SENATE AMENDED PRIOR PRINTER'S NOS. 33, 1066 PRINTER'S NO. 1178
No. 32 Session of 1981
INTRODUCED BY LEVI, FRYER, A. C. FOSTER, JR. AND DeMEDIO, JANUARY 19, 1981
AS AMENDED ON SECOND CONSIDERATION, IN SENATE, MARCH 31, 1981
AN ACT 1 Amending the act of July 12, 1972 (P.L.781, No.185) entitled, as <-- 2 amended, "An act providing debt limits for local government 3 units, including municipalities and school districts; 4 providing the methods of incurring, evidencing, securing and 5 collecting debt; defining the powers and duties of the 6 Department of Community Affairs and certain other public 7 officers and agencies with respect thereto; exercising the 8 inherent legislative authority of the General Assembly by 9 providing additional over-all limitations on the incurring of 10 lease rental and other obligations for the acquisition of 11 capital assets to be repaid from the general tax revenues of 12 such local government units; imposing penalties for filing 13 false or untrue statements or refusing to give information 14 with respect to proceedings for the incurring of debt; and 15 conferring jurisdiction on the Commonwealth Court with 16 respect to certain proceedings relating to the incurring of 17 debt," making technical and editorial changes. 18 AMENDING THE ACT OF JULY 6, 1917 (P.L.747, NO.271), ENTITLED "AN <-- 19 ACT REQUIRING ALL COUNTIES, CITIES, BOROUGHS, TOWNSHIPS, 20 SCHOOL DISTRICTS, AND OTHER MUNICIPALITIES AND INCORPORATED 21 DISTRICTS, TO SELL ANY BONDS OR OTHER SECURITIES ISSUED BY 22 THEM TO THE HIGHEST RESPONSIBLE BIDDER, AFTER DUE PUBLIC 23 NOTICE," PROVIDING THAT A CITY OF THE FIRST CLASS SHALL SELL 24 BONDS OR OTHER SECURITIES, EXCEPT AS PROVIDED HEREIN, ISSUED 25 BY IT AT PUBLIC SALE AFTER NOT LESS THAN ONE PUBLIC NOTICE 26 FOR SUCH PRICE, AT, ABOVE OR BELOW THEIR PAR VALUE PLUS 27 ACCRUED INTEREST, AS SHALL BE DETERMINED BY THE AUTHORITIES 28 OF THE CITY, PROVIDING THAT SUCH A CITY MAY SELL BONDS OR 29 OTHER SECURITIES AT PRIVATE SALE WHERE NO CONFORMING BID HAS 30 BEEN RECEIVED AT A PRIOR PUBLIC SALE, AND PROVIDING THAT SUCH 31 PROVISIONS SHALL APPLY TO ALL BORROWINGS AND THE ISSUANCE OF 32 BONDS OR OTHER SECURITIES THEREFOR, WHENEVER AUTHORIZED.
1 The General Assembly of the Commonwealth of Pennsylvania 2 hereby enacts as follows: 3 Section 1. Clause (1.1) of subsection (c) of section 102, <-- 4 subsections (d) and (e) SUBSECTION (D) of section 202, section <-- 5 205, clause (7) of subsection (b) of section 208, subsection (d) 6 of section 303, section 304, clause (1) of section 403, 7 subsection (a) of section 409, subsection (b) of section 410, 8 clause (1) of section 414, the heading of Article V, sections 9 501, 502, 503, 504, 505, 507, 508, 509 and 510, subsections (b) 10 and (c) of section 602, sections 606, 701, 706 and 804, 11 subsection (b) of section 807, subsection (a) of section 809, <-- 12 subsection (a) of section 901, the heading of Article X, 13 subsection (c) of section 1006, clause (4) of section 1102, 14 sections 1201 and 1202 SECTION 1201, subsections (b) and (c) of <-- 15 section 1203 and sections 1204 and 1301, act of July 12, 1972 16 (P.L.781, No.185), known as the "Local Government Unit Debt 17 Act," reenacted and amended April 28, 1978 (P.L.124, No.52), are 18 amended to read: 19 Section 102. Definitions.--* * * 20 (c) As used in this act unless the context clearly otherwise 21 requires: 22 * * * 23 (1.1) "Authority" means an authority or nonprofit 24 corporation organized under any law of the Commonwealth by or on 25 behalf of the Commonwealth, any local government unit or jointly 26 by any one or more of the foregoing. 27 * * * 28 Section 202. Limitations on the Incurring of Other Debt.-- 29 * * * 30 (d) Additional nonelectoral or additional lease rental debt 19810H0032B1178 - 2 -
1 or both in the aggregate amount of one hundred per cent of the 2 borrowing base may be incurred: 3 (i) by a county which has assumed, either before or after 4 the effective date of this act, county-wide responsibility for; 5 or 6 (ii) where the county has not assumed county-wide 7 responsibility, by a local government unit which has, either 8 before or after the effective date of this act, assumed 9 responsibility for its and its adjacent areas; for hospitals and 10 other public health services, air and water pollution control, 11 flood control, environmental protection, water distribution and 12 supply systems, sewage and refuse collection and disposal 13 systems, education at any level, highways, public transportation 14 or port operations, but such additional debt limit may be so 15 utilized only to provide funds for and towards the cost of 16 capital facilities for any or any combination of the foregoing 17 purposes. Debt, other than electoral debt, at any time incurred 18 for such purposes or any of them, may be assigned by ordinance 19 to this additional debt limit, if the remaining borrowing 20 capacity within the regular limits is insufficient to finance 21 other projects deemed necessary by the governing body of the 22 local government unit. 23 (e) If replacement of assets is required as a result of <-- 24 fire, flood, storm, war, riot, civil commotion or other 25 catastrophe, or such replacement or any improvements are 26 required for the prevention of dangers to health or safety, or 27 if funds are required for the payment of tort liability not 28 covered by insurance, or if funds are required to be used for 29 and towards the costs of mandated installations of health, 30 safety, anti-pollution, environmental protection and control 19810H0032B1178 - 3 -
1 facilities or of complying with other mandated Federal or 2 Commonwealth programs, a local government unit not having 3 sufficient remaining borrowing capacity as nonelectoral or lease 4 rental debt or being otherwise prohibited by section 305 from 5 incurring debt for the purpose, upon petition to the court of 6 common pleas alleging the catastrophe, or the danger to health 7 and safety, or the mandated nature of the program and the 8 estimated costs of the proposed facilities, and upon proof 9 thereof to the satisfaction of the court, shall be authorized, 10 notwithstanding section 305 or the insufficiency of nonelectoral 11 or lease rental borrowing capacity, to incur debt, as either 12 lease rental or nonelectoral debt, up to an additional fifty per 13 cent of its borrowing base, if such increase is found by the 14 court to have been made necessary under this subsection by 15 reason of the causes set forth in the petition. The increase 16 together with all outstanding other additional emergency debt 17 which may have been previously authorized under this subsection 18 (excluding any allocated to the additional debt limit under 19 subsection (d) of this section) shall not exceed fifty per cent 20 of the borrowing base. Public notice of the intention to file 21 such a petition and of the purpose for which the additional 22 emergency debt is to be incurred shall be given by advertisement 23 in at least one and not more than two papers of general 24 circulation and in the legal journal not less than five nor more 25 than twenty days before the filing thereof. Such additional 26 emergency debt may be incurred only for the purposes and upon 27 the terms approved by the court. The amount of such debt 28 initially in excess of the regular debt limits shall not 29 thereafter be included in computing net amounts of nonelectoral 30 or lease rental debt. 19810H0032B1178 - 4 -
1 * * * <-- 2 Section 205. Procedure for Exclusion of Self-liquidating 3 Debt Evidenced by Revenue Bonds or Notes to Determine Net 4 Nonelectoral Debt.--Self-liquidating debt evidenced by revenue 5 bonds or notes shall not be excluded from nonelectoral debt for 6 the purpose of establishing net nonelectoral debt until there 7 has been filed with the department: 8 (1) A statement by the proper officials of the local 9 government unit certifying the amount of such debt, the project 10 for which it was incurred, and the nature of the revenues from 11 which such debt is to be repaid[;]. 12 (2) A certificate from a qualified professional engineer or 13 architect, or other person qualified by experience as may be 14 appropriate to the project estimating the revenues and operating 15 expenses of the project, and showing that the net revenues so 16 estimated will be sufficient to pay the annual debt service as 17 it falls due. 18 (3) An opinion of the bond counsel approving the issue, to 19 the effect that the holders of the bonds or notes have no claim 20 upon the taxing power or tax revenues of the local government 21 unit issuing the bonds or notes, but only claims upon the 22 specific revenues pledged and rights to the enforcement of any 23 covenants as to the levying or collection of rates and charges 24 for the use of the project being financed or any covenants as to 25 the assessment of benefits upon properties serviceable by the 26 project as provided in such covenants with the holders of the 27 revenue bonds. 28 Section 208. Determination of Existing Net Nonelectoral Debt 29 and Net Nonelectoral Plus Net Lease Rental Debt.--* * * 30 (b) Net nonelectoral and net lease rental debt shall then be 19810H0032B1178 - 5 -
1 determined by subtracting separately from gross nonelectoral 2 debt and gross lease rental debt respectively, as may be 3 applicable, and as the local government unit may desire to 4 claim: 5 * * * 6 (7) All other solvent debts due the local government unit 7 directly, the payment of which can be enforced as one of the 8 unit's quick assets, and which have not been committed to any 9 other purpose; and 10 * * * 11 Section 303. Conduct of Election.--* * * 12 (d) The election officers and clerks shall make return on 13 forms provided by the county board of elections of the votes 14 cast on such question to the county board of elections, which 15 shall compute the same and transmit a certified return thereof 16 to the governing body of the local government unit which shall 17 enter the same on its minutes. If such certified return shows 18 that a majority of those voting on such question have voted in 19 favor thereof, irrespective of any other law requiring a greater 20 percentage, the local government unit shall file with the 21 department a certified copy of the [desired] desire resolution, 22 the certified return and proofs of publication of the notice of 23 election, whereupon the amount of such debt so approved shall 24 constitute electoral debt from and after the date of the 25 election, subject to the provisions of section 304. 26 Section 304. Finality of Result of Election.--Any interested 27 party or any taxpayer may contest the validity of any election 28 proceedings under this Article III by filing with the [Court] 29 court a petition in the nature of a bill in equity, specifically 30 alleging the error or errors complained of in the proceedings, 19810H0032B1178 - 6 -
1 and the petitioner shall have the burden of proof. If no such 2 petition has been filed or if a petition shall have been filed 3 and shall have been finally dismissed, the election shall be 4 conclusively deemed to be valid for all purposes. If prior to 5 the timely filing of a petition, further proceedings in 6 connection with the incurring of such debt shall have been filed 7 with the department, then any contest shall proceed by way of an 8 appeal from the action of the department upon such proceedings. 9 The petition or appeal provided by this section shall be such 10 party's, or such taxpayer's, sole and exclusive remedy. 11 Section 403. Contents of Ordinance Authorizing Issuance of 12 Bonds or Notes or Instruments Evidencing Lease Rental Debt; 13 Fixing the Date of Incurring Nonelectoral and Lease Rental Debt; 14 Changes in Purpose of Nonelectoral General Obligation Bonds.-- 15 The ordinance or ordinances or, in the case of notes issued 16 under section 409, the resolution, authorizing the issuance of 17 bonds or notes or the execution of a lease, guaranty, subsidy 18 contract or other agreement evidencing lease rental debt by a 19 local government unit shall contain, in substance: 20 (1) In all cases, including lease rental debt: 21 (i) A brief description of the project for which the debt is 22 to be incurred, and, if a capital project, a realistic estimated 23 useful life thereof; 24 (ii) A statement of the aggregate principal amount of bonds 25 or notes proposed to be issued pursuant to the ordinance or, as 26 the case may be, to be secured by the instrument evidencing 27 lease rental debt; 28 (iii) A statement whether the debt is to be incurred as 29 electoral debt, nonelectoral debt or lease rental debt; 30 (iv) An authorization and direction to a specified officer 19810H0032B1178 - 7 -
1 or specified officers and their successors to prepare and 2 certify and[;], except in the case of notes issued under section 3 409, to file the debt statement required by section 410 of this 4 act, to execute and deliver the bonds or notes or the instrument 5 evidencing lease rental debt; and to take other necessary 6 action, and such designation may be changed from time to time 7 thereafter; and 8 (v) An authorization, in the case of nonelectoral or lease 9 rental debt which is subject to exclusion as subsidized debt or 10 self-liquidating debt if such exclusion is presently desired, to 11 the proper officers of the local government unit to prepare and 12 file any statements required by Article II of this act which are 13 necessary to qualify all or any portion of the debt for 14 exclusion from the appropriate debt limit as self-liquidating 15 debt or subsidized debt. 16 * * * 17 Section 409. Small Borrowing for Capital Purposes.--(a) Any 18 local government unit is hereby authorized to incur debt by 19 resolution rather than by ordinance to be evidenced by notes to 20 provide funds for a project as defined in this act without 21 complying with the requirements of Article VIII provided: (i) 22 that the aggregate amount of such debt outstanding at any one 23 time shall not exceed the lesser of $50,000 or thirty percent of 24 the borrowing base; (ii) that the principal of each such debt 25 shall mature not later than five years from the date of 26 issuance; (iii) that the incurrence of such debt shall not cause 27 the debt limits of Article II to be exceeded; and (iv) that the 28 provisions of section 10 of Article IX of the Constitution shall 29 have been observed and provided further that the provisions of 30 section 808 shall apply to notes issued in violation of the 19810H0032B1178 - 8 -
1 foregoing requirements. 2 * * * 3 Section 410. Debt Statement.--* * * 4 (b) Where debt has previously been excluded as self- 5 liquidating or subsidized debt, the debt statement shall be 6 accompanied by a certification that no decrease in the amounts 7 to be excluded is required by any change of circumstances, or if 8 there has been a change, other than decreases resulting from the 9 payments of bonds or notes, so that less debt is to be excluded 10 or if it has become possible to exclude a greater amount of 11 debt, and the local government unit desires to do so, the debt 12 statement shall be accompanied by appropriate certificates 13 supporting the revised amount to be excluded and a revised 14 approval shall be obtained from the department. [and filed in 15 the office for the recording of deeds in the county in which 16 such local government unit is located to effectuate such 17 exclusion.] 18 Section 414. Evidence of Signatures of Holders and of 19 Ownership of Bonds, Notes and Tax Anticipation Notes.--* * * 20 (1) The certificate shall state that the person or persons 21 signing such instrument were known to be such persons by the 22 individual certifying and that such person or persons 23 acknowledged the execution of the instrument as his or their 24 act. The authority of an attorney or agent may be proven by like 25 statement of the principal acknowledged in a like manner, but a 26 certificate as to authority shall not be necessary if an 27 instrument is executed on behalf of a corporate holder of bonds, 28 notes or coupons by a person purporting to be the president or a 29 vice-president of such corporation with the corporate seal 30 affixed and attested by a person purporting to be its secretary 19810H0032B1178 - 9 -
1 or an assistant secretary. 2 The fact and date of the execution by the holder of any 3 bond, note or coupon, or the attorney thereof, of any instrument 4 may be proved by the certificate, which, except as hereinafter 5 provided, need not be acknowledged or verified, of: 6 (i) an officer of any bank or bank and trust company which 7 is in Pennsylvania, or which has a correspondent in Pennsylvania 8 certifying to the authenticity of its certificate; 9 (ii) an authorized signer for any broker or dealer in 10 securities doing business in Pennsylvania, or having a 11 correspondent in Pennsylvania certifying to the authenticity of 12 its certificate; 13 (iii) any notary public or other officer authorized to take 14 acknowledgments of deeds to be recorded in the state in which he 15 purports to act; 16 (iv) any other witness to such execution, whose certificate, 17 however, must be verified before a notary public or other 18 officer authorized to take acknowledgments of deeds in the state 19 in which he purports to act. 20 * * * 21 ARTICLE V 22 Tax and Revenue Anticipation Notes and Funding Debt 23 Section 501. Power to Issue Tax and Revenue Anticipation 24 Notes.--A local government unit shall have power and authority, 25 by resolution of its governing body, to borrow money from time 26 to time in any fiscal year in anticipation of the receipt of 27 current taxes or current revenues, or both, to evidence the 28 obligation by notes, appropriately designated, and to authorize, 29 issue and sell such notes in the manner, and subject to the 30 limitations provided therefor in this article. References in 19810H0032B1178 - 10 -
1 this act to tax anticipation notes include also revenue 2 anticipation notes and tax and revenue anticipation notes. 3 Limitations imposed by this act on the incurring of nonelectoral 4 debt shall not apply to the obligations evidenced by tax 5 anticipation notes. Such power to borrow from time to time shall 6 include but not be limited to, the power to make a single 7 authorization and then issue and sell portions of such amount of 8 authorized notes whenever desired during the fiscal year. 9 Section 502. Limitation on Amount of Tax and Revenue 10 Anticipation Notes.--No local government unit shall authorize or 11 issue tax anticipation notes in any one fiscal year which in the 12 aggregate shall exceed eighty-five per cent of: 13 (1) in the case of notes solely payable from and secured by 14 a pledge of taxes, the amount of such taxes levied for the 15 current fiscal year; 16 (2) in the case of notes solely payable from and secured by 17 a pledge of revenues other than tax revenues, the amount of such 18 revenues pledged; or 19 (3) in the case of notes payable from and secured by a 20 pledge of taxes and other revenues, the sum of such taxes levied 21 and such revenues pledged, which, in all cases, are certified, 22 pursuant to section 506, as remaining to be collected or 23 received in such fiscal year during the period when the notes 24 will be outstanding. The certificate shall be as of a date not 25 more than thirty days prior to, and no later than, the date of 26 the vote on the resolution authorizing the issue and sale of the 27 tax anticipation notes. In computing the aggregate amount of tax 28 anticipation notes outstanding at any given time during the 29 fiscal year for the purpose of the limitation imposed by this 30 section, allowance shall be made for such notes as have already 19810H0032B1178 - 11 -
1 been fully paid and for amounts already paid into appropriate 2 sinking funds, if any. 3 Section 503. Limitation on Stated Maturity Date of Tax and 4 Revenue Anticipation Notes; Time of Payment of Interest.--No tax 5 anticipation notes shall be stated to mature beyond the last day 6 of the fiscal year in which such tax anticipation notes are 7 issued. Interest on tax anticipation notes from the date thereof 8 shall be payable at the maturity of such notes or payable in 9 installments at such earlier dates and at such annual rate or 10 rates as the governing body of the local government unit may 11 determine. 12 Section 504. Other Terms of Tax and Revenue Anticipation 13 Notes.--Tax anticipation notes shall be issued in such 14 denominations, shall be subject to such rights of prior 15 redemption, shall have such privileges of interchange and 16 registration, shall be dated, shall be stated to mature (subject 17 to the provisions of section 503) on such dates and in such 18 amounts, shall be in registered or bearer form with or without 19 coupons, shall be payable in such coin or currency as at the 20 place and at the time of payment shall be legal tender for the 21 payment of public and private debts, and shall be payable at 22 such place or places, one of which shall be within the 23 Commonwealth of Pennsylvania, all as the governing body of the 24 issuing local government unit may determine by resolution. 25 Section 505. Security for Tax and Revenue Anticipation 26 Notes; Sinking Fund.--All tax anticipation notes issued in a 27 single fiscal year, shall be equally and ratably secured by the 28 pledge of, security interest in, and a lien and charge on, the 29 taxes or revenues or both of the local government unit specified 30 in the authorizing resolution to be received during the period 19810H0032B1178 - 12 -
1 when the notes will be outstanding. Such pledge, lien and charge 2 shall be fully perfected as against the local government unit, 3 all creditors thereof, and all third parties in accordance with 4 the terms of such resolution from and after the filing of a 5 financing statement or statements in accordance with the Uniform 6 Commercial Code. For the purpose of such filing the sinking fund 7 depositary, if any, otherwise the fiscal agent or paying agent 8 designated in the notes, may act as the representative of 9 noteholders and, in such capacity, execute and file the 10 financing statement and any continuation or termination 11 statements as secured party. The authorizing resolution may 12 establish one or more sinking funds and provide for periodic or 13 other deposits therein, and may contain such covenants or other 14 provisions as the local government unit shall determine. The 15 amount of any tax anticipation notes issued in compliance with 16 this act shall be general obligations of the local government 17 unit and, if the same shall not be paid within the fiscal year 18 in which such notes were issued, shall be deemed to be 19 nonelectoral debt enforceable in the manner of a general 20 obligation which unless funded pursuant to this article, shall 21 be included in the budget of the local government unit for the 22 ensuing fiscal year and shall be payable from the taxes and 23 revenues of such ensuing year notwithstanding that the amount 24 thereof shall cause the nonelectoral debt of such local 25 government unit to exceed the limitations of Article II. 26 The holder of such tax anticipation notes issued by a first 27 class school district or the sinking fund depositary of the 28 applicable sinking fund, if any, therefor shall have the right 29 to enforce such pledge of, security interest in and lien and 30 charge on, the pledged taxes and revenues of the first class 19810H0032B1178 - 13 -
1 school district against all State and local public officials in 2 possession of any of such taxes and revenues at any time which 3 may be collected directly from such officials upon notice by 4 such holder or depositary for application to the payment thereof 5 as and when due or for deposit in the applicable sinking fund at 6 the times and in the amounts specified in such tax anticipation 7 notes. Any State or local public official in possession of any 8 of such taxes and revenues shall make payment, against receipt 9 therefor, directly to the holder of such tax anticipation notes 10 or to such depositary upon such notice and shall thereby be 11 discharged from any further liability or responsibility for such 12 taxes and revenues. If such payment shall be to a holder of tax 13 anticipation notes, it shall be made against surrender of the 14 notes to the payor for delivery to the first class school 15 district in the case of payment in full, otherwise it shall be 16 made against production of the notes for notation thereon of the 17 amount of the payment. The provisions of this paragraph with 18 respect to the enforceability and collection of taxes and 19 revenues which secure tax anticipation notes of a first class 20 school district shall supersede any contrary or inconsistent 21 statutory provision or rule of law. This paragraph shall be 22 construed and applied to fulfill the legislative purpose of 23 clarifying and facilitating temporary borrowings by a first 24 class school district by assuring to holders of tax anticipation 25 notes the full and immediate benefit of the security therefor 26 without delay, diminishment or interference based on any 27 statute, decision, ordinance or administrative rule or practice. 28 Section 507. Sale of Tax and Revenue Anticipation Notes.-- 29 Tax anticipation notes may be sold at public, private, or 30 invited sale as the governing body of the local government unit 19810H0032B1178 - 14 -
1 may determine. Any public sale shall be advertised and conducted 2 in the manner and subject to the conditions provided for a 3 public sale of bonds in Article VII of this act, except as 4 modified by this Article V. The governing body of the local 5 government unit shall award the notes by resolution to specified 6 purchasers at a specified price, not less than the principal 7 amount thereof. At the time of delivery of each issue, series or 8 subseries of tax anticipation notes, authorized officers of the 9 local government unit shall certify to the original purchasers 10 thereof that the amount of all such notes to remain outstanding 11 will not exceed the limitations of section 502 calculated, 12 however, from the date of such certificate to the respective 13 maturity dates of all such notes to remain outstanding. Such 14 certificate need not be filed with the department but a copy 15 thereof shall be retained by the local government unit until all 16 tax anticipation notes issued during the fiscal year shall have 17 been paid in full. 18 Section 508. Condition Precedent to Validity of Tax and 19 Revenue Anticipation Notes.--No tax anticipation note shall be 20 valid or obligatory in the hands of an original purchaser 21 thereof until certified copies of the authorizing and awarding 22 resolution, the certificate as to the taxes and revenues 23 remaining to be collected, and a true copy of the accepted 24 proposal for the purchase of the tax anticipation notes shall 25 have been filed with the department. No approval of the 26 department shall be required. 27 Section 509. Unfunded Debt.--For the purpose of this 28 article, unfunded debt shall mean obligations of the same or [a] 29 one or more prior [year] years incurred for current expenses 30 (including tax anticipation notes), due and owing or judgments 19810H0032B1178 - 15 -
1 against the local government unit entered by a court of 2 competent jurisdiction after adversary proceedings, for the 3 payment of either of which category the taxes and other revenues 4 remaining to be collected in the fiscal year and funds on hand 5 will not be sufficient without a curtailment of municipal 6 services to an extent endangering the health or safety of the 7 public or proper education of school children, and the local 8 government unit either may not legally levy a sufficient tax for 9 the balance of the fiscal year, or a sufficient tax, if legally 10 leviable, would not be in the public interest. Unfunded debt 11 shall not, however, include debt incurred under this act nor 12 obligations in respect of a project or part of a project as 13 defined in section 102(c)(12) or incurred in respect of the cost 14 of a project as defined in section 107. 15 Section 510. Approval by Court.--(a) Whenever the governing 16 body of a local government unit shall be of the opinion that it 17 has outstanding unfunded debt, it may, by petition to the court 18 of common pleas setting forth the facts, request approval for 19 the issuance of bonds or notes to fund the unfunded debt. After 20 hearing, on such notice to the local government unit and its 21 taxpayers as the court may prescribe, the court shall make an 22 order granting authority to fund all or a part of such unfunded 23 debt if the court shall find that such unfunded debt is a lawful 24 obligation of the local government unit, that there has been an 25 unforeseeable decline in revenues, or that taxes levied have not 26 produced the revenues anticipated or that it was not reasonable 27 to foresee such obligation; that paying such debt by curtailing 28 municipal services will be dangerous to the public health, 29 safety or education, and that it is not feasible or not in the 30 public interest to levy additional taxes in the current fiscal 19810H0032B1178 - 16 -
1 year. The funding debt so approved shall be stated to mature in 2 such amounts and over such number of years, not exceeding ten, 3 as the court shall find will accomplish the payment of the debt 4 without endangering the rendering of municipal services or 5 requiring the levying of excessive taxes. If the funding of the 6 unfunded debt has not been approved by a vote of the electors, 7 the order of the court upon cause shown may fix the portion 8 thereof, if any, which shall not be charged against the 9 nonelectoral debt limitations of the local government unit under 10 sections 202 and 505 of this act, during the time such funding 11 debt is outstanding. [The percentages fixed by section 202 of 12 this act shall be deemed increased to the extent required for 13 such funding debt.] 14 (b) The bonds or notes representing funding debt so 15 authorized by the court shall be issued and sold by the 16 governing body as provided by other provisions of this act in 17 respect of general obligation bonds except as such provisions 18 are modified by this section or by orders of the court issued 19 under this section, and the proceedings filed by the local 20 government unit in respect of such funding bonds under section 21 801 shall include certified copies of the petition and of the 22 order of the court. 23 (c) This section shall not be applicable to the funding of 24 obligations in respect of a project or part of a project as 25 defined in section 102(c)(12) or incurred in respect of the cost 26 of a project as defined in section 107. 27 Section 602. Limitations on Stated Maturity Dates.--* * * 28 (b) Bonds or notes may be serial bonds or notes, or term 29 bonds or notes or any combination thereof that may be selected 30 by the governing body of the issuing local government unit. If 19810H0032B1178 - 17 -
1 term bonds or notes are issued, such bonds or notes must be 2 subject to mandatory redemption, and, if serial or installment 3 bonds or notes, the amounts of the stated maturities or 4 installments shall be fixed, (1) so as to amortize the issue on 5 at least an approximately level annual debt service plan during 6 the period specified for the payment of principal in subsection 7 (c) of this section 602; or (2) so that the debt service on 8 outstanding debt of the same classification (and for this 9 purpose lease rental debt shall be considered as the same 10 classification as general obligation debt) will be brought more 11 nearly into an over-all level annual debt service plan. 12 (c) Except as provided by subsection (e), stated 13 installments or maturities of principal of any series of bonds 14 or notes or the mandatory redemption of such principal may not 15 be deferred beyond the later of: 16 (1) two years from date of issue, or 17 (2) one year after estimated completion of construction[:]. 18 In the case of revenue or guaranteed revenue bonds this 19 provision will be satisfied by a covenant for the mandatory 20 application to term bonds [or] of such revenues as may remain 21 after payment of interest and operating expenses up to such 22 fixed amount conforming to subsection (b) above as shall be 23 specified in the ordinance pursuant to which the bonds or notes 24 are issued. 25 * * * 26 Section 606. Pledge of Revenues.--The governing body of any 27 local government unit which has determined to issue any revenue 28 bonds or notes, or any guaranteed revenue bonds or notes, may 29 provide, by ordinance, for such pledges of or priorities in such 30 rentals, revenues, receipts, rates and charges to be received 19810H0032B1178 - 18 -
1 from projects of the issuing local government unit as may be 2 desirable. Such pledge or priority shall be perfected as a 3 security interest against all creditors of the local government 4 unit and all third parties, in accordance with the terms of such 5 ordinance, from and after the filing of a financing statement or 6 statements in accordance with the Uniform Commercial Code. For 7 the purpose of such filing the sinking fund depositary may act 8 as representative of the bond or note holders and, in such 9 capacity, execute and file the financing statement and any 10 continuation or termination statements as secured party. 11 Section 701. Manner of Sale of Bonds or Notes.--(a) Except 12 as otherwise specifically provided in this act and subject to 13 the following subsection, bonds or notes may be sold at public 14 sale or private sale by negotiation or upon invitation and at 15 such price all as the governing body of the issuing local 16 government unit shall determine. Before making any private sale 17 by negotiation of bonds or notes, the governing body shall adopt 18 a resolution finding that a private sale by negotiation is in 19 the best financial interest of the local government unit. Bonds 20 or notes may be conditionally sold before the final details of 21 the series are fixed. 22 (b) Bonds or notes, if sold at public sale, shall be sold to 23 the highest responsible bidder or bidders after one public 24 notice by advertisement of either the official notice of sale, 25 or of the availability of the official notice of sale, in at 26 least one and not more than two newspapers of general 27 circulation in the county in which the local government unit is 28 located. The advertisement may also be published in a financial 29 journal circulating among the underwriters of securities. 30 Advertisements shall be published not less than ten nor more 19810H0032B1178 - 19 -
1 than thirty days prior to the date fixed for opening proposals, 2 and need not appear on the same date nor successively in each 3 newspaper or journal. 4 Section 706. Required Bid Security.--[Bid] In the case of 5 public sale, bid security shall be given by each bidder, shall 6 be in cash or by certified or official bank check payable to the 7 local government unit, and shall be not less than two per cent 8 of the principal amount of the bonds or notes to be purchased. 9 The bid security of the unsuccessful bidder or bidders shall be 10 returned to each unsuccessful bidder, without interest in 11 accordance with written instructions of the bidder conforming to 12 the official notice of sale, promptly upon an award of the bonds 13 or notes or upon the rejection of all bids. The bid security of 14 the successful bidder shall be retained by the treasurer of the 15 local government unit and (with or without allowance for 16 interest as the official notice of sale may specify) shall be 17 applied on the purchase price when the bonds or notes are 18 actually delivered and paid for, retained as liquidated damages 19 if the bidder defaults, or returned to the bidder with interest 20 at the judgment rate if, after an acceptance of the proposal, 21 the bonds or notes are not issued for any reason not 22 constituting a default by the bidder. Unless required by the 23 local governing body, no bid security shall be required in the 24 case of tax anticipation notes, bond anticipation notes or notes 25 to be issued under section 409. 26 Section 804. Examination of Bond or Note Transcript and 27 Other Filings by Department; Certificate of Approval.--The 28 department shall, upon receipt of any bond or note transcripts, 29 or other filings, carefully examine the same to determine 30 whether the debt outstanding and to be outstanding is within the 19810H0032B1178 - 20 -
1 applicable limitations imposed by this act, and whether the 2 proceedings for incurring the debt, for issuing and selling the 3 bonds or notes and for excluding self-liquidating and subsidized 4 debt have been taken in conformity with the Constitution and 5 [all then applicable laws] this act. If, upon completion of its 6 examination, a transcript or other filing is found by the 7 department to be in conformity with the Constitution and 8 [existing laws] this act, the department shall certify its 9 approval, if required under other provisions of this act, to the 10 local government unit. 11 Section 807. Records of Department.--* * * 12 (b) The department shall keep a public record, with respect 13 to each local government unit showing: 14 (1) The name of the local government unit; 15 (2) The purpose of each series issued or lease executed; 16 (3) Whether such series represents nonelectoral, lease 17 rental or electoral debt, and the extent to which such debt is 18 subsidized or self-liquidating, and if subsidized or self- 19 liquidating in part the principal amount thereby eliminated from 20 nonelectoral debt; 21 (4) The schedule of stated maturity dates, interest rates 22 and mandatory sinking fund payments for each outstanding issue 23 of bonds or notes or the schedule of lease rentals; 24 (5) The dates and designations of each issue of bonds or 25 notes, lease or other document to be executed with the approval 26 number assigned to each such issue, lease or other document 27 approved; 28 (6) The local government unit's most recently certified 29 borrowing base and regular debt limits computed therefrom; 30 (7) The date and manner of authorization of any use of any 19810H0032B1178 - 21 -
1 additional debt limit. 2 * * * 3 Section 809. Finality of Proceedings; Validity of Bonds, 4 Notes, Tax Anticipation Notes, Leases, Guaranties, Subsidy 5 Contracts or Other Agreements.--(a) Where a certificate of 6 approval has been issued by the department or has been deemed 7 issued under section 806, or, in the case of tax anticipation 8 notes where the filing with the department required by section 9 508 has occurred, and no petition for a declaratory order or 10 complaint has been filed within the applicable time limits 11 specified in section 901, or when after a petition for a 12 declaratory order or complaint has been filed, the proceedings 13 have been approved finally by [the court,] the department, and 14 no appeal to court has been taken, or an appeal to court has 15 been taken, and the proceedings have been approved finally by 16 the court or the appeal has been dismissed, the validity of the 17 proceedings, the right of the local government unit lawfully to 18 issue its bonds or notes or to enter into a lease, guaranty, 19 subsidy contract or other agreement evidencing lease rental debt 20 pursuant to such proceedings, and the validity and due 21 enforceability of the bonds, notes or other instruments in 22 accordance with their terms shall not thereafter be inquired 23 into judicially, in equity, at law, or by civil or criminal 24 proceedings, or otherwise, either directly or collaterally. The 25 effect of the approval by the department, or by the court on 26 appeal, or, in the case of tax anticipation notes, the effect of 27 filing in compliance with section 508, shall be to ratify, 28 validate and confirm such proceedings absolutely, including the 29 lawful nature of the project and, in the case of tax 30 anticipation notes, the accuracy of the estimates contained in 19810H0032B1178 - 22 -
1 the certificate as to taxes and revenues to be collected, 2 notwithstanding any defect or error in such proceedings, except 3 as specifically provided hereinafter in this section, and any 4 debt limit imposed by this act shall be deemed increased to the 5 extent necessary to validate such debt or obligation. Nothing 6 herein contained shall, however, free an initial purchaser of 7 bonds or notes from liability to a local government unit for the 8 payment of the consideration agreed in the contract of sale, or 9 make all such bonds or notes valid and enforceable in the hands 10 of an initial purchaser unless the issuer shall have received a 11 substantial consideration for the series as a whole. 12 * * * 13 Section 901. Petitions for Declaratory Orders and Complaints 14 to the Department; Exclusive Jurisdiction of Department.--(a) 15 Where proceedings for the incurring of debt represented by bonds 16 or notes or by a lease, guaranty, subsidy contract or other 17 agreement evidencing the acquisition of a capital asset, for the 18 issuance of tax anticipation notes, or for the exclusion of debt 19 as self-liquidating or subsidized, have been taken by a local 20 government unit, such local government unit, or any taxpayer of 21 the local government unit, or other interested party may file 22 with the department a petition for a declaratory order asserting 23 the validity or a complaint asserting the invalidity of such 24 proceedings, or any part thereof. Any such complaint asserting 25 the invalidity of such proceedings or part thereof taken under 26 section 409 may be filed at any time not later than one year 27 after final adoption of the resolution authorizing the debt. Any 28 such complaint asserting the invalidity of such proceedings or 29 part thereof excluding debt as self-liquidating under section 30 205 or authorizing tax anticipation notes under Article V may be 19810H0032B1178 - 23 -
1 filed at any time not later than fifteen days after the filing 2 with the department of the documents required by section 205 or 3 of the proceedings pursuant to section 506, as the case may be. 4 Any such complaint asserting the invalidity of any such 5 proceedings or part thereof in cases in which, under this act, 6 the approval or deemed approval of the department is required, 7 may be filed with the department at any time not later than the 8 later of (i) fifteen days after the date of the submission of 9 the proceedings by the local government unit to the department 10 for approval even though such proceeding may be subject to 11 correction as provided in section 805 or otherwise or (ii) five 12 days after the date of the last submission of any such corrected 13 document or certification to the department. 14 If a petition for a declaratory order or complaint shall be 15 filed in respect of proceedings requiring the approval of the 16 department after the submission of the proceedings to the 17 department but prior to approval, disapproval or deemed 18 approval, the department shall not be deemed to have approved 19 the proceedings during the pendency of the matter before the 20 department. 21 * * * <-- 22 (B) EXCLUSIVE JURISDICTION IS HEREBY CONFERRED ON THE <-- 23 DEPARTMENT TO HEAR AND DETERMINE ALL PROCEDURAL AND SUBSTANTIVE 24 MATTERS ARISING FROM THE PROCEEDINGS OF A LOCAL GOVERNMENT UNIT 25 TAKEN PURSUANT TO THIS ACT, INCLUDING WITHOUT LIMITATION, THE 26 REGULARITY OF THE PROCEEDINGS, THE VALIDITY OF THE BONDS, NOTES, 27 TAX ANTICIPATION NOTES OR OTHER OBLIGATIONS OF THE LOCAL 28 GOVERNMENT UNIT, AND THE LEGALITY OF THE PURPOSE FOR WHICH SUCH 29 OBLIGATIONS ARE TO BE ISSUED. IF A LOCAL GOVERNMENT UNIT SHALL 30 FILE A PETITION FOR A DECLARATORY ORDER WITH THE DEPARTMENT, 19810H0032B1178 - 24 -
1 RELATING TO SUCH PROCEEDINGS, THE DEPARTMENT MAY REQUIRE SUCH 2 SERVICE BY PUBLICATION ON TAXPAYERS AS THE CIRCUMSTANCES 3 WARRANT. IN ALL OTHER RESPECTS THE PROCEEDINGS BEFORE THE 4 DEPARTMENT SHALL BE GOVERNED BY REGULATIONS OF THE DEPARTMENT. 5 THE DEPARTMENT SHALL HAVE THE POWER, AFTER APPROPRIATE 6 PROCEEDINGS IN ACCORDANCE WITH SUCH REGULATIONS, TO APPROVE OR 7 DISAPPROVE THE PROCEEDINGS OF THE LOCAL GOVERNMENT UNIT OR TO 8 DIRECT CORRECTION AS PROVIDED IN SECTION 805. A DETERMINATION BY 9 THE DEPARTMENT UNDER THIS ACT SHALL, EXCEPT AS PROVIDED IN 10 [SECTION 902] THIS SUBSECTION, BE CONCLUSIVE AND BINDING AS TO 11 ALL PROCEDURAL AND SUBSTANTIVE MATTERS WHICH WERE OR COULD HAVE 12 BEEN PRESENTED TO THE DEPARTMENT HEREUNDER. [A DETERMINATION IN 13 FAVOR OF THE LOCAL GOVERNMENT UNIT UNDER THIS SECTION SHALL HAVE 14 THE EFFECT PROVIDED IN SECTION 809.] ALL DETERMINATIONS BY THE 15 DEPARTMENT UNDER THIS ACT ARE REVIEWABLE AS PROVIDED IN 2 16 PA.C.S. CH. 7 (RELATING TO JUDICIAL REVIEW). 17 ARTICLE X 18 Sinking and Assessment Funds[:]; Reserves 19 and Pledged Revenues 20 Section 1006. Inspection of Sinking Funds; Orders to 21 Comply.--* * * 22 (c) In addition to the criminal prosecutions provided for in 23 Article XIII of this act, or in lieu thereof, the department 24 may, in its discretion, apply to the [Court] court for a writ of 25 mandamus to issue to such officer or governing body of the local 26 government unit to compel compliance with such order of the 27 department or such order with such modifications thereof as to 28 the court may seem just and proper. 29 Section 1102. Treatment of Costs Upon a Refunding.--In any 30 refunding, a principal amount of refunding bonds or notes or 19810H0032B1178 - 25 -
1 obligations evidencing lease rental debt equal to the sum of the 2 following: 3 * * * 4 (4) The costs of issue and sale of the refunding bonds, 5 notes or obligations; may be considered as interest on the 6 refunding bonds, notes or obligations, may be separately stated 7 in all reporting of debt, and in all computation of debt limits 8 and if so considered and reported by the local government unit 9 shall not be considered as electoral, nonelectoral or lease 10 rental debt. In subsequent debt statements, any such separately 11 stated principal amount of bonds, notes or obligations shall be 12 reported as being amortized in the same proportion as the series 13 of which they are a part. 14 * * * 15 Section 1201. Failure to Budget Debt Service.--If a local 16 government unit having outstanding any general obligation bonds 17 or notes or guaranteed revenue bonds or notes, lease rental debt 18 or guaranty of authority obligations fails or refuses to make 19 adequate provision in its budget for any fiscal year for the 20 sums payable in respect of such bonds or notes, lease rental or 21 guaranty in such year or shall fail to appropriate or pay the 22 moneys necessary in such year for the payment of the amount of 23 the lease rental or guaranty, [or] as the case may be, of the 24 maturing principal of and the interest on such bonds or notes or 25 any of them, or any tax anticipation notes, or any sinking fund 26 obligation for such bonds or notes or tax anticipation notes, or 27 guaranty or the lease rental payment coming due in the fiscal 28 year of such budget or for which such appropriations or payments 29 should have been made, then at the suit of the holder of any 30 bond, note, or tax anticipation note, or coupon or guaranty, or 19810H0032B1178 - 26 -
1 the holder of any authority obligation secured by a lease 2 evidencing the acquisition of a capital asset or of any taxpayer 3 of the local government unit, the court of common pleas shall, 4 after a hearing held upon such notice to the local government 5 unit as the court may direct, and upon a finding of such failure 6 or neglect, by writ of mandamus, require the treasurer of the 7 local government unit, and it shall be the duty of such 8 treasurer, to pay into the sinking fund for each series of bonds 9 or notes then outstanding, or for each guaranty or lease rental 10 payment, the first tax moneys or other available revenues or 11 moneys thereafter received in such fiscal year by such 12 treasurer, equally and ratably for each series for which 13 provision has not been made in proportion to debt service for 14 such year on each such series then outstanding, or the amounts 15 due upon guaranties or as payments with respect to lease rental 16 debt, as the case may be, (except that any priority on incoming 17 tax moneys accorded to a separate sinking fund for tax 18 anticipation notes under the authority of section 505, shall not 19 be affected by this provision), until the sum on deposit in each 20 sinking fund shall equal the moneys that should have been 21 budgeted or appropriated for each such series. 22 Section 1202. Failure to Pay Principal or Interest.--(a) If <-- 23 a local government unit fails or neglects to pay or cause to be 24 paid the interest or principal on any of its general obligation 25 bonds or notes, or tax anticipation notes, as the same becomes 26 due and payable whether at the stated maturity date or upon an 27 unrevoked call for prior redemption, or to perform its payment 28 obligations with respect to any lease rental debt or guaranteed 29 revenue bonds or notes, and such failure shall continue for 30 thirty days, the holder thereof shall, subject to priorities 19810H0032B1178 - 27 -
1 created under sections 505, 1201 and 1203 of this act and to any 2 limitations upon individual rights of action properly provided 3 in the bond ordinance or any indenture, have the right to 4 recover the amount due in an action in the court of common 5 pleas. The judgment recovered shall have an appropriate priority 6 upon the moneys next coming into the treasury of the local 7 government unit and shall be a judgment upon which funding bonds 8 may be issued pursuant to Article V of this act. 9 (b) If a local government unit fails or neglects to pay or 10 cause to be paid the principal of or the interest upon any 11 revenue bond or note as the same shall become due, whether at 12 the stated maturity or upon call for prior redemption, the 13 holder thereof shall, subject to priorities created under 14 sections 505, 1202 and 1203 of this act and to any limitations 15 upon individual rights of action properly provided in the bond 16 ordinance or any indenture, have the right to recover the amount 17 due in an action in the court of common pleas but the judgment 18 shall be limited to payment out of the assessments, revenues, 19 rates, rents, tolls and charges from the project which are 20 pledged for the payment of such bonds or notes. 21 Section 1203. Trustee for Bondholders.--* * * <-- 22 (b) Such trustee may, and upon written request of the 23 holders of twenty-five per cent in principal amount of such 24 bonds or notes then outstanding and upon being furnished with 25 [identity] indemnity satisfactory to it shall, in his or its own 26 name take one or more of the actions set forth below and the 27 taking of such actions shall preclude similar action whether 28 previously or subsequently initiated by individual holders of 29 bonds or notes. 30 (1) By mandamus or other suit, action or proceeding at law 19810H0032B1178 - 28 -
1 or in equity enforce all rights of the holders of the bonds or 2 notes, including in the case of revenue or guaranteed revenue 3 obligations the right to require the local government unit to 4 impose and collect rents, rates, tolls and charges adequate to 5 carry out any agreement or covenant as to, or pledge of such 6 rents, rates, tolls or charges, for the use of the project or 7 projects financed by such bonds or notes, or to require the 8 local government unit to carry out any other agreements with the 9 holders of such bonds or notes; 10 (2) Bring suit on the bonds or notes without the necessity 11 for producing the bonds or notes, and with same effect as a suit 12 by any holder; 13 (3) In the case of revenue or guaranteed revenue bonds or 14 notes to require the local government unit to account as if it 15 were the trustee of an express trust for the holders of such 16 bonds or notes, for any pledged revenues received; 17 (4) In the case of general obligation bonds or notes, 18 petition the court to levy, and the court is hereby empowered to 19 levy, after a hearing upon such notice to the owners of 20 assessable real estate, as the court may prescribe, the amount 21 due before or after the exercise of any right of acceleration on 22 the bonds or notes plus estimated costs of collection as an 23 assessment upon the properties benefited by the improvement 24 pursuant to the front foot rule if the project is an assessable 25 improvement, otherwise upon all taxable real estate and other 26 property subject to ad valorem taxation in the local government 27 unit, in proportion to the value thereof as assessed for tax 28 purposes, and the trustee may collect or cause the local 29 government unit to collect, such assessments as by foreclosure 30 of a mortgage or security interest on the realty or other 19810H0032B1178 - 29 -
1 property if not paid on demand; 2 (5) In the case of guaranteed revenue bonds or notes or a 3 guarantee of authority obligations or unpaid lease rentals under 4 leases evidencing the acquisition of capital assets, to petition 5 the court to levy, and the court is hereby empowered to levy, 6 after hearing upon such notice to the owners of assessable real 7 estate, and other property subject to ad valorem taxation, as 8 the court may prescribe, the amount due on the guaranty or under 9 the lease plus estimated costs of collection as an annual 10 assessment for the current and future years upon all taxable 11 real estate and other properties subject to ad valorem taxation 12 in the local government unit in proportion to the value thereof 13 as assessed for tax purposes, and the trustee may collect or 14 cause the local government unit to collect such assessments as 15 by foreclosure of a mortgage or security interest on the realty 16 or other property if not paid on demand. The levy shall bear 17 interest, until paid, at a rate sufficient to cover accruing 18 interest on the bonds or notes; 19 (6) By suit in equity, enjoin any acts or things which may 20 be unlawful or in violation of the rights of the holders of such 21 bonds, notes, guaranty, or authority obligations under a lease 22 evidencing the acquisition of capital assets; 23 (7) After thirty days prior written notice to the local 24 government unit, and subject to any limitations in the bond 25 ordinance or relevant indenture declare the unpaid principal of 26 all such bonds or notes to be, and it shall thereby become 27 forthwith due and payable with interest at the rates stated in 28 the bonds until final payment, and, if all defaults shall be 29 made good then to annul such declaration and its consequences. 30 Any assessment levied pursuant to clauses (4) and (5) above 19810H0032B1178 - 30 -
1 shall have the same priority and preference as to other liens or 2 mortgages on the real estate or security interests in fixtures 3 thereon or other property, as a lien for unpaid taxes. 4 (c) The court of common pleas in cases of extreme hardship 5 may provide for the payment of sums levied in five or less 6 annual installments with interest at a rate sufficient to cover 7 the interest accruing on the bonds or notes. 8 * * * 9 Section 1204. Receiver for Revenue Projects.--A trustee for 10 the holders of defaulted bonds or notes, whether or not the 11 series of bonds [presented] represented by the trustee has been 12 declared to be and has become forthwith due and payable, shall 13 be entitled as of right to the appointment, by the court of 14 common pleas [of the county in which such local government unit 15 is located, or, if located in two counties, then of either 16 county,] of a receiver of all or any part or parts of a project 17 or the projects, the rents, rates, revenues, tolls and charges 18 of which are pledged for the security of the bonds or notes of 19 such series. Except as otherwise provided in [the] this section, 20 such receiver shall have no power to sell, assign, mortgage, or 21 otherwise dispose of, but may enter and take possession of the 22 project or projects or part or parts thereof, and, subject to 23 the equal or prior rights of the holders of any other series of 24 bonds or notes, shall take possession of all moneys and other 25 property derived from or applicable to the construction, 26 operation, maintenance, repair and reconstruction of such 27 project or projects or parts thereof. The receiver may 28 thereafter proceed with any construction or other work thereon 29 which the local government unit is under obligation to do. The 30 receiver may operate, maintain, repair, and reconstruct such 19810H0032B1178 - 31 -
1 project or projects, or parts thereof and collect and receive 2 all rents, rates, receipts, tolls, other charges and revenues 3 arising therefrom, subject to the equal or prior rights of the 4 holders of any other series of bonds or notes therein. As part 5 of his power to operate and maintain a project, the receiver may 6 sell or otherwise dispose of equipment which is no longer used 7 or usable by the project. The receiver shall perform the public 8 duties and carry out the lawful agreements and obligations of 9 the local government unit with respect to the project or 10 projects or parts thereof, all under the direction of the court 11 but shall not perform any essential governmental functions. 12 Section 1301. False Statement in Documents [Constitute] 13 Constitutes Perjury; Fines and Penalties Therefor.--Whoever 14 wilfully and corruptly makes under oath false oral or written 15 statements or any false statement in any document required to be 16 filed in the department, [in the office of the recorder of 17 deeds] or in the office of the prothonotary of the appropriate 18 county, is guilty of perjury, or false swearing, as the case may 19 be, and whoever wilfully and corruptly procures or suborns any 20 other person to make any such false statement, is guilty of a 21 crime, and on conviction of either offense, shall be sentenced 22 to pay a fine or undergo imprisonment or both within the limits 23 prescribed by Title 18 Pa.C.S. (relating to crimes and 24 offenses). 25 Section 2. This act shall take effect in 60 days. 26 SECTION 1. THE TITLE, ACT OF JULY 6, 1917 (P.L.747, NO.271), <-- 27 ENTITLED "AN ACT REQUIRING ALL COUNTIES, CITIES, BOROUGHS, 28 TOWNSHIPS, SCHOOL DISTRICTS, AND OTHER MUNICIPALITIES AND 29 INCORPORATED DISTRICTS TO SELL ANY BONDS OR OTHER SECURITIES 30 ISSUED BY THEM TO THE HIGHEST RESPONSIBLE BIDDER AFTER DUE 19810H0032B1178 - 32 -
1 PUBLIC NOTICE," IS AMENDED TO READ: 2 AN ACT 3 [REQUIRING ALL COUNTIES, CITIES, BOROUGHS, TOWNSHIPS, SCHOOL 4 DISTRICTS, AND OTHER MUNICIPALITIES AND INCORPORATED 5 DISTRICTS TO SELL ANY BONDS OR OTHER SECURITIES ISSUED BY 6 THEM TO THE HIGHEST RESPONSIBLE BIDDER AFTER DUE PUBLIC 7 NOTICE.] 8 PROVIDING THAT A CITY OF THE FIRST CLASS SHALL SELL BONDS OR 9 OTHER SECURITIES, EXCEPT AS PROVIDED HEREIN, ISSUED BY IT AT 10 PUBLIC SALE AFTER NOT LESS THAN ONE PUBLIC NOTICE FOR SUCH 11 PRICE, AT, ABOVE OR BELOW THEIR PAR VALUE PLUS ACCRUED 12 INTEREST, AS SHALL BE DETERMINED BY THE AUTHORITIES OF THE 13 CITY AND PROVIDING THAT SUCH A CITY MAY SELL BONDS OR OTHER 14 SECURITIES AT PRIVATE SALE WHEN NO CONFORMING BID HAS BEEN 15 RECEIVED AT A PRIOR PUBLIC SALE; AND PROVIDING THAT THE 16 PROVISIONS HEREOF SHALL APPLY TO ALL BORROWINGS AND THE 17 ISSUANCE OF BONDS OR OTHER SECURITIES THEREFOR, WHENEVER 18 AUTHORIZED. 19 SECTION 2. SECTION 1 OF THE ACT, AMENDED APRIL 11, 1929 20 (P.L.518, NO.221), IS AMENDED TO READ: 21 SECTION 1. [BE IT ENACTED, &C., THAT WHEN ANY COUNTY, CITY, 22 BOROUGH, TOWNSHIP, SCHOOL DISTRICT, OR OTHER MUNICIPALITY OR 23 INCORPORATED DISTRICT OF THIS COMMONWEALTH] WHEN ANY CITY OF THE 24 FIRST CLASS, HAVING AUTHORITY SO TO DO, SHALL BORROW MONEY AND 25 ISSUE BONDS OR OTHER SECURITIES THEREFOR, EXCEPT IN THE CASE OF 26 THE GIVING OF NOTES FOR TEMPORARY LOANS AS MAY BE AUTHORIZED BY 27 LAW AND EXCEPT IN THE CASE OF THE ISSUANCE OF BONDS OR OTHER 28 SECURITIES UNDER THE ACT OF OCTOBER 18, 1972 (P.L.955, NO.234), 29 KNOWN AS "THE FIRST CLASS CITY REVENUE BOND ACT," THE 30 AUTHORITIES THEREOF SHALL SELL THE SAME TO THE HIGHEST 19810H0032B1178 - 33 -
1 RESPONSIBLE BIDDER FOR SUCH PRICE, AT, ABOVE OR BELOW THEIR PAR 2 VALUE PLUS ACCRUED INTEREST, AS SHALL BE DETERMINED BY THE 3 AUTHORITIES OF SUCH CITY, AFTER PUBLIC NOTICE BY ADVERTISEMENT[, 4 ONCE A WEEK FOR THREE WEEKS,] OF EITHER THE OFFICIAL INVITATION 5 FOR BIDS OR OF THE AVAILABILITY OF THE OFFICIAL INVITATION FOR 6 BIDS IN AT LEAST ONE NEWSPAPER OF GENERAL CIRCULATION PUBLISHED 7 IN [THE COUNTY IN WHICH SUCH COUNTY, CITY, BOROUGH, TOWNSHIP, OR 8 SCHOOL DISTRICT, OR OTHER MUNICIPALITY OR INCORPORATED DISTRICT, 9 SHALL BE SITUATED: PROVIDED, THAT NO BID FOR SUCH BONDS OR 10 SECURITIES AT LESS THAN THEIR PAR VALUE SHALL BE ACCEPTED: AND 11 PROVIDED FURTHER, THAT WHERE] SUCH CITY. ADVERTISEMENTS SHALL BE 12 PUBLISHED AT LEAST ONE TIME NOT LESS THAN TEN NOR MORE THAN 13 THIRTY DAYS PRIOR TO THE DATE FIXED FOR OPENING BIDS. WHERE 14 BONDS AND SECURITIES SHALL HAVE BEEN HERETOFORE OR SHALL 15 HEREAFTER BE ADVERTISED FOR SALE, AS PROVIDED IN THIS ACT, AND 16 NO [BIDS HAVE] CONFORMING BID HAS BEEN RECEIVED, THEN IT SHALL 17 BE LAWFUL FOR SUCH [COUNTY, CITY, BOROUGH, TOWNSHIP, SCHOOL 18 DISTRICT, OR OTHER MUNICIPALITY, OR INCORPORATED DISTRICT,] CITY 19 TO SELL THE SAME AT PRIVATE SALE [FOR NOT LESS THAN PAR AND 20 ACCRUED INTEREST] AT SUCH PRICE, AT, ABOVE OR BELOW THEIR PAR 21 VALUE PLUS ACCRUED INTEREST AS THE AUTHORITIES OF SUCH CITY 22 SHALL DETERMINE. THIS SECTION SHALL APPLY TO ALL BORROWINGS AND 23 THE ISSUANCE OF BONDS OR OTHER SECURITIES THEREFOR, WHETHER 24 HERETOFORE OR HEREAFTER AUTHORIZED. 25 SECTION 3. THIS ACT SHALL TAKE EFFECT IMMEDIATELY. L23L53HVY/19810H0032B1178 - 34 -