Trial Engrossment of Amendment A07383 to House Bill 2862 P.N. 4375, Regular Session 2019-2020

A07383

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

2862

Session of

2020

INTRODUCED BY DELOZIER, M. K. KELLER, GALLOWAY, DUNBAR, GLEIM,

JAMES, MARSHALL, MILLARD, ROTHMAN, RYAN, SAYLOR, SCHLOSSBERG

AND READSHAW, SEPTEMBER 15, 2020

REFERRED TO COMMITTEE ON COMMERCE, SEPTEMBER 15, 2020

AN ACT

Amending the act of May 15, 1933 (P.L.565, No.111), entitled "An

act relating to the powers and duties of the Department of

Banking and Securities and the Secretary of Banking and

Securities in exercising supervision over, and taking

possession of and conducting or liquidating the business and

property of, corporations, associations, and persons

receiving deposits or otherwise transacting a banking

business, corporations acting as fiduciaries, and building

and loan associations; providing for the payment of the

expenses of the Department of Banking by supervised

corporations, associations, or persons, and appropriating the

Banking Department Fund; authorizing the Department of

Banking, under certain circumstances, to examine

corporations, associations, or persons affiliated, or having

business transactions with supervised corporations,

associations or persons; authorizing appeals to the Supreme

Court, and prescribing and limiting the powers and duties of

certain other courts and their prothonotaries, registers of

wills, recorders of deeds, and certain State departments,

commissions, and officers; authorizing certain local public

officers and State departments to collect fees for services

rendered under this act; regulating securities; providing

penalties; and repealing certain acts and parts of acts," in

banking and securities, further providing for fund.

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

"An act relating to the finances of the State government;

providing for cancer control, prevention and research, for

ambulatory surgical center data collection, for the Joint

Underwriting Association, for entertainment business

financial management firms, for private dam financial

assurance and for reinstatement of item vetoes; 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 additional special funds and restricted

accounts, adding provisions relating to miscellaneous trust

funds by converting the Banking Fund to the Banking Trust

Fund, the Institution Resolution Account to the Institution

Resolution Trust Fund and the Keystone Recreation, Park and

Conservation Fund to the Keystone Recreation, Park and

Conservation Trust Fund; and making related repeals.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 1113-A of the act of May 15, 1933

(P.L.565, No.111), known as the Department of Banking and

Securities Code, is amended to read:

Section 1113-A. [Fund] Trust funds; money received from

licensees.

(a) [Continuation] Banking Trust Fund.--The Banking

Department Fund [is] redesignated as the Banking Fund[.] is

converted into a trust fund to be administered for the benefit

of institutions, credit unions, licensees and their customers,

except for persons subject to regulation under the act of

December 5, 1972 (P.L.1280, No.284), known as the Pennsylvania

Securities Act of 1972. The fund shall be administered by the

A07383 - 2 -

department. All interest earned from the investment or deposit

of money accumulated in the fund shall be deposited in the fund

for the same use. All money deposited into the fund shall be

held in trust and shall not be considered general revenue of the

Commonwealth and shall be used only to effectuate the purposes

of this section as determined by the department and shall be

subject to audit by the Auditor General.

(b) Sources of the Banking Trust Fund.--The sources of the

fund are as follows:

(1) Money collected or received by the department

arising from:

(i) fees, assessments, charges and penalties

relating to the regulation of [associations,] credit

unions, institutions and licensees;

(ii) the sale by the Department of General Services

of unserviceable property originally paid for out of the

fund; and

(iii) similar sources.

(2) The sources of the fund shall not include fees,

assessments, charges and penalties generated from:

(i) the [act of December 5, 1972 (P.L.1280, No.284),

known as the] Pennsylvania Securities Act of 1972; [or]

(ii) the act of March 3, 1976 (P.L.42, No.19), known

as the Takeover Disclosure Law[.]; or

(iii) portions of the money under paragraph (1)

determined by the secretary to be paid into the

Institution Resolution Trust Fund under subsection (g).

by the department to pay its expenses relating to the

examination and regulation of institutions, credit unions and

A07383 - 3 -

licensees, except for persons subject to regulation under the

Pennsylvania Securities Act of 1972, including the following:

(1) Salaries of the secretary, the deputies, the

examiners, the other employees of the department and

attorneys.

(2) Rental and other expenses for offices, rooms, garage

space and other accommodations, regardless of the

municipality in which they are located, occupied by the

department. This paragraph excludes offices, rooms, garage

space and accommodations in the Capitol Complex.

(3) Premiums for workers' compensation insurance

covering the officers and employees of the department.

(4) Premiums for surety bonds for officers and employees

of the department required by law to furnish the bonds.

(5) Furniture, stationery, materials, supplies and

overhead expenses of the department.

(c.1) Operating reserves of the Banking Trust Fund.--The

fund shall maintain an adequate operating reserve as determined

by the secretary to be necessary to ensure the ability of the

department to continue to pay its expenses described in

subsection (c) in the event of adverse economic conditions, the

loss of revenue as a result of institutions or licensees

becoming subject to the jurisdiction of another primary

regulator or emergencies. In determining the amount of the

reserve to be held by the fund, the secretary shall take into

consideration the accreditation requirements of the Conference

of State Bank Supervisors, the National Association of State

Credit Union Supervisors and the American Association of

Residential Mortgage Regulators.

(d) Department of General Services.--Purchases and leases

A07383 - 4 -

under subsection (c) shall be made through the Department of

General Services, as agent. Contracts of insurance and surety

bonds under subsection (c) shall be placed through the

Department of General Services, as agent.

(e) Restrictions on appropriations.--

(1) For fiscal years beginning after June 30, 1995, and

ending before July 1, 2012, the General Assembly shall

appropriate funds as it determines to be necessary from the

fund for use by the department or other Commonwealth

agencies.

(2) For fiscal years beginning after June 30, 2012, the

General Assembly shall appropriate the funds as it determines

to be necessary from the fund and the Institution Resolution

Trust Fund for use only by the department and not for any

other Commonwealth agency.

(f) Warrant.--Money in the [fund] Banking Trust Fund and the

Institution Resolution Trust Fund appropriated to the department

shall be paid out upon warrant of the State Treasurer drawn

after requested by the secretary.

(g) Institution Resolution [Account] Trust Fund.--

(1) The Institution Resolution Account is [established

as a restricted account within the fund.] converted into a

trust fund to be administered for the benefit of banks, bank

and trust companies, trust companies, savings banks, credit

unions and their customers. The Institution Resolution Trust

Fund shall be administered by the department. All interest

earned from the investment or deposit of money accumulated in

the fund shall be deposited in the fund for the same use. All

money deposited into the fund shall be held in trust and

shall not be considered general revenue of the Commonwealth

A07383 - 5 -

and shall be used only to effectuate the purposes of this

subsection as determined by the department and shall be

subject to audit by the Auditor General.

(2) The sources of the [account] Institution Resolution

Trust Fund are as follows:

(i) An amount determined by the secretary each

fiscal year based upon economic and regulatory conditions

from assessments, fees and administrative penalties

generated from statutes administered by the department

other than:

(A) the Pennsylvania Securities Act of 1972; or

(B) the Takeover Disclosure Law.

(ii) Amounts received from court litigation

involving the department.

(3) The secretary may use the money in the [account]

Institution Resolution Trust Fund to pay for costs associated

with any of the following:

(i) Resolution of an institution or an association,

under Article X. Money under this subparagraph may be

used in lieu of paying expenses from the assets of an

institution or association under section 1006.

(ii) Seizure and liquidation of a credit union under

17 Pa.C.S. § 503 (relating to regulation by department).

(4) In determining the amount to pay into the

Institution Resolution Trust Fund each year pursuant to

paragraph (1), the secretary shall do so in a manner that

builds up a reserve sufficient to pay costs as described in

paragraph (3) in a manner that will allow the department to

discharge its obligations to resolve, seize or liquidate an

institution or credit union without impairing the ability of

A07383 - 6 -

the department to continue to perform its other duties.

Section 1. Article XVII-A.1 of the act of April 9, 1929

(P.L.343, No.176), known as The Fiscal Code, is amended by

adding a subarticle to read:

SUBARTICLE J

MISCELLANEOUS TRUST FUNDS

Section 1791-A.1. Banking Trust Fund.

(a) Conversion of Banking Fund .--The Banking Fund is

converted into a trust fund in the State Treasury to be known as

the Banking Trust Fund and administered for the benefit of

institutions, credit unions, licensees and their customers,

except for persons subject to regulation under the act of

December 5, 1972 (P.L.1280, No.284), known as the Pennsylvania

Securities Act of 1972. The fund shall be administered by the

department. All interest earned from the investment or deposit

of money accumulated in the fund shall be deposited into the

fund for the same use. All money deposited into the fund shall:

(1) be held in trust;

(2) not be considered general revenue of the

Commonwealth;

(3) be used only to effectuate the purposes of this

section as determined by the department; and

(4) be subject to audit by the Auditor General.

(b) Sources.--The sources of the fund are as follows:

(1) Money collected or received by the department

arising from:

(i) fees, assessments, charges and penalties

relating to the regulation of credit unions, institutions

and licensees;

(ii) the sale by the Department of General Services

A07383 - 7 -

of unserviceable property originally paid for out of the

fund; and

(iii) similar sources.

(2) The sources of the fund shall not include fees,

assessments, charges and penalties generated from:

(i) the Pennsylvania Securities Act of 1972;

(ii) the act of March 3, 1976 (P.L.42, No.19), known

as the Takeover Disclosure Law; or

(iii) portions of the money under paragraph (1)

determined by the secretary to be paid into the

Institution Resolution Trust Fund under section 1792-A.1.

to pay its expenses relating to the examination and regulation

of institutions, credit unions and licensees, except for persons

subject to regulation under the Pennsylvania Securities Act of

1972 , including the following:

(1) Salaries of the secretary, the deputies, the

examiners, the other employees of the department and

attorneys.

(2) Rental and other expenses for offices, rooms, garage

space and other accommodations, regardless of the

municipality in which they are located, occupied by the

department. This paragraph excludes offices, rooms, garage

space and accommodations in the Capitol Complex.

(3) Premiums for workers' compensation insurance

covering the officers and employees of the department.

(4) Premiums for surety bonds for officers and employees

of the department required by law to furnish the bonds.

(5) Furniture, stationery, materials, supplies and

overhead expenses of the department.

A07383 - 8 -

(c.1) Operating reserves.--The fund shall maintain an

adequate operating reserve as determined by the secretary to be

necessary to ensure the ability of the department to continue to

pay its expenses described in subsection (c) in the event of

adverse economic conditions, the loss of revenue as a result of

institutions or licensees becoming subject to the jurisdiction

of another primary regulator or emergencies. In determining the

amount of the reserve to be held by the fund, the secretary

shall take into consideration the accreditation requirements of

the Conference of State Bank Supervisors, the National

Association of State Credit Union Supervisors and the American

Association of Residential Mortgage Regulators.

(d) Department of General Services.--Purchases and leases

under subsection (c) shall be made through the Department of

General Services, as agent. Contracts of insurance and surety

bonds under subsection (c) shall be placed through the

Department of General Services, as agent.

(e) Restrictions on appropriations.--For fiscal years

beginning after June 30, 2012, the General Assembly shall

appropriate the funds as it determines to be necessary from the

fund for use only by the department and not for any other

Commonwealth agency.

(f) Warrant.--Money in the fund appropriated to the

department shall be paid out upon warrant of the State Treasurer

drawn after requested by the secretary.

(g) Definitions.--As used in this section, the following

words and phrases shall have the meanings given to them in this

subsection unless the context clearly indicates otherwise:

"Department." The Department of Banking and Securities of

the Commonwealth.

A07383 - 9 -

"Fund." The Banking Trust Fund described in subsection (a).

"Secretary. The Secretary of Banking and Securities of the

Commonwealth.

Section 1792-A.1. Institution Resolution Trust Fund .

(a) Conversion of Institution Resolution Account.--The

Institution Resolution Account in the Banking Fund is converted

into a trust fund in the State Treasury to be known as the

Institution Resolution Trust Fund and administered for the

benefit of banks, bank and trust companies, trust companies,

savings banks, credit unions and their customers. The fund shall

be administered by the department. All interest earned from the

investment or deposit of money accumulated in the fund shall be

deposited into the fund for the same use. All money deposited

into the fund shall:

(1) be held in trust;

(2) not be considered general revenue of the

Commonwealth;

(3) be used only to effectuate the purposes of this

subsection as determined by the department; and

(4) be subject to audit by the Auditor General.

(b) Sources.--The sources of the f und are as follows:

(1) An amount determined by the secretary each fiscal

year based upon economic and regulatory conditions from

assessments, fees and administrative penalties generated from

statutes administered by the department other than:

(i) the act of December 5, 1972 (P.L.1280, No.284),

known as the Pennsylvania Securities Act of 1972; or

(ii) the act of March 3, 1976 (P.L.42, No.19), known

as the Takeover Disclosure Law .

(2) Amounts received from court litigation involving the

A07383 - 10 -

department.

for costs associated with any of the following:

(1) Resolution of an institution or an association,

under Article X of the act of May 15, 1933 (P.L.565, No.111),

known as the Department of Banking and Securities Code . Money

under this paragraph may be used in lieu of paying expenses

from the assets of an institution or association under

section 1006 of the Department of Banking and Securities

Code.

(2) Seizure and liquidation of a credit union under 17

Pa.C.S. § 503 (relating to regulation by department).

(d) Reserve.--In determining the amount to pay into the f und

each year, the secretary shall do so in a manner that builds up

a reserve sufficient to pay costs as described in subsection (c)

in a manner that will allow the department to discharge its

obligations to resolve, seize or liquidate an institution or

credit union without impairing the ability of the department to

continue to perform its other duties.

(e) Restrictions on appropriations.--For fiscal years

beginning after June 30, 2012, the General Assembly shall

appropriate the funds as it determines to be necessary from the

the fund for use only by the department and not for any other

Commonwealth agency.

(f) Warrant.--Money in the fund appropriated to the

department shall be paid out upon warrant of the State Treasurer

drawn after requested by the secretary.

(g) Definitions.--As used in this section, the following

words and phrases shall have the meanings given to them in this

subsection unless the context clearly indicates otherwise:

A07383 - 11 -

"Department." The Department of Banking and Securities of

the Commonwealth.

"Fund." The Institution Resolution Trust Fund described in

subsection (a).

"Secretary." The Secretary of Banking and Securities of the

Commonwealth.

Section 1793-A.1. Keystone Recreation, Park and Conservation

Trust Fund.

(a) Conversion of Keystone Recreation, Park and Conservation

Fund.--The Keystone Recreation, Park and Conservation Fund

established in section 4 of the act of July 2, 1993 (P.L.359,

No.50), known as the Keystone Recreation, Park and Conservation

Fund Act , is converted to a trust fund in the State Treasury to

be known as the Keystone Recreation, Park and Conservation Trust

Fund to provide money necessary to implement the provisions of

that act. All interest earned from the investment or deposit of

money accumulated in the fund shall be deposited into the fund

for the same use. All money deposited into the fund shall:

(1) be held in trust;

(2) not be considered general revenue of the

Commonwealth;

(3) be used only to effectuate the purposes of this

section as determined by the agency; and

(4) be subject to audit by the Auditor General.

(b) Source of funds.--All proceeds from the sale of bonds or

notes as approved under section 5 of the Keystone Recreation,

Park and Conservation Fund Act and the monthly transfer of a

portion of the State Realty Transfer Tax shall provide the

necessary money for the fund.

A07383 - 12 -

appropriated on a continuing nonlapsing basis to the designated

agencies in the amounts specified in section 12 of the Keystone

Recreation, Park and Conservation Fund Act. No money shall be

expended by any agency without authorization by the Governor.

(d) Interest.--All interest earned by the fund and all

refunds or repayments shall be credited to the fund and are

hereby appropriated to the appropriate agencies in the same

percentage as specified in section 12 of the Keystone

Recreation, Park and Conservation Fund Act.

(e) Definitions.--As used in this section, the following

words and phrases shall have the meanings given to them in this

subsection unless the context clearly indicates otherwise:

"Agency." As defined in the Keystone Recreation, Park and

Conservation Fund Act .

"Fund." The Keystone Recreation, Park and Conservation Trust

Fund described in this section.

Section 2. The addition of section 1793-A.1 of the act is a

continuation of section 4 of the act of July 2, 1993 (P.L.359,

No.50), known as the Keystone Recreation, Park and Conservation

Fund Act, and the following shall apply:

(1) Except as otherwise provided in section 1793-A.1 of

the act, all activities initiated under section 4 of the

Keystone Recreation, Park and Conservation Fund Act, shall

continue and remain in full force and effect and may be

completed under section 1793-A.1 of the act. Resolutions,

orders, regulations, rules and decisions which were made

under section 4 of the Keystone Recreation, Park and

Conservation Fund Act and which are in effect on the

effective date of this section shall remain in full force and

effect until revoked, vacated or modified under section 1793-

A07383 - 13 -

A.1 of the act. Contracts, obligations and agreements entered

into under section 4 of the Keystone Recreation, Park and

Conservation Fund Act are not affected nor impaired by the

repeal of section 4 of the Keystone Recreation, Park and

Conservation Fund Act.

(2) Except as specified in paragraph (3), any difference

in language between section 1793-A.1 of the act and section 4

of the Keystone Recreation, Park and Conservation Fund Act is

intended only to conform to the style of the Pennsylvania

Consolidated Statutes and is not intended to change or affect

the legislative intent, judicial construction or

administrative interpretation and implementation of section 4

of the Keystone Recreation, Park and Conservation Fund Act.

(3) Paragraph (2) does not apply to section 1793-A.1(a)

and (e) of the act.

Section 3. The following shall apply:

(1) A reference in any law to the Banking Fund shall be

deemed to be a reference to the Banking Trust Fund.

(2) A reference in any law to the Institution Resolution

Account in the Banking Fund shall be deemed to be a reference

to the Institution Resolution Trust Fund.

(3) A reference in any law to the Keystone Recreation,

Park and Conservation Fund shall be deemed to be a reference

to the Keystone Recreation, Park and Conservation Trust Fund.

Section 4. Repeals are as follows:

(1) The General Assembly finds that the repeal under

paragraph (2) is necessary to effectuate the addition of

sections 1791-A.1 and 1792-A.1 of the act.

(2) Section 1113-A of the act of May 15, 1933 (P.L.565,

No.111), known as the Department of Banking and Securities

A07383 - 14 -

Code, is repealed.

(3) The General Assembly finds that the repeal under

paragraph (4) is necessary to effectuate the addition of

section 1793-A.1 of the act.

(4) Section 4 of the act of July 2, 1993 (P.L.359,

No.50), known as the Keystone Recreation, Park and

Conservation Fund Act, is repealed.

Section 2 5. This act shall take effect immediately.

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