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HARRISBURG -- Local governments could engage in emergency short-term borrowing to get through the COVID-19 crisis under a House-passed bill that won approval in a Senate committee on Tuesday.
House Bill 2536 approved unanimously by the Local Government Committee would allow counties, cities, boroughs, townships and school districts to borrow money through emergency tax anticipation notes until the end of fiscal year 2022.
Drafted with the help of the Local Government Commission, HB2536 if enacted would help local governments manage cash flow during the COVID-19 emergency.
Local governments can finance TANs based on forecasts of forthcoming revenue. The bill allows governments to finance the emergency TANs for a period longer than the current period of one year.
The House approved the bill sponsored by Rep. Lee James, R-Venango, by a near unanimous vote last June. The Senate panel amended the bill to have the TANs mature at the end of fiscal year 2022.
According to a Local Government Commission analysis, local governments have faced shifted tax deadlines, job losses among residents and emergency expenses because of the pandemic.
"It is likely that many entities will not have collected all the taxes and fees that have been levied during the current fiscal year by the time traditional tax anticipation notes would mature later this fall," the analysis said. "The provisions of this bill would allow these entities to have more time to repay TANs with a longer maturity term."
The bill is moving through the Senate at a time of uncertain prospects on whether Washington will approve a second COVID-19 relief package with aid directly earmarked to local and state governments.
A number of local government associations support the legislation.
"The additional flexibility is needed and should provide further support to school districts that may experience cash flow issues because of the severe downturn in local revenues due to the crisis," said John M. Callahan, chief advocacy officer for the Pennsylvania School Boards Association.
The Pennsylvania Municipal League supports HB2536 noting it's an optional tool, said spokeswoman Amy Sturges.
Tackling another pandemic issue, the Senate panel also unanimously approved Senate Bill 1164 to require reporting of COVID-19 deaths to county coroners.
The bill addresses problems that coroners have faced in getting information from state Health Department officials about COVID-19 deaths, said sponsor Sen. Judy Ward, R-Blair.
The bill would remove the phrase "having a view of the body" relating to coroner's duties and specify that any possible COVID-19 deaths must be reported to the coroner for investigation.