PRINTER'S NO. 2237
No. 1783 Session of 1989
INTRODUCED BY SERAFINI, TIGUE, BELARDI, HASAY, CAWLEY, BLAUM,
JAROLIN AND STABACK, JUNE 28, 1989
REFERRED TO COMMITTEE ON CONSUMER AFFAIRS, JUNE 28, 1989
AN ACT
1 Amending Title 66 (Public Utilities) of the Pennsylvania
2 Consolidated Statutes, providing incentives for water
3 utilities to preserve watershed lands.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Section 102 of Title 66 of the Pennsylvania
7 Consolidated Statutes is amended by adding a definition to read:
8 § 102. Definitions.
9 Subject to additional definitions contained in subsequent
10 provisions of this part which are applicable to specific
11 provisions of this part, the following words and phrases when
12 used in this part shall have, unless the context clearly
13 indicates otherwise, the meanings given to them in this section:
14 * * *
15 "Watershed land." Real property located within the drainage
16 area of any lake, stream, reservoir, river or other body of
17 water, which body of water is used, directly or indirectly, to
18 provide drinking water to the public. The term shall include any
1 interest in such real estate and any affiliated interest
2 acquired by a public utility to protect its water distribution
3 facilities.
4 Section 2. Title 66 is amended by adding sections to read:
5 § 529. Transfer of watershed land.
6 (a) Transfer of watershed land.--A public utility engaged in
7 the business of diverting, developing, pumping, impounding,
8 distributing or furnishing water to or for the public for
9 compensation, that wishes to sell, lease or otherwise transfer
10 an interest in watershed land shall first petition for and
11 obtain the approval from the commission for the transaction. The
12 commission shall prohibit a public utility from selling, leasing
13 or otherwise transferring watershed land if the commission
14 determines that the sale, lease or transfer could have an
15 adverse effect on the safety, adequacy, efficiency or
16 reasonableness of the utility's service; or increase the
17 utility's cost of providing service to its customers.
18 (b) Requirements of utility petition.--Whenever a public
19 utility files a petition seeking approval of the sale, lease or
20 other transfer of watershed land, as set forth in subsection
21 (a), the utility shall demonstrate that the sale, lease or
22 transfer will not have an adverse effect on the safety,
23 adequacy, efficiency or reasonableness of the utility's service;
24 or increase the utility's cost of providing service to its
25 customers.
26 (c) Procedure.--The commission shall hold hearings to make
27 the determinations required by subsection (a) or (b). In a
28 proceeding, the commission shall determine the reasonableness of
29 the compensation received by the utility for the sale, lease or
30 other transfer of watershed land. The affected public utility
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1 shall have the burden of proof in any proceeding pursuant to
2 this section.
3 (d) Environmental questions.--The commission shall certify
4 to the Department of Environmental Resources questions regarding
5 the applicability of environmental laws and regulations, when
6 the question arises in a proceeding under this section, and
7 shall incorporate the department's findings in its decision.
8 (e) Transactions with affiliates.--In any instance where the
9 utility proposes to sell, lease or otherwise transfer watershed
10 land to an affiliated interest of the utility, as defined in
11 section 2101 (relating to definition of affiliated interest),
12 the commission shall not approve the sale, lease or transfer
13 unless the commission finds that the compensation received by
14 the utility is at least equal to the fair market value of the
15 watershed land being sold, leased or transferred.
16 (f) Regulations.--The commission shall adopt regulations to
17 carry out its powers and duties under this section.
18 § 1327. Recognition of proceeds of sale of watershed land.
19 (a) Accounting required.--Whenever a public utility engaged
20 in the business of diverting, developing, pumping, impounding,
21 distributing or furnishing water to or for the public for
22 compensation sells, leases or otherwise transfers an interest in
23 watershed land, the utility shall keep a separate record of the
24 gross proceeds of such sale, lease or other transfer; the
25 undepreciated original cost of the property; the accrued
26 depreciation on the property; and the expenses directly
27 associated with the sale, lease or other transfer of the
28 property.
29 (b) Duties of commission.--In any proceeding in which the
30 commission determines a level of just and reasonable rates for a
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1 public utility engaged in the business of diverting, developing,
2 pumping, impounding, distributing or furnishing water to or for
3 the public for compensation, the commission shall credit to
4 ratepayers the net proceeds of the sale, lease or other transfer
5 of watershed land by the utility.
6 (c) Definition.--As used in this section, the term "net
7 proceeds" means:
8 (1) If the purchaser, lessee or transferee is an
9 affiliated interest of the utility as defined in section 2101
10 (relating to definition of affiliated interest), the greater
11 of:
12 (i) the proceeds received from the transfer less the
13 depreciated original cost of the property less the
14 expenses directly associated with the transfer which are
15 properly allocable to the utility; or
16 (ii) the fair market value of the watershed land
17 transferred less the depreciated original cost of the
18 property less the expenses directly associated with the
19 transfer which are properly allocable to the utility.
20 (2) If the purchaser, lessee or transferee is not an
21 affiliated interest of the utility as defined in section
22 2101, the proceeds received from the transfer less the
23 depreciated original cost of the property less the utility's
24 expenses directly associated with the transfer.
25 Section 3. This act shall take effect in 60 days.
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