1Amending Title 53 (Municipalities Generally) of the Pennsylvania 
2Consolidated Statutes, in indebtedness and borrowing, further 
3providing for definitions, for classification and authority 
4to issue bonds and notes, for cost of project and for 
5exclusion of other self-liquidating debt to determine net 
6nonelectoral debt or net lease rental debt; providing for 
7preliminary approval by the department of the issuance of 
8certain debt; further providing for small borrowing for 
9capital purposes, for debt statement, for submission to 
10department, for fees for filing, for certificate of approval 
11of transcript, for effect of failure of timely action by 
12department and for records of department; providing for 
13duties of participants in Local Government Unit Debt Act 
14transactions; and making a related repeal.

15The General Assembly of the Commonwealth of Pennsylvania
16hereby enacts as follows:

17Section 1. The definition of "self-liquidating debt" in 
18subsection (b) of section 8002 of Title 53 of the Pennsylvania 
19Consolidated Statutes is amended and subsection (c) is amended 
20by adding definitions to read:

21§ 8002. Definitions.

22* * *

23(b) Exclusions from debt.--With respect to exclusions from

1any particular category of debt and subject to additional
2definitions contained in subsequent provisions of this subpart
3which are applicable to specific provisions of this subpart, the
4following words and phrases when used in this subpart shall have
5the meanings given to them in this section unless the context
6clearly indicates otherwise:

7"Self-liquidating debt." Debt payable solely from rents,
8rates or other charges to the ultimate users of the project, to
9be financed in whole or in part by that debt, or payable solely
10from special levies or assessments of benefits lawfully
11earmarked exclusively for that purpose. The term also includes
12debt or any portion thereof at the time qualified as self-
13liquidating pursuant to this subpart, whether or not solely
14payable from those sources. The term "ultimate users" includes
15the local government unit itself only where its use of the
16project is incidental to the use of the project by other users.
17A debt with respect to which debt service payments have been 
18made under a guaranty of the debt shall not be considered self-
19liquidating.

20* * *

21(c) Other definitions.--Subject to additional definitions
22contained in subsequent provisions of this subpart which are
23applicable to specific provisions of this subpart, the following
24words and phrases when used in this subpart shall have the
25meanings given to them in this section unless the context
26clearly indicates otherwise:

27* * *

28"Financial advisor." A person who for compensation engages
29in the business of advising a local government unit, either
30directly or in writing, as to the value of securities, bonds or

1notes or as to the advisability of investing in, purchasing or
2selling securities, bonds or notes. The term does not include an
3attorney, accountant or engineer whose performance of such
4services is solely incidental to the practice of his profession.
5The term does not include a lender, underwriter or other entity
6purchasing the bonds or notes of a local government unit.

7* * *

8"Working capital." An amount which constitutes, under
9generally accepted accounting principles, the cost of the day-
10to-day operations of the project as well as a proper allowance
11for contingencies. Reimbursements under a guaranty or amounts to
12be used to address budgetary deficits of a local government unit 
13or for other purposes not related to the construction or 
14operation of the project do not constitute reasonable working 
15capital in connection with the incurring of debt under this 
16subpart.

17Section 2. Sections 8005(c) and (d), 8007 and 8026(a)(5) of
18Title 53 are amended to read:

19§ 8005. Classification and authority to issue bonds and notes.

20* * *

21(c) Authority to issue bonds and notes and lease rental 
22debt.--Notwithstanding any other law to the contrary, every
23local government unit shall have full power and authority to
24issue bonds or notes, and make guaranties, leases, subsidy
25contracts or other agreements evidencing the acquisition of
26capital assets payable out of taxes and other general revenues,
27to provide funds for and towards the cost of or the cost of
28completing any project or combination of projects which the
29local government unit is authorized to own, acquire, subsidize,
30operate or lease or to participate in owning, acquiring,

1subsidizing, operating or leasing with others, to issue tax
2anticipation notes and funding bonds or notes as provided in
3this subpart and to contract for insurance covering the risks of
4nonpayment of principal, interest and premium of bonds, notes,
5tax anticipation notes and guaranties.

6(d) Nature of guaranty procedure for issuance and 
7prohibitions.--The following shall apply to a guaranty:

8(1) For the purpose of this subpart, unless debt
9evidenced by a guaranty has been approved as electoral debt
10in accordance with Subchapter C (relating to procedure for
11securing approval of electors), the guaranty shall be deemed
12to be nonelectoral debt if the local government unit
13guaranties its own bonds or notes and shall be deemed to be
14lease rental debt if it guaranties the bonds or notes of an
15authority or another local government unit. For the purpose
16of all other statutes, the guaranty shall be deemed to create
17debt or indebtedness of the local government unit making the
18guaranty.

<-19(2) A local government unit may only issue a guaranty of

<-20(2) (i) A local government unit may only issue a
21guaranty of debt of another local government unit or an
22authority after <-the initial local government unit it has
23conducted its own due diligence to determine the risks
24involved in the transaction, including the impact of the
25guaranty on the future financial condition of the local
26government unit, the financial condition of the entity
27seeking the guaranty, the sources and reliability of
28revenue to cover the underlying obligation and the
29likelihood of default of the entity seeking the guaranty.
30A guaranty may only be made by vote of the governing body

1after a public meeting at which the <-initial local
2government unit demonstrates the foregoing <-such due
3diligence. A local government unit may only issue a
4guaranty to an authority or other local government unit
5for projects which are expressly authorized by statute,
6including projects under section 5607 <-(relating to
7purposes and powers). Notwithstanding the foregoing
<-8(relating to purposes and powers).

9(ii) Notwithstanding the provisions of subparagraph 
10(i), a local government unit may not issue a guaranty to
11an authority or other local government unit for sums due
12under a qualified interest rate management agreement, nor
13may guaranties be issued for projects which involve
14untested technology or experimentation.

15(3) A local government unit is prohibited from
16collecting a fee to guaranty the debt of an authority or
17another local government unit.

18§ 8007. Cost of project.

19The cost of a project includes the amount of all payments to
20contractors or for the acquisition of a project or for lands,
21easements, rights and other appurtenances deemed necessary for
22the project, fees of architects, engineers, appraisers,
23consultants, financial advisors and attorneys incurred in
24connection with the project financing costs, costs of necessary
25printing and advertising, costs of preliminary feasibility
26studies and tests, cost estimates and interest on money borrowed
27to finance the project, if capitalized, to the date of
28completion of construction and, if deemed necessary, for one
29year thereafter, amounts to be placed in reserve funds, if any,
30a reasonable initial working capital for operating the project

1and a proper allowance for contingencies and any amount which
2constitutes, under generally accepted accounting principles, a
3cost of, and which has been determined by an independent actuary
4or other expert to be required for the purposes of, a reserve or
5a contribution toward a combined reserve, pool or other
6arrangement for losses or liabilities covered by a self-
7insurance arrangement established by one or more local
8government units. Costs paid, from sources other than the debt 
9that is to be refunded, more than two years before an issuance 
10of new debt to finance the costs may not be included in the 
11costs of a project financed by the new debt. Reimbursements 
12under a guaranty or amounts to be used by a local government 
13unit to address budgetary deficits or other purposes not related 
14to the project do not constitute a cost of a project in 
15connection with the incurring of debt under this subpart. Costs 
16that qualify for funding of unfunded debt under section 8130 
17(relating to approval by court to fund unfunded debt) may only 
18constitute a cost of a project if the local government unit 
19complies with the requirements of section 8130.

20§ 8026. Exclusion of other self-liquidating debt to determine
21net nonelectoral debt or net lease rental debt.

22(a) Filings with department.--Self-liquidating debt shall
23not be excluded in determining net nonelectoral debt or net
24lease rental debt for the purpose of establishing net debt of
25either category where the debt is evidenced by general
26obligation bonds or notes, by bonds, notes or other obligations
27of an authority or of another local government unit or by a
28guaranty until there has been filed with and approved by the
29department a report to the local government unit from qualified
30registered engineers or architects or other persons qualified by

1experience appropriate to the project, setting forth:

2* * *

3(5) The estimated net revenues of the project for each
4year of the remaining life of the bonds, notes or obligations
5with [a] <-justification <-an explanation for any assumed 
6increase and a computation showing, in reasonable detail,
7that the net revenues, together with other available funds to
8be received in respect of the project, will be sufficient in
9each year to pay the annual debt service, other than
10capitalized debt service, on the bonds, notes or obligations
11or a specified aggregate principal amount thereof.

12* * *

13Section 3. Title 53 is amended by adding a section to read:

14§ 8102.1. Preliminary approval by the department of the
15issuance of certain debt.

16(a) General rule.--Prior to the enactment of an ordinance
17authorizing the sale or issuance of any general obligation bonds
18or notes or guaranteed revenue bonds or notes constituting
19nonelectoral debt or any agreement evidencing lease rental debt,
20a local government unit shall obtain a preliminary authorization
21to incur debt from the department. <-The following debt
22transactions shall be exempt from the requirement to obtain
23preliminary approval under this section:

24(1) Small borrowing for capital purposes as provided in
25section 8109 (relating to small borrowing for capital
26purposes).

27(2) Transactions under Subchapter C of Chapter 82
28(relating to refunding of debt) which consist exclusively of
29the issuance and sale of obligations, the proceeds of which
30are to be used solely for the payment or redemption of

1outstanding obligations upon or prior to maturity and the
2costs of issuing the obligations. A refunding transaction
3which includes a qualified interest rate management agreement
4shall not be exempt from the requirements of this section.

5(b) Authorization.--Authorization shall be obtained by
6filing a notice with the department in the form of a certificate
7signed by two officers of the local government unit. The
8department shall prescribe the form of the certificate which
9shall include a basic description of the intended financing and,
10as applicable, the following:

11(1) Evidence that the local government unit is current
12in the filing of its annual financial statements with
13Commonwealth agencies under applicable State law.

14(2) A description of the intended type and amount of
15payment or performance bond, letter or credit or other
16financial security proposed to insure the completion of the
17project.

18(3) Information that the local government unit is up to
19date on all of its municipal securities disclosures required
20under 17 CFR § 240.15c2-12 (relating to municipal securities
21disclosure).

22(4) If the local government unit intends for the
23proposed debt to be self-liquidating or subsidized,
24information <-satisfactory which reasonably demonstrates to the
25department that the debt will qualify as self-liquidating or
26subsidized debt, including filings required under section
278024 (relating to exclusion of subsidized debt from net
28nonelectoral debt or net lease rental debt), 8025 (relating
29to exclusion of self-liquidating debt evidenced by revenue
30bonds or notes to determine net nonelectoral debt) or 8026

1(relating to exclusion of other self-liquidating debt to
2determine net nonelectoral debt or net lease rental debt), as
3applicable.

4(5) If the local government unit has existing debt which
5was previously approved by the department as subsidized or
6self-liquidating, information satisfactory to the department
7that the debt continues to be treated as subsidized or self-
8liquidating and that no decrease in the amount to be excluded
9is required by any change in circumstances, other than
10resulting from the payments of the debt, or, if there has
11been a change in circumstances, information demonstrating to
12the satisfaction of the department the amount of debt that
13should continue to be treated as subsidized or self-
14liquidating.

15(6) Schedules demonstrating the estimated net debt
16service impact of the transaction and a certification that
17the local government adopted or approved a plan to provide
18the tax or other revenues necessary to pay the debt service
19on the debt<-, if applicable.

20(7) The debt statement required by section 8110
21(relating to debt statement).

22(8) A statement of the intended manner of sale of the
23bonds or notes.

24(9) A project cost statement detailing the intended uses
25of debt proceeds.

26(c) Additional information.--As part of the department's
27review of a filing by a local government unit under subsection
28(b), the department may request and the local government unit
29shall provide additional information <-regarding, including any of
30the following:

1(1) <-justification <-an explanation for costs of issuance
2exceeding 2% of the principal amount of the proposed debt;

3(2) <-justification an explanation for the use of more
4than 10% of the proceeds of the debt for working capital; and

5(3) if bonds or notes are to be sold at private sale by
6negotiation, the basis for the local government unit's
7finding that the bonds or notes are in the best financial
8interests of the local government unit.

9(d) Action by department.--If the department, upon review of
10the filing made by the local government unit under subsection
11(b) and any additional information provided under subsection
12(c), if applicable, finds <-in its reasonable discretion that:

13(1) The requirements are satisfied in connection with
14the proposed debt, the department shall issue a preliminary
15approval of the debt.

16(2) The requirements are not satisfied in connection
17with the proposed debt, the department shall issue a
18preliminary disapproval of the debt and the local government
19may not proceed to incur the debt until the requirements are
20satisfied.

21(e) Timely action required.--The department shall have 30
22days after receipt of the filing required under subsection (b)
23to issue a preliminary approval or disapproval of the debt. If
24the local government unit has submitted a certificate for
25preliminary approval to the department by certified mail, return
26receipt requested or otherwise has an official receipt from the
27department and the local government unit has not, within 30 days
28of the date of receipt of the filing by the department, received
29the certificate of preliminary approval, disapproval or
30notification of correctable error, the filing shall be deemed to

1have been preliminarily approved for all purposes unless the
2local government unit has extended the time within which the
3department may act by written communication to the department or
4by failure to object to a written communication from the
5department requesting the extension. No extension shall exceed
615 days.

7(f) Incurrence of debt.--Upon issuance of preliminary
8approval of the department, the local government unit shall have
9one year to incur the debt under this subpart. The bonds or
10notes shall be sold, or instruments evidencing lease rental debt
11delivered, not more than two years following the date of the
12preliminary approval.

13(g) Review.--All determinations by the department under this
14section are reviewable as provided under 2 Pa.C.S. Ch. 7
15(relating to judicial review).

<-16(h) Exemptions and special provisions.--

17(1) Small borrowing for capital purposes as provided in
18section 8109 (relating to small borrowing for capital
19purposes) shall be exempt from the requirements of this
20section.

21(2) A local government unit may obtain a single annual
22preliminary authorization with regard to all such anticipated
23or potential refinancing transactions that comply with
24section 8244 (relating to effect of debt limits on refunding
25nonelectoral bonds or notes or lease rental debt). The
26department shall provide a procedure through which a local
27government unit may obtain authorization, which must include
28identifying current debt which the unit may seek to refund
29and complying with applicable provisions of this section.

30(3) A transaction which includes a qualified interest

1rate management agreement shall not be exempt from the
2requirements of this section.

3Section 4. Sections 8109(a)(1) and 8110(b) of Title 53 are
4amended to read:

5§ 8109. Small borrowing for capital purposes.

6(a) General rule.--Any local government unit may incur debt
7by resolution rather than by ordinance to be evidenced by notes
8to provide funds for a project as defined in this subpart
9without complying with the requirements of Subchapter A of
10Chapter 82 (relating to Department of Community and Economic
11Development) if:

12(1) The aggregate amount of the debt outstanding at any
13one time shall not exceed the lesser of [$125,000] $250,000
14or 30% of the nonelectoral debt limit as authorized in
15section 8022(a) (relating to limitations on incurring of
16other debt).

17* * *

18§ 8110. Debt statement.

19* * *

20(b) Previously excluded self-liquidating or subsidized 
21debt.--Where debt has previously been excluded as self-
22liquidating or subsidized debt, the debt statement shall be 
23accompanied by a certification that indicates one of the 
24following:

25(1) no decrease in the amounts to be excluded is 
26required by any change of circumstances [or ,if there has 
27been a change, other than decreases resulting from the 
28payments of bonds or notes, so that less debt is to be 
29excluded. If it has become possible to exclude a greater 
30amount of debt and the local government unit desires to do
 

1so, the debt statement shall be accompanied by appropriate 
2certificates supporting the revised amount to be excluded, 
3and a revised approval shall be obtained from the 
4department.];

5(2) a decrease in the amounts to be excluded is required
6due to a change in circumstances, in which case:

7(i) The change in circumstance must be described. If
8it has become possible to exclude a greater amount of
9debt and the local government unit wants to do so, the
10debt statement shall be accompanied by appropriate
11certifications supporting the revised amount to be
12excluded and a revised approval shall be obtained from
13the department.

14(ii) No debt service payments have been made under a
15guaranty of debt previously established as self-
16liquidating. Debt service payments that have been made 
17under a guarantee of the local government unit shall no 
18longer be considered self-liquidating unless and until 
19the local government unit files with the department a new 
20report satisfying the requirements of section 8025 
21(relating to exclusion of self-liquidating debt evidenced 
22by revenue bonds or notes to determine net nonelectoral 
23debt) or 8026 (relating to exclusion of other self-
24liquidating debt to determine net nonelectoral debt or 
25net lease rental debt), as the case may be.

26Section 5. Section 8111(a) of Title 53 is amended by adding
27paragraphs to read:

28§ 8111. Submission to department.

29(a) General rule.--Before delivering any bonds or notes
30other than notes representing small borrowings issued under

1section 8109 (relating to small borrowing for capital purposes),
2the local government unit shall apply for and receive or be
3deemed to have received the approval of the department under
4section 8204 (relating to certificate of approval of transcript)
5or 8206 (relating to effect of failure of timely action by
6department). The application, in such form as the department
7prescribes, shall be accompanied by a transcript of the
8proceedings consisting of certified copies of any of the
9following, not previously filed, which are applicable:

10* * *

11(8) A written statement with regard to the manner of
12compliance or intended compliance with the requirements of
13the act of December 20, 1967 (P.L.869, No.385), known as the
14Public Works Contractors' Bond Law of 1967.

15(9) An itemized statement of all estimated disbursements
16for costs to be made from the proceeds of the borrowing <-to 
17the extent possible.

18* * *

19Section 6. Sections 8203, 8204, 8206 and 8207(a) and (c) of
20Title 53 are amended to read:

21§ 8203. Fees for filing.

22Every filing under this subpart with the department shall be
23accompanied by a filing fee [as determined in section 605-A of 
24the act of April 9, 1929 (P.L.177, No.175), known as The 
25Administrative Code of 1929.] of $250<-. In addition, the,<- subject 
26to the following provisions:

27(1) The filing shall be accompanied by an additional fee 
28of 1/32 mill on each dollar of the aggregate principal amount 
29of the debt relating to <-the filing. No submission shall 
<-30constitute a filing until the the filing.

1(2) No submission shall constitute a filing until the
2proper fee is paid. <-[All fees received under this section
<-3shall be [paid by the department into the State Treasury
4through the Department of Revenue.] <-deposited into the Local 
5Government Unit Debt Act Administrative Account, established 
6as follows:

7(1) There is hereby established a restricted receipt
8account within the General Fund of the State Treasury which
9shall be known as the Local Government Unit Debt Act
10Administrative Account.

11(2) All moneys in the Local Government Unit Debt Act
12Administrative Account shall be held in trust solely for the
13purpose of defraying the costs of the administration of this
14subpart and shall be earmarked for the use of and annually
15appropriated to the department for disbursement solely for
16that purpose. The account shall be subject to audit by the
17Auditor General.

18(3) The fee shall be waived for borrowings in connection
19with a plan or recovery plan under the act of July 10, 1987
20(P.L.246, No.47), known as the Municipalities Financial
21Recovery Act.

22(4) Fees paid in connection with a filing under section
238102.1 (relating to preliminary approval by the department on
24the issuance of certain debt) shall constitute payment of
25fees due under section 8204 (relating to certificate of
26fiscal <-final approval).

27§ 8204. Certificate of final approval [of transcript].

28The department shall, upon receipt of a submission under 
29section 8111 (relating to submission to department) containing 
30an application for final approval and any bond or note

1transcripts or other filings, carefully examine them to
2determine whether the debt outstanding and to be outstanding is
3within the applicable limitations imposed by this subpart and
4whether the proceedings for incurring the debt, for issuing and
5selling the bonds or notes and for excluding self-liquidating
6and subsidized debt have been taken in conformity with the
7Constitution of Pennsylvania and this subpart. If, upon
8completion of its examination, a transcript or other filing is
9found by the department to be in conformity with the
10Constitution of Pennsylvania and this subpart, the department
11shall certify its approval to the local government unit if
12required under other provisions of this subpart. If the debt 
13requires preliminary approval under section 8102.1 (relating to 
14preliminary approval by the department of the issuance of 
15certain debt), the certificates and filings related to 
16preliminary approval shall be part of the transcript and a 
17requirement for final approval under this section. If the debt 
18has received preliminary approval under section 8102.1, the 
19department shall provide for a procedure to expedite the 
20processing of final approval.

21§ 8206. Effect of failure of timely action by department.

22If the local government unit has submitted [a filing] an 
23application for final approval to the department by certified
24mail, return receipt requested, or otherwise has an official
25receipt from the department, and the local government unit has
26not, within 20 days of the date of receipt of the filing by the
27department, received the certificate of final approval or
28disapproval or notification of correctable error, the filing
29shall be deemed to have been approved for all purposes unless
30the local government unit has extended the time within which the

1department may act by written communication to the department or
2by failure to object to a written communication from the
3department requesting the extension. Extensions shall not exceed
4one additional period of 20 days.

5§ 8207. Records of department.

6(a) Retention period.--The department shall keep all
7proceedings including all applications and statements by a local 
8government unit under sections 8102.1 (relating to preliminary 
9approval by the department of the issuance of certain debt), 
108111 (relating to submission to department) and 8201 (relating 
11to certification to department of bond or note transcript or 
12lease, guaranty, subsidy contract or other agreement) on file
13for a period of not less than [four months after issuance of its
14certificate of approval or disapproval and thereafter as long as
15any appeal respecting the proceedings is pending and not finally
16determined.] five years after the debt issuance has been paid 
17off by the local government unit. The department shall also keep 
18copies of all documents filed with the department relating to a 
19qualified interest rate management agreement for as long as the 
20qualified interest rate management agreement is in effect.

21* * *

22(c) Records open for inspection.--[The records of the
23department shall be public records available for examination by
24any citizen of this Commonwealth or any bondholders or
25noteholders.] All submissions, determinations and records of the 
26department under this subpart, including those related to 
27qualified interest rate management agreements and including 
28correspondence with the interested parties to any debt 
29proceeding, shall be public records available for examination by 
30any citizen of this Commonwealth, any interested parties or any
 

1bondholder or noteholder, including holders of tax anticipation 
2notes, of the local government unit.

3Section 7. Chapter 82 of Title 53 is amended by adding a
4subchapter to read:

5SUBCHAPTER G

6MISCELLANEOUS <-OTHER PROVISIONS

7Sec.

88291. Duties of participants <-in Local Government Unit Debt Act
9transactions.

10§ 8291. Duties of participants <-in Local Government Unit Debt
11Act transactions.

12(a) Declaration of representation.--<-With regard to each
13transaction under this subchapter, <-As a condition of
14participation in transactions under Chapter 81 (relating to
15incurring debt and issuing bonds and notes) and this chapter,
16each attorney or financial advisor involved in the transaction
17shall provide a written declaration to the local government unit
18as to which party is being represented by the attorney or
19financial advisor, the source from which the attorney or
20financial advisor will receive compensation for services related
21to the transaction and whether the compensation is dependent
22upon the issuance of debt by the local government unit. A full
23time employee of the local government unit shall not be required
24to file a declaration under this subsection.

<-25(b) Fiduciary duty.--An attorney or financial advisor
26retained by or who in subsection (a) purports to represent a
27local government unit with regard to a transaction under this
28subpart shall stand in a fiduciary relationship to the local
29government unit and shall perform loyally, in good faith and in
30a manner the attorney or financial advisor reasonably believes

1to be in the best interests of the local government unit. The
2attorney or financial advisor shall act with such care,
3including reasonable inquiry, skill and diligence that a person
4of ordinary prudence would use under similar circumstances and
5provide opinion both as to positive and negative possible
6impacts of the transaction. An attorney or financial advisor in
7the course of the representation is entitled to rely on
8reasonable representations and certifications made to the
9attorney or financial advisor by architects, engineers and other
10persons retained by and the officers and employees of the local
11government unit in connection with the transaction. For
12attorneys licensed to practice law in this Commonwealth, this
13duty shall be interpreted to be consistent with Supreme Court
14rule of professional conduct pertaining to attorney fiduciary
15relationships. For financial advisors retained by a local
16government unit, this duty shall be in addition to any fiduciary
17duty which may be imposed by Federal law.

<-18(b) Fiduciary duty of local government unit
19representatives.--

20(1) An attorney or financial advisor who purports to
21represent a local government unit under subsection (a) in a
22transaction under this subpart shall stand in a fiduciary
23relationship to the local government unit.

24(2) (i) With regard to a financial advisor who
25represents a local government unit, the term "fiduciary
26duty" shall mean the duty to perform loyally, in good
27faith and in a manner the financial advisor reasonably
28believes to be in the best interests of the local
29government unit. The financial advisor shall act with
30such care, including reasonable inquiry, skill and

1diligence that a person of ordinary prudence would use
2under similar circumstances, and provide opinion as to
3possible positive and negative impacts of a transaction.

4(ii) With regard to attorneys licensed to practice
5law in this Commonwealth, the fiduciary duty shall be as
6prescribed by the Pennsylvania Supreme Court, including
7its Rules of Professional Conduct.

8(3) An attorney or financial advisor in the course of
9the representation shall be entitled to rely on reasonable
10representations and certifications made to the attorney or
11financial advisor by architects, engineers and other persons
12retained by and the officers and employees of a local
13government unit.

14(4) Pursuant to subsection (f) of Municipal Securities 
15Rulemaking Board Rule G-23 (relating to activities of 
16financial advisors), 17 CFR §§ 240.15Ba1-1 (relating to 
17definitions), 240.15Ba1-2 (relating to registration of 
18municipal advisors and information regarding certain natural 
19persons), 240.15Ba1-3 (relating to exemption of certain 
20natural persons from registration under section 15B(a)(1)(B) 
21of the act), 240.15Ba1-4 (relating to withdrawal from 
22municipal advisor registration), 240.15Ba1-5 (relating to 
23amendments to form MA and form MA-I), 240.15Ba1-6 (relating 
24to consent to service of process to be filed by non-resident 
25municipal advisors; legal opinion to be provide by non-
26resident municipal advisors), 240.15Ba1-7 (relating to 
27registration of successor to municipal advisor) and 
28240.15Ba1-8 (relating to books and records to be made and 
29maintained by municipal advisors), and as to local government 
30unit representatives only, the fiduciary duty described in
 

1this section shall be in addition to any duty contained in 
2rules promulgated by the Municipal Securities Rulemaking 
3Board that may apply to the attorney or financial advisor.

4(c) Ultra vires acts.--An officer or member of the governing
5body of a local government unit or a financial advisor or
6attorney may not knowingly participate in <-an ultra vires act.
7For purposes of this subsection, an act is ultra vires when:

8(1) the local government unit is without authority to
9perform the act; or

10(2) the act is in excess of the authority granted to the
11local government unit <-a violation of this title.

12(d) Materially false or misleading certifications.--An
13officer or member of the governing body of a local government
14unit or an attorney or financial advisor may not knowingly file
15a materially false or misleading certification or statement with
<-16the department under this act subpart.

17(e) Penalties.--

18(1) An officer or member of the governing body of a
19local government unit or an attorney or financial advisor who
20aids or participates in the commission of an act prohibited
21in subsection (c) or (d) commits a misdemeanor of the second
22degree and shall, upon conviction, be sentenced to pay a fine
23of not more than $5,000 or to imprisonment for not more than
24two years, or both.

25(2) Notwithstanding paragraph (1), a local government 
26may seek civil judicial redress for a violation of this 
27section that results in damages to the local government unit 
28not caused by the local government unit or its agents. A 
29local government unit shall prohibit or restrict the future 
30participation in transactions under this subpart of an
 

1individual attorney or financial advisor who violates this 
2section and may also prohibit or restrict participation of a 
3firm that employs the attorney or financial advisor for a 
4period not to exceed two years.

5Section 8. Repeals are as follows:

6(1) The General Assembly declares that the repeal under
7paragraph (2) is necessary to effectuate the amendment of 53
8Pa.C.S. § 8203.

9(2) Section 605-A of the act of April 9, 1929 (P.L.177,
10No.175), known as The Administrative Code of 1929, is
11repealed.

12(3) All acts and parts of acts are repealed insofar as
13they are inconsistent with the amendment or addition of 53
14Pa.C.S. §§ 8002(b) and (c), 8005(c) and (d), 8007,
158026(a)(5), 8102.1, 8111(a), 8203, 8204, 8206, 8207(a) and
16(c) and 8291.

17Section 9. This act shall take effect in 60 days.