Senate Bill sb0140c1
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 CS for SB's 140, 998 & 1060
By the Committee on Comprehensive Planning; and Senators
Argenziano, Cowin, Constantine and Fasano
316-1952-03
1 A bill to be entitled
2 An act relating to utilities; amending s.
3 163.01, F.S.; providing applicability of
4 provisions relating to ownership and operation
5 of utilities by entities composed of
6 municipalities and counties; prescribing powers
7 of counties and specified municipalities with
8 respect to acquisition of water utilities and
9 wastewater utilities by separate legal entities
10 composed of municipalities and counties;
11 authorizing the Public Service Commission to
12 review the acquisition of a utility by two or
13 more host governments; providing for a binding
14 arbitration process under the Public Service
15 Commission to resolve certain disputes relating
16 to utility acquisition; authorizing the
17 commission to adopt rules; requiring the Public
18 Service Commission to establish rules that base
19 the acquisition price for a host government to
20 acquire a utility on certain information;
21 amending s. 120.52, F.S.; deleting an exception
22 from the requirements of ch. 120, F.S., for an
23 entity created under s. 163.01(7), F.S.;
24 amending s. 367.021, F.S.; excluding an entity
25 created under s. 163.01(7)(g)1., F.S., from the
26 definition of "governmental authority";
27 amending s. 367.071, F.S.; deleting a provision
28 authorizing a utility to be sold or transferred
29 prior to approval of the Public Service
30 Commission with a contingency clause in the
31 contract; providing an effective date.
1
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 CS for SB's 140, 998 & 1060
316-1952-03
1 Be It Enacted by the Legislature of the State of Florida:
2
3 Section 1. Paragraph (g) of subsection (7) of section
4 163.01, Florida Statutes, is amended to read:
5 163.01 Florida Interlocal Cooperation Act of 1969.--
6 (7)
7 (g)1. Notwithstanding any other provisions of this
8 section, any separate legal entity created under this section,
9 the membership of which is limited to municipalities and
10 counties of the state, may acquire, own, construct, improve,
11 operate, and manage public facilities, or finance facilities
12 on behalf of any person, relating to a governmental function
13 or purpose, including, but not limited to, wastewater
14 facilities, water or alternative water supply facilities, and
15 water reuse facilities, which may serve populations within or
16 outside of the members of the entity. Notwithstanding s.
17 367.171(7), any separate legal entity created under this
18 paragraph is not subject to Public Service Commission
19 jurisdiction, except when a county or host government
20 specifically requests binding arbitration services through the
21 commission under subparagraphs 4. and 5. and as is otherwise
22 provided for in general law. The separate legal entity and may
23 not provide utility services within the service area of an
24 existing utility system unless it has received the consent of
25 the utility.
26 2. For purposes of this paragraph, the term "utility"
27 means a water or wastewater utility and includes every person,
28 separate legal entity, lessee, trustee, or receiver owning,
29 operating, managing, or controlling a system, or proposing
30 construction of a system, who is providing, or proposes to
31 provide, water or wastewater service to the public for
2
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 CS for SB's 140, 998 & 1060
316-1952-03
1 compensation. For purposes of this paragraph, the term
2 "system" means each separate water or wastewater facility
3 providing service. For purposes of this paragraph, the term
4 "host government" means either the governing body of the
5 county, if the largest number of equivalent residential
6 connections currently served by a system of the utility is
7 located in the unincorporated area, or the governing body of a
8 municipality, if the largest number of equivalent residential
9 connections currently served by a system of the utility is
10 located within that municipality's boundaries. A separate
11 legal entity that seeks to acquire any utility must notify the
12 host government in writing by certified mail about the
13 contemplated acquisition not less than 90 days before any
14 proposed transfer of ownership, use, or possession of any
15 utility assets by such separate legal entity. The potential
16 acquisition notice must be provided to the legislative head of
17 the governing body of the host government and to its chief
18 administrative officer and must provide the name and address
19 of a contact person for the separate legal entity and
20 information identified in s. 367.071(4)(a) concerning the
21 contemplated acquisition.
22 3. Within 90 days following receipt of the notice, the
23 host government may adopt a resolution to approve the utility
24 acquisition; adopt a resolution to prohibit the utility
25 acquisition by the separate legal entity if the host
26 government determines that the proposed acquisition is not in
27 the public interest; request in writing an automatic 45-day
28 extension of the 90-day period in order to allow sufficient
29 time for the host government to evaluate the proposed
30 acquisition; or take no action to agenda the proposed
31 acquisition for discussion at a public meeting, which shall be
3
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 CS for SB's 140, 998 & 1060
316-1952-03
1 construed as approval of the proposed acquisition. If a host
2 government adopts a prohibition resolution, the separate legal
3 entity may not acquire the utility within that host
4 government's territory without specific consent of the host
5 government by future resolution. If a host government does not
6 adopt a prohibition resolution or an approval resolution, does
7 not provide a written request for an extension of the 90-day
8 notice period, and takes no action to initiate judicial
9 proceedings regarding the proposed acquisition, the separate
10 legal entity may proceed to acquire the utility after the
11 90-day notice period without further notice, except as
12 otherwise agreed upon by the separate legal entity and the
13 host government. In utility acquisitions involving two or more
14 host governments, the Public Service Commission shall consider
15 whether the sale, assignment, or transfer of the utility is in
16 the public interest pursuant to the provisions of s.
17 367.071(1). Each county regulating water and wastewater
18 utilities or systems pursuant to s. 367.171 shall consider
19 whether the sale, assignment, or transfer of the utility or
20 utility systems within its jurisdictions is in the public
21 interest pursuant to the county ordinances governing water and
22 wastewater utility regulation.
23 4. In addition to the host government's right to
24 review as fair and reasonable the rates, charges, customer
25 classifications, and terms of service that will be in place at
26 the time of acquisition, any county with equivalent
27 residential connections from that utility located within its
28 boundaries has the right to review and approve as fair and
29 reasonable any later changes proposed by the separate legal
30 entity to the rates, charges, customer classifications, and
31 terms of service, before adoption by the separate legal
4
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 CS for SB's 140, 998 & 1060
316-1952-03
1 entity. In addition, such counties have the right to review
2 and approve any changes to the financing of such facilities
3 which may result in increased costs to customers. Such right
4 of review and approval by the county is subject to the
5 obligation of the separate legal entity to establish rates and
6 charges that comply with the requirements contained in any
7 resolution or trust agreement relating to the issuance of
8 bonds to acquire and improve the affected utility, and such
9 right does not affect the obligation of the separate legal
10 entity to set rates at a level sufficient to pay debt service
11 on its obligations issued in relation to the affected utility.
12 In order to facilitate review of proposed changes by such
13 counties, the separate legal entity must notify the counties
14 in writing by certified mail about the proposed changes not
15 less than 90 days before it implements any changes. The notice
16 of proposed changes must be provided to the legislative head
17 of the governing body of each affected county and to its chief
18 administrative officer and must provide the name and address
19 of a contact person for the separate legal entity and
20 information identified in s. 367.081(2)(a)1. as it applies to
21 publicly owned utilities about the proposed changes. If after
22 review the county believes that the proposed changes are in
23 the public interest, the county may pass a resolution
24 approving the proposed changes. If after review the county
25 believes that the proposed changes are not in the public
26 interest, the county may enter into negotiation with the
27 separate legal entity to resolve those concerns. If no
28 agreement is reached within 30 days after the county's
29 determination that the proposed changes are not in the public
30 interest, the county may request and, if requested, shall
31 receive binding arbitration services through the Public
5
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 CS for SB's 140, 998 & 1060
316-1952-03
1 Service Commission to resolve the dispute with the separate
2 legal entity. The commission shall develop and adopt
3 administrative rules governing the arbitration process and
4 establishing fees for this dispute-resolution service.
5 5. The host government is guaranteed the right to
6 acquire any utility or utility system within its boundaries
7 owned by the separate legal entity. In those instances when
8 the separate legal entity and the host government cannot agree
9 on the terms and conditions of the acquisition, the host
10 government may request and, if requested, shall receive
11 binding arbitration services through the Public Service
12 Commission to resolve the disputed acquisition terms. The
13 commission shall develop and adopt administrative rules
14 governing the arbitration process and establishing the fees
15 for these services. In developing and adopting its rules
16 governing the acquisition price for a given host government to
17 acquire the utility or utility system located within its
18 jurisdiction, the Public Service Commission shall, to the
19 greatest extent possible, base the acquisition price on the
20 same percentage to the total bonded indebtedness of the
21 separate legal entity upon acquiring the utility as the
22 acquired system's rate base was to the utility's total rate
23 base at the time transferred from a regulated utility to the
24 separate legal entity. This paragraph is an alternative
25 provision otherwise provided by law as authorized in s. 4,
26 Art. VIII of the State Constitution for any transfer of power
27 as a result of an acquisition of a utility by a separate legal
28 entity from a municipality, county, or special district.
29 6. The entity may finance or refinance the
30 acquisition, construction, expansion, and improvement of such
31 facilities relating to a governmental function or purpose
6
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 CS for SB's 140, 998 & 1060
316-1952-03
1 through the issuance of its bonds, notes, or other obligations
2 under this section or as otherwise authorized by law. Except
3 as limited by the terms and conditions of the utility
4 acquisition agreement, as approved by the applicable host
5 government, the entity has all the powers provided by the
6 interlocal agreement under which it is created or which are
7 necessary to finance, own, operate, or manage the public
8 facility, including, without limitation, the power to
9 establish rates, charges, and fees for products or services
10 provided by it, the power to levy special assessments, the
11 power to sell or finance all or a portion of such facility,
12 and the power to contract with a public or private entity to
13 manage and operate such facilities or to provide or receive
14 facilities, services, or products. Except as may be limited by
15 the interlocal agreement under which the entity is created,
16 all of the privileges, benefits, powers, and terms of s.
17 125.01, relating to counties, and s. 166.021, relating to
18 municipalities, are fully applicable to the entity. However,
19 neither the entity nor any of its members on behalf of the
20 entity may exercise the power of eminent domain over the
21 facilities or property of any existing water or wastewater
22 plant utility system, nor may the entity acquire title to any
23 water or wastewater plant utility facilities, other
24 facilities, or property which was acquired by the use of
25 eminent domain after the effective date of this act. Bonds,
26 notes, and other obligations issued by the entity are issued
27 on behalf of the public agencies that are members of the
28 entity.
29 7.2. Except as limited by the terms and conditions of
30 the utility acquisition agreement, as approved by the
31 applicable host government, any entity created under this
7
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 CS for SB's 140, 998 & 1060
316-1952-03
1 section may also issue bond anticipation notes in connection
2 with the authorization, issuance, and sale of bonds. The bonds
3 may be issued as serial bonds or as term bonds or both. Any
4 entity may issue capital appreciation bonds or variable rate
5 bonds. Any bonds, notes, or other obligations must be
6 authorized by resolution of the governing body of the entity
7 and bear the date or dates; mature at the time or times, not
8 exceeding 40 years from their respective dates; bear interest
9 at the rate or rates; be payable at the time or times; be in
10 the denomination; be in the form; carry the registration
11 privileges; be executed in the manner; be payable from the
12 sources and in the medium or payment and at the place; and be
13 subject to the terms of redemption, including redemption prior
14 to maturity, as the resolution may provide. If any officer
15 whose signature, or a facsimile of whose signature, appears on
16 any bonds, notes, or other obligations ceases to be an officer
17 before the delivery of the bonds, notes, or other obligations,
18 the signature or facsimile is valid and sufficient for all
19 purposes as if he or she had remained in office until the
20 delivery. The bonds, notes, or other obligations may be sold
21 at public or private sale for such price as the governing body
22 of the entity shall determine. Pending preparation of the
23 definitive bonds, the entity may issue interim certificates,
24 which shall be exchanged for the definitive bonds. The bonds
25 may be secured by a form of credit enhancement, if any, as the
26 entity deems appropriate. The bonds may be secured by an
27 indenture of trust or trust agreement. In addition, the
28 governing body of the legal entity may delegate, to an
29 officer, official, or agent of the legal entity as the
30 governing body of the legal entity may select, the power to
31 determine the time; manner of sale, public or private;
8
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 CS for SB's 140, 998 & 1060
316-1952-03
1 maturities; rate of interest, which may be fixed or may vary
2 at the time and in accordance with a specified formula or
3 method of determination; and other terms and conditions as may
4 be deemed appropriate by the officer, official, or agent so
5 designated by the governing body of the legal entity. However,
6 the amount and maturity of the bonds, notes, or other
7 obligations and the interest rate of the bonds, notes, or
8 other obligations must be within the limits prescribed by the
9 governing body of the legal entity and its resolution
10 delegating to an officer, official, or agent the power to
11 authorize the issuance and sale of the bonds, notes, or other
12 obligations.
13 8.3. Bonds, notes, or other obligations issued under
14 this paragraph subparagraph 1. may be validated as provided in
15 chapter 75. The complaint in any action to validate the bonds,
16 notes, or other obligations must be filed only in the Circuit
17 Court for Leon County. The notice required to be published by
18 s. 75.06 must be published in Leon County and in each county
19 that is a member of the entity issuing the bonds, notes, or
20 other obligations, or in which a member of the entity is
21 located, and the complaint and order of the circuit court must
22 be served only on the State Attorney of the Second Judicial
23 Circuit and on the state attorney of each circuit in each
24 county that is a member of the entity issuing the bonds,
25 notes, or other obligations or in which a member of the entity
26 is located. Section 75.04(2) does not apply to a complaint for
27 validation brought by the legal entity.
28 9.4. The accomplishment of the authorized purposes of
29 a legal entity created under this paragraph is in all respects
30 for the benefit of the people of the state, for the increase
31 of their commerce and prosperity, and for the improvement of
9
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 CS for SB's 140, 998 & 1060
316-1952-03
1 their health and living conditions. Since the legal entity
2 will perform essential governmental functions in accomplishing
3 its purposes, the legal entity is not required to pay any
4 taxes or assessments of any kind whatsoever upon any property
5 acquired or used by it for such purposes or upon any revenues
6 at any time received by it. The bonds, notes, and other
7 obligations of an entity, their transfer and the income
8 therefrom, including any profits made on the sale thereof, are
9 at all times free from taxation of any kind by the state or by
10 any political subdivision or other agency or instrumentality
11 thereof. The exemption granted in this subparagraph is not
12 applicable to any tax imposed by chapter 220 on interest,
13 income, or profits on debt obligations owned by corporations.
14 Section 2. Subsection (1) of section 120.52, Florida
15 Statutes, is amended to read:
16 120.52 Definitions.--As used in this act:
17 (1) "Agency" means:
18 (a) The Governor in the exercise of all executive
19 powers other than those derived from the constitution.
20 (b) Each:
21 1. State officer and state department, and each
22 departmental unit described in s. 20.04.
23 2. Authority, including a regional water supply
24 authority.
25 3. Board.
26 4. Commission, including the Commission on Ethics and
27 the Fish and Wildlife Conservation Commission when acting
28 pursuant to statutory authority derived from the Legislature.
29 5. Regional planning agency.
30 6. Multicounty special district with a majority of its
31 governing board comprised of nonelected persons.
10
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 CS for SB's 140, 998 & 1060
316-1952-03
1 7. Educational units.
2 8. Entity described in chapters 163, 373, 380, and 582
3 and s. 186.504.
4 (c) Each other unit of government in the state,
5 including counties and municipalities, to the extent they are
6 expressly made subject to this act by general or special law
7 or existing judicial decisions.
8
9 This definition does not include any legal entity or agency
10 created in whole or in part pursuant to chapter 361, part II,
11 an expressway authority pursuant to chapter 348, any legal or
12 administrative entity created by an interlocal agreement
13 pursuant to s. 163.01(7), unless any party to such agreement
14 is otherwise an agency as defined in this subsection, or any
15 multicounty special district with a majority of its governing
16 board comprised of elected persons; however, this definition
17 shall include a regional water supply authority.
18 Section 3. Subsection (7) of section 367.021, Florida
19 Statutes, is amended to read:
20 367.021 Definitions.--As used in this chapter, the
21 following words or terms shall have the meanings indicated:
22 (7) "Governmental authority" means a political
23 subdivision, as defined by s. 1.01(8), a regional water supply
24 authority created pursuant to s. 373.1962, or a nonprofit
25 corporation formed for the purpose of acting on behalf of a
26 political subdivision with respect to a water or wastewater
27 facility; however, this definition shall exclude a separate
28 legal entity created pursuant to s. 163.01(7)(g)1.
29 Section 4. Subsections (1) and (4) of section 367.071,
30 Florida Statutes, are amended to read:
31
11
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 CS for SB's 140, 998 & 1060
316-1952-03
1 367.071 Sale, assignment, or transfer of certificate
2 of authorization, facilities, or control.--
3 (1) A No utility may not shall sell, assign, or
4 transfer its certificate of authorization, facilities or any
5 portion thereof, or majority organizational control without
6 determination and approval of the commission that the proposed
7 sale, assignment, or transfer is in the public interest and
8 that the buyer, assignee, or transferee will fulfill the
9 commitments, obligations, and representations of the utility.
10 However, a sale, assignment, or transfer of its certificate of
11 authorization, facilities or any portion thereof, or majority
12 organizational control may occur prior to commission approval
13 if the contract for sale, assignment, or transfer is made
14 contingent upon commission approval.
15 (4) An application shall be disposed of as provided in
16 s. 367.045, except that:
17 (a) The sale of facilities, in whole or part, to a
18 governmental authority, as defined in s. 367.021(7), shall be
19 approved as a matter of right; however, the governmental
20 authority shall, prior to taking any official action, obtain
21 from the utility or commission with respect to the facilities
22 to be sold the most recent available income and expense
23 statement, balance sheet, and statement of rate base for
24 regulatory purposes and contributions-in-aid-of-construction.
25 Any request for rate relief pending before the commission at
26 the time of sale is deemed to have been withdrawn. Interim
27 rates, if previously approved by the commission, must be
28 discontinued, and any money collected pursuant to interim rate
29 relief must be refunded to the customers of the utility with
30 interest.
31
12
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 CS for SB's 140, 998 & 1060
316-1952-03
1 (b) When paragraph (a) does not apply, the commission
2 shall amend the certificate of authorization as necessary to
3 reflect the change resulting from the sale, assignment, or
4 transfer.
5 Section 5. This act shall take effect upon becoming a
6 law.
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
13
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 CS for SB's 140, 998 & 1060
316-1952-03
1 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
2 Senate Bills 140, 998 and 1060
3
4 This committee substitute gives the Public Service Commission
authority to review utility acquisitions involving two or
5 more host governments to determine whether the sale,
assignment, or transfer of the utility is in the public
6 interest. Also, the committee substitute requires each county
regulating water and wastewater utilities or systems under s.
7 367.171, F.S., to review the transfer of a utility or utility
systems within its jurisdiction to determine whether it is in
8 the public interest pursuant to county ordinances governing
water and wastewater utility regulation.
9
In addition, the committee substitute requires the Public
10 Service Commission, when developing its rules governing the
acquisition price for a host government to acquire a utility
11 within its jurisdiction, to base the acquisition price, to the
greatest extent possible, on the same percentage to the total
12 bonded indebtedness of the separate legal entity upon
acquiring the utility as the acquired system's rate base was
13 to the utility's total rate base at the time it was
transferred from a regulated utility to the separate legal
14 entity.
15 The committee substitute provides a definition for the word
"system". It also deletes the exception for a separate legal
16 entity from the definition of "agency" for the purposes of ch.
120, F.S., the Administrative Procedure Act. The committee
17 substitute also amends s. 367.021, F.S., to exclude a separate
legal entity created under s. 163.01(7)(g)1., F.S., from the
18 definition of "governmental authority". Further, the committee
substitute amends s. 367.071, F.S., to delete a provision that
19 allows a utility to be sold or transferred prior to the
approval of the Public Service Commission if the contract for
20 sale is contingent upon commission approval.
21 The committee substitute removes a provision prohibiting a
separate legal entity created by local governments under s.
22 163.01(7)(g)1., F.S., from acquiring, owning, constructing,
improving, or operating a water utility outside the
23 territorial limits of the members of the separate legal
entity. Also, the committee substitute deletes a provision
24 allowing the host government to adopt a membership resolution
indicating its intent to become a member of the separate legal
25 entity after receiving notice of the proposed acquisition of a
utility by the entity. The committee substitute removes a
26 provision allowing the host government to review and approve
proposed changes to rates, charges, and customer
27 classifications after the acquisition of a utility by a
separate legal entity. Finally, the committee substitute
28 deletes a retroactive clause and a provision stating that a
separate legal entity acquiring a utility subsequent to
29 September 1, 2002 must substantially comply with the
requirements of the act.
30
31
14
CODING: Words stricken are deletions; words underlined are additions.