THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY CREIGHTON, CALTAGIRONE, CLYMER, DAVIS, GEIST, GIBBONS, GINGRICH, GROVE, HELM, KNOWLES, MILLER, MOUL, MUSTIO, DAVIDSON AND MALONEY, JUNE 23, 2011

AS REPORTED FROM COMMITTEE ON LOCAL GOVERNMENT, HOUSE OF REPRESENTATIVES, AS AMENDED, JUNE 19, 2012   

AN ACT

Amending Title 53 (Municipalities Generally) of the Pennsylvania

Consolidated Statutes, in municipal authorities, further

providing for purposes and powers.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 5607(d)(23) and (30) of Title 53 of the

Pennsylvania Consolidated Statutes are amended to read:

§ 5607.  Purposes and powers.

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(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:

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(23)  To require the posting of financial security to

insure the completion in accordance with the approved plat

and with the rules and regulations of the authority of any

water mains or sanitary sewer lines, or both, and related

apparatus and facilities required to be installed by or on

behalf of a developer under an approved land development or

subdivision plat as these terms are defined under the act of

July 31, 1968 (P.L.805, No.247), known as the Pennsylvania

Municipalities Planning Code. If financial security is

required by the authority and without limitation as to other

types of financial security which the authority may approve,

which approval shall not be unreasonably withheld, federally

chartered or Commonwealth-chartered lending institution

irrevocable letters of credit and restrictive or escrow

accounts in these lending institutions shall be deemed

acceptable financial security. Financial security shall be

posted with a bonding company or federally chartered or

Commonwealth-chartered lending institution chosen by the

party posting the financial security if the bonding company

or lending institution is authorized to conduct business

within this Commonwealth. The bond or other security shall

provide for and secure to the authority the completion of

required improvements within one year from the date of

posting of the security. The amount of financial security

shall be equal to 110% of the cost of the required

improvements for which financial security is to be posted.

The cost of required improvements shall be established by

submitting to the authority a bona fide bid from a contractor

chosen by the party posting the financial security. In the

absence of a bona fide bid, the cost shall be established by

an estimate prepared by the authority's engineer. If the

party posting the financial security requires more than one

year from the date of posting the financial security to

complete the required improvements, the amount of financial

security may be increased by an additional 10% for each one-

year period beyond the first anniversary date from the

initial posting date or to 110% of the cost of completing the

required improvements as reestablished on or about the

expiration of the preceding one-year period by using the

above bidding procedure. As the work of installing the

required improvements proceeds, the party posting the

financial security may request the authority to release or

authorize the release of, from time to time, portions of the

financial security necessary to pay the contractor performing

the work. Release requests shall be in writing addressed to

the authority, and the authority shall have 45 days after

receiving a request to ascertain from the authority engineer,

certified in writing, that the portion of the work has been

completed in accordance with the approved plat. Upon

receiving written certification, the authority shall

authorize release by the bonding company or lending

institution of an amount estimated by the authority engineer

to fairly represent the value of the improvements completed.

If the authority fails to act within the 45-day period, it

shall be deemed to have approved the requested release of

funds. [The authority may, prior to final release at the time

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of completion and certification by its engineer, [require

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retention of] retain 10% of the [estimated cost of] original

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amount of the posted financial security for the 

improvements.] If the authority accepts dedication of all or

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some of the required improvements following completion, it

may require the posting of financial security to secure

structural integrity of the dedicated improvements as well as

the functioning of the improvements in accordance with the

design and specifications as depicted on the final plat and

the authority's rules and regulations. This financial

security shall expire not later than 18 months from the date

of acceptance of dedication and shall be of the same type as

set forth in this paragraph with regard to that which is

required for installation of the improvements, except that it

shall not exceed 15% of the actual cost of installation of

the improvements. Any inconsistent ordinance, resolution or

statute is null and void.

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(30)  Where a sewer or water system of an authority is to

be extended at the expense of the owner of properties or

where the authority otherwise would construct customer

facilities referred to in paragraph (24), other than water

meter installation, a property owner shall have the right to

construct the extension or install the customer facilities

himself or through a subcontractor approved by the authority,

which approval shall not be unreasonably withheld. The

authority shall have the right, at its option, to perform the

construction itself only if the authority provides the

extension or customer facilities at a lower cost and within

the same timetable specified or proposed by the property

owner or his approved subcontractor. Construction by the

property owner shall be in accordance with an agreement for

the extension of the authority's system and plans and

specifications approved by the authority and shall be

undertaken only pursuant to the existing regulations,

requirements, rules and standards of the authority applicable

to such construction. Construction shall be subject to

inspection by an inspector authorized to approve similar

construction and employed by the authority during

construction. When a main is to be extended at the expense of

the owner of properties, the property owner may be required

to deposit with the authority, in advance of construction,

the authority's estimated reasonable and necessary cost of

reviewing plans, construction inspections, administrative,

legal and engineering services. The authority may require

that construction shall not commence until the property owner

has posted appropriate financial security in accordance with

paragraph (23). The authority may require the property owner

to reimburse it for reasonable and necessary expenses it

incurred as a result of the extension. If an independent firm

is employed for engineering review of the plans and the

inspection of improvements, reimbursement for its services

shall be reasonable and in accordance with the ordinary and

customary fees charged by the independent firm for work

performed for similar services in the community. If the

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authority requires the property owner to reimburse it for

fees for engineering review of the plans and the inspection

of the improvements, the authority shall designate by

resolution a minimum of three approved engineers from

different firms who are readily available to provide services

in the municipality, and the property owner may select an

engineer from this list who shall be the authority's engineer

for reviewing the plans or inspecting the improvements for

that particular project. If the property owner selects an

engineer, only the review and inspection fees by the selected

engineer may be charged to the property owner. The fees shall

not exceed the rate or cost charged by the independent firm

to the authority when fees are not reimbursed or otherwise

imposed on applicants. Upon completion of construction, the

property owner shall dedicate and the authority shall accept

the extension of the authority's system if dedication of

facilities and the installation complies with the plans,

specifications, regulations of the authority and the

agreement. An authority may provide in its regulations those

facilities which, having been constructed at the expense of

the owner of properties, the authority will require to be

dedicated and which facility or facilities the authority will

accept as a part of its system.

(i)  In the event the property owner disputes the

amount of any billing in connection with the review of

plans, construction inspections, administrative, legal

and engineering services, the property owner shall,

within [20 working] 180 60 days of the date of billing,

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notify the authority and the authority's professional

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consultant that the billing is disputed as excessive,

unreasonable or unnecessary, in which case the authority

shall not delay or disapprove any application or any

approval or permit related to the extension or facilities

due to the property owner's dispute over the disputed

billings unless the property owner has failed to make

payment in accordance with the decision rendered under

clause (iii) within [30] 180 60 days after the mailing

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date of such decision.

(ii)  If, within [30] 180 60 days from the date of

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billing, the [authority] professional consultant and the

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property owner cannot agree on the amount of billings

which are reasonable and necessary, the property owner  

[and authority] shall have the right to request the

appointment of another professional consultant to serve

as arbitrator. The property owner and the professional

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consultant authority whose fees are being challenged 

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shall, by mutual agreement, appoint a professional of the

same profession or discipline licensed in Pennsylvania to

review the billings and make a determination as to the

amount of billings which is reasonable and necessary.

(iii)  The professional appointed as arbitrator under

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clause (ii) shall hear evidence and review the

documentation as the professional in his or her sole

opinion deems necessary and shall render a decision

within [60] 50 days of the [billing] date of appointment.

[The property owner shall be required to pay the entire

amount determined in the decision immediately.] Based

upon the decision of the arbitrator, the property owner, 

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professional consultant or authority shall be required to

pay any amounts necessary to implement the decision

within 60 days. In the event the authority property owner 

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has paid the authority or retained professional

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consultant an amount in excess of the amount determined

to be reasonable and necessary, the authority or retained 

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professional consultant shall within 60 days reimburse

the excess payment.

(iv)  In the event that the authority and property

owner cannot agree upon the professional to be appointed

within [30] 20 days of the [billing date] request for

appointment of an arbitrator, the president judge of the

court of common pleas of the judicial district in which

the municipality is located, or if at the time there is

no president judge, the senior active judge then sitting

upon application of either party shall appoint a

professional, who shall be neither the authority engineer

nor any professional who has been retained by or

performed services for the authority or the property

owner within the preceding five years.

(v)  The fee of the [appointed professional for

determining the reasonable and necessary expenses]

arbitrator shall be paid by the [applicant] property

owner if the [amount of payment required in the decision

is equal to or greater than the original bill] disputed

fee is sustained by the arbitrator. If the amount of

payment required in the decision is less than the

original bill by $2,500 or more, the [authority] party

charging the disputed fee shall pay the fee of the

[professional] arbitrator. If the amount of the payment

required in the decision is less than the original bill

by $2,499 or less, the [authority] party charging the

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disputed fee and the property owner shall each pay one-

half of the fee of the [appointed professional]

arbitrator.

(vi)  In the event that the disputed fees have been

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paid and the arbitrator finds that the disputed fees are

unreasonable or excessive by more than $10,000, the

arbitrator shall:

(A)  award the amount of the fees found to be

unreasonable or excessive to the party that paid the

disputed fee; and

(B)  impose a surcharge of 4% of the amount found

as unreasonable or excessive to be paid to the party

that paid the disputed fee.

(vii)  An authority or property owner shall have 100

days after paying a fee to dispute any fee charged as

being unreasonable or excessive.

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Section 2.  This act shall take effect in 60 days.