PRINTER'S NO. 626
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 20070S0581B0626 - 2 -
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. 20070S0581B0626 - 6 -
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 20070S0581B0626 - 7 -
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. B12L53JS/20070S0581B0626 - 10 -