THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY PETRI, CALTAGIRONE, CLYMER, D. COSTA, CUTLER, DENLINGER, GEIST, GEORGE, HENNESSEY, HESS, MOUL, MURT, RAPP, SCAVELLO, K. SMITH, WAGNER, WATSON AND WHITE, FEBRUARY 8, 2011

REFERRED TO COMMITTEE ON FINANCE, FEBRUARY 8, 2011  

AN ACT

Amending Title 64 (Public Authorities and Quasi-Public

Corporations) of the Pennsylvania Consolidated Statutes, in

Commonwealth Financing Authority, further providing for

indebtedness; and establishing the Energy Independence Bond

Guarantee Program.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 1543(b) and (d) of Title 64 of the

Pennsylvania Consolidated Statutes are amended to read:

§ 1543.  Indebtedness.

* * *

(b)  Program limitations.--Indebtedness incurred by the

authority under subsection (a) shall not, in aggregate, exceed

any of the following:

(1)  $300,000,000 for the program established in section

1551 (relating to Business in Our Sites Program).

(2)  $150,000,000 for the program established in section

1552 (relating to First Industries Program).

(3)  $60,000,000 for the program established in section

1557 (relating to New Pennsylvania Venture Capital Investment

Program).

(4)  $150,000,000 for the program established in section

1555 (relating to Building Pennsylvania Program).

(5)  $75,000,000 for the program established in 12

Pa.C.S. Ch. 29.

(6)  $250,000,000 for the program established in section

1554 (relating to New Pennsylvania Venture Guarantee

Program).

(7)  $100,000,000 for the program established in section

1556 (relating to Tax Increment Financing Guarantee Program).

(8)  $50,000,000 for the program established in section

1553 (relating to Second Stage Loan Program).

(9)  $1,000,000,000 for the program established in

section 1559 (relating to Energy Independence Bond Guarantee

Program).

* * *

(d)  Exception.--Subsection (c) shall not apply to the

aggregate amount of indebtedness incurred by the authority,

including through the issuance of bonds, for the following

programs:

(1)  The program established in section 1553.

(2)  The program established in section 1554.

(3)  The program established in section 1556.

(4)  The program established in section 1559.

* * *

Section 2.  Title 64 is amended by adding a section to read:

§ 1559.  Energy Independence Bond Guarantee Program.

(a)  Establishment.--There is established a program to be

known as the Energy Independence Bond Guarantee Program. The

program shall guarantee the payment of energy independence bonds

issued by public utilities to the public, provided that the

public utilities agree to certain requirements specified in this

section and by the authority.

(b)  Guarantee applications.--A public utility may submit an

application to the authority requesting a guarantee of payment

for energy independence bonds issued by the public utility to

the public. The application shall be on a form required by the

board and shall include or demonstrate all of the following:

(1)  The applicant's name and address.

(2)  The resumes of the individuals responsible for the

infrastructure development project decisions of the

applicant.

(3)  A history of the applicant's infrastructure

development.

(4)  The location of all infrastructure development

projects intended to be financed in whole or in part by

proceeds from energy independence bonds issued by the

applicant.

(5)  That the revenues to be realized from the

infrastructure development projects will be sufficient to

offset the amount of debt service to be paid on the energy

independence bonds.

(6)  The amount of the guarantee sought.

(7)  A listing of banks with which the applicant intends

to enter into an agreement or has already entered into an

agreement for selling the energy independence bonds of the

applicant to the public.

(8)  A statement of the fees or other payment proposed to

be paid to the authority by the applicant as consideration

for the issuance of a guarantee.

(9)  Any other information required by the board.

(c)  Application review.--The board shall review the

application to determine all of the following:

(1)  That the applicant intends to issue energy

independence bonds meeting the requirements of this section.

(2)  That the applicant will provide the board with its

annual financial statements, audited by a nationally

recognized independent certified public accountant, for the

duration of the guarantee. Financial statements shall be

prepared in accordance with generally accepted accounting

principles.

(3)  That the board will have the ability to determine

that the subject of a proposed infrastructure development

project using proceeds from the energy independence bonds is

acceptable to the board prior to the applicant expending the

proceeds.

(4)  That the applicant has complied with all other

requirements established by the board.

(d)  Approval of guarantee.--Upon being satisfied that all

requirements have been met, the board may approve the

application, and, if approved, the authority shall execute a

guarantee agreement in favor of the applicant. In addition to

any other terms and conditions required by the board, the

guarantee agreement shall provide for all of the following:

(1)  Each energy independence bond shall have a face

value of $100 and shall state on its face that repayment is

guaranteed by the authority.

(2)  The energy independence bonds shall be sold by the

applicant at its offices and at financial institutions in

this Commonwealth that have entered into an agreement with

the applicant for that purpose, which agreement provides that

the financial institution may not receive more than 1% of the

proceeds from each energy independence bond sold.

(3)  The applicant shall provide the authority with the

right to inspect the infrastructure development projects

supported by the proceeds from the energy independence bonds. 

(4)  The applicant shall not permit any work on the

infrastructure development projects to be conducted outside

this Commonwealth and shall only use materials produced in

the United States unless the authority grants a waiver

therefrom in writing.

(5)  The procedure under which the holder of an energy

independence bond may submit a claim for payment under the

guarantee agreement in the event that the applicant is unable

to do so.

(6)  A provision that the guarantee will cover the face

amount of the energy independence bond.

(7)  A procedure and schedule for the periodic

reconciliation of amounts payable under the guarantee.

(8)  A prohibition against the transfer of the benefits

of the guarantee to another person without the prior approval

of the board.

(9)  If the authority makes payment on a claim submitted

by the holder of an energy independence bond, the authority

may assume all rights and privileges previously belonging to

the bondholder and may renegotiate the terms of the repayment

of the debt guaranteed by the authority under terms as the

authority deems appropriate.

(e)  Limitations.--

(1)  The liability of the authority for any guarantee

approved under this section shall be limited to the approved

amount of that guarantee.

(2)  The board may approve guarantees under this section

not to exceed $1,000,000,000 in the aggregate for public

utilities. No public utility shall receive more than

$300,000,000   in guarantees under this section.

(3)  Applications for guarantees may be accepted until

July 1, 2010, or until the aggregate of approved guarantees

equals $1,000,000,000, whichever occurs first.

(4)  No individual may purchase more than ten energy

independence bonds issued by any public utility.

Section 3.  This act shall take effect in 60 days.