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| PRIOR PRINTER'S NO. 138 | PRINTER'S NO. 1354 |
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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY BRUBAKER, EICHELBERGER, RAFFERTY, FERLO, STOUT, EARLL, O'PAKE, KASUNIC, BROWNE, PILEGGI AND ERICKSON, FEBRUARY 2, 2009 |
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| SENATOR CORMAN, APPROPRIATIONS, RE-REPORTED AS AMENDED, JULY 28, 2009 |
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| AN ACT |
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1 | Amending the act of February 1, 1966 (1965 P.L.1656, No.581), |
2 | entitled "An act concerning boroughs, and revising, amending |
3 | and consolidating the law relating to boroughs," further |
4 | providing for regulation of contracts; and providing for |
5 | additional contracting authority for electric power and |
6 | energy. |
7 | The General Assembly of the Commonwealth of Pennsylvania |
8 | hereby enacts as follows: |
9 | Section 1. Section 1402(d) of the act of February 1, 1966 |
10 | (1965 P.L.1656, No.581), known as The Borough Code, is amended |
11 | by adding a clause to read: |
12 | Section 1402. Regulation of Contracts.--* * * |
13 | (d) The contracts or purchases made by council, which shall |
14 | not require advertising, bidding or price quotations as |
15 | hereinbefore provided, are as follows: |
16 | * * * |
17 | (6) Those made relating to the purchase of electricity and |
18 | associated energy and related services with any of the |
19 | following: |
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1 | (i) A political subdivision. |
2 | (ii) Another state. |
3 | (iii) The Commonwealth or an agency thereof. |
4 | (iv) The Federal Government. |
5 | (v) A private corporation. |
6 | (vi) An electric cooperative corporation under 15 Pa.C.S. |
7 | Ch. 73 (relating to electric cooperative corporations). |
8 | (vii) A non-profit membership corporation whose membership | <-- |
9 | consists of Pennsylvania boroughs and municipalities of another |
10 | state. |
11 | (vii) A non-profit membership corporation. As used in this | <-- |
12 | subclause, the term "non-profit membership corporation" means an |
13 | entity, the membership of which: |
14 | (A) consists solely of Pennsylvania boroughs, such as a |
15 | consortium, buying group or municipal power agency under section |
16 | 2471.2; or |
17 | (B) consists of Pennsylvania boroughs and political |
18 | subdivisions of another state or states. |
19 | (viii) An electric cooperative of another state. |
20 | Nothing in this clause shall prohibit council from engaging in |
21 | advertising, bidding or price quotations if the council |
22 | determines that the advertising, bidding or price quotations are |
23 | in the public interest. |
24 | * * * |
25 | Section 2. The act is amended by adding a section to read: |
26 | Section 2471.3. Additional Contracting Authority for |
27 | Electric Power and Energy.--(a) In addition to the authority |
28 | provided under section 2471, a borough that is a member of a |
29 | non-profit membership corporation may contract with the non- |
30 | profit membership corporation for the following: |
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1 | (1) The development of electric power and associated energy |
2 | including the conduct of investigations or studies necessary to |
3 | determine the feasibility and cost of additional sources and |
4 | supplies of electric power and associated energy. |
5 | (2) The purchase, sale, exchange, interchange, wheeling, |
6 | pooling or transmission of electric power and associated energy |
7 | or the right to the capacity from sources and projects in this |
8 | Commonwealth or another state for a period not to exceed fifty |
9 | years. |
10 | (b) A contract under subsection (a)(2) shall include the |
11 | purpose of the contract, the duration of the contract and |
12 | available procedures to terminate the contract subsequent to the |
13 | repayment of all indebtedness secured under the contract. |
14 | (c) If a borough is a member of a non-profit membership |
15 | corporation, a contract under subsection (a)(2) may, if |
16 | specifically set forth in the contract, obligate the borough to: |
17 | (1) take and pay for a minimum quantity of electric power |
18 | and associated energy if the power and energy is available for |
19 | delivery; or | <-- |
20 | (2) in connection with a project owned by the non-profit |
21 | membership corporation or in which the non-profit membership |
22 | corporation obtains an undivided ownership interest, to take or |
23 | pay for a minimum amount of electric power and energy.; or | <-- |
24 | (3) pay for electric power and energy only if utilized by |
25 | the borough. |
26 | (d) (1) The authority under subsection (c)(1) shall apply |
27 | whether or not the borough accepts delivery of the power and |
28 | energy. |
29 | (2) The authority under subsection (c)(2) shall apply |
30 | notwithstanding the suspension, interruption, interference or |
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1 | reduction or curtailment of the output of the project or the |
2 | electric power and energy contracted for, and whether or not: |
3 | (i) The the electric power and energy is available for | <-- |
4 | delivery to the borough.; or | <-- |
5 | (ii) The the borough accepts delivery of the electric power | <-- |
6 | and energy. |
7 | (e) No borough may be obligated under a take-or-pay or take- | <-- |
8 | and-pay arrangement entered into with a non-profit membership |
9 | corporation in which the borough maintains membership unless |
10 | that obligation is expressly authorized by an act of the borough |
11 | council. |
12 | (e) (f) A non-profit membership corporation shall not: | <-- |
13 | (1) condition membership in the non-profit membership |
14 | corporation on the inclusion of any take-or-pay or take-and-pay |
15 | obligations in a contract under subsection (a)(2); or |
16 | (2) require take-or-pay or take-and-pay obligations in a | <-- |
17 | contract with a borough unless the contract meets the criteria |
18 | of subsection (c)(1) or (2). |
19 | (2) except as set forth in subsection (g), require take-or- | <-- |
20 | pay or take-and-pay obligations in a contract with a borough |
21 | unless the contract meets the criteria of subsection (c)(1) or |
22 | (2). |
23 | (g) The General Assembly finds and declares as follows: |
24 | (1) A borough which is a member of a non-profit membership |
25 | corporation may enter into future power supply contracts, |
26 | contract renewals or contract extensions with the non-profit |
27 | membership corporation under subsection (c)(3): |
28 | (i) with no take-or-pay or take-and-pay obligations as |
29 | permitted by subsection (c)(1) and (2); and |
30 | (ii) without prejudice or discrimination as compared to any |
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1 | other borough which chooses to enter into contracts permitted by |
2 | subsection (c)(1) and (2) with the non-profit membership |
3 | corporation. |
4 | (2) In order to carry out clause (1), a non-profit |
5 | membership corporation which provides or offers electric power |
6 | and associated energy to a member borough in this Commonwealth |
7 | under subsection (a)(2) shall offer, to all of its member |
8 | boroughs in this Commonwealth, future power supply contract |
9 | terms, contract renewals or contract extensions under subsection |
10 | (c)(3) on a comparable and nondiscriminatory basis and with |
11 | similar terms and conditions to future power supply contract |
12 | terms, contract renewals or contract extensions that would be |
13 | appropriate under subsection (c)(3) which the non-profit |
14 | membership corporation contemporaneously offers to its members |
15 | in other states. |
16 | (f) (h) All obligations under a contract under subsection | <-- |
17 | (a)(2) shall be paid from revenues derived from the operation. | <-- |
18 | Payments of the borough's electric system, and payments shall be | <-- |
19 | an operating expense of the borough's electric system. |
20 | (g) (i) If explicitly set forth in a contract under | <-- |
21 | subsection (a)(2), a borough may agree to assume, prorate or |
22 | otherwise, become liable for the obligations of another borough | <-- |
23 | of this Commonwealth or of a municipality political subdivision | <-- |
24 | of another state that is a member of the non-profit membership |
25 | corporation if the borough or other municipality political | <-- |
26 | subdivision defaults in the payment of its obligations for the |
27 | purchase of the electric power and associated energy. The |
28 | contract may include provisions to permit a borough to succeed |
29 | to the rights and interests of the defaulting borough or |
30 | municipality political subdivision to purchase electric power | <-- |
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1 | and associated energy. A borough's liability for the obligations |
2 | of a defaulting borough of this Commonwealth or a municipality | <-- |
3 | political subdivision of another state shall not exceed twenty- | <-- |
4 | five percent of a borough's initial nominal entitlement to |
5 | electric power and associated energy under the contract. |
6 | (h) (j) None of the obligations under the contract shall | <-- |
7 | constitute a legal or equitable pledge, charge, lien or |
8 | encumbrance on any property of the borough or on any of its |
9 | income, receipts or revenues, except revenues of its electric |
10 | system. The full faith and credit and the taxing power of the |
11 | borough shall not be pledged for the payment of an obligation |
12 | under the contract. |
13 | (k) The provisions of this section are intended to add to | <-- |
14 | the powers and rights of a borough, and nothing in this section |
15 | shall be construed to limit either the general or specific |
16 | powers or rights of a borough set forth in this act. |
17 | (l) As used in this section, the term "non-profit membership |
18 | corporation" means an entity the membership of which: |
19 | (1) consists solely of Pennsylvania boroughs, such as a |
20 | consortium, buying group or municipal power agency under section |
21 | 2471.2; or |
22 | (2) consists of Pennsylvania boroughs and political |
23 | subdivisions of another state or states. |
24 | Section 3. This act shall take effect in 60 days. |
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