Regular Session 2015-2016 House Bill 1487 P.N. 2104

PRINTER'S NO. 2104

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1487

Session of

2015

INTRODUCED BY QUINN, DEAN, HEFFLEY AND DUSH, AUGUST 13, 2015

REFERRED TO COMMITTEE ON FINANCE, AUGUST 13, 2015

AN ACT

Amending the act of April 9, 1929 (P.L.343, No.176), entitled,

as amended, "An act relating to the finances of the State

government; providing for the settlement, assessment,

collection, and lien of taxes, bonus, and all other accounts

due the Commonwealth, the collection and recovery of fees and

other money or property due or belonging to the Commonwealth,

or any agency thereof, including escheated property and the

proceeds of its sale, the custody and disbursement or other

disposition of funds and securities belonging to or in the

possession of the Commonwealth, and the settlement of claims

against the Commonwealth, the resettlement of accounts and

appeals to the courts, refunds of moneys erroneously paid to

the Commonwealth, auditing the accounts of the Commonwealth

and all agencies thereof, of all public officers collecting

moneys payable to the Commonwealth, or any agency thereof,

and all receipts of appropriations from the Commonwealth,

authorizing the Commonwealth to issue tax anticipation notes

to defray current expenses, implementing the provisions of

section 7(a) of Article VIII of the Constitution of

Pennsylvania authorizing and restricting the incurring of

certain debt and imposing penalties; affecting every

department, board, commission, and officer of the State

government, every political subdivision of the State, and

certain officers of such subdivisions, every person,

association, and corporation required to pay, assess, or

collect taxes, or to make returns or reports under the laws

imposing taxes for State purposes, or to pay license fees or

other moneys to the Commonwealth, or any agency thereof,

every State depository and every debtor or creditor of the

Commonwealth," in procedure for the disbursement of money

from the State Treasury, providing for payments to political

subdivisions due to budget impasse and for investments

through line of credit to political subdivisions due to

budget impasse.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The act of April 9, 1929 (P.L.343, No.176), known

as The Fiscal Code, is amended by adding sections to read:

Section 1506.1. Payments to Political Subdivisions Due to

Budget Impasse.--(a) When the Commonwealth has not enacted a

general appropriation act, which has been passed by the General

Assembly and signed by the Governor, on or before the beginning

of the State fiscal year, a budget impasse shall be deemed to

have occurred. A budget impasse concludes upon the passage by

the General Assembly and the signing by the Governor of a

general appropriation act for that fiscal year.

(b) If a budget impasse does not conclude within thirty

days, each political subdivision shall be entitled to be

reimbursed from the Commonwealth for all or a portion of

interest payments associated with any short-term debt incurred

by the political subdivision necessary to prevent interruption

of State-authorized program service delivery during a period of

budget impasse that does not conclude within thirty days. In no

case shall interest payment reimbursements be greater than a

rate of twenty basis points over the rate set by the Board of

Finance and Revenue for Commonwealth depositories pursuant to

section 505 and that is in effect at the time the short-term

loan was incurred.

(b), each political subdivision shall be entitled to recover all

or a portion of its net loss incurred as a consequence of any

sale or liquidation of investment assets necessary to prevent

interruption of State-authorized program service delivery during

a period of budget impasse that does not conclude within thirty

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days. In no case shall net loss reimbursements be greater than a

rate of twenty basis points over the rate set by the Board of

Finance and Revenue for Commonwealth depositories pursuant to

section 505 and that is in effect at the time the net loss was

incurred.

(d) Reimbursement of interest payments and net losses under

subsections (b) and (c) shall be payable by the Commonwealth,

upon application of the political subdivision, in accordance

with the following:

(1) The political subdivision shall submit to the State

Treasurer an itemization of the amount necessary to be

appropriated by the General Assembly to reimburse the political

subdivision for the interest payments made and net losses

incurred by the political subdivision. To the extent the

political subdivision experiences net gains as a result of

action taken under this section, the net gains shall be used to

offset any reported costs or expenses incurred by the political

subdivision.

(2) The State Treasurer shall establish a uniform method for

the determination of interest payments and gains and losses. The

method shall be used by each political subdivision in making a

claim for reimbursement. The reimbursement application shall be

on a form and in a manner determined by the State Treasurer and

shall include an itemized accounting of all debt incurred and

related interest payments, and assets liquidated and net losses

incurred from liquidation, for which reimbursement is being

claimed.

(3) Upon appropriation by the General Assembly to provide

for the reimbursement of interest payments and net losses, the

amount shall be paid by the State Treasurer through the Office

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of the Budget to the political subdivision within thirty days of

approval by the State Treasurer of the reimbursement

application.

(e) This section shall apply to the fiscal year beginning

July 1, 2015, and July 1 of each fiscal year thereafter, during

a period of budget impasse.

Section 1509. Investments through line of credit to

political subdivision due to budget impasse.--(a) When the

Commonwealth has not enacted a general appropriation act, which

has been passed by the General Assembly and signed by the

Governor, on or before the beginning of the State fiscal year, a

budget impasse shall be deemed to have occurred. A budget

impasse concludes upon the passage by the General Assembly and

the signing by the Governor of a general appropriation act for

that fiscal year.

(b) Pursuant to its investment authority as set forth in

section 301.1, the Treasury Department may make available from

the Treasury Department's short-term investment pool to

political subdivisions a line of credit to prevent the

interruption of State-authorized program service delivery as a

consequence of a budget impasse that does not conclude within

thirty days. The line of credit shall be made available only

from those funds that are beyond the ordinary means of the

Commonwealth. A line of credit may be requested for the period

beginning August 1 of any fiscal year in which, by July 1 of

that fiscal year, no general appropriation act has been enacted

for that fiscal year, and ending on the date on which a general

appropriation act for that fiscal year is enacted.

State-authorized program services that cannot be provided

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without the line of credit and documentation of funds received

from the Commonwealth in the prior fiscal year. Documentation

shall include the line item appropriation from which the program

services are to be paid. Failure to submit required

documentation may result in denial of a line of credit.

(d) The line of credit shall not exceed thirty-five per

centum of the total prior fiscal year's funds received by the

political subdivision from the Commonwealth for State-authorized

program services for which the line of credit is sought, less

any funds received from the Commonwealth for those services

during the same fiscal year.

(e) The Treasury Department may charge interest on any

outstanding amount of credit, not to exceed twenty basis points

over the rate set by the Board of Finance and Revenue for

Commonwealth depositories pursuant to section 505 and that is in

effect at the time of execution of the line of credit.

(f) Within ten days of the enactment of a general

appropriation act for a fiscal year, the Treasury Department

shall prepare and submit to the Secretary of the Budget, and the

Appropriations Committee of the Senate and the Appropriations

Committee of the House of Representatives , a report detailing

the following:

(1) Line of credit recipients and the amount of each line of

credit.

(2) The State-authorized program services which were

provided by the line of credit recipient and the line item

appropriation from which the program services are paid when a

budget impasse has not occurred.

(g) The Treasury Department shall notify each line of credit

recipient of its repayment obligation and shall withhold out of

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any State appropriation due to the line of credit recipient an

amount equal to the total of the principal balance of the line

of credit.

(h) This section shall apply to the fiscal year beginning

July 1, 2015, and July 1 of each fiscal year thereafter, during

a period of budget impasse.

Section 2. It is the intent of the General Assembly to

reimburse political subdivisions that incur interest on lines of

credit under section 1509 of the act and that such reimbursement

shall be made to the extent that funds are available through an

act of the General Assembly, including, but not limited to, a

general appropriation act, enacted after the effective date of

this section.

Section 3. This act shall take effect immediately.

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