Signed by Governor Tom Corbett

Vote Smart's Synopsis:

Vote to concur with House amendments and adopt additional amendments to a bill that authorizes the Governor of Pennsylvania to declare a fiscal emergency and intervene if a distressed city fails to declare its own fiscal emergency under the Fiscally Distressed Municipalities Act.

Highlights:

• Authorizes the Governor to declare a state of fiscal emergency within a distressed city and to exercise the authority of the elected or appointed officials of the distressed city in order to ensure the provision of vital and necessary services (Sec. 2).

• Specifies that the emergency powers of the Governor are as follows (Sec. 2):
• The power to collect funds payable to the distressed city and the authority to use those funds to pay for vital and necessary services;
• The power to obtain emergency financial aid for the distressed city and use such aid to pay for vital and necessary services;
• The power to enter into contracts and agreements on behalf of the distressed city;
• The power to modify the emergency action plan as necessary to ensure the provision of vital and necessary services; and
• Any other power of the elected or appointed officials of the distressed city.

• Prohibits the Governor from performing certain actions including, but not limited to, the following (Sec. 2):
• Unilaterally levying taxes;
• Unilaterally impairing or modifying existing bonds, notes, municipal securities or other lawful contractual or legal obligations of the distressed city; or
• Authorizing the use of the proceeds of the sale, lease, or assignment of the assets of the distressed city for any purpose other than the payment of outstanding debt obligations or future debt obligations.

• Defines "fiscal emergency" as a situation in which (Sec. 2):
• The distressed city is insolvent or is projected to be insolvent within 180 days or less; or
• The distressed city is unable to ensure the continued provision of vital and necessary services; and
• The distressed city has failed to adopt or implement an alternative plan for the provision of vital and necessary services.

• Repeals debt obligations, other than payroll and pension obligations, from the definition of "vital and necessary services" (Sec. 2).

Full Bill Text