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
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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
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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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