1Authorizing the Department of General Services to lease
2submerged lands in excess of 25 acres within Erie County, for
3the assessment, development, construction and operation of
4utility scale offshore wind, solar or kinetic energy
5generation facilities; providing for collection of certain
6lease and royalty payments; establishing the Lake Erie Large
7Scale Energy System Development Fund; and providing for
8transfers and distributions from the fund.

9The General Assembly of the Commonwealth of Pennsylvania
10hereby enacts as follows:

11Section 1. Short title.

12This act shall be known and may be cited as the Lake Erie
13Wind Energy Development Act.

14Section 2. Definitions.

15The following words and phrases when used in this act shall
16have the meanings given to them in this section unless the
17context clearly indicates otherwise:

18"Department." The Department of General Services of the
19Commonwealth.

20"Fund." The Lake Erie Large Scale Energy System Development

1Fund established by this act.

2"Large scale energy system" or "system." A wind energy
3generation system at more than 500 megawatts as measured by the
4nameplate capacity of the system or a solar energy system of at
5least 12 megawatts as measured by the nameplate capacity of the
6system.

7Section 3. Lands within the Lake Erie Basin.

8(a) Legislative declaration.--The General Assembly declares
9that the Commonwealth owns lands within the bed of Lake Erie, 
10all of which lands are located in Erie County.

11(b) Authorization.--

12(1) The Department of General Services, acting on behalf
13of the Commonwealth, may lease submerged lands equal to or
14greater than 25 acres, but not in excess of 10,000 contiguous
15acres, within the bed of Lake Erie in Erie County.

16(2) The department shall develop a map designating the
17areas of the bed of Lake Erie that may be leased for large
18scale energy system development. The department shall ensure
19that the areas that may be leased are concentrated in the
20central and western portion of Lake Erie, avoid development
21in nearshore areas, avoid shipping lanes and avoid areas of
22Lake Erie where migratory birds are concentrated.

23(3) The department shall develop and implement a
24competitive process for the leasing of submerged lands for
25the development of large scale energy systems to convert wind
26or solar energy to electricity. The competitive process shall
27include, at a minimum:

28(i) A demonstration by the bidders of their
29expertise, experience and financial capacity to conduct a
30feasibility study and to develop such a system.

1(ii) A certification that the bidder has the
2financial capability to cover all costs associated with
3the feasibility study and interconnecting to an energy
4distribution system.

5(iii) A demonstration by the bidders of the benefits
6to be accrued by the Commonwealth, including, but not
7limited to:

8(A) The number of full-time jobs to be created.

9(B) The overall economic impact of the proposed
10system.

11(C) The environmental benefits of the system.

12(D) The overall need for the system.

13(E) The amount of power to be provided by the
14proposed system.

15(F) An initial assessment of community and
16public acceptance of the proposed system.

17Section 4. Lease conditions.

18(a) Qualifications of lessees.--A lease and a subsequent
19long-term lease approved under this act shall be restricted to
20lessees who:

21(1) Demonstrate the expertise and capability to develop
22large scale energy systems in a marine environment.

23(2) Have been deemed to be the most qualified bidder
24based upon the criteria listed in section 3(b)(3) and any
25other additional criteria that may be developed by the
26department.

27(3) File with the department a bond payable to the
28Commonwealth to cover the entire cost associated with the
29removal of facilities developed pursuant to this act and
30located in submerged lands of Lake Erie.

1(b) Waters of this Commonwealth.--A lease and any subsequent
2long-term lease approved under section 3 shall ensure reasonable
3accommodation for fishing, maritime commerce, energy
4transmission rights-of-way and other current and future
5commercial and recreational uses of the waters of this
6Commonwealth held in the public trust.

7(c) Term of lease.--The initial term of a lease shall be for
8a term of up to seven years. The department may upon sufficient
9justification renew the lease for an additional three-year term.
10In the event the lessee does not develop the parcel or
11contiguous parcels of submerged lands by installing a large
12scale energy system within the initial seven-year lease period,
13the lease shall terminate.

14(d) Term of long-term lease.--

15(1) A person awarded a lease under this act may be
16eligible to enter into a long-term lease for the facilities
17to be constructed.

18(2) The department, based upon satisfactory evidence
19that the lessee is capable of long-term operation of the
20large scale energy system, may enter into a long-term lease
21with an initial term of up to 35 years for the construction,
22operation, maintenance and removal of a large scale energy
23system and any associated transmission facilities in Lake
24Erie.

25(3) The initial long-term lease may be extended for all
26or any portion of the leased premises for additional terms of
27up to 35 years.

28(4) The long-term lease shall contain a provision for
29termination if the lessee has not initiated construction of
30the large scale energy system within a reasonable period of

1time to be established in the terms of the lease.

2(5) The department may permit, as an option to the long-
3term lease, the ability of the lessee to lease contiguous
4parcels. The department shall have the authority to determine
5the size of the contiguous parcels but not to exceed
6increments of 10,000 acres.

7(e) Feasibility study.--

8(1) Prior to commencing construction of the system, a
9developer awarded a lease shall conduct a feasibility study
10to assess the ability of the large scale energy system to be
11viable and to assess the environmental impacts and siting
12considerations necessary to the successful development of
13such a system.

14(2) The environmental impacts to be addressed shall
15include, but not be limited to, the impacts to fishing,
16migratory bird and mammal routes.

17(3) The siting considerations to be assessed shall
18include, but not be limited to:

19(i) Ice impacts.

20(ii) Wind speed.

21(iii) Ship traffic.

22(iv) Viewshed impacts.

23(4) The department shall utilize the results of the
24feasibility study, as part of the review process associated
25with the approval or disapproval, to proceed with the
26construction of a large scale energy system.

27(5) No feasibility study, construction, installation or
28operation of large scale energy systems or other related
29structures on the lands subject to lease shall occur without
30adherence to Federal and State laws and prior receipt of all

1applicable Federal and State permits.

2(f) Improvements.--Development of the parcels authorized to
3be leased by this act shall be for large scale energy systems,
4including electrical collection and transmission facilities,
5submerged electrical transmission cables and other related
6structures.

7(g) Regulations.--The department shall, for purposes of
8leasing the bed of Lake Erie for large scale energy system
9development, adopt regulations which at a minimum:

10(1) Determine minimum standards for the technology used
11to construct large scale energy systems on and to transmit
12electricity from the areas of Lake Erie leased for that
13purpose.

14(2) Establish procedures for the conduct of feasibility
15studies by large scale energy system developers related to,
16but not limited to, the siting, economics and environmental
17issues of a system.

18(3) Establish reasonable fees to cover the costs
19incurred by the department and directly related to the
20preparation, review, execution of lease or other agreements
21associated with this act.

22(4) Establish a process for the developer of the large
23scale energy system to demonstrate community and public
24acceptance of the proposed system.

25(5) Establish any other requirements that the department
26determines are necessary to implement or administer this
27section.

28(6) Prohibit lessees from entering into subleases.

29(h) Covenants.--These conditions shall be covenants that run
30with the land and shall be binding upon the lessee. Should the

1lessee permit the parcels authorized to be leased under this
2section, or any portion thereof, to be used in a manner
3inconsistent with the conditions contained in this act, all
4rights and interests in the lease authorized by this act shall
5terminate immediately.

6(i) Lease agreements.--

7(1) Any lease and any other documents authorized by this
8act shall be approved as to form and legality by the Attorney
9General and the Office of General Counsel in accordance with
10law and shall be executed by the department, which approvals
11shall not be unreasonably withheld, in the name of the
12Commonwealth.

13(2) The lease shall grant the lessee the right to use
14the premises in accordance with this act for the purposes of
15conducting a feasibility study and development of large scale
16energy systems.

17(j) Sublease by department prohibited.--The department may
18not enter into subleases or nondisturbance agreements on any of
19the submerged lands of this Commonwealth in accordance with this
20act.

21(k) Transfer of interest prohibited.--Except as provided in
22section 3, this act does not authorize or otherwise allow for or
23include any transfer of any mineral or other surface or
24subsurface interest associated with Lake Erie submerged lands of
25this Commonwealth.

26Section 5. Other applicable law.

27Except as provided in section 3, nothing in this act shall be
28construed to affect or otherwise limit the requirements of the
29provisions of the act of November 26, 1978 (P.L.1375, No.325),
30known as the Dam Safety and Encroachments Act, which may require

1further measures to provide for public access and use of the
2land and adjacent water.

3Section 6. Interagency responsibilities.

4The department shall work cooperatively with:

5(1) The Department of Environmental Protection to ensure
6that all of the systems meet all applicable environmental
7standards and comply with all environmental permit
8requirements.

9(2) The Pennsylvania Public Utility Commission to
10establish that the proposed large scale energy system is
11viable, both economically and from an energy production
12perspective. The Pennsylvania Public Utility Commission shall
13also assist the department in assessing the system's impact
14on ratepayers, and the ability of the proposed developer to
15have sufficient resources and the ability to successfully
16complete all the activities necessary for interconnection to
17the electric distribution system.

18Section 7. Royalty payments.

19Each operator of a large scale energy system shall be subject
20to the payment to the Commonwealth of a 2% royalty on the gross
21revenues of the system. The operator of the system shall submit
22this payment annually unless an alternative payment schedule is
23approved by the department. The operator shall submit the
24initial royalty payment beginning on January 1 of the year
25following the system's being placed into production.

26Section 8. Lake Erie Large Scale Energy System Development
27Fund.

28(a) Establishment.--The Lake Erie Large Scale Energy System
29Development Fund is established in the State Treasury.

30(b) Deposits.--All royalty payments from the production of

1electricity from large scale energy systems situated on lands
2owned by the Commonwealth in Lake Erie shall be deposited in the
3fund.

4Section 9. Transfers and distributions.

5On the last business day of each calendar quarter the State
6Treasurer shall make the following transfers and distributions
7of the moneys from the fund:

8(1) Twenty percent shall be distributed to Erie County.

9(2) Twenty percent shall be distributed to the
10Pennsylvania Fish and Boat Commission to be used for
11programs, projects or other activities related to Lake Erie.

12(3) Forty percent shall be distributed to the Department
13of Environmental Protection, which shall be used for dam
14removal, restoration and repair projects.

15(4) Twenty percent shall be transferred to the
16Conservation District Fund for distribution to county
17conservation districts pursuant to the guidelines established
18by the State Conservation Commission.

19Section 10. Effective date.

20This act shall take effect in 120 days.