HB 509 — An Act amending the act of July 10, 1987 (P.L.246, No.47), known as the Municipalities Financial Recovery Act, in receivership in municipalities, further providing for powers, duties and prohibited actions.

PRINTER'S NO.   491

                      THE GENERAL ASSEMBLY OF PENNSYLVANIA



                          HOUSE BILL
                          No. 509
                                                Session of
                                                  2025

     INTRODUCED BY KAZEEM, GIRAL, SANCHEZ, FIEDLER, KHAN, HILL-EVANS,
        CIRESI, OTTEN, KENYATTA, DEASY, O'MARA, GREEN AND GILLEN,
        FEBRUARY 5, 2025

     REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, FEBRUARY 5, 2025


                                     AN ACT
 1   Amending the act of July 10, 1987 (P.L.246, No.47), entitled "An
 2      act empowering the Department of Community and Economic
 3      Development to assist municipalities in avoiding financial
 4      distress; declare certain municipalities as financially
 5      distressed; providing for the restructuring of debt of
 6      financially distressed municipalities; limiting the ability
 7      of financially distressed municipalities to obtain government
 8      funding; authorizing municipalities to participate in Federal
 9      debt adjustment actions and bankruptcy actions under certain
10      circumstances; authorizing certain taxes; and providing for
11      the disincorporation of municipalities and the establishment
12      of unincorporated service districts," in receivership in
13      municipalities, further providing for powers, duties and
14      prohibited actions.
15      The General Assembly of the Commonwealth of Pennsylvania
16   hereby enacts as follows:
17      Section 1.     Section 706(a)(5) of the act of July 10, 1987
18   (P.L.246, No.47), known as the Municipalities Financial Recovery
19   Act, is amended to read:
20   Section 706.     Powers, duties and prohibited actions.
21      (a)   Powers and duties.--Notwithstanding any other provision
22   of law, the receiver shall have the following powers and duties:
23            * * *
 1        (5)   To require the distressed municipality or authority
 2    to cause the sale, lease, conveyance, assignment or other use
 3    or disposition of the distressed municipality's or
 4    authority's assets in accordance with section 707[.],
 5    provided that the distressed municipality and receiver obtain
 6    approval from 75% of the governing bodies of municipalities
 7    which have service agreements with or whose residents
 8    previously received water or sewer services, or both, from
 9    the distressed municipality or authority prior to the sale,
10    lease, conveyance, assignment or other use or disposition of
11    the distressed municipality's or authority's assets.
12    Municipal approval shall be as follows:
13              (i)    The approval must be in the form of a
14        resolution.
15              (ii)    The resolution must be adopted at a public
16        meeting by an affirmative vote of a majority of the
17        members of the governing body of the municipality.
18              (iii)    The result of an affirmative vote must be
19        transmitted to the distressed municipality and receiver
20        within 48 hours of the vote.
21        * * *
22    Section 2.      This act shall take effect in 60 days.




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