THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY BOSCOLA, BROWNE, RAFFERTY, M. WHITE, ORIE, WAUGH, FOLMER, MENSCH, EARLL AND WARD, MARCH 29, 2010

REFERRED TO FINANCE, MARCH 29, 2010  

AN ACT

Amending Title 53 (Municipalities Generally) of the Pennsylvania

Consolidated Statutes, in municipal authorities, further

providing for purposes and powers; in indebtedness and

borrowing, providing for financial advisors and independent

financial advisors; and, in interest rate risk and interest

cost management, further providing for qualified interest

rate management agreements.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 5607(d)(13) of Title 53 of the

Pennsylvania Consolidated Statutes is amended to read:

§ 5607.  Purposes and powers.

* * *

(d)  Powers.--Every authority may exercise all powers

necessary or convenient for the carrying out of the purposes set

forth in this section, including, but without limiting the

generality of the foregoing, the following rights and powers:

* * *

(13)  (i)  To make contracts of every name and nature and

to execute all instruments necessary or convenient for

the carrying on of its business.

(ii)  Notwithstanding subparagraph (i), after the

effective date of this subparagraph, no authority may

enter into a qualified interest rate management agreement

as defined in section 8002 (relating to definitions).

* * *

Section 2.  Title 53 is amended by adding a section to read:

§ 8010.  Financial advisors and independent financial advisors.

(a)  Competitive selection process.--If a local government

unit decides to retain, as authorized by law, the services of a

financial advisor, it may do so only through a competitive

selection process.

(b)  Quarterly evaluation.--A local government unit shall

evaluate the quality, cost and independence of the services

provided by its financial advisor not less than quarterly and

report the results of the evaluation to the public.

(c)  Applicability.--The requirements of subsections (a) and

(b) shall also apply to an independent financial advisor

retained under Subchapter F of Chapter 82 (relating to interest

rate risk and interest cost management).

Section 3.  Section 8281(a) of Title 53 is amended to read:

§ 8281.  Qualified interest rate management agreements.

(a)  General rule.--

(1)  Except as set forth in [paragraph] paragraphs (4)

and (5), notwithstanding any other law to the contrary, a

local government unit may negotiate and enter into qualified

interest rate management agreements consistent with the

provisions of this subchapter.

(2)  The local government unit must authorize and award

by resolution each qualified interest rate management

agreement or any confirmation of a transaction. The

resolution is subject to section 8003(a) and (b) (relating to

advertisement and effectiveness of ordinances) but may be

valid and effective for all purposes immediately upon

adoption or as otherwise provided in the resolution.

(3)  A local government unit has the power to contract

for insurance covering the risks of nonpayment of amounts due

under qualified interest rate management agreements.

(4)  The authority granted in this subchapter shall not

apply to any local government unit which has been declared

distressed by the Department of Community and Economic

Development.

(5)  After the effective date of this paragraph, no local

government unit may negotiate or enter into a qualified

interest rate management agreement.

* * *

Section 4.  Nothing in this act shall be construed to affect

any qualified interest rate management agreement entered into by

a local government unit prior to the effective date of this

section.

Section 5.  This act shall take effect immediately.