THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY M. K. KELLER, APRIL 25, 2012

REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, APRIL 25, 2012  

AN ACT

Amending the act of August 23, 1967 (P.L.251, No.102), entitled,

as amended, "An act providing for the incorporation as public

instrumentalities of the Commonwealth and as bodies corporate

and politic of industrial and commercial development

authorities for municipalities, counties and townships;

prescribing the rights, powers and duties of such authorities

hereafter incorporated; authorizing such authorities to

acquire, by gift or purchase, to construct, improve and

maintain industrial, specialized, or commercial development

projects including projects for the elimination or prevention

of blight and the control of air and water pollution, and to

borrow money and issue bonds therefor; providing for the

payment of such bonds and giving security therefor, and

prescribing the rights of the holders of such bonds;

authorizing the lease or sale of industrial, specialized, or

commercial development projects to industrial, specialized,

or commercial enterprises; authorizing any county,

municipality or township to transfer or convey to such

authorities, any facilities or property available for

industrial, specialized, or commercial development projects;

exempting the property and securities of such authorities

from taxation; authorizing such authorities to enter into

contracts with and to accept grants from the Federal

Government or any agency thereof; and providing for approval

by the Secretary of Commerce of the proceedings relating to

industrial, specialized, or commercial development projects

of such authorities," further providing for competition in

award of contracts.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 12 of the act of August 23, 1967

(P.L.251, No.102), known as the Economic Development Financing

Law, amended December 17, 1993 (P.L.490, No.74), is amended to

read:

Section 12.  Competition in Award of Contracts.--(a)  All

construction, reconstruction, repairs or work of any nature made

directly by any authority where the entire cost, value or amount

of such construction, reconstruction, repairs or work, including

labor and materials, shall exceed [ten thousand dollars

($10,000)] eighteen thousand five hundred dollars ($18,500),

subject to adjustment under subsection (h), except construction,

reconstruction, repairs or work done by employes of said

authority, or by labor supplied under agreement with any Federal

or State agency, with supplies and materials purchased as

hereinafter provided, shall be done only under contract or

contracts to be entered into by the authority with the lowest

responsible bidder upon proper terms, after due public notice

has been given asking for competitive bids as hereinafter

provided: Provided, however, That where the authority is the

legal title holder to the project, and there exists an agreement

whereby a project user or project applicant will or can acquire

legal title to the said project under the then certain terms and

conditions, contracts for construction, reconstruction, repair,

or work of any nature, or purchase of machinery and equipment,

may be awarded by the project user or project applicant without

regard to the limitations of this section 12: And provided

further, however, That for the purposes of this section 12,

"construction" or "acquisition" shall not include acquisition of

property for project purposes. No contract shall be entered into

between an authority and a contractor for construction of any

project or portion thereof, unless the contractor shall give an

undertaking with a sufficient surety or sureties approved by the

authority, and in an amount fixed by the authority, for the

faithful performance of the contract. All contracts of surety

shall provide among other things that the contractor entering

into a contract with the authority will pay for all materials

furnished and services rendered for the performance of the

contract, and that any person or corporation furnishing such

materials or rendering such services may maintain an action to

recover for the same against the obligor in the undertaking, as

though such person or corporation was named therein, provided

the action is brought within one year after the time the cause

of action accrued.

(b)  All supplies and materials costing [ten thousand dollars

($10,000)], subject to adjustment under subsection (h), eighteen

thousand five hundred dollars ($18,500) or more to be purchased

directly by an authority shall be purchased only after due

advertisement as hereinafter provided. The authority shall

accept the lowest bid or bids, kind, quality and material being

equal, but the authority shall have the right to reject any or

all bids or select a single item from any bid. The provisions as

to bidding shall not apply to the purchase of patented and

manufactured products offered for sale in a noncompetitive

market or solely by a manufacturer's authorized dealer.

(c)  The terms "advertisement" or "due public notice"

wherever used in this section, shall mean a notice published at

least ten days before the award of any contract, in a newspaper

of general circulation published in the municipality where the

authority has its principal office, and if no newspaper is

published therein then by publication in a newspaper in the

county where the authority has its principal office: Provided,

That such notice may be waived where the authority determines an

emergency exists, and such supplies and materials must be

immediately purchased by the said authority.

(d)  No member of the authority or officer or employe thereof

shall, either directly or indirectly, be a party to or be in any

manner interested in any contract or agreement with the

authority for any matter, cause or thing whatsoever by reason

whereof any liability or indebtedness shall in any way be

created against such authority. If any contract or agreement

shall be made in violation of the provisions of this section the

same shall be null and void and no action shall be maintained

thereon against such authority.

(e)  Subject to the aforesaid, any authority may (but without

intending by this provision to limit any powers of such

authority) enter into and carry out such contracts, or establish

or comply with such rules and regulations concerning labor and

materials and other related matters in connection with any

project or portion thereof, as the authority may deem desirable,

or as may be requested by any Federal agency that may assist in

the financing of such project or any part thereof.

(f)  The provisions of this section 12 shall not apply in

respect of the construction of any project or the purchase of

any equipment, materials or supplies which the authority may

have had transferred to it upon completion, by purchase or

otherwise, by a project applicant or project user or any other

person or corporation.

(g)  Notwithstanding any of the foregoing, all construction,

reconstruction, repairs or work of any nature with regard to

publicly owned infrastructure facilities, where the entire cost,

value or amount of such construction, reconstruction, repairs or

work, including labor and materials, shall exceed [ten thousand

dollars ($10,000)] eighteen thousand five hundred dollars

($18,500), subject to adjustment under subsection (h), shall be

done only under contract or contracts to be entered into by the

authority or the owner of the infrastructure facility, with the

lowest responsible bidder upon proper terms, after due public

notice has been given asking for competitive bids as set forth

in this section or other applicable law.

(h)  Adjustments to the base amounts shall be made as

follows:

(1)  The Department of Labor and Industry shall determine the

percentage change in the Consumer Price Index for All Urban

Consumers: All Items (CPI-U) for the United States City Average

as published by the United States Department of Labor, Bureau of

Labor Statistics, for the twelve-month period ending September

30, 2012, and for each successive twelve-month period

thereafter.

(2)  If the department determines that there is no positive

percentage change, then no adjustment to the base amounts shall

occur for the relevant time period.

(3)  (i)  If the department determines that there is a

positive percentage change in the first year that the

determination is made under paragraph (1), the positive

percentage change shall be multiplied by each base amount, and

the products shall be added to the base amounts, respectively,

and the sums shall be preliminary adjusted amounts.

(ii)  The preliminary adjusted amounts shall be rounded to

the nearest one hundred dollars ($100) to determine the final

adjusted base amounts.

(4)  In each successive year in which there is a positive

percentage change in the CPI-U for the United States City

Average, the positive percentage change shall be multiplied by

the most recent preliminary adjusted amounts, and the products

shall be added to the preliminary adjusted amount of the prior

year to calculate the preliminary adjusted amounts for the

current year. The sums thereof shall be rounded to the nearest

one hundred dollars ($100) to determine the new final adjusted

base amounts.

(5)  The determinations and adjustments required under this

subsection shall be made in the period between October 1 and

November 15, 2012, and annually between October 1 and November

15 of each year thereafter.

(6)  The final adjusted base amounts and new final adjusted

base amounts obtained under paragraphs (3) and (4) shall become

effective January 1 for the calendar year following the year in

which the determination required under paragraph (1) is made.

(7)  The department shall publish notice in the Pennsylvania

Bulletin prior to January 1 of each calendar year of the annual

percentage change determined under paragraph (1) and the

unadjusted or final adjusted base amounts determined under

paragraphs (3) and (4) at which competitive bidding is required

for the calendar year beginning the first day of January after

publication of the notice. The notice shall include a written

and illustrative explanation of the calculations performed by

the department in establishing the unadjusted or final adjusted

base amounts under this subsection for the ensuing calendar

year.

(8)  The annual increase in the preliminary adjusted base

amounts obtained under paragraphs (3) and (4) shall not exceed

three percent.

Section 2.  This act shall apply to contracts and purchases

advertised on or after the effective date of this section.

Section 3.  This act shall take effect immediately.