PRINTER'S NO. 2385
No. 1858 Session of 1989
INTRODUCED BY FREIND, MORRIS, TRELLO, BRANDT, BUNT,
E. Z. TAYLOR, NAHILL, J. TAYLOR, MAIALE, RYBAK, TIGUE, OLASZ,
VROON, PERZEL, FOX, MRKONIC, BELARDI, KENNEY, LASHINGER,
ITKIN, HALUSKA, MICOZZIE, JOHNSON, SAURMAN AND JAMES,
SEPTEMBER 18, 1989
REFERRED TO COMMITTEE ON APPROPRIATIONS, SEPTEMBER 18, 1989
AN ACT
1 Establishing the criteria and procedures for the expenditure of
2 Commonwealth funds to correct housing problems caused by non-
3 mine subsidence in a municipality; and making an
4 appropriation.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Definitions.
8 The following words and phrases when used in this act shall
9 have the meanings given to them in this section unless the
10 context clearly indicates otherwise:
11 "Department." The Department of Community Affairs of the
12 Commonwealth.
13 "Municipality." Any city of the first, second, second class
14 A or third class, borough, incorporated town, township of the
15 first or second class, county of the first, second, second class
16 A through eighth class, or any similar general purpose unit of
17 government which shall hereafter be created by the General
1 Assembly.
2 Section 2. Terms and conditions.
3 Any funds of the Commonwealth paid to any municipality
4 following the effective date of this act to resolve housing
5 problems caused by non-mine subsidence, including funds
6 appropriated by the General Assembly to the Department of
7 Environmental Resources and to the Department of Community
8 Affairs for housing and redevelopment assistance by the act of
9 July 3, 1987 (P.L.459, No.9A), known as the General
10 Appropriation Act of 1987, shall be paid to the municipality
11 only on the condition that the municipality meets the following
12 terms and conditions:
13 (1) All expenditures of Commonwealth funds shall be
14 approved, supervised and monitored by the department.
15 (2) Prior to the expenditure of any funds for the
16 acquisition of property imminently dangerous due to
17 structural damage caused by subsidence or property located in
18 an area affected by such imminently dangerous property, two
19 independent engineering studies of the affected area shall be
20 prepared, one by an engineer or engineering firm selected by
21 the municipality in which the affected area is located and
22 one by an engineer or engineering firm selected by the
23 department. The studies shall establish, by street address,
24 those properties which:
25 (i) Must be razed due to the severity of the
26 structural damage or subsoil conditions.
27 (ii) Must be razed due to their being located in an
28 area affected by such property.
29 (iii) Need not be acquired and razed, but need
30 rehabilitation and structural improvements such as
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1 shoring, etc., to give added support to existing
2 foundations and walls.
3 (iv) Need not be acquired and razed but show signs
4 of extensive damage as a result of roof collapse or the
5 failure of the heating, plumbing and/or sewer systems.
6 (v) Need not be acquired and razed and need only
7 minimal rehabilitation.
8 At least two public hearings, at times convenient to
9 residents, shall be held by the municipality and
10 representatives of the department in the areas affected by
11 non-mine subsidence to discuss the results of the engineering
12 studies with residents and neighborhood organizations.
13 (3) Moneys provided shall be used solely for:
14 (i) Reasonable costs associated with the phased
15 acquisition of property imminently dangerous due to
16 structural damage caused by subsidence, or located in an
17 area affected by such property.
18 (ii) Reasonable costs associated with relocating
19 residents owning or occupying such property. For the
20 purposes of this subparagraph, minimum reasonable costs
21 associated with relocating residents shall be determined
22 by compliance with the Uniform Relocation Assistance and
23 Real Property Acquisition Policies Act of 1970 (Public
24 Law 91-646; 84 Stat. 1894).
25 (iii) Reasonable costs of the phased construction of
26 new single-family or multifamily rental housing to
27 replace the homes acquired and razed, with owner-
28 occupants whose homes are acquired and razed being given
29 the first opportunity to purchase or rent the new housing
30 constructed.
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1 (iv) Reasonable costs of the phased construction of
2 new neighborhood commercial development needed to support
3 the new housing constructed.
4 (v) Reasonable costs associated with rehabilitating
5 properties which, based on an engineering report, need
6 not be acquired and razed but need rehabilitative
7 construction in the form of shoring, etc., to stabilize
8 foundations and walls.
9 Moneys provided shall not be used to acquire any property
10 which, based on engineering studies, need not be acquired and
11 razed, unless the owner of such property agrees to sell.
12 (4) A land reuse plan shall be developed by the
13 municipality according to guidelines developed by the
14 department. Such plan shall be approved by the department and
15 by a majority of the residents and neighborhood organizations
16 in the area affected by non-mine subsidence prior to any
17 moneys being provided by the department to the municipality
18 and shall include, but not be limited to, the following:
19 (i) Based on the two engineering studies, a drawing
20 indicating, by street address, each property to be
21 acquired and razed, as well as an indication, by street
22 address, of those properties that are not to be razed but
23 which are in need of rehabilitative construction.
24 (ii) An annual property acquisition schedule
25 indicating the properties to be acquired and razed during
26 a given year, both residential and commercial, etc., and
27 monthly progress reports.
28 (iii) An annual construction plan indicating the
29 type of residential housing and/or neighborhood
30 commercial development to be constructed on vacant land
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1 during a given year and monthly progress reports.
2 (iv) An annual rehabilitation plan indicating those
3 properties to undergo rehabilitative construction during
4 a given year and monthly progress reports.
5 (5) The land reuse plan developed shall phase the
6 construction of new housing and coordinate the relocation of
7 owner-occupants, as well as other residents living in housing
8 which is imminently dangerous due to structural damage caused
9 by subsidence or located in an area affected by such
10 imminently dangerous property, in order that residents of
11 such housing may be relocated into the new housing as it is
12 constructed and becomes available for occupancy.
13 (6) A relocation plan shall be developed by the
14 municipality according to guidelines developed by the
15 department. Such plan shall be approved by the department and
16 by a majority of the residents and neighborhood organizations
17 in the area affected by non-mine subsidence and shall include
18 what constitutes reasonable relocation expenses, before any
19 moneys may be provided by the department to the municipality.
20 Such plan shall also include, but not be limited to, the
21 following:
22 (i) A list of all individuals already relocated and
23 those to be relocated, based on a priority schedule
24 developed by the municipality and approved by the
25 department and by a majority of the residents and
26 neighborhood organizations. The relocation schedule shall
27 prioritize those individuals to be relocated based on the
28 severity of the dangerous condition of the homes which
29 they own, or in which they reside, due to subsidence,
30 according to inspections and a designation by the
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1 municipality.
2 (ii) A list of new single-family and/or multifamily
3 rental housing units to be constructed each year,
4 including monthly progress reports, and the names of
5 those individuals scheduled to be relocated and actually
6 relocated into the new housing constructed. Such schedule
7 shall insure that owner-occupants whose property has been
8 acquired are given the first opportunity to purchase or
9 rent the new housing which is constructed.
10 (7) An annual financial plan and monthly progress
11 reports shall be developed by the municipality for each
12 fiscal year that funds are requested from the department, and
13 such plan shall be approved by the department and by a
14 majority of the residents and neighborhood organizations
15 before any moneys may be provided by the department to the
16 municipality. The guidelines for the preparation of the
17 annual financial plan shall be developed by the department
18 and shall include, but not be limited to, the following:
19 (i) An annual budget which shall include:
20 (A) A detailed breakdown of all property
21 acquisition costs.
22 (B) A detailed breakdown of all relocation
23 expenditures.
24 (C) A detailed breakdown of all costs associated
25 with the construction of new single-family and
26 multifamily rental housing.
27 (D) A detailed breakdown of all costs associated
28 with the construction of new neighborhood commercial
29 development.
30 (E) A detailed breakdown of all rehabilitative
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1 construction costs.
2 (F) A detailed breakdown of all overhead and
3 administrative costs, including administrative costs
4 incurred by the department.
5 (ii) A separate annual property acquisition report
6 and monthly progress reports which shall include:
7 (A) A listing of all property to be acquired
8 during the year and/or acquired to date.
9 (B) A physical and deed description of each
10 parcel.
11 (C) The name of the legal owner and date
12 purchased, for each parcel.
13 (D) A statement by the municipality indicating
14 that the property to be acquired is imminently
15 dangerous due to structural damage caused by
16 subsidence or is located in an area affected by
17 imminently dangerous property and, based on
18 engineering studies, must be acquired and razed; and
19 the date of the physical inspection which established
20 that.
21 (E) The agreed-to acquisition price for each
22 parcel to be acquired. This price shall be approved
23 by the department based on an appraisal of each
24 parcel by a certified appraiser or appraisal firm
25 approved by the department. The appraisal of each
26 property shall be the fair market value irrespective
27 of the property's current assessment, as if the
28 property were not damaged as a result of subsidence.
29 No payment shall be made with Commonwealth funds for
30 the acquisition of any property at a price other than
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1 that approved by the department based on their review
2 of the independent appraisal. Where any question
3 exists with respect to the fair market value
4 established by the appraisal, the department may
5 order a second appraisal and based on the two
6 appraisals shall establish the fair market value for
7 the property.
8 (F) The total property acquisition costs for
9 that fiscal year.
10 (8) When preparing the plans and reports required by
11 this act, the municipality shall consult, on a monthly basis,
12 or more frequently as is necessary, with neighborhood
13 residents and neighborhood organizations in the area affected
14 by subsidence.
15 (9) The municipality shall annually apply to the
16 department for moneys proposed to be spent during the next
17 fiscal year, as provided in the annual financial plan
18 approved by the department, whether or not such funds have
19 been appropriated to the department or to another agency of
20 the Commonwealth. Where such funds have initially been
21 appropriated to another agency, the funds shall be
22 transferred to the department upon request as needed. The
23 department shall prepare guidelines and procedures for
24 applying for such moneys, including the date by which an
25 application from a municipality must be received.
26 (10) Moneys provided to the municipality by the
27 department under provisions of this act may not be used to
28 acquire residential real property designated by the
29 municipality as imminently dangerous due to structural damage
30 caused by subsidence, or property in or around the affected
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1 property, unless the homeowner had purchased the property
2 prior to a date established by the department. The homeowner
3 shall determine whether the acquisition price paid for the
4 property shall be in the form of a certificate or certified
5 check. Moneys provided to the municipality by the department
6 under provisions of this act may not be used to acquire
7 commercial property designated by the municipality as
8 imminently dangerous due to structural damage caused by
9 subsidence or property located in an area affected by such
10 imminently dangerous property unless the commercial property
11 was owned by the present owner on or before a date
12 established by the department. Moneys provided to the
13 municipality by the department under provisions of this act
14 may not be used to acquire property owned by relators,
15 agents, banks or other investors.
16 (11) No money provided to the municipality by the
17 department under provisions of this act may be used to
18 acquire real property which is imminently dangerous due to
19 structural damage caused by subsidence if there is reason to
20 believe that representations were fraudulently made
21 concerning the soundness of the structure as an inducement
22 for securing a mortgage or mortgage insurance, unless the
23 municipality has first demonstrated to the satisfaction of
24 the department that it has exhausted all efforts to
25 investigate and prosecute those individuals responsible for
26 any alleged fraudulent certification of the property and has
27 also initiated such appropriate legal actions as it deems
28 necessary to seek restitution for damages relating to the
29 diminished value of property from any institutions or other
30 parties which may have been a party to the fraudulent act or
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1 legally responsible for the mortgage or mortgage insurance
2 having been approved as a result of such criminal conduct on
3 their part. This shall not prevent the acquisition and
4 settlement with the present owner of such property, if the
5 present owner is not involved with any fraudulent
6 misrepresentation prior to or during such litigation.
7 (12) The municipality may provide to a nonprofit
8 corporation any moneys it is provided by the Commonwealth to
9 carry out provisions of this act on behalf of the
10 municipality, provided the requirements of this act are met
11 by the housing assistance corporation receiving the
12 Commonwealth moneys provided by the municipality.
13 (13) No Commonwealth funds administered by the
14 municipality shall be used for the rehabilitation of
15 properties:
16 (i) Which are determined to be imminently dangerous
17 due to structural damage caused by subsidence in any
18 given year.
19 (ii) Which will subsequently be acquired and razed
20 during the next year according to the land reuse plan
21 developed by the municipality, as required by this act.
22 (iii) Whose acquisition and demolition costs are to
23 be paid for from moneys provided by the Commonwealth.
24 (14) An audit of all expenditures of moneys provided to
25 a municipality by the department under provisions of this act
26 shall be made annually by a CPA (Certified Public Accountant)
27 or CPA firm to be designated by the department. This shall
28 include an audit of moneys which a municipality received from
29 the department and reloaned to a housing assistance
30 corporation. In such case, all expenditures made by the
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1 housing assistance corporation from funds received from the
2 municipality shall be included in the audit. The costs of
3 this outside annual CPA audit shall be paid for from funds
4 provided by the Commonwealth to a municipality to resolve
5 non-mine housing subsidence problems. Copies of the annual
6 CPA audit shall be made available to members of the General
7 Assembly and to neighborhood organizations in the area
8 affected by subsidence.
9 Section 3. Administrative costs.
10 Administrative costs incurred by the department in monitoring
11 and supervising Commonwealth funds provided to a municipality to
12 resolve non-mine housing subsidence problems, as required by
13 this act, shall be considered eligible project costs and
14 deducted from any funds the Commonwealth provides to a
15 municipality for this purpose and shall be accounted for
16 accordingly.
17 Section 4. Assistance.
18 The Pennsylvania Housing Finance Agency shall assist the
19 municipality in the financing of any new housing constructed to
20 replace housing which is acquired and razed due to it being
21 determined to be imminently dangerous due to structural damage
22 caused by subsidence or due to its being located in an area
23 affected by such imminently dangerous housing.
24 Section 5. Non-Mine Subsidence Loan Program.
25 (a) Fund.--The department shall establish a Non-Mine
26 Subsidence Rehabilitation Loan Fund for the purpose of providing
27 financial assistance in the form of low interest loans, grants
28 and loan guarantees, etc., to homeowners to repair or prevent
29 structural damage caused by non-mine subsidence.
30 (b) Regulations.--The department shall promulgate such rules
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1 and regulations necessary to carry out the objectives of this
2 section.
3 (c) Appropriation.--The sum of $10,000,000 is hereby
4 appropriated to the department for deposit into the Non-Mine
5 Subsidence Rehabilitation Loan Fund.
6 Section 6. Effective date.
7 This act shall take effect immediately.
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