|Posted:||February 3, 2017 10:06 AM|
|From:||Representative Patrick J. Harkins|
|To:||All House members|
|Subject:||Legislation to Reform the Local Government Unit Debt Act|
|In the near future, I will be introducing legislation that would make much-needed reforms to the Local Government Unit Debt Act under Title 53 (Municipalities Generally). This bill is similar to the Senate’s planned reintroduction of Senate Bill 901 from the 2013-2014 legislative session and House Bill 1044 from 2015-2016 legislative session.
As you may know, the Senate Local Government Committee held hearings last session to examine the financial situation surrounding the Harrisburg Authority and its relationship to the fiscal distress of the City of Harrisburg. Much of the information presented at the hearings focused on provisions of the Local Government Unit Debt Act. This act provides for the review of project financings by the Pennsylvania Department of Community and Economic Development (DCED), defines the different types of debt a municipality may enter into, and sets limits on the amount of debt a municipality can incur without voter approval. The hearings held by the Senate Local Government Committee revealed several deficiencies in the current statute.
As such, this legislation would correct those deficiencies through the following:
•Establish an actual review process of complicated transactions by DCED before debt is incurred;
•Eliminate the ability to charge a fee for issuing a guarantee;
•Limit the ability of municipalities to provide unlimited guarantees of other entities’ debts;
•Amend the “self-liquidating” and “working capital” definitions to prohibit reimbursements for payments made under a guarantee or other non-project-related costs;
•Provide for fiduciary duties of those who represent local governments, as well as penalties for false filings.
Please join me in co-sponsoring this important piece of legislation.
Introduced as HB1307