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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY BROWNE, ERICKSON, BOSCOLA, FOLMER, ALLOWAY, ROBBINS, ORIE, WAUGH, PIPPY AND EARLL, MARCH 2, 2009 |
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| REFERRED TO STATE GOVERNMENT, MARCH 2, 2009 |
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| AN ACT |
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1 | Prohibiting government competition with private enterprise. |
2 | The General Assembly of the Commonwealth of Pennsylvania |
3 | hereby enacts as follows: |
4 | Section 1. Short title. |
5 | This act shall be known and may be cited as the Free |
6 | Enterprise and Taxpayer Protection Act. |
7 | Section 2. Declaration of policy. |
8 | The General Assembly finds and declares as follows: |
9 | (1) Private enterprise is necessary to the health, |
10 | welfare and prosperity of this Commonwealth. |
11 | (2) Government competes with private enterprise when it |
12 | provides goods and services to the public beyond its |
13 | government function. |
14 | (3) This act is intended to protect economic |
15 | opportunities for private enterprise against unfair |
16 | competition by government agencies and to enhance the |
17 | efficient provision of goods and services to the public. |
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1 | Section 3. Definitions. |
2 | The following words and phrases when used in this act shall |
3 | have the meanings given to them in this section unless the |
4 | context clearly indicates otherwise: |
5 | "Agency." A government agency as defined in this act. |
6 | "Authority." Any authority created by a government agency or |
7 | agencies for a purpose other than the purpose of the agency or |
8 | agencies. |
9 | "Commercial activity." Performing services or providing |
10 | goods that can normally be obtained from private enterprise. |
11 | "Government agency." The State, any unit of State |
12 | government, and any municipality, municipal or county authority |
13 | or political subdivision. The term includes all of the |
14 | following: |
15 | (1) An entity which is not majority-owned as private |
16 | property and established under the Constitution of |
17 | Pennsylvania, statute, ordinance or any other order or action |
18 | by the entity or its officers. |
19 | (2) A State-owned and State-related university, |
20 | community college and public school district. |
21 | "Government competition." The provision of goods or services |
22 | to the public by government agencies that are essentially the |
23 | same as those offered by private enterprise. |
24 | "Government functions." Those functions that are exclusively |
25 | the prerogative of government, including operation of the agency |
26 | or department, fulfillment of the legal obligations of the |
27 | agency, law enforcement and the judicial system. |
28 | "Invited guests." Persons who enter onto a campus for |
29 | educational, research or public service activity and not |
30 | primarily to purchase or receive goods and services which are |
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1 | not related to the educational, research or public service |
2 | activity for which the persons enter onto the campus. |
3 | "Local agency." A department, office, commission, |
4 | institution, board or other agency or local organization, |
5 | regardless of whether moneys are appropriated to the agency, |
6 | including cities, boroughs, towns, townships or any other |
7 | municipal entity. |
8 | "Necessary services." Those services that are critical for |
9 | human safety and health, including fire departments, emergency |
10 | services and medical services. |
11 | "Private enterprise." An individual, firm, partnership, |
12 | joint venture, corporation, association or any other legal |
13 | entity engaging in the manufacturing, processing, sale, offering |
14 | for sale, rental, leasing, delivery, dispensing, distributing or |
15 | advertising of goods or services for profit. |
16 | "Private sector." Two or more competing privately owned |
17 | companies. |
18 | "Public service." An activity that is normally and generally |
19 | associated with community colleges and universities in this |
20 | Commonwealth, a purpose or significant result of which is not to |
21 | engage in competition with private enterprise. |
22 | "State agency." A department, office, commission, |
23 | institution, board or other agency or State organization, |
24 | regardless of whether moneys are appropriated to the agency. |
25 | "Telecommunications." Radio, telegraph, telefax, telephoto, |
26 | television, cable and satellite transmission, computer, Internet |
27 | and other electronic services. |
28 | "Utilities." Provision of electric power and water supply. |
29 | "Vital services." Those services that are vital to the |
30 | public, including water and electric supply, sewers, garbage and |
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1 | trash removal, recycling, streets and roads, public |
2 | transportation and public transportation infrastructure, State |
3 | and local correctional facilities, child care, elder care, |
4 | telecommunication services which include radio, telegraph, |
5 | telefax, telephoto, television cable and satellite transmission, |
6 | computer, Internet and other electronic services. |
7 | Section 4. Government competition prohibited. |
8 | Government, government agencies, State-owned and State- |
9 | related universities, community colleges, school districts and |
10 | public authorities are prohibited from competing against private |
11 | enterprise, including by intergovernmental or interagency |
12 | agreement, and are prohibited from funding, capitalizing, |
13 | securing the indebtedness of, or leasing the obligations of, or |
14 | subsidizing, any charitable or not-for-profit institution which |
15 | would use such support to compete against private enterprise. |
16 | Section 5. Excepted functions and services. |
17 | The following functions or services are excepted from the |
18 | provisions of section 4: |
19 | (1) Government functions. |
20 | (2) Necessary services. Nothing in this act shall |
21 | preclude a government agency or authority from utilizing |
22 | private enterprise to provide necessary services. |
23 | (3) Vital services, to the extent such services are not |
24 | available from private enterprise. In such cases, government |
25 | shall make good faith efforts for private enterprise to |
26 | furnish such services. |
27 | (4) The development, management and operation of State |
28 | parks, historical monuments and hiking or equestrian trails. |
29 | (5) Provisions of goods and services to students and |
30 | invited guests by State-owned and State-related universities, |
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1 | community colleges and public school districts. |
2 | Section 6. Existing government competition. |
3 | (a) General rule.--In cases of government competition |
4 | against private enterprise that exist on the effective date of |
5 | this act, the government agency or authority may continue to |
6 | engage in the competition but may not exceed the scope of the |
7 | competition. |
8 | (b) Construction.--Nothing in this act shall be construed to |
9 | preclude a government agency or authority from contracting with |
10 | private enterprise to provide goods or services to the public. |
11 | Section 7. Financial statements. |
12 | (a) Maintenance.-- |
13 | (1) In all cases of commercial activity by government |
14 | agencies, annual financial statements of all income and |
15 | expenses of the commercial activities shall be maintained |
16 | separately and on the same basis as the financial statements |
17 | of the government agencies. |
18 | (2) Income from monetary assets of government agencies |
19 | shall not be shown as income of commercial activities but |
20 | shall be shown as income of the government agencies. |
21 | (b) Income from government agencies.--The financial |
22 | statements of commercial activities shall not include any income |
23 | from government agencies. Grants shall not be included as income |
24 | of the commercial activities, but shall be shown as income to |
25 | the government agencies. |
26 | (c) Common expenses.--The financial statements of commercial |
27 | activities shall include proportionate amounts of common |
28 | expenses shared with government agencies, including utility |
29 | costs, supplies, repair and replacement costs, insurance of all |
30 | types, employee compensation, employee benefits, payroll taxes, |
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1 | debt service and depreciation of all types. |
2 | (d) Audit.--The financial statements of government agencies |
3 | and commercial activities shall be audited and certified as |
4 | correct by a certified public accountant and auditor within 120 |
5 | days after the end of the annual accounting period and when |
6 | certified shall be released to the public. |
7 | Section 8. Remedies. |
8 | (a) Nature of action and jurisdiction.--The civil cause of |
9 | action authorized under this section shall be brought in the |
10 | Commonwealth Court, which shall have jurisdiction to issue |
11 | preliminary and permanent injunctive relief. |
12 | (b) Preliminary orders.-- |
13 | (1) An affected person or entity may file a complaint |
14 | seeking preliminary injunctive relief by alleging that a |
15 | government agency is participating or planning to participate |
16 | in commercial activity resulting in new competition with |
17 | existing private enterprise. Upon receipt of the complaint, |
18 | the court shall order a preliminary hearing, which shall not |
19 | be later than 30 days from the date of the order. |
20 | (2) The court shall issue appropriate preliminary |
21 | injunctive relief if at the preliminary hearing the plaintiff |
22 | makes a prima facie showing that: |
23 | (i) the government agency is or is planning to |
24 | participate in commercial activity; |
25 | (ii) that commercial activity results or will result |
26 | in competition with private enterprise; |
27 | (iii) the government has not made a good faith |
28 | effort for private enterprise to furnish vital services; |
29 | and |
30 | (iv) the threat to private enterprise or public |
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1 | moneys is imminent. |
2 | (3) The plaintiff shall not be required to show no |
3 | adequate remedy at law or irreparable harm nor any other |
4 | common law element applicable to obtaining preliminary |
5 | injunctive relief. |
6 | (4) If the court finds that the government agency is |
7 | participating or planning to participate in commercial |
8 | activity resulting in competition with private enterprise but |
9 | that preliminary injunctive relief is not warranted the court |
10 | shall deny the request for preliminary injunctive relief and |
11 | proceed to trial. |
12 | (c) Permanent injunction.--Where, after a final hearing on |
13 | the merits, the court finds that a government agency is |
14 | participating or planning to participate in commercial activity |
15 | resulting in competition with private enterprise in violation of |
16 | this act, the court shall grant permanent injunctive relief and |
17 | shall issue orders as necessary to abate the government |
18 | competition with private enterprise. |
19 | (d) Monetary damages.--The court may award actual monetary |
20 | damages to the plaintiff. The plaintiff must prove actual |
21 | damages by clear and convincing evidence. |
22 | (e) Recovery of costs.--Whenever an action for injunctive |
23 | relief and damages brought under this section terminates in a |
24 | settlement or judgment favorable to the plaintiff, the plaintiff |
25 | shall be entitled to recover the actual costs of the suit, |
26 | including reasonable attorney fees and all expenses and |
27 | disbursements made by the plaintiff in bringing the action. |
28 | Section 30. Effective date. |
29 | This act shall take effect in 60 days. |
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