Florida Senate - 2015                                     SB 776
       
       
        
       By Senator Hays
       
       
       
       
       
       11-00460D-15                                           2015776__
    1                        A bill to be entitled                      
    2         An act relating to water and wastewater; creating s.
    3         159.8105, F.S.; requiring the Division of Bond Finance
    4         of the State Board of Administration to review the
    5         allocation of private activity bonds to determine the
    6         availability of additional allocation or reallocation
    7         of bonds for water and wastewater infrastructure
    8         projects; amending s. 212.08, F.S.; extending
    9         specified tax exemptions to certain investor-owned
   10         water and wastewater utilities; amending s. 367.022,
   11         F.S.; exempting from regulation by the Florida Public
   12         Service Commission a person who resells water service
   13         to certain tenants or residents up to a specified
   14         percentage or cost; amending s. 367.081, F.S.;
   15         authorizing the creation of a utility reserve fund;
   16         requiring the commission to adopt rules to govern the
   17         implementation and management of the fund;
   18         establishing criteria for adjusted rates; specifying
   19         expense items that may be automatically increased or
   20         decreased; authorizing the commission to establish, by
   21         rule, additional specified expense items that cause an
   22         automatic increase or decrease of utility rates;
   23         requiring, rather than authorizing, the commission to
   24         establish a leverage formula under certain
   25         circumstances; restricting a utility from recovering
   26         more than a certain percentage of reasonable rate case
   27         expenses; amending s. 367.0814, F.S.; prohibiting the
   28         commission from awarding rate case expense to recover
   29         attorney fees or fees of other outside consultants in
   30         certain circumstances; requiring the commission to
   31         adopt rules; amending s. 367.0816, F.S.; prohibiting a
   32         utility from recovering rate case expenses for more
   33         than one rate case at a time; amending s. 367.111,
   34         F.S.; authorizing the commission to review water
   35         quality and wastewater service under certain
   36         circumstances; amending s. 403.8532, F.S.; authorizing
   37         the Department of Environmental Protection to require
   38         or request that the Florida Water Pollution Control
   39         Financing Corporation make loans, grants, and deposits
   40         to for-profit, privately owned or investor-owned water
   41         systems; deleting current restrictions on such
   42         activities; amending ss. 367.084 and 367.171, F.S.;
   43         conforming cross-references; making technical changes;
   44         providing an effective date.
   45          
   46  Be It Enacted by the Legislature of the State of Florida:
   47  
   48         Section 1. Section 159.8105, Florida Statutes, is created
   49  to read:
   50         159.8105 Allocation of bonds for water and wastewater
   51  infrastructure projects.—The division shall review the
   52  allocation of private activity bonds to determine the
   53  availability of additional allocation and reallocation of bonds
   54  for water and wastewater infrastructure projects.
   55         Section 2. Paragraph (nnn) is added to subsection (7) of
   56  section 212.08, Florida Statutes, to read:
   57         212.08 Sales, rental, use, consumption, distribution, and
   58  storage tax; specified exemptions.—The sale at retail, the
   59  rental, the use, the consumption, the distribution, and the
   60  storage to be used or consumed in this state of the following
   61  are hereby specifically exempt from the tax imposed by this
   62  chapter.
   63         (7) MISCELLANEOUS EXEMPTIONS.—Exemptions provided to any
   64  entity by this chapter do not inure to any transaction that is
   65  otherwise taxable under this chapter when payment is made by a
   66  representative or employee of the entity by any means,
   67  including, but not limited to, cash, check, or credit card, even
   68  when that representative or employee is subsequently reimbursed
   69  by the entity. In addition, exemptions provided to any entity by
   70  this subsection do not inure to any transaction that is
   71  otherwise taxable under this chapter unless the entity has
   72  obtained a sales tax exemption certificate from the department
   73  or the entity obtains or provides other documentation as
   74  required by the department. Eligible purchases or leases made
   75  with such a certificate must be in strict compliance with this
   76  subsection and departmental rules, and any person who makes an
   77  exempt purchase with a certificate that is not in strict
   78  compliance with this subsection and the rules is liable for and
   79  shall pay the tax. The department may adopt rules to administer
   80  this subsection.
   81         (nnn) Investor-owned water and wastewater utilities.—Sales
   82  or leases to an investor-owned water or wastewater utility owned
   83  or operated by a Florida corporation are exempt from the tax
   84  imposed by this chapter if the sole or primary function of the
   85  corporation is to construct, maintain, or operate a water or
   86  wastewater system in this state and if the goods or services
   87  purchased or leased are used in this state.
   88         Section 3. Present subsections (9) through (12) of section
   89  367.022, Florida Statutes, are redesignated as subsections (10)
   90  through (13), respectively, and a new subsection (9) is added to
   91  that section, to read:
   92         367.022 Exemptions.—The following are not subject to
   93  regulation by the commission as a utility nor are they subject
   94  to the provisions of this chapter, except as expressly provided:
   95         (9)A person who resells water service to his or her
   96  tenants or to individually metered residents for a fee that does
   97  not exceed the actual purchase price plus the actual cost of
   98  meter reading and billing, not to exceed 9 percent of the actual
   99  cost of service.
  100         Section 4. Paragraph (c) is added to subsection (2) of
  101  section 367.081, Florida Statutes, and paragraph (b) of
  102  subsection (4) and subsection (7) of that section are amended,
  103  to read:
  104         367.081 Rates; procedure for fixing and changing.—
  105         (2)
  106         (c) In establishing rates for a utility, the commission may
  107  create a utility reserve fund for infrastructure repair and
  108  replacement for a utility, to be funded by a portion of the
  109  rates charged by the utility, by a secured escrow account, or
  110  through a letter of credit. The commission shall adopt rules to
  111  govern the implementation, management, and utilization of the
  112  fund, including, but not limited to, rules related to expenses
  113  for which the fund may be used, segregation of reserve account
  114  funds, requirements for a capital improvement plan, and
  115  requirements for commission authorization before disbursements
  116  are made from the fund.
  117         (4)
  118         (b) The approved rates of a any utility which receives all
  119  or any portion of its utility service from a governmental
  120  authority or from a water or wastewater utility regulated by the
  121  commission and which redistributes that service to its utility
  122  customers shall be automatically increased or decreased without
  123  hearing, upon verified notice to the commission 45 days prior to
  124  its implementation of the increase or decrease. Such notice must
  125  inform the commission which costs for a specified expense item
  126  that the rates charged by the governmental authority or other
  127  utility have changed. The approved rates of any utility which is
  128  subject to an increase or decrease in the rates or fees that it
  129  is charged for electric power, the amount of ad valorem taxes
  130  assessed against its used and useful property, the fees charged
  131  by the Department of Environmental Protection in connection with
  132  the National Pollutant Discharge Elimination System Program, or
  133  the regulatory assessment fees imposed upon it by the commission
  134  shall be increased or decreased by the utility, without action
  135  by the commission, upon verified notice to the commission 45
  136  days prior to its implementation of the increase or decrease
  137  that the rates charged by the supplier of the electric power or
  138  the taxes imposed by the governmental authority, or the
  139  regulatory assessment fees imposed upon it by the commission
  140  have changed. The new rates authorized shall reflect the amount
  141  of the change of the ad valorem taxes or rates imposed upon the
  142  utility by the governmental authority, other utility, or
  143  supplier of electric power, or the regulatory assessment fees
  144  imposed upon it by the commission. The approved rates of any
  145  utility shall be automatically increased, without hearing, upon
  146  verified notice to the commission 45 days prior to
  147  implementation of the increase that costs have been incurred for
  148  water quality or wastewater quality testing required by the
  149  Department of Environmental Protection.
  150         1. The new rates authorized shall reflect, on an amortized
  151  or annual basis, as appropriate, the cost of, or the amount of
  152  change in the cost of, the specified expense item, required
  153  water quality or wastewater quality testing performed by
  154  laboratories approved by the Department of Environmental
  155  Protection for that purpose. The new rates, however, shall not
  156  reflect the costs of a specified expense item any required water
  157  quality or wastewater quality testing already included in a
  158  utility’s rates. Specified expense items that are eligible
  159  include:
  160         a. The approved rates of a utility that receives all or any
  161  portion of its utility service from a governmental authority or
  162  from a water or wastewater utility regulated by the commission
  163  and which redistributes that service to its own customers.
  164         b. The rates or fees that the utility is charged for
  165  electric power.
  166         c. The amount of ad valorem taxes assessed against used and
  167  useful property.
  168         d. The fees charged by the Department of Environmental
  169  Protection in connection with the National Pollutant Discharge
  170  Elimination System Program.
  171         e. The regulatory assessment fees imposed by the
  172  commission.
  173         f. Costs incurred for water quality or wastewater quality
  174  testing required by the Department of Environmental Protection.
  175         g. The fees charged for wastewater biosolids disposal.
  176         h. Costs incurred for a tank inspection required by the
  177  Department of Environmental Protection or a local governmental
  178  authority.
  179         i. Operator and distribution license fees required by the
  180  Department of Environmental Protection or a local governmental
  181  authority.
  182         j. Water or wastewater operating permit fees charged by the
  183  Department of Environmental Protection or a local governmental
  184  authority.
  185         k. Consumptive or water use permit fees charged by a water
  186  management district.
  187         2. A utility may not use this procedure to increase its
  188  rates as a result of an increase in a specific expense item
  189  which occurred water quality or wastewater quality testing or an
  190  increase in the cost of purchased water services, sewer
  191  services, or electric power or in assessed ad valorem taxes,
  192  which increase was initiated more than 12 months before the
  193  filing by the utility.
  194         3. The commission may establish by rule additional specific
  195  expense items that are outside the control of the utility and
  196  have been imposed upon the utility by a federal, state, or local
  197  law, rule, order, or notice. If the commission establishes such
  198  rule, the commission shall, at least once every 5 years, review
  199  the rule and determine if each expense item should continue to
  200  be cause for an automatic increase or decrease and whether
  201  additional items should be included.
  202         4.The provisions of This subsection does do not prevent a
  203  utility from seeking a change in rates pursuant to the
  204  provisions of subsection (2).
  205         (7) The commission shall determine the reasonableness of
  206  rate case expenses and shall disallow all rate case expenses
  207  determined to be unreasonable. No rate case expense determined
  208  to be unreasonable shall be paid by a consumer. In determining
  209  the reasonable level of rate case expense, the commission shall
  210  consider the extent to which a utility has utilized or failed to
  211  utilize the provisions of paragraph (4)(a) or paragraph (4)(b)
  212  and such other criteria as it may establish by rule. A utility
  213  may recover only up to 50 percent of rate case expenses that are
  214  determined to be reasonable.
  215         Section 5. Subsection (3) of section 367.0814, Florida
  216  Statutes, is amended to read:
  217         367.0814 Staff assistance in changing rates and charges;
  218  interim rates.—
  219         (3) The provisions of s. 367.081(1), (2)(a), and (3) shall
  220  apply in determining the utility’s rates and charges. However,
  221  the commission shall not award rate case expenses to recover
  222  attorney fees or fees of other outside consultants who are
  223  engaged for purposes of preparing or filing the case if a
  224  utility receives staff assistance in changing rates and charges
  225  pursuant to this section, unless the Office of Public Counsel or
  226  interested parties have intervened. The commission may award
  227  rate case expenses for attorney fees or other outside consultant
  228  fees if the fees are incurred for the purpose of providing
  229  consulting or legal services to the utility after the initial
  230  staff report is made available to customers and the utility. If
  231  there is a protest or appeal by a party other than the utility,
  232  the commission may award rate case expense to the utility for
  233  attorney fees or other outside consultant fees for costs
  234  incurred after the protest or appeal. By December 31, 2015, the
  235  commission must adopt rules to administer this subsection.
  236         Section 6. Section 367.0816, Florida Statutes, is amended
  237  to read:
  238         367.0816 Recovery of rate case expenses.—
  239         (1) The amount of rate case expense determined by the
  240  commission pursuant to the provisions of this chapter to be
  241  recovered through a public utilities rate shall be apportioned
  242  for recovery over a period of 4 years. At the conclusion of the
  243  recovery period, the rate of the public utility shall be reduced
  244  immediately by the amount of rate case expense previously
  245  included in rates.
  246         (2) A utility may not recover the 4-year amortized rate
  247  case expense for more than one rate case at any given time. If
  248  the commission approves and a utility implements a rate change
  249  from a subsequent rate case pursuant to this section, the
  250  utility forfeits any unamortized rate case expense from a prior
  251  rate case. The unamortized portion of rate case expense for a
  252  prior case must be removed from rates before the implementation
  253  of an additional amortized rate case expense for the most recent
  254  rate proceeding.
  255         Section 7. Subsection (3) is added to section 367.111,
  256  Florida Statutes, to read:
  257         367.111 Service.—
  258         (3) The commission may, on its own motion or based on
  259  complaints of customers of a water utility subject to its
  260  jurisdiction, review water quality as it pertains to secondary
  261  drinking water standards established by the Department of
  262  Environmental Protection. The commission may, on its own motion
  263  or based on complaints of customers of a wastewater utility
  264  subject to its jurisdiction, review wastewater service as it
  265  pertain to odor, noise, aerosol drift, or lighting.
  266         Section 8. Subsection (3) of section 403.8532, Florida
  267  Statutes, is amended to read:
  268         403.8532 Drinking water state revolving loan fund; use;
  269  rules.—
  270         (3) The department may make, or request that the
  271  corporation make, loans, grants, and deposits to community water
  272  systems; for-profit, privately owned or investor-owned water
  273  systems;, nonprofit, transient, noncommunity water systems;, and
  274  nonprofit, nontransient, noncommunity water systems to assist
  275  them in planning, designing, and constructing public water
  276  systems, unless such public water systems are for-profit
  277  privately owned or investor-owned systems that regularly serve
  278  1,500 service connections or more within a single certified or
  279  franchised area. However, a for-profit privately owned or
  280  investor-owned public water system that regularly serves 1,500
  281  service connections or more within a single certified or
  282  franchised area may qualify for a loan only if the proposed
  283  project will result in the consolidation of two or more public
  284  water systems. The department may provide loan guarantees,
  285  purchase loan insurance, and refinance local debt through the
  286  issue of new loans for projects approved by the department.
  287  Public water systems may borrow funds made available pursuant to
  288  this section and may pledge any revenues or other adequate
  289  security available to them to repay any funds borrowed.
  290         (a) The department shall administer loans so that amounts
  291  credited to the Drinking Water Revolving Loan Trust Fund in any
  292  fiscal year are reserved for the following purposes:
  293         1. At least 15 percent for qualifying small public water
  294  systems.
  295         2. Up to 15 percent for qualifying financially
  296  disadvantaged communities.
  297         (b) If an insufficient number of the projects for which
  298  funds are reserved under this subsection have been submitted to
  299  the department at the time the funding priority list authorized
  300  under this section is adopted, the reservation of these funds no
  301  longer applies. The department may award the unreserved funds as
  302  otherwise provided in this section.
  303         Section 9. Section 367.084, Florida Statutes, is amended to
  304  read:
  305         367.084 Rate adjustment orders.—An Any order issued by the
  306  commission adjusting general increases or reductions of the
  307  rates and charges of a any utility or regulated company must be
  308  reduced to writing, including any dissenting or concurring
  309  opinions, within 20 days after the official vote of the
  310  commission. Within such 20-day period, the commission shall also
  311  mail a copy to the clerk of the circuit court of each county in
  312  which customers of the utility or regulated company are served
  313  who are affected by the rate adjustment, which copy must be kept
  314  on file and made available to the public. The commission shall
  315  notify all parties of record in the proceeding of the date of
  316  such mailing. Such an order is not considered rendered for
  317  purposes of appeal, rehearing, or judicial review until the date
  318  the copies are mailed as required by this section. This
  319  provision does not delay the effective date of the order. Such
  320  an order is considered rendered on the date of the official vote
  321  for the purposes of s. 367.081(7) s. 367.081(6).
  322         Section 10. Subsection (8) of section 367.171, Florida
  323  Statutes, is amended to read:
  324         367.171 Effectiveness of this chapter.—
  325         (8) Each county that which is not subject to excluded from
  326  the provisions of this chapter shall regulate the rates of all
  327  utilities in that county which would otherwise be subject to
  328  regulation by the commission pursuant to s. 367.081(1), (2),
  329  (3), and (7) (6). The county may shall not regulate the rates or
  330  charges of any system or facility that which would otherwise be
  331  exempt from commission regulation pursuant to s. 367.022(2). For
  332  this purpose the county or its agency shall proceed as though
  333  the county or agency is the commission.
  334         Section 11. This act shall take effect July 1, 2015.