PRINTER'S NO. 425
No. 370 Session of 2005
INTRODUCED BY ORIE, D. WHITE, RAFFERTY AND REGOLA,
MARCH 16, 2005
REFERRED TO LOCAL GOVERNMENT, MARCH 16, 2005
AN ACT
1 Amending Title 53 (Municipalities Generally) of the Pennsylvania
2 Consolidated Statutes, further providing for, in relation to
3 municipal authorities, method of incorporation, for
4 limitations, for prohibitions, for governing body and for
5 money of authorities.
6 The General Assembly of the Commonwealth of Pennsylvania
7 hereby enacts as follows:
8 Section 1. Section 5603(a), (b), (c) and (e) of Title 53 of
9 the Pennsylvania Consolidated Statutes are amended and the
10 section is amended by adding a subsection to read:
11 § 5603. Method of incorporation.
12 [(a) Resolution of intent.--Whenever the municipal]
13 (a) Resolution of intent.--
14 (1) Except as otherwise provided in paragraph (2),
15 whenever the municipal authorities of any municipality singly
16 or of two or more municipalities jointly desire to organize
17 an authority under this chapter, they shall adopt a
18 resolution or ordinance signifying their intention to do so.
19 No such resolution or ordinance shall be adopted until after
1 a public hearing has been held, the notice of which shall be
2 given at least 30 days before the hearing and in the same
3 manner as provided in subsection (b) for the giving of notice
4 of the adoption of the resolution or ordinance.
5 (2) Whenever the municipal authorities in any city of
6 the second class or county of the second class singly or of
7 two or more such municipalities jointly desire to organize an
8 authority under this chapter, they shall adopt a resolution
9 or ordinance signifying their intention to do so. No such
10 resolution or ordinance shall be adopted until after a public
11 hearing has been held, the notice of which shall be given at
12 least 30 days before the hearing and in the same manner as
13 provided in subsection (b.1) for the giving of notice of the
14 adoption of the resolution or ordinance.
15 (b) General notice of adopted resolution.--[If] For
16 municipal authorities subject to subsection (a)(1), if the
17 resolution or ordinance is adopted, the municipal authorities of
18 such municipality or municipalities shall cause a notice of such
19 resolution or ordinance to be published at least one time in the
20 legal periodical of the county or counties in which the
21 authority is to be organized and at least one time in a
22 newspaper published and in general circulation in such county or
23 counties. The notice shall contain a brief statement of the
24 substance of the resolution or ordinance, including the
25 substance of the articles making reference to this chapter. In
26 the case of authorities created for the purpose of making
27 business improvements or providing administrative services, if
28 appropriate, the notice shall specifically provide that the
29 municipality or municipalities have retained the right which
30 exists under this chapter to approve any plan of the authority.
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1 The notice shall state that on a day certain, not less than
2 three days after publication of the notice, articles of
3 incorporation of the proposed authority shall be filed with the
4 Secretary of the Commonwealth. No municipality shall be required
5 to make any other publication of the resolution or ordinance
6 under the provisions of existing law.
7 (b.1) Certification of ballot question and referendum.--The
8 governing body of each city of the second class or county of the
9 second class that has adopted a resolution under subsection
10 (a)(2) shall certify a copy of the resolution and submit the
11 same to the appropriate election officials at least 90 days
12 prior to the next primary or general election. The applicable
13 election officials shall place the proposal on the ballot in a
14 manner fairly representing the content of the resolution by
15 referendum at the election. The question shall include an
16 explanation of the purpose of the authority and how the
17 authority and its activities will be financed. The explanation
18 shall include a statement concerning the debt limitations of the
19 proposed authority. The question shall be placed on the ballot
20 as a referendum and shall become effective by a majority vote of
21 the electors voting thereon. The procedure for referendum shall
22 be governed by the act of June 3, 1937 (P.L.1333, No.320), known
23 as the Pennsylvania Election Code.
24 (c) Filing articles of incorporation.--On or before the day
25 specified in the notice required under subsection (b), the
26 municipal authorities subject to subsection (a)(1) shall file
27 with the Secretary of the Commonwealth articles of incorporation
28 together with proof of publication of the notice required under
29 subsection (b). Within 30 days of certification of the election
30 results approving its creation, the incorporating municipality
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1 or municipalities subject to subsection (a)(2) shall file with
2 the Secretary of the Commonwealth articles of incorporation. The
3 articles of incorporation shall set forth:
4 (1) The name of the authority.
5 (2) A statement that the authority is formed under this
6 chapter.
7 (3) A statement whether any other authority has been
8 organized under this chapter or under the former act of June
9 28, 1935 (P.L.463, No.191), entitled "An act providing for
10 the incorporation, as bodies corporate and politic, of
11 "Authorities" for municipalities, counties, and townships;
12 defining the same; prescribing the rights, powers, and duties
13 of such Authorities; authorizing such Authorities to acquire,
14 construct, improve, maintain, and operate projects, and to
15 borrow money and issue bonds therefor; providing for the
16 payment of such bonds, and prescribing the rights of the
17 holders thereof; conferring the right of eminent domain on
18 such Authorities; authorizing such Authorities to enter into
19 contracts with and to accept grants from the Federal
20 Government or any agency thereof; and for other purposes," or
21 the former act of May 2, 1945 (P.L.382, No.164), known as the
22 Municipality Authorities Act of 1945, and is in existence in
23 or for the incorporating municipality or municipalities. If
24 any one or more of the municipalities have already joined
25 with other municipalities not composing the same group in
26 organizing a joint authority, the application shall set forth
27 the name of that authority together with the names of the
28 municipalities joining in it.
29 (4) The name of the incorporating municipality or
30 municipalities together with the names and addresses of its
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1 municipal authorities.
2 (5) The names, addresses and term of office of the first
3 members of the board of the authority.
4 (6) In the case of authorities created for the purpose
5 of making business improvements or providing administrative
6 services, if appropriate, a statement that the municipality
7 or municipalities have retained the right which exists under
8 this chapter to approve any plan of the authority.
9 (7) In the case of authorities subject to subsection
10 (a)(2), the debt limitations which shall apply to the
11 authority.
12 (8) In the case of authorities subject to subsection
13 (a)(2), the term of existence of the authority prior to which
14 the incorporating municipalities must reenact an ordinance to
15 continue its existence.
16 [(7)] (9) Any other matter which shall be determined in
17 accordance with the provisions of this chapter.
18 * * *
19 (e) Certification of incorporation.--If the Secretary of the
20 Commonwealth finds that the articles of incorporation conform to
21 law, he shall, but not prior to the day specified in the notice
22 published in accordance with subsection (b) for authorities
23 subject to subsection (a)(1), endorse his approval of them and,
24 when all proper fees and charges have been paid, shall file the
25 articles and issue a certificate of incorporation to which shall
26 be attached a copy of the approved articles. Upon the issuance
27 of a certificate of incorporation by the Secretary of the
28 Commonwealth, the corporate existence of the authority shall
29 begin. The certificate of incorporation shall be conclusive
30 evidence of the fact that the authority has been incorporated,
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1 but proceedings may be instituted by the Commonwealth to
2 dissolve an authority which was formed without substantial
3 compliance with the provisions of this section.
4 * * *
5 Section 2. Section 5607(b) and (e) of Title 53 are amended
6 to read:
7 § 5607. Purposes and powers.
8 * * *
9 (b) Limitations.--This section is subject to the following
10 limitations:
11 (1) An authority created by a school district or school
12 districts shall have the power only to acquire, hold,
13 construct, improve, maintain, operate and lease public school
14 buildings and other school projects acquired, constructed or
15 improved for public school purposes.
16 (2) The purpose and intent of this chapter being to
17 benefit the people of the Commonwealth by, among other
18 things, increasing their commerce, health, safety and
19 prosperity and not to unnecessarily burden or interfere with
20 existing business by the establishment of competitive
21 enterprises, none of the powers granted by this chapter shall
22 be exercised in the construction, financing, improvement,
23 maintenance, extension or operation of any project or
24 projects or providing financing for insurance reserves which
25 in whole or in part shall duplicate or compete with existing
26 enterprises serving substantially the same purposes. This
27 limitation shall not apply to the exercise of the powers
28 granted under this section:
29 (i) for facilities and equipment for the collection,
30 removal or disposal of ashes, garbage, rubbish and other
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1 refuse materials by incineration, landfill or other
2 methods if each municipality organizing or intending to
3 use the facilities of an authority having such powers
4 shall declare by resolution or ordinance that it is
5 desirable for the health and safety of the people of such
6 municipality that it use the facilities of the authority
7 and state if any contract between such municipality and
8 any other person, firm or corporation for the collection,
9 removal or disposal of ashes, garbage, rubbish and other
10 refuse material has by its terms expired or is terminable
11 at the option of the municipality or will expire within
12 six months from the date such ordinance becomes
13 effective;
14 (ii) for industrial development projects if the
15 authority does not develop industrial projects which will
16 compete with existing industries;
17 (iii) for authorities created for the purpose of
18 providing business improvements and administrative
19 services if each municipality organizing an authority for
20 such a project shall declare by resolution or ordinance
21 that it is desirable for the entire local government unit
22 to improve the business district;
23 (iv) to hospital projects or health centers to be
24 leased to or financed with loans to public hospitals,
25 nonprofit corporation health centers or nonprofit
26 hospital corporations serving the public or to school
27 building projects and facilities to be leased to or
28 financed with loans to private, nonprofit, nonsectarian
29 secondary schools, colleges and universities, State-
30 related universities and community colleges or to
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1 facilities, as limited under the provisions of this
2 section, to produce steam or to generate electric power
3 if each municipality organizing an authority for such a
4 project shall declare by resolution or ordinance that it
5 is desirable for the health, safety and welfare of the
6 people in the area served by such facilities to have such
7 facilities provided by or financed through an authority;
8 (v) to provide financing for insurance reserves if
9 each municipality or authority intending to use any
10 proceeds thereof shall declare by resolution or ordinance
11 that it is desirable for the health, safety and welfare
12 of the people in such local government unit or served by
13 such authority; or
14 (vi) to projects for financing working capital.
15 (3) It is the intent of this chapter in specifying and
16 defining the authorized purposes and projects of an authority
17 to permit the authority to benefit the people of this
18 Commonwealth by, among other things, increasing their
19 commerce, health, safety and prosperity while not
20 unnecessarily burdening or interfering with any municipality
21 which has not incorporated or joined that authority.
22 Therefore, notwithstanding any other provisions of this
23 chapter, an authority shall not have as its purpose and shall
24 not undertake as a project solely for revenue-producing
25 purposes the acquiring of buildings, facilities or tracts of
26 land which in the case of an authority incorporated or joined
27 by a county or counties are located either within or outside
28 the boundaries of the county or counties and in the case of
29 all other authorities are located outside the boundaries of
30 the municipality or municipalities that incorporated or
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1 joined the authority unless either:
2 (i) the governing body of each municipality in which
3 the project will be undertaken has by resolution
4 evidenced its approval; or
5 (ii) in cases where the property acquired is not
6 subject to tax abatement, the authority covenants and
7 agrees with each municipality in which the authority will
8 acquire real property as part of the project either to
9 make annual payments in lieu of real estate taxes and
10 special assessments for amounts and time periods
11 specified in the agreement or to pay annually the amount
12 of real estate taxes and special assessments which would
13 be payable if the real property so acquired were fully
14 taxable and subject to special assessments.
15 (4) Unless otherwise expressly provided by law all
16 projects and bonds of an authority in a second class city or
17 second class county shall be subject to open competitive
18 bidding.
19 * * *
20 (e) [Prohibition] Prohibitions.--
21 (1) An authority may not pledge the credit or taxing
22 power of the Commonwealth or its political subdivision.
23 (2) The obligations of an authority are not obligations
24 of the Commonwealth or its political subdivision.
25 (3) Neither the Commonwealth nor a political subdivision
26 shall be liable for the payment of principal of or interest
27 on obligations
28 (4) An authority in a second class city or second class
29 county may not borrow to meet its own operating expenses.
30 * * *
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1 Section 3. Sections 5610(a) and 5612(b) of Title 53 are
2 amended and the sections are amended by adding subsections to
3 read:
4 § 5610. Governing body.
5 (a) Board.--The powers of each authority shall be exercised
6 by a board composed as follows:
7 (1) If the authority is incorporated by one
8 municipality, the board shall consist of a number of members,
9 not less than five, as enumerated in the articles of
10 incorporation. The governing body of the municipality shall
11 appoint the members of the board, whose terms of office shall
12 commence on the effective date of their appointment. One
13 member shall serve for one year, one for two years, one for
14 three years, one for four years and one for five years
15 commencing with the first Monday in January next succeeding
16 the date of incorporation or amendment. If there are more
17 than five members of the board, their terms shall be
18 staggered in a similar manner for terms of one to five years
19 from the first Monday in January next succeeding. Thereafter,
20 whenever a vacancy has occurred by reason of the expiration
21 of the term of any member, the governing body shall appoint a
22 member of the board for a term of five years from the date of
23 expiration of the prior term to succeed the member whose term
24 has expired.
25 (2) If the authority is incorporated by two or more
26 municipalities, the board shall consist of a number of
27 members at least equal to the number of municipalities
28 incorporating the authority, but in no event less than five.
29 When one or more additional municipalities join an existing
30 authority, each of the joining municipalities shall have
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1 similar membership on the board as the municipalities then
2 members of the authority and the joining municipalities may
3 determine by appropriate resolutions. The members of the
4 board of a joint authority shall each be appointed by the
5 governing body of the incorporating or joining municipality
6 he represents, and their terms of office shall commence on
7 the effective date of their appointment. One member shall
8 serve for one year, one for two years, one for three years,
9 one for four years and one for five years from the first
10 Monday in January next succeeding the date of incorporation,
11 amendment or joinder, and if there are more than five members
12 of the board, their terms shall be staggered in a similar
13 manner for terms of from one to five years commencing with
14 the first Monday in January next succeeding. Thereafter,
15 whenever a vacancy has occurred by reason of the expiration
16 of the term of any member, the governing body of the
17 municipality which has the power of appointment shall appoint
18 a member of the board for a term of five years from the date
19 of expiration of the prior term.
20 (3) In the case of an authority in a second class city
21 or second class county:
22 (i) No member shall be appointed without a majority
23 vote of the municipal governing body.
24 (ii) No member may be an elected official or an
25 employee of the appointing municipality.
26 (iii) Each member must possess qualifications
27 relevant to the purpose of the authority.
28 (iv) The board shall not be composed of entirely one
29 political party.
30 (v) No member can serve on more than one authority
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1 formed by the same municipality.
2 * * *
3 (g) Removal, retention and conflict of interest.--The
4 following provisions shall apply only to an authority in a
5 second class city or second class county:
6 (1) Unless removed or a successor appointed, board
7 members shall stand for retention election as provided in
8 this subsection.
9 (2) A member of the authority appointed under subsection
10 (a) or retained under this section may file a declaration of
11 candidacy for retention election with the Secretary of the
12 Commonwealth on or before the first Monday of January of the
13 year preceding the year in which his term of office expires.
14 If no declaration is filed, a vacancy shall exist upon the
15 expiration of the term of office of the member, to be filled
16 by the municipality in accordance with subsection (a).
17 (3) If a member files a declaration, his name shall be
18 submitted to the electors of the municipality without party
19 designation, as a separate question or in a separate column
20 or line on voting machines, at the municipal election
21 immediately preceding the expiration of the term of office of
22 the members, to determine only the question whether he shall
23 be retained in office.
24 (4) If a majority is against retention, a vacancy shall
25 exist upon the expiration of his term of office, to be filled
26 by appointment under subsection (a). If a majority favors
27 retention, the member shall serve for the regular term of
28 office, unless sooner removed or vacated. At the expiration
29 of each term a member shall be eligible for retention as
30 provided in this section.
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1 (5) No member of the authority or officer or employee of
2 the authority may directly or indirectly be a party to or be
3 interested in any contract or agreement with the authority
4 for any matter, cause or thing if the contract or agreement
5 establishes liability against or indebtedness of the
6 authority. Any contract or agreement made in violation of
7 this subsection is void, and no action may be maintained on
8 the agreement against the authority.
9 (h) Open meetings.--The governing body of an authority in a
10 second class city or second class county shall be construed as
11 an agency for purposes of and as defined under 65 Pa.C.S. § 703
12 (relating to definitions) and its meetings shall be subject to
13 the provisions of 65 Pa.C.S. Ch. 7 (relating to open meetings).
14 § 5612. Money of authority.
15 * * *
16 [(b) Report.--Every authority whose fiscal year ends
17 December 31 shall file on or before July 1 an annual report of
18 its fiscal affairs covering the preceding calendar year with the
19 Department of Community and Economic Development and with the
20 municipality creating the authority on forms prepared and
21 distributed by the Department of Community and Economic
22 Development. Authorities whose fiscal year does not end on
23 December 31 shall file the report within 90 days after the end
24 of their fiscal year. Every authority shall have its books,
25 accounts and records audited annually by a certified public
26 accountant, and a copy of his audit report shall be filed in the
27 authority office for the purpose of public review and in the
28 office of the municipality or municipalities that created the
29 authority. A concise financial statement shall be published
30 annually at least once in a newspaper of general circulation in
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1 the municipality where the principal office of the authority is
2 located. If the publication is not made by the authority, the
3 municipality shall publish such statement at the expense of the
4 authority. If the authority fails to make such an audit, then
5 the controller, auditor or accountant designated by the
6 municipality hereby authorized and empowered from time to time
7 to examine at the expense of the authority the accounts and
8 books of it, including its receipts, disbursements, contracts,
9 leases, sinking funds, investments and any other matters
10 relating to its finances, operation and affairs.]
11 (b) Report.--
12 (1) Except as otherwise provided in paragraph (2):
13 (i) Every authority whose fiscal year ends December
14 31 shall file on or before July 1 an annual report of its
15 fiscal affairs covering the preceding calendar year with
16 the Department of Community and Economic Development and
17 with the municipality creating the authority on forms
18 prepared and distributed by the Department of Community
19 and Economic Development. Authorities whose fiscal year
20 does not end on December 31 shall file the report within
21 90 days after the end of their fiscal year.
22 (ii) Every authority shall have its books, accounts
23 and records audited annually by a certified public
24 accountant, and a copy of his audit report shall be filed
25 in the authority office for the purpose of public review
26 and in the office of the municipality or municipalities
27 that created the authority.
28 (iii) A concise financial statement shall be
29 published annually at least once in a newspaper of
30 general circulation in the municipality where the
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1 principal office of the authority is located.
2 (iv) If the publication is not made by the
3 authority, the municipality shall publish such statement
4 at the expense of the authority. If the authority fails
5 to make such an audit, then the controller, auditor or
6 accountant designated by the municipality is hereby
7 authorized and empowered from time to time to examine at
8 the expense of the authority the accounts and books of
9 it, including its receipts, disbursements, contracts,
10 leases, sinking funds, investments and any other matters
11 relating to its finances, operation and affairs.
12 (2) The following provisions shall apply only to an
13 authority in a city of the second class or county of the
14 second class:
15 (i) Every authority whose fiscal year ends December
16 31 shall file on or before July 1 an annual report of its
17 fiscal affairs covering the preceding calendar year with
18 the Department of Community and Economic Development and
19 with the municipality creating the authority on forms
20 prepared and distributed by the Department of Community
21 and Economic Development. Authorities whose fiscal year
22 does not end on December 31 shall file the report within
23 90 days after the end of their fiscal year.
24 (ii) Every authority shall have its books, accounts
25 and records audited annually in accordance with generally
26 accepted auditing standards by an independent certified
27 public accountant who is not affiliated with the
28 authority, and a copy of his audit report shall be filed
29 in the authority office for the purpose of public review
30 and in the office of the municipality or municipalities
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1 that created the authority and with the Department of
2 Community and Economic Development and the Appropriations
3 Committee of the Senate and the Appropriations Committee
4 of the House of Representatives.
5 (iii) A concise financial statement shall be
6 published annually at least once in a newspaper of
7 general circulation in the municipality where the
8 principal office of the authority is located. If the
9 publication is not made by the authority, the
10 municipality shall publish such statement at the expense
11 of the authority.
12 (iv) If the authority fails to make such an audit,
13 then the controller, auditor or accountant designated by
14 the municipality or the Auditor General are hereby
15 authorized and empowered from time to time to examine at
16 the expense of the authority the accounts and books of
17 it, including its receipts, disbursements, contracts,
18 leases, sinking funds, investments and any other matters
19 relating to its finances, operations and affairs.
20 (v) Every ten years, or sooner if required by the
21 articles of incorporation of the authority, the report
22 shall include an evaluation of the performance of the
23 authority and a recommendation regarding whether the
24 authority should be continued, discontinued or continued
25 with changes to its articles of incorporation and its
26 operating practices.
27 * * *
28 (d) Open records.--The authority in a city of the second
29 class or county of the second class shall be construed as an
30 agency for the purposes of and as defined under the act of June
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1 21, 1957 (P.L.390, No.212), referred to as the Right-to-Know
2 Law, and the books, accounts and records of the authority shall
3 be construed as public records for purposes of and defined under
4 that act and shall be accessible for inspection and duplication
5 by a requester in accordance with that act.
6 Section 4. As to already existing authorities, nothing in
7 this act shall impair or alter existing bonds or contractual
8 agreements. The provisions of this act with regard to the
9 qualifications, selection and retention of members of an
10 authority governing board shall be phased in as each member's
11 term expires or a vacancy occurs.
12 Section 5. This act shall take effect in 60 days.
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