HARRISBURG, June 26, 2013 Legislation to protect Pennsylvania’s taxpayers from irresponsible financial transactions by local governments or their related municipal authorities moved one step closer to becoming law today.

Sens. John Blake (D-Lackawanna/Luzerne/Monroe) and John H. Eichelberger Jr. (R-Bedford/Blair/Huntingdon/Fulton/Mifflin) today had two bills of a four-bill municipal debt reform package pass the Senate Local Government Committee, of which Eichelberger is the chairman and Blake is a member. The committee unanimously passed both bills that will now start to move through the legislative process.

Senate Bill 901 grants greater oversight of municipal borrowing processes to the PA Department of Community and Economic Development (DCED). It would also limit local government guarantees of bonds and loans taken out by municipal authorities, and prohibit the charging of fees for those guarantees.

Senate Bill 902 would give the state Ethics Commission and other law enforcement officials the power to investigate circumstances of conflict of interest if local officials are found to have benefitted personally from decisions they made in an official capacity involving public funds. It would also require that proceeds from borrowings carried out by local municipal authorities not be used for purposes unrelated to the project for which the debt was incurred.

“We moved one step closer today to providing needed taxpayer protections and improved oversight on local government financing deals,” said Blake, the prime sponsor of SB 902.

“These bills need to be signed into law to correct flaws or omissions in previous laws and to ensure Pennsylvania’s local government officials are properly accountable to the taxpayers and ratepayers they serve. In addition, SB 901 will ensure that DCED is better positioned — and resourced — to monitor and approve financial transactions that occur to advance the public interest and to meet the needs of our local communities,” Eichelberger said.

The lawmakers have been working with Local Government Committee Democratic Chairman Sen. Rob Teplitz (D-Dauphin) as well as with Sen. Mike Folmer (R-Berks/Chester/Dauphin/Lancaster/Lebanon) on a package of reform proposals that resulted from hearings last fall on the Harrisburg incinerator financing debacle that undermined the fiscal security of the City of Harrisburg. Additional bills authored by Teplitz and Folmer involving so called “swap” transactions by local governments and local municipal authorities will be the subject of additional hearings later this year.

“Today’s votes on SB 901 and SB 902 demonstrated strong bi-partisan support, and we will continue to work together to ensure the entire four-bill reform package gets to the governor’s desk,” Eichelberger said.




 Mark Shade (Sen. Blake) – 717-787-9220 or mshade@pasenate.com

Lee Derr (Sen. Eichelberger) – 717-787-5490 or lderr@pasen.gov