PRINTER'S NO. 764
No. 658 Session of 2003
INTRODUCED BY HERMAN, DALEY, PHILLIPS, DeWEESE, HERSHEY, GEORGE,
ADOLPH, ALLEN, ARMSTRONG, BASTIAN, BEBKO-JONES, BELFANTI,
BROWNE, CAPPELLI, CAWLEY, COSTA, CREIGHTON, CURRY, DAILEY,
FAIRCHILD, GRUCELA, GRUITZA, HARHAI, HARPER, HENNESSEY,
LaGROTTA, LAUGHLIN, LEACH, McILHATTAN, PALLONE, PETRARCA,
READSHAW, REICHLEY, SAINATO, SANTONI, SATHER, SAYLOR, SEMMEL,
SHANER, STAIRS, TANGRETTI, TIGUE, WASHINGTON, WILT AND
WOJNAROSKI, MARCH 4, 2003
REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY,
MARCH 4, 2003
AN ACT
1 Amending the act of April 9, 1929 (P.L.177, No.175), entitled
2 "An act providing for and reorganizing the conduct of the
3 executive and administrative work of the Commonwealth by the
4 Executive Department thereof and the administrative
5 departments, boards, commissions, and officers thereof,
6 including the boards of trustees of State Normal Schools, or
7 Teachers Colleges; abolishing, creating, reorganizing or
8 authorizing the reorganization of certain administrative
9 departments, boards, and commissions; defining the powers and
10 duties of the Governor and other executive and administrative
11 officers, and of the several administrative departments,
12 boards, commissions, and officers; fixing the salaries of the
13 Governor, Lieutenant Governor, and certain other executive
14 and administrative officers; providing for the appointment of
15 certain administrative officers, and of all deputies and
16 other assistants and employes in certain departments, boards,
17 and commissions; and prescribing the manner in which the
18 number and compensation of the deputies and all other
19 assistants and employes of certain departments, boards and
20 commissions shall be determined," further providing for
21 energy development; abolishing the Energy Development
22 Authority; establishing the Energy Partnership; and making an
23 appropriation.
24 The General Assembly finds and declares as follows:
25 (1) The purpose of this act is to establish an advisory
1 board on energy issues and provide a solid base of State
2 funding for energy research programs in this Commonwealth.
3 (2) Although there are abundant indigenous energy
4 resources, Pennsylvania faces a tremendous challenge to meet
5 its energy needs while protecting the public and the
6 environment.
7 (3) Without adequate attention to continuing input from
8 persons knowledgeable about energy-related issues in this
9 Commonwealth and without sufficient State funding for
10 targeted research, Pennsylvania faces the consequences of
11 falling behind on energy information, projects and programs
12 affecting quality of life now and in the future.
13 (4) The Energy Institute at The Pennsylvania State
14 University and other Pennsylvania colleges and universities
15 have endeavored to work with Federal and State Government
16 agencies and with industry and labor engaged in the energy
17 sector to improve Pennsylvania's energy and environmental
18 future, but their research is significantly underfunded.
19 (5) This underfunding represents missed opportunities
20 for Pennsylvania to participate in research and development
21 programs that require matching funds and it places the
22 Commonwealth in a poor competitive position with respect to
23 other states rich in energy resources.
24 (6) Pennsylvania must help publicly supported
25 researchers to work closely with energy businesses,
26 consumers, conservationists, environmentalists and others to
27 identify challenges and opportunities before such research is
28 conducted and to transfer the information and technology
29 resulting from such research.
30 (7) This act promotes Pennsylvania as a leader in
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1 energy-related issues and provides funds to support targeted
2 research initiatives so that the Commonwealth can meet
3 tomorrow's energy needs while using our natural resources
4 responsibly.
5 (8) Energy research and development is a critically
6 important activity with great public benefits.
7 (9) The Energy Institute at The Pennsylvania State
8 University and other Pennsylvania colleges and universities
9 conduct basic, developmental and adaptive research related to
10 the energy and related environmental sectors.
11 (10) Commonwealth funds should be expended to enhance
12 and sustain publicly supported programs for energy and
13 related environmental research in Pennsylvania.
14 (11) An energy partnership board should be established
15 to advise the Governor and the Department of Community and
16 Economic Development regarding energy supply, development,
17 production, use and demand management in Pennsylvania.
18 The General Assembly of the Commonwealth of Pennsylvania
19 hereby enacts as follows:
20 Section 1. Section 2801-C of the act of April 9, 1929
21 (P.L.177, No.175), known as The Administrative Code of 1929,
22 added December 14, 1982 (P.L.1213, No.280), is amended to read:
23 Section 2801-C. Definitions.--The following words and
24 phrases when used in this article shall have the meanings given
25 to them in this section unless the context clearly indicates
26 otherwise:
27 ["Authority" means the Energy Development Authority.]
28 "Board" means the board of directors of the [authority]
29 partnership.
30 ["Bond" or "Bonds" means notes, bonds, refunding or renewal
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1 notes and bonds and other evidence of indebtedness or
2 obligations which the authority is authorized to issue.]
3 "Carbon-based industries" means Pennsylvania-based aggregate,
4 coal, electricity-generation, petroleum and natural gas
5 industries.
6 "Cost" means the expense of construction and the expense of
7 acquisition of all structures, lands and other property rights
8 and interests in land necessary to a project. The term also
9 includes the expense of demolishing, removing or relocating any
10 buildings or structures on lands acquired or to be acquired,
11 including the expense of acquiring any lands to which such
12 buildings or structures may be moved or relocated; sewage
13 treatment, waste treatment and pollution control facilities;
14 railroad sidings, spurs or branch lines; all labor, materials,
15 machinery and equipment, fixtures; financing charges; [interest
16 on all bonds prior to and during construction, and for a period
17 of one year thereafter;] engineering, financial and legal
18 services; plans, specifications, studies, surveys necessary or
19 incidental to determining the feasibility or practicability of
20 constructing a project; administrative expenses; reserves for
21 interest and for extension, enlargements, additions and
22 improvements; and such other expenses as may be necessary or
23 incidental to the construction of the project and the placing of
24 the same in operation.
25 "Department" means the Department of Community and Economic
26 Development of the Commonwealth.
27 "Partnership" means the Energy Partnership established in
28 section 2803-C.
29 "Person" means a natural person, corporation, partnership,
30 association, and any municipality of this Commonwealth and any
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1 public corporation, authority or body whatsoever.
2 "Petroleum product" includes motor gasoline, kerosene,
3 distillates (including Number 2 fuel oil) and diesel fuel.
4 "Project" means an activity, entirely or largely conducted in
5 Pennsylvania, which cannot be effectively funded using privately
6 available resources, relating to:
7 (1) basic and applied research concerning energy use, energy
8 demand management, renewable energy resources and energy
9 extraction, transmission, storage [or], conversion, pollution
10 avoidance and control technologies and development of value-
11 added products using carbon-based industries and resources;
12 (2) limited scale demonstration of innovative or
13 commercially unproven technology to promote the conservation,
14 production[,] or use [or conservation] of energy and aggregate
15 resources, consistent with economic feasibility, environmental
16 protection and public health and safety; or
17 (3) activities to promote or remove obstacles to the
18 utilization and transportation of Pennsylvania energy resources,
19 including but not limited to limited scale synthetic fuel
20 facilities and the conversion or technological improvement of
21 industrial, commercial or agricultural systems to utilize
22 Pennsylvania [coal or] carbon-based, aggregate and renewable
23 energy resources: Provided, That no such facility unreasonably
24 interferes with private waste recycling industries.
25 "Renewable resources" means sources of electricity which can
26 be naturally replenished, including solar, wind, geothermal,
27 biomass and small hydroelectric resources and alternative
28 generation technologies, such as fuel cells.
29 Section 2. Section 2803-C of the act, amended or added
30 December 14, 1982 (P.L.1213, No.280) and July 11, 1985 (P.L.211,
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1 No.55), is amended to read:
2 Section 2803-C. Energy [Development Authority]
3 Partnership.--(a) [There] The Energy Partnership is [hereby]
4 established [the Energy Development Authority] as an advisory
5 board in the department.
6 (b) The [authority] partnership shall [be governed and all
7 of its corporate powers exercised by a board of directors which
8 shall] be composed of the following individuals:
9 (1) [Nine] Sixteen members to be appointed by the Governor.
10 [, one of whom shall be designated as chairman. At least two
11 members shall be members of the general public. The members
12 initially appointed shall serve for terms of two, three and four
13 years, respectively, the particular term of each to be
14 designated by the Governor at the time of appointment. The terms
15 of all of their successors shall be four years each, except that
16 any person appointed to fill a vacancy shall serve only for the
17 unexpired term. Every member's term shall extend until his
18 successor is appointed and qualified. Any appointment of a
19 member of the authority shall be subject to the advice and
20 consent of a majority of all of the members of the Senate. Any
21 appointed member of the authority shall be eligible for
22 reappointment.] The Governor shall designate one of the public
23 officials appointed by him as chairman of the partnership, and
24 that official shall serve as chief advisor to the Governor and
25 the department for energy policy and research development.
26 Members must be knowledgeable in fields related to energy and
27 aggregate resource development, production and use. Appointments
28 shall be as follows:
29 (i) Two members must each be a representative of an electric
30 power utility.
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1 (ii) One member must be a representative of the independent
2 oil or gas exploration and production industry in this
3 Commonwealth.
4 (iii) One member must be a representative of a local natural
5 gas distribution company in this Commonwealth.
6 (iv) One member must be a representative of the crude oil
7 refining industry operating in this Commonwealth.
8 (v) One member must be a representative of the anthracite
9 coal industry.
10 (vi) One member must be a representative of the bituminous
11 coal industry.
12 (vii) One member must be a representative of a small power
13 producer.
14 (viii) Two members must be representatives of renewable
15 energy producers.
16 (ix) One member must be a representative of either the
17 energy efficiency industry or the demand-side management
18 industry.
19 (x) One member must be a representative of an aggregate
20 industry.
21 (xi) One member must be a representative of the Energy
22 Institute of The Pennsylvania State University. The member under
23 this subclause shall be a nonvoting member.
24 (xii) One member must be a representative of the energy
25 research staff of a college or university other than The
26 Pennsylvania State University. The member under this subclause
27 shall be a nonvoting member.
28 (xiii) One member must be a representative of an
29 organization which represents environmental interests.
30 (xiv) One member must be a representative of organized labor
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1 who is employed by an energy-related industry.
2 (2) The Secretary of Environmental [Resources] Protection or
3 his designee.
4 (3) The Secretary of [Banking] Public Welfare or his
5 designee.
6 (4) The Secretary of [Commerce] Community and Economic
7 Development or his designee.
8 (5) The Secretary of Agriculture or his designee.
9 (6) Two members of the Senate, one from the majority party
10 and one from the minority party, to be appointed by the
11 President pro tempore to serve at his pleasure, or the designees
12 appointed by such members.
13 (7) Two members of the House of Representatives, one from
14 the majority party and one from the minority party, to be
15 appointed by the Speaker of the House to serve at his pleasure,
16 or the designees appointed by such members.
17 (8) The Consumer Advocate or his designee.
18 (9) The Chairman of the Public Utility Commission or his
19 designee.
20 (10) The Director of the Pennsylvania Emergency Management
21 Agency.
22 (c) The members of the board of directors shall be entitled
23 to no compensation for their services as members but shall be
24 entitled to reimbursement for [all necessary] travel, room and
25 board expenses incurred in [connection with the performance of
26 their duties as members] attending partnership meetings.
27 (d) The board of directors shall provide for the holding of
28 regular and special meetings. [Ten] Thirteen directors attending
29 shall constitute a quorum for the transaction of any business
30 and at least [six] nine votes shall be required to adopt any
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1 action, except that at least [nine] eleven votes shall be
2 required to [approve] recommend financial assistance for any
3 project.
4 (e) Recusal shall be as follows:
5 (1) A director may not participate in a decision affecting
6 an entity if the director or a member of the director's
7 immediate family:
8 (i) is a partner in the entity;
9 (ii) is a director or an officer of the entity; or
10 (iii) holds at least five percent (5%) voting stock in the
11 entity.
12 (2) A decision made in violation of clause (1) is void.
13 (3) Recusal under clause (1) shall not affect the quorum
14 under subsection (d).
15 (f) The persons who on the effective date of this subsection
16 are members of the board of directors of the former Energy
17 Development Authority who meet the requirements of subsection
18 (b)(1) may continue to serve on the board until their terms on
19 the Energy Development Authority would have expired and may be
20 reappointed to the board of directors of the partnership for
21 successive terms.
22 Section 3. Section 2804-C of the act, added December 14,
23 1982 (P.L.1213, No.280), is amended to read:
24 Section 2804-C. Technical and Financial Support.--(a) The
25 [Governor] department shall [designate a State agency to]
26 provide staff services to the [authority] partnership for its
27 administration of [the act] this article, including technical
28 services to assist the [authority] partnership in carrying out
29 the provisions of this article.
30 (b) The [authority] partnership may utilize personnel and
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1 services from any departments, agencies or any other authorities
2 of the Commonwealth whose facilities and services may be useful
3 to the [authority] partnership for [their] implementation of
4 this article upon approval of such departments, agencies or
5 authorities.
6 (c) The [authority] partnership is authorized to make
7 reimbursement to any agency, department or authority of the
8 Commonwealth for such expenses as may be incurred in the
9 provision of any services or the use of any facilities acquired
10 by the [authority] partnership.
11 (d) Notwithstanding the provisions of 66 Pa.C.S. § 511
12 (relating to disposition, appropriation and disbursement of
13 assessments and fees), or any other statute of this
14 Commonwealth, no funds received as reimbursement under this
15 section shall be considered to be in substitution for funds from
16 any other source, nor shall such funds reduce assessments to any
17 utility. No such funds shall lapse at the termination of any
18 fiscal year nor shall such funds reduce any assessment by the
19 Public Utility Commission in any fiscal year.
20 Section 4. Sections 2806-C, 2807-C, 2808-C, 2809-C, 2810-C,
21 2811-C, 2812-C and 2813-C of the act are repealed.
22 Section 5. The act is amended by adding sections to read:
23 Section 2814-C. Powers and Duties.--(a) The department
24 assumes all outstanding obligations of the former Energy
25 Development Authority.
26 (b) The partnership shall serve as advisor to the Governor
27 and the department and make recommendations on energy matters,
28 including:
29 (1) The status of energy supply and production in this
30 Commonwealth.
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1 (2) More prudent and efficient use of energy in this
2 Commonwealth.
3 (3) Promoting the development of this Commonwealth's
4 abundant carbon-based energy resources in an environmentally
5 sound manner.
6 (4) Planning for future energy needs and potential energy
7 emergencies.
8 (5) Providing affordable and secure energy sources to
9 citizens of this Commonwealth, with special attention to the
10 needs of low-income citizens.
11 (6) Improving the reliability and security of energy supply
12 and generation in this Commonwealth.
13 (7) Pursuing a diverse, flexible and balanced energy supply
14 mix.
15 (8) Balancing the needs of energy users and energy producers
16 through regulations which promote improved government-to-
17 industry relations, better customer service and reasonable costs
18 for users and producers.
19 (9) Marketing, and providing data about, this Commonwealth's
20 energy resources to interested parties.
21 (10) Sustaining, expanding and developing market
22 applications for the Commonwealth's energy resources.
23 (11) Promoting the development and marketing of this
24 Commonwealth's renewable energy resources.
25 (12) Promoting energy conservation technologies and
26 encouraging the conservation of energy on a continuing basis,
27 even at times when there is an abundant supply of energy.
28 (13) Under section 2815-C, reviewing and recommending
29 financial assistance for projects through grants or loans
30 approved by the department, with emphasis upon establishing
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1 project partnerships with energy industries, Federal agencies
2 and institutions of higher education in this Commonwealth.
3 Section 2815-C. Allocation and Use of Financial Assistance
4 Funds for Energy Projects.--(a) (1) Appropriations for energy
5 projects shall be made to the department, which, after
6 consultation with the partnership, shall allocate funds
7 appropriated under this article to the following entities,
8 providing each the shares indicated:
9 (i) the Energy Institute at The Pennsylvania State
10 University, eighty percent (80%); and
11 (ii) other Pennsylvania colleges and universities with
12 energy-related research programs, twenty percent (20%), which
13 shall be allocated to one or more applying universities on a
14 project-by-project basis.
15 (2) Three years after the effective date of this section and
16 every three years thereafter, the partnership shall review the
17 percentages set forth in clause (1) and make recommendations to
18 the department regarding their appropriateness. The department
19 shall report continued or revised levels of allocations to the
20 General Assembly in its annual budget request.
21 (b) The universities receiving funds under this article
22 shall work closely with the partnership to develop and
23 prioritize an energy research, development and application
24 agenda. To support that agenda, funds shall be expended as
25 follows:
26 (1) To support a broad program of energy research, to
27 include research on the development, use and marketing of
28 Pennsylvania carbon-based energy resources and the related
29 environmental, economic and social impacts of the results of
30 such research, development and application activities.
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1 (2) To support research in pursuit of an affordable,
2 balanced and reliable energy supply mix to meet future energy
3 needs and environmental requirements.
4 (3) To support nonprofit groups that provide energy
5 assistance, utility assistance or weatherization or cooling
6 assistance, to promote energy conservation.
7 (4) To meet the expenses required to conduct the research,
8 development and application activities. It is intended that the
9 institutions that receive energy research assistance shall
10 continue to:
11 (i) operate and maintain the on-campus buildings and
12 facilities used in their energy-related programs and to provide
13 the support services typically provided other university
14 programs from the higher education budget; and
15 (ii) fund energy-related programs from the higher education
16 budget.
17 (5) (i) A minimum of eighty-five percent (85%) of the funds
18 allocated to each institution shall be used to fund and support
19 research, development and application activities identified in
20 clauses (1) through (4). Of this amount, a minimum of ten
21 percent (10%) shall be used to fund an innovative competitive
22 grants program administered jointly by the institutions
23 identified in subsection (a).
24 (ii) The grants program is intended to be organized around
25 desired practical, quantifiable and achievable objectives in the
26 energy sector.
27 (iii) Proposals may be submitted by any nonprofit
28 institution, organization, agency or business in this
29 Commonwealth. All research, development and application
30 activities must take place within this Commonwealth.
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1 (iv) The principal investigator must be a qualified
2 researcher with experience in an energy-related industry or
3 discipline.
4 (v) The partnership shall be advised of submitted proposals,
5 and, at its discretion, may assist in evaluating and selecting
6 proposals for cooperative funding.
7 (6) Funds from other public or private sources shall be
8 combined with funds appropriated under this article to support
9 projects and related expenses authorized under this section such
10 that the funds awarded under this section constitute no more
11 than seventy-five percent (75%) of the total direct cost of each
12 project.
13 (c) This section shall apply to all projects, including
14 those at the institutions named in this section.
15 Section 2816-C. Administrative Oversight.--(a) The
16 department shall provide general administrative oversight with
17 the assistance and advice of the partnership. Energy research
18 administrators at each of the funded institutions shall
19 administer the specifics of the research program. Annually,
20 these administrators shall prepare a combined proposed budget
21 that the Secretary of Community and Economic Development shall
22 submit to the Governor for inclusion in the executive budget and
23 consideration by the General Assembly. The budget shall specify
24 major categories of proposed expenditures, including salaries,
25 wages, benefits, operation and maintenance costs, supplies and
26 expenses, and capital improvements related to energy research
27 projects.
28 (b) To offset the cost of administering this article, the
29 department may retain one percent (1%) of the total
30 appropriation under section 2817-C.
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1 Section 2817-C. Appropriation.--The sum of $6,000,000, or as
2 much thereof as may be necessary, is hereby appropriated to the
3 Department of Community and Economic Development for the fiscal
4 year July 1, 2003, to June 30, 2004, to carry out the purposes
5 of this article.
6 Section 6. This act shall take effect in 60 days.
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