HB 0129 2003
1	CHAMBER ACTION
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6	The Committee on Local Government & Veterans' Affairs recommends
7	the following:
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9	Committee Substitute
10	Remove the entire bill and insert:
11	A bill to be entitled
12	An act relating to the Florida Interlocal Cooperation Act
13	of 1969; amending s. 163.01, F.S.; providing procedures
14	for the approval of the transfer of powers between local
15	governments and a legal entity for the acquisition of
16	water or wastewater facilities serving residents outside
17	the jurisdiction of the members of the legal entity;
18	providing for alternative compliance with s. 4, Art. VIII
19	of the State Constitution; declaring a legal entity a
20	government authority under certain circumstances;
21	requiring a county to reserve the power to review and
22	approve rates under certain circumstances; prohibiting a
23	legal entity from receiving income generated from
24	customers under certain circumstances; granting a county
25	the right to acquire facilities of a legal entity serving
26	residents outside the jurisdiction of the members of the
27	legal entity under certain circumstances; providing for
28	retroactive application; amending s. 367.081, F.S.;
29	prohibiting the consideration by the Public Service
30	Commission of certain gains or losses when establishing
31	utility rates; providing an effective date.
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33	Be It Enacted by the Legislature of the State of Florida:
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35	Section 1. Paragraph (g) of subsection (7) of section
36	163.01, Florida Statutes, is amended to read:
37	163.01 Florida Interlocal Cooperation Act of 1969.--
38	(7)
39	(g)1. Notwithstanding any other provisions of this
40	section, any separate legal entity created under this section,
41	the membership of which is limited to municipalities and
42	counties of the state, may acquire, own, construct, improve,
43	operate, and manage public facilities, or finance facilities on
44	behalf of any person, relating to a governmental function or
45	purpose, including, but not limited to, wastewater facilities,
46	water or alternative water supply facilities, and water reuse
47	facilities, which may serve populations within or outside of the
48	members of the entity. Notwithstanding s. 367.171(7), any
49	separate legal entity created under this paragraph is not
50	subject to commission jurisdiction and may not provide utility
51	services within the service area of an existing utility system
52	unless it has received the consent of the utility. A separate
53	legal entity, other than a water supply authority created
54	pursuant to ss. 373.1962 and 373.1963, which seeks to acquire
55	any public facilities that serve populations outside of the
56	jurisdiction of members of the entity must notify in writing
57	each host government of the contemplated acquisition prior to
58	any transfer of ownership, use, or possession of any utility
59	assets to such separate legal entity. The potential acquisition
60	notice must be provided in writing to the legislative head of
61	the governing body of the host government and its chief
62	administrative officer and provide the name and address of a
63	contact person of the separate legal entity for the receipt of
64	information on the contemplated acquisition. Within 45 days
65	following receipt of the notice, the host government may adopt a
66	membership resolution indicating its intent to become a member
67	of the separate legal entity, a prohibition resolution to
68	prohibit the acquisition by the separate legal entity of public
69	facilities within its jurisdiction, an approval resolution
70	prescribing any restrictions on the proposed acquisition
71	required by the host local government, or take no action of any
72	kind. If a host government adopts a membership resolution, the
73	separate legal entity shall accept the host government as a
74	member prior to any transfer of ownership, use, or possession of
75	the public facilities on the same basis as its existing members.
76	If a host government adopts a prohibition resolution, the
77	separate legal entity may not acquire the public facilities
78	within such host government’s territory without specific consent
79	of the host government by future resolution. For purposes of
80	this paragraph, a “host government” is the governing body of the
81	county if a majority of the retail utility customers to be
82	served by the acquired public facilities within the county
83	reside in the unincorporated area or is the governing body of a
84	municipality if the majority of the retail utility customers to
85	be served by the acquired public facilities reside within the
86	municipal boundaries. A host government shall, in its adoption
87	of an approval resolution or a membership resolution or by a
88	resolution adopted subsequent to the closing of an acquisition,
89	reserve the right to review and approve as fair and reasonable
90	the rates, charges, and customer classifications adopted by the
91	separate legal entity for the use of the acquired public
92	facilities within the jurisdiction of the host local government.
93	Such right of rate review and approval by the host local
94	government is subject to the obligation of the separate legal
95	entity to establish rates and charges that comply with the
96	requirements contained in any resolution or trust agreement
97	relating to the issuance of bonds to acquire and improve the
98	affected public facilities and such right does not affect the
99	obligation of the separate legal entity to set rates at a level
100	sufficient to pay debt service on its obligations issued in
101	relation to the affected public facilities. A separate legal
102	entity created under this section shall be a governmental
103	authority for purposes of chapter 367. This paragraph is an
104	alternative provision otherwise provided by law as authorized in
105	s. 4, Art. VIII of the State Constitution for any transfer of
106	power as a result of an acquisition of public facilities by a
107	separate legal entity from a municipality, county, or special
108	district.The entity may finance or refinance the acquisition,
109	construction, expansion, and improvement of such facilities
110	relating to a governmental function or purpose through the
111	issuance of its bonds, notes, or other obligations under this
112	section or as otherwise authorized by law. The entity has all
113	the powers provided by the interlocal agreement under which it
114	is created or which are necessary to finance, own, operate, or
115	manage the public facility, including, without limitation, the
116	power to establish rates, charges, and fees for products or
117	services provided by it, the power to levy special assessments,
118	the power to sell or finance all or a portion of such facility,
119	and the power to contract with a public or private entity to
120	manage and operate such facilities or to provide or receive
121	facilities, services, or products. Except as may be limited by
122	the interlocal agreement under which the entity is created, all
123	of the privileges, benefits, powers, and terms of s. 125.01,
124	relating to counties, and s. 166.021, relating to
125	municipalities, are fully applicable to the entity. However,
126	neither the entity nor any of its members on behalf of the
127	entity may exercise the power of eminent domain over the
128	facilities or property of any existing water or wastewater plant
129	utility system, nor may the entity acquire title to any water or
130	wastewater plant utility facilities, other facilities, or
131	property which was acquired by the use of eminent domain after
132	the effective date of this act. Bonds, notes, and other
133	obligations issued by the entity are issued on behalf of the
134	public agencies that are members of the entity.
135	2. Any entity created under this section may also issue
136	bond anticipation notes in connection with the authorization,
137	issuance, and sale of bonds. The bonds may be issued as serial
138	bonds or as term bonds or both. Any entity may issue capital
139	appreciation bonds or variable rate bonds. Any bonds, notes, or
140	other obligations must be authorized by resolution of the
141	governing body of the entity and bear the date or dates; mature
142	at the time or times, not exceeding 40 years from their
143	respective dates; bear interest at the rate or rates; be payable
144	at the time or times; be in the denomination; be in the form;
145	carry the registration privileges; be executed in the manner; be
146	payable from the sources and in the medium or payment and at the
147	place; and be subject to the terms of redemption, including
148	redemption prior to maturity, as the resolution may provide. If
149	any officer whose signature, or a facsimile of whose signature,
150	appears on any bonds, notes, or other obligations ceases to be
151	an officer before the delivery of the bonds, notes, or other
152	obligations, the signature or facsimile is valid and sufficient
153	for all purposes as if he or she had remained in office until
154	the delivery. The bonds, notes, or other obligations may be sold
155	at public or private sale for such price as the governing body
156	of the entity shall determine. Pending preparation of the
157	definitive bonds, the entity may issue interim certificates,
158	which shall be exchanged for the definitive bonds. The bonds may
159	be secured by a form of credit enhancement, if any, as the
160	entity deems appropriate. The bonds may be secured by an
161	indenture of trust or trust agreement. In addition, the
162	governing body of the legal entity may delegate, to an officer,
163	official, or agent of the legal entity as the governing body of
164	the legal entity may select, the power to determine the time;
165	manner of sale, public or private; maturities; rate of interest,
166	which may be fixed or may vary at the time and in accordance
167	with a specified formula or method of determination; and other
168	terms and conditions as may be deemed appropriate by the
169	officer, official, or agent so designated by the governing body
170	of the legal entity. However, the amount and maturity of the
171	bonds, notes, or other obligations and the interest rate of the
172	bonds, notes, or other obligations must be within the limits
173	prescribed by the governing body of the legal entity and its
174	resolution delegating to an officer, official, or agent the
175	power to authorize the issuance and sale of the bonds, notes, or
176	other obligations.
177	3. Bonds, notes, or other obligations issued under
178	subparagraph 1. may be validated as provided in chapter 75. The
179	complaint in any action to validate the bonds, notes, or other
180	obligations must be filed only in the Circuit Court for Leon
181	County. The notice required to be published by s. 75.06 must be
182	published in Leon County and in each county that is a member of
183	the entity issuing the bonds, notes, or other obligations, or in
184	which a member of the entity is located, and the complaint and
185	order of the circuit court must be served only on the State
186	Attorney of the Second Judicial Circuit and on the state
187	attorney of each circuit in each county that is a member of the
188	entity issuing the bonds, notes, or other obligations or in
189	which a member of the entity is located. Section 75.04(2) does
190	not apply to a complaint for validation brought by the legal
191	entity.
192	4. The accomplishment of the authorized purposes of a
193	legal entity created under this paragraph is in all respects for
194	the benefit of the people of the state, for the increase of
195	their commerce and prosperity, and for the improvement of their
196	health and living conditions. Since the legal entity will
197	perform essential governmental functions in accomplishing its
198	purposes, the legal entity is not required to pay any taxes or
199	assessments of any kind whatsoever upon any property acquired or
200	used by it for such purposes or upon any revenues at any time
201	received by it. The bonds, notes, and other obligations of an
202	entity, their transfer and the income therefrom, including any
203	profits made on the sale thereof, are at all times free from
204	taxation of any kind by the state or by any political
205	subdivision or other agency or instrumentality thereof. The
206	exemption granted in this subparagraph is not applicable to any
207	tax imposed by chapter 220 on interest, income, or profits on
208	debt obligations owned by corporations.
209	5. Subsequent to the acquisition or construction of any
210	wastewater facilities, water or alternative water supply
211	facilities, or water reuse facilities by a separate legal entity
212	created pursuant to this subsection, revenues or other income of
213	any description may not be transferred or paid to a member of a
214	separate legal entity or to any other county or municipality
215	from user fees or other charges or revenues generated from
216	customers not physically located within the jurisdictional or
217	service delivery boundaries of the member or the county or
218	municipality receiving the transfer or payment. Any transfer or
219	payment to a member or other local government shall be solely
220	from user fees or other charges or revenue generated from
221	customers physically located within the jurisdictional or
222	service delivery boundaries of the member or the local
223	government receiving the transfer or payment.
224	6. The host government is guaranteed the right to acquire
225	any utility within its boundaries owned by the separate legal
226	entity. The separate legal entity shall sell and transfer a
227	utility to a host government for an amount equal to any
228	outstanding indebtedness associated with the utility to be sold
229	and transferred or an amount determined pursuant to any
230	resolution, trust agreement, or other financing document plus
231	the reasonable transaction costs incurred by the separate legal
232	entity to complete the sale and transfer.
233	Section 2. The acquisition requirements contained in the
234	amendment to s. 163.01(7)(g)1., Florida Statutes, provided in
235	this act which condition the acquisition by a separate legal
236	entity of public facilities that serve populations outside of
237	the members of the entity on the provision by such separate
238	legal entity of a potential acquisition notice to all host
239	governments, as defined in s. 163.01(7)(g)1., Florida Statutes,
240	and on the granting to a host government the opportunity to
241	adopt a membership resolution, a prohibition resolution, or an
242	approval resolution shall be retroactively applied and
243	substantial compliance with such acquisition requirements shall
244	be a specific condition of any acquisition subsequent to
245	September 1, 2002, of public facilities by a separate legal
246	entity created by interlocal agreement pursuant to s.
247	163.01(7)(g)1., Florida Statutes, pursuant to an acquisition
248	agreement entered into prior or subsequent to September 1, 2002.
249	Section 3. Paragraph (c) is added to subsection (2) of
250	section 367.081, Florida Statutes, to read:
251	367.081 Rates; procedure for fixing and changing.--
252	(2)
253	(c) In establishing rates for a utility, the commission
254	shall not consider any gain or loss on the sale or condemnation
255	of a utility’s assets that results in the loss of customers
256	served by such assets and the associated future customer revenue
257	streams. Any such gain or loss shall be borne by the
258	shareholders of the utility.
259	Section 4. This act shall take effect upon becoming a law
260	and shall apply retroactively to September 1, 2002.
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