THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY WOZNIAK, ALLOWAY, SOLOBAY AND FERLO, NOVEMBER 10, 2011

REFERRED TO LOCAL GOVERNMENT, NOVEMBER 10, 2011  

AN ACT

Amending the act of February 1, 1966 (1965 P.L.1656, No.581),

entitled "An act concerning boroughs, and revising, amending

and consolidating the law relating to boroughs," providing

for the dissolution of nonviable boroughs; and making

editorial changes.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Article III heading of the act of February 1,

1966 (1965 P.L.1656, No.581), known as The Borough Code, is

amended and the article is amended by adding a subdivision

heading to read:

ARTICLE III

ANNULMENT OF CHARTERS [AND], CHANGE OF CORPORATE NAMES, AND

DISSOLUTION

(a)  Annulment of Charter or Change of Corporate Names

Section 2.  Article III of the act is amended by adding a

subdivision to read:

(b)  Dissolution of Nonviable Boroughs

Section 311.  Definitions.

The following words and phrases when used in this subdivision

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Coordinator."  The coordinator designated for the borough in

accordance with the act of July 10, 1987 (P.L.246, No.47), known

as the Municipalities Financial Recovery Act.

"Department."  The Department of Community and Economic

Development of the Commonwealth.

"Municipalities Financial Recovery Act."  The act of July 10,

1987 (P.L.246, No.47), known as the Municipalities Financial

Recovery Act.

"Township."  A township of the second class.

"Secretary."  The Secretary of Community and Economic

Development.

Section 312.  Petition for dissolution.

(a)  Petition.--Any ten registered electors of a borough that

satisfies the requirements of subsection (b) may present to the

court of common pleas a petition requesting the court to issue a

determination that the borough is no longer viable as an

independent municipal corporation and shall be dissolved, its

charter annulled and its territory to revert to and become a

part of the township from which it was taken, subject to the

township's government and control.

(b)  Conditions.--No borough shall be the subject of a

petition under subsection (a) unless:

(1)  the borough is distressed in accordance with the

Municipalities Financial Recovery Act as of the date of the

petition and has remained distressed for ten years prior to

the date of the petition;

(2)  the borough has lost 50% or more of its population

over the course of five consecutive decennial censuses

immediately preceding the date of the petition; and

(3)  the territory comprising the borough was formerly

contained within a township.

Section 313.  Filing of petition, notice and exceptions.

(a)  Filing and notice.--Upon presentation to the court, the

petition shall be filed with the clerk of courts and notice of

the filing shall immediately thereafter be given in a newspaper

of general circulation in the county, once a week for four

consecutive weeks, and once in the county legal journal, if any,

during the four-week period. The notice shall provide the date

the petition was filed and specify that exceptions to the

petition may be filed within 45 days of the date of the

petition. Notice shall also be provided by certified mail,

return receipt requested, to the following:

(1)  The governing body of the borough.

(2)  The governing body of the township into which the

borough territory would be absorbed.

(3)  The coordinator.

(4)  The secretary.

(b)  Responsibility of petitioners.--Notice in accordance

with this section and all costs related thereto shall be

provided by the petitioners.

(c)  Exceptions.--Exceptions to the petition may be filed by

any of the following:

(1)  A resident of the borough.

(2)  The governing body of the township into which the

territory of the borough would be absorbed.

(3)  Any creditor or bondholder of the borough.

(4)  Any collective bargaining unit or contractor of the

borough.

Section 314.  Hearing and notice.

(a)  Hearing.--No later than 60 days after the date of the

filing of the petition, the court shall conduct a hearing on the

petition and exceptions. Notice of the hearing shall be provided

by the court to those receiving notice under section 313(a) and

to all other parties that have filed exceptions in accordance

with section 313(c).

(b)  Proceedings.--The petitioners and those receiving notice

under this section, with the exception of the coordinator, shall

be parties to the proceedings, and shall be entitled to present

testimony or other evidence relevant to the nonviability of the

borough or relevant to exceptions timely filed, provided that

the court, in its discretion, may consolidate testimony related

to similar exceptions. The coordinator, or another designee of

the secretary, shall testify to the progress of the borough

under the recovery plan in accordance with the Municipalities

Financial Recovery Act and render an opinion regarding the

viability of the borough. The court may receive additional

evidence relevant to the matter, including, but not limited to,

evidence relating to:

(1)  The effect of dissolution on the township into which

the borough territory would be absorbed.

(2)  Additional plans, proceedings or strategies that

could ensure that the borough remain viable.

(3)  The effect of the dissolution on any bonds, other

obligations or agreements of the borough.

(c)  Additional evidence.--If the court determines that there

is a need for additional investigation, it may request the

parties or the coordinator to provide such additional evidence

as may be necessary for a decree in accordance with section 315.

(d)  Costs and fees.--Court costs and filing fees associated

with proceedings under this subdivision shall be paid by the

petitioners subject to reimbursement in accordance with section

318.

Section 315.  Decree.

(a)  Issuance.--The court shall issue a decree granting the

petition unless it shall find, by clear and convincing evidence,

that:

(1)  the borough should continue to exist as a separate

municipal corporation because of a reasonable expectation

that the borough is or will become viable in accordance with

the current recovery plan or a reasonable alternative; or

(2)  the dissolution of the borough will seriously

jeopardize the fiscal viability of the township into which

the borough territory would be absorbed.

(b)  Grant of petition.--A decree granting the petition shall

be filed with the recorder of deeds, the department, the

Department of Transportation and the planning commission of the

county or counties within which the township lies. The decree

shall specify a date of transition no later than 90 days

following the date of the decree.

(c)  Denial of petition.--A decree denying the petition shall

be filed with the recorder of deeds. No petition requesting the

dissolution of the borough that is the subject of the decree may

be brought again within a period of two years of the date of the

decree.

(d)  Termination of status and notice.--Upon receipt of the

decree by the department, the secretary shall terminate the

status of the borough as distressed pursuant to section 253 of

the Municipalities Financial Recovery Act. The secretary shall

notify all creditors of the borough that the borough has been

dissolved, and the township will assume all liabilities of the

borough upon the date of transition.

Section 316.  Existing government preserved temporarily and

transition.

(a)  Transition.--The borough shall continue to be governed

as before the dissolution until the date of transition specified

in the decree, at which time the government of the borough shall

cease and terminate, its charter shall be annulled and its

territory shall revert to and become a part of the township from

which it was taken, subject to the township's government and

control. The governing bodies of the borough and the township

shall cooperate in assuring transition by the date specified in

the decree. Between the filing of the decree and the date of

transition, the borough shall not enact any ordinance, enter

into any new contract or assume any new debt unless the action

is necessary for transition and approved by the governing body

of the township. Upon transition:

(1)  The property and assets of the borough, including

all uncollected taxes and liens, may be converted into cash

by the township supervisors solely for the payment of the

outstanding indebtedness of the borough, but any moneys not

needed for this purpose shall revert to the township.

Township taxes on persons residing or employed in, and

property contained within, that portion of the township

formerly included within the limits of the borough may be

reserved by the township to be used exclusively for the

payment of outstanding indebtedness of the borough not

otherwise paid as provided in this paragraph.

(2)  The township shall be the successor to the title to

all property, all obligations, liabilities, agreements,

grants and privileges of the borough existing or accruing

immediately prior to the date of transition. The title to

real estate vested in the township shall not revert or be in

any way impaired by reason of the dissolution of the borough.

Nothing in this subdivision shall be construed as authorizing

the impairment of any contractual rights existing prior to

the date of transition.

(3)  The persons and property within that portion of the

township formerly included within the limits of the borough

shall be subject to the ordinances, codes, regulations and

rules of the township, provided that any lot, structure or

use of property that was lawful prior to transition shall be

considered nonconforming for any township ordinance enacted

in accordance with the act of July 31, 1968 (P.L.805,

No.247), known as the Pennsylvania Municipalities Planning

Code.

(b)  Employees.--Subsequent to the date of transition, the

township may, in accordance with existing contracts or

arbitration award provisions and consistent with applicable

laws, reduce the number of uniformed and nonuniformed employees

to avoid overstaffing and duplication of positions in the

township. If the township determines in its discretion that it

is necessary to increase the number of uniformed or nonuniformed

employees, employees shall be reinstated in the order of their

seniority if they had been previously furloughed.

(c)  Collective bargaining provisions.--Nothing in this

section shall prohibit a township from exercising its powers and

responsibilities pursuant to provisions of law related to

collective bargaining, including, but not limited to, the act of

June 24, 1968 (P.L.237, No.111), referred to as the Policemen

and Firemen Collective Bargaining Act, and the act of July 23,

1970 (P.L.563, No.195), known as the Public Employe Relations

Act.

Section 317.  Priority in economic assistance and financial aid.

Any township that is the subject of a decree under this

subdivision shall:

(1)  Be considered an eligible municipality for purposes

of economic assistance as that term is used in Subchapter E

of Chapter 2 of the Municipalities Financial Recovery Act for

a period not to exceed five years from the date of the

decree. Upon receipt of the decree as provided in section

315, the secretary shall notify all Commonwealth agencies of

the township's priority status.

(2)  Be eligible for grants and loans pursuant to Chapter

3 of the Municipalities Financial Recovery Act without

establishing that an emergency exists. However, any funds

received shall be used exclusively for costs associated with

the process of transition and shall be subject to the

limitations provided in section 303 of the Municipalities

Financial Recovery Act.

Section 318.  Court costs and filing fees.

The granting of a petition shall entitle the petitioners to

reimbursement for filing fees and court costs paid in

proceedings pursuant to this subdivision. In no event shall

attorney fees be eligible for reimbursement. Notwithstanding any

provision of law to the contrary, the department shall provide

reimbursement from the Municipalities Financial Recovery

Revolving Aid Fund created under section 301(c) of the

Municipalities Financial Recovery Act.

Section 3.  This act shall take effect immediately.