Regular Session 2019-2020 House Bill 1585 P.N. 2033

PRINTER'S NO. 2033

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1585

Session of

2019

INTRODUCED BY WHEATLEY, MURT, A. DAVIS, SCHLOSSBERG, READSHAW,

SANCHEZ, ULLMAN, FRANKEL, HILL-EVANS, CALTAGIRONE, HARRIS,

MULLINS, FREEMAN, HARKINS, McNEILL, DERMODY, DiGIROLAMO,

DONATUCCI, GOODMAN, STURLA, BOYLE, YOUNGBLOOD, BRIGGS,

BULLOCK, BURGOS, CARROLL, CONKLIN, DEASY, DELLOSO, DeLUCA,

DRISCOLL, GAINEY, GALLOWAY, KIM, MADDEN, McCARTER, McCLINTON,

MERSKI, RAVENSTAHL, ROEBUCK, SAMUELSON, SCHWEYER, SIMS,

SOLOMON, WARREN, ZABEL, WILLIAMS, DAVIDSON, MILLARD, NEILSON,

ISAACSON, PASHINSKI, KINSEY, KORTZ, MALAGARI, WEBSTER,

BRADFORD, FITZGERALD, KIRKLAND, CIRESI, FLYNN, CEPHAS,

T. DAVIS, SHUSTERMAN, MULLERY, DALEY, SAPPEY, BIZZARRO,

MARKOSEK, MEHAFFIE, D. MILLER, ROZZI, COMITTA, CRUZ, O'MARA,

HOHENSTEIN, KULIK, KENYATTA, TOOHIL, DeLISSIO, KAUFER,

KRUEGER, JOHNSON-HARRELL, RADER, HANBIDGE, BROWN,

KOSIEROWSKI, BARRAR, HOWARD, LONGIETTI, STEPHENS, POLINCHOCK,

HEFFLEY, SCHROEDER, FARRY, HELM, QUINN, VITALI AND MATZIE,

JUNE 6, 2019

REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY,

JUNE 6, 2019

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 infrastructure revenue; 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 an article to

read:

ARTICLE XXVI

INFRASTRUCTURE REVENUE

PART I

PRELIMINARY PROVISIONS

Section 2601. Short title.

This article shall be known and may be cited as the Restore

Pennsylvania Act .

Section 2602. 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:

"Average annual price of natural gas." As defined in 58

Pa.C.S. § 2301 (relating to definitions).

"Fund." The Restore Pennsylvania Fund established under

section 2636.

"Lease." An agreement conveying to a lessee the right to

remove or recover oil, natural gas or gas of any other

designation from land of the lessor.

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

or liquids past a certain point.

"Natural gas." As defined in 58 Pa.C.S. § 2301.

"Producer." As defined in 58 Pa.C.S. § 2301.

"Royalty payment." A payment made by a lessee to a lessor in

accordance with section 2612 and the act of July 20, 1979

(P.L.183, No.60), known as the Oil and Gas Lease Act.

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

an unconventional formation in this Commonwealth. The term does

not include the extraction or other removal of natural gas, in

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gaseous or liquid form, which is burned, used, consumed or

otherwise employed in oil and gas operations at a natural gas

well site:

(1) for secondary recovery;

(2) for re-pressuring;

(3) for pressure maintenance; or

(4) as fuel for equipment.

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

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

been transplanted into the formation or site.

"Trigger date." The date 60 days after the effective date of

this section.

"Unconventional formation." As defined in 58 Pa.C.S. § 2301.

"Unconventional gas well." As defined in 58 Pa.C.S. § 2301.

"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, notwithstanding

the actual elevation or location of point of delivery above

sea level or variations in the atmospheric pressure.

(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 Bureau of

Standards of the Department of Commerce or Report No. 3 of

the Gas Measurement Committee of the American Gas

Association, or any amendments of the report. 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.

PART II

IMPOSITION AND PAYMENT OF TAX

Section 2611. Volumetric severance tax.

(a) Imposition.--Each unconventional gas well shall pay a

volumetric severance tax. The imposition of the volumetric

severance tax under this article shall not affect the collection

and distribution of the unconventional gas well fee imposed

under 58 Pa.C.S. Ch. 23 (relating to unconventional gas well

fee).

(b) Computation.--The volumetric severance tax payable under

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subsection (a) shall be calculated by applying the applicable

rate under subsection (b.1) to natural gas severed from the

unconventional gas well subject to the tax during the imposition

period under subsection (b.2).

(b.1) Tax rate.--The tax rate shall be as follows:

(1) If the average annual price of natural gas for the

calendar year immediately preceding the start of the

imposition period is less than $3.00, the tax rate shall be

$0.091 per unit severed.

(2) If the average annual price of natural gas for the

calendar year immediately preceding the start of the

imposition period is equal to or greater than $3.00 and less

than $5.00, the tax rate shall be $0.109 per unit severed.

(3) If the average annual price of natural gas for the

calendar year immediately preceding the start of the

imposition period is equal to or greater than $5.00 and less

than $6.00, the tax rate shall be $0.131 per unit severed.

(4) If the average annual price of natural gas for the

calendar year immediately preceding the start of the

imposition period is equal to or greater than $6.00, the tax

rate shall be $0.157 per unit severed.

(b.2) Imposition period.--The imposition period shall be as

follows:

(1) For fiscal year 2019-2020, the imposition period

shall be from January 1, 2020, to April 30, 2020.

(2) For fiscal year 2020-2021 and each fiscal year

thereafter, the imposition period shall be from May 1 of the

preceding fiscal year to April 30 of the current fiscal year.

(b.3) Payment.--The volumetric severance tax imposed under

this article shall be due on the same day the report is due

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under subsection (b.4). The tax shall become delinquent if not

remitted to the Department of Revenue on the reporting date.

(b.4) Report.--By June 15, 2020, and June 15 of each year

thereafter, each producer shall submit payment of the volumetric

severance tax to the Department of Revenue and a report on a

form prescribed by the Department of Revenue for the imposition

period.

(b.5) Exemptions.--The volumetric severance tax imposed

under this article shall not be imposed on the following:

(1) natural gas severed, sold and delivered by a

producer at or within five miles of the producing site for

the processing or manufacture of tangible personal property

as defined under section 201;

(2) natural gas severed under a natural gas lease and

provided to a lessor for no consideration for the lessor's

own use;

(3) natural gas severed from a storage field; or

(4) a stripper well as defined under 58 Pa.C.S. § 2301

(relating to definitions).

(1) Except as provided under paragraph (2), for purposes

of computing the volumetric severance tax, natural gas

severed shall be measured at the wellhead meter.

(2) Natural gas severed prior to the trigger date shall

be measured according to the standards and methods used for

reporting natural gas production to the Department of

Environmental Protection.

(d) Administration.--The Department of Revenue shall enforce

the provisions of this article and may prescribe, adopt,

promulgate and enforce rules and regulations relating to any

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matter or thing pertaining to the administration or enforcement

of the provisions of this article and the collection of taxes

imposed by this article.

(e) Deposit.--Money collected from the volumetric severance

tax under this section shall be deposited by the State Treasurer

into the fund.

(f) Payment of tax.--A producer may not make the tax imposed

under this section on natural gas severed under a lease an

obligation, indebtedness or liability of the lessor and may not

otherwise require the lessor to reimburse the producer for the

amount of the tax.

Section 2612. Minimum royalty.

(a) Royalty.--The term "royalty" under the act of July 20,

1979 (P.L.183, No.60), known as the Oil and Gas Lease Act, shall

mean the lessor's ownership interest in the gross proceeds

generated at the first arm's length point of sale of oil,

natural gas or gas of other designations, to a third-party

purchaser unaffiliated with the lessee, or to the extent the

underlying lease allows the lessor to take the lessor's royalty

in-kind, the lessor's ownership interest in the oil, natural gas

or gas of other designations at the same location, but from

which ownership interest is excluded the costs of development

and drilling and all postproduction expenses incurred by the

lessee between the well-head and the point of sale.

(b) Applicability.--The application of the term "royalty"

under subsection (a) shall only apply to oil, natural gas or gas

of any other designation recovered and sold by a lessee on or

after the effective date of this section.

Section 2613. Remedy.

(a) Civil action and venue.--A lessor who is party to a

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lease may file an action for failure of the lessee to pay the

royalty as defined in section 2612 in the court of common pleas

of the county where the land of the lessor is located or the

county in this Commonwealth in which the lessor resides.

(b) Burden of proof.--

(1) Demonstration by a lessor who is party to a lease

that the lessee has made a royalty payment which is less than

the amount required under section 2612(a) shall create a

presumption that a violation has occurred.

(2) The presumption under paragraph (1) may be rebutted

if the lessee presents clear and convincing evidence that the

required royalty payment was made.

which a court finds that the lessee who is party to a lease has

violated the terms relating to guaranteed royalty, the lessor

shall be entitled to the remedies under subsections (d) and (e)

if, before filing suit, the lessor gave to the lessee 30 days'

written notice by certified mail of the deficiency and the

lessee failed to cure the deficiency.

(d) Additional remedies.--In addition to actual damages and

any other remedy deemed appropriate by the court, the court

shall award to the lessor reasonable attorney fees and costs in

bringing the action, including expert witness fees.

(e) Treble damages.--If the court finds that the lessee

acted willfully in failing to pay the royalty payment due or

where a lessee has been previously found to have failed to pay

the royalty payment due, the court may award treble damages to

the lessor.

(f) Other remedies not precluded.--The remedies provided

under this section are not exclusive of, do not require

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exhaustion of and shall be in addition to any other remedies

provided by the lease, by law or in equity.

PART III

RESTORE PENNSYLVANIA PROGRAM

Section 2621. Definitions.

The following words and phrases when used in this part shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Authority." The Pennsylvania Economic Development Financing

Authority.

"Board." The Restore Pennsylvania Board established under

section 2623.

"Commonwealth agency." A department, board, commission,

authority or other officer or agency of the Commonwealth. The

term does not include any court or other officer or agency of

the unified judicial system or the General Assembly or an

officer or agency of the General Assembly.

"Department." The Department of Community and Economic

Development.

"Program." The Restore Pennsylvania Program established

under section 2622.

Section 2622. Establishment of program.

There is established the Restore Pennsylvania Program. The

program shall provide financial assistance in the form of

grants, loans or other forms of financing or funding for

eligible uses under section 2624.

Section 2623. Restore Pennsylvania Board.

(a) Establishment.--The Restore Pennsylvania Board is

established within the department.

(b) Composition.--The board shall be composed of the

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following members:

(1) Three individuals appointed by the Governor.

(2) One individual appointed by the President pro

tempore of the Senate.

(3) One individual appointed by the Minority Leader of

the Senate.

(4) One individual appointed by the Speaker of the House

of Representatives.

(5) One individual appointed by the Minority Leader of

the House of Representatives.

board to serve as chairperson. The members of the board shall

select from among themselves any other officers as they shall

determine.

(d) Meetings.--The board shall meet at the call of the

chairperson. The board shall meet at least once every 12 months.

(e) Quorum.--Six members of the board shall constitute a

quorum. The following apply:

(1) Consent of at least six members shall be necessary

to take action to allocate funds under section 2624(a).

(2) A majority of the members of the board shall be

necessary to take any other action.

(f) Participation and voting.--The following apply:

(1) Members of the board may participate in a meeting by

telephone conference or other electronic technology by means

in which all individuals participating in the meeting can

hear each other.

(2) Members of the board may delegate votes to designees

acting on their behalf only after informing the chairperson

in writing.

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(g) Compensation.--The members of the board shall receive no

compensation for their services as members of the board but

shall be reimbursed for all necessary and reasonable expenses

incurred in connection with the performance of their duties as

members of the board.

(h) Appointments.--Appointing authorities shall appoint

initial members to the board within 30 days of the effective

date of this subsection. Any appointee to the board may be

removed with or without cause by the appointing authority.

Whenever a vacancy occurs on the board, the appointing authority

shall appoint a successor member within 30 days of the vacancy.

(i) Administrative assistance.--The department shall provide

administrative assistance to the board.

Section 2624. Use of funds.

(a) Allocation of funds.--The following apply:

(1) After the bond proceeds have been applied under Part

IV, the board shall allocate the remaining bond proceeds

among all of the following categories:

(i) High-speed Internet access.

(ii) Flood control infrastructure.

(iii) Disaster response.

(iv) Green infrastructure.

(v) Blight demolition and redevelopment.

(vi) Storm water infrastructure.

(vii) Brownfield clean-up.

(viii) Contaminant remediation.

(ix) Business development and site selection.

(x) Energy efficiency.

(xi) Transportation infrastructure.

(2) The board may annually adjust the allocations under

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paragraph (1) as permitted by law.

(3) Within 15 days of the determination of the

allocations or adjustment of the allocations under paragraph

(1) or (2), the board shall provide the authority and the

Secretary of the Budget with a written notification of the

allocations of funds.

(b) Financial assistance.--After the board provides the

written notification required under subsection (a)(3), the funds

shall be used to provide financial assistance in the form of

grants, loans or other forms of financing or funding, as

determined by the Secretary of the Budget, as provided under

subsection (c).

(1) For high-speed Internet access, funds may be used by

the department for the establishment by the department of a

Pennsylvania Broadband Development Program. The Pennsylvania

Broadband Development Program shall provide grants, loans or

other forms of financing for the planning and construction of

infrastructure to provide broadband service to unserved and

underserved areas of this Commonwealth. The following may

apply for funding under the Pennsylvania Broadband

Development Program:

(i) For-profit and nonprofit entities.

(ii) Commonwealth agencies and political

subdivisions.

(iii) Rural electric cooperatives organized or

qualified to do business in this Commonwealth under 15

Pa.C.S. Ch. 73 (relating to electric cooperative

corporations).

(2) For flood control infrastructure, funds may be used

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as follows:

(i) For the Stream Improvement Program administered

by the Department of Environmental Protection to provide

grants to municipalities and county conservation

districts for stream restoration and maintenance

projects.

(ii) For grants from the Pennsylvania Infrastructure

Investment Authority to Commonwealth agencies and

political subdivisions for the acquisition, construction,

improvement, including the installation of security

measures, expansion, repair or rehabilitation of all or

part of a flood control system. As used in this

subparagraph, the term "flood control system" includes

levees, dikes, walls, culverts, revetments, dams,

including high hazard unsafe dams, lakes, reservoirs and

other works and improvements deemed necessary to prevent

floods or control, preserve, restore and regulate the

flow of rivers and streams.

(3) For disaster response measures, funds may be used by

the Pennsylvania Emergency Management Agency as follows:

(i) To establish the Disaster Assistance Trust Fund

for the purpose of providing grants to meet disaster-

related necessary expenses or serious needs of

individuals or families directly affected by a declared

disaster emergency under 35 Pa.C.S. Ch. 73 Subch. A

(relating to the Governor and disaster emergencies),

regardless of whether a Presidential disaster declaration

was issued for the area. Grants under this subparagraph

shall be limited to expenses or needs that are not

covered by private insurance or do not qualify for

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Federal assistance.

(ii) To establish the Pipeline Preparedness and

Response Fund for the following purposes:

(A) Funding State-administered emergency

response training, planning and coordination for

county or municipal employees, volunteer firefighters

or volunteer emergency medical technicians.

(B) Providing grants to counties, municipalities

and school districts where a natural gas or hazardous

liquid pipeline is located in a high consequence area

as determined by the Pennsylvania Emergency

Management Agency. Grants under this clause shall be

awarded for emergency planning, coordination,

communication and implementation, training and

equipment acquisition.

(iii) To provide a reimbursement for the costs

incurred by a county or municipality during a response to

an emergency relating to pipelines within the county or

municipality. The costs eligible for reimbursement may

include police and fire protection costs for the county

or municipality during the response.

(4) For green infrastructure, funds may be used as

follows:

(i) By the Department of Environmental Protection

for existing programs for watershed protection, mine and

acid mine drainage remediation and for plugging of

abandoned oil and gas wells.

(ii) By the Department of Conservation and Natural

Resources for existing programs to improve State parks

and State forests, watershed restoration and open space

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preservation, and provide community park and recreation

grants.

(iii) By the Department of Agriculture for existing

programs for county-based farmland preservation and for

transfer to the State Conservation Commission to provide

financial and technical assistance grants to conservation

districts for the implementation of best management

practices on farms within this Commonwealth.

(iv) By the department to fund main street and

downtown redevelopment relating to smart growth.

(v) By the Pennsylvania Fish and Boat Commission for

capital improvement projects for existing lands and

facilities.

(vi) By the Pennsylvania Game Commission for capital

improvement projects to existing lands and facilities.

(vii) By the Department of Transportation and the

Department of Conservation and Natural Resources for the

purpose of funding the development of new all-terrain

vehicle trails, connectors and feasibility studies.

(5) For blight demolition and redevelopment, funds may

be used by the department to establish the Blight Demolition

and Redevelopment Fund for the purpose of providing grants,

loans or other forms of financing to local entities,

including land banks, counties, cities, municipalities,

redevelopment authorities, economic development groups,

community development agencies and others for the planning,

demolition, remediation and redevelopment of blighted areas.

(6) For storm water infrastructure, funds may be used by

the Department of Environmental Protection for the

establishment of the Storm Water Control Grant Program for

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the purpose of providing grants to authorities and

municipalities with separate storm sewers as defined by 40

CFR 122.26(b)(8) (relating to storm water discharges

(applicable to State NPDES programs, see § 123.25)) to

implement pollution reduction plans and for compliance with

the act of October 4, 1978 (P.L.864, No.167), known as the

Storm Water Management Act. Priority for participation in the

Storm Water Control Grant Program shall be given to eligible

applicants that are currently subject to a Federal or State

court or agency order, consent decree or new permit discharge

requirements and eligible applicants that propose to work to

achieve cost effective compliance as part of a regional

collaborative approach.

(7) For brownfield clean-up, funds may be used for

providing funding to the Hazardous Sites Cleanup Fund

established under section 1761-A of The Fiscal Code, for uses

consistent with the act of October 18, 1988 (P.L.756,

No.108), known as the Hazardous Sites Cleanup Act.

(8) The following apply:

(i) For contaminant remediation, funds may be used

as follows:

(A) By the Department of Health to provide

grants to abate lead contaminated paint found in

schools, child care centers and residences in this

Commonwealth.

(B) By the Department of Education and the

Department of Human Services to provide grants to

remediate lead contamination in the drinking water of

schools and child care centers in this Commonwealth.

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Investment Authority for funding a Perfluorinated

Compound Remediation Program to provide grants to

treat per- and polyfluoroalkyl substances (PFAS) in

drinking water throughout this Commonwealth. The

Pennsylvania Infrastructure Investment Authority

shall be authorized to recover funds from responsible

parties.

(ii) As used in this paragraph, "child care center"

means the premises where care is provided at any one time

for seven or more children unrelated to the operator.

(9) For business development and site selection, funds

may be used for the Business in Our Sites Program established

under 64 Pa.C.S. § 1551 (relating to Business in Our Sites

Program) to provide financial assistance.

(10) For energy efficiency, funds may be used as

follows:

(i) By the department for the Alternative and Clean

Energy Program to provide grants or loans for the

utilization, development and construction of alternative

and clean energy projects in this Commonwealth.

(ii) To provide funds to the Natural Gas

Infrastructure Development Fund established under section

1742-A.1 of the act of April 9, 1929 (P.L.343, No.176),

known as The Fiscal Code.

(11) For transportation infrastructure, funds may be

used as follows:

(i) By the Department of Transportation to provide

funds to the Multimodal Transportation Fund for all of

the following purposes:

(A) The construction, reconstruction or

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maintenance of any roads and bridges owned or

maintained by a county, municipality, person,

association or corporation, other than a highway or

bridge owned, controlled or maintained by the

Department of Transportation or any tolling

authority.

(B) To increase bike and pedestrian paths and

access.

(ii) By the Department of Transportation to fund the

maintenance of State-owned four-digit roads in counties

with a population of less than 150,000.

(iii) By the Department of Conservation and Natural

Resources and the State Conservation Commission to

provide grants for dirt, gravel and low-volume road

maintenance as provided under 75 Pa.C.S. § 9106 (relating

to dirt, gravel and low-volume road maintenance).

(iv) To provide funds to the Public Transportation

Trust Fund to provide financial assistance for programs

of Statewide significance under 74 Pa.C.S. § 1516

(relating to programs of Statewide significance).

(d) Diversity.--In providing financial assistance in the

form of grants, loans or other forms of financing or funding

under subsection (b), a Commonwealth agency shall consider

regional and socioeconomic diversity. When a Commonwealth agency

uses a competitive grant process as the method for providing

financial assistance, the Commonwealth agency shall provide

outreach and educational programming to encourage and support

the submission of applications from varying types of

communities.

(e) Matching funds.--

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(1) Notwithstanding any other provision of law, a

Commonwealth agency shall determine whether financial

assistance provided under subsection (b) shall be matched

with other funds. When matching is required, the Commonwealth

agency shall establish criteria for the amount and type of

matching funds.

(2) Nothing in this part shall be construed to prohibit

an applicant or a Commonwealth agency from using the funds

received under this section as matching funds for other grant

opportunities or from using other Federal or State funds to

match funds received under this section.

(f) Applications.--To the extent feasible, Commonwealth

agencies may permit an applicant to apply to more than one grant

program in one application.

(g) Rules and regulations.--A Commonwealth agency may

promulgate any rules, regulations, guidelines, forms or

procedures and standards as it deems necessary to administer

this section.

(h) Program administration.--In order to facilitate the

administration of the Restore Pennsylvania Program, a

Commonwealth agency may promulgate, adopt and use guidelines

which shall be transmitted to the Legislative Reference Bureau

for publication in the Pennsylvania Bulletin. Guidelines under

this subsection shall not be subject to review under any of the

following:

(1) Section 205 of the act of July 31, 1968 (P.L.769,

No.240), referred to as the Commonwealth Documents Law.

(2) Sections 204(b) and 301(10) of the act of October

15, 1980 (P.L.950, No.164), known as the Commonwealth

Attorneys Act.

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(3) The act of June 25, 1982 (P.L.633, No.181), known as

the Regulatory Review Act.

PART IV

RESTORE PENNSYLVANIA BONDS

Section 2631. Definitions.

The following words and phrases when used in this part shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Authority." The Pennsylvania Economic Development Financing

Authority.

"Bond." Any type of revenue obligation, including a bond or

series of bonds, note, certificate or other instrument, issued

by the authority under this part.

"Bond administrative expenses." Expenses incurred to

administer bonds as provided under the Financing Law, or as

otherwise necessary to ensure compliance with applicable Federal

or State laws.

"Bond obligations." The principal of a bond and any premium

and interest payable on a bond, together with any amount owed

under a related credit agreement or a related resolution of the

authority authorizing a bond.

"Commonwealth agency." A department, board, commission,

authority or other officer or agency of the Commonwealth. The

term does not include any court or other officer or agency of

the unified judicial system or the General Assembly or an

officer or agency of the General Assembly.

"Credit agreement." Any loan agreement, revolving credit

agreement, agreement establishing a line of credit, letter of

credit or another agreement that enhances the marketability,

security or creditworthiness of a bond.

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"Department." The Department of Community and Economic

Development of the Commonwealth.

"Financing Law." The act of August 23, 1967 (P.L.251,

No.102), known as the Economic Development Financing Law, as

amended.

"Restore Pennsylvania Bond Account" or "account." The

restricted account established under section 2635.

"Restore Pennsylvania Program" or "program." The program

established under section 2622.

"Secretary." The Secretary of the Budget of the

Commonwealth.

Section 2632. Program funding.

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

declares that funding the Restore Pennsylvania Program through

the authority protects the health, safety and general welfare of

the residents of this Commonwealth, is in the best interest of

this Commonwealth and is consistent with the Financing Law.

(b) Financing.--Notwithstanding any other provision of law,

the following apply:

(1) The authority may issue bonds under the Financing

Law, consistent with this article, to provide funding for the

Restore Pennsylvania Program or refunding or redeeming of

prior bonds.

(2) Participation of an industrial and commercial

development authority shall not be required to finance the

program or any project or use of funds permitted by this

article.

(3) A Commonwealth agency shall be an eligible project

applicant under the Financing Law for the purposes consistent

with this article.

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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 any indebtedness, liability or obligation of the

Commonwealth.

(2) Bond obligations and bond administrative expenses

shall be payable solely from revenues or funds pledged or

available for the repayment of the bond obligations and bond

administrative expenses as authorized under this article.

Revenues or funds pledged or available under this paragraph

include the proceeds of any issuance of bonds.

(3) Each bond shall contain on the bond's face the

following statement:

The authority is obligated to pay the principal of

the bond or the interest on the bond only from funds

made available under Article XXVI of the act of March

4, 1971 (P.L.6, No.2), known as the Tax Reform Code

of 1971. The Commonwealth or a political subdivision

is not obligated to pay the principal or interest of

the bond. The full faith and credit of the

Commonwealth is not pledged to the payment of the

principal or interest of the bond.

Section 2633. Bond terms.

(a) Terms.--

(1) The department and the authority, in consultation

with the secretary, shall determine all of the the following:

(i) The maximum principal amount of the bonds for

each separate bond issue.

(ii) The maximum term of the bonds, which shall not

exceed 20 years.

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(2) The total principal amount of bonds outstanding

under this article for all bonds issued shall not exceed

$4,500,000,000.

(b) Refunding bonds.---Notwithstanding any other limitation,

the authority may issue refunding bonds at any time while bonds

that were issued under this article are outstanding.

Section 2634. Issuance of bonds and security.

(a) Issuance.--The issuance of bonds shall be subject to the

provisions of the Financing Law, unless otherwise specified

under this article.

(b) Agreements.--The authority and the department may enter

into loan agreements, credit agreements, bond purchase

agreements and other contracts, instruments, service agreements

and other agreements in connection with the bonds as necessary

to effectuate the purposes of the Financing Law and this

article .

(1) Bond obligations and bond administrative expenses

are secured, for the benefit of the holders of the bonds and

the obligees under an agreement under subsection (b), by

pledge of security interest in and first lien on all of the

following:

(i) All money deposited in the Restore Pennsylvania

Bond Account established under section 2635, including

all investment income on the money in the account.

(ii) All money relating to the bonds held on deposit

in any other fund or account under an instrument or

agreement pertaining to the bonds, including bond

reserves and interest income on the money.

(2) The security provided under this subsection shall

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not apply to money in any fund relating to arbitrage rebate

obligations.

(d) General revenue.--The Commonwealth may pledge revenues

collected by the Commonwealth for the payment of bond

obligations and bond administrative expenses. If money deposited

in the Restore Pennsylvania Bond Account is insufficient to

timely pay in full bond obligations and bond administrative

expenses, the department shall request an appropriation as

provided for in the service agreement authorized in section

2637. Payments of general revenue money are subject to and

dependent upon the appropriation of money by the General

Assembly.

Section 2635. Restore Pennsylvania Bond Account.

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

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

the Restore Pennsylvania Bond Account.

(b) Transfers.--The following apply:

(1) Money held in the fund established under section

2636 and certified by the secretary for the payment of bond

obligations and bond administrative expenses for bonds issued

under this article shall be deposited into the Restore

Pennsylvania Bond Account in sufficient amounts to ensure the

timely payment of bond obligations and bond administrative

expenses and replenishment of bond reserves under any

instrument or agreement relating to the bonds.

(2) General revenues pledged by the Commonwealth under

section 2634(d) and certified by the secretary for payment of

bond obligations and bond administrative expenses shall be

deposited in the Restore Pennsylvania Bond Account to

supplement money received under paragraph (1).

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Section 2636. Restore Pennsylvania Fund.

(a) Establishment.--The Restore Pennsylvania Fund is

established as a special nonlapsing fund in the State Treasury.

(b) Allocations.--Money deposited into the Restore

Pennsylvania Fund shall first be allocated to meet the bond

obligations and bond administrative expenses as specified under

section 2634. The secretary shall certify to the State Treasurer

the amounts necessary to meet the bond obligations and bond

administrative expenses for the fiscal year, and the State

Treasurer shall transfer the amount certified to the Restore

Pennsylvania Bond Account without further appropriation.

requirements under subsection (b) shall be used for the purposes

under section 2624(c).

Section 2637. Service agreements.

The authority and the department may enter into a service

agreement to effectuate the provisions of this article,

including an agreement to secure bonds issued for the program.

Under the service agreement, the department 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 bond obligations and bond

administrative expenses and any other financing costs due on the

bonds issued for the program. The department's payment of the

service charges shall be subject to and dependent upon the

appropriation of money by the General Assembly to the department

for the payment of the service charges. The service agreement

may be amended or supplemented by the department and the

authority in connection with the issuance of any series of bonds

or refunding bonds authorized under this article.

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Section 2638. Use of bond proceeds.

Upon the issuance of bonds, the proceeds shall be applied in

the following order:

(1) Paying the costs of the issuance of the bonds.

(2) Funding bond reserves.

(3) Paying for bond administrative expenses.

(4) Redeeming or purchasing outstanding bonds, if

applicable.

(5) Paying bond obligations.

(6) Refunding outstanding bonds, if applicable.

(7) Making any other deposit required under any

instrument or agreement pertaining to the bonds.

Section 2639. Limitation on appropriations.

(a) Fund payments.--The amount of payments from the Restore

Pennsylvania Fund that are pledged and certified by the

secretary for the payments of bond obligations and bond

administrative expenses and any other financing costs due on the

bonds issued under this article and excess money under section

2636 shall not be subject to an appropriation.

(b) Account payments.--Payments from the Restore

Pennsylvania Bond Account relating to the issuance of bonds

under this article shall not be subject to an appropriation.

Section 2640. Impairment bond-related obligations.

The Commonwealth pledges that it shall not do any of the

following actions:

(1) Limit or alter the rights and responsibilities of

the authority or the department under this article, including

paying bond obligations and bond administrative expenses and

complying with any other instrument or agreement pertaining

to bonds.

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(2) Alter or limit the security interest or pledge

granted under section 2634.

(3) Impair the rights and remedies of the holders of

bonds, until the bonds and interest on the bonds are fully

met and discharged.

Section 2641. Personal liability.

The members, directors, officers and employees of the

department and the authority shall not be personally liable as a

result of good faith exercise of the duties provided under this

article.

Section 2642. Annual report.

(a) Submission.--No later than March 1 of the year following

the first year that bonds are issued under this article and each

year thereafter, if bond obligations exist in the prior year,

the department shall submit an annual report with the available

data on the bonds for the prior year to all of the following:

(1) The chairperson and minority chairperson of the

Appropriations Committee of the Senate.

(2) The chairperson and minority chairperson of the

Appropriations Committee of the House of Representatives.

(b) Contents.--The report under subsection (a) shall

include, but not be limited to, all of the following

information:

(1) Existing and anticipated bond principal and

interest.

(2) Administrative costs, revenue, repayments,

refinancing and overall benefits from the bonds.

(3) Any other relevant data, facts and statistics as

determined by the department.

Section 2643. Expiration of article.

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(a) Notice.--Within 30 days following the repayment of bond

obligations, bond administrative expenses and other financing

costs incurred under this article, the secretary shall transmit

notice to the Legislative Reference Bureau for publication in

the Pennsylvania Bulletin.

(b) Expiration.--This article shall expire on the date when

the notice under subsection (a) is published in the Pennsylvania

Bulletin.

PART IX

MISCELLANEOUS PROVISIONS

Section 2661. Severability.

The provisions of this article are severable. If any

provision of this article or its application to any person or

circumstance is held invalid, the invalidity shall not affect

other provisions or applications of this article which can be

given effect without the invalid provision or application.

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 XXVI of the act.

(2) 58 Pa.C.S. § 2318 is repealed.

Section 3. This act shall take effect immediately.

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