House Bill 4105

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    Florida House of Representatives - 1998                HB 4105

        By Representative Saunders






  1                      A bill to be entitled

  2         An act relating to water and wastewater utility

  3         systems; amending ss. 125.3401, 153.90, 153.91,

  4         153.92, 153.93, 153.94, 180.301, 189.423, and

  5         190.0125, F.S.; authorizing counties,

  6         municipalities, special districts, and

  7         community development districts to enter into

  8         water facility privatization contracts;

  9         providing legislative findings and declaration;

10         providing definitions; providing responsibility

11         of such entities to set user fees; providing

12         requirements and conditions for such contracts;

13         exempting such contracts from the requirements

14         of ch. 287, F.S.; amending s. 367.022, F.S.;

15         exempting facilities operated under a

16         privatization contract from regulation by the

17         Public Service Commission; reenacting s.

18         367.171(8), F.S.; relating to county regulation

19         of utility rates, to incorporate the amendment

20         to s. 367.022, F.S., in a reference; providing

21         an effective date.

22

23  Be It Enacted by the Legislature of the State of Florida:

24

25         Section 1.  Section 125.3401, Florida Statutes, is

26  amended to read:

27         125.3401  Purchase, sale, or privatization of water,

28  sewer, or wastewater reuse utility by county.--

29         (1)  No county may purchase or sell a water, sewer, or

30  wastewater reuse utility that provides service to the public

31  for compensation, or enter into a water or wastewater facility

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  1  privatization contract for either a water or a wastewater

  2  facility, until the governing body of the county has held a

  3  public hearing on the purchase, sale, or water or wastewater

  4  facility privatization contract and made a determination that

  5  the purchase, sale, or water or wastewater facility

  6  privatization contract is in the public interest.  In

  7  determining if the purchase, sale, or water or wastewater

  8  facility privatization contract is in the public interest, the

  9  county shall consider, at a minimum, the following:

10         (a)(1)  The most recent available income and expense

11  statement for the utility;

12         (b)(2)  The most recent available balance sheet for the

13  utility, listing assets and liabilities and clearly showing

14  the amount of contributions-in-aid-of-construction and the

15  accumulated depreciation thereon;

16         (c)(3)  A statement of the existing rate base of the

17  utility for regulatory purposes;

18         (d)(4)  The physical condition of the utility

19  facilities being purchased, sold, or subject to a water or

20  wastewater facility privatization contract;

21         (e)(5)  The reasonableness of the purchase, sale sales,

22  or water or wastewater facility privatization contract price

23  and terms;

24         (f)(6)  The impact impacts of the purchase, sale, or

25  water or wastewater facility privatization contract on utility

26  customers, both positive and negative;

27         (g)1.(7)(a)  Any additional investment required and the

28  ability and willingness of the purchaser, or the private firm

29  under a water or wastewater facility privatization contract,

30  to make that investment, whether the purchaser is the county

31  or the entity purchasing the utility from the county; and

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  1         2.(b)  In the case of a water or wastewater facility

  2  privatization contract, the terms and conditions on which the

  3  private firm will provide capital investment and financing or

  4  a combination thereof for contemplated capital replacements,

  5  additions, expansions, and repairs.  The county shall give

  6  significant weight to this criteria;.

  7         (h)(8)  The alternatives to the purchase, sale, or

  8  water or wastewater facility privatization contract, and the

  9  potential impact on utility customers if the purchase, sale,

10  or water or wastewater facility privatization contract is not

11  made; and

12         (i)(9)(a)  The ability of the purchaser or the private

13  firm under a water or wastewater facility privatization

14  contract to provide and maintain high-quality and

15  cost-effective utility service, whether the purchaser is the

16  county or the entity purchasing the utility from the county.

17         (b)  In the case of a water or wastewater facility

18  privatization contract, the county shall give significant

19  weight to the technical expertise and experience of the

20  private firm in carrying out the obligations specified in the

21  water or wastewater facility privatization contract.

22         (2)  The county shall prepare a statement showing that

23  the purchase, sale, or water or wastewater facility

24  privatization contract is in the public interest, including a

25  summary of the purchaser's or private firm's experience in

26  water, sewer, or and wastewater reuse utility operation and a

27  showing of financial ability to provide the service,

28  irrespective of whether the purchaser or seller private firm

29  is the county or the transaction involves a water or

30  wastewater facility privatization contract entity purchasing

31  the utility from the county.

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  1         (3)(10)  All moneys paid by a private firm to a county

  2  pursuant to a water or wastewater facility privatization

  3  contract shall be used for the purpose of reducing or

  4  offsetting property taxes, water or wastewater service rates,

  5  or debt reduction or making infrastructure improvements or

  6  capital asset expenditures or other public purpose; provided,

  7  however, nothing herein shall preclude the county from using

  8  all or part of the moneys for the purpose of the county's

  9  qualification for relief from the repayment of federal grant

10  awards associated with the water or wastewater system as may

11  be required by federal law or regulation.

12         Section 2.  Section 153.90, Florida Statutes, is

13  amended to read:

14         153.90  Legislative findings and declarations.--

15         (1)  The Legislature hereby finds and declares as

16  follows:

17         (a)  That providing modern, efficient water and

18  wastewater facilities is vital to the health and general

19  welfare of the citizens of the state;

20         (b)  That the construction, rehabilitation, operation,

21  and maintenance of water and wastewater facilities is are

22  essential to economic growth and development in the state;

23         (c)  That protection of taxpayers requires that water

24  and wastewater services be provided on an economical basis

25  consistent with service and safety standards;

26         (d)  That alternative methods of financing the

27  construction, operation, and improvement of water and

28  wastewater facilities must be developed and encouraged;

29         (e)  That although public entities currently have broad

30  home rule powers and other statutory authority to enter into

31  certain types of privatization agreements, the ability of

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  1  public entities to provide efficient water and wastewater

  2  facilities will be enhanced by specifically authorizing public

  3  entities to enter into long-term privatization contracts for

  4  the performance of water and wastewater facility functions by

  5  private firms;

  6         (f)  That water and wastewater facility privatization

  7  contracts will allow private firms to utilize their expertise,

  8  experience, and resources to enable public entities to provide

  9  modern, efficient water and wastewater services while

10  protecting the rights and interests of citizens; and

11         (g)  That Executive Order No. 12803 provides relief to

12  public entities from repayment of federal grant awards where

13  the public entity enters into a water or wastewater facility

14  privatization contract consistent with the requirements of

15  this act and existing law, and public entities should be

16  encouraged to take advantage of that relief.

17         (2)  The Legislature therefore determines that it is in

18  the public interest of the state to supplement and enhance the

19  authority of public entities to solicit, negotiate, and enter

20  into contracts with private entities for the financing,

21  designing, acquisition, ownership, leasing, construction,

22  improvement, operation, maintenance, and administration, or

23  any combination thereof, of water and wastewater facilities.

24         (3)  It is the intent of the Legislature that the

25  provisions of this act be liberally construed in order to

26  accomplish their purposes and that the provisions of this act

27  shall be in addition and supplemental to powers conferred by

28  any other law.

29         Section 3.  Section 153.91, Florida Statutes, is

30  amended to read:

31         153.91  Definitions.--As used in this act, the term:

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  1         (1)(2)  "Interlocal agreement" means an agreement

  2  entered into pursuant to s. 163.01 by two or more public

  3  entities in respect to a water or wastewater facility

  4  privatization contract.

  5         (2)(4)  "Private firm" means any privately or publicly

  6  held business entity qualified to do business in Florida

  7  having the financial capacity and technical, administrative,

  8  and regulatory experience and expertise necessary to enable it

  9  to carry out the obligations specified in a water or

10  wastewater facility privatization contract.

11         (3)  "Public entity" means any political subdivision of

12  this state which is authorized to provide water or wastewater

13  service, including, but not limited to, any county, city,

14  metropolitan or consolidated government, special district, and

15  community development district.

16         (4)(5)  "Wastewater facility" means any equipment,

17  building, or other property used or useful in connection with

18  the provision of a wastewater service to the public, including

19  such interests in land as are necessary or convenient to

20  permit a private firm to perform a contract in respect

21  thereto.

22         (5)(1)  "Wastewater facility privatization contract"

23  means a written agreement, or one or more related written

24  agreements, between a private firm and one or more public

25  entities, which provides for the operation, maintenance,

26  repair, management, and administration, or any combination

27  thereof, of a wastewater facility for a term of more than 5

28  years, but not more than 40 years in duration, and which may

29  also provide for the planning, design, construction,

30  improvement, acquisition, financing, ownership, sale, and

31

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  1  leasing, or any combination thereof, of the wastewater

  2  facility.

  3         (6)  "Water facility" means any equipment, building, or

  4  other property used or useful in connection with the provision

  5  of water service to the public, including such interests in

  6  land as are necessary or convenient to permit a private firm

  7  to perform a contract in respect thereto.

  8         (7)  "Water facility privatization contract" means a

  9  written agreement, or one or more related written agreements,

10  between a private firm and one or more public entities, which

11  provides for the operation, maintenance, repair, management,

12  and administration, or any combination thereof, of a water

13  facility for a term of more than 5 years but not more than 40

14  years in duration, and which may also provide for the

15  planning, design, construction, improvement, acquisition,

16  financing, ownership, sale, and leasing, or any combination

17  thereof, of the water facility.

18         Section 4.  Section 153.92, Florida Statutes, is

19  amended to read:

20         153.92  Clarifying the authority to enter into water or

21  wastewater facility privatization contracts.--Any public

22  entity may enter into a water or wastewater facility

23  privatization contract, and may join with one or more other

24  public entities in such a contract pursuant to an interlocal

25  agreement.  A public entity entering into a water or

26  wastewater facility privatization contract may make such

27  conveyances of its property, and may make such other

28  agreements and perform such other acts consistent with law, as

29  are determined by the public entity to be necessary or

30  convenient to effectuate the water or wastewater facility

31  privatization contract.  It is the intent of the Legislature

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  1  that the language used in this section is intended to clarify

  2  the existing authority rather than provide any additional

  3  authority for public entities to enter into water or

  4  wastewater facility privatization contracts.

  5         Section 5.  Section 153.93, Florida Statutes, is

  6  amended to read:

  7         153.93  Responsibility for setting user

  8  fees.--Responsibility for the setting of user fees charged to

  9  members of the public purchasing or using either water service

10  of a water facility or a wastewater service of a wastewater

11  facility, subject to either a water or a wastewater facility

12  privatization contract; collection of such fees; and

13  enforcement of fee obligations, regulations, and other

14  requirements and obligations applicable to members of the

15  public who purchase or use the water or wastewater service,

16  shall remain obligations of the public entity.

17         Section 6.  Section 153.94, Florida Statutes, is

18  amended to read:

19         153.94  Applicability of other laws.--Except as

20  expressly provided in this act:

21         (1)  With respect to any water or wastewater facility

22  privatization contract entered into under this act, a public

23  entity is subject to s. 125.3401, s. 180.301, s. 189.423, or

24  s. 190.0125 but is not subject to the requirements of chapter

25  287.

26         (2)  A water or wastewater facility subject to a water

27  or wastewater facility privatization contract made under this

28  act shall continue to be regulated for all local, state, and

29  federal purposes as if owned, operated, and maintained by the

30  public entity.

31

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  1         Section 7.  Section 180.301, Florida Statutes, is

  2  amended to read:

  3         180.301  Purchase, sale, or privatization of water,

  4  sewer, or wastewater reuse utility by municipality.--

  5         (1)  No municipality may purchase or sell a water,

  6  sewer, or wastewater reuse utility that provides service to

  7  the public for compensation, or enter into a water or

  8  wastewater facility privatization contract for either a water

  9  or a wastewater facility until the governing body of the

10  municipality has held a public hearing on the purchase, sale,

11  or water or wastewater facility privatization contract, and

12  made a determination that the purchase, sale, or water or

13  wastewater facility privatization contract is in the public

14  interest.  In determining if the purchase, sale, or water or

15  wastewater facility privatization contract is in the public

16  interest, the municipality shall consider, at a minimum, the

17  following:

18         (a)(1)  The most recent available income and expense

19  statement for the utility;

20         (b)(2)  The most recent available balance sheet for the

21  utility, listing assets and liabilities and clearly showing

22  the amount of contributions-in-aid-of-construction and the

23  accumulated depreciation thereon;

24         (c)(3)  A statement of the existing rate base of the

25  utility for regulatory purposes;

26         (d)(4)  The physical condition of the utility

27  facilities being purchased, sold, or subject to a water or

28  wastewater facility privatization contract;

29         (e)(5)  The reasonableness of the purchase, sale, or

30  water or wastewater facility privatization contract price and

31  terms;

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  1         (f)(6)  The impact impacts of the purchase, sale, or

  2  water or wastewater facility privatization contract on utility

  3  customers, both positive and negative;

  4         (g)1.(7)(a)  Any additional investment required and the

  5  ability and willingness of the purchaser, or the private firm

  6  under a water or wastewater facility privatization contract,

  7  to make that investment, whether the purchaser is the

  8  municipality or the entity purchasing the utility from the

  9  municipality; and

10         2.(b)  In the case of a water or wastewater facility

11  privatization contract, the terms and conditions on which the

12  private firm will provide capital investment and financing or

13  a combination thereof for contemplated capital replacements,

14  additions, expansions, and repairs.  The municipality shall

15  give significant weight to this criteria criterion.

16         (h)(8)  The alternatives to the purchase, sale, or

17  water or wastewater facility privatization contract, and the

18  potential impact on utility customers if the purchase, sale,

19  or water or wastewater facility privatization contract is not

20  made; and

21         (i)(9)(a)  The ability of the purchaser or the private

22  firm under a water or wastewater facility privatization

23  contract to provide and maintain high-quality and

24  cost-effective utility service, whether the purchaser is the

25  municipality or the entity purchasing the utility from the

26  municipality.

27         (b)  In the case of a water or wastewater facility

28  privatization contract, the municipality shall give

29  significant weight to the technical expertise and experience

30  of the private firm in carrying out the obligation specified

31  in the water or wastewater facility privatization contract.

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  1         (2)  The municipality shall prepare a statement showing

  2  that the purchase, sale, or water or wastewater facility

  3  privatization contract is in the public interest, including a

  4  summary of the purchaser's or private firm's experience in

  5  water, sewer, or wastewater reuse utility operation and a

  6  showing of financial ability to provide the service,

  7  irrespective of whether the purchaser or seller is the

  8  municipality or the transaction involves a water or wastewater

  9  facility privatization contract entity purchasing the utility

10  from the municipality.

11         (3)(10)  All moneys paid by a private firm to a

12  municipality pursuant to a water or wastewater facility

13  privatization contract shall be used for the purpose of

14  reducing or offsetting property taxes, water or wastewater

15  service rates, or debt reduction or making infrastructure

16  improvements or capital asset expenditures or other public

17  purpose; provided, however, nothing herein shall preclude the

18  municipality from using all or part of the moneys for the

19  purpose of the municipality's qualification for relief from

20  the repayment of federal grant awards associated with the

21  water or wastewater system as may be required by federal law

22  or regulation.

23         Section 8.  Section 189.423, Florida Statutes, is

24  amended to read:

25         189.423  Purchase, sale, or privatization of water,

26  sewer, or wastewater reuse utility by special district.--

27         (1)  No dependent or independent special district may

28  purchase or sell a water, sewer, or wastewater reuse utility

29  that provides service to the public for compensation, or enter

30  into a water or wastewater facility privatization contract for

31  either a water or a wastewater facility, until the governing

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  1  body of the district has held a public hearing on the

  2  purchase, sale, or water or wastewater facility privatization

  3  contract and made a determination that the purchase, sale, or

  4  water or wastewater facility privatization contract is in the

  5  public interest. In determining if the purchase, sale, or

  6  water or wastewater facility privatization contract is in the

  7  public interest, the district shall consider, at a minimum,

  8  the following:

  9         (a)(1)  The most recent available income and expense

10  statement for the utility;

11         (b)(2)  The most recent available balance sheet for the

12  utility, listing assets and liabilities and clearly showing

13  the amount of contributions-in-aid-of-construction and the

14  accumulated depreciation thereon;

15         (c)(3)  A statement of the existing rate base of the

16  utility for regulatory purposes;

17         (d)(4)  The physical condition of the utility

18  facilities being purchased, sold, or subject to water or

19  wastewater facility privatization contract;

20         (e)(5)  The reasonableness of the purchase, sale, or

21  water or wastewater facility privatization contract price and

22  terms;

23         (f)(6)  The impact impacts of the purchase, sale, or

24  water or wastewater facility privatization contract on utility

25  customers, both positive and negative;

26         (g)1.(7)(a)  Any additional investment required and the

27  ability and willingness of the purchaser, or the private firm

28  under a water or wastewater facility privatization contract,

29  to make that investment, whether the purchaser is the special

30  district or the entity purchasing the utility from the special

31  district; and

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  1         2.(b)  In the case of a water or wastewater facility

  2  privatization contract, the terms and conditions on which the

  3  private firm will provide capital investment and financing or

  4  a combination thereof for contemplated capital replacements,

  5  additions, expansions, and repairs.  The special district

  6  shall give significant weight to this criteria.

  7         (h)(8)  The alternatives to the purchase, sale, or

  8  water or wastewater facility privatization contract, and the

  9  potential impact on utility customers if the purchase, sale,

10  or water or wastewater facility privatization contract is not

11  made; and

12         (i)(9)(a)  The ability of the purchaser or the private

13  firm under a water or wastewater facility privatization

14  contract to provide and maintain high-quality and

15  cost-effective utility service, whether the purchaser is the

16  special district or the entity purchasing the utility from the

17  special district.;

18         (b)  In the case of a water or wastewater facility

19  privatization contract, the special district shall give

20  significant weight to the technical expertise and experience

21  of the private firm in carrying out the obligations specified

22  in the water or wastewater facility privatization contract.;

23  and

24         (2)  The special district shall prepare a statement

25  showing that the purchase, sale, or water or wastewater

26  facility privatization contract is in the public interest,

27  including a summary of the purchaser's or private firm's

28  experience in water, sewer, or wastewater reuse utility

29  operation and a showing of financial ability to provide the

30  service, irrespective of whether the purchaser or seller

31  private firm is the special district or the transaction

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  1  involves a water or wastewater facility privatization contract

  2  entity purchasing the utility from the special district.  The

  3  provisions of this section shall not apply to community

  4  development districts established pursuant to chapter 190.

  5         (3)(10)  All moneys paid by a private firm to a special

  6  district pursuant to a water or wastewater facility

  7  privatization contract shall be used for the purpose of

  8  reducing or offsetting property taxes, water or wastewater

  9  service rates, or debt reduction or making infrastructure

10  improvements or capital asset expenditures or other public

11  purpose; provided, however, nothing herein shall preclude the

12  special district from using all or part of the moneys for the

13  purpose of the special district's qualification for relief

14  from the repayment of federal grant awards associated with the

15  water or wastewater system as may be required by federal law

16  or regulation.

17         Section 9.  Section 190.0125, Florida Statutes, is

18  amended to read:

19         190.0125  Purchase, privatization, or sale of water,

20  sewer, or wastewater reuse utility by district.--

21         (1)  No community development district may purchase or

22  sell a water, sewer, or wastewater reuse utility that provides

23  service to the public for compensation, or enter into a water

24  or wastewater facility privatization contract for either a

25  water or a wastewater facility, until the governing body of

26  the community development district has held a public hearing

27  on the purchase, sale, or water or wastewater facility

28  privatization contract and made a determination that the

29  purchase, sale, or water or wastewater facility privatization

30  contract is in the public interest. In determining if the

31  purchase, sale, or water or wastewater facility privatization

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  1  contract is in the public interest, the community development

  2  district shall consider, at a minimum, the following:

  3         (a)(1)  The most recent available income and expense

  4  statement for the utility;

  5         (b)(2)  The most recent available balance sheet for the

  6  utility, listing assets and liabilities and clearly showing

  7  the amount of contributions-in-aid-of-construction and the

  8  accumulated depreciation thereon;

  9         (c)(3)  A statement of the existing rate base of the

10  utility for regulatory purposes;

11         (d)(4)  The physical condition of the utility

12  facilities being purchased, sold, or subject to a water or

13  wastewater facility privatization contract;

14         (e)(5)  The reasonableness of the purchase, sale sales,

15  or water or wastewater facility privatization contract price

16  and terms;

17         (f)(6)  The impact impacts of the purchase, sale, or

18  water or wastewater facility privatization contract on utility

19  customers, both positive and negative;

20         (g)1.(7)(a)  Any additional investment required and the

21  ability and willingness of the purchaser, or the private firm

22  under a water or wastewater facility privatization contract,

23  to make that investment, whether the purchaser is the

24  community development district or the entity purchasing the

25  utility from the community development district; and

26         2.(b)  In the case of a water or wastewater facility

27  privatization contract, the terms and conditions on which the

28  private firm will provide capital investment and financing or

29  a combination thereof for contemplated capital replacements,

30  additions, expansions, and repairs.  The community development

31  district shall give significant weight to this criteria.

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  1         (h)(8)  The alternatives to the purchase, sale, or

  2  water or wastewater facility privatization contract, and the

  3  potential impact on utility customers if the purchase, sale,

  4  or water or wastewater facility privatization contract is not

  5  made; and

  6         (i)(9)(a)  The ability of the purchaser or the private

  7  firm under a water or wastewater facility privatization

  8  contract to provide and maintain high-quality and

  9  cost-effective utility service, whether the purchaser is the

10  community development district or the entity purchasing the

11  utility from the community development district.;

12         (b)  In the case of a water or wastewater facility

13  privatization contract, the community development district

14  shall give significant weight to the technical expertise and

15  experience of the private firm in carrying out the obligations

16  specified in the water or wastewater facility privatization

17  contract.; and

18         (2)  The community development district shall prepare a

19  statement showing that the purchase, sale, or water or

20  wastewater facility privatization contract is in the public

21  interest, including a summary of the purchaser's or private

22  firm's experience in water, sewer, or wastewater reuse utility

23  operation and a showing of financial ability to provide the

24  service, irrespective of whether the purchaser or seller

25  private firm is the community development district or the

26  transaction involves a water or wastewater facility

27  privatization contract entity purchasing the utility from the

28  community development district.

29         (3)(10)  All moneys paid by a private firm to a

30  community development district pursuant to a water or

31  wastewater facility privatization contract shall be used for

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  1  the purpose of reducing or offsetting property taxes, water or

  2  wastewater service rates, or debt reduction or making

  3  infrastructure improvements or capital asset expenditures or

  4  other public purpose; provided, however, nothing herein shall

  5  preclude the community development district from using all or

  6  part of the moneys for the purpose of the community

  7  development district's qualification for relief from the

  8  repayment of federal grant awards associated with the water or

  9  wastewater system as may be required by federal law or

10  regulation.

11         Section 10.  Subsection (2) of section 367.022, Florida

12  Statutes, is amended to read:

13         367.022  Exemptions.--The following are not subject to

14  regulation by the commission as a utility nor are they subject

15  to the provisions of this chapter, except as expressly

16  provided:

17         (2)  Systems owned, operated, managed, or controlled by

18  governmental authorities, including water or wastewater

19  facilities operated by private firms under water or wastewater

20  facility privatization contracts as defined in s. 153.91;

21         Section 11.  For the purpose of incorporating the

22  amendment to s. 367.022(2), Florida Statutes, in a reference

23  thereto, subsection (8) of section 367.171, Florida Statutes,

24  is reenacted to read:

25         367.171  Effectiveness of this chapter.--

26         (8)  Each county which is excluded from the provisions

27  of this chapter shall regulate the rates of all utilities in

28  that county which would otherwise be subject to regulation by

29  the commission pursuant to s. 367.081(1), (2), (3), and (6).

30  The county shall not regulate the rates or charges of any

31  system or facility which would otherwise be exempt from

                                  17

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 1998                HB 4105

    550-153-98






  1  commission regulation pursuant to s. 367.022(2).  For this

  2  purpose the county or its agency shall proceed as though the

  3  county or agency is the commission.

  4         Section 12.  This act shall take effect upon becoming a

  5  law.

  6

  7            *****************************************

  8                          HOUSE SUMMARY

  9
      Defines "water facility" and "water facility
10    privatization contract" with respect to provisions
      regulating water and wastewater utility systems. Revises
11    provisions which currently authorize counties,
      municipalities, special districts, and community
12    development districts to enter into wastewater facility
      privatization contracts, to similarly authorize water
13    facility privatization contracts. Conforms requirements
      and conditions for water facility privatization contracts
14    and responsibilities of the public entities entering into
      such contracts. Provides an exemption from regulation by
15    the Public Service Commission for water facilities
      operated by a private firm under a privatization
16    contract.

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