Florida Senate - 2005 COMMITTEE AMENDMENT
Bill No. SB 1366
Barcode 785092
CHAMBER ACTION
Senate House
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11 The Committee on Communications and Public Utilities
12 (Constantine) recommended the following amendment:
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14 Senate Amendment (with title amendment)
15 Delete everything after the enacting clause
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17 and insert:
18 Section 1. Section 366.8260, Florida Statutes, is
19 created to read:
20 366.8260 Storm-recovery financing.--
21 (1) DEFINITIONS.--As used in this section, the term:
22 (a) "Ancillary agreement" means any bond, insurance
23 policy, letter of credit, reserve account, surety bond, swap
24 arrangement, hedging arrangement, liquidity or credit support
25 arrangement, or other financial arrangement entered into in
26 connection with the issuance of storm-recovery bonds.
27 (b) "Assignee" means any entity, including, but not
28 limited to, a corporation, limited liability company,
29 partnership or limited partnership, public authority, trust,
30 financing entity, or other legally recognized entity to which
31 an electric utility assigns, sells, or transfers, other than
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1 as security, all or a portion of its interest in or right to
2 storm-recovery property. The term also includes any entity to
3 which an assignee assigns, sells, or transfers, other than as
4 security, its interest in or right to storm-recovery property.
5 (c) "Commission" means the Florida Public Service
6 Commission.
7 (d) "Electric utility" or "utility" has the same
8 meaning as that provided in s. 366.8255.
9 (e) "Financing costs" means:
10 1. Interest and acquisition, defeasance, or redemption
11 premiums that are payable on storm-recovery bonds;
12 2. Any payment required under an ancillary agreement
13 and any amount required to fund or replenish a reserve account
14 or other accounts established under the terms of any
15 indenture, ancillary agreement, or other financing documents
16 pertaining to storm-recovery bonds;
17 3. Any other cost related to issuing, supporting,
18 repaying, and servicing storm-recovery bonds, including, but
19 not limited to, servicing fees, accounting and auditing fees,
20 trustee fees, legal fees, consulting fees, administrative
21 fees, placement and underwriting fees, capitalized interest,
22 rating agency fees, stock exchange listing and compliance
23 fees, and filing fees, including costs related to obtaining
24 the financing order;
25 4. Any taxes and license fees imposed on the revenues
26 generated from the collection of storm-recovery charges;
27 5. Any income taxes resulting from the collection of
28 storm-recovery charges in any such case whether paid, payable,
29 or accrued; or
30 6. Any state and local taxes, franchise, gross
31 receipts, and other taxes or similar charges, including but
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1 not limited to, regulatory assessment fees, in any such case
2 whether paid, payable, or accrued.
3 (f) "Financing order" means an order under subsection
4 (2) which allows for the issuance of storm-recovery bonds, the
5 imposition, collection, and periodic adjustments of
6 storm-recovery charges, and the creation of storm-recovery
7 property.
8 (g) "Financing party" means holders of storm-recovery
9 bonds and trustees, collateral agents, or other persons acting
10 for the benefit of holders of storm-recovery bonds.
11 (h) "Financing statement" has the same meaning as that
12 provided in Article 9 of the Uniform Commercial Code.
13 (i) "Pledgee" means a financing party to which an
14 electric utility or its successors or assignees mortgages,
15 negotiates, hypothecates, pledges, or creates a security
16 interest or lien on all or any portion of its interest in or
17 right to storm-recovery property.
18 (j) "Storm" means a named tropical storm or hurricane
19 that occurred during calendar year 2004 or thereafter.
20 (k) "Storm-recovery activity" means any activity or
21 activities by or on behalf of an electric utility in
22 connection with the restoration of service associated with
23 electric power outages affecting customers of an electric
24 utility as the result of a storm or storms, including, but not
25 limited to, mobilization, staging, and construction,
26 reconstruction, replacement, or repair of electric generation,
27 transmission, or distribution facilities.
28 (l) "Storm-recovery bonds" means bonds, debentures,
29 notes, certificates of participation, certificates of
30 beneficial interest, certificates of ownership, or other
31 evidences of indebtedness or ownership that are issued by an
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1 electric utility or an assignee pursuant to a financing order,
2 the proceeds of which are used directly or indirectly to
3 recover, finance, or refinance commission-approved
4 storm-recovery costs and financing costs, and that are secured
5 by or payable from storm-recovery property.
6 (m) "Storm-recovery charge" means the amounts
7 authorized by the commission to recover, finance, or refinance
8 storm-recovery costs and financing costs as provided for in a
9 financing order to be imposed on all customer bills and
10 collected by an electric utility or its successors or
11 assignees, or a collection agent, in full through a charge
12 that is separate and apart from the electric utility's base
13 rates, which charge shall be paid by all customers receiving
14 transmission or distribution service from the electric utility
15 or its successors or assignees under commission-approved rate
16 schedules or under special contracts, even if the customer
17 elects to purchase electricity from an alternative electricity
18 supplier following a fundamental change in regulation of
19 public utilities in this state.
20 (n) "Storm-recovery costs" means, at the option and
21 request of the electric utility, and as approved by the
22 commission pursuant to sub-subparagraph (2)(b)1.b., costs
23 incurred or to be incurred by an electric utility in
24 undertaking a storm-recovery activity. Such costs shall be net
25 of applicable insurance proceeds and, where determined
26 appropriate by the commission, shall include adjustments for
27 normal capital replacement and operating costs, lost revenues,
28 or other potential offsetting adjustments. Storm-recovery
29 costs shall include the costs to finance any deficiency or
30 deficiencies in storm-recovery reserves until such time as
31 storm-recovery bonds are issued, and costs of retiring any
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1 existing indebtedness relating to storm-recovery activities.
2 (o) "Storm-recovery property" means:
3 1. All rights and interests of an electric utility or
4 successor or assignee of the electric utility under a
5 financing order, including the right to impose, bill, collect,
6 and receive storm-recovery charges authorized in the financing
7 order and to obtain periodic adjustments to such charges as
8 provided in the financing order.
9 2. All revenues, collections, claims, rights to
10 payments, payments, money, or proceeds arising from the rights
11 and interests specified in subparagraph 1., regardless of
12 whether such revenues, collections, claims, rights to payment,
13 payments, money, or proceeds are imposed, billed, received,
14 collected, or maintained together with or commingled with
15 other revenues, collections, rights to payment, payments,
16 money, or proceeds.
17 (p) "Storm-recovery reserve" means an electric utility
18 storm reserve or such other similar reserve established by law
19 or rule or pursuant to order of the commission.
20 (q) "Uniform Commercial Code" has the same meaning as
21 that provided in s. 671.101.
22 (2) FINANCING ORDERS.--
23 (a) An electric utility may petition the commission
24 for a financing order. For each petition, the electric utility
25 shall:
26 1. Describe the storm-recovery activities that the
27 electric utility has undertaken or proposes to undertake and
28 describe the reasons for undertaking the activities.
29 2. Set forth the known storm-recovery costs and
30 estimate the costs of any storm-recovery activities that are
31 not completed, or for which the costs are not yet known, as
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1 identified and requested by the electric utility.
2 3. Set forth the level of the storm-recovery reserve
3 that the utility proposes to establish or replenish and has
4 determined would be appropriate to recover through
5 storm-recovery bonds and is seeking to so recover and such
6 level that the utility is funding or will seek to fund through
7 other means, together with a description of the factors and
8 calculations used in determining the amounts and methods of
9 recovery.
10 4. Indicate whether the electric utility proposes to
11 finance all or a portion of the storm-recovery costs using
12 storm-recovery bonds. If the electric utility proposes to
13 finance a portion of such costs, the electric utility shall
14 identify that portion in the petition.
15 5. Estimate the financing costs related to the
16 storm-recovery bonds proposed under subparagraph 4.
17 6. Estimate the storm-recovery charges necessary to
18 recover the storm-recovery costs and financing costs and the
19 period for recovery of such costs.
20 7. Estimate any cost savings or demonstrate how it
21 would avoid or significantly mitigate rate impacts to
22 customers resulting from financing storm-recovery costs with
23 storm-recovery bonds as opposed to the traditional method of
24 recovering such costs from customers and through alternative
25 financing methods available to the electric utility.
26 8. File with the petition direct testimony supporting
27 the petition.
28 (b)1. Proceedings on a petition submitted pursuant to
29 paragraph (a) shall begin with a petition by an electric
30 utility and shall be disposed of in accordance with the
31 provisions of chapter 120 and applicable rules, except that
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1 the provisions of this section, to the extent applicable,
2 shall control.
3 a. Within 7 days after the filing of a petition, the
4 commission shall publish a case schedule, which schedule shall
5 place the matter before the commission on an agenda that will
6 permit a commission decision no later than 120 days after the
7 date the petition is filed.
8 b. No later than 135 days after the date the petition
9 is filed, the commission shall issue a financing order or an
10 order rejecting the petition. A party to the commission
11 proceeding may petition the commission for reconsideration of
12 the financing order within 5 days after the date of its
13 issuance. The commission shall issue a financing order
14 authorizing financing of reasonable and prudent storm-recovery
15 costs and financing costs if the commission finds that the
16 issuance of the storm-recovery bonds and the imposition of
17 storm-recovery charges authorized by the order are reasonably
18 expected to result in lower overall costs or would avoid or
19 significantly mitigate rate impacts to customers as compared
20 with alternative methods of financing or recovering
21 storm-recovery costs. Any determination of whether
22 storm-recovery costs are reasonable and prudent shall be made
23 with reference to the general public interest in, and the
24 scope of effort required to provide, the safe and expeditious
25 restoration of electric service.
26 2. In a financing order issued to an electric utility,
27 the commission shall:
28 a. Except as provided in sub-subparagraph f. and in
29 subparagraph 4., specify the amount of storm-recovery costs
30 and the level of storm-recovery reserves, taking into
31 consideration, to the extent the commission deems appropriate,
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1 any other methods used to recover these costs, and describe
2 and estimate the amount of financing costs which may be
3 recovered through storm-recovery charges; and specify the
4 period over which such costs may be recovered.
5 b. Determine that the proposed structuring, expected
6 pricing, and financing costs of the storm-recovery bonds are
7 reasonably expected to result in lower overall costs or would
8 avoid or significantly mitigate rate impacts to customers as
9 compared with alternative methods of financing or recovering
10 storm-recovery costs.
11 c. Provide that, for the period specified pursuant to
12 sub-subparagraph a., the imposition and collection of
13 storm-recovery charges authorized in the financing order shall
14 be paid by all customers receiving transmission or
15 distribution service from the electric utility or its
16 successors or assignees under commission-approved rate
17 schedules or under special contracts, even if the customer
18 elects to purchase electricity from an alternative electric
19 supplier following a fundamental change in regulation of
20 public utilities in the state.
21 d. Determine what portion, if any, of the
22 storm-recovery reserves must be held in a funded reserve and
23 any limitations on how the reserve may be held, accessed, or
24 used.
25 e. Include a formula-based mechanism for making
26 expeditious periodic adjustments in the storm-recovery charges
27 that customers are required to pay under the financing order
28 and for making any adjustments that are necessary to correct
29 for any overcollection or undercollection of the charges or to
30 otherwise ensure the timely payment of storm-recovery bonds
31 and financing costs and other required amounts and charges
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1 payable in connection with the storm-recovery bonds.
2 f. Specify the storm-recovery property that is, or
3 shall be, created in favor of an electric utility or its
4 successors or assignees and that shall be used to pay or
5 secure storm-recovery bonds and financing costs.
6 g. Specify the degree of flexibility to be afforded to
7 the electric utility in establishing the terms and conditions
8 of the storm-recovery bonds, including, but not limited to,
9 repayment schedules, interest rates, and other financing
10 costs.
11 h. Provide that storm-recovery charges be allocated to
12 the customer classes using the criteria set out in s.
13 366.06(1), in the manner in which these costs or their
14 equivalent were allocated in the cost-of-service study
15 approved in connection with the electric utility's last rate
16 case. If the electric utility's last rate case was resolved by
17 a settlement agreement, the the cost-of-service methodology
18 filed by the electric utility in that case shall be used.
19 i. Provide that, after the final terms of an issuance
20 of storm-recovery bonds have been established and prior to the
21 issuance of storm-recovery bonds, the electric utility shall
22 determine the resulting initial storm-recovery charge in
23 accordance with the financing order and such initial
24 storm-recovery charge shall be final and effective upon the
25 issuance of such storm-recovery bonds without further
26 commission action.
27 j. Include any other conditions that the commission
28 considers appropriate and that are not otherwise inconsistent
29 with this section.
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31 In performing the responsibilities of this subparagraph and
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1 subparagraph 5., the commission may engage outside consultants
2 or counsel, which consultant or counsel must be mutually
3 agreed upon by the commission and the electric utility. Any
4 expenses associated with such services shall be included as
5 part of financing costs and included in storm-recovery
6 charges.
7 3. A financing order issued to an electric utility may
8 provide that creation of the electric utility's storm-recovery
9 property pursuant to sub-subparagraph 2.f. is conditioned
10 upon, and shall be simultaneous with, the sale or other
11 transfer of the storm-recovery property to an assignee and the
12 pledge of the storm-recovery property to secure storm-recovery
13 bonds.
14 4. If the commission issues a financing order, the
15 electric utility shall file with the commission at least
16 biannually a petition or a letter applying the formula-based
17 mechanism pursuant to sub-subparagraph 2.e. and, based on
18 estimates of consumption for each rate class and other
19 mathematical factors, requesting administrative approval to
20 make the adjustments described in sub-subparagraph 2.e. The
21 review of such a request shall be limited to determining
22 whether there is any mathematical error in the application of
23 the formula-based mechanism relating to the appropriate amount
24 of any overcollection or undercollection of storm-recovery
25 charges and the amount of an adjustment. Such adjustments
26 shall ensure the recovery of revenues sufficient to provide
27 for the payment of principal, interest, acquisition,
28 defeasance, financing costs, or redemption premium and other
29 fees, costs, and charges in respect of storm-recovery bonds
30 approved under the financing order. Within 60 days after
31 receiving an electric utility's request pursuant to this
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1 paragraph, the commission shall either approve the request or
2 inform the electric utility of any mathematical errors in its
3 calculation. If the commission informs the utility of
4 mathematical errors in its calculation, the utility may
5 correct its error and refile its request. The timeframes
6 previously described in this paragraph shall apply to a
7 refiled request.
8 5. Within 120 days after the issuance of
9 storm-recovery bonds, the electric utility shall file with the
10 commission information on the actual costs of the
11 storm-recovery-bond issuance. The commission shall review such
12 information to determine if such costs incurred in the
13 issuance of the bonds resulted in the lowest overall costs
14 that were reasonably consistent with market conditions at the
15 time of the issuance and the terms of the financing order. The
16 commission may disallow any incremental issuance costs in
17 excess of the lowest overall costs by requiring the utility to
18 make a contribution to the storm reserve in an amount equal to
19 the excess of actual issuance costs incurred, and paid for out
20 of storm recovery bond proceeds, and the lowest overall
21 issuance costs as determined by the commission. The commission
22 may not make adjustments to the storm-recovery charges for any
23 such excess issuance costs.
24 6. Subsequent to the earlier of the transfer of
25 storm-recovery property to an assignee or the issuance of
26 storm-recovery bonds authorized thereby, a financing order is
27 irrevocable and, except as provided in subparagraph 4. and
28 paragraph (c), the commission may not amend, modify, or
29 terminate the financing order by any subsequent action or
30 reduce, impair, postpone, terminate, or otherwise adjust
31 storm-recovery charges approved in the financing order. After
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1 the issuance of a financing order, the electric utility
2 retains sole discretion regarding whether to assign, sell, or
3 otherwise transfer storm-recovery property or to cause the
4 storm-recovery bonds to be issued, including the right to
5 defer or postpone such assignment, sale, transfer, or
6 issuance.
7 (c) At the request of an electric utility, the
8 commission may commence a proceeding and issue a subsequent
9 financing order that provides for retiring and refunding
10 storm-recovery bonds issued pursuant to the original financing
11 order if the commission finds that the subsequent financing
12 order satisfies all of the criteria specified in paragraph
13 (b). Effective on retirement of the refunded storm-recovery
14 bonds and the issuance of new storm-recovery bonds, the
15 commission shall adjust the related storm-recovery charges
16 accordingly.
17 (d) Within 30 days after the commission issues an
18 order pursuant to paragraph (b) or a decision denying a
19 request for reconsideration or, if the request for
20 reconsideration is granted, within 30 days after the
21 commission issues its decision on reconsideration, an
22 adversely affected party may petition for judicial review in
23 the Florida Supreme Court. The petition for review shall be
24 served upon the executive director of the commission
25 personally or by service at the office of the commission.
26 Review on appeal shall be based solely on the record before
27 the commission and briefs to the court and shall be limited to
28 determining whether the order issued pursuant to paragraph
29 (b), or the order on reconsideration, conforms to the
30 constitution and laws of this state and the United States and
31 is within the authority of the commission under this section.
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1 Inasmuch as delay in the determination of the appeal of a
2 financing order will delay the issuance of storm-recovery
3 bonds, thereby diminishing savings to customers which might be
4 achieved if such bonds were issued as contemplated by a
5 financing order, the Supreme Court shall proceed to hear and
6 determine the action as expeditiously as practicable and give
7 the action precedence over other matters not accorded similar
8 precedence by law.
9 (e)1. A financing order remains in effect until the
10 storm-recovery bonds issued pursuant to the order have been
11 paid in full and the commission-approved financing costs of
12 such bonds have been recovered in full.
13 2. A financing order issued to an electric utility
14 shall remain in effect and unabated notwithstanding the
15 reorganization, bankruptcy, or other insolvency proceedings of
16 the electric utility or its successors or assignees.
17 (3) EXCEPTIONS TO COMMISSION JURISDICTION.--
18 (a) If the commission issues a financing order to an
19 electric utility pursuant to this section, the commission may
20 not, in exercising its powers and carrying out its duties
21 regarding any matter within its authority pursuant to this
22 chapter, consider the storm-recovery bonds issued pursuant to
23 the order to be the debt of the electric utility other than
24 for federal income tax purposes, consider the storm-recovery
25 charges paid under the order to be the revenue of the electric
26 utility for any purpose, or consider the storm-recovery costs
27 or financing costs specified in the order to be the costs of
28 the electric utility, nor may the commission determine any
29 action taken by an electric utility which is consistent with
30 the order to be unjust or unreasonable.
31 (b) The commission may not order or otherwise directly
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1 or indirectly require an electric utility to use
2 storm-recovery bonds to finance any project, addition, plant,
3 facility, extension, capital improvement, equipment, or any
4 other expenditure, unless the electric utility has filed a
5 petition under paragraph (2)(a) to finance such expenditure
6 using storm-recovery bonds. The commission may not refuse to
7 allow an electric utility to recover costs for storm-recovery
8 activities in an otherwise permissible fashion, or refuse or
9 condition authorization or approval pursuant to s. 366.04 of
10 the issuance and sale by an electric utility of securities or
11 the assumption by it of liabilities or obligations, solely
12 because of the potential availability of storm-recovery
13 financing.
14 (4) ELECTRIC UTILITY DUTIES.--
15 (a) The electric bills of an electric utility that has
16 obtained a financing order and issued storm-recovery bonds
17 must explicitly reflect that a portion of the charges on such
18 bill represents storm-recovery charges approved in a financing
19 order issued to the electric utility and, if the
20 storm-recovery property has been transferred to an assignee,
21 must include a statement to the effect that the assignee is
22 the owner of the rights to storm-recovery charges and that the
23 electric utility or any other entity, if applicable, is acting
24 as a collection agent or servicer for the assignee. The tariff
25 applicable to customers must indicate the storm-recovery
26 charge and the ownership of that charge. The commission shall
27 determine whether to require electric utilities to include
28 such information or amounts owed with respect to the
29 storm-recovery property as a separate line item on individual
30 electric bills.
31 (b) The failure of an electric utility to comply with
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1 this subsection shall not invalidate, impair, or affect any
2 financing order, storm-recovery property, storm-recovery
3 charge, or storm-recovery bonds but shall subject the electric
4 utility to penalties under s. 366.095.
5 (5) STORM-RECOVERY PROPERTY.--
6 (a)1. All storm-recovery property that is specified in
7 a financing order shall constitute an existing, present
8 property right or interest therein, notwithstanding that the
9 imposition and collection of storm-recovery charges depends on
10 the electric utility to which the order is issued performing
11 its servicing functions relating to the collection of
12 storm-recovery charges and on future electricity consumption.
13 Such property shall exist whether or not the revenues or
14 proceeds arising from the property have been billed, have
15 accrued, or have been collected and notwithstanding the fact
16 that the value or amount of the property is dependent on the
17 future provision of service to customers by the electric
18 utility or its successors or assignees.
19 2. Storm-recovery property specified in a financing
20 order shall continue to exist until the storm-recovery bonds
21 issued pursuant to the order are paid in full and all
22 financing costs and other costs of the bonds have been
23 recovered in full.
24 3. All or any portion of storm-recovery property
25 specified in a financing order issued to an electric utility
26 may be transferred, sold, conveyed, or assigned to a successor
27 or assignee, including an affiliate or affiliates of the
28 electric utility created for the limited purpose of acquiring,
29 owning, or administering storm-recovery property or issuing
30 storm-recovery bonds under the financing order. All or any
31 portion of storm-recovery property may be pledged to secure
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1 storm-recovery bonds issued pursuant to the order, amounts
2 payable to financing parties and to counterparties under any
3 ancillary agreements, and other financing costs. Each such
4 transfer, sale, conveyance, assignment, or pledge by an
5 electric utility or affiliate of an electric utility is
6 considered to be a transaction in the ordinary course of
7 business.
8 4. If an electric utility defaults on any required
9 payment of charges arising from storm-recovery property
10 specified in a financing order, a court, upon application by
11 an interested party, and without limiting any other remedies
12 available to the applying party, shall order the sequestration
13 and payment of the revenues arising from the storm-recovery
14 property to the financing parties. Any such order shall remain
15 in full force and effect notwithstanding any reorganization,
16 bankruptcy, or other insolvency proceedings with respect to
17 the electric utility or its successors or assignees.
18 5. The interest of a transferee, purchaser, acquirer,
19 assignee, or pledgee in storm-recovery property specified in a
20 financing order issued to an electric utility, and in the
21 revenue and collections arising from that property, is not
22 subject to setoff, counterclaim, surcharge, or defense by the
23 electric utility or any other person or in connection with the
24 reorganization, bankruptcy, or other insolvency of the
25 electric utility or any other entity.
26 6. Any successor to an electric utility, whether
27 pursuant to any reorganization, bankruptcy, or other
28 insolvency proceeding or whether pursuant to any merger or
29 acquisition, sale, or other business combination, or transfer
30 by operation of law, as a result of electric utility
31 restructuring or otherwise, shall perform and satisfy all
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1 obligations of, and have the same rights under a financing
2 order as, the electric utility under the financing order in
3 the same manner and to the same extent as the electric
4 utility, including collecting and paying to the person
5 entitled to receive the revenues, collections, payments, or
6 proceeds of the storm-recovery property.
7 (b)1. Except as specified in this section, the Uniform
8 Commercial Code does not apply to storm-recovery property or
9 any right, title, or interest of a utility or assignee
10 described in subparagraph (1)(o)1., whether before or after
11 the issuance of the financing order. In addition, such right,
12 title, or interest pertaining to a financing order, including,
13 but not limited to, the associated storm-recovery property and
14 any revenues, collections, claims, rights to payment,
15 payments, money, or proceeds of or arising from storm-recovery
16 charges pursuant to such order, shall not be deemed proceeds
17 of any right or interest other than in the financing order and
18 the storm-recovery property arising from the order.
19 2. The creation, attachment, granting, perfection,
20 priority, and enforcement of liens and security interests in
21 storm-recovery property to secure storm-recovery bonds is
22 governed solely by this section and not by the Uniform
23 Commercial Code.
24 3. A valid, enforceable, and attached lien and
25 security interest in storm-recovery property may be created
26 only upon the later of:
27 a. The issuance of a financing order;
28 b. The execution and delivery of a security agreement
29 with a financing party in connection with the issuance of
30 storm-recovery bonds; or
31 c. The receipt of value for the storm-recovery bonds.
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1
2 A valid, enforceable, and attached security interest shall be
3 perfected against third parties as of the date of filing of a
4 financing statement in the Florida Secured Transaction
5 Registry, as such registry is defined in Article 9 of the
6 Uniform Commercial Code, in accordance with subparagraph 4.,
7 and shall thereafter be a continuously perfected lien; and
8 such security interest in the storm-recovery property and all
9 proceeds of such storm-recovery property, whether or not
10 billed, accrued, or collected, and whether or not deposited
11 into a deposit account and however evidenced, shall have
12 priority in accordance with subparagraph 8. and take
13 precedence over any subsequent judicial or other lien
14 creditor. No continuation statement need be filed to maintain
15 such perfection.
16 4. Financing statements required to be filed pursuant
17 to this section shall be filed, maintained, and indexed in the
18 same manner and in the same system of records maintained for
19 the filing of financing statements in the Florida Secured
20 Transaction Registry under Article 9 of the Uniform Commercial
21 Code. The filing of such a financing statement shall be the
22 only method of perfecting a lien or security interest on
23 storm-recovery property.
24 5. The priority of a lien and security interest
25 perfected under this paragraph is not impaired by any later
26 modification of the financing order or storm-recovery property
27 or by the commingling of funds arising from storm-recovery
28 property with other funds, and any other security interest
29 that may apply to those funds shall be terminated as to all
30 funds transferred to a segregated account for the benefit of
31 an assignee or a financing party or to an assignee or
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1 financing party directly.
2 6. If a default or termination occurs under the terms
3 of the storm-recovery bonds, the financing parties or their
4 representatives may foreclose on or otherwise enforce their
5 lien and security interest in any storm-recovery property as
6 if they were a secured party under Article 9 of the Uniform
7 Commercial Code; and a court may order that amounts arising
8 from storm-recovery property be transferred to a separate
9 account for the financing parties' benefit, to which their
10 lien and security interest shall apply. On application by or
11 on behalf of the financing parties to a circuit court of this
12 state, such court shall order the sequestration and payment to
13 the financing parties of revenues arising from the
14 storm-recovery property.
15 7. The interest of a pledgee of an interest or any
16 rights in any storm-recovery property is not perfected until
17 filing as provided in subparagraph 4.
18 8. The priority of the conflicting interests of
19 pledgees in the same interest or rights in any storm-recovery
20 property is determined as follows:
21 a. Conflicting perfected interests or rights of
22 pledgees rank according to priority in time of perfection.
23 Priority dates from the time a filing covering the interest or
24 right is made in accordance with this paragraph.
25 b. A perfected interest or right of a pledgee has
26 priority over a conflicting unperfected interest or right of a
27 pledgee.
28 c. A perfected interest or right of a pledgee has
29 priority over a person who becomes a lien creditor after the
30 perfection of such pledgee's interest or right.
31 (c) The sale, assignment, or transfer of
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1 storm-recovery property is governed by this paragraph. All of
2 the following apply to a sale, assignment, or transfer under
3 this paragraph:
4 1. The sale, conveyance, assignment, or other transfer
5 of storm-recovery property by an electric utility to an
6 assignee that the parties have in the governing documentation
7 expressly stated to be a sale or other absolute transfer is an
8 absolute transfer and true sale of, and not a pledge of or
9 secured transaction relating to, the transferor's right,
10 title, and interest in, to, and under the storm-recovery
11 property, other than for federal and state income and
12 franchise tax purposes. After such a transaction, the
13 storm-recovery property is not subject to any claims of the
14 transferor or the transferor's creditors, other than creditors
15 holding a prior security interest in the storm-recovery
16 property perfected under paragraph (b).
17 2. The characterization of the sale, conveyance,
18 assignment, or other transfer as a true sale or other absolute
19 transfer under subparagraph 1. and the corresponding
20 characterization of the transferee's property interest is not
21 affected by:
22 a. Commingling of amounts arising with respect to the
23 storm-recovery property with other amounts.
24 b. The retention by the transferor of a partial or
25 residual interest, including an equity interest, in the
26 storm-recovery property, whether direct or indirect, or
27 whether subordinate or otherwise.
28 c. Any recourse that the transferee may have against
29 the transferor other than any such recourse created,
30 contingent upon, or otherwise occurring or resulting from one
31 or more of the transferor's customers' inability to timely pay
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1 all or a portion of the storm-recovery charge.
2 d. Any indemnifications, obligations, or repurchase
3 rights made or provided by the transferor, other than
4 indemnity or repurchase rights based solely upon a
5 transferor's customers' inability to timely pay all or a
6 portion of the storm-recovery charge.
7 e. The responsibility of the transferor to collect
8 storm-recovery charges.
9 f. The treatment of the sale, conveyance, assignment,
10 or other transfer for tax, financial reporting, or other
11 purposes.
12 g. Granting or providing to holders of the
13 storm-recovery bonds a preferred right to the storm-recovery
14 property or credit enhancement by the electric utility or its
15 affiliates with respect to the storm-recovery bonds.
16 3. Any right that an electric utility has in the
17 storm-recovery property prior to its pledge, sale, or transfer
18 or any other right created under this section or created in
19 the financing order and assignable under this section or
20 assignable pursuant to a financing order shall be property in
21 the form of a contract right. Transfer of an interest in
22 storm-recovery property to an assignee is enforceable only
23 upon the later of the issuance of a financing order, the
24 execution and delivery of transfer documents to the assignee
25 in connection with the issuance of storm-recovery bonds, and
26 the receipt of value. An enforceable transfer of an interest
27 in storm-recovery property to an assignee shall be perfected
28 against all third parties, including subsequent judicial or
29 other lien creditors, when a notice of that transfer has been
30 given by the filing of a financing statement in accordance
31 with subparagraph 4. The transfer shall be perfected against
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1 third parties as of the date of filing.
2 4. Financing statements required to be filed under
3 this section shall be maintained and indexed in the same
4 manner and in the same system of records maintained for the
5 filing of financing statements in the Florida Secured
6 Transaction Registry under Article 9 of the Uniform Commercial
7 Code. The filing of such a financing statement shall be the
8 only method of perfecting a transfer of storm-recovery
9 property.
10 5. The priority of a transfer perfected under this
11 section is not impaired by any later modification of the
12 financing order or storm-recovery property or by the
13 commingling of funds arising from storm-recovery property with
14 other funds, and any other security interest that may apply to
15 those funds shall be terminated when they are transferred to a
16 segregated account for the assignee or a financing party. If
17 storm-recovery property has been transferred to an assignee or
18 financing party, any proceeds of that property shall be held
19 in trust for the assignee or financing party.
20 6. The priority of the conflicting interests of
21 assignees in the same interest or rights in any storm-recovery
22 property is determined as follows:
23 a. Conflicting perfected interests or rights of
24 assignees rank according to priority in time of perfection.
25 Priority dates from the time a filing covering the transfer is
26 made in accordance with subparagraph 4.
27 b. A perfected interest or right of an assignee has
28 priority over a conflicting unperfected interest or right of
29 an assignee.
30 c. A perfected interest or right of an assignee has
31 priority over a person who becomes a lien creditor after the
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1 perfection of such assignee's interest or right.
2 (6) DESCRIPTION OR INDICATION OF PROPERTY.--The
3 description of storm-recovery property being transferred to an
4 assignee in any sale agreement, purchase agreement, or other
5 transfer agreement, granted or pledged to a pledgee in any
6 security agreement, pledge agreement, or other security
7 document, or indicated in any financing statement is only
8 sufficient if such description or indication describes the
9 financing order that created the storm-recovery property and
10 states that such agreement or financing statement covers all
11 or part of such property described in such financing order.
12 This subsection applies to all purported transfers of, and all
13 purported grants or liens or security interests in,
14 storm-recovery property, regardless of whether the related
15 sale agreement, purchase agreement, other transfer agreement,
16 security agreement, pledge agreement, or other security
17 document was entered into, or any financing statement was
18 filed, before or after the effective date of this section.
19 (7) FINANCING STATEMENTS.--All financing statements
20 referenced in this section shall be subject to Part 5 of
21 Article 9 of the Uniform Commercial Code except that the
22 requirement as to continuation statements shall not apply.
23 (8) CHOICE OF LAW.--The law governing the validity,
24 enforceability, attachment, perfection, priority, and exercise
25 of remedies with respect to the transfer of an interest or
26 right or the pledge or creation of a security interest in any
27 storm-recovery property shall be the laws of this state, and
28 exclusively, the laws of this section.
29 (9) STORM-RECOVERY BONDS NOT PUBLIC DEBT.--The state
30 or its political subdivisions are not liable on any
31 storm-recovery bonds, and the bonds are not a debt or a
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1 general obligation of the state or any of its political
2 subdivisions, agencies, or instrumentalities. An issue of
3 storm-recovery bonds does not, directly or indirectly or
4 contingently, obligate the state or any agency, political
5 subdivision, or instrumentality of the state to levy any tax
6 or make any appropriation for payment of the bonds, other than
7 in their capacity as consumers of electricity. This subsection
8 shall in no way preclude bond guarantees or enhancements
9 pursuant to this section. All bonds must contain on the face
10 thereof a statement to the following effect: "Neither the full
11 faith and credit nor the taxing power of the State of Florida
12 is pledged to the payment of the principal of, or interest on,
13 this bond."
14 (10) STORM-RECOVERY BONDS AS LEGAL INVESTMENTS WITH
15 RESPECT TO INVESTORS THAT REQUIRE STATUTORY AUTHORITY
16 REGARDING LEGAL INVESTMENT.--The following entities may
17 legally invest any sinking funds, moneys, or other funds
18 belonging to them or under their control in storm-recovery
19 bonds:
20 (a) The state, the investment board, municipal
21 corporations, political subdivisions, public bodies, and
22 public officers except for members of the commission.
23 (b) Banks and bankers, savings and loan associations,
24 credit unions, trust companies, savings banks and
25 institutions, investment companies, insurance companies,
26 insurance associations, and other persons carrying on a
27 banking or insurance business.
28 (c) Personal representatives, guardians, trustees, and
29 other fiduciaries.
30 (d) All other persons whatsoever who are now or may
31 hereafter be authorized to invest in bonds or other
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1 obligations of a similar nature.
2 (11) STATE PLEDGE.--
3 (a) For purposes of this subsection, the term
4 "bondholder" means a person who holds a storm-recovery bond.
5 (b) The state pledges to and agrees with bondholders,
6 the owners of the storm-recovery property, and other financing
7 parties that the state will not:
8 1. Alter the provisions of this section which make the
9 storm-recovery charges imposed by a financing order
10 irrevocable, binding, and nonbypassable charges;
11 2. Take or permit any action that impairs or would
12 impair the value of storm-recovery property; or
13 3. Except as allowed under this section, reduce,
14 alter, or impair storm-recovery charges that are to be
15 imposed, collected, and remitted for the benefit of the
16 bondholders and other financing parties until any and all
17 principal, interest, premium, financing costs and other fees,
18 expenses, or charges incurred, and any contracts to be
19 performed, in connection with the related storm-recovery bonds
20 have been paid and performed in full.
21
22 Nothing in this paragraph shall preclude limitation or
23 alteration if full compensation is made by law for the full
24 protection of the storm-recovery charges collected pursuant to
25 a financing order and of the holders of storm-recovery bonds
26 and any assignee or financing party entering into a contract
27 with the electric utility.
28 (c) Any person or entity that issues storm-recovery
29 bonds may include the pledge specified in paragraph (b) in the
30 bonds and related documentation.
31 (12) NOT AN ELECTRIC UTILITY.--An assignee or
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1 financing party shall not be considered an electric utility or
2 person providing electric service by virtue of engaging in the
3 transactions described in this section.
4 (13) CONFLICTS.--In the event of conflict between this
5 section and any other law regarding the attachment,
6 assignment, or perfection, or the effect of perfection, or
7 priority of, assignment or transfer of, or security interest
8 in storm-recovery property, this section shall govern to the
9 extent of the conflict.
10 (14) EFFECT OF INVALIDITY ON ACTIONS.--Effective on
11 the date that storm-recovery bonds are first issued under this
12 section, if any provision of this section is held to be
13 invalid or is invalidated, superseded, replaced, repealed, or
14 expires for any reason, that occurrence shall not affect the
15 validity of any action allowed under this section which is
16 taken by an electric utility, an assignee, a financing party,
17 a collection agent, or a party to an ancillary agreement; and
18 any such action shall remain in full force and effect with
19 respect to all storm-recovery bonds issued or authorized in a
20 financing order to be issued under this section prior to the
21 date that such provision is held to be invalid or is
22 invalidated, superseded, replaced, or repealed, or that
23 expires for any reason.
24 (15) PENALTIES.--A violation of this section or of a
25 financing order issued under this section subjects the utility
26 that obtained the order to penalties under s. 366.095 and to
27 any other penalties or remedies that the commission determines
28 are necessary to achieve the intent of this section and the
29 intent and terms of the financing order and to prevent any
30 increase in financial impact to the utility's ratepayers above
31 that set forth in the financing order. If the commission
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1 orders a penalty or a remedy for a violation, the monetary
2 penalty or remedy and the costs of defending against the
3 proposed penalty or remedy may not be recovered from the
4 ratepayers.
5 Section 2. Paragraphs (m) and (n) of subsection (4) of
6 section 679.1091, Florida Statutes, are amended, and paragraph
7 (o) is added to that subsection, to read:
8 679.1091 Scope.--
9 (4) This chapter does not apply to:
10 (m) An assignment of a deposit account, other than a
11 nonnegotiable certificate of deposit, in a consumer
12 transaction, but ss. 679.3151 and 679.322 apply with respect
13 to proceeds and priorities in proceeds; or
14 (n) Any transfer by a government or governmental unit;
15 or
16 (o) A transfer or pledge of, or creation of a security
17 interest in, any interest or right or portion of any interest
18 or right in any storm-recovery property as defined in s.
19 366.8260.
20 Section 3. This act shall take effect upon becoming a
21 law.
22
23
24 ================ T I T L E A M E N D M E N T ===============
25 And the title is amended as follows:
26 Delete everything before the enacting clause
27
28 and insert:
29 A bill to be entitled
30 An act relating to storm infrastructure
31 recovery; creating s. 366.8260, F.S.; providing
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1 definitions; authorizing electric utilities to
2 petition the Florida Public Service Commission
3 for certain financing orders for certain
4 storm-recovery purposes; providing
5 requirements; providing powers and duties of
6 the commission in issuing such orders;
7 specifying procedures and requirements for the
8 commission in issuing financing orders;
9 authorizing electric utilities to create
10 storm-recovery property; providing for pledge
11 of storm-recovery property to secure
12 storm-recovery bonds; providing for retirement
13 of storm-recovery bonds under certain
14 circumstances; providing for judicial review of
15 such orders; providing for effect of such
16 orders; providing exceptions to commission
17 jurisdiction to issue financing orders;
18 providing limitations; prohibiting the
19 commission from requiring use of storm-recovery
20 bonds for certain purposes; specifying duties
21 of electric utilities; specifying properties,
22 requirements, permissible activities, and
23 limitations relating to storm-recovery property
24 under certain circumstances; providing for
25 security interests in storm-recovery property;
26 providing for perfecting security interests in
27 storm-recovery property; providing for priority
28 of and resolution of conflicting interests;
29 providing requirements, procedures, and
30 limitations for sale, assignment, or transfer
31 of storm-recovery property; providing
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1 requirements for descriptions or indications of
2 storm-recovery property transferred, granted,
3 or pledged, or indicated in a financing
4 statement; subjecting financing statements to
5 certain provisions of law; specifying that
6 storm-recovery bonds are not public debt;
7 specifying storm-recovery bonds as legal
8 investments for certain entities; specifying
9 certain state pledges relating to bondholders;
10 declaring certain entities as not electric
11 utilities under certain circumstances;
12 specifying effect of certain provisions in
13 situations of conflict; providing for
14 protecting validity of certain bonds under
15 certain circumstances; limiting commission
16 authority to issue certain financing orders
17 after a time certain; amending s. 679.1091,
18 F.S.; specifying nonapplication of secured
19 transactions provisions of the Uniform
20 Commercial Code to interests in storm-recovery
21 property; providing an effective date.
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