2022 Pennsylvania Consolidated & Unconsolidated Statutes
Act 19 - MUNICIPALITIES FINANCIAL RECOVERY ACT - DESIGNATION, PERFORMANCE OF COORDINATOR AND RECEIVER

Session of 2022

No. 2022-19

SB 479

AN ACT

Amending the act of July 10, 1987 (P.L.246, No.47), entitled "An act empowering the Department of Community and Economic Development to assist municipalities in avoiding financial distress; declare certain municipalities as financially distressed; providing for the restructuring of debt of financially distressed municipalities; limiting the ability of financially distressed municipalities to obtain government funding; authorizing municipalities to participate in Federal debt adjustment actions and bankruptcy actions under certain circumstances; authorizing certain taxes; and providing for the disincorporation of municipalities and the establishment of unincorporated service districts," in municipal financial distress, further providing for designation and for performance of coordinator; and, in receivership in municipalities, further providing for receiver.

The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows:

Section 1.  Section 221 of the act of July 10, 1987 (P.L.246, No.47), known as the Municipalities Financial Recovery Act, is amended by adding subsections to read:

Section 221.  Designation.

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(f)  Prohibitions.--The coordinator may not:

(1)  Engage in any conduct prohibited by the act of July 19, 1957 (P.L.1017, No.451), known as the State Adverse Interest Act, or 65 Pa.C.S. Ch. 11 (relating to ethics standards and financial disclosure).

(2)  Receive any compensation, fee or commission:

(i)  From the distressed municipality unless specifically authorized by the coordinator's contract.

(ii)  In accordance with any sale or lease of property or other financial transaction involving the distressed municipality or an authority directly or indirectly controlled by the distressed municipality.

(g)  Prior appointment.--A person who has previously contracted with the department or the distressed municipality as a coordinator, receiver, financial consultant, legal counsel or through a contract under the Early Intervention Program under Chapter 1-A may not be deemed ineligible to be appointed as a coordinator under this section solely on the basis of that contract.

Section 2.  Section 224.1(b) of the act is amended to read:

Section 224.1.  Performance of coordinator.

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(b)  Termination of coordinator.--An unfavorable review under this section or a violation of section 221(f) may constitute grounds for termination of the coordinator's contract.

Section 3.  Section 705(f) of the act is amended and the section is amended by adding a subsection to read:

Section 705.  Receiver.

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(f)  Prohibitions.--The receiver [shall] may not:

(1)  Seek or hold a position as any other elected or appointed public official within this Commonwealth or as a political party officer during the term of the receivership.

(2)  Seek election as a public official or political party officer for one year after the person's service as receiver has ended.

(3)  Engage in any conduct prohibited by the act of July 19, 1957 (P.L.1017, No.451), known as the State Adverse Interest Act, or 65 Pa.C.S. Ch. 11 (relating to ethics standards and financial disclosure).

(4)  Receive any compensation, fee or commission:

(i)  From the distressed municipality unless specifically authorized by the receiver's contract.

(ii)  In accordance with any sale or lease of property or other financial transaction involving the distressed municipality or an authority directly or indirectly controlled by the distressed municipality.

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(h)  Prior appointment.--A person who has previously contracted with the department or the distressed municipality as a coordinator, receiver, financial consultant, legal counsel or through a contract under the Early Intervention Program under Chapter 1-A may not be deemed ineligible to be appointed as a receiver under this section solely on the basis of that contract.

Section 4.  This act shall take effect in 60 days.

APPROVED--The 19th day of April, A.D. 2022.

TOM WOLF