HB 1583CS

CHAMBER ACTION



1The Committee on Appropriations recommends the following:
2
3     Committee Substitute
4     Remove the entire bill and insert:
5
A bill to be entitled
6An act relating to water and wastewater utilities;
7amending s. 163.01, F.S.; revising provisions for a
8separate legal entity to acquire, own, construct, improve,
9operate, and manage or finance certain public facilities;
10defining the terms "host government," "separate legal
11entity," "system," and "utility"; requiring certain notice
12to the host government by the separate legal entity that
13seeks to acquire any utility; providing for the host
14government to adopt a resolution to accept or reject the
15proposal or to become a member of the separate legal
16entity; requiring the separate legal entity to accept the
17host government as a member upon adoption of a membership
18resolution by the host government; providing for the
19separate legal entity to complete the utility acquisition;
20requiring any transfer or payment by the separate legal
21entity to a member, special district, county, or
22municipality to be solely from revenues generated from
23customers that are physically located within the
24jurisdictional or service delivery boundaries of the
25member, special district, county, or municipality
26receiving the transfer or payment; specifying
27constitutional authorization; creating s. 367.0813, F.S.;
28clarifying state policy that gains or losses from a
29purchase or condemnation of a utility's assets that
30results in the loss of customers served by such assets and
31the associated future revenue streams shall be borne by
32the shareholders of the utility; amending s. 367.145,
33F.S.; revising requirements for payment of assessment fees
34by certain utilities; providing for severability;
35providing for application; providing an effective date.
36
37Be It Enacted by the Legislature of the State of Florida:
38
39     Section 1.  Paragraph (g) of subsection (7) of section
40163.01, Florida Statutes, is amended to read:
41     163.01  Florida Interlocal Cooperation Act of 1969.--
42     (7)
43     (g)1.  Notwithstanding any other provisions of this
44section, any separate legal entity created under this section,
45the membership of which is limited to municipalities and
46counties of the state, and which may include a special district
47in addition to a municipality or county, or both, may acquire,
48own, construct, improve, operate, and manage public facilities,
49or finance facilities on behalf of any person, relating to a
50governmental function or purpose, including, but not limited to,
51wastewater facilities, water or alternative water supply
52facilities, and water reuse facilities, which may serve
53populations within or outside of the members of the entity.
54Notwithstanding s. 367.171(7), any separate legal entity created
55under this paragraph is not subject to Public Service Commission
56jurisdiction. The separate legal entity and may not provide
57utility services within the service area of an existing utility
58system unless it has received the consent of the utility.
59     2.  For purposes of this paragraph, the term:
60     a.  "Host government" means either the governing body of
61the county, if the largest number of equivalent residential
62connections currently served by a system of the utility is
63located in the unincorporated area, or the governing body of a
64municipality, if the largest number of equivalent residential
65connections currently served by a system of the utility is
66located within that municipality's boundaries.
67     b.  "Separate legal entity" means any entity created by
68interlocal agreement the membership of which is limited to two
69or more special districts, municipalities, or counties of the
70state but which entity is legally separate and apart from any of
71its member governments.
72     c.  "System" means a water or wastewater facility or group
73of such facilities owned by one entity or affiliate entities.
74     d.  "Utility" means a water or wastewater utility and
75includes every person, separate legal entity, lessee, trustee,
76or receiver owning, operating, managing, or controlling a
77system, or proposing construction of a system, who is providing,
78or proposes to provide, water or wastewater service to the
79public for compensation.
80     3.  A separate legal entity that seeks to acquire any
81utility must notify the host government in writing by certified
82mail about the contemplated acquisition not less than 30 days
83before any proposed transfer of ownership, use, or possession of
84any utility assets by such separate legal entity. The potential
85acquisition notice must be provided to the legislative head of
86the governing body of the host government and to its chief
87administrative officer and must provide the name and address of
88a contact person for the separate legal entity and information
89identified in s. 367.071(4)(a) concerning the contemplated
90acquisition.
91     4.a.  Within 30 days following receipt of the notice, the
92host government may adopt a resolution to become a member of the
93separate legal entity, adopt a resolution to approve the utility
94acquisition, or adopt a resolution to prohibit the utility
95acquisition by the separate legal entity if the host government
96determines that the proposed acquisition is not in the public
97interest. A resolution adopted by the host government that
98prohibits the acquisition may include conditions that would make
99the proposal acceptable to the host government.
100     b.  If a host government adopts a membership resolution,
101the separate legal entity must accept the host government as a
102member on the same basis as its existing members before any
103transfer of ownership, use, or possession of the utility or the
104utility facilities. If a host government adopts a resolution to
105approve the utility acquisition, the separate legal entity may
106complete the acquisition. If a host government adopts a
107prohibition resolution, the separate legal entity may not
108acquire the utility within that host government's territory
109without the specific consent of the host government by future
110resolution. If a host government does not adopt a prohibition
111resolution or an approval resolution, the separate legal entity
112may proceed to acquire the utility after the 30-day notice
113period without further notice.
114     5.  After the acquisition or construction of any utility
115systems by a separate legal entity created under this paragraph,
116revenues or any other income may not be transferred or paid to a
117member of a separate legal entity or to any other special
118district, county, or municipality from user fees or other
119charges or revenues generated from customers that are not
120physically located within the jurisdictional or service delivery
121boundaries of the member, special district, county, or
122municipality receiving the transfer or payment. Any transfer or
123payment to a member, special district, or other local government
124must be solely from user fees or other charges or revenues
125generated from customers that are physically located within the
126jurisdictional or service delivery boundaries of the member,
127special district, or local government receiving the transfer or
128payment.
129     6.  This section is an alternative provision otherwise
130provided by law as authorized in s. 4, Art. VIII of the State
131Constitution for any transfer of power as a result of an
132acquisition of a utility by a separate legal entity from a
133municipality, county, or special district.
134     7.  The entity may finance or refinance the acquisition,
135construction, expansion, and improvement of such facilities
136relating to a governmental function or purpose through the
137issuance of its bonds, notes, or other obligations under this
138section or as otherwise authorized by law. The entity has all
139the powers provided by the interlocal agreement under which it
140is created or which are necessary to finance, own, operate, or
141manage the public facility, including, without limitation, the
142power to establish rates, charges, and fees for products or
143services provided by it, the power to levy special assessments,
144the power to sell or finance all or a portion of such facility,
145and the power to contract with a public or private entity to
146manage and operate such facilities or to provide or receive
147facilities, services, or products. Except as may be limited by
148the interlocal agreement under which the entity is created, all
149of the privileges, benefits, powers, and terms of s. 125.01,
150relating to counties, and s. 166.021, relating to
151municipalities, are fully applicable to the entity. However,
152neither the entity nor any of its members on behalf of the
153entity may exercise the power of eminent domain over the
154facilities or property of any existing water or wastewater plant
155utility system, nor may the entity acquire title to any water or
156wastewater plant utility facilities, other facilities, or
157property which was acquired by the use of eminent domain after
158the effective date of this act. Bonds, notes, and other
159obligations issued by the entity are issued on behalf of the
160public agencies that are members of the entity.
161     8.2.  Any entity created under this section may also issue
162bond anticipation notes in connection with the authorization,
163issuance, and sale of bonds. The bonds may be issued as serial
164bonds or as term bonds or both. Any entity may issue capital
165appreciation bonds or variable rate bonds. Any bonds, notes, or
166other obligations must be authorized by resolution of the
167governing body of the entity and bear the date or dates; mature
168at the time or times, not exceeding 40 years from their
169respective dates; bear interest at the rate or rates; be payable
170at the time or times; be in the denomination; be in the form;
171carry the registration privileges; be executed in the manner; be
172payable from the sources and in the medium or payment and at the
173place; and be subject to the terms of redemption, including
174redemption prior to maturity, as the resolution may provide. If
175any officer whose signature, or a facsimile of whose signature,
176appears on any bonds, notes, or other obligations ceases to be
177an officer before the delivery of the bonds, notes, or other
178obligations, the signature or facsimile is valid and sufficient
179for all purposes as if he or she had remained in office until
180the delivery. The bonds, notes, or other obligations may be sold
181at public or private sale for such price as the governing body
182of the entity shall determine. Pending preparation of the
183definitive bonds, the entity may issue interim certificates,
184which shall be exchanged for the definitive bonds. The bonds may
185be secured by a form of credit enhancement, if any, as the
186entity deems appropriate. The bonds may be secured by an
187indenture of trust or trust agreement. In addition, the
188governing body of the legal entity may delegate, to an officer,
189official, or agent of the legal entity as the governing body of
190the legal entity may select, the power to determine the time;
191manner of sale, public or private; maturities; rate of interest,
192which may be fixed or may vary at the time and in accordance
193with a specified formula or method of determination; and other
194terms and conditions as may be deemed appropriate by the
195officer, official, or agent so designated by the governing body
196of the legal entity. However, the amount and maturity of the
197bonds, notes, or other obligations and the interest rate of the
198bonds, notes, or other obligations must be within the limits
199prescribed by the governing body of the legal entity and its
200resolution delegating to an officer, official, or agent the
201power to authorize the issuance and sale of the bonds, notes, or
202other obligations.
203     9.3.  Bonds, notes, or other obligations issued under this
204paragraph subparagraph 1. may be validated as provided in
205chapter 75. The complaint in any action to validate the bonds,
206notes, or other obligations must be filed only in the Circuit
207Court for Leon County. The notice required to be published by s.
20875.06 must be published in Leon County and in each county that
209is a member of the entity issuing the bonds, notes, or other
210obligations, or in which a member of the entity is located, and
211the complaint and order of the circuit court must be served only
212on the State Attorney of the Second Judicial Circuit and on the
213state attorney of each circuit in each county that is a member
214of the entity issuing the bonds, notes, or other obligations or
215in which a member of the entity is located. Section 75.04(2)
216does not apply to a complaint for validation brought by the
217legal entity.
218     10.4.  The accomplishment of the authorized purposes of a
219legal entity created under this paragraph is in all respects for
220the benefit of the people of the state, for the increase of
221their commerce and prosperity, and for the improvement of their
222health and living conditions. Since the legal entity will
223perform essential governmental functions in accomplishing its
224purposes, the legal entity is not required to pay any taxes or
225assessments of any kind whatsoever upon any property acquired or
226used by it for such purposes or upon any revenues at any time
227received by it. The bonds, notes, and other obligations of an
228entity, their transfer and the income therefrom, including any
229profits made on the sale thereof, are at all times free from
230taxation of any kind by the state or by any political
231subdivision or other agency or instrumentality thereof. The
232exemption granted in this subparagraph is not applicable to any
233tax imposed by chapter 220 on interest, income, or profits on
234debt obligations owned by corporations.
235     Section 2.  Section 367.0813, Florida Statutes, is created
236to read:
237     367.0813  Gain or loss on purchase or condemnation by
238governmental authority.--In order to provide appropriate
239incentives to encourage the private sector to participate in the
240investment in water and wastewater infrastructure, to protect
241private-sector property rights of a utility's shareholders, and
242to avoid additional burden of costs placed on ratepayers by
243relitigating this issue, the Legislature affirms and clarifies
244the clear policy of this state that gains or losses from a
245purchase or condemnation of a utility's assets that results in
246the loss of customers served by such assets and the associated
247future revenue streams shall be borne by the shareholders of the
248utility. This section shall apply to all transactions prior to,
249on, and after the effective date of this section.
250     Section 3.  Subsection (1) of section 367.145, Florida
251Statutes, is amended to read:
252     367.145  Regulatory assessment and application fees.--
253     (1)  The commission shall set by rule a regulatory
254assessment fee that each utility must pay in accordance with s.
255350.113(3); however, each small utility with annual revenues of
256less than $200,000 shall pay once a year in conjunction with
257filing its annual financial report required by commission rule.
258Notwithstanding any provision of law to the contrary, the amount
259of the regulatory assessment fee shall not exceed 4.5 percent of
260the gross revenues of the utility derived from intrastate
261business, excluding sales for resale made to a regulated
262company.
263     (a)  A governmental authority to which ownership or control
264of a utility is transferred is not liable for any fees owed the
265commission by the utility as of the date of transfer. However,
266whenever a purchase at wholesale is made of any water or
267wastewater service and a fee is paid or payable thereon by the
268selling utility and the utility purchasing such water or
269wastewater service resells the same directly to customers, the
270purchasing utility is entitled to, and must receive, credit on
271such fees as may be due by it under this section to the extent
272of the fee paid or payable upon such water or wastewater service
273by the utility from which such purchase was made. All such fee
274payments and penalties must be deposited in accordance with s.
275350.113.
276     (b)  In addition to the penalties and interest otherwise
277provided, the commission may impose a penalty upon a utility for
278failure to pay regulatory assessment fees in a timely manner in
279accordance with s. 367.161.
280     Section 4.  If any provision of this act or its application
281to any person or circumstance is held invalid, the invalidity
282does not affect other provisions or applications of this act
283which can be given effect without the invalid provision or
284application and to this end the provisions of this act are
285declared severable.
286     Section 5.  This act shall take effect upon becoming a law
287and shall apply to all contracts pending on or after that date.


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