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PRINTER'S NO. 1329
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
1024
Session of
2015
INTRODUCED BY FONTANA AND SCHWANK, OCTOBER 20, 2015
REFERRED TO COMMUNITY, ECONOMIC AND RECREATIONAL DEVELOPMENT,
OCTOBER 20, 2015
AN ACT
Repealing the act of February 12, 2004 (P.L.73, No.11), entitled
"An act providing for intergovernmental cooperation in cities
of the second class; establishing an intergovernmental
authority; providing for financing, for bankruptcy and for
sovereign immunity; and making an appropriation."
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of February 12, 2004 (P.L.73, No.11),
known as the Intergovernmental Cooperation Authority Act for
Cities of the Second Class, is repealed:
[AN ACT
Providing for intergovernmental cooperation in cities of the
second class; establishing an intergovernmental authority;
providing for financing, for bankruptcy and for sovereign
immunity; and making an appropriation.
CHAPTER 1
GENERAL PROVISIONS
Section 101. Short title.
This act shall be known and may be cited as the
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Intergovernmental Cooperation Authority Act for Cities of the
Second Class.
Section 102. Purpose and legislative intent.
(a) Policy.--It is hereby declared to be a public policy of
the Commonwealth to exercise its retained sovereign powers with
regard to taxation and matters of Statewide concern in a manner
calculated to foster the fiscal integrity of cities of the
second class to assure that these cities provide for the health,
safety and welfare of their citizens; pay principal and interest
owed on their debt obligations when due; meet financial
obligations to their employees, vendors and suppliers; and
provide for proper financial planning procedures and budgeting
practices. The inability of a city of the second class to
provide essential services to its citizens as a result of a
fiscal emergency is hereby determined to affect adversely the
health, safety and welfare not only of the citizens of that
municipality but also of other citizens in this Commonwealth.
(b) Legislative intent.--
(1) It is the intent of the General Assembly to:
(i) provide cities of the second class with the
legal tools with which such cities can perform essential
municipal services; and
(ii) foster sound financial planning and budgetary
practices for cities of the second class, which cities
shall be charged with the responsibility to exercise
efficient and accountable fiscal practices, such as:
(A) increased managerial accountability;
(B) consolidation or elimination of inefficient
city programs and authorities;
(C) reevaluation of tax exemption policies with
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regard to real property taxes;
(D) increased collection of existing tax
revenues;
(E) privatization or outsourcing of appropriate
city services;
(F) sale of city assets as appropriate;
(G) improvement of procurement practices,
including competitive bidding procedures; and
(H) review of compensation and benefits of city
employees; and
(iii) exercise its powers consistent with the rights
of citizens to home rule and self-government.
(2) The General Assembly further declares that this
legislation is intended to remedy the apparent fiscal
emergency confronting cities of the second class through the
implementation of sovereign powers of the Commonwealth. To
safeguard the rights of the citizens to the electoral process
and home rule, the General Assembly intends to exercise its
power in an appropriate manner with the elected officers of
cities of the second class.
(3) It is further declared that this legislation is
intended to operate concurrently and equally with the act of
July 10, 1987 (P.L.246, No.47), known as the Municipalities
Financial Recovery Act.
Section 103. Legislative findings.
It is hereby determined and declared as a matter of
legislative finding that:
(1) Cities of the second class have encountered
recurring financial difficulties which may affect the
performance of necessary municipal services to the detriment
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of the health, safety and general welfare of residents of
such cities.
(2) It is critically important that cities of the second
class maintain their creditworthiness.
(3) Due to the economic and social interrelationship
among all citizens in our economy, the fiscal integrity of
cities of the second class is a matter of concern to
residents of the entire Commonwealth, and the financial
problems of such cities have a direct and negative effect on
the entire Commonwealth.
(4) Because cities of the second class consume a
substantial proportion of the products of Pennsylvania's
farms, factories, manufacturing plants and service
enterprises, economic difficulties confronting cities of the
second class detrimentally affect the economy of the
Commonwealth as a whole and become a matter of Statewide
concern.
(5) Because residents of cities of the second class
contribute a substantial proportion of all Commonwealth tax
revenues, a disruption of the economic and social life of
such cities may have a significant detrimental effect upon
Commonwealth revenues.
(6) The financial difficulties of cities of the second
class can best be addressed and resolved by cooperation
between governmental entities.
(7) The Constitution of Pennsylvania grants
municipalities authority to cooperate with other governmental
entities in the exercise of any function or responsibility.
(8) The Commonwealth retains certain sovereign powers
with respect to cities of the second class, among them the
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powers to authorize and levy taxes, to authorize the
incurring of indebtedness and to provide financial assistance
that may be necessary to assist cities in solving their
financial problems.
(9) The Commonwealth may attach conditions to grants of
authority to incur indebtedness or assistance to cities of
the second class in order to ensure that deficits are
eliminated and access to capital markets is achieved and
maintained.
(10) Such conditions shall be incorporated into
intergovernmental cooperation agreements between the
Commonwealth or its instrumentalities and cities of the
second class.
(11) Cities of the second class and the Commonwealth
will benefit from the creation of an independent authority
composed of members experienced in finance and management
which may advise such cities, the General Assembly and the
Governor concerning solutions to fiscal problems cities of
the second class may face.
(12) The creation of such an authority will allow such
cities to continue to provide the necessary municipal
services for their residents and to contribute to the economy
of the Commonwealth.
(13) Several task forces have studied the fiscal
condition of a city of the second class and have published
findings and suggestions regarding the fiscal structure of
the city and actions that could be taken concerning
preservation of the financial viability of the city into the
future. Those reports, widely known as the Competitive
Pittsburgh report, the PGH 21 report and the Governor's
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Pittsburgh Economic Improvement Task Force report, should be
evaluated by the authority in making its recommendations to
the city. However, it is intended that the authority
established by this act examine the fiscal affairs of the
entire city of the second class, including all of its
authorities and related corporate entities.
Section 104. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Assisted city." A city of the second class which receives
assistance from the Intergovernmental Cooperation Authority for
Cities of the Second Class. The term includes any municipal
authority, other authority or other corporate entity which
directly or indirectly performs a governmental function on
behalf of the city, is directly or indirectly controlled by the
city or to which the city has direct or indirect power of
appointment or has directly or indirectly pledged or designated
the city's revenues or the city's credit.
"Authority." The Intergovernmental Cooperation Authority for
Cities of the Second Class established in section 201.
"Board." The governing board of the Intergovernmental
Cooperation Authority for Cities of the Second Class.
"City." A city of the second class.
"City account." A trust fund held for the exclusive benefit
of an assisted city.
"Corporate entity." A municipal authority, other authority
or other corporate entity which performs a governmental function
on behalf of the city or to which the city has power of
appointment or has pledged or designated revenues.
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"Deficit." Such negative fund balance in any principal
operating fund or funds of a city or corporate entity existing
at the beginning of a fiscal year or projected to exist as of
the close of a fiscal year, as may be more specifically
identified, calculated and set forth in an intergovernmental
cooperation agreement or financial plan of an assisted city
described in section 209.
"Federal agency." The United States, the President of the
United States and any department or corporation, agency or
instrumentality created, designated or established by the United
States.
"Governing body." The legislative body of a city.
"Government agency." The Governor, departments, boards,
commissions, authorities and other officers and agencies of
State government, including those which are not subject to the
policy supervision and control of the Governor, any political
subdivision, municipal or other local authority and any officer
or agency of any such political subdivision or local authority,
but the term does not include any court or other officer or
agency of the unified judicial system or the General Assembly or
its officers and agencies.
"Intergovernmental cooperation agreement." Any agreement
made by the authority and a city under the provisions of section
203(d).
"Party officer." The following members or officers of any
political party:
(1) a member of a national committee;
(2) a chairman, vice chairman, secretary, treasurer or
counsel of a State committee or member of the executive
committee of a State committee;
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(3) a county chairman, vice chairman, counsel, secretary
or treasurer of a county committee; or
(4) a chairman, vice chairman, counsel, secretary,
treasurer or ward leader of a city or municipal committee.
"Public official." Any elected or appointed official or
employee in the executive, legislative or judicial branch of the
Commonwealth or any political subdivision thereof, provided that
it shall not include members of advisory boards that have no
authority to expend public funds other than reimbursement for
personal expense or to otherwise exercise the power of the
Commonwealth or any political subdivision thereof. The term
shall not include any appointed official who receives no
compensation other than reimbursement for actual expenses.
CHAPTER 2
INTERGOVERNMENTAL COOPERATION AUTHORITY FOR
CITIES OF THE SECOND CLASS
Section 201. Authority established.
A body corporate and politic to be known as the
Intergovernmental Cooperation Authority for Cities of the Second
Class is established as a public authority and instrumentality
of the Commonwealth, exercising public powers of the
Commonwealth as an agency and instrumentality thereof. The
exercise by the authority of the powers conferred by this act is
hereby declared to be and shall for all purposes be deemed and
held to be the performance of an essential public function.
Section 202. Governing board.
(a) Composition of board.--
(1) The powers and duties of the authority shall be
exercised by a governing board composed of five members:
(i) One member shall be appointed by the President
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pro tempore of the Senate.
(ii) One member shall be appointed by the Minority
Leader of the Senate.
(iii) One member shall be appointed by the Speaker
of the House of Representatives.
(iv) One member shall be appointed by the Minority
Leader of the House of Representatives.
(v) One member shall be appointed by the Governor.
(vi) The Secretary of the Budget and the director of
finance of each assisted city shall serve as ex officio
members of the board. The board and any appointed
coordinator shall cooperate in the sharing of reports,
information and recommendations with regard to the
assisted city. The ex officio members may not vote and
shall not be counted for purposes of establishing a
quorum. The Secretary of the Budget and the director of
finance of each assisted city may designate in writing a
representative of their respective offices to attend
meetings of the board on their behalf.
(2) All members and designees must have substantial
experience in finance or management.
(3) All members of the board must be residents of this
Commonwealth and, except the Secretary of the Budget, must
either be residents of the assisted city or have their
primary places of business or employment in that city.
(b) Term.--Appointing authorities shall appoint the initial
members of the board within seven days of the effective date of
this act, and the appointed members shall select a chairperson
from among themselves at the initial organizational meeting of
the board and upon any subsequent vacancy in the office of
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chairperson. The term of a board member shall begin on the date
of the appointment. A member's term shall be coterminous with
that of the appointing authority. The member selected as
chairperson shall serve in that capacity for two years from the
date of selection or for the duration of his term on the board,
whichever is less, and may be reelected to subsequent two-year
terms. An appointed board member shall serve at the pleasure of
the member's appointing authority. Whenever a vacancy occurs
among the appointed members on the board, whether prior to or on
the expiration of a term, the appointing authority who
originally appointed the board member whose seat has become
vacant shall appoint a successor member within 30 days of the
vacancy. A member appointed by an appointing authority to fill a
vacancy occurring prior to the expiration of a term shall serve
the unexpired term.
(c) Organization.--The appointees of the President pro
tempore of the Senate and the Speaker of the House of
Representatives shall set a date, time and place for the initial
organizational meeting of the board within five days of the
appointment of the initial members of the board. The initial
organizational meeting shall be held within 15 days of the
effective date of this act. In addition to the chairperson, the
members shall elect such other officers as they may determine. A
member may hold more than one office of the board at any time.
(d) Meetings.--After the initial organizational meeting, the
board shall meet as frequently as it deems appropriate but at
least once during each quarter of the fiscal year. In addition,
a meeting of the board shall be called by the chairperson if a
request for a meeting is submitted to the chairperson by at
least two members of the board. A majority of the board shall
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constitute a quorum for the purpose of conducting the business
of the board and for all other purposes. All actions of the
board shall be taken by a majority of the board except as
otherwise specifically noted. The provisions of 65 Pa.C.S. Ch. 7
(relating to open meetings) shall apply to the board.
(e) Expenses.--A member shall not receive compensation or
remuneration but shall be entitled to reimbursement for all
reasonable and necessary actual expenses.
(f) Employees and agents.--The board shall fix and determine
the number of employees of the authority and their respective
compensation and duties. The board may contract for or receive
the loan of services of persons in the employ of other
government agencies, and other government agencies shall be
authorized to make such employees available. The board may
retain an executive director upon a majority vote. The board
may, by a majority vote, hire an independent general counsel to
the authority and may engage consultants and contract for other
professional services upon a majority vote. The board may, upon
the approval of a majority, delegate to the executive director
such powers of the board as the board deems necessary to carry
out the purposes of the authority, subject in every case to the
supervision and control of the board.
(g) Public officials and party officers; conflicts of
interest prohibited.--
(1) Except for the Secretary of the Budget, neither
members of the board nor the executive director shall seek or
hold a position as any other public official within this
Commonwealth or as a party officer while in the service of
the authority. Members of the board and the executive
director shall not seek election as public officials or party
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officers for one year after their service with the authority.
Members of the board and the executive director may serve as
appointive public officials any time after their periods of
service with the authority.
(2) Employees and agents of the authority shall not seek
or hold other positions as public officials or party officers
while in the employ of the authority. The authority may
receive the loan of services of persons in other government
agencies in accordance with subsection (f), notwithstanding
that such persons are public officials. Employees of the
authority shall not seek election as public officials or
party officers for one year after leaving the employ of the
authority.
(3) No member of the board or employee of the authority
may directly or indirectly be a party to or be interested in
any contract or agreement with the authority or with the
assisted city. No member or employee may use his office or
employment or any confidential information received through
his office or employment for the private pecuniary benefit of
himself, a member of his immediate family or a business with
which he or a member of his immediate family is associated.
Any member or employee who shall willfully violate this
provision shall forfeit his office or employment and shall be
subject to such other criminal and civil sanctions as may be
imposed by law. Any contract or agreement knowingly made in
contravention of this provision is void.
(h) Statutes applying to authority.--
(1) The provisions of the following acts shall apply to
the authority:
(i) 65 Pa.C.S. Ch. 7 (relating to open meetings).
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(ii) The act of June 21, 1957 (P.L.390, No.212),
referred to as the Right-to-Know Law.
(iii) Except as set forth in paragraph (2), the act
of July 19, 1957 (P.L.1017, No.451), known as the State
Adverse Interest Act.
(iv) 65 Pa.C.S. Ch. 11 (relating to ethics standards
and financial disclosure).
(2) Notwithstanding the provisions of the State Adverse
Interest Act, the Secretary of the Budget and the director of
finance of each assisted city shall, while serving as ex
officio members of the board, also serve in their official
capacities with respect to the negotiation and execution of
intergovernmental cooperation agreements and other agreements
between an assisted city and the authority.
(i) Advisory committee.--
(1) The board may appoint by majority vote one advisory
committee comprised of professionals engaged in municipal
management and finance or other experts as it may deem
necessary. The members of an advisory committee shall reside
within an assisted city or a county within the statistical
metropolitan area in which the assisted city is located.
(2) The provisions of subsection (g) shall be applicable
to members of an advisory committee; however, the board may
allow city council to designate a liaison from city council
to serve on an advisory committee.
(3) The advisory committee shall consist of no more than
six members, excluding any council liaison.
Section 203. Powers and duties.
(a) General powers and duties.--The authority is established
for the purposes, without limitation, by itself or by agreement
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in cooperation with others, of assisting cities in solving their
budgetary and financial problems.
(b) Specific duties.--The authority shall have the powers
and its duties shall be:
(1) To assist cities in achieving financial stability in
any manner consistent with the purposes and powers described
by this act.
(2) To assist cities in avoiding defaults, eliminating
and financing deficits and debts, maintaining sound budgetary
practices and avoiding the interruption of municipal
services.
(3) To negotiate intergovernmental cooperation
agreements with cities containing such terms and conditions
as will enable such cities to eliminate and avoid deficits,
maintain sound budgetary practices and avoid interruption of
municipal services.
(4) To make annual signed reports within 120 days after
the close of the assisted city's fiscal year, commencing with
the fiscal year ending December 31, 2003, to the Governor and
the General Assembly describing the city's financial
condition and the authority's progress with respect to
restoring the financial stability of assisted cities and
achieving balanced budgets for assisted cities. Such reports
shall be filed with the Governor, with the presiding officers
of the Senate and the House of Representatives, with the
chairperson and minority chairperson of the Appropriations
Committee of the Senate and the chairperson and the minority
chairperson of the Appropriations Committee of the House of
Representatives and with the governing body, mayor and
controller of the assisted city and be publicly available in
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the assisted city during normal business hours for public
inspection, and may be reproduced by any member of the public
at commercial costs of reproduction. Such report shall
clearly show by consistent category the last five years of
operating revenues and expenditures, capital expenditures,
gross and net indebtedness transactions, including a schedule
of principal and interest, five-year projections of the
assisted city's operating and capital budgets, and the entire
projected indebtedness transactions, including a schedule of
principal and interest of such indebtedness until any and all
debt has been completely retired. Such report shall contain a
narrative explaining progress of the assisted city in meeting
its annual and five-year budgetary objectives, an appraisal
by the authority of the progress the assisted city is making
to achieve its goals and an appraisal of the extent to which
the assisted city is making a good faith effort to achieve
its goals. Such report shall disclose any violations of
Federal and State law that the authority may have discovered.
Such report shall include as appendixes all historical loans
or other contracts entered into by the assisted city and its
authorities.
(c) Specific powers.--In addition to the powers and duties
set forth elsewhere in this act, the authority shall have the
specific powers:
(1) To obtain copies of all reports and documents
regarding the revenues, expenditures, budgets, deficits,
debts, costs, plans, operations, estimates and any other
financial or budgetary matters of an assisted city.
(2) To obtain additional reports and information on the
above matters in such form as are deemed necessary by the
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authority.
(3) To make factual findings concerning an assisted
city's budgetary and fiscal affairs.
(4) To make recommendations to an assisted city and the
General Assembly concerning the budgetary and fiscal affairs
of the assisted city, which shall include consideration of
the following issues and other issues at the discretion of
the authority:
(i) Consolidation or merger of services performed by
an assisted city, school, county or other surrounding
municipality.
(ii) Consolidation of public safety services.
(iii) Appropriate staffing levels of city
departments and corporate entities.
(iv) Cooperative agreements or contractual
arrangements between health care facilities licensed by
the Department of Health.
(v) Financial or contractual obligations of the
assisted city.
(vi) Contributions of nonprofit or charitable
organizations which receive the benefit of municipal
services provided by the assisted city.
(vii) Reduction or restructuring of debt
obligations.
(viii) Cooperative agreements between the assisted
city and the county in which it is located or
municipalities which border the assisted city.
(ix) Cooperative agreements between the assisted
city and the school district in which it is located.
(x) Collective bargaining agreements and other
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contracts of the assisted city.
(xi) Elimination, sale or transfer of assisted city
services or property.
(xii) Implementation of cost-saving measures by the
assisted city.
(xiii) Increased managerial accountability.
(xiv) Performance of government operations and
delivery of municipal services.
(xv) Reevaluation of tax exemption policies and
practices with regard to real property taxation within
the assisted city.
(xvi) Improvements in procurement practices.
(xvii) Implementation of user fees for services,
including sewage, water treatment and refuse collection.
(xviii) Privatization and outsourcing of appropriate
assisted city services.
(xix) Increased collection of fines and costs
relating to parking violations or violations of other
city ordinances.
(xx) Competitive bidding of appropriate assisted
city services, and competitive bidding practices.
(xxi) The use of technology to achieve cost savings.
(xxii) A study of health care and other benefits
offered by the assisted city to its employees.
(xxiii) The sale of the assisted city's workers'
compensation fund.
(xxiv) The sale of unencumbered assets of the
assisted city or its authorities.
(xxv) The elimination or reorganization of
authorities or departments.
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(xxvi) The use by the assisted city of tax and other
revenues received, including those received under the act
of July 28, 1953 (P.L.723, No.230), known as the Second
Class County Code, and the proper use of such revenues.
(xxvii) The use of budgetary practices and
principles as they relate to forecasting, public
openness, projections, estimates, tax policy, lending,
borrowing and strategic planning.
(xxviii) The transfers of employees and assets by
and between bureaus, departments and authorities of the
assisted city.
(xxix) Prior suggestions published by others prior
to the enactment of this act with regard to the assisted
city.
(xxx) A review of the taxing authority of the city
as compared with the taxing authority of school districts
of the first class A.
(xxxi) A review of the ratio of debt service to
general fund outlays of the assisted city, the
appropriate ratio and the means to achieve it.
(xxxii) A review of outstanding debt, debt payments
and the ability to prepay such debt.
(5) To make recommendations to the Governor and the
General Assembly regarding legislation or resolutions which
relate to an assisted city's fiscal stability. The authority
shall submit a preliminary report of the recommendations to
the Governor and the General Assembly within 60 days of the
effective date of this act. The report shall include, but not
be limited to, recommendations as to whether or not the city
needs additional revenues, the best sources of such revenues
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and ways for the city to reduce expenditures. Any
recommendations for new revenue, if warranted, shall state
whether such revenues should be earmarked for specific
expenditures, including, but not limited to, prepayment of
debt, and whether such revenues should be subject to sunset
provisions.
(6) To exercise powers of review concerning the
budgetary and fiscal affairs of the assisted city consistent
with this act and the city's home rule charter or other
optional plan of government.
(7) To receive revenues from any source, directly or by
assignment, pledge or otherwise.
(8) To sue and be sued, implead and be impleaded,
interplead, complain and defend in all courts.
(9) To adopt, use and alter at will a corporate seal.
(10) To make bylaws for the management and regulation of
its affairs and adopt rules, regulations and policies in
connection with the performance of its functions and duties
which, notwithstanding any other provision of law to the
contrary, shall not be subject to review pursuant to the act
of June 25, 1982 (P.L.633, No.181), known as the Regulatory
Review Act.
(11) To make and enter into contracts and other
instruments necessary or convenient for the conduct of its
business and the exercise of the powers of the authority.
(12) To appoint officers, agents, employees and servants
and to prescribe their duties and to fix their compensation
as set forth in section 202(f).
(13) To retain counsel and auditors to render such
professional services as the authority deems appropriate. The
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authority shall not be considered either an executive agency
or an independent agency for the purpose of the act of
October 15, 1980 (P.L.950, No.164), known as the Commonwealth
Attorneys Act, but shall possess the same status for such
purpose as the Auditor General, State Treasurer and the
Pennsylvania Public Utility Commission, except that the
provisions of section 204(b) and (f) of the Commonwealth
Attorneys Act shall not apply to the authority;
notwithstanding 42 Pa.C.S. Ch. 85 (relating to matters
affecting government units), the authority, through its legal
counsel, shall defend actions brought against the authority
or its members, officers, officials and employees when acting
within the scope of their official duties.
(14) To cooperate with any Federal agency or government
agency.
(15) To acquire, by gift or otherwise, purchase, hold,
receive, lease, sublease and use any franchise, license,
property, real, personal or mixed, tangible or intangible or
any interest therein. However, the authority shall be
absolutely limited in its power to acquire real property
under this act to real property that will be used only for
the office space in which the authority will conduct its
daily business if necessary. If possible, an assisted city
shall provide office space to the authority at no cost to the
authority as part of an intergovernmental cooperation
agreement.
(16) To sell, transfer, convey and dispose of any
property, real, personal or mixed, tangible or intangible or
any interest therein.
(17) To enter into contracts for group insurance and to
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contribute to retirement plans for the benefit of its
employees and to enroll its employees in an existing
retirement system of a government agency.
(18) To accept, purchase or borrow equipment, supplies,
services or other things necessary or convenient to the work
of the authority from other government agencies, and all
government agencies are authorized to sell, lend or grant to
the authority such equipment, supplies, services or other
things necessary or convenient to the work of the authority.
(19) To invest any funds held by the authority as set
forth in section 212.
(20) To receive and hold assets, moneys and funds from
any source, including, but not limited to, appropriations,
grants and gifts.
(21) To procure insurance, guarantees and sureties the
authority determines necessary or desirable for its purposes.
(22) To pledge the credit of the authority as the
authority determines necessary or desirable for its purposes.
(23) To do all acts and things necessary or convenient
for the promotion of its purposes and the general welfare of
the authority and to carry out the powers granted to it by
this act or any other acts.
(d) Intergovernmental cooperation agreements.--The authority
shall have the power and its duty shall be to enter into and to
implement fully such intergovernmental cooperation agreements
with cities as are approved by a majority of the board. The
following shall apply:
(1) A city may enter into an intergovernmental
cooperation agreement in which it, consistent with this act,
covenants to cooperate or agree in the exercise of any
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function, power or responsibility with, or delegate or
transfer any function, power or responsibility to, the
authority upon the adoption by the governing body of such
city of an ordinance authorizing and approving the
intergovernmental cooperation agreement.
(2) An ordinance that authorizes a city to enter into an
intergovernmental cooperation agreement with the authority
shall specify:
(i) the purpose and objectives of the agreement;
(ii) the conditions of the agreement; and
(iii) the term of the agreement, including
provisions relating to its termination.
(e) Limitation.--Notwithstanding any purpose or general or
specific power granted by this act or any other act, whether
express or implied, the authority shall have no power to pledge
the credit or taxing powers of the Commonwealth.
Section 204. Term of existence.
The authority shall exist for a term of at least seven years.
If, after seven years, an assisted city has had annual operating
budgets and five-year financial plans approved by the board for
at least the three immediately preceding years, the Secretary of
Community and Economic Development shall certify that the
authority is no longer needed, and the provisions of this
chapter will no longer be in effect 90 days following that
certification. Upon termination of the authority, records and
documents of the authority shall be transferred to the director
of finance of the assisted city. The authority shall submit a
final report on its activities and the city's fiscal condition
to the Governor and the General Assembly within 60 days of its
termination.
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Section 205. Fiscal year.
The fiscal year of the authority shall be the same as the
fiscal year of the Commonwealth.
Section 206. Annual budget of authority.
(a) Budget.--Before March 1, 2004, for the fiscal year July
1, 2004, to June 30, 2005, and before October 15, 2005, and each
October 15 thereafter, the authority shall adopt a budget by a
majority of the board setting forth in reasonable detail the
projected expenses of operation of the authority for the ensuing
fiscal year, including the salary and benefits of the executive
director and any other employees of the authority, and the
projected revenues of the authority to be derived from
investment earnings and any other moneys of the authority which
are estimated to be available to pay the operating expenses set
forth in the budget. A copy of the authority's budget shall be
submitted to the Governor and to the General Assembly. The
authority or its designated representatives may be afforded an
opportunity to appear before the Governor and the Appropriations
Committee of the Senate and the Appropriations Committee of the
House of Representatives regarding the authority's budget.
(b) Limit on operating expenses.--Following the submission
of the authority's budget to the Governor and the General
Assembly and any hearing held by an appropriations committee
under subsection (a), the General Assembly, by concurrent
resolution with presentment to the Governor, in accordance with
section 9 of Article III of the Constitution of Pennsylvania,
may limit the operating expenses of the authority. In that
event, it shall be unlawful for the authority to spend more for
operating expenses than the limit established for that fiscal
year by the concurrent resolution. If the General Assembly does
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not adopt a concurrent resolution prior to May 30, the
authority's budget shall be deemed approved for that fiscal
year.
(c) Funding.--After July 1, 2005, upon request of the
authority and pursuant to the limits established in subsection
(b), the city shall annually fund any portion of the budget of
the authority which exceeds the authority's State appropriation,
including its reasonable and necessary expenses and costs
incurred for consultants engaged by the board to carry out its
duties.
(d) Examination of books.--The chairperson and minority
chairperson of the Appropriations Committee of the Senate and
the chairperson and minority chairperson of the Appropriations
Committee of the House of Representatives shall have the right
at any time to examine the books, accounts and records of the
authority.
Section 207. Annual report to be filed; annual audits.
The authority shall file a signed annual report with the
chairperson and the minority chairperson of the Appropriations
Committee of the Senate and chairperson and the minority
chairperson of the Appropriations Committee of the House of
Representatives, which shall make provisions for the accounting
of revenues and expenses. The authority shall have its books,
accounts and records audited annually in accordance with
generally accepted auditing standards by an independent auditor
who shall be a certified public accountant, and a copy of his
audit report shall be attached to and be made a part of the
authority's annual report. A concise financial statement shall
be published annually in the Pennsylvania Bulletin.
Section 208. Limit on city borrowing.
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A city and its corporate entities may not borrow or receive
funds for any lawful purpose unless the city has entered into an
intergovernmental cooperation agreement with the authority and
there is an approved financial plan in effect.
Section 209. Financial plan of an assisted city.
(a) Requirement of a financial plan.--An assisted city shall
develop, implement and periodically revise a financial plan as
described in this section.
(b) Elements of plan.--The financial plan shall include:
(1) Projected revenues and expenditures of the principal
operating fund or funds of the assisted city for five fiscal
years consisting of the current fiscal year and the next four
fiscal years.
(2) Plan components that will:
(i) eliminate any projected deficit for the current
fiscal year and for subsequent fiscal years;
(ii) restore to special fund accounts money from
those accounts used for purposes other than those
specifically authorized;
(iii) balance the current fiscal year budget and
subsequent budgets in the financial plan through sound
budgetary practices, including, but not limited to,
reductions in expenditures, improvements in productivity,
increases in revenues or a combination of these steps;
(iv) provide procedures to avoid a fiscal emergency
condition in the future; and
(v) enhance the ability of the assisted city to
access short-term and long-term credit markets.
(c) Standards for formulation of plan.--
(1) All projections of revenues and expenditures in a
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financial plan shall be based on prudent, reasonable and
appropriate assumptions and methods of estimation, all such
assumptions and methods to be consistently applied and
reported in the financial plan. The financial plan of an
assisted city shall not include projected revenue that in
order to be collected requires the enactment by the General
Assembly of new taxing powers.
(2) All revenue and appropriation estimates shall be on
a modified accrual basis in accordance with generally
accepted standards agreed to by the authority such as those
promulgated by the Governmental Accounting Standards Board.
Revenue estimates shall recognize revenues in the accounting
period in which they become both measurable and available.
Estimates of city-generated revenues shall be based on
current or proposed tax rates, historical collection patterns
and generally recognized econometric models. Estimates of
revenues to be received from the State government shall be
based on historical patterns, currently available levels or
on levels proposed in a budget by the Governor. Estimates of
revenues to be received from the Federal Government shall be
based on historical patterns, currently available levels or
on levels proposed in a budget by the President or in a
congressional budget resolution. Nontax revenues shall be
based on current or proposed rates, charges or fees,
historical patterns and generally recognized econometric
models. Appropriation estimates shall include, at a minimum,
all obligations incurred during the fiscal year and estimated
to be payable during the fiscal year or in the 24-month
period following the close of the current fiscal year and all
obligations of prior fiscal years not covered by encumbered
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funds from prior fiscal years. Any deviations from these
standards of estimating revenues and appropriations proposed
to be used by an assisted city shall be specifically
disclosed and shall be approved by a majority of the board.
(3) All cash flow projections shall be based upon
prudent, reasonable and appropriate assumptions as to sources
and uses of cash, including, but not limited to, prudent,
reasonable and appropriate assumptions as to the timing of
receipt and expenditure thereof, and shall provide for
operations of the assisted city to be conducted within the
resources so projected. All estimates shall take due account
of the past and anticipated collection, expenditure and
service demand experience of the assisted city and of current
and projected economic conditions.
(d) Form of plan.--Each financial plan shall, consistent
with the requirements of an assisted city's home rule charter or
optional plan of government:
(1) be in such form and shall contain:
(i) for each of the first two fiscal years covered
by the financial plan, such information as shall reflect
an assisted city's total expenditures by fund and by lump
sum amount for each board, commission, department or
office of an assisted city; and
(ii) for the remaining three fiscal years of the
financial plan, such information as shall reflect an
assisted city's total expenditures by fund and by lump
sum amount for major object classification;
(2) include projections of all revenues and expenditures
for five fiscal years, including, but not limited to,
projected capital expenditures and short-term and long-term
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debt incurrence and cash flow forecasts by fund for the first
year of the financial plan;
(3) include a schedule of projected capital commitments
of the assisted city and proposed sources of funding for such
commitments; and
(4) be accompanied by a statement describing in
reasonable detail the significant assumptions and methods of
estimation used in arriving at the projections contained in
such plan.
(e) Annual submission of plan.--Within 90 days of the
effective date of this section, an assisted city shall develop,
and the authority shall review and act upon, an initial five-
year financial plan which includes a report on the status of
implementation of prior published suggestions regarding
consolidation and cost savings. During each subsequent fiscal
year, the mayor or chief executive officer of each assisted city
shall, at least 100 days prior to the beginning of its fiscal
year or on such other date as the authority may approve upon the
request of the assisted city, prepare and submit its proposed
five-year plan. At the same time the plan is submitted, the
mayor or chief executive officer shall also submit to the
authority:
(1) the mayor's or chief executive officer's proposed
annual operating budget and capital budget which shall be
consistent with the first year of the financial plan and
which shall be prepared in accordance with the assisted
city's home rule charter or other optional plan of
government; and
(2) a statement by the mayor or chief executive officer
that such budget:
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(i) is consistent with the financial plan;
(ii) contains funding adequate for debt service
payments, legally mandated services and lease payments
securing bonds of other government agencies;
(iii) is based upon prudent, reasonable and
appropriate assumptions and methods of estimation; and
(iv) complies with any balanced budget requirements
contained in the charter and ordinances of the city or
State law.
(f) Balanced budget requirement.--The mayor of every city
and assisted city shall submit, and the city council of every
city and assisted city shall adopt, a balanced budget each year
consistent with the requirements of 53 Pa.C.S. § 3016 (relating
to form and adoption of budget) and the city's or assisted
city's home rule charter or other optional plan of government. A
balanced budget of a city or assisted city shall not include
projected revenues that in order to be collected require the
enactment by the General Assembly of new taxing powers or the
approval of a court of common pleas of the county in which the
city or assisted city is located. The failure of a city or
assisted city to comply with this subsection shall result in the
withholding of Commonwealth funds pursuant to section 210(e) and
(f).
(g) Authority review and approval of plan.--
(1) The authority shall promptly review each financial
plan, proposed operating budget and capital budget submitted
by the assisted city. In conducting such review, the
authority shall request from the city controller of the
assisted city an opinion or certification, prepared in
accordance with generally accepted auditing standards, with
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respect to the reasonableness of the assumptions and
estimates in the financial plan. The city controller and
other elected officials shall comply with any such request
from the authority. Not more than 30 days after submission of
a financial plan and proposed operating budget, the authority
shall determine whether:
(i) the financial plan projects balanced budgets,
based upon prudent, reasonable and appropriate
assumptions as described in this section, for each year
of the plan; and
(ii) the proposed operating budget and capital
budget are consistent with the proposed financial plan.
If the authority determines that these criteria are
satisfied, the authority shall approve such financial plan by
a majority vote.
(2) The authority shall not be bound by any opinions or
certifications of the city controller of the assisted city
issued pursuant to this subsection.
(3) If the authority fails to take any action within 30
days on a financial plan, the financial plan as submitted
shall be deemed approved. However, if, during the 30 days, a
written request by two members of the authority board for a
meeting and vote on the question of approval of the financial
plan has been submitted to the chairperson and a meeting and
vote do not take place, the financial plan shall be deemed
disapproved.
(h) Authority disapproval of plan.--
(1) If the authority disapproves the proposed financial
plan, the authority shall, when it notifies an assisted city
of its decision, state in writing in reasonable detail the
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reasons for such disapproval, including the amount of any
estimated budget imbalance.
(2) The assisted city shall submit a revised financial
plan to the authority within 15 days of such disapproval,
which revised plan eliminates the budget imbalance. Not more
than 15 days after the submission of such revised financial
plan, the authority shall determine whether the revised plan
satisfies the criteria set forth in subsection (g)(1). If the
authority determines that these criteria are satisfied, the
authority shall approve such financial plan by a majority
vote. If the authority shall not so approve the financial
plan, then the authority shall, in accordance with section
210(e), certify the assisted city's noncompliance with the
financial plan to the Secretary of the Budget, the President
pro tempore of the Senate and the Speaker of the House of
Representatives.
(i) Revisions to plan.--
(1) The plan shall be revised on an annual basis to
include the operating budget for the next fiscal year and to
extend the plan for an additional fiscal year. In addition,
the mayor or chief executive officer of a city shall, within
90 days of assuming office, propose revisions to the
financial plan or certify to the authority that he or she
adopts the existing plan. An assisted city may, during the
course of a fiscal year, submit proposed revisions to the
financial plan and shall submit a proposed revision for any
amendment to the city's operating or capital budget.
(2) The authority shall review each proposed revision
within 20 days of its submission. The authority shall approve
the revision if it will not, based on prudent, reasonable and
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appropriate assumptions, cause the plan to become imbalanced.
Proposed revisions shall become part of the financial plan
upon the approval of a majority of the authority board unless
some other method of approval is permitted by authority rules
and regulations approved by a majority or pursuant to an
agreement with the city contained in an intergovernmental
cooperation agreement. If the authority fails to take action
within 20 days on a proposed revision, such submission shall
be deemed approved unless a written request for a meeting and
vote has been made in accordance with subsection (g)(3), in
which event if a meeting and vote do not take place, the
proposed revision shall be deemed disapproved.
(3) If the governing body of a city adopts a budget
inconsistent with an approved financial plan, the assisted
city shall submit the enacted budget to the authority as a
proposed revision to the plan. The authority shall review the
proposed revision within 30 days of its submission in
accordance with the criteria set forth in subsection (g) and
the approval process set forth in paragraph (2).
(j) Supplemental reports.--Within 45 days of the end of each
fiscal quarter, or monthly if a variation from the financial
plan has been determined in accordance with section 210(c), the
mayor or chief executive officer of an assisted city shall
provide the authority with reports describing actual or current
estimates of revenues and expenditures compared to budgeted
revenues and expenditures for such period reflected in its cash
flow forecast. Each report required under this section shall
indicate any variance between actual or current estimates and
budgeted revenues, expenditures and cash for the period covered
by such report. An assisted city shall also provide periodic
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reports on debt service requirements in conformity with section
210(b).
(k) Effect of plan upon contracts and collective bargaining
agreements.--
(1) A contract or collective bargaining agreement in
existence in an assisted city prior to the approval by the
authority of a financial plan submitted pursuant to this
section shall remain effective after approval of such plan
until such contract or agreement expires.
(2) After the approval by the authority of a financial
plan submitted pursuant to this section, an assisted city
shall execute contracts and collective bargaining agreements
in compliance with such plan. If an assisted city executes a
contract or a collective bargaining agreement which is not in
compliance with the plan, the contract or agreement shall not
be void or voidable solely by reason of such noncompliance,
but the assisted city shall submit to the authority a
proposed revision to the plan which demonstrates that
revenues sufficient to pay the costs of the contract or
collective bargaining agreement will be available in the
affected fiscal years of the plan.
(l) Effect of plan upon certain arbitration awards.--
(1) After the approval by the authority of a financial
plan submitted pursuant to this section, any determination of
a board of arbitration established pursuant to the provisions
of the act of June 24, 1968 (P.L.237, No.111), referred to as
the Policemen and Firemen Collective Bargaining Act,
providing for an increase in wages or fringe benefits of any
employee of an assisted city under the plan, in addition to
considering any standard or factor required to be considered
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by applicable law, shall take into consideration and accord
substantial weight to:
(i) the approved financial plan; and
(ii) relevant market factors, such as the financial
situation of the assisted city, inflation, productivity,
size of work force and pay and benefit levels in
economically and demographically comparable political
subdivisions.
(2) Such determination shall be in writing and a copy
thereof shall be forwarded to each party to the dispute and
the authority. Any determination of the board of arbitration
which provides for an increase in wages or fringe benefits of
any employee of an assisted city shall state with specificity
in writing all factors which the board of arbitration took
into account in considering and giving substantial weight to
the factors referred to in paragraph (1).
(3) Any party to a proceeding before a board of
arbitration may appeal to the court of common pleas to
review:
(i) consideration under paragraph (1); or
(ii) failure of the board of arbitration to issue a
determination under paragraph (2).
(4) An appeal under paragraph (3) must be commenced not
later than 30 days after the issuance of a final
determination by the board of arbitration.
(5) The decision of the board of arbitration shall be
vacated and remanded to the board of arbitration if the court
finds:
(i) that the board of arbitration failed to take
into consideration and accord substantial weight to the
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factors referred to in paragraph (1); or
(ii) that the board of arbitration has failed to
issue a determination under paragraph (2).
(6) If, after the exhaustion of all appeals, the final
arbitration award is not in compliance with the approved
financial plan, the award shall not be void or voidable
solely by reason of such noncompliance, but the assisted city
shall submit to the authority a proposed revision to the plan
which demonstrates that revenues sufficient to pay the costs
of the award will be available in the affected fiscal years
of the plan.
Section 210. Powers and duties of authority with respect to
financial plans.
(a) Formulation and approval of plan.--To advance the
financial recovery of each assisted city, the authority shall
require the assisted city to submit a five-year financial plan
in accordance with section 209. With regard to the formulation
of such plan, the authority shall:
(1) Consult with an assisted city as it prepares the
financial plan.
(2) Prescribe the form of the financial plan.
(3) Prescribe the supporting information required in
connection with such plan, such information to include at a
minimum:
(i) debt service payments due or projected to be due
during the relevant fiscal years;
(ii) payments for legally mandated services included
in the plan and due or projected to be due during the
relevant fiscal years; and
(iii) a statement in reasonable detail of the
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significant assumptions and methods of estimation used in
arriving at the projections in the plan.
(4) Exercise any rights of approval or disapproval and
issue such recommendations as are authorized by this act in
accordance with the standards for formulation of the plan set
forth in section 209(c).
(b) Authority functions after plan is approved.--After a
financial plan has been approved, the authority shall:
(1) Receive and review:
(i) the financial reports submitted by the mayor or
chief executive officer of a city under section 209(j);
(ii) reports concerning the debt service
requirements on all bonds, notes of the assisted city and
lease payments of the assisted city securing bonds or
other government agencies for the following quarter,
which reports shall be in such form and contain such
information as the authority shall determine and which
shall be issued no later than 60 days prior to the
beginning of the quarter to which they pertain and shall
be updated immediately upon each issuance of bonds or
notes by the assisted city or execution of a lease
securing bonds of another government agency after the
date of such report to reflect any change in debt service
requirements as a result of such issuance; and
(iii) any additional information provided by the
assisted city concerning changed conditions or unexpected
events which may affect the assisted city's adherence to
the financial plan. The reports described in subparagraph
(ii) shall be certified by the city controller.
(2) Determine, on the basis of information and reports
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described in paragraph (1), whether an assisted city has
adhered to the financial plan.
(c) Variation from the plan.--If the authority determines,
based upon reports submitted by an assisted city under
subsection (b) or independent audits, examinations or studies of
the assisted city's finances obtained under subsection (i)(3),
that an assisted city's actual revenues and expenditures vary
from those estimated in the financial plan, the authority shall
require the city to provide such additional information as the
authority deems necessary to explain the variation. The
authority shall take no action with respect to an assisted city
for departures from the financial plan in a fiscal quarter if:
(1) the city provides a written explanation for the
variation that the authority deems reasonable;
(2) the city proposes remedial action which the
authority believes will restore the assisted city's overall
compliance with the financial plan;
(3) information provided by the city in the immediately
succeeding quarterly financial report demonstrates that the
assisted city is taking such remedial action and otherwise
complying with the plan; and
(4) the assisted city submits monthly supplemental
reports in accordance with section 209(j) until it regains
compliance with the financial plan.
(d) Authority may make recommendations.--The authority may
at any time issue recommendations as to how an assisted city may
achieve compliance with the financial plan and shall provide
copies of such recommendations to the mayor or chief executive
officer and the governing body of the city and to the officials
named in section 203(b)(4).
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(e) When Commonwealth shall withhold funds.--
(1) The authority shall certify to the Secretary of the
Budget an assisted city's noncompliance with the financial
plan during any period when the authority has determined by
the vote of a majority that the assisted city has not adhered
to the plan and has not taken acceptable remedial action
during the next quarter following such departure from the
plan.
(2) The authority shall certify to the Secretary of the
Budget that an assisted city is not in compliance with the
plan if the assisted city:
(i) has no financial plan approved by the authority,
has failed to provide requested documents or has failed
to file a financial plan with the authority; or
(ii) has failed to file mandatory revisions to the
plan or reports as required by section 209(i), (j), (k)
or (l).
(3) If the authority certifies that an assisted city is
not in compliance with the financial plan under paragraph (1)
or (2), the Secretary of the Budget shall notify the city
that such certification has been made and that each grant,
loan, entitlement or payment to the assisted city by the
Commonwealth shall be suspended pending compliance with the
financial plan. Funds withheld shall be held in escrow by the
Commonwealth until compliance with the plan is restored as
set forth in paragraph (4). Funds held in escrow pursuant to
this subsection shall not lapse pursuant to section 621 of
the act of April 9, 1929 (P.L.177, No.175), known as The
Administrative Code of 1929, or any other law.
(4) The authority shall, by majority vote, determine
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when the conditions which caused an assisted city to be
certified as not in compliance with the financial plan have
ceased to exist and shall promptly notify the Secretary of
the Budget of such vote. The Secretary of the Budget shall
thereupon release all funds held in escrow, together with all
interest and income earned thereon during the period held in
escrow, and the disbursements of amounts in the city account
shall resume.
(f) Exemptions.--Notwithstanding the provisions of
subsection (e), the following shall not be withheld from an
assisted city:
(1) funds granted or allocated to an assisted city
directly from an agency of the Commonwealth or from the
Federal Government for distribution by the Commonwealth after
the declaration of a disaster resulting from a catastrophe;
(2) funds for capital projects under contract in
progress;
(3) pension fund payments required by law; and
(4) funds the assisted city has pledged to repay bonds
or notes.
(g) Effect of Commonwealth's failure to disburse funds.--The
provisions of subsection (e) shall not apply and an assisted
city shall not be found to have departed from the financial plan
due to the Commonwealth's failure to pay any money, including
payment of Federal funds distributed by or through the
Commonwealth, due to the assisted city from moneys appropriated
by the General Assembly.
(h) Assisted city to determine expenditure of available
funds.--Nothing in this act shall be construed to limit the
power of an assisted city to determine from time to time, within
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available funds of the assisted city, the purposes for which
expenditures are to be made by the assisted city and the amounts
of such expenditures then permitted under the financial plan of
the assisted city.
(i) Documents and examinations to be reviewed or undertaken
by the authority.--The authority shall:
(1) receive from an assisted city and review the
reports, documents, budgetary and financial planning data and
other information prepared by or on behalf of such assisted
city and which are to be made available to the authority
under this act;
(2) inspect and copy such books, records and information
of an assisted city as the authority deems necessary to
accomplish the purposes of this act; and
(3) conduct or cause to be conducted such independent
audits, examinations or studies of an assisted city's
finances as the authority deems appropriate.
(j) Remedies of authority for failure of an assisted city to
file financial plans and reports.--In the event that an assisted
city shall fail to file with the authority any financial plan,
revision to a financial plan, report or other information
required to be filed with the authority pursuant to this act,
the authority, in addition to all other rights which the
authority may have at law or in equity, shall have the right by
mandamus to compel the assisted city and the officers, employees
and agents thereof to file with the authority the financial
plan, revision to a financial plan, report or other information
which the assisted city has failed to file. The authority shall
give the assisted city written notice of the failure of the
assisted city to file and of the authority's intention to
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initiate an action under this subsection and shall not initiate
such an action earlier than ten days after the giving of such
notice.
Section 211. Limitation on authority and on assisted cities to
file petition for relief under Federal bankruptcy
law.
(a) Limitation on bankruptcy filing.--Notwithstanding any
other provision of law, the authority and any assisted city
shall not be authorized to file a petition for relief under 11
U.S.C. Ch. 9 (relating to adjustments of debts of a
municipality) or any successor Federal bankruptcy law, and no
government agency shall authorize the authority or such city to
become a debtor under 11 U.S.C. Ch. 9 or any successor Federal
bankruptcy law.
(b) Bankruptcy filing approval.--In addition to the
limitation set forth in subsection (a) and notwithstanding any
other provision of law, no city shall be authorized to file a
petition for relief under 11 U.S.C. Ch. 9 or any successor
Federal bankruptcy law unless such petition has been submitted
to, and the filing thereof has been approved in writing by, the
Governor. The Governor is designated in accordance with 11
U.S.C. § 109(c)(2) (relating to who may be a debtor) as the
organization of the Commonwealth which shall have power to
approve or disapprove the filing of any such petition of a
political subdivision and to approve or disapprove any plan of
readjustment of the debts of any such political subdivision
prepared, filed and submitted with the petition to the court, as
provided under 11 U.S.C. Ch. 9.
(c) Review of bankruptcy petition.--
(1) When any such petition shall be submitted to the
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Governor for approval, accompanied with a proposed plan of
readjustment of the debts of a city, the Governor shall make
a careful and thorough investigation of the financial
condition of such city, of its assets and liabilities, of its
sinking fund and whether the affairs thereof are managed in a
careful, prudent and economic manner in order to ascertain
whether the presentation of such petition is justified or
represents an unjust attempt by such city to evade payment of
some of its contractual obligations and, if the Governor
believes that such petition should be approved, whether the
plan of readjustment submitted will be helpful to the
financial condition of the city and is feasible and, at the
same time, fair and equitable to all creditors.
(2) The Governor shall also, prior to giving his
approval, ascertain the amount, if any, of the obligations of
any such petitioning city which is held by any agency or
agencies of the State government as trust funds and shall,
before approving any such petition and plan of readjustment,
consult with and give every such agency an opportunity to be
heard and the privilege to examine the findings of the
Governor resulting from the investigation required to be made
under this act and shall likewise hear any other creditor of
such city, whether resident in or outside this Commonwealth,
who shall apply therefor.
(3) The Governor, if he approves a petition, shall,
before giving his approval, require such modification in the
proposed plan for readjusting the debts as to him appears
proper.
Section 212. Investment of funds.
Funds of the authority which are not required for immediate
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use may be invested in obligations of an assisted city or in
obligations of the Federal Government or of the Commonwealth or
obligations which are legal investments for Commonwealth funds.
However, no money may be invested in obligations issued by or
obligations guaranteed by an assisted city without the approval
of a majority of the board.
Section 213. Sovereign immunity.
Members of the board shall not be liable personally for any
obligations of the authority. It is hereby declared to be the
intent of the General Assembly that the authority created by
this act and its members, officers, officials and employees
shall enjoy sovereign and official immunity as provided in 1
Pa.C.S. § 2310 (relating to sovereign immunity reaffirmed;
specific waiver) and shall remain immune from suit except as
provided by and subject to the provisions of 42 Pa.C.S. §§ 8501
(relating to definitions) through 8528 (relating to limitations
on damages).
CHAPTER 7
MISCELLANEOUS PROVISIONS
Section 701. Appropriation.
The sum of $200,000 is hereby appropriated from the General
Fund to the Intergovernmental Cooperation Authority for Cities
of the Second Class as a continuing appropriation for the
purpose of providing operating funds for the Intergovernmental
Cooperation Authority for Cities of the Second Class. This
appropriation shall lapse June 30, 2005.
Section 702. General rights and prohibitions.
Nothing in this act shall limit the rights or impair the
obligations of any assisted city to comply with the provisions
of any contract in effect on the effective date of this act or
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shall in any way impair the rights of the obligees of any
assisted city with respect to any such contract.
Section 703. Nondiscrimination.
The authority shall comply in all respects with the
nondiscrimination and contract compliance plans used by the
Department of General Services to assure that all persons are
accorded equality of opportunity in employment and contracting
by the authority and its contractors, subcontractors, assignees,
lessees, agents, vendors and suppliers.
Section 704. Construction of act.
(a) Liberal construction.--The provisions of this act
providing for security for and rights and remedies of obligees
of the authority shall be liberally construed to achieve the
purposes stated and provided for by this act.
(b) Severability.--If any provision of the title or any
chapter, section or clause of this act or the application
thereof to any person, party or corporation, public or private,
shall be judged invalid by a court of competent jurisdiction,
such order or judgment shall be confined in its operation to the
controversy in which it was rendered and shall not affect or
invalidate the remainder of any provision of the title or any
chapter or any section or clause of this act or the application
of any part thereof to any other person, party or corporation,
public or private, or circumstance, and to this end the
provisions of the title or any chapter, section or clause of
this act hereby are declared to be severable. It is hereby
declared as the legislative intent that this act would have been
adopted had any provision declared unconstitutional not been
included herein.
Section 705. Limitation of authority powers.
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Except as provided in section 210(i), nothing contained in
this act shall be construed to confer upon the authority any
powers with respect to a school district.
Section 706. Repeal.
All acts and parts of acts are repealed insofar as they are
inconsistent with this act.
Section 707. Effective date.
This act shall take effect immediately.]
Section 2. This act shall take effect in 60 days.
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