PRINTER'S NO. 2889
No. 2193 Session of 1998
INTRODUCED BY L. I. COHEN, ORIE, RUBLEY, LEDERER, LAUGHLIN,
SAYLOR, SEMMEL, YOUNGBLOOD, CLYMER, C. WILLIAMS, SEYFERT,
HENNESSEY AND RAMOS, FEBRUARY 4, 1998
REFERRED TO COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT,
FEBRUARY 4, 1998
AN ACT
1 Requiring the substitution of and equivalency for the single
2 currency of the European Union in certain contracts,
3 securities and instruments.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Short title.
7 This act shall be known and may be cited as the European
8 Union Currency Equivalency Law.
9 Section 2. Definitions.
10 The following words and phrases when used in this act shall
11 have the meanings given to them in this section unless the
12 context clearly indicates otherwise:
13 "Euro." The currency of participating member states of the
14 European Union that adopt a single currency in accordance with
15 the treaty on European Union signed February 7, 1992.
16 "European currency unit" or "ECU." The currency basket that
17 is from time to time used as the unit of account of the European
1 Community as defined in European Council Regulation No.3320/94.
2 At such time as the euro first becomes the monetary unit of
3 participating member states of the European Union:
4 (1) References to the ECU in a contract, security or
5 instrument that defines or refers to the ECU in terms similar
6 to this definition shall be replaced by references to the
7 euro at a rate of one euro to one ECU.
8 (2) References to the ECU in a contract, security or
9 instrument that does not define or refer to the ECU in terms
10 similar to this definition shall be presumed, unless
11 demonstrated or proven to the contrary by the intention of
12 the parties, to refer to the currency basket that is from
13 time to time used as the unit of account of the European
14 Community in accordance with the treaty of the European Union
15 signed February 7, 1992.
16 "Introduction of the euro." This term includes the
17 implementation from time to time of economic and monetary union
18 in member states of the European Union in accordance with the
19 treaty of European Union signed February 7, 1992.
20 Section 3. Equivalents required.
21 (a) General rule.--If a subject or medium of payment of a
22 contract, security or instrument is a currency that has been
23 substituted for or replaced by the euro, the euro shall be a
24 commercially reasonable substitute and substantial equivalent
25 that may be either:
26 (1) used in determining the value of the currency; or
27 (2) tendered in each case at the conversion rate
28 specified in and otherwise calculated in accordance with the
29 regulations adopted by the Council of the European Union.
30 (b) Substitution for ECU.--If a subject or medium of payment
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1 of a contract, security or instrument is the ECU, the euro shall
2 be a commercially reasonable substitute and substantial
3 equivalent that may be either:
4 (1) used in determining the value of the ECU; or
5 (2) tendered in each case at the conversion rate
6 specified in and otherwise calculated in accordance with the
7 regulations adopted by the Council of the European Union.
8 (c) Operation.--Performance of any of the obligations
9 described in subsections (a) and (b) may be made either in the
10 currency or currencies originally designated in the contract,
11 security or instrument, provided that such currency or
12 currencies remain legal tender or in euro. No other currency
13 shall be used, whether or not such other currency:
14 (1) has been substituted or replaced by the euro; or
15 (2) is a currency that is considered a denomination of
16 the euro and has a fixed conversion rate with respect to the
17 euro.
18 (d) Operation not to excuse performance or create unilateral
19 rights.--None of the following events shall have the effect of
20 discharging or excusing performance under any contract, security
21 or instrument or giving a party to any contract, security or
22 instrument the right to unilaterally alter or terminate the
23 contract, security or instrument:
24 (1) the introduction of the euro;
25 (2) the tendering of euro in connection with any
26 obligation in compliance with subsection (a) or (b);
27 (3) the determining of the value of any obligation in
28 compliance with subsection (a) or (b); or
29 (4) the calculating or determining of the subject or
30 medium of payment of a contract, security or instrument with
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1 reference to interest rate or other basis that has been
2 substituted or replaced due to the introduction of the euro
3 and that is a commercially reasonable substitute and
4 substantial equivalent.
5 Section 4. Construction of act.
6 Nothing in this act shall be construed to alter or impair the
7 rights of parties to any contract, security or instrument that
8 specifically refers to the introduction of the euro. In
9 circumstances involving currency alteration, other than the
10 introduction of the euro, nothing in this act shall be construed
11 as creating any negative inference or negative presumption
12 regarding the validity or enforceability of any contract,
13 security or instrument denominated in whole or in part in a
14 currency affected by that alteration.
15 Section 5. Applicability.
16 Notwithstanding the provisions of Title 13 of the
17 Pennsylvania Consolidated Statutes or any other law of this
18 Commonwealth, this act shall apply to all contracts, securities
19 and instruments, including, but not limited to, commercial
20 transactions.
21 Section 6. Effective date.
22 This act shall take effect in 60 days.
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