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§ 11701.607. Consent agreement

Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 53 P.S. Municipal and Quasi-Municipal CorporationsEffective: December 30, 2014

Purdon's Pennsylvania Statutes and Consolidated Statutes
Title 53 P.S. Municipal and Quasi-Municipal Corporations
Part I. General Municipal Law
Chapter 30E. Municipalities Financial Recovery Act (Refs & Annos)
Chapter 6. Fiscal Emergencies in Municipalities (Refs & Annos)
Effective: December 30, 2014
53 P.S. § 11701.607
§ 11701.607. Consent agreement
Currentness
(a) Negotiations.--Within eight days of the declaration of a fiscal emergency, the governing body and, if applicable, the chief executive officer of the distressed municipality shall convene a special public meeting to negotiate a consent agreement. The meeting shall be attended by the secretary or secretary's designee. Negotiations among creditors and any of the parties in this subsection shall be conducted in accordance with section 223(b).1
(b) Contents.--
(1) The consent agreement shall incorporate a plan setting forth measures designed to provide long-term financial stability to the distressed municipality after the termination of the fiscal emergency.
(2) The consent agreement shall include all of the following:
(i) Continued provision of vital and necessary services.
(ii) Payment of the lawful financial obligations of the distressed municipality and authority. This subparagraph includes debt obligations, municipal securities, lease rental obligations, legal obligations and consensual modifications of existing obligations, except as otherwise ordered by a court of competent jurisdiction.
(iii) Timely deposit of required payments to the pension fund for the distressed municipality and each authority or the fund in which the distressed municipality and each authority participates.
(iv) Legislative and administrative actions to be taken by the elected or appointed officials of the distressed municipality during the term of the consent agreement.
(3) The consent agreement may include:
(i) The sale, lease, conveyance, assignment or other use or disposition of the assets of the distressed municipality or authority.
(ii) Approval, modification, rejection, renegotiation or termination of contracts or agreements of the distressed municipality or authorities.
(iii) Execution of new contracts or agreements.
(4) The consent agreement may not include any of the following:
(i) Projections of revenue from a tax or tax rate not currently authorized by law.
(ii) Provisions that unilaterally abrogate, alter or otherwise interfere with a lien, charge, covenant or relative priority, that is:
(A) held by a holder of a debt obligation of a distressed municipality; and
(B) granted by the contract, law, rule or regulation governing the debt obligation.
(iii) Provisions that unilaterally impair or modify existing bonds, notes, municipal securities or other lawful contractual or legal obligations of the distressed municipality or authority.
(iv) Provisions that authorize the use of the proceeds of the sale, lease, conveyance, assignment or other use or disposition of the assets of the distressed municipality or authorities in a manner contrary to section 707.
(v) Any increase in the rate of an earned income tax imposed on nonresident workers.
(c) Ordinance.--Notwithstanding any law to the contrary, the following shall apply:
(1) Upon approval by a majority vote of the governing body of the distressed municipality, the consent agreement shall be presented to the secretary within 20 days of the declaration of fiscal emergency.
(2) The secretary shall approve or disapprove the consent agreement within three days.
(3) If the secretary determines that the consent agreement is sufficient to overcome the distressed municipality's financial distress and approves the agreement, the governing body shall enact the consent agreement in the form of an ordinance within seven days of approval by the secretary.
(4) The ordinance shall provide that, in the event of a breach or unilateral modification of the consent decree by the governing body or an elected or appointed official, the Governor may institute or reinstitute proceedings under Chapter 7.2
(d) Consent to proceedings under Chapter 7.--In addition to breach or modification of the consent agreement under subsection (c), the following shall be deemed consent to proceedings under Chapter 7:
(1) Failure of the governing body of the distressed municipality to convene or the failure of a quorum of the governing body to participate in a special public meeting required by subsection (a).
(2) Failure of the governing body or, if applicable, the chief executive officer to enact a valid ordinance under subsection (c).
(3) Failure of the distressed municipality to comply with the consent agreement or provision of an ordinance enacted under subsection (c).
(4) Enactment by the distressed municipality of an amendment to the ordinance enacted in subsection (c) in violation of subsection (e).
(e) Amendment.--The ordinance may be amended upon the approval of the secretary.
(f) Collective bargaining.--A collective bargaining agreement or arbitration settlement executed following the enactment of an ordinance under this section may not in any manner violate, expand or diminish the provisions of the consent agreement, provided, however, that the provisions of section 2523 shall apply to any consent agreement adopted in accordance with this subchapter.

Credits

1987, July 10, P.L. 246, No. 47, § 607, added 2011, Oct. 20, P.L. 318, No. 79, § 2, imd. effective. Amended 2014, Oct. 31, P.L. 2983, No. 199, § 28, effective in 60 days [Dec. 30, 2014].

Footnotes

1
53 P.S. § 11701.223.
2
53 P.S. § 11701.701 et seq.
3
53 P.S. § 11701.252.
53 P.S. § 11701.607, PA ST 53 P.S. § 11701.607
Current through Act 13 of the 2024 Regular Session. Some statute sections may be more current, see credits for details.
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