Regular Session 2017-2018 Senate Bill 1276 P.N. 2134

PRINTER'S NO. 2134

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

1276

Session of

2018

INTRODUCED BY HUGHES, TARTAGLIONE, FARNESE, COSTA AND BREWSTER,

OCTOBER 25, 2018

REFERRED TO ENVIRONMENTAL RESOURCES AND ENERGY, OCTOBER 25, 2018

AN ACT

Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An

act relating to tax reform and State taxation by codifying

and enumerating certain subjects of taxation and imposing

taxes thereon; providing procedures for the payment,

collection, administration and enforcement thereof; providing

for tax credits in certain cases; conferring powers and

imposing duties upon the Department of Revenue, certain

employers, fiduciaries, individuals, persons, corporations

and other entities; prescribing crimes, offenses and

penalties," providing for education reinvestment, for

severance tax, for public school building renovation and

rehabilitation, for public school building renovation and

rehabilitation bonds, for public school building renovation

and rehabilitation grant program and for comprehensive public

school safety program; and making a related repeal.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The act of March 4, 1971 (P.L.6, No.2), known as

the Tax Reform Code of 1971, is amended by adding articles to

read:

ARTICLE XI-E

SEVERANCE TAX FOR EDUCATION REINVESTMENT

Section 1101-E. Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Association." A partnership, limited partnership or any

other form of unincorporated enterprise owned or conducted by

two or more persons.

"Barrel." Forty-two United States gallons at an atmospheric

pressure of 231 cubic inches of liquid at a standard temperature

of 60 degrees Fahrenheit.

"Coal bed methane." Gas which can be produced from coal

beds, coal seams, mined-out areas or gob wells.

"Corporation." A corporation, joint stock association,

limited liability company, business trust or any other

incorporated enterprise organized under the laws of the United

States, this Commonwealth or any other state, territory or

foreign country or dependency.

"Department." The Department of Revenue of the Commonwealth.

"Dry natural gas." Hydrocarbon gases, consisting mostly of

methane, that remain after the natural gas liquid portion of the

natural gas stream has been removed and any volume of

nonhydrocarbon gases have been removed in sufficient quantity to

render the gas marketable. The term includes consumer-grade

natural gas or pipeline-quality natural gas.

"Gross proceeds." The value, whether in money or other

property, actually proceeding from the sale of property, without

a deduction for the cost of property sold or expenses of any

kind.

"Gross value." The gross proceeds received or receivable for

property transferred, except as follows:

(1) In a transaction involving related parties, gross

proceeds of the property transferred may not be less than the

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fair market value of similar grade and quality property.

(2) In the absence of a sale, gross proceeds of the

property transferred may not be less than the fair market

value of similar grade and quality property.

(3) In a transaction where property is transferred for

the purpose of processing and resale, gross proceeds of the

property transferred may not be less than the fair market

value of similar grade and quality property.

"Meter." A device to measure the passage of volumes of gases

or liquids past a certain point.

"Natural gas." A fossil fuel consisting of a mixture of

hydrocarbon gases, including methane, ethane, propane, butane,

carbon dioxide, oxygen, nitrogen and hydrogen sulfide and other

gas species. The term includes natural gas from oil fields known

as associated gas or casing head gas, natural gas fields known

as nonassociated gas, shale beds and other formations. The term

does not include coal bed methane.

"Natural gas liquids." Hydrocarbons, including ethane,

propane, butane, isobutane and pentane that are separated from

natural gas as liquids through the process of absorption,

condensation, adsorption, cooling in gas separators, gas

processing or cycling plants.

"Person." A corporation, partnership, limited liability

company, business trust, other association, government entity

other than the Commonwealth, estate, trust, foundation or

natural person.

"Postproduction costs." Proportional costs incurred in and

associated with processing and transporting natural gas from the

point the gas is brought to the surface to the point of sale,

limited to gathering, separating, treating, dehydrating,

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compressing, processing, transporting or losses by use as fuel

or line loss of natural gas and the costs of fractionating and

marketing ethane, propane, butane and other complex

hydrocarbons. The term does not include corporate structure or

financing costs.

"Producer." A person who engages or continues within this

Commonwealth in the business of severing natural gas from

unconventional formations for sale, profit or commercial use.

"Producing site." A point of severance, including a well and

its associated zones and multilateral well bores, that is

capable of producing natural gas from an unconventional

formation.

"Related parties." Two or more people, organizations or

businesses owned or controlled directly or indirectly by the

same interests. Control exists if a contract or lease, either

written or oral, is entered into where one party severs or

processes natural gas owned or held by another party and the

owner or lessor participates in the severing, processing or

marketing of the natural gas or receives any value other than an

arm's-length passive royalty interest.

"Reporting period." A calendar month in which natural gas is

severed.

"Sales meter." A meter at the point where natural gas is

sold or transported to a purchaser or the market.

"Sever." The extraction or other removal of natural gas from

an unconventional formation in this Commonwealth.

"Storage field." A natural formation or other site that is

used to store natural gas that did not originate from and has

been transplanted into such formation or site.

"Stripper well." A producing site that produced an average

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of less than 90 units of natural gas per day during the calendar

year immediately preceding a reporting period.

"Tax." The tax imposed under section 1102-E.

"Taxpayer." A person subject to the tax imposed by this

article.

"Unconventional formation." A geological shale formation

existing below the base of the Elk Sandstone or its geologic

equivalent stratigraphic interval where natural gas generally

cannot be produced at economic flow rates or in economic volumes

except by vertical or horizontal well bores stimulated by

hydraulic fracture treatments or using multilateral well bores

or other techniques to expose more of the formation to the well

bore.

"Unit." A thousand cubic feet (Mcf) of natural gas at a

temperature of 60 degrees Fahrenheit and an absolute pressure of

14.73 pounds per square inch, in accordance with American Gas

Association (AGA) standards and according to Boyle's Law for the

measurement of gas under varying pressures with deviations

therefrom as follows:

(1) The average absolute atmospheric pressure shall be

assumed to be 14.4 pounds to the square inch, regardless of

actual elevation or location of point of delivery above sea

level or variations in such atmospheric pressure from time to

time.

(2) The temperature of the gas passing the meters shall

be determined by the continuous use of a recording

thermometer installed so that the thermometer may properly

record the temperature of the gas flowing through the meters.

The arithmetic average of the temperature recorded each 24-

hour day shall be used in computing gas volumes. If a

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recording thermometer is not installed, or if installed and

not operating properly, an average flowing temperature of 60

degrees Fahrenheit shall be used in computing gas volume.

(3) The specific gravity of the gas shall be determined

by tests made by the use of an Edwards or Acme gravity

balance, annually, or at intervals as are found necessary in

practice. Specific gravity shall be used in computing gas

volumes.

(4) The deviation of the natural gas from Boyle's Law

shall be determined by tests annually or at other shorter

intervals as are found necessary in practice. The apparatus

and the method to be used in making the tests shall be in

accordance with recommendations of the National Institute of

Standards and Technology, or Report No. 3 of the Gas

Measurement Committee of the American Gas Association, or any

amendments thereof. The results of the tests shall be used in

computing the volume of gas delivered.

"Wellhead meter." A meter placed at a producing site to

measure the actual volume of natural gas severed.

Section 1102-E. Imposition of tax.

(a) Imposition.--A privilege tax is levied on every

producer.

(b) Rate.--The tax imposed under subsection (a) shall be the

sum of the following:

(1) Subject to the provisions of section 1104-E, 3.5% of

the gross value of each unit of the dry natural gas derived

from the natural gas severed.

(2) Subject to the provisions of section 1104-E, 3.5% of

the gross value of the natural gas liquids derived from the

natural gas severed.

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not be imposed upon the following:

(1) Natural gas, dry natural gas or natural gas liquids

severed under a natural gas lease and provided to a lessor

for no consideration for the lessor's own use.

(2) Natural gas, dry natural gas or natural gas liquids

severed from a stripper well.

(3) Natural gas, dry natural gas or natural gas liquids

severed from a storage field.

Section 1103-E. Postproduction costs.

The producer may deduct postproduction costs from the gross

value of natural gas and natural gas liquids subject to the tax

imposed under section 1102-E. The amount of the deduction shall

not exceed 15% of the gross value.

Section 1104-E. Prohibition.

No deduction from the minimum royalty payment required to be

paid to a lessor under a lease permitting a producer to sever

natural gas from real property subject to the lease shall be

made by a producer for postproduction costs or the tax imposed

under section 1102-E.

Section 1105-E. Existing agreements.

A provision of any agreement in existence prior to the

effective date of this section that violates section 1104-E is

declared to be illegal, contrary to public policy and null and

void.

Section 1106-E. Future agreements.

On or after the effective date of this section, a provision

of an agreement in violation of section 1104-E is declared to be

illegal, contrary to public policy and null and void.

Section 1107-E. Nonseverability.

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If any portion of section 1104-E, 1105-E or 1106-E, or

application thereof, is held to be invalid by a court, section

1103-E shall be void.

Section 1108-E. Return and payment.

(a) Return.--Each producer is required to file a return with

the department, on a form to be prescribed by the department,

reporting all severed natural gas per reporting period and the

tax due as imposed under section 1102-E.

(b) Filing.--The return required by subsection (a) must be

filed with the department on or before the 20th day of the

fourth calendar month after a reporting period.

on the day the return is required to be filed and becomes

delinquent if not remitted to the department by that date.

Section 1109-E. Natural gas severance tax licensing.

(a) License required.--Each producer subject to the tax

under section 1102-E must apply to the department for a

severance tax license before severing natural gas from this

Commonwealth. A producer who has been severing natural gas from

this Commonwealth prior to the effective date of this article

must obtain a license from the department within six months from

the effective date of this section. All other producers must

obtain a license before severing natural gas from this

Commonwealth. A producer is liable for the tax imposed under

section 1102-E without regard to whether the producer obtains or

is required to obtain a license.

(b) Fee.--The department may charge an application fee to

cover the administrative costs associated with the application

and licensing process. If the department charges an application

fee, the department may not issue a license until the producer

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has paid the application fee.

the producer shall provide a declaration of all sites in this

Commonwealth used by the producer for the severance of natural

gas. The declaration shall include all producing sites and sites

which are stripper wells. The producer shall update the

declaration when the producer adds or removes a producing site

in this Commonwealth or when there is a change in the status of

a producing site. The producer shall update the declaration

within 30 days after any calendar month in which a change in the

information contained in the declaration occurs.

(d) Duties of department.--The department shall, after the

receipt of an application, issue the license applied for under

subsection (a), if the applicant filed all required State tax

reports and paid any State taxes not subject to a timely

perfected administrative or judicial appeal or subject to a duly

authorized deferred payment plan. The license shall be

nonassignable. Each producer shall be required to renew the

license on a staggered renewal system established by the

department. After the initial staggered period, a license issued

shall be valid for a period of five years.

(e) State taxes.--If an applicant for a license or a person

holding a license has not filed all required State tax reports

and paid any State taxes not subject to a timely perfected

administrative or judicial appeal or subject to a duly

authorized deferred payment plan, the department may refuse to

issue, suspend or revoke the license. The department shall

notify the applicant or licensee of a refusal, suspension or

revocation. The notice shall contain a statement that the

refusal, suspension or revocation may be made public. The notice

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shall be made by first class mail. An applicant or licensee

aggrieved by the determination of the department may file an

appeal of the determination in the same manner as provided for

reassessments of tax under section 1111-E. In the case of a

suspension or revocation which is appealed, the license shall

remain valid pending a final outcome of the appeal.

Notwithstanding any other provision of law to the contrary, if

no appeal is taken or if an appeal is taken and denied at the

conclusion of the appeal process, the department may disclose,

by publication or otherwise, the identity of a person whose

license has been refused, suspended or revoked under this

subsection. Disclosure may include the basis for refusal,

suspension or revocation.

(f) Severing without a license.--A person that severs

natural gas in this Commonwealth without holding a valid license

under this section shall be guilty of a summary offense and,

upon conviction, shall be sentenced to pay a fine of not less

than $300 nor more than $1,500 and, in default thereof, to

undergo imprisonment of not less than five days nor more than 30

days. The penalties imposed by this subsection shall be in

addition to any other penalties imposed by law. For purposes of

this subsection, the severing of natural gas during any calendar

day shall constitute a separate violation. The Secretary of

Revenue may designate employees of the department to enforce the

provisions of this subsection. The employees shall exhibit proof

of and be within the scope of the designation when instituting

proceedings as provided by the Pennsylvania Rules of Criminal

Procedure.

(g) Liability.--Failure to obtain a license does not relieve

a person from liability for the tax imposed under section 1102-

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(h) Civil penalty.--In addition to any tax, interest or

other penalty due under this article, the department shall

impose a civil penalty of 10 ¢ per unit severed during the period

a producer is required to and does not have a license. The

penalty shall be assessed and collected under this article.

Section 1110-E. Meters.

A producer shall provide for and maintain discrete wellhead

and sales meters. A producer shall ensure that all meters are

maintained according to industry standards.

Section 1111-E. Administration of tax.

Unless otherwise noted to the contrary, Article II, Part VI,

Chapters IV, V, VI, VII and VIII shall apply to this article.

Section 1112-E. Records.

A producer shall maintain the following records:

(1) Wellhead and sales meter charts for each reporting

period and the meter calibration and maintenance records. If

turbine meters are in use, the maintenance records shall be

made available to the department upon request.

(2) All records, statements and other instruments

furnished to a producer by any person to whom the producer

delivers for sale, transport or other delivery of any natural

gas.

(3) Records, statements and other instruments as the

department may prescribe by regulation.

Section 1113-E. Enforcement of article.

The department and the Department of Environmental Protection

shall have the ability to inspect records and locations to

ensure compliance with this article.

Section 1114-E. Use of revenue.

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Revenue collected under this article shall be used for public

school building renovation and rehabilitation bonds under

Article XXVIII-A.

ARTICLE XXVIII-A

PUBLIC SCHOOL BUILDING RENOVATION

AND REHABILITATION

PART I

GENERAL PROVISIONS

Section 2801-A. Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Account." The Public School Building Renovation and

Rehabilitation Bond Debt Service Account established in section

2815-A.

"Authority." The Commonwealth Financing Authority

established under 64 Pa.C.S. Ch. 15 (relating to Commonwealth

Financing Authority).

"Department." The Department of Education of the

Commonwealth.

"Eligible cost." The cost of all labor, materials, necessary

operational machinery and equipment, lands, property, plans and

specifications, surveys, estimates of costs and revenues,

prefeasibility studies, engineering and legal services and all

improvement, expansion, extension, repair or rehabilitation of

all or part of a project.

"Executive director." The Executive Director of the

Commonwealth Financing Authority.

"Finance." The issuance of revenue bonds utilizing annual

severance tax revenues collected under Article XI-E.

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"Fund." The Public School Building Renovation and

Rehabilitation Grant Fund established in section 2814-A.

"Grant program." The Public School Building Renovation and

Rehabilitation Grant Program established in section 2823-A.

"Office." The Governor's Budget Office.

"Program." The Comprehensive Public School Safety Program

established in section 2824-A.

"Repair and renovation projects." Eligible costs associated

with the improvement, repair, rehabilitation or security

measures of all or part of a public school building, which

include the following:

(1) Emergency repairs resulting from a natural or

manmade disaster.

(2) Green and energy efficiency upgrades.

(3) Lead abatement, remediation and removal.

(4) Asbestos abatement, remediation and removal.

(5) Heating, ventilation and air conditioning purchase,

repair or replacement.

(6) Electrical system repair or replacement.

(7) Roof and window repair or replacement.

(8) Purchase, repair or replacement of indoor air

quality systems.

(9) Modifications to comply with the Americans with

Disabilities Act of 1990 (Public Law 101-336, 104 Stat. 327).

"School district." As defined in section 102 of the act of

March 10, 1949 (P.L.30, No.14), known as the Public School Code

of 1949.

"Secretary." The Secretary of the Budget of the

Commonwealth.

PART II

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PUBLIC SCHOOL BUILDING RENOVATION

AND REHABILITATION BONDS

Section 2811-A. Bond issuance.

(a) Declaration of policy.--The General Assembly finds and

declares as follows:

(1) This Commonwealth's school districts are facing

significant challenges due to the age and physical condition

of existing school buildings.

(2) The current appropriations from the General Fund do

not provide a dedicated source of funding for public school

building renovation and rehabilitation.

(3) Existing State and local revenue sources are not

sufficient to cover the cost of renovating and rehabilitating

this Commonwealth's aging public school buildings.

(4) A significant portion of annual expenditures from

the General Fund are dedicated to providing for the education

of the children of this Commonwealth.

(5) The children of this Commonwealth have a right to

receive a public education in facilities that are safe,

structurally sound and free of public health hazards.

(6) The ability of the Commonwealth to provide for the

protection of the health, safety and general welfare of the

school children of this Commonwealth is jeopardized by the

declining physical condition of our public school buildings.

(7) The provisions of 64 Pa.C.S. Ch. 15 (relating to

Commonwealth Financing Authority) are entitled to liberal

construction in order to effect legislative and public

purposes.

(8) One of the stated purposes of 64 Pa.C.S. Ch. 15 is

"t o protect the health, safety and general welfare of the

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people of this Commonwealth and to further encourage economic

development and efficiency within this Commonwealth by

providing basic services and facilities, it is necessary to

provide additional or alternative means of financing

infrastructure facilities, transportation systems, industrial

parks, energy conversion facilities, facilities for the

furnishing of energy, water and telecommunications,

facilities for the collection or treatment of wastewater and

storm water, tourism, parking facilities, health care

facilities and other basic service and related facilities

which are conducive to economic activity within this

Commonwealth " under 64 Pa.C.S. § 1503(6) (relating to

findings and declaration of policy).

(9) Utilizing the annual revenues received through the

imposition of the severance tax under Article XI-E to

leverage funding to offset the cost of school repair and

renovation projects necessary for the protection of the

health, safety and general welfare of the school children of

this Commonwealth and the provision of basic services and

facilities is in the best interest of the Commonwealth.

(b) Authority.--Notwithstanding any other law, the authority

is authorized to issue bonds, the proceeds of which shall be

deposited into the fund to provide funding for school repair and

renovation projects.

2812-A. An issuance of a bond under this article shall be

undertaken in a manner consistent with the best interest of the

Commonwealth and in a way that provides the greatest value to

taxpayers and furthers the purposes of this article.

(d) Debt or liability.--

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(1) Bonds issued under this article shall not be a debt

or liability of the Commonwealth and shall not create or

constitute an indebtedness, liability or obligation of the

Commonwealth.

(2) Bond obligations shall be payable solely from

revenues or money pledged or available for repayment or

payment as authorized under this article.

(3) Each bond must contain on its face a statement that:

(i) The authority is obligated to pay the principal

of or interest on the bonds only from the revenues or

money pledged or available for repayment as authorized

under this article.

(ii) The Commonwealth shall not be obligated to pay

the principal of or interest on the bonds.

(iii) The full faith and credit of the Commonwealth

is not pledged to the payment of the principal of or the

interest on the bonds.

Section 2812-A. Limitations on bond issuance.

(a) Maximum principal amount.--If the authority issues bonds

under this article, the authority may incur indebtedness in an

amount up to $5,000,000,000 plus the payment of all reasonable

costs and expenses related to the issuance of indebtedness in

accordance with 64 Pa.C.S. Ch. 15 (relating to Commonwealth

Financing Authority) for up to 30 years. The total principal

amount of bond proceeds authorized to be issued under this

article shall be limited to $500,000,000 per year for a period

of 10 years beginning in fiscal year 2018-2019.

(b) Limitation.--The authority shall not issue any bonds

under this article, except refunding bonds, after June 30, 2027.

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the authority, at the request of the secretary, may issue

refunding bonds at any time while bonds issued under this

article are outstanding, provided that the final maturity of a

series of bonds being refunded shall not be extended.

(d) Interest.--Interest on bonds issued under this article

and refunding bonds authorized under this section shall be

payable at the time or times the authority determines in the

resolution authorizing the bonds and, except as provided under

subsection (e), shall otherwise be subject to the other

provisions of 64 Pa.C.S. Ch. 15. Interest may be capitalized for

a period not to exceed two years.

(e) Debt limitations.--The aggregate principal amount of

bonds specified in this section shall not be subject to the debt

limitations specified in 64 Pa.C.S. § 1543 (relating to

indebtedness).

(f) Term of bonds.--The term of the bonds issued under this

article may not exceed 30 years.

Section 2813-A. Finance pledge.

(a) Annual payments for bond issuance.--

(1) For a bond issuance under this article, annual

revenues generated from the severance tax imposed under

Article XI-E are pledged by the Commonwealth in the amount

certified by the secretary under paragraph (2) for payment of

principal and interest for bonds issued by the authority

under this article.

(2) The secretary shall certify the amount of annual

payments to be pledged for payment of principal and interest

for the bonds issued by the authority under this article

within 30 days of the closing date of the bond transaction.

The certification shall be published as a notice in the

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Pennsylvania Bulletin.

(b) General revenues.--

(1) For a bond issuance, the Commonwealth may pledge

revenues collected by the Commonwealth under Article II for

the payment of principal and interest for the bonds issued by

the authority under this article. A pledge made under this

subsection shall be subordinate to the pledge of Article II

revenues made before the effective date of this section for

outstanding indebtedness of the authority.

(2) The secretary shall certify the maximum annual

amount of general revenues to be pledged to supplement

amounts pledged under subsection (a) for payment of principal

and interest for bonds issued by the authority under this

article within 30 days of the closing date of the bond

transaction. The certification shall be published as a notice

in the Pennsylvania Bulletin.

Section 2814-A. Public School Building Renovation and

Rehabilitation Grant Fund.

(a) Establishment.--There is established in the State

Treasury a special fund to be known as the Public School

Building Renovation and Rehabilitation Grant Fund.

(b) Deposit of proceeds.--The net proceeds of bonds issued

under this article, other than refunding bonds, exclusive of

costs of issuance, reserves and other financing charges, shall

be transferred by the authority to the State Treasurer for

deposit into the fund and shall be available for grants to

public schools as provided in this part.

Section 2815-A. Public School Building Renovation and

Rehabilitation Bond Debt Service Account.

(a) Establishment.--There is established in the State

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Treasury a restricted account in the General Fund to be known as

the Public School Building Renovation and Rehabilitation Bond

Debt Service Account.

(b) Annual payments.--The amount of revenue generated from

the severance tax imposed under Article XI-E, pledged by the

Commonwealth under section 2813-A and certified by the secretary

for the payment of principal and interest for bonds issued under

this article shall be deposited into the account on July 1 of

each year beginning in 2019.

Commonwealth under section 2813-A and certified by the secretary

for the payment of principal and interest for bonds issued under

this article shall be deposited into the account in amounts

determined by the secretary.

(d) Payments on bonds.--Payments of principal and interest

due on the bonds shall be made from the account.

Section 2816-A. Service agreement for bond issuance authorized.

(a) Authorization.--For a bond issuance under this article,

the authority and the office may enter into an agreement or

service agreement to effectuate the purposes of this article,

including an agreement to secure bonds issued under this

article, under which the secretary shall agree to pay service

charges to the authority in each fiscal year that the bonds or

refunding bonds are outstanding in amounts sufficient to timely

pay in full the debt service and any other financing costs due

on the bonds issued under this article.

(b) Payment of service charges.--The office's payment of any

service charges shall be subject to and dependent upon approval

by the authority and the appropriation of money by the General

Assembly to the office for payment of any service charges.

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amended or supplemented by the authority and the office in

connection with the issuance of a series of bonds or refunding

bonds authorized in this section.

Section 2817-A. Limitation on appropriations.

The amount of annual revenues collected from the severance

tax imposed under Article XI-E that are pledged and certified by

the secretary under section 2813-A for the payment of principal

and interest for bonds issued under this article shall not be

subject to appropriation under section 1713-A.1 of the act of

April 9, 1929 (P.L.343, No.176), known as The Fiscal Code.

PART III

PUBLIC SCHOOL BUILDING RENOVATION AND REHABILITATION

GRANT PROGRAM AND COMPREHENSIVE

PUBLIC SCHOOL SAFETY PROGRAM

Section 2821-A. Scope of part.

This part relates to the Public School Building Renovation

and Rehabilitation Grant Program and the Comprehensive Public

School Safety Program.

Section 2822-A. Use of bond proceeds.

(a) Grants.--Money received from the issuance of bonds under

Part II which are deposited into the fund shall be used for

grants by the authority for the Public School Building

Renovation and Rehabilitation Grant Program established under

section 2823-A to school districts for public school building

repair and renovation projects. Each year:

(1) Seventy-five percent of the available money shall be

awarded to school districts which are in one of the following

categories:

(i) In financial recovery status under Subchapter C

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of Article VI-A of the act of March 10, 1949 (P.L.30,

No.14), known as the Public School Code of 1949.

(ii) In financial watch status under Subchapter B of

Article VI-A of the Public School Code of 1949.

(iii) Declared distressed under section 696 of the

Public School Code of 1949.

(iv) With 20% of school age children identified as

in acute poverty by the American Community Survey data,

as used in section 2502.53 of the Public School Code of

1949.

(2) Twenty-five percent of the available money shall be

awarded to school districts not eligible under paragraph (1).

(b) Prohibition.--The authority may not award grants for any

of the following purposes:

(1) Construction of a new public school building.

(2) Payment of maintenance costs other than those

allowed in this part.

(3) Purchase, lease or upgrade of school district

vehicles.

(4) Improvement of a stand-alone facility which is not

used for the purpose of educating children, including

administrative or operations buildings or logistical support

facilities.

Section 2823-A. Public School Building Renovation and

Rehabilitation Grant Program.

(a) Establishment.--The Public School Building Renovation

and Rehabilitation Grant Program is established and shall be

administered by the authority.

(b) Application.--A school district may submit an

application for a grant under this section in writing to the

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department. The department may establish the form and manner in

which an application is submitted.

under subsection (b) shall include:

(1) A detailed plan of the repair and renovation project

the school district is applying for.

(2) A statement indicating that the repair and

renovation project is necessary to protect the health and

safety of the students in a school district.

(3) Any other information required by the authority or

the department.

(d) Review.--Within 30 days of receipt of an application,

the department shall review and approve or deny the application.

If the application is approved, it shall be sent to the

authority. If the application is denied, the department shall

forward reasons for denial to the applicant and allow the

applicant to reapply.

(e) Approval.--The authority may only approve grants for

applicants which have been reviewed and approved by the

department under subsection (d).

Section 2824-A. Comprehensive Public School Safety Program.

(a) Establishment.--The Comprehensive Public School Safety

Program is established to ensure that all school buildings in

this Commonwealth are properly maintained and preserved and

provide a suitable educational setting.

(b) Duties of school district.--Each school district in this

Commonwealth shall require an occupied school building which is

owned, operated or leased by the district to participate in the

program.

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inspections, safety ratings and monitoring as provided under

section 2825-A.

Section 2825-A. Building inspections, safety ratings and

monitoring.

(a) Building inspections.--To ensure that all occupied

school buildings are properly maintained and preserved and

provide a suitable educational setting, each school district

shall assess each building owned, operated or leased by the

district. Buildings shall be assessed by a building condition

survey conducted every other year, an annual fire safety

inspection and a visual inspection conducted in years in which

no building condition survey is conducted for the building in

accordance with the following:

(1) A building condition survey shall be conducted for

each occupied school building on or before November 15, 2020,

and every other year thereafter. A building condition survey

for new buildings which receive a certificate of substantial

completion dated August 31, 2019, through September 30, 2023,

may not be required until November 15, 2024, and every other

year thereafter in accordance with the following:

(i) The physical inspections for the survey shall be

conducted by a licensed architect or engineer. The

secretary shall prescribe the form in which to complete

the survey.

(ii) The survey shall include each program space and

an inspection of the following building system components

for evidence of movement, deterioration, structural

failure, probable useful life, need for repair and

maintenance and need for replacement:

(A) The building site, including utilities,

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paving, playgrounds and play fields.

(B) Roofing.

walls, doors, windows and fire escapes.

(D) Building structural elements.

(E) Building interiors, including finishes,

doors and hardware.

(F) Electrical systems, including service and

distribution, lighting, communications, technology

infrastructure and cabling.

(G) Plumbing, including water distribution

systems, drainage systems and fixtures.

(H) Heating and cooling systems, including

boilers, furnaces, terminal units and control

systems.

(I) Ventilation systems.

(J) Air conditioning systems, including

refrigeration, terminal units and control systems.

(K) Special construction, including stairs,

elevators, escalators and swimming pools.

(L) Fire protection and security systems,

including alarm, detection and fire protection.

(M) Environmental features, including

appearance, cleanliness, acoustics, lighting quality,

thermal comfort, humidity, ventilation and space

adequacy.

(iii) Reports of building condition surveys, signed

and sealed by the licensed architect or engineer, shall

be submitted to the secretary by January 15, 2021, and

January 15 of every other year thereafter.

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(2) Annual visual inspections shall be conducted in

accordance with the following:

(i) A visual inspection of every occupied school

building shall be conducted in each year in which no

building condition survey is conducted for the building.

A building condition survey conducted under paragraph (1)

shall fulfill the requirement for the year in which the

survey is conducted and the secretary may require more

frequent inspections as deemed necessary to maintain the

safety of school buildings and the welfare of occupants.

(ii) The annual visual inspection shall consist of a

visual reinspection of the components of the building

condition survey for changes that may have occurred and a

review and update of the safety rating under subsection

(b) as needed.

(iii) The annual visual inspection shall be

conducted by individuals certified by the Department of

State as a code enforcement official and representatives

of the school administration.

(iv) If an annual visual inspection finds a

deficiency that would result in a determination that the

safety rating of the building under subsection (b) is

unsatisfactory or unsafe, the school district shall

retain a licensed architect or engineer to perform a

detailed inspection and develop a corrective action plan.

In addition, the secretary may require a school district

to conduct a detailed inspection by a licensed architect

or engineer if the secretary determines that the school

district has provided insufficient spending for

maintenance, repair or capital renewal of the building.

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(v) The annual visual inspection shall be completed

by November 15 of each year that a school building is not

scheduled for a building condition survey.

(vi) The results of the annual visual inspection of

all occupied school buildings shall be reported and

signed by the individual who conducts the inspection and

shall be filed with the secretary by January 15. The

report shall indicate if more frequent inspections and

repairs are necessary to protect the health and safety of

the occupants of the school building. Annual visual

inspection reports shall be made available to the public

on the publicly accessible Internet website of the school

district and the department.

(b) Safety rating system.--Each school district shall

provide on an annual basis a safety rating of all occupied

school buildings to assess the structural integrity and overall

safety of the building in accordance with the following:

(1) The safety rating shall be established by each

school district and shall identify and assess the condition

of every major system component of each occupied school

building based upon overall assessment of the system or

element, probable useful life, structural integrity, overall

safety, need for repair and maintenance, need for

replacement, the estimated cost of necessary repairs or

replacement and assessment of the effectiveness of the

building comprehensive maintenance plan required by this

part.

(2) The major system components of each occupied school

building shall be rated in one of the following categories:

(i) Excellent, which identifies exemplary systems.

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No remediation required, requires only routine

maintenance as identified in the building comprehensive

maintenance plan.

(ii) Satisfactory, which identifies systems which

are functioning reliably but routine maintenance and

repair are required.

(iii) Unsatisfactory, which identifies systems which

are functioning unreliably or have exceeded the useful

life. A corrective action plan is in place and repairs or

replacement have been scheduled.

(iv) Unsafe, which identifies systems which are

nonfunctioning, unreliable or not functioning as

designed. The system endangers the occupants' health or

safety or has deficiencies that have resulted in serious

accident or injury.

(v) Indeterminate, which identifies systems which

require additional probing or testing and a summary

report will be issued or drawings or specifications are

required.

(3) Building system deficiencies shall be categorized as

health and safety, structural, comfort or aesthetic.

(4) The overall rating of the school building shall be

determined by each district in consideration of paragraphs

(2) and (3) in one of the following categories:

(i) Excellent, which identifies systems rated in

overall excellent condition. A preventive maintenance

plan is in place.

(ii) Good, which identifies systems rated in overall

good or better condition.

(iii) Satisfactory, which identifies any system

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categorized as comfort or aesthetic rated as

unsatisfactory. All systems categorized as health and

safety or structural rated good or better.

(iv) Unsafe, which identifies any system categorized

as health and safety or structural rated unsafe or

unhealthful. This rating shall result in the revocation

of the building's certificate of occupancy.

a process to monitor the condition of each occupied school

building in order to ensure that the buildings are safe and

maintained in a state of good repair. The process shall include

the following elements:

(1) Establishment of a health and safety committee

comprised of representation from district officials, staff,

bargaining units and parents.

(2) Establishment of a comprehensive maintenance plan

for all major building systems to ensure the building is

maintained in a state of good repair. The plan shall include

provisions for the least toxic approach to integrated pest

management and establishing maintenance procedures and

guidelines which will contribute to acceptable indoor air

quality. The comprehensive maintenance plan shall be

available for public inspection.

(3) The annual review and approval by the school board,

School Reform Commission, State-appointed receiver or chief

recovery officer of the annual building inspection reports

and the overall safety rating.

(d) Additional standards.--Nothing in this section shall

prevent a school district from adopting stricter building

inspections.

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(e) Applicability.--The provisions of this section shall

apply to all occupied public school buildings.

Section 2. Repeals are as follows:

(1) The General Assembly declares that the repeal under

paragraph (2) is necessary to effectuate the addition of

Article XI-E of the act.

(2) 58 Pa.C.S. § 2318 is repealed.

Section 3. This act shall take effect as follows:

(1) The following provisions shall take effect

immediately:

(i) The addition of section 1109-E of the act.

(ii) This section.

(2) The addition of the remainder of Article XI-E of the

act shall take effect September 1, 2018.

(3) The remainder of this act shall take effect in 60

days.

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