The Financially Distressed Municipalities Act ''(Act of 1987, P.L. 246, No. 47)'', also known as Act 47, is a

Pennsylvania Pennsylvania (; ( Pennsylvania Dutch: )), officially the Commonwealth of Pennsylvania, is a state spanning the Mid-Atlantic, Northeastern, Appalachian, and Great Lakes regions of the United States. It borders Delaware to its southeast, ...

statute A statute is a formal written enactment of a legislative authority that governs the legal entities of a city, state, or country by way of consent. Typically, statutes command or prohibit something, or declare policy. Statutes are rules made by le ...

outlining procedures to stabilize

municipalities A municipality is usually a single administrative division having corporate status and powers of self-government or jurisdiction as granted by national and regional laws to which it is subordinate. The term ''municipality'' may also mean the go ...

in Pennsylvania undergoing

financial distress Financial distress is a term in corporate finance used to indicate a condition when promises to creditors of a company are broken or honored with difficulty. If financial distress cannot be relieved, it can lead to bankruptcy. Financial distres ...

. The Act empowers the

Pennsylvania Department of Community and Economic Development Pennsylvania Department of Community and Economic Development is a cabinet-level state agency in Pennsylvania. The mission of the department is to enhance investment opportunities for businesses and to improve the quality of life for residents. Th ...

to declare certain

as financially distressed. It provides for the restructuring of debt of financially distressed municipalities, limits the ability of financially distressed municipalities to obtain

government funding A government is the system or group of people governing an organized community, generally a state. In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government is a ...

; authorizes municipalities to participate in federal

debt adjustment Debt adjustment is a form of debt relief that allows a government, organization, corporation, or individual to repay a debt over a longer period of time and with smaller payment amounts than the lender and borrower originally agreed upon. It is an a ...

actions and

bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor ...

actions under certain circumstances; and provides for consolidation or merger of

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municipalities to relieve financial distress.

History

Most provisions of Act 47 initially remained suspended until the termination of the Pennsylvania Intergovernmental Cooperation Act (Section 708 of Act 1991, June 5, P.L. 9, No 6). The cities of

Erie Erie (; ) is a city on the south shore of Lake Erie and the county seat of Erie County, Pennsylvania, United States. Erie is the fifth largest city in Pennsylvania and the largest city in Northwestern Pennsylvania with a population of 94,831 a ...

and Altoona, among others, have narrowly avoided Act 47 designation. Their mayors seek legislative changes to the binding arbitration rules of Act 111, as well as a reduction in the designation of tax-exempt properties, to improve their financial health.

Benefits of Act 47

Although some municipalities (listed in the chart below) have had the Financially Distressed designation removed, most cannot afford to lose the benefits Act 47 provides. The benefits include revenue from the nonresident wage tax available only to cities with Act 47 status.

Distressed municipalities

The following municipalities were designated as part of the Municipalities Financial Recovery Program as of the date indicated. Any dates of imposition and lifting of sanctions, and the rescinding of the initial designation are also noted.
List of Act 47 Municipalities

References

{{Reflist

External links

Municipalities Financial Recovery Act, Third Edition, January 2001

Pittsburgh Act 47 Plan
1987 in law Pennsylvania statutes 1987 in Pennsylvania