THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY BROWNE, ERICKSON, BOSCOLA, FOLMER, ALLOWAY, ROBBINS, ORIE, WAUGH, PIPPY AND EARLL, MARCH 2, 2009

REFERRED TO STATE GOVERNMENT, MARCH 2, 2009  

AN ACT

Prohibiting government competition with private enterprise.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Short title.

This act shall be known and may be cited as the Free

Enterprise and Taxpayer Protection Act.

Section 2.  Declaration of policy.

The General Assembly finds and declares as follows:

(1)  Private enterprise is necessary to the health,

welfare and prosperity of this Commonwealth.

(2)  Government competes with private enterprise when it

provides goods and services to the public beyond its

government function.

(3)  This act is intended to protect economic

opportunities for private enterprise against unfair

competition by government agencies and to enhance the

efficient provision of goods and services to the public.

Section 3.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Agency."  A government agency as defined in this act.

"Authority."  Any authority created by a government agency or

agencies for a purpose other than the purpose of the agency or

agencies.

"Commercial activity."  Performing services or providing

goods that can normally be obtained from private enterprise.

"Government agency."  The State, any unit of State

government, and any municipality, municipal or county authority

or political subdivision. The term includes all of the

following:

(1)  An entity which is not majority-owned as private

property and established under the Constitution of

Pennsylvania, statute, ordinance or any other order or action

by the entity or its officers.

(2)  A State-owned and State-related university,

community college and public school district.

"Government competition."  The provision of goods or services

to the public by government agencies that are essentially the

same as those offered by private enterprise.

"Government functions."  Those functions that are exclusively

the prerogative of government, including operation of the agency

or department, fulfillment of the legal obligations of the

agency, law enforcement and the judicial system.

"Invited guests."  Persons who enter onto a campus for

educational, research or public service activity and not

primarily to purchase or receive goods and services which are

not related to the educational, research or public service

activity for which the persons enter onto the campus.

"Local agency."  A department, office, commission,

institution, board or other agency or local organization,

regardless of whether moneys are appropriated to the agency,

including cities, boroughs, towns, townships or any other

municipal entity.

"Necessary services."  Those services that are critical for

human safety and health, including fire departments, emergency

services and medical services.

"Private enterprise."  An individual, firm, partnership,

joint venture, corporation, association or any other legal

entity engaging in the manufacturing, processing, sale, offering

for sale, rental, leasing, delivery, dispensing, distributing or

advertising of goods or services for profit.

"Private sector."  Two or more competing privately owned

companies.

"Public service."  An activity that is normally and generally

associated with community colleges and universities in this

Commonwealth, a purpose or significant result of which is not to

engage in competition with private enterprise.

"State agency."  A department, office, commission,

institution, board or other agency or State organization,

regardless of whether moneys are appropriated to the agency.

"Telecommunications."  Radio, telegraph, telefax, telephoto,

television, cable and satellite transmission, computer, Internet

and other electronic services.

"Utilities."  Provision of electric power and water supply.

"Vital services."  Those services that are vital to the

public, including water and electric supply, sewers, garbage and

trash removal, recycling, streets and roads, public

transportation and public transportation infrastructure, State

and local correctional facilities, child care, elder care,

telecommunication services which include radio, telegraph,

telefax, telephoto, television cable and satellite transmission,

computer, Internet and other electronic services.

Section 4.  Government competition prohibited.

Government, government agencies, State-owned and State-

related universities, community colleges, school districts and

public authorities are prohibited from competing against private

enterprise, including by intergovernmental or interagency

agreement, and are prohibited from funding, capitalizing,

securing the indebtedness of, or leasing the obligations of, or

subsidizing, any charitable or not-for-profit institution which

would use such support to compete against private enterprise.

Section 5.  Excepted functions and services.

The following functions or services are excepted from the

provisions of section 4:

(1)  Government functions.

(2)  Necessary services. Nothing in this act shall

preclude a government agency or authority from utilizing

private enterprise to provide necessary services.

(3)  Vital services, to the extent such services are not

available from private enterprise. In such cases, government

shall make good faith efforts for private enterprise to

furnish such services.

(4)  The development, management and operation of State

parks, historical monuments and hiking or equestrian trails.

(5)  Provisions of goods and services to students and

invited guests by State-owned and State-related universities,

community colleges and public school districts.

Section 6.  Existing government competition.

(a)  General rule.--In cases of government competition

against private enterprise that exist on the effective date of

this act, the government agency or authority may continue to

engage in the competition but may not exceed the scope of the

competition.

(b)  Construction.--Nothing in this act shall be construed to

preclude a government agency or authority from contracting with

private enterprise to provide goods or services to the public.

Section 7.  Financial statements.

(a)  Maintenance.--

(1)  In all cases of commercial activity by government

agencies, annual financial statements of all income and

expenses of the commercial activities shall be maintained

separately and on the same basis as the financial statements

of the government agencies.

(2)  Income from monetary assets of government agencies

shall not be shown as income of commercial activities but

shall be shown as income of the government agencies.

(b)  Income from government agencies.--The financial

statements of commercial activities shall not include any income

from government agencies. Grants shall not be included as income

of the commercial activities, but shall be shown as income to

the government agencies.

(c)  Common expenses.--The financial statements of commercial

activities shall include proportionate amounts of common

expenses shared with government agencies, including utility

costs, supplies, repair and replacement costs, insurance of all

types, employee compensation, employee benefits, payroll taxes,

debt service and depreciation of all types.

(d)  Audit.--The financial statements of government agencies

and commercial activities shall be audited and certified as

correct by a certified public accountant and auditor within 120

days after the end of the annual accounting period and when

certified shall be released to the public.

Section 8.  Remedies.

(a)  Nature of action and jurisdiction.--The civil cause of

action authorized under this section shall be brought in the

Commonwealth Court, which shall have jurisdiction to issue

preliminary and permanent injunctive relief.

(b)  Preliminary orders.--

(1)  An affected person or entity may file a complaint

seeking preliminary injunctive relief by alleging that a

government agency is participating or planning to participate

in commercial activity resulting in new competition with

existing private enterprise. Upon receipt of the complaint,

the court shall order a preliminary hearing, which shall not

be later than 30 days from the date of the order.

(2)  The court shall issue appropriate preliminary

injunctive relief if at the preliminary hearing the plaintiff

makes a prima facie showing that:

(i)  the government agency is or is planning to

participate in commercial activity;

(ii)  that commercial activity results or will result

in competition with private enterprise;

(iii)  the government has not made a good faith

effort for private enterprise to furnish vital services;

and

(iv)  the threat to private enterprise or public

moneys is imminent.

(3)  The plaintiff shall not be required to show no

adequate remedy at law or irreparable harm nor any other

common law element applicable to obtaining preliminary

injunctive relief.

(4)  If the court finds that the government agency is

participating or planning to participate in commercial

activity resulting in competition with private enterprise but

that preliminary injunctive relief is not warranted the court

shall deny the request for preliminary injunctive relief and

proceed to trial.

(c)  Permanent injunction.--Where, after a final hearing on

the merits, the court finds that a government agency is

participating or planning to participate in commercial activity

resulting in competition with private enterprise in violation of

this act, the court shall grant permanent injunctive relief and

shall issue orders as necessary to abate the government

competition with private enterprise.

(d)  Monetary damages.--The court may award actual monetary

damages to the plaintiff. The plaintiff must prove actual

damages by clear and convincing evidence.

(e)  Recovery of costs.--Whenever an action for injunctive

relief and damages brought under this section terminates in a

settlement or judgment favorable to the plaintiff, the plaintiff

shall be entitled to recover the actual costs of the suit,

including reasonable attorney fees and all expenses and

disbursements made by the plaintiff in bringing the action.

Section 30.  Effective date.

This act shall take effect in 60 days.