As released by the Office of Senator Rob Teplitz:

Committee Approves Bills to Improve Oversight of Municipal Financing Deals

The bills would prevent financial debacles like the Harrisburg incinerator project 

HARRISBURG, June 26, 2013 — Two measures aimed at providing better state oversight of municipal financing deals received approval today from the Senate Local Government Committee, according to state Sen. Rob Teplitz, the committee’s Democratic chairman and a co-sponsor of the bills.

Senate Bill 901 makes several reforms to the Local Government Unit Debt Act, including limiting local government guarantees of municipal authority borrowings, eliminating the ability to charge a fee for issuing a guarantee, and giving the state Department of Community and Economic Development (DCED) greater authority over the borrowing processes of local government units.

Senate Bill 902 allows the State Ethics Commission to investigate alleged ethical violations by individuals involved in financial transactions by municipal authorities. Currently, the Ethics Commission does not have this jurisdiction. If ethical violations are found, they would be considered a violation of the state Public Official and Employee Ethics Act and those individuals would be subject to the scrutiny of the Ethics Commission, district attorney, or the Office of Attorney General.

“Municipalities across the state, including the City of Harrisburg, are strained because of risky financing schemes that didn’t work out in their favor. Now, the taxpayers are paying the price,” said Teplitz (D-Dauphin/York). “For the sake of the future prosperity of our communities, we need to make sure that safeguards are put in place. These bills will take significant steps toward providing better supervision of financing deals and improve how municipalities utilize taxpayer dollars.”

The bills are part of a legislative package that Teplitz and other lawmakers introduced last month to address the financial consequences of risky borrowing in municipalities.

The Harrisburg’s incinerator project, which greatly contributed to the city’s current financial struggles, inspired the legislation approved in committee today.

The bills now move to the full Senate for consideration.