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PRINTER'S NO. 490
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
490
Session of
2017
INTRODUCED BY EICHELBERGER, BLAKE, FOLMER, BOSCOLA, COSTA,
BROWNE, SCHWANK AND VULAKOVICH, MARCH 10, 2017
REFERRED TO LOCAL GOVERNMENT, MARCH 10, 2017
AN ACT
Amending Title 53 (Municipalities Generally) of the Pennsylvania
Consolidated Statutes, in indebtedness and borrowing, further
providing for definitions, for classification and authority
to issue bonds and notes, for cost of project and for
exclusion of other self-liquidating debt to determine net
nonelectoral debt or net lease rental debt, providing for
preliminary filings with the department prior to the issuance
of certain debt, further providing for ordinance authorizing
issuance of bonds or notes or instruments evidencing lease
rental debt, for small borrowing for capital purposes, for
debt statement, for submission to department, for fees for
filing, for certificate of approval of transcript, for effect
of failure of timely action by department and for records of
department and providing for duties of participants in
transactions relating to incurring debt and issuing bonds and
notes.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definition of "self-liquidating debt" in
section 8002(b) of Title 53 of the Pennsylvania Consolidated
Statutes is amended and subsection (c) is amended by adding
definitions to read:
§ 8002. Definitions.
* * *
(b) Exclusions from debt.--With respect to exclusions from
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any particular category of debt and subject to additional
definitions contained in subsequent provisions of this subpart
which are applicable to specific provisions of this subpart, the
following words and phrases when used in this subpart shall have
the meanings given to them in this section unless the context
clearly indicates otherwise:
"Self-liquidating debt." Debt payable solely from rents,
rates or other charges to the ultimate users of the project, to
be financed in whole or in part by that debt, or payable solely
from special levies or assessments of benefits lawfully
earmarked exclusively for that purpose. The term also includes
debt or any portion thereof at the time qualified as self-
liquidating pursuant to this subpart, whether or not solely
payable from those sources. The term "ultimate users" includes
the local government unit itself only where its use of the
project is incidental to the use of the project by other users.
A debt with respect to which debt service payments have been
made under a guaranty of the debt shall not be considered self-
liquidating.
* * *
(c) Other definitions.--Subject to additional definitions
contained in subsequent provisions of this subpart which are
applicable to specific provisions of this subpart, the following
words and phrases when used in this subpart shall have the
meanings given to them in this section unless the context
clearly indicates otherwise:
* * *
"Financial advisor." A person retained directly by a local
government unit who for compensation engages in the business of
advising that local government unit, either directly or in
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writing, as to the value of securities, bonds or notes or as to
the advisability of investing in, purchasing or selling
securities, bonds or notes. The term does not include an
attorney, accountant or engineer whose performance of such
services is solely incidental to the practice of his profession.
The term does not include a lender, underwriter or other entity
purchasing the bonds or notes of a local government unit.
* * *
"Working capital." An amount which constitutes, under
generally accepted accounting principles, the cost of the day-
to-day operations of the project as well as a proper allowance
for contingencies, for a period not to exceed one year after
completion of the project. Working capital for periods exceeding
one year shall be treated as unfunded debt under sections 8129
(relating to scope of unfunded debt) and 8130 (relating to
approval by court to fund unfunded debt). Reimbursements under a
guaranty or amounts to be used to address budgetary deficits of
a local government unit or for other purposes not related to the
construction or operation of the project do not constitute
reasonable working capital in connection with the incurring of
debt under this subpart.
Section 2. Sections 8005(c) and (d) and 8007 of Title 53 are
amended to read:
§ 8005. Classification and authority to issue bonds and notes.
* * *
(c) Authority to issue bonds and notes and lease rental
debt.--Notwithstanding any other law to the contrary, every
local government unit shall have full power and authority to
issue bonds or notes, and make guaranties, leases, subsidy
contracts or other agreements evidencing the acquisition of
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capital assets payable out of taxes and other general revenues,
to provide funds for and towards the cost of or the cost of
completing any project or combination of projects which the
local government unit is authorized to own, acquire, subsidize,
operate or lease or to participate in owning, acquiring,
subsidizing, operating or leasing with others, to issue tax
anticipation notes and funding bonds or notes as provided in
this subpart and to contract for insurance covering the risks of
nonpayment of principal, interest and premium of bonds, notes,
tax anticipation notes and guaranties.
(d) Nature of guaranty procedure for issuance and
prohibitions.--The following shall apply to a guaranty:
(1) For the purpose of this subpart, unless debt
evidenced by a guaranty has been approved as electoral debt
in accordance with Subchapter C (relating to procedure for
securing approval of electors), the guaranty shall be deemed
to be nonelectoral debt if the local government unit
guaranties its own bonds or notes and shall be deemed to be
lease rental debt if it guaranties the bonds or notes of an
authority or another local government unit. For the purpose
of all other statutes, the guaranty shall be deemed to create
debt or indebtedness of the local government unit making the
guaranty.
(2) (i) A local government unit may issue a guaranty of
debt of another separate and distinct local government
unit or an authority it did not incorporate, only after
the local government unit has conducted its own due
diligence to determine the risks involved in the
transaction, including the impact of the guaranty on the
future financial condition of the local government unit,
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the financial condition of the entity seeking the
guaranty, the sources and reliability of revenue to cover
the underlying obligation and the likelihood of default
of the entity seeking the guaranty. A guaranty may only
be made by vote of the governing body after a public
meeting at which the local government unit demonstrates
due diligence. A local government unit may only issue a
guaranty to an authority or other local government unit
for projects which are expressly authorized by statute,
including projects under section 5607 (relating to
purposes and powers).
(ii) Notwithstanding the provisions of subparagraph
(i), a local government unit may not issue a guaranty to
a separate and distinct authority or local government
unit for sums due under a qualified interest rate
management agreement, nor may guaranties be issued for
projects which involve untested technology or
experimentation.
(3) A local government unit is prohibited from
collecting a fee to guaranty the debt of an authority or
another local government unit.
(4) Notwithstanding any other provision of this chapter
or any other law to the contrary, an authority or a municipal
authority in existence on the effective date of this
paragraph incorporated by two or more local government units
for the purpose of providing loan programs for capital
projects for the benefit of local government units and
authorities or municipal authorities, shall not be subject to
the provisions of paragraph (2).
§ 8007. Cost of project.
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(a) Included costs.--The cost of a project includes the
amount of all payments to contractors or for the acquisition of
a project or for lands, easements, rights and other
appurtenances deemed necessary for the project, fees of
architects, engineers, appraisers, consultants, financial
advisors and attorneys incurred in connection with the project
financing costs, costs of necessary printing and advertising,
costs of preliminary feasibility studies and tests, cost
estimates and interest on money borrowed to finance the project,
if capitalized, to the date of completion of construction and,
if deemed necessary, for one year thereafter, amounts to be
placed in reserve funds, if any, a reasonable initial working
capital for operating the project and a proper allowance for
contingencies and any amount which constitutes, under generally
accepted accounting principles, a cost of, and which has been
determined by an independent actuary or other expert to be
required for the purposes of, a reserve or a contribution toward
a combined reserve, pool or other arrangement for losses or
liabilities covered by a self-insurance arrangement established
by one or more local government units.
(b) Excluded costs.--Costs paid, from sources other than the
debt that is to be refunded, more than two years before an
issuance of new debt to finance the costs may not be included in
the costs of a project financed by the new debt. Reimbursements
under a guaranty or amounts to be used by a local government
unit to address budgetary deficits or other purposes not related
to the project do not constitute a cost of a project in
connection with the incurring of debt under this subpart.
(c) Funding of unfunded debt.--Costs that qualify for
funding of unfunded debt under section 8130 (relating to
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approval by court to fund unfunded debt) may only constitute a
cost of a project if the local government unit complies with the
requirements of section 8130.
Section 3. Section 8026(a)(5) of Title 53 is amended and the
section is amended by adding a subsection to read:
§ 8026. Exclusion of other self-liquidating debt to determine
net nonelectoral debt or net lease rental debt.
(a) Filings with department.--Self-liquidating debt shall
not be excluded in determining net nonelectoral debt or net
lease rental debt for the purpose of establishing net debt of
either category where the debt is evidenced by general
obligation bonds or notes, by bonds, notes or other obligations
of an authority or of another local government unit or by a
guaranty until there has been filed with and approved by the
department a report to the local government unit from qualified
registered engineers or architects or other persons qualified by
experience appropriate to the project, setting forth:
* * *
(5) The estimated net revenues of the project for each
year of the remaining life of the bonds, notes or obligations
with an explanation for any assumed increase and a
computation showing, in reasonable detail, that the net
revenues, together with other available funds to be received
in respect of the project, will be sufficient in each year to
pay the annual debt service, other than capitalized debt
service, on the bonds, notes or obligations or a specified
aggregate principal amount thereof.
* * *
(c) Change in circumstances.--If there has been a change in
circumstances and the local government unit has existing debt
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that was previously approved by the department as self-
liquidating or subsidized, a new certification shall be filed.
The certification shall specify whether or not the debt should
continue to be treated as self-liquidating or subsidized and
state whether any decrease in the amount to be excluded is
required by any change in circumstances, other than resulting
from the payments of the debt.
Section 4. Title 53 is amended by adding a section to read:
§ 8102.1. Preliminary filings with the department prior to the
issuance of certain debt.
(a) General rule.--At least 10 days prior to the enactment
of an ordinance authorizing the sale or issuance of any general
obligation bonds or notes or guaranteed revenue bonds or notes
constituting nonelectoral debt or any agreement evidencing lease
rental debt, a local government unit shall have obtained proof
of having filed with the department the information and
documentation required by this section. Proof of filing for
purposes of subsection (c) may be obtained by a certified mail
return receipt or other delivery requiring signature, or a
notice of receipt from the department.
(b) Required filings.--A local government unit shall file
with the department a basic description of the intended
financing and, as applicable, the following information and
documentation:
(1) Evidence that the local government unit is current
in the filing of its annual financial statements with
Commonwealth agencies under applicable State law.
(2) A description of the intended type and amount of
payment or performance bond, letter of credit or other
financial security proposed to guarantee completion of the
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project.
(3) Information that the local government unit is up to
date on all of its municipal securities disclosures required
under 17 CFR 240.15c2-12 (relating to municipal securities
disclosure).
(4) A copy of the interest rate management plan prepared
or reviewed by an independent financial advisor with respect
to a proposed qualified interest rate management agreement.
(5) If the local government unit intends for the
proposed debt to be self-liquidating or subsidized, a
statement that the debt will qualify as self-liquidating debt
or subsidized debt, including the filings required under
section 8024 (relating to exclusion of subsidized debt from
net nonelectoral debt or net lease rental debt), 8025
(relating to exclusion of self-liquidating debt evidenced by
revenue bonds or notes to determine net nonelectoral debt)
and 8026 (relating to exclusion of other self-liquidating
debt to determine net nonelectoral debt or net lease rental
debt), as applicable.
(6) The debt statement required by section 8110
(relating to debt statement).
(7) Whether the bonds or notes are zero coupon or
capital appreciation bonds or notes and, if so, the ratio of
total estimated principal and interest payments over the
proceeds of the issue.
(8) A project cost statement detailing the intended uses
of debt proceeds.
(9) If a guaranty from another local government unit is
proposed as a portion of the proposed borrowing, information
demonstrating compliance with section 8005(d) (relating to
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classification and authority to issue bonds and notes).
(10) The declaration required by section 8291(a)
(relating to duties of participants).
(c) Action by department.--
(1) The department shall have 10 days after receipt of
the filing required under subsection (b) to notify the local
government unit of receipt of filing required under
subsection (b). An acknowledgment of a filing shall be valid
for one year from the date of its issuance.
(2) If the department fails to notify the local
government unit of an incorrect or incomplete filing or fails
to otherwise acknowledge the receipt of a filing within 10
days, the local government unit may proceed to incur the debt
or may presume the filing to be valid for one year from the
date the filing was submitted to the department.
(3) If the department finds in its reasonable discretion
that the requirements are not satisfied in connection with
the proposed debt, the department shall issue a notice of
incomplete filing and the local government unit may not
proceed to incur the debt until acknowledgment from the
department that the filing requirements of subsection (b)
have been completed.
(d) Exempt transactions.--The following debt transactions
shall be exempt from the requirement to file preliminary
documentation under this section:
(1) Small borrowing for capital purposes as provided in
section 8109 (relating to small borrowing for capital
purposes).
(2) Transactions under Subchapter C of Chapter 82
(relating to refunding of debt) which consist exclusively of
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the issuance and sale of obligations, the proceeds of which
are to be used solely for purposes specified in section
8241(b)(1) (relating to power to refund) for the payment or
redemption of outstanding obligations upon or prior to
maturity and the costs of issuing the obligations. A
refunding transaction which includes a qualified interest
rate management agreement shall not be exempt from the
requirements of this section.
(e) Review.--All determinations by the department under this
section are reviewable as provided under 2 Pa.C.S. Ch. 7
(relating to judicial review).
Section 5. Sections 8103(a)(1), 8109(a)(1) and 8110(b) of
Title 53 are amended to read:
§ 8103. Ordinance authorizing issuance of bonds or notes or
instruments evidencing lease rental debt.
(a) General rule.--The ordinance or ordinances or, in the
case of notes issued under section 8109 (relating to small
borrowing for capital purposes), the resolution authorizing the
issuance of bonds or notes or the execution of a lease,
guaranty, subsidy contract or other agreement evidencing lease
rental debt by a local government unit shall contain, in
substance:
(1) In all cases, including lease rental debt, the
following:
(i) A brief description of the project for which the
debt is to be incurred and, if a capital project, a
realistic estimated useful life thereof.
(ii) A statement of the aggregate principal amount
of bonds or notes proposed to be issued pursuant to the
ordinance or, as the case may be, to be secured by the
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instrument evidencing lease rental debt.
(iii) A statement whether the debt is to be incurred
as electoral debt, nonelectoral debt or lease rental
debt.
(iv) An authorization and direction to one or more
specified officers and their successors to prepare and
certify and, except in the case of notes issued under
section 8109, to file the debt statement required by
section 8110 (relating to debt statement), to execute and
deliver the bonds or notes or the instrument evidencing
lease rental debt and to take other necessary action.
This designation may be changed from time to time
thereafter.
(v) In the case of nonelectoral or lease rental debt
which is subject to exclusion as subsidized debt or self-
liquidating debt if the exclusion is presently desired,
an authorization to the proper officers of the local
government unit to prepare and file any statements
required by Subchapter B of Chapter 80 (relating to
limitations on debt of local government units) which are
necessary to qualify all or any portion of the debt for
exclusion from the appropriate debt limit as self-
liquidating debt or subsidized debt. If an exclusion is
to be claimed that the debt will be self-liquidating, the
identity of the expert relied upon to make that
determination.
(vi) As an exhibit, a disclosure statement in a
format prescribed by the department containing
information as to the following:
(A) The principal amount of the debt, the term
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over which the debt will be repaid and the estimated
net debt service obligation to the local government
unit.
(B) A breakdown of the expected use of debt
proceeds for:
(I) The acquisition and construction of real
estate, including lands, buildings, easements,
rights and other appurtenances deemed necessary
for the project.
(II) Equipment and furnishings.
(III) Fees of architects, engineers,
financial advisors, attorneys and other
professionals incurred in connection with the
project.
(IV) Costs of necessary printing and
advertising.
(V) Costs of preliminary feasibility studies
and tests.
(VI) Working capital for operating the
project.
(C) A description of the basis for the decision
that the bonds or notes are to be sold at a public
sale, at a private sale by negotiation or upon
invitation at the price the governing body
determines.
(D) The identity of the bond counsel.
(E) The identity of the sinking fund depositary
and paying agent.
(F) The identities of the purchaser of the bonds
or notes.
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(G) Whether a qualified interest rate management
agreement is associated with the debt.
(H) Whether the project involves the sale of any
assets owned by the local government unit.
(I) The local government unit's plan to provide
necessary tax or other revenues to pay the debt
service on the debt.
* * *
§ 8109. Small borrowing for capital purposes.
(a) General rule.--Any local government unit may incur debt
by resolution rather than by ordinance to be evidenced by notes
to provide funds for a project as defined in this subpart
without complying with the requirements of Subchapter A of
Chapter 82 (relating to Department of Community and Economic
Development) if:
(1) The aggregate amount of the debt outstanding at any
one time shall not exceed the lesser of [$125,000] $250,000
or 30% of the nonelectoral debt limit as authorized in
section 8022(a) (relating to limitations on incurring of
other debt).
* * *
§ 8110. Debt statement.
* * *
(b) Previously excluded self-liquidating or subsidized
debt.--Where debt has previously been excluded as self-
liquidating or subsidized debt, the debt statement shall be
accompanied by a certification that indicates one of the
following:
(1) no decrease in the amounts to be excluded is
required by any change of circumstances [or, if there has
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been a change, other than decreases resulting from the
payments of bonds or notes, so that less debt is to be
excluded. If it has become possible to exclude a greater
amount of debt and the local government unit desires to do
so, the debt statement shall be accompanied by appropriate
certificates supporting the revised amount to be excluded,
and a revised approval shall be obtained from the
department.]; or
(2) a decrease in the amounts to be excluded is required
due to a change in circumstances, in which case:
(i) The change in circumstance must be described. If
it has become possible to exclude a greater amount of
debt and the local government unit wants to do so, the
debt statement shall be accompanied by appropriate
certifications supporting the revised amount to be
excluded and a revised approval shall be obtained from
the department.
(ii) No debt service payments have been made under a
guaranty of debt previously established as self-
liquidating. Debt service payments that have been made
under a guaranty of the local government unit shall no
longer be considered self-liquidating unless and until
the local government unit files with the department a new
report satisfying the requirements of section 8025
(relating to exclusion of self-liquidating debt evidenced
by revenue bonds or notes to determine net nonelectoral
debt) or 8026 (relating to exclusion of other self-
liquidating debt to determine net nonelectoral debt or
net lease rental debt), as the case may be.
Section 6. Section 8111(a) of Title 53 is amended by adding
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paragraphs to read:
§ 8111. Submission to department.
(a) General rule.--Before delivering any bonds or notes
other than notes representing small borrowings issued under
section 8109 (relating to small borrowing for capital purposes),
the local government unit shall apply for and receive or be
deemed to have received the approval of the department under
section 8204 (relating to certificate of final approval [of
transcript]) or 8206 (relating to effect of failure of timely
action by department). The application, in such form as the
department prescribes, shall be accompanied by a transcript of
the proceedings consisting of certified copies of any of the
following, not previously filed, which are applicable:
* * *
(8) A written statement with regard to the manner of
compliance or intended compliance with the requirements of
the act of December 20, 1967 (P.L.869, No.385), known as the
Public Works Contractors' Bond Law of 1967.
(9) An itemized statement of all estimated disbursements
for costs to be made from the proceeds of the borrowing to
the extent possible.
* * *
Section 7. Sections 8203, 8204, 8206 and 8207(a) and (c) of
Title 53 are amended to read:
§ 8203. Fees for filing.
Every filing with the department, with the exception of the
preliminary filing under section 8102.1 (relating to preliminary
filings with the department prior to the issuance of certain
debt), shall be accompanied by a filing fee as determined in
section 605-A of the act of April 9, 1929 (P.L.177, No.175),
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known as The Administrative Code of 1929. No submission shall
constitute a filing until the proper fee is paid. All fees
received under this section shall be paid by the department into
the State Treasury through the Department of Revenue. A
preliminary filing under section 8102.1 shall be accompanied by
a fee of $50.
§ 8204. Certificate of final approval [of transcript].
(a) Examination of transcripts and filings.--
(1) The department shall, upon receipt of any bond or
note transcripts or other filings, carefully examine them to
determine whether the debt outstanding and to be outstanding
is within the applicable limitations imposed by this subpart
and whether the proceedings for incurring the debt, for
issuing and selling the bonds or notes and for excluding
self-liquidating and subsidized debt have been taken in
conformity with the Constitution of Pennsylvania and this
subpart.
(2) If the debt requires preliminary filings to be made
under section 8102.1 (relating to preliminary filings with
the department prior to the issuance of certain debt), the
preliminary filings shall become part of the transcript and
be a requirement for final approval under this section.
(b) Duty to certify.--If, upon completion of its
examination, a transcript or other filing is found by the
department to be in conformity with the Constitution of
Pennsylvania and this subpart, the department shall certify its
approval to the local government unit if required under other
provisions of this subpart.
§ 8206. Effect of failure of timely action by department.
If the local government unit has submitted [a filing] an
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application for final approval to the department by certified
mail, return receipt requested, or otherwise has an official
receipt from the department, and the local government unit has
not, within 20 days of the date of receipt of the filing by the
department, received the certificate of final approval or
disapproval or notification of correctable error, the filing
shall be deemed to have been approved for all purposes unless
the local government unit has extended the time within which the
department may act by written communication to the department or
by failure to object to a written communication from the
department requesting the extension. Extensions shall not exceed
one additional period of 20 days.
§ 8207. Records of department.
(a) Retention period.--
(1) The department shall keep all proceedings, including
all applications and statements by a local government unit
under sections 8102.1 (relating to preliminary filings with
the department prior to the issuance of certain debt), 8111
(relating to submission to department) and 8201 (relating to
certification to department of bond or note transcript or
lease, guaranty, subsidy contract or other agreement) on file
for a period of not less than [four months after issuance of
its certificate of approval or disapproval and thereafter as
long as any appeal respecting the proceedings is pending and
not finally determined.] five years after the debt issuance
has been paid off by the local government unit.
(2) The department shall also keep copies of all
documents filed with the department relating to a qualified
interest rate management agreement for as long as the
qualified interest rate management agreement is in effect.
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* * *
(c) Records open for inspection.--[The records of the
department shall be public records available for examination by
any citizen of this Commonwealth or any bondholders or
noteholders.] All submissions, determinations and records of the
department under this subpart, including those related to
qualified interest rate management agreements and including
correspondence with the interested parties to any debt
proceeding, shall be public records available for examination by
any resident of this Commonwealth, any interested parties or any
bondholder or noteholder, including holders of tax anticipation
notes, of the local government unit.
Section 8. Chapter 82 of Title 53 is amended by adding a
subchapter to read:
SUBCHAPTER G
OTHER PROVISIONS
Sec.
8291. Duties of participants.
§ 8291. Duties of participants.
(a) Declaration of representation.--
(1) As a condition of participation in transactions
under Chapter 81 (relating to incurring debt and issuing
bonds and notes) and this chapter, each attorney , financial
advisor or municipal advisor registered under the Securities
Exchange Act of 1934 (48 Stat. 881, 15 U.S.C. § 78a et seq.)
who is involved in the transaction shall provide a written
declaration to the local government unit as to;
(i) Which party is being represented by the attorney
or financial advisor.
(ii) The source from which the attorney or financial
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advisor will receive compensation for services related to
the transaction.
(iii) Whether the compensation is dependent upon the
issuance of debt by the local government unit.
(2) A full-time employee of the local government unit
shall not be required to file a declaration under this
subsection.
(b) Fiduciary duty of representatives retained by local
government units.--
(1) An attorney or financial advisor, including an
independent financial advisor under section 8281 (relating to
qualified interest rate management agreements) who is
retained and compensated by a local government to represent
the local government unit in a transaction under this
subpart, shall stand in a fiduciary relationship to the local
government unit.
(2) (i) With regard to a financial advisor who
represents a local government unit, the term "fiduciary
duty" shall mean the duty to perform loyally, in good
faith and in a manner the financial advisor reasonably
believes to be in the best interests of the local
government unit. The financial advisor shall act with
care, including reasonable inquiry, skill and diligence
that a person of ordinary prudence would use under
similar circumstances, and provide opinion as to possible
positive and negative impacts of a transaction.
(ii) With regard to attorneys licensed to practice
law in this Commonwealth, the fiduciary duty shall be as
prescribed by the Pennsylvania Supreme Court, including
the Pennsylvania Rules of Professional Conduct.
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(3) An attorney or financial advisor in the course of
the representation shall be entitled to rely on reasonable
representations and certifications made to the attorney or
financial advisor by architects, engineers and other persons
retained by and the officers and employees of a local
government unit.
(4) Pursuant to subsection (f) of Municipal Securities
Rulemaking Board Rule G-23 (relating to activities of
financial advisors), 17 CFR 240.15Ba1-1 (relating to
definitions), 240.15Ba1-2 (relating to registration of
municipal advisors and information regarding certain natural
persons), 240.15Ba1-3 (relating to exemption of certain
natural persons from registration under section 15B(a)(1)(B)
of the Act), 240.15Ba1-4 (relating to withdrawal from
municipal advisor registration), 240.15Ba1-5 (relating to
amendments to Form MA and Form MA-I), 240.15Ba1-6 (relating
to consent to service of process to be filed by non-resident
municipal advisors; legal opinion to be provided by non-
resident municipal advisors), 240.15Ba1-7 (relating to
registration of successor to municipal advisor) and
240.15Ba1-8 (relating to books and records to be made and
maintained by municipal advisors), and only as to those
representatives retained and compensated directly by the
local government unit, the fiduciary duty described in this
section shall be in addition to any duty imposed by rules
promulgated by the Municipal Securities Rulemaking Board that
may apply to the attorney or financial advisor.
(c) Ultra vires acts.--An officer or member of the governing
body of a local government unit or a financial advisor or
attorney may not knowingly participate in a violation of this
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title.
(d) Materially false or misleading certifications.--An
officer or member of the governing body of a local government
unit or an attorney or financial advisor may not knowingly file
a materially false or misleading certification or statement with
the department under this subpart.
(e) Penalties.--
(1) An officer or member of the governing body of a
local government unit or an attorney or financial advisor who
aids or participates in the commission of an act prohibited
in subsection (c) or (d) commits a misdemeanor of the second
degree and shall, upon conviction, be sentenced to pay a fine
of not more than $5,000 or to imprisonment for not more than
two years, or both.
(2) Notwithstanding paragraph (1), a local government
may seek civil judicial redress for a violation of this
section that results in damages to the local government unit
not caused by the local government unit or its agents. A
local government unit shall prohibit or restrict the future
participation in transactions under this subpart of an
individual attorney or financial advisor who violates this
section and may also prohibit or restrict participation of a
firm that employs the attorney or financial advisor for a
period not to exceed two years.
Section 9. All acts and parts of acts are repealed insofar
as they are inconsistent with the amendment or addition of 53
Pa.C.S. §§ 8002(b) and (c), 8005(c) and (d), 8007, 8026(a)(5)
and (c), 8102.1, 8111(a), 8204, 8206, 8207(a) and (c) and 8291.
Section 10. This act shall take effect in 60 days.
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