PRIOR PRINTER'S NOS. 1184, 1583
PRINTER'S NO. 2234
THE GENERAL ASSEMBLY OF PENNSYLVANIA
INTRODUCED BY TEPLITZ, FOLMER, BLAKE, EICHELBERGER, BOSCOLA, YUDICHAK, WOZNIAK, SOLOBAY, BREWSTER, FARNESE, WAUGH AND BROWNE, JUNE 7, 2013
SENATOR CORMAN, APPROPRIATIONS, RE-REPORTED AS AMENDED, JULY 1, 2014
<-6Section 1. Short title.
9Section 1 <-2. Definitions.
15(1) A city of the first class.
16(2) A county of the first class.
17(3) A municipal authority created under 53 Pa.C.S. Ch.
5"Interest rate management agreement." An agreement,
6including a confirmation evidencing a transaction effected under
7a master agreement, entered into by a <-first class city or county
<-8contracting authority in accordance with and fulfilling the
9requirements of section 2, which agreement in the judgment of
10the first class city or county <-contracting authority is designed
<-11to manage interest rate risk or interest cost of the first class
12city or county <-contracting authority on any debt or other debt-
13related obligations a first class city or county <-contracting
14authority is authorized to incur, including, but not limited to,
15swaps, interest rate caps, collars, corridors, ceiling and floor
16agreements, forward agreements, float agreements and other
17similar arrangements which in the judgment of the <-first class
18city or county contracting authority will assist the <-first class
19city or county <-contracting authority in managing the interest
20rate risk or interest cost of the <-first class city or county
<-22Section 2 3. Interest rate management agreement requirements.
23(a) General rule.--Notwithstanding any other law to the
24contrary, any interest rate management agreement entered into by
25a <-first class city or county contracting authority shall comply
26with the provisions of this section.
27(b) Requirements.--The following requirements shall apply:
2(2) No payments shall be made to or on behalf of a <-first
3class city or county <-contracting authority by the other party
4to an interest rate management agreement except periodic
5scheduled payments, termination payments and attorney fees
6and other consultant fees incurred in connection with
7entering into an interest rate management agreement.
8(3) Periodic scheduled payments on an interest rate
9management agreement must commence not later than three years
10after the date of the confirmation associated with the
11interest rate management agreement.
12(4) The index or basis used for calculating the periodic
13scheduled payments receivable by the <-first class city or
14county <-contracting authority on an interest rate management
15agreement shall be substantially similar to the index or
16basis used for calculating the interest due on the associated
17debt or other debt-related obligations of the <-first class
18city or county <-contracting authority.
19(5) At the time an interest rate management agreement is
20entered into, the sum of the notional amount thereof, without
21duplication for the notional amount of any offsetting
22transactions, and all other interest rate management
23agreements entered into or guaranteed, and then in effect of
24a <-first class city or county contracting authority, shall not
25exceed 30% of the total principal amount of the aggregate
26general obligation debt and other debt-related obligations
27payable from or supported by its general fund then
28outstanding. If an interest rate management agreement is
29payable from or supported by another specified fund or
30revenues, the limitation shall apply based solely on interest
4(6) Scheduled periodic payments and termination payments
5received by a <-first class city or county contracting
6authority on an interest rate management agreement shall be
7deposited in a payment account to:
11(ii) If the interest rate management agreement
12described under subparagraph (i) has been terminated and
13none of the related debt or debt-related obligations are
14outstanding, pay periodic swap payments on interest rate
15management agreements or principal and interest on debt
16or debt-related obligations payable from or supported by
17the same fund or revenues as the interest rate management
18agreement described under subparagraph (i).
19(iii) If all of the interest rate management
20agreements described under subparagraph (ii) have been
21terminated and no debt or debt-related obligations
22described under subparagraph (ii) are outstanding, pay
23any other obligations of the <-first class city or county
25(7) The scheduled expiration date of an interest rate
26management agreement shall not exceed ten years from the date
27of the related confirmation unless the interest rate
28management agreement contains a provision allowing the <-first
29class city or county <-contracting authority to terminate the
30same at any time after ten years from the date of the related
1confirmation without making a termination payment.
6(i) Acknowledges that the <-first class city or county
<-7contracting authority which is entering into the interest
8rate management agreement under this subpart is a
9political subdivision of this Commonwealth<-. or a
10municipal authority created under 53 Pa.C.S. Ch. 56
11(relating to municipal authorities) by a city of the
12first class or a county of the first class.
13(ii) Acknowledges that it has read this act.
14(iii) Acknowledges that a <-first class city or county
<-15contracting authority may only enter into an interest
16rate management agreement to manage interest rate risk or
17interest cost of the <-first class city or county
<-18contracting authority on debt or other debt-related
19obligations of the <-first class city or county contracting
21(iv) Acknowledges and agrees that it will notify the
22department, in writing, promptly upon the payment to the
23other party of a termination payment by the <-first class
24city or county <-contracting authority, including the date
25and amount of the payment and the identity of the
26interest rate management agreement under which the
27payment was made.
28Section <-3 4. Notice and retention of records.
<-1first class city or county contracting authority shall file with
2the department certified copies of the resolution, including any
3appendix to the resolution together with an itemized statement
4of all attorney fees, consultant fees and any other costs
5expected to be paid on behalf of a <-first class city or county
<-6contracting authority by the other party to such interest rate
11Section <-4 5. Financial reporting.
12A <-first class city or county contracting authority which has
13entered into an interest rate management agreement shall include
14in its annual financial statements information with respect to
15each interest rate management agreement it has authorized or
16entered into, including any information required pursuant to any
17statement issued by the Governmental Accounting Standards Board.
18Section <-5 6. Applicability.
19The following shall apply:
24(2) This act shall not apply to any amendment,
25termination or novation of an interest rate management
26agreement <-where such if the interest rate management
27agreement was entered into prior to the effective date of
28this act as long as <-section if the term of the interest rate
29management agreement is not extended.
<-30(3) Notwithstanding any other provision of law, this act
3(i) A city of the first class.
4(ii) A county of the first class.
8Section <-6 40. Effective date.
9This act shall take effect in 60 days.