Senate Bill sb0998

    Florida Senate - 2003                                   SB 998

    By Senator Cowin





    20-184-03

  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         providing for a binding arbitration process

12         under the Public Service Commission to resolve

13         certain disputes relating to utility

14         acquisition; authorizing the commission to

15         adopt rules; providing an effective date.

16  

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

18  

19         Section 1.  Paragraph (g) of subsection (7) of section

20  163.01, Florida Statutes, is amended to read:

21         163.01  Florida Interlocal Cooperation Act of 1969.--

22         (7)

23         (g)1.  Notwithstanding any other provisions of this

24  section, any separate legal entity created under this section,

25  the membership of which is limited to municipalities and

26  counties of the state, may acquire, own, construct, improve,

27  operate, and manage public facilities, or finance facilities

28  on behalf of any person, relating to a governmental function

29  or purpose, including, but not limited to, wastewater

30  facilities, water or alternative water supply facilities, and

31  water reuse facilities, which may serve populations within or

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 1  outside of the members of the entity. Notwithstanding s.

 2  367.171(7), any separate legal entity created under this

 3  paragraph is not subject to Public Service Commission

 4  jurisdiction, except when a county or host government

 5  specifically requests binding arbitration services through the

 6  commission under subparagraphs 4. and 5. The separate legal

 7  entity and may not provide utility services within the service

 8  area of an existing utility system unless it has received the

 9  consent of the utility.

10         2.  For purposes of this paragraph, the term "utility"

11  means a water or wastewater utility and includes every person,

12  separate legal entity, lessee, trustee, or receiver owning,

13  operating, managing, or controlling a system, or proposing

14  construction of a system, who is providing, or proposes to

15  provide, water or wastewater service to the public for

16  compensation. For purposes of this paragraph, the term "host

17  government" means either the governing body of the county, if

18  the largest number of equivalent residential connections

19  currently served by the utility is located in the

20  unincorporated area, or the governing body of a municipality,

21  if the largest number of equivalent residential connections

22  currently served by the utility is located within that

23  municipality's boundaries. A separate legal entity that seeks

24  to acquire any utility must notify the host government in

25  writing by certified mail about the contemplated acquisition

26  not less than 90 days before any proposed transfer of

27  ownership, use, or possession of any utility assets by such

28  separate legal entity. The potential acquisition notice must

29  be provided to the legislative head of the governing body of

30  the host government and to its chief administrative officer

31  and must provide the name and address of a contact person for

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 1  the separate legal entity and information identified in s.

 2  367.071(4)(a) concerning the contemplated acquisition.

 3         3.  Within 90 days following receipt of the notice, the

 4  host government may adopt a resolution to approve the utility

 5  acquisition; adopt a resolution to prohibit the utility

 6  acquisition by the separate legal entity if the host

 7  government determines that the proposed acquisition is not in

 8  the public interest; request in writing an automatic 45-day

 9  extension of the 90-day period in order to allow sufficient

10  time for the host government to evaluate the proposed

11  acquisition; or take no action to agenda the proposed

12  acquisition for discussion at a public meeting, which shall be

13  construed as approval of the proposed acquisition. If a host

14  government adopts a prohibition resolution, the separate legal

15  entity may not acquire the utility within that host

16  government's territory without specific consent of the host

17  government by future resolution. If a host government does not

18  adopt a prohibition resolution or an approval resolution, does

19  not provide a written request for an extension of the 90-day

20  notice period, and takes no action to initiate judicial

21  proceedings regarding the proposed acquisition, the separate

22  legal entity may proceed to acquire the utility after the

23  90-day notice period without further notice, except as

24  otherwise agreed upon by the separate legal entity and the

25  host government.

26         4.  In addition to the host government's right to

27  review as fair and reasonable the rates, charges, customer

28  classifications, and terms of service that will be in place at

29  the time of acquisition, any county with equivalent

30  residential connections from that utility located within its

31  boundaries has the right to review and approve as fair and

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 1  reasonable any later changes proposed by the separate legal

 2  entity to the rates, charges, customer classifications, and

 3  terms of service, before adoption by the separate legal

 4  entity. In addition, such counties have the right to review

 5  and approve any changes to the financing of such facilities

 6  which may result in increased costs to customers. Such right

 7  of review and approval by the county is subject to the

 8  obligation of the separate legal entity to establish rates and

 9  charges that comply with the requirements contained in any

10  resolution or trust agreement relating to the issuance of

11  bonds to acquire and improve the affected utility, and such

12  right does not affect the obligation of the separate legal

13  entity to set rates at a level sufficient to pay debt service

14  on its obligations issued in relation to the affected utility.

15  In order to facilitate review of proposed changes by such

16  counties, the separate legal entity must notify the counties

17  in writing by certified mail about the proposed changes not

18  less than 90 days before it implements any changes. The notice

19  of proposed changes must be provided to the legislative head

20  of the governing body of each affected county and to its chief

21  administrative officer and must provide the name and address

22  of a contact person for the separate legal entity and

23  information identified in s. 367.081(2)(a)1. as it applies to

24  publicly owned utilities about the proposed changes. If after

25  review the county believes that the proposed changes are in

26  the public interest, the county may pass a resolution

27  approving the proposed changes. If after review the county

28  believes that the proposed changes are not in the public

29  interest, the county may enter into negotiation with the

30  separate legal entity to resolve those concerns. If no

31  agreement is reached within 30 days after the county's

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 1  determination that the proposed changes are not in the public

 2  interest, the county may request and, if requested, shall

 3  receive binding arbitration services through the Public

 4  Service Commission to resolve the dispute with the separate

 5  legal entity. The commission shall develop and adopt

 6  administrative rules governing the arbitration process and

 7  establishing fees for this dispute-resolution service.

 8         5.  The host government is guaranteed the right to

 9  acquire any utility within its boundaries owned by the

10  separate legal entity. In those instances when the separate

11  legal entity and the host government cannot agree on the terms

12  and conditions of the acquisition, the host government may

13  request and, if requested, shall receive binding arbitration

14  services through the Public Service Commission to resolve the

15  disputed acquisition terms. The commission shall develop and

16  adopt administrative rules governing the arbitration process

17  and establishing the fees for these services. This paragraph

18  is an alternative provision otherwise provided by law as

19  authorized in s. 4, Art. VIII of the State Constitution for

20  any transfer of power as a result of an acquisition of a

21  utility by a separate legal entity from a municipality,

22  county, or special district.

23         6.  The entity may finance or refinance the

24  acquisition, construction, expansion, and improvement of such

25  facilities relating to a governmental function or purpose

26  through the issuance of its bonds, notes, or other obligations

27  under this section or as otherwise authorized by law. Except

28  as limited by the terms and conditions of the utility

29  acquisition agreement, as approved by the applicable host

30  government, the entity has all the powers provided by the

31  interlocal agreement under which it is created or which are

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 1  necessary to finance, own, operate, or manage the public

 2  facility, including, without limitation, the power to

 3  establish rates, charges, and fees for products or services

 4  provided by it, the power to levy special assessments, the

 5  power to sell or finance all or a portion of such facility,

 6  and the power to contract with a public or private entity to

 7  manage and operate such facilities or to provide or receive

 8  facilities, services, or products. Except as may be limited by

 9  the interlocal agreement under which the entity is created,

10  all of the privileges, benefits, powers, and terms of s.

11  125.01, relating to counties, and s. 166.021, relating to

12  municipalities, are fully applicable to the entity. However,

13  neither the entity nor any of its members on behalf of the

14  entity may exercise the power of eminent domain over the

15  facilities or property of any existing water or wastewater

16  plant utility system, nor may the entity acquire title to any

17  water or wastewater plant utility facilities, other

18  facilities, or property which was acquired by the use of

19  eminent domain after the effective date of this act. Bonds,

20  notes, and other obligations issued by the entity are issued

21  on behalf of the public agencies that are members of the

22  entity.

23         7.2.  Except as limited by the terms and conditions of

24  the utility acquisition agreement, as approved by the

25  applicable host government, any entity created under this

26  section may also issue bond anticipation notes in connection

27  with the authorization, issuance, and sale of bonds. The bonds

28  may be issued as serial bonds or as term bonds or both. Any

29  entity may issue capital appreciation bonds or variable rate

30  bonds. Any bonds, notes, or other obligations must be

31  authorized by resolution of the governing body of the entity

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 1  and bear the date or dates; mature at the time or times, not

 2  exceeding 40 years from their respective dates; bear interest

 3  at the rate or rates; be payable at the time or times; be in

 4  the denomination; be in the form; carry the registration

 5  privileges; be executed in the manner; be payable from the

 6  sources and in the medium or payment and at the place; and be

 7  subject to the terms of redemption, including redemption prior

 8  to maturity, as the resolution may provide. If any officer

 9  whose signature, or a facsimile of whose signature, appears on

10  any bonds, notes, or other obligations ceases to be an officer

11  before the delivery of the bonds, notes, or other obligations,

12  the signature or facsimile is valid and sufficient for all

13  purposes as if he or she had remained in office until the

14  delivery. The bonds, notes, or other obligations may be sold

15  at public or private sale for such price as the governing body

16  of the entity shall determine. Pending preparation of the

17  definitive bonds, the entity may issue interim certificates,

18  which shall be exchanged for the definitive bonds. The bonds

19  may be secured by a form of credit enhancement, if any, as the

20  entity deems appropriate. The bonds may be secured by an

21  indenture of trust or trust agreement. In addition, the

22  governing body of the legal entity may delegate, to an

23  officer, official, or agent of the legal entity as the

24  governing body of the legal entity may select, the power to

25  determine the time; manner of sale, public or private;

26  maturities; rate of interest, which may be fixed or may vary

27  at the time and in accordance with a specified formula or

28  method of determination; and other terms and conditions as may

29  be deemed appropriate by the officer, official, or agent so

30  designated by the governing body of the legal entity. However,

31  the amount and maturity of the bonds, notes, or other

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 1  obligations and the interest rate of the bonds, notes, or

 2  other obligations must be within the limits prescribed by the

 3  governing body of the legal entity and its resolution

 4  delegating to an officer, official, or agent the power to

 5  authorize the issuance and sale of the bonds, notes, or other

 6  obligations.

 7         8.3.  Bonds, notes, or other obligations issued under

 8  this paragraph subparagraph 1. may be validated as provided in

 9  chapter 75. The complaint in any action to validate the bonds,

10  notes, or other obligations must be filed only in the Circuit

11  Court for Leon County. The notice required to be published by

12  s. 75.06 must be published in Leon County and in each county

13  that is a member of the entity issuing the bonds, notes, or

14  other obligations, or in which a member of the entity is

15  located, and the complaint and order of the circuit court must

16  be served only on the State Attorney of the Second Judicial

17  Circuit and on the state attorney of each circuit in each

18  county that is a member of the entity issuing the bonds,

19  notes, or other obligations or in which a member of the entity

20  is located. Section 75.04(2) does not apply to a complaint for

21  validation brought by the legal entity.

22         9.4.  The accomplishment of the authorized purposes of

23  a legal entity created under this paragraph is in all respects

24  for the benefit of the people of the state, for the increase

25  of their commerce and prosperity, and for the improvement of

26  their health and living conditions. Since the legal entity

27  will perform essential governmental functions in accomplishing

28  its purposes, the legal entity is not required to pay any

29  taxes or assessments of any kind whatsoever upon any property

30  acquired or used by it for such purposes or upon any revenues

31  at any time received by it. The bonds, notes, and other

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 1  obligations of an entity, their transfer and the income

 2  therefrom, including any profits made on the sale thereof, are

 3  at all times free from taxation of any kind by the state or by

 4  any political subdivision or other agency or instrumentality

 5  thereof. The exemption granted in this subparagraph is not

 6  applicable to any tax imposed by chapter 220 on interest,

 7  income, or profits on debt obligations owned by corporations.

 8         Section 2.  This act shall take effect upon becoming a

 9  law.

10  

11            *****************************************

12                          SENATE SUMMARY

13    Limits applicability of those portions of the Florida
      Interlocal Cooperation Act which deal with acquisition,
14    operation, and construction of water, wastewater,
      alternative water supply, and water reuse facilities by
15    legal entities composed of municipalities and counties.
      Provides powers of a host government, as defined, with
16    respect to approval of such an entity's acquisition of a
      utility and approval of rates and other terms of service
17    by a utility. Provides for binding arbitration services
      by the Public Service Commission in case of disputes
18    between host governments and separate legal entities.
      Declares the right of a host government to acquire such a
19    utility operation within its boundaries.

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