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| PRIOR PRINTER'S NOS. 138, 1354 | PRINTER'S NO. 1376 |
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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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| AS AMENDED ON THIRD CONSIDERATION, AUGUST 11, 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. As used in this |
9 | subclause, the term "non-profit membership corporation" means an |
10 | entity, the membership of which: |
11 | (A) consists solely of Pennsylvania boroughs, such as a |
12 | consortium, buying group or municipal power agency under section |
13 | 2471.2; or |
14 | (B) consists of Pennsylvania boroughs and political |
15 | subdivisions of another state or states. |
16 | (viii) An electric cooperative of another state. |
17 | Nothing in this clause shall prohibit council from engaging in |
18 | advertising, bidding or price quotations if the council |
19 | determines that the advertising, bidding or price quotations are |
20 | in the public interest. |
21 | * * * |
22 | Section 2. The act is amended by adding a section to read: |
23 | Section 2471.3. Additional Contracting Authority for |
24 | Electric Power and Energy.--(a) In addition to the authority |
25 | provided under section 2471, a borough that is a member of a |
26 | non-profit membership corporation may contract with the non- |
27 | profit membership corporation for the following: |
28 | (1) The development of electric power and associated energy |
29 | including the conduct of investigations or studies necessary to |
30 | determine the feasibility and cost of additional sources and |
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1 | supplies of electric power and associated energy. |
2 | (2) The purchase, sale, exchange, interchange, wheeling, |
3 | pooling or transmission of electric power and associated energy |
4 | or the right to the capacity from sources and projects in this |
5 | Commonwealth or another state for a period not to exceed fifty |
6 | years. |
7 | (b) A contract under subsection (a)(2) shall include the |
8 | purpose of the contract, the duration of the contract and |
9 | available procedures to terminate the contract subsequent to the |
10 | repayment of all indebtedness secured under the contract. |
11 | (c) If a borough is a member of a non-profit membership |
12 | corporation, a contract under subsection (a)(2) may, if |
13 | specifically set forth in the contract, obligate the borough to: |
14 | (1) take and pay for a minimum quantity of electric power |
15 | and associated energy if the power and energy is available for |
16 | delivery; |
17 | (2) in connection with a project owned by the non-profit |
18 | membership corporation or in which the non-profit membership |
19 | corporation obtains an undivided ownership interest, to take or |
20 | pay for a minimum amount of electric power and energy; or |
21 | (3) pay for electric power and energy only if utilized by |
22 | the borough. |
23 | (d) (1) The authority under subsection (c)(1) shall apply |
24 | whether or not the borough accepts delivery of the power and |
25 | energy. |
26 | (2) The authority under subsection (c)(2) shall apply |
27 | notwithstanding the suspension, interruption, interference or |
28 | reduction or curtailment of the output of the project or the |
29 | electric power and energy contracted for, and whether or not: |
30 | (i) the electric power and energy is available for delivery |
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1 | to the borough; or |
2 | (ii) the borough accepts delivery of the electric power and |
3 | energy. |
4 | (e) No borough may be obligated under a take-or-pay or take- |
5 | and-pay arrangement entered into with a non-profit membership |
6 | corporation in which the borough maintains membership unless |
7 | that obligation is expressly authorized by an act of the borough |
8 | council. |
9 | (f) A non-profit membership corporation shall not: |
10 | (1) condition membership in the non-profit membership |
11 | corporation on the inclusion of any take-or-pay or take-and-pay |
12 | obligations in a contract under subsection (a)(2); or |
13 | (2) except as set forth in subsection (g), require take-or- |
14 | pay or take-and-pay obligations in a contract with a borough |
15 | unless the contract meets the criteria of subsection (c)(1) or |
16 | (2). |
17 | (g) The General Assembly finds and declares as follows: | <-- |
18 | (1) A borough which is a member of a non-profit membership |
19 | corporation may enter into future power supply contracts, |
20 | contract renewals or contract extensions with the non-profit |
21 | membership corporation under subsection (c)(3): |
22 | (i) (1) with no take-or-pay or take-and-pay obligations as | <-- |
23 | permitted by subsection (c)(1) and (2); and |
24 | (ii) (2) without prejudice or discrimination as compared to | <-- |
25 | any other borough which chooses to enter into contracts |
26 | permitted by subsection (c)(1) and (2) with the non-profit |
27 | membership corporation. |
28 | (2) (h) In order to carry out clause (1) subsection (g), a | <-- |
29 | non-profit membership corporation which provides or offers |
30 | electric power and associated energy to a member borough in this |
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1 | Commonwealth under subsection (a)(2) shall offer, to all of its |
2 | member boroughs in this Commonwealth, future power supply |
3 | contract terms, contract renewals or contract extensions under |
4 | subsection (c)(3) on a comparable and nondiscriminatory basis |
5 | and with similar terms and conditions to future power supply |
6 | contract terms, contract renewals or contract extensions that |
7 | would be appropriate under subsection (c)(3) which the non- |
8 | profit membership corporation contemporaneously offers to its |
9 | members in other states. |
10 | (h) (i) All obligations under a contract under subsection | <-- |
11 | (a)(2) shall be paid from revenues derived from the operation of |
12 | the borough's electric system, and payments shall be an |
13 | operating expense of the borough's electric system. |
14 | (i) (j) If explicitly set forth in a contract under | <-- |
15 | subsection (a)(2), a borough may agree to assume, prorate or |
16 | otherwise become liable for the obligations of another borough |
17 | of this Commonwealth or of a political subdivision of another |
18 | state that is a member of the non-profit membership corporation |
19 | if the borough or other political subdivision defaults in the |
20 | payment of its obligations for the purchase of the electric |
21 | power and associated energy. The contract may include provisions |
22 | to permit a borough to succeed to the rights and interests of |
23 | the defaulting borough or political subdivision to purchase |
24 | electric power and associated energy. A borough's liability for |
25 | the obligations of a defaulting borough of this Commonwealth or |
26 | a political subdivision of another state shall not exceed |
27 | twenty-five percent of a borough's initial nominal entitlement |
28 | to electric power and associated energy under the contract. |
29 | (j) (k) None of the obligations under the contract shall | <-- |
30 | constitute a legal or equitable pledge, charge, lien or |
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1 | encumbrance on any property of the borough or on any of its |
2 | income, receipts or revenues, except revenues of its electric |
3 | system. The full faith and credit and the taxing power of the |
4 | borough shall not be pledged for the payment of an obligation |
5 | under the contract. |
6 | (k) (l) The provisions of this section are intended to add | <-- |
7 | to the powers and rights of a borough, and nothing in this |
8 | section shall be construed to limit either the general or |
9 | specific powers or rights of a borough set forth in this act. |
10 | (l) (m) As used in this section, the term "non-profit | <-- |
11 | membership corporation" means an entity the membership of which: |
12 | (1) consists solely of Pennsylvania boroughs, such as a |
13 | consortium, buying group or municipal power agency under section |
14 | 2471.2; or |
15 | (2) consists of Pennsylvania boroughs and political |
16 | subdivisions of another state or states. |
17 | Section 3. This act shall take effect in 60 days | <-- |
18 | immediately. | <-- |
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