, is

26

amended to read:

27

Section 102.  Purpose and legislative intent.

28

(a)  Policy.--It is hereby declared to be a public policy of

29

the Commonwealth to foster fiscal integrity of municipalities so

30

that they provide for the health, safety and welfare of their

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1

citizens; pay due principal and interest on their debt

2

obligations when due; meet financial obligations to their

3

employees, vendors and suppliers; and provide for proper

4

financial accounting procedures, budgeting and taxing practices.

5

The failure of a municipality to do so is hereby determined to

6

affect adversely the health, safety and welfare not only of the

7

citizens of the municipality but also of other citizens in this

8

Commonwealth.

9

(b)  Legislative intent.--The General Assembly finds and

10

declares as follows:

11

(1)  It is the intent of the General Assembly to:

12

(i)  Enact procedures and provide powers and

13

guidelines to ensure fiscal integrity of municipalities

14

while leaving principal responsibility for conducting the

15

governmental affairs of a municipality, including

16

choosing the priorities for and manner of expenditures

17

based on available revenues, to the charge of its elected

18

officials, consistent with the public policy set forth in

19

this section.

20

(ii)  Enact procedures for the adjustment of

21

municipal debt by negotiated agreement with creditors.

22

(iii)  Provide for the exercise of the Commonwealth's

23

sovereign and plenary police power in emergency fiscal

24

conditions to protect the health, safety and welfare of a

25

municipality's citizens when local officials are

26

unwilling or unable to accept a solvency plan developed

27

for the benefit of the community.

28

(2)  [The General Assembly further recognizes that

29

changing] Changing and deteriorating economic conditions,

30

developing technologies and attendant unemployment erode

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1

local tax bases and threaten essential municipal services.

2

Under such circumstances, [the General Assembly believes

3

that] such distressed governmental units may no longer be

4

viable and that the citizens of those communities should be

5

granted the opportunity to voluntarily consolidate or merge

6

their municipalities with other municipalities in an effort

7

to allow municipal boundaries to reflect the geographic and

8

economic realities of a distressed area, to merge a common

9

community of interest, to take advantage of economies of

10

scale in providing services and to create an expanded revenue

11

base to provide necessary public services to the citizens of

12

financially distressed municipalities.

13

(3)  Policies of certain municipalities are so

14

ineffective and the financial conditions so severe that the

15

provision of vital and necessary services is threatened.

16

(4)  Sustained failure of a municipality to enact or

17

implement a fiscal plan to adequately address or prevent

18

insolvency after repeated opportunities to do so:

19

(i)  constitutes a fiscal emergency; and

20

(ii)  signifies:

21

(A)  a breakdown in the function of municipal

22

government;

23

(B)  a dereliction of its elected officials'

24

paramount public duty to safeguard the health, safety

25

and welfare of its citizens; and

26

(C)  a threat to the fiscal stability of

27

neighboring communities.

28

(5)  The Governor must act, in the face of a fiscal

29

emergency under paragraph (4)(i) and dereliction of official

30

duty under paragraph (4)(ii)(B), pursuant to the

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1

Commonwealth's paramount right and duty to maintain law and

2

order and protect and preserve the health, safety and welfare

3

of its citizens and ensure compliance with this act under

4

Article IX of the Constitution of Pennsylvania.

5

Section 2.  The act is amended by adding chapters to read:

6

CHAPTER 6

7

FISCAL EMERGENCIES IN CITIES OF THE THIRD CLASS

8

Section 601.  Definitions.

9

The following words and phrases when used in this chapter

10

shall have the meanings given to them in this section unless the

11

context clearly indicates otherwise:

12

"Authority."  A municipal authority, parking authority or any

13

other authority or corporate entity that is directly or

14

indirectly controlled by a distressed city or to which a

15

distressed city has power of appointment.

16

"City."  A city of the third class.

17

"Debt obligations."  Any obligation to pay money, including

18

amounts owed for payments relating to lease rental debt, debt

19

service, bonds, notes, guarantees for bonds or notes, trust

20

indentures or other agreements.

21

"Distressed city."  A city which has been determined to be

22

financially distressed under section 203(f).

23

"Fiscal emergency."  A determination made by the Governor

24

under section 602(b).

25

"Insolvent."  Unable to meet all financial obligations as

26

they become due, including payment of debt obligations.

27

"Vital and necessary services."  Basic and fundamental

28

municipal services, including any of the following:

29

(1)  Police and fire services.

30

(2)  Ambulance and rescue services.

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1

(3)  Water supply and distribution.

2

(4)  Wastewater services.

3

(5)  Refuse collection and disposal.

4

(6)  Snow removal.

5

(7)  Fulfillment of financial obligations necessary for

6

the continued provision of one or more basic and fundamental

7

municipal services, including payroll and pension

8

obligations, lease rental debt and all other debt

9

obligations.

10

Section 602.  Declaration of fiscal emergency.

11

(a)  Fiscal emergency.--A fiscal emergency exists if the

12

distressed city:

13

(1)  (i)  is insolvent or is projected to be insolvent

14

within 180 days or less; or

15

(ii)  is unable to ensure the continued provision of

16

vital and necessary services; and

17

(2)  (i)  has failed to adopt or fully implement the

18

coordinator's plan; or

19

(ii)  has failed to adopt or fully implement an

20

alternative plan that the secretary has approved under

21

section 246.

22

(b)  Governor.--Upon making a determination that a state of

23

fiscal emergency exists, the Governor may declare a state of

24

fiscal emergency within the distressed city. Immediately upon

25

making the declaration, the Governor shall:

26

(1)  Provide written notice of the declaration to the

27

governing body of the distressed city along with a concise

28

statement of facts supporting the determination.

29

(2)  Direct the secretary to, within ten days of the

30

Governor's declaration, develop an emergency action plan to

- 17 -

 


1

ensure that vital and necessary services are maintained

2

within the city during the state of fiscal emergency.

3

(c)  Secretary.--In developing the emergency action plan, the

4

secretary shall consider the financial plan prepared by the

5

coordinator under Subchapter C of Chapter 2 and any other

6

available plan or information the secretary deems appropriate

7

and may employ financial or legal experts to assist in

8

addressing the fiscal emergency. Notwithstanding any law to the

9

contrary, the employment of such experts shall not be subject to

10

contractual competitive bidding procedures.

11

Section 603.  Notification by the secretary.

12

(a)  Notice.--Upon completion of the emergency action plan,

13

the secretary shall cause the plan to be posted on the

14

department's Internet website and shall provide written notice

15

of the emergency action plan by overnight delivery service,

16

providing proof of receipt, to all members of the governing body

17

and the chief executive officer of the distressed city.

18

(b)  Publication.--The secretary shall publish once in a

19

newspaper of general circulation notice that the emergency

20

action plan has been completed. The notice shall specify the

21

Internet address of the department's website where the plan is

22

posted.

23

Section 604.  Powers of the Governor.

24

(a)  Powers.--During the state of fiscal emergency, the

25

Governor may exercise the authority of the elected or appointed

26

officials of the distressed city or authority as necessary to

27

ensure the provision of vital and necessary services and may

28

delegate the authority to the secretary or a designee of the

29

secretary. The emergency powers of the Governor shall include

30

the following:

- 18 -

 


1

(1)  The power to collect funds payable to the distressed

2

city and authority and use those funds to pay for vital and

3

necessary services.

4

(2)  The power to obtain emergency financial aid for the

5

distressed city and authority under Chapter 3 to pay for

6

vital and necessary services.

7

(3)  The power to enter into contracts and agreements on

8

behalf of the distressed city and authority to pay for vital

9

and necessary services.

10

(4)  The power to modify the emergency action plan as

11

necessary to ensure the provision of vital and necessary

12

services.

13

(5)  Any other power of the elected or appointed

14

officials of the distressed city or authority to ensure the

15

provision of vital and necessary services.

16

(b)  Orders.--The Governor may issue an order to an elected

17

or appointed official of the distressed city or an authority to

18

implement any provision of the emergency action plan or refrain

19

from taking any action that would interfere with the powers

20

granted to the Governor or the goals of the plan. An order

21

issued under this subsection shall be enforceable under section

22

606.

23

(c)  Authorization prohibited.--Neither this chapter nor the

24

emergency action plan shall be interpreted to authorize the

25

Governor to:

26

(1)  unilaterally levy taxes;

27

(2)  unilaterally abrogate, alter or otherwise interfere

28

with a lien, charge, covenant or relative priority that is:

29

(i)  held by a holder of a debt obligation of a

30

distressed city; and

- 19 -

 


1

(ii)  granted by the contract, law, rule or

2

regulation governing the debt obligation.

3

(3)  Unilaterally impair or modify existing bonds, notes,

4

municipal securities or other uncontested contractual or

5

legal obligations of the distressed city or authority.

6

(4)  Authorize the use of the proceeds of the sale,

7

lease, conveyance, assignment or other use or disposition of

8

the assets of the distressed city or authorities in a manner

9

contrary to section 707.

10

(5)  Pledge the full faith and credit of the

11

Commonwealth.

12

Section 605.  Elected and appointed officials.

13

During a fiscal emergency, the authorities and elected

14

officials of the distressed city shall continue to carry out the

15

duties of their respective offices, except that no decision or

16

action shall conflict with an emergency action plan, order or

17

exercise of power by the Governor under section 604.

18

Section 606.  Mandamus.

19

The Governor may petition Commonwealth Court to issue a writ

20

of mandamus upon any elected or appointed official of the

21

distressed city or authority to secure compliance with an order

22

issued under section 604(b). The court shall grant the relief

23

requested within 14 days of the filing of the petition if it

24

determines that the order was issued in compliance with this

25

chapter.

26

Section 607.  Consent agreement.

27

(a)  Negotiations.--Within eight days of the declaration of a

28

fiscal emergency, the governing body and chief executive officer

29

of the distressed city shall convene a special public meeting to

30

negotiate a consent agreement. The meeting shall be attended by

- 20 -

 


1

the secretary or secretary's designee. Negotiations among

2

creditors and any of the parties in this subsection shall be

3

conducted in accordance with section 223(b).

4

(b)  Contents.--

5

(1)  The consent agreement shall incorporate a plan

6

setting forth measures designed to provide long-term

7

financial stability to the distressed city after the

8

termination of the fiscal emergency.

9

(2)  The consent agreement shall include all of the

10

following:

11

(i)  Continued provision of vital and necessary

12

services.

13

(ii)  Payment of the financial obligations of the

14

distressed city and authority. This subparagraph

15

includes debt obligations, municipal securities, lease

16

rental obligations, uncontested legal obligations and

17

consensual modifications of existing obligations.

18

(iii)  Timely deposit of required payments to the

19

pension fund for the distressed city and each authority

20

or the fund in which the distressed city and each

21

authority participates.

22

(iv)  Legislative and administrative actions to be

23

taken by the elected or appointed officials of the

24

distressed city during the term of the consent agreement.

25

(3)  The consent agreement may include:

26

(i)  The sale, lease, conveyance, assignment or other

27

use or disposition of the assets of the distressed city

28

or authority.

29

(ii)  Approval, modification, rejection,

30

renegotiation or termination of contracts or agreements

- 21 -

 


1

of the distressed city or authorities.

2

(iii)  Execution of new contracts or agreements.

3

(4)  The consent agreement may not include any of the

4

following:

5

(i)  Projections of revenue from a tax or tax rate

6

not currently authorized by law.

7

(ii)  Provisions that unilaterally abrogate, alter or

8

otherwise interfere with a lien, charge, covenant or

9

relative priority, that is:

10

(A)  held by a holder of a debt obligation of a

11

distressed city; and

12

(B)  granted by the contract, law, rule or

13

regulation governing the debt obligation.

14

(iii)  Provisions that unilaterally impair or modify

15

existing bonds, notes or municipal securities.

16

(iv)  Provisions that authorize the use of the

17

proceeds of the sale, lease, conveyance, assignment or

18

other use or disposition of the assets of the distressed

19

city or authorities in a manner contrary to section 707.

20

(v)  Any increase in the rate of an earned income tax

21

imposed on nonresident workers.

22

(c)  Ordinance.--Notwithstanding any law to the contrary, the

23

following shall apply:

24

(1)  Upon approval by a majority of the governing body of

25

the distressed city, the consent agreement shall be presented

26

to the secretary within 20 days of the declaration of fiscal

27

emergency.

28

(2)  The secretary shall approve or disapprove the

29

consent agreement within three days.

30

(3)  If the secretary determines that the consent

- 22 -

 


1

agreement is sufficient to overcome the distressed city's

2

financial distress and approves the agreement, the governing

3

body shall enact the consent agreement in the form of an

4

ordinance within seven days of approval by the secretary.

5

(4)  The ordinance shall provide that, in the event of a

6

breach or unilateral modification of the consent decree by

7

the governing body or an elected or appointed official, the

8

Governor may institute or reinstitute proceedings under

9

Chapter 7.

10

(d)  Consent to proceedings under Chapter 7.-ā€“In addition to

11

breach or modification of the consent agreement under subsection

12

(c), the following shall be deemed consent to proceedings under

13

Chapter 7:

14

(1)  Failure of the governing body of the distressed city

15

to convene, or the failure of a quorum of the governing body

16

to participate in, a special public meeting required by

17

subsection (a).

18

(2)  Failure of the governing body or chief executive

19

officer to enact a valid ordinance under subsection (c).

20

(3)  Failure of the distressed city to comply with the

21

consent agreement or provision of an ordinance enacted under

22

subsection (c).

23

(4)  Enactment by the distressed city of an amendment to

24

the ordinance enacted in subsection (c) in violation of

25

subsection (e).

26

(e)  Amendment.--The ordinance may be amended upon the

27

approval of the secretary.

28

(f)  Collective bargaining.--A collective bargaining

29

agreement or arbitration settlement executed following enactment

30

of an ordinance under this section is void to the extent that it

- 23 -

 


1

violates, expands or diminishes the provisions of the consent

2

agreement.

3

Section 608.  Termination of fiscal emergency and suspension of

4

powers.

5

(a)  Financial emergency.--A fiscal emergency shall end upon

6

certification by the secretary that the city is no longer

7

financially distressed.

8

(b)  Governor's powers.--The emergency powers of the Governor

9

under this chapter shall be suspended upon the enactment and

10

continued implementation of an ordinance under section 607 or

11

entry of a judicial order appointing a receiver under section

12

702.

13

Section 609.  Restrictions.

14

(a)  Earned income tax on nonresidents.--A distressed city

15

subject to this chapter or Chapter 7 may not petition a court of

16

common pleas for an increase in the rate of an earned income tax

17

imposed on nonresident workers under section 123(c) until the

18

secretary terminates the distress status of the city under

19

section 253.

20

(b)  Municipal debt adjustment.--A distressed city subject to

21

this chapter or Chapter 7 may not file a municipal debt

22

adjustment action under Federal law except to the extent

23

authorized under Chapter 7.

24

Section 610.  Applicability.

25

(a)  Statement.--

26

(1)  This chapter shall apply only to distressed cities.

27

(2)  Except as set forth in subsection (b), nothing in

28

this chapter is intended to limit or otherwise abrogate the

29

applicability of any other part of this act.

30

(b)  Conflict.--If there is a conflict between a provision of

- 24 -

 


1

this chapter and any other provision of this act, the provision

2

of this chapter shall prevail.

3

CHAPTER 7

4

RECEIVERSHIP IN CITIES OF THE THIRD CLASS

5

Section 701.  Definitions.

6

The following words and phrases when used in this chapter

7

shall have the meanings given to them in this section unless the

8

context clearly indicates otherwise:

9

"Authority."  A municipal authority, parking authority or any

10

other authority or corporate entity that is directly or

11

indirectly controlled by a distressed city or to which a

12

distressed city has power of appointment.

13

"City."  A city of the third class.

14

"Debt obligations."  Any obligation to pay money, including

15

amounts owed for payments relating to lease rental debt, debt

16

service, bonds, notes, guarantees for bonds or notes, trust

17

indentures or other agreements.

18

"Distressed city."  A city which has been determined to be

19

financially distressed under section 203(f).

20

"Fiscal emergency."  A determination made by the Governor

21

under section 602(b).

22

"Insolvent."  Unable to meet all financial obligations as

23

they become due, including payment of debt obligations.

24

"Vital and necessary services."  Basic and fundamental

25

municipal services, including any of the following:

26

(1)  Police and fire services.

27

(2)  Ambulance and rescue services.

28

(3)  Water supply and distribution.

29

(4)  Wastewater services.

30

(5)  Refuse collection and disposal.

- 25 -

 


1

(6)  Snow removal.

2

(7)  Fulfillment of financial obligations necessary for

3

the continued provision of one or more basic and fundamental

4

municipal services, including payroll and pension

5

obligations, lease rental debt and all other debt

6

obligations.

7

Section 702.  Receivership.

8

(a)  Receiver.--Following the issuance of a declaration of

9

fiscal emergency under section 602(b), the Governor may direct

10

the secretary to file a petition in Commonwealth Court to

11

appoint the individual named in the petition as a receiver for

12

the distressed city. The court shall have no authority to

13

appoint anyone other than the individual named in the petition

14

as the receiver.

15

(b)  Service and notice.--

16

(1)  The secretary shall serve the petition upon:

17

(i)  the governing body of the distressed city;

18

(ii)  the chief executive officer of the distressed

19

city; and

20

(iii)  the governing body of each authority.

21

(2)  The secretary must publish notice of the filing of

22

the petition once in a newspaper of general circulation.

23

(c)  Hearing.--Within 15 days of the failure of the

24

distressed city to adopt a valid ordinance under section 607,

25

the Commonwealth Court shall conduct a hearing on the petition.

26

(d)  Determination.--No later than 60 days following the

27

filing of a petition under this section, the court shall issue

28

an order under subsection (e) if it finds by a preponderance of

29

the evidence that all of the following apply:

30

(1)  Thirty days have passed since the declaration of a

- 26 -

 


1

fiscal emergency.

2

(2)  There has been a failure by:

3

(i)  the governing body of the distressed city to

4

adopt a consent agreement acceptable to the secretary

5

under section 607;

6

(ii)  the governing body of the distressed city to

7

fully implement a consent agreement acceptable to the

8

secretary under section 607; or

9

(iii)  an elected or appointed official of the

10

distressed city or authority to strictly comply with an

11

order issued by the Governor under section 604.

12

(3)  A fiscal emergency under section 602(a) continues to

13

exist.

14

(e)  Order.--An order issued under subsection (e) shall:

15

(1)  set forth the findings under subsection (d);

16

(2)  grant the petition and declares the distressed city

17

to be in receivership;

18

(3)  appoint the individual named in the petition to be

19

the receiver for a period not to exceed two years, subject to

20

extension under section 710(b);

21

(4)  direct the receiver to develop a recovery plan under

22

section 703 and submit it to the court, the governing body of

23

the distressed city and the secretary; and

24

(5)  require and empower the receiver to implement the

25

emergency action plan developed by the secretary under

26

section 602 until a recovery plan developed by the receiver

27

is approved by the court under section 703.

28

Section 703.  Recovery plan.

29

(a)  Issuance.--Within 30 days of the appointment of the

30

receiver, the recovery plan required under section 702(e)(4)

- 27 -

 


1

shall be furnished to Commonwealth Court, the secretary and the

2

governing body and chief executive officer of the distressed

3

city.

4

(b)  Contents.--The receiver shall consider the plan prepared

5

by the coordinator under section 241 and any other existing

6

alternate plans in the development of the recovery plan. The

7

following shall apply:

8

(1)  The recovery plan shall provide for all of the

9

following:

10

(i)  Continued provision of vital and necessary

11

services.

12

(ii)  Payment of the financial obligations of the

13

distressed city and authorities. This subparagraph

14

includes debt obligations, municipal securities, lease

15

rental obligations, uncontested legal obligations and

16

consensual modifications of existing obligations.

17

(iii)  Timely deposit of required payments to the

18

pension fund in which the distressed city and each

19

authority participates.

20

(2)  The recovery plan may inlcude:

21

(i)  the sale, lease, conveyance, assignment or other

22

use or disposition of the assets of the distressed city

23

or authority;

24

(ii)  the approval, modification, rejection,

25

renegotiation or termination of contracts or agreements

26

of the distressed city or authorities;

27

(iii)  the execution of new contracts or agreements;

28

and

29

(iv)  other information the receiver deems

30

appropriate.

- 28 -

 


1

(c)  Restrictions.ā€”-The recovery plan may not do any of the

2

following:

3

(1)  Unilaterally levy taxes.

4

(2)  Unilaterally abrogate, alter or otherwise interfere

5

with a lien, charge, covenant or relative priority that is:

6

(i)  held by a holder of a debt obligation of a

7

distressed city; and

8

(ii)  granted by the contract, law, rule or

9

regulation governing the debt obligation.

10

(3)  Unilaterally impair or modify existing bonds, notes

11

or municipal securities.

12

(4)  Authorize the use of the proceeds of the sale,

13

lease, conveyance, assignment or other use or disposition of

14

the assets of the distressed city or authority in a manner

15

contrary to section 707.

16

(d)  Confirmation.--Commonwealth Court shall conduct a

17

hearing on the recovery plan within 30 days of the receipt of

18

the plan from the receiver. The court shall confirm the plan

19

within 60 days of the receipt of the plan unless it finds clear

20

and convincing evidence that the plan is arbitrary, capricious

21

or wholly inadequate to alleviate the fiscal emergency in the

22

distressed city.

23

(e)  Modification of plan.--The receiver shall notify the

24

Commonwealth Court of any modification to the plan. The court

25

may conduct a hearing on the modification within 30 days of its

26

receipt. The court shall confirm the modification within 60 days

27

of receipt of the modification unless it finds clear and

28

convincing evidence that the recovery plan as modified is

29

arbitrary, capricious or wholly inadequate to alleviate the

30

fiscal emergency in the distressed city.

- 29 -

 


1

Section 704.  Confirmation.

2

(a)  Effect of confirmation.--The confirmation of the

3

recovery plan and any modification to the receiver's plan under

4

section 703 shall have the effect of:

5

(1)  imposing on the elected and appointed officials of

6

the distressed city or an authority a mandatory duty to

7

undertake the acts set forth in the recovery plan;

8

(2)  suspending the authority of the elected and

9

appointed officials of the distressed city or an authority to

10

exercise power on behalf of the distressed city or authority

11

pursuant to law, charter, ordinance, rule or regulation to

12

the extent that the power would interfere with the powers

13

granted to the receiver or the goals of the recovery plan;

14

and

15

(3)  superseding the emergency action plan developed by

16

the secretary under section 602.

17

(b)  Form of government.--Confirmation of the recovery plan

18

and any modification to the plan under section 703 shall not be

19

construed to:

20

(1)  change the form of government of the distressed city

21

or an authority; or

22

(2)  except as set forth in subsection (a), affect powers

23

and duties of elected and appointed officials of the

24

distressed city or an authority.

25

(c)  Collective bargaining.--A collective bargaining

26

agreement or arbitration settlement executed after confirmation

27

of a recovery plan is void to the extent that it violates,

28

expands or diminishes the provisions of the recovery plan.

29

Section 705.  Receiver.

30

(a)  Appointment.--The court shall appoint the receiver as

- 30 -

 


1

provided under section 702.

2

(b)  Qualifications.--The receiver shall have the following

3

qualifications:

4

(1)  Have a minimum of five years' experience and

5

demonstrable expertise in business, financial or local or

6

state budgetary matters.

7

(2)  Be a resident of this Commonwealth for at least one

8

year prior to the appointment.

9

(c)  Vacancy.--A vacancy in the office of the receiver shall

10

be filled in the same manner as the original appointment.

11

(d)  Revocation.--Upon application by the secretary, the

12

appointment of the receiver shall be revoked and the receiver

13

shall be replaced by the individual named in the application.

14

The court shall have no authority to appoint anyone other than

15

the individual named in the application as the receiver.

16

(e)  Compensation and expenses.--The receiver's compensation

17

and reimbursement for actual and necessary expenses shall be

18

paid by the Commonwealth. Compensation shall be established by

19

the secretary.

20

(f)  Prohibitions.--The receiver shall not:

21

(1)  Seek or hold a position as any other elected or

22

appointed public official within this Commonwealth or as a

23

political party officer during the term of the receivership.

24

(2)  Seek election as a public official or political

25

party officer for one year after the person's service as

26

receiver has ended.

27

(3)  Engage in any conduct prohibited by the act of July

28

19, 1957 (P.L.1017, No.451), known as the State Adverse

29

Interest Act, or 65 Pa.C.S. Ch. 11 (relating to ethics

30

standards and financial disclosure).

- 31 -

 


1

(g)  Liability.--The receiver shall not be liable personally

2

for any obligations of the distressed city. It is declared to be

3

the intent of the General Assembly that the receiver shall enjoy

4

sovereign and official immunity as provided in 1 Pa.C.S. § 2310

5

(relating to sovereign immunity reaffirmed; specific waiver) and

6

shall remain immune from suit except as provided by and subject

7

to the provisions of 42 Pa.C.S. Ch. 85 Subchs. A (relating to

8

general provisions) and B (relating to actions against

9

Commonwealth parties).

10

Section 706.  Powers, duties and prohibited actions.

11

(a)  Powers and duties.--Notwithstanding any other provision

12

of law, the receiver shall have the following powers and duties:

13

(1)  To require the distressed city to take actions

14

necessary to implement the recovery plan under section 703.

15

(2)  To modify the recovery plan as necessary to achieve

16

financial stability of the distressed city in accordance with

17

section 703.

18

(3)  To require the distressed city to negotiate

19

intergovernmental cooperation agreements between the

20

distressed city and other political subdivisions in order to

21

eliminate and avoid deficits, maintain sound budgetary

22

practices and avoid interruption of municipal services.

23

(4)  To submit quarterly reports to the governing body

24

and the chief executive officer of the distressed city and to

25

the department. The reports shall be posted on the Internet

26

website for the distressed city.

27

(5)  To require the distressed city to cause the sale,

28

lease, conveyance, assignment or other use or disposition of

29

the distressed city's assets in accordance with section 707.

30

(6)  To approve, disapprove, modify, reject, terminate or

- 32 -

 


1

renegotiate contracts and agreements with the distressed

2

city, except to the extent prohibited by the Constitutions of

3

the United States and Pennsylvania.

4

(7)  To direct the distressed city to take any other

5

action to implement the recovery plan.

6

(8)  To attend executive sessions of the governing body

7

of the distressed city and make reports to the public on

8

implementation of the recovery plan.

9

(9)  Subject to the limitation on bankruptcy in Article

10

XVI-D.1 of the act of April 9, 1929 (P.L.343, No.176), known

11

as The Fiscal Code, to file a municipal debt adjustment

12

action under Federal law and to act on the city's behalf in

13

the proceeding. The power under this paragraph shall only be

14

exercised upon the written authorization of the secretary.

15

The filing of a municipal debt adjustment action under this

16

paragraph and any plan of the receiver accepted by the

17

Federal court shall be considered a modification of the

18

recovery plan, except that the modification shall not be

19

subject to judicial review under section 709. A recovery plan

20

submitted to, and approved by, the Federal court under a

21

Federal municipal debt adjustment action may include Federal

22

remedies not otherwise available under this chapter.

23

(10)  To meet and consult with the advisory committee

24

under section 711.

25

(11)  To employ financial or legal experts deemed

26

necessary to develop and implement the recovery plan.

27

Notwithstanding any law to the contrary, the employment of

28

such experts shall not be subject to contractual competitive

29

bidding procedures.

30

(b)  Authorization prohibited.--Neither this chapter nor the

- 33 -

 


1

recovery plan shall be interpreted to authorize the receiver to

2

do any of the following:

3

(1)  Unilaterally levy taxes.

4

(2)  Unilaterally abrogate, alter or otherwise interfere

5

with a lien, charge, covenant or relative priority that is:

6

(i)  held by a holder of a debt obligation of a

7

distressed city; and

8

(ii)  granted by the contract, law, rule or

9

regulation governing the debt obligation.

10

(3)  Unilaterally impair or modify existing debt

11

obligations or municipal securities.

12

(4)  Authorize the use of the proceeds of the sale,

13

lease, conveyance, assignment or other use or disposition of

14

the assets of the distressed city or authority in a manner

15

contrary to section 707.

16

Section 707.  Use or disposition of assets.

17

(a)  Use of proceeds.--The proceeds from any sale, lease,

18

conveyance, assignment or other use or disposition of assets of

19

the distressed city or authority shall be applied to the payment

20

of outstanding debt obligations owed by the distressed city or

21

authority, subject to any lien, charge, covenant, restriction,

22

contract, law, rule or regulation, that encumbers or is

23

otherwise applicable to the assets. Proceeds remaining after

24

payment of outstanding debt obligations owed by the distressed

25

city or authority may be used by the receiver to restructure or

26

provide escrow for the payment of future debt obligations or to

27

meet operating and capital needs of the distressed city or

28

authority.

29

(b)  Prohibitions.--Nothing under this section shall be

30

construed to authorize the receiver to unilaterally abrogate,

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1

alter or otherwise interfere with a lien, charge, covenant or

2

relative priority that is:

3

(1)  held by a holder of a debt obligation of a

4

distressed city; and

5

(2)  granted by the contract, law, rule or regulation

6

governing the debt obligation.

7

Section 708.  Elected and appointed officials.

8

(a)  Orders.--The receiver may issue an order to an elected

9

or appointed official of the distressed city or an authority to:

10

(1)  implement any provision of the recovery plan; and

11

(2)  refrain from taking any action that would interfere

12

with the powers granted to the receiver or the goals of the

13

recovery plan.

14

(b)  Enforcement.--An order issued under subsection (a) shall

15

be enforceable under section 709.

16

Section 709.  Judicial actions.

17

(a)  Action by receiver.--The receiver may petition

18

Commonwealth Court to issue a writ of mandamus upon any elected

19

or appointed official of the distressed city or authority to

20

secure compliance with an order issued under section 708. The

21

court shall grant or deny the relief within 14 days of the

22

filing of the petition. The court shall grant the relief

23

requested if it determines that the order was issued in

24

compliance with this chapter.

25

(b)  Action by elected or appointed officials.--Any elected

26

or appointed official of a distressed city or authority may

27

petition Commonwealth Court to enjoin any action of the receiver

28

that is contrary to this chapter.

29

Section 710.  Termination of receivership.

30

(a)  Time.--Except as provided under subsection (b), the

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1

receivership under this chapter shall expire two years after the

2

appointment of the receiver.

3

(b)  Extension.--The secretary may petition Commonwealth

4

Court for one or more extensions of the receivership. The court

5

shall grant each extension for another two years if the

6

secretary establishes by a preponderance of the evidence that

7

further implementation of the recovery plan is necessary to end

8

the fiscal emergency.

9

Section 711.  Municipal Financial Recovery Advisory Committee.

10

(a)  Establishment.--There is established a Municipal

11

Financial Recovery Advisory Committee to meet and consult with

12

the receiver in carrying out the duties under this chapter. The

13

sole function of the advisory committee shall be to provide

14

recommendations and feedback to the receiver on the

15

implementation of the recovery plan.

16

(b)  Composition.--The advisory committee established under

17

subsection (a) shall be comprised of the following:

18

(1)  The chief executive officer of the distressed city

19

or a designee.

20

(2)  The president of the governing body of the

21

distressed city or a designee.

22

(3)  One member appointed by the county commissioners of

23

the county where the distressed city is located.

24

(4)  One member appointed by the Governor.

25

(c)  Compensation.--Members of the advisory committee shall

26

receive no compensation for their services.

27

(d)  Meetings.--The advisory committee shall meet with the

28

receiver at least twice per month to discuss the recovery plan.

29

Meetings of the advisory committee shall be in accordance with

30

65 Pa.C.S. Ch. 7 (relating to open meetings).

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1

(e)  Duty to consult.--The receiver shall consult with the

2

advisory committee prior to exercising any of the powers under

3

section 706(a)(1), (2), (3), (5), (6), (7) and (9).

4

(f)  Termination.--The advisory committee shall terminate in

5

conjunction with the expiration of the receivership as provided

6

for under section 710.

7

Section 712.  Applicability.

8

(a)  Statement.--

9

(1)  This chapter shall apply only to distressed cities.

10

(2)  Except as set forth in subsection (b), nothing in

11

this chapter is intended to limit or otherwise abrogate the

12

applicability of any other part of this act.

13

(b)  Conflict.--If there is a conflict between a provision of

14

this chapter and any other provision of this act, the provision

15

of this chapter shall prevail.

16

Section 3.  The heading of Chapter 6 and section 601 of the

17

act are renumbered to read:

18

CHAPTER [6] 20

19

TECHNICAL PROVISIONS

20

Section [601] 2001.  Repeals.

21

Section 2501-C(e) and (f) of the act of April 9, 1929

22

(P.L.177, No.175), known as The Administrative Code of 1929, are

23

repealed insofar as they are inconsistent with this act.

24

The act of June 11, 1935 (P.L.323, No.146), entitled "An act

25

designating the Department of Internal Affairs as the agency of

26

the Commonwealth to approve or disapprove petitions to courts,

27

and plans for the readjustment of debts of political

28

subdivisions, under the act of Congress relating to the

29

bankruptcy of political subdivisions; and defining the powers

30

and duties of said department in relation thereto," is repealed

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1

insofar as it relates to a municipality as defined in section

2

103 of this act.

3

Section 4.  Section 602 of the act, amended December 19, 1988

4

(P.L.1272, No.157), is renumbered to read:

5

Section [602] 2002.  Expiration.

6

Section 203(a)(5) shall expire upon publication in the

7

Pennsylvania Bulletin of the notice required under section

8

121(f).

9

 Section 5.  Section 603 of the act is renumbered to read:

10

Section [603] 2003.  Effective date.

11

This act shall take effect in 60 days.

12

Section 6.  The provisions of this act are severable. If any

13

provision of this act or its application to any person or

14

circumstance is held invalid, the invalidity shall not affect

15

other provisions or applications of this act which can be given

16

effect without the invalid provision or application.

17

Section 7.  This act shall take effect immediately.

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