Pennsylvania Amends Municipality Authorities Act To Restrict Authority Expenditures

On June 27, 2012, Pennsylvania Governor Tom Corbett signed into law Senate Bill 375, which had been approved by a vote of 47-0 in the Senate on June 13 and by a vote of 196-0 in the House on June 19. The bill places certain restrictions on municipal water and sewer authorities' ability to expend resources on activities not related to their core purpose. By amending Title 53 of the Pennsylvania Consolidated Statutes to add new Section 5612(a.1), the bill provides that authority funds may not be used "for any grant, loan or other expenditure for any purpose other than a service or project directly related to the mission or purpose of the authority as set forth in the articles of incorporation or in the resolution or ordinance establishing the authority." With limited exceptions, the bill additionally provides ratepayers with a cause of action in the courts of common pleas to recover improper expenditures directly from the recipient.