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                                                       PRINTER'S NO. 626

THE GENERAL ASSEMBLY OF PENNSYLVANIA


SENATE BILL

No. 581 Session of 2007


        INTRODUCED BY ORIE, FONTANA, PIPPY, WOZNIAK, WAUGH, BOSCOLA AND
           RAFFERTY, MARCH 20, 2007

        REFERRED TO LOCAL GOVERNMENT, MARCH 20, 2007

                                     AN ACT

     1  Amending Title 53 (Municipalities Generally) of the Pennsylvania
     2     Consolidated Statutes, further providing, in relation to
     3     municipal authorities, for method of incorporation, for
     4     limitations, for prohibition, 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(c) of Title 53 of the Pennsylvania
     9  Consolidated Statutes is amended to read:
    10  § 5603.  Method of incorporation.
    11     * * *
    12     (c)  Filing articles of incorporation.--On or before the day
    13  specified in the notice required under subsection (b), the
    14  municipal authorities shall file with the Secretary of the
    15  Commonwealth articles of incorporation together with proof of
    16  publication of the notice required under subsection (b). The
    17  articles of incorporation shall set forth:
    18         (1)  The name of the authority.
    19         (2)  A statement that the authority is formed under this

     1     chapter.
     2         (3)  A statement whether any other authority has been
     3     organized under this chapter or under the former act of June
     4     28, 1935 (P.L.463, No.191), entitled "An act providing for
     5     the incorporation, as bodies corporate and politic, of
     6     ["Authorities"] 'Authorities' for municipalities, counties,
     7     and townships; defining the same; prescribing the rights,
     8     powers, and duties of such Authorities; authorizing such
     9     Authorities to acquire, construct, improve, maintain, and
    10     operate projects, and to borrow money and issue bonds
    11     therefor; providing for the payment of such bonds, and
    12     prescribing the rights of the holders thereof; conferring the
    13     right of eminent domain on such Authorities; authorizing such
    14     Authorities to enter into contracts with and to accept grants
    15     from the Federal Government or any agency thereof; and for
    16     other purposes," or the former act of May 2, 1945 (P.L.382,
    17     No.164), known as the Municipality Authorities Act of 1945,
    18     and is in existence in or for the incorporating municipality
    19     or municipalities. If any one or more of the municipalities
    20     have already joined with other municipalities not composing
    21     the same group in organizing a joint authority, the
    22     application shall set forth the name of that authority
    23     together with the names of the municipalities joining in it.
    24         (4)  The name of the incorporating municipality or
    25     municipalities together with the names and addresses of its
    26     municipal authorities.
    27         (5)  The names, addresses and term of office of the first
    28     members of the board of the authority.
    29         (6)  In the case of authorities created for the purpose
    30     of making business improvements or providing administrative
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     1     services, if appropriate, a statement that the municipality
     2     or municipalities have retained the right which exists under
     3     this chapter to approve any plan of the authority.
     4         (7)  The debt limitations which shall apply to the
     5     authority.
     6         (8)  The term of existence of the authority prior to
     7     which the incorporating municipalities must reenact an
     8     ordinance to continue its existence.
     9         [(7)] (9)  Any other matter which shall be determined in
    10     accordance with the provisions of this chapter.
    11     * * *
    12     Section 2.  Section 5607(b) and (e) of Title 53 are amended
    13  to read:
    14  § 5607.  Purposes and powers.
    15     * * *
    16     (b)  Limitations.--This section is subject to the following
    17  limitations:
    18         (1)  An authority created by a school district or school
    19     districts shall have the power only to acquire, hold,
    20     construct, improve, maintain, operate and lease public school
    21     buildings and other school projects acquired, constructed or
    22     improved for public school purposes.
    23         (2)  The purpose and intent of this chapter being to
    24     benefit the people of the Commonwealth by, among other
    25     things, increasing their commerce, health, safety and
    26     prosperity and not to unnecessarily burden or interfere with
    27     existing business by the establishment of competitive
    28     enterprises, none of the powers granted by this chapter shall
    29     be exercised in the construction, financing, improvement,
    30     maintenance, extension or operation of any project or
    20070S0581B0626                  - 3 -     

     1     projects or providing financing for insurance reserves which
     2     in whole or in part shall duplicate or compete with existing
     3     enterprises serving substantially the same purposes. This
     4     limitation shall not apply to the exercise of the powers
     5     granted under this section:
     6             (i)  for facilities and equipment for the collection,
     7         removal or disposal of ashes, garbage, rubbish and other
     8         refuse materials by incineration, landfill or other
     9         methods if each municipality organizing or intending to
    10         use the facilities of an authority having such powers
    11         shall declare by resolution or ordinance that it is
    12         desirable for the health and safety of the people of such
    13         municipality that it use the facilities of the authority
    14         and state if any contract between such municipality and
    15         any other person, firm or corporation for the collection,
    16         removal or disposal of ashes, garbage, rubbish and other
    17         refuse material has by its terms expired or is terminable
    18         at the option of the municipality or will expire within
    19         six months from the date such ordinance becomes
    20         effective;
    21             (ii)  for industrial development projects if the
    22         authority does not develop industrial projects which will
    23         compete with existing industries;
    24             (iii)  for authorities created for the purpose of
    25         providing business improvements and administrative
    26         services if each municipality organizing an authority for
    27         such a project shall declare by resolution or ordinance
    28         that it is desirable for the entire local government unit
    29         to improve the business district;
    30             (iv)  to hospital projects or health centers to be
    20070S0581B0626                  - 4 -     

     1         leased to or financed with loans to public hospitals,
     2         nonprofit corporation health centers or nonprofit
     3         hospital corporations serving the public or to school
     4         building projects and facilities to be leased to or
     5         financed with loans to private, nonprofit, nonsectarian
     6         secondary schools, colleges and universities, State-
     7         related universities and community colleges or to
     8         facilities, as limited under the provisions of this
     9         section, to produce steam or to generate electric power
    10         if each municipality organizing an authority for such a
    11         project shall declare by resolution or ordinance that it
    12         is desirable for the health, safety and welfare of the
    13         people in the area served by such facilities to have such
    14         facilities provided by or financed through an authority;
    15             (v)  to provide financing for insurance reserves if
    16         each municipality or authority intending to use any
    17         proceeds thereof shall declare by resolution or ordinance
    18         that it is desirable for the health, safety and welfare
    19         of the people in such local government unit or served by
    20         such authority; or
    21             (vi)  to projects for financing working capital.
    22         (3)  It is the intent of this chapter in specifying and
    23     defining the authorized purposes and projects of an authority
    24     to permit the authority to benefit the people of this
    25     Commonwealth by, among other things, increasing their
    26     commerce, health, safety and prosperity while not
    27     unnecessarily burdening or interfering with any municipality
    28     which has not incorporated or joined that authority.
    29     Therefore, notwithstanding any other provisions of this
    30     chapter, an authority shall not have as its purpose and shall
    20070S0581B0626                  - 5 -     

     1     not undertake as a project solely for revenue-producing
     2     purposes the acquiring of buildings, facilities or tracts of
     3     land which in the case of an authority incorporated or joined
     4     by a county or counties are located either within or outside
     5     the boundaries of the county or counties and in the case of
     6     all other authorities are located outside the boundaries of
     7     the municipality or municipalities that incorporated or
     8     joined the authority unless either:
     9             (i)  the governing body of each municipality in which
    10         the project will be undertaken has by resolution
    11         evidenced its approval; or
    12             (ii)  in cases where the property acquired is not
    13         subject to tax abatement, the authority covenants and
    14         agrees with each municipality in which the authority will
    15         acquire real property as part of the project either to
    16         make annual payments in lieu of real estate taxes and
    17         special assessments for amounts and time periods
    18         specified in the agreement or to pay annually the amount
    19         of real estate taxes and special assessments which would
    20         be payable if the real property so acquired were fully
    21         taxable and subject to special assessments.
    22         (4)  Unless otherwise expressly provided by law, all
    23     projects and bonds of an authority shall be subject to open
    24     competitive bidding.
    25     * * *
    26     (e)  [Prohibition] Prohibitions.--
    27         (1)  An authority may not pledge the credit or taxing
    28     power of the Commonwealth or its political subdivision.
    29         (2)  The obligations of an authority are not obligations
    30     of the Commonwealth or its political subdivision.
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     1         (3)  Neither the Commonwealth nor a political subdivision
     2     shall be liable for the payment of principal of or interest
     3     on obligations of an authority.
     4         (4)  No authority may borrow to meet its own operating
     5     expenses.
     6     * * *
     7     Section 3.  Section 5610(a) of Title 53 is amended and the
     8  section is amended by adding subsections to read:
     9  § 5610.  Governing body.
    10     (a)  Board.--The powers of each authority shall be exercised
    11  by a board composed as follows:
    12         (1)  If the authority is incorporated by one
    13     municipality, the board shall consist of a number of members,
    14     not less than five, as enumerated in the articles of
    15     incorporation. The governing body of the municipality shall
    16     appoint the members of the board, whose terms of office shall
    17     commence on the effective date of their appointment. One
    18     member shall serve for one year, one for two years, one for
    19     three years, one for four years and one for five years
    20     commencing with the first Monday in January next succeeding
    21     the date of incorporation or amendment. If there are more
    22     than five members of the board, their terms shall be
    23     staggered in a similar manner for terms of one to five years
    24     from the first Monday in January next succeeding. Thereafter,
    25     whenever a vacancy has occurred by reason of the expiration
    26     of the term of any member, the governing body shall appoint a
    27     member of the board for a term of five years from the date of
    28     expiration of the prior term to succeed the member whose term
    29     has expired.
    30         (2)  If the authority is incorporated by two or more
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     1     municipalities, the board shall consist of a number of
     2     members at least equal to the number of municipalities
     3     incorporating the authority, but in no event less than five.
     4     When one or more additional municipalities join an existing
     5     authority, each of the joining municipalities shall have
     6     similar membership on the board as the municipalities then
     7     members of the authority and the joining municipalities may
     8     determine by appropriate resolutions. The members of the
     9     board of a joint authority shall each be appointed by the
    10     governing body of the incorporating or joining municipality
    11     he represents, and their terms of office shall commence on
    12     the effective date of their appointment. One member shall
    13     serve for one year, one for two years, one for three years,
    14     one for four years and one for five years from the first
    15     Monday in January next succeeding the date of incorporation,
    16     amendment or joinder, and if there are more than five members
    17     of the board, their terms shall be staggered in a similar
    18     manner for terms of from one to five years commencing with
    19     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 of the
    22     municipality which has the power of appointment shall appoint
    23     a member of the board for a term of five years from the date
    24     of expiration of the prior term.
    25         (3)  Prohibitions on membership:
    26             (i)  No member shall be appointed without a majority
    27         vote of the municipal governing body.
    28             (ii)  No member may be an elected official or an
    29         employee of the appointing municipality.
    30             (iii)  Each member must possess qualifications
    20070S0581B0626                  - 8 -     

     1         relevant to the purpose of the authority.
     2             (iv)  The board shall not be composed of entirely one
     3         political party.
     4             (v)  No member can serve on more than one authority
     5         formed by the same municipality.
     6     * * *
     7     (g)  Conflict of interest.--No member of the authority or
     8  officer or employee of the authority may directly or indirectly
     9  be a party to or be interested in any contract or agreement with
    10  the authority for any matter, cause or thing if the contract or
    11  agreement establishes liability against or indebtedness of the
    12  authority. Any contract or agreement made in violation of this
    13  subsection is void, and no action may be maintained on the
    14  agreement against the authority.
    15     (h)  Open meetings.--The governing body of an authority shall
    16  be construed as an agency for purposes of and as defined under
    17  65 Pa.C.S. § 703 (relating to definitions), and its meetings
    18  shall be subject to the provisions of 65 Pa.C.S. Ch. 7 (relating
    19  to open meetings).
    20     Section 4.  Section 5612 of Title 53 is amended by adding a
    21  subsection to read:
    22  § 5612.  Money of authority.
    23     * * *
    24     (d)  Open records.--An authority shall be construed as an
    25  agency for the purposes of and as defined under the act of June
    26  21, 1957 (P.L.390, No.212), referred to as the Right-to-Know
    27  Law, and the books, accounts and records of the authority shall
    28  be construed as public records for purposes of and as defined
    29  under that act and shall be accessible for inspection and
    30  duplication by a requester in accordance with that act.
    20070S0581B0626                  - 9 -     

     1     Section 5.  As to already existing authorities, nothing in
     2  this act shall impair or alter existing bonds or contractual
     3  agreements. The provisions of this act with regard to the
     4  qualifications of members of an authority governing board shall
     5  be phased in as each member's term expires or a vacancy occurs.
     6     Section 6.  This act shall take effect in 60 days.
















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