Bill Text: FL S0534 | 2016 | Regular Session | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Water and Wastewater

Spectrum: Slight Partisan Bill (? 3-1)

Status: (Introduced - Dead) 2016-03-09 - Laid on Table, companion bill(s) passed, see CS/CS/CS/HB 491 (Ch. 2016-226) [S0534 Detail]

Download: Florida-2016-S0534-Comm_Sub.html

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       Florida Senate - 2016                       CS for CS for SB 534
       
       
        
       By the Committees on Communications, Energy, and Public
       Utilities; and Environmental Preservation and Conservation; and
       Senator Hays
       
       579-02057-16                                           2016534c2
    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 and 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 commission to allow a utility to
   16         create a reserve fund upon the commission’s own motion
   17         or upon the request of the utility; requiring the
   18         commission to adopt rules to govern the
   19         implementation, management, and use of the fund;
   20         establishing criteria for adjusted rates; specifying
   21         expense items that may be the basis for an automatic
   22         increase or decrease of a utility’s rates; authorizing
   23         the commission to establish by rule additional
   24         specified expense items; requiring the commission to
   25         consider certain criteria and make findings and
   26         allocations among the ratepayers, shareholders,
   27         owners, or affiliates when determining reasonable rate
   28         case expenses; amending s. 367.0814, F.S.; authorizing
   29         the commission to award rate case expenses to recover
   30         attorney fees or fees of other outside consultants in
   31         certain circumstances; requiring the commission to
   32         adopt rules by a certain date; amending s. 367.0816,
   33         F.S.; prohibiting a utility from recovering certain
   34         expenses for more than one rate case at a time;
   35         amending s. 367.111, F.S.; authorizing the commission
   36         to review water quality and wastewater service upon
   37         its own motion or based on complaints of customers;
   38         amending s. 367.165, F.S.; requiring a county that
   39         regulates water or wastewater services to comply with
   40         the requirements for abandoned water and wastewater
   41         systems; amending s. 403.8532, F.S.; authorizing the
   42         Department of Environmental Protection to require or
   43         request that the Florida Water Pollution Control
   44         Financing Corporation make loans, grants, and deposits
   45         to for-profit, privately owned, or investor-owned
   46         water systems; deleting restrictions on such
   47         activities; providing an effective date.
   48          
   49  Be It Enacted by the Legislature of the State of Florida:
   50  
   51         Section 1. Section 159.8105, Florida Statutes, is created
   52  to read:
   53         159.8105 Allocation of bonds for water and wastewater
   54  infrastructure projects.—The division shall review the
   55  allocation of private activity bonds to determine the
   56  availability of additional allocation and reallocation of bonds
   57  for water and wastewater infrastructure projects.
   58         Section 2. Paragraph (ooo) is added to subsection (7) of
   59  section 212.08, Florida Statutes, to read:
   60         212.08 Sales, rental, use, consumption, distribution, and
   61  storage tax; specified exemptions.—The sale at retail, the
   62  rental, the use, the consumption, the distribution, and the
   63  storage to be used or consumed in this state of the following
   64  are hereby specifically exempt from the tax imposed by this
   65  chapter.
   66         (7) MISCELLANEOUS EXEMPTIONS.—Exemptions provided to any
   67  entity by this chapter do not inure to any transaction that is
   68  otherwise taxable under this chapter when payment is made by a
   69  representative or employee of the entity by any means,
   70  including, but not limited to, cash, check, or credit card, even
   71  when that representative or employee is subsequently reimbursed
   72  by the entity. In addition, exemptions provided to any entity by
   73  this subsection do not inure to any transaction that is
   74  otherwise taxable under this chapter unless the entity has
   75  obtained a sales tax exemption certificate from the department
   76  or the entity obtains or provides other documentation as
   77  required by the department. Eligible purchases or leases made
   78  with such a certificate must be in strict compliance with this
   79  subsection and departmental rules, and any person who makes an
   80  exempt purchase with a certificate that is not in strict
   81  compliance with this subsection and the rules is liable for and
   82  shall pay the tax. The department may adopt rules to administer
   83  this subsection.
   84         (ooo) Investor-owned water and wastewater utilities.—Sales
   85  or leases to an investor-owned water or wastewater utility
   86  holding a certificate of authorization under s. 367.031 are
   87  exempt from the tax imposed by this chapter if the sole or
   88  primary function of the utility is to construct, maintain, or
   89  operate a water or wastewater system in this state and if the
   90  goods or services purchased or leased are used in this state.
   91         Section 3. Present subsections (9) through (12) of section
   92  367.022, Florida Statutes, are redesignated as subsections (10)
   93  through (13), respectively, and a new subsection (9) is added to
   94  that section, to read:
   95         367.022 Exemptions.—The following are not subject to
   96  regulation by the commission as a utility nor are they subject
   97  to the provisions of this chapter, except as expressly provided:
   98         (9) Any person who resells water service to his or her
   99  tenants or to individually metered residents for a fee that does
  100  not exceed the actual purchase price of the water service plus
  101  the actual cost of meter reading and billing, not to exceed 9
  102  percent of the actual cost of water service.
  103         Section 4. Paragraph (c) is added to subsection (2) of
  104  section 367.081, Florida Statutes, and paragraph (b) of
  105  subsection (4) and subsection (7) of that section are amended,
  106  to read:
  107         367.081 Rates; procedure for fixing and changing.—
  108         (2)
  109         (c) In establishing rates for a utility, upon its own
  110  motion or upon the request of a utility, the commission may
  111  authorize a utility to create a utility reserve fund for
  112  infrastructure repair and replacement for a utility for existing
  113  distribution and collection infrastructure that is nearing the
  114  end of its useful life or is detrimental to water quality or
  115  reliability of service, to be funded by a portion of the rates
  116  charged by the utility, by a secured escrow account, or through
  117  a letter of credit. The commission shall adopt rules to govern
  118  the implementation, management, and use of the fund, including,
  119  but not limited to, rules related to expenses for which the fund
  120  may be used, segregation of reserve account funds, requirements
  121  for a capital improvement plan, and requirements for commission
  122  authorization before disbursements are made from the fund.
  123         (4)
  124         (b) The approved rates of any utility which receives all or
  125  any portion of its utility service from a governmental authority
  126  or from a water or wastewater utility regulated by the
  127  commission and which redistributes that service to its utility
  128  customers shall be automatically increased or decreased without
  129  hearing, upon verified notice to the commission 45 days before
  130  prior to its implementation of the increase or decrease that the
  131  utility’s costs for any specified expense item the rates charged
  132  by the governmental authority or other utility have changed. The
  133  approved rates of any utility which is subject to an increase or
  134  decrease in the rates or fees that it is charged for electric
  135  power, the amount of ad valorem taxes assessed against its used
  136  and useful property, the fees charged by the Department of
  137  Environmental Protection in connection with the National
  138  Pollutant Discharge Elimination System Program, or the
  139  regulatory assessment fees imposed upon it by the commission
  140  shall be increased or decreased by the utility, without action
  141  by the commission, upon verified notice to the commission 45
  142  days prior to its implementation of the increase or decrease
  143  that the rates charged by the supplier of the electric power or
  144  the taxes imposed by the governmental authority, or the
  145  regulatory assessment fees imposed upon it by the commission
  146  have changed. The new rates authorized shall reflect the amount
  147  of the change of the ad valorem taxes or rates imposed upon the
  148  utility by the governmental authority, other utility, or
  149  supplier of electric power, or the regulatory assessment fees
  150  imposed upon it by the commission. The approved rates of any
  151  utility shall be automatically increased, without hearing, upon
  152  verified notice to the commission 45 days prior to
  153  implementation of the increase that costs have been incurred for
  154  water quality or wastewater quality testing required by the
  155  Department of Environmental Protection.
  156         1. The new rates authorized shall reflect, on an amortized
  157  or annual basis, as appropriate, the cost of, or the amount of
  158  change in the cost of, the specified expense item, required
  159  water quality or wastewater quality testing performed by
  160  laboratories approved by the Department of Environmental
  161  Protection for that purpose. The new rates, however, shall not
  162  reflect the costs of any specified expense item any required
  163  water quality or wastewater quality testing already included in
  164  a utility’s rates. Specified expense items that are eligible for
  165  automatic increase or decrease of a utility’s rates include, but
  166  are not limited to:
  167         a. The rates charged by a governmental authority or other
  168  water or wastewater utility regulated by the commission which
  169  provides utility service to the utility.
  170         b. The rates or fees that the utility is charged for
  171  electric power.
  172         c. The amount of ad valorem taxes assessed against the
  173  utility’s used and useful property.
  174         d. The fees charged by the Department of Environmental
  175  Protection in connection with the National Pollutant Discharge
  176  Elimination System Program.
  177         e. The regulatory assessment fees imposed upon the utility
  178  by the commission.
  179         f. Costs incurred for water quality or wastewater quality
  180  testing required by the Department of Environmental Protection.
  181         g. The fees charged for wastewater biosolids disposal.
  182         h. Costs incurred for any tank inspection required by the
  183  Department of Environmental Protection or a local governmental
  184  authority.
  185         i. Treatment plant operator and water distribution system
  186  operator license fees required by the Department of
  187  Environmental Protection or a local governmental authority.
  188         j. Water or wastewater operating permit fees charged by the
  189  Department of Environmental Protection or a local governmental
  190  authority.
  191         k. Consumptive or water use permit fees charged by a water
  192  management district.
  193         2. A utility may not use this procedure to increase its
  194  rates as a result of an increase in a specific expense item
  195  which occurred water quality or wastewater quality testing or an
  196  increase in the cost of purchased water services, sewer
  197  services, or electric power or in assessed ad valorem taxes,
  198  which increase was initiated more than 12 months before the
  199  filing by the utility.
  200         3. The commission may establish by rule additional specific
  201  expense items that are outside the control of the utility and
  202  have been imposed upon the utility by a federal, state, or local
  203  law, rule, order, or notice. If the commission establishes such
  204  a rule, the commission shall review the rule at least once every
  205  5 years and determine whether each expense item should continue
  206  to be cause for an automatic increase or decrease and whether
  207  additional items should be included.
  208         4. The provisions of This subsection does do not prevent a
  209  utility from seeking a change in rates pursuant to the
  210  provisions of subsection (2).
  211         (7) The commission shall determine the reasonableness of
  212  rate case expenses and shall disallow all rate case expenses
  213  determined to be unreasonable. No rate case expense determined
  214  to be unreasonable shall be paid by a consumer.
  215         (a) In determining the reasonable level of rate case
  216  expense, the commission shall consider the following criteria
  217  and disallow a rate case expense based upon:
  218         1. The extent to which a utility has utilized or failed to
  219  utilize the provisions of paragraph (4)(a) or paragraph (4)(b).
  220         2. Whether the customers have received a material benefit
  221  as a result of the rate case.
  222         3. The amount of time between each rate case.
  223         4. The extent to which a utility has used automatic
  224  increases or decreases authorized under subsection (4).
  225         5. The extent to which, at the time of the initial filing,
  226  the utility filed complete documentation as required by
  227  commission rule, including, but not limited to, minimum filing
  228  requirements.
  229         6. Whether the utility’s rate case filing seeks
  230  preferential benefits to shareholders, owners, or nonregulated
  231  affiliates.
  232         7. The proportion of any rate increase approved by the
  233  commission as compared to the amount initially requested by the
  234  utility.
  235         8. The amount of overall rate case expense incurred and
  236  requested as compared to the amount of rate increase approved by
  237  the commission.
  238         9. The quality of service provided by the utility; and
  239         10. Such other criteria as it may establish by rule.
  240         (b) The commission shall make specific findings of fact,
  241  supported by competent, substantial evidence, for each criterion
  242  and the extent to which each criterion benefits the customer.
  243  The commission may allocate the benefits between the customers
  244  and the shareholders, owners, or affiliates accordingly.
  245         Section 5. Subsection (3) of section 367.0814, Florida
  246  Statutes, is amended to read:
  247         367.0814 Staff assistance in changing rates and charges;
  248  interim rates.—
  249         (3) The provisions of s. 367.081(1), (2)(a), and (3) shall
  250  apply in determining the utility’s rates and charges. However,
  251  the commission may not award rate case expenses to recover
  252  attorney fees or fees of other outside consultants who are
  253  engaged for the purpose of preparing or filing the case if a
  254  utility receives staff assistance in changing rates and charges
  255  pursuant to this section, unless the Office of Public Counsel or
  256  interested parties have intervened. The commission may award
  257  rate case expenses for attorney fees or fees of other outside
  258  consultants if such fees are incurred for the purpose of
  259  providing consulting or legal services to the utility after the
  260  initial staff report is made available to customers and the
  261  utility. If there is a protest or an appeal by a party other
  262  than the utility, the commission may award rate case expenses to
  263  the utility for attorney fees or fees of other outside
  264  consultants for costs incurred after the protest or appeal. By
  265  December 31, 2016, the commission must adopt rules to administer
  266  this subsection.
  267         Section 6. Section 367.0816, Florida Statutes, is amended
  268  to read:
  269         367.0816 Recovery of rate case expenses.—
  270         (1) The amount of rate case expense determined by the
  271  commission pursuant to the provisions of this chapter to be
  272  recovered through a public utilities rate shall be apportioned
  273  for recovery over a period of 4 years. At the conclusion of the
  274  recovery period, the rate of the public utility shall be reduced
  275  immediately by the amount of rate case expense previously
  276  included in rates.
  277         (2) A utility may not recover the 4-year amortized rate
  278  case expense for more than one rate case at any given time. If
  279  the commission approves and a utility implements a rate change
  280  from a subsequent rate case pursuant to this section, any
  281  unamortized rate case expense for a prior rate case must be
  282  discontinued. The unamortized portion of rate case expense for a
  283  prior rate case must be removed from rates before the
  284  implementation of an additional amortized rate case expense for
  285  the most recent rate proceeding.
  286         Section 7. Subsection (3) is added to section 367.111,
  287  Florida Statutes, to read:
  288         367.111 Service.—
  289         (3) The commission may, on its own motion or based on
  290  complaints of customers of a water utility subject to its
  291  jurisdiction, review water quality as it pertains to secondary
  292  drinking water standards established by the Department of
  293  Environmental Protection. The commission may, on its own motion
  294  or based on complaints of customers of a wastewater utility
  295  subject to its jurisdiction, review wastewater service as it
  296  pertains to odor, noise, aerosol drift, or lighting.
  297         Section 8. Section 367.165, Florida Statutes, is amended to
  298  read:
  299         367.165 Abandonment.—It is the intent of the Legislature
  300  that water or wastewater service to the customers of a utility
  301  not be interrupted by the abandonment or placement into
  302  receivership of the utility. Notwithstanding s. 367.171, this
  303  section applies to each county. To that end:
  304         (1) A No person, lessee, trustee, or receiver owning,
  305  operating, managing, or controlling a utility may not shall
  306  abandon the utility without giving 60 days’ notice to the county
  307  or counties in which the utility is located and to the
  308  commission. Anyone who violates the provisions of this
  309  subsection is guilty of a misdemeanor of the first degree,
  310  punishable as provided in s. 775.082 or s. 775.083. Each day of
  311  such abandonment constitutes a separate offense. In addition,
  312  such act is a violation of this chapter, and the commission may
  313  impose upon the utility a penalty for each such offense of not
  314  more than $5,000 or may amend, suspend, or revoke its
  315  certificate of authorization; each day of such abandonment
  316  without prior notice constitutes a separate offense.
  317         (2) After receiving such notice, the county, or counties
  318  acting jointly if more than one county is affected, shall
  319  petition the circuit court of the judicial circuit in which such
  320  utility is domiciled to appoint a receiver, which may be the
  321  governing body of a political subdivision or any other person
  322  deemed appropriate. The receiver shall operate the utility from
  323  the date of abandonment until such time as the receiver disposes
  324  of the property of the utility in a manner designed to continue
  325  the efficient and effective operation of utility service.
  326         (3) The notification to the commission under subsection (1)
  327  is sufficient cause for revocation, suspension, or amendment of
  328  the certificate of authorization of the utility as of the date
  329  of abandonment. The receiver operating such utility shall be
  330  considered to hold a temporary authorization from the
  331  commission, and the approved rates of the utility shall be
  332  deemed to be the interim rates of the receiver until modified by
  333  the commission.
  334         Section 9. Subsection (3) of section 403.8532, Florida
  335  Statutes, is amended to read:
  336         403.8532 Drinking water state revolving loan fund; use;
  337  rules.—
  338         (3) The department may make, or request that the
  339  corporation make, loans, grants, and deposits to community water
  340  systems; for-profit, privately owned, or investor-owned water
  341  systems;, nonprofit, transient, noncommunity water systems;, and
  342  nonprofit, nontransient, noncommunity water systems to assist
  343  them in planning, designing, and constructing public water
  344  systems, unless such public water systems are for-profit
  345  privately owned or investor-owned systems that regularly serve
  346  1,500 service connections or more within a single certified or
  347  franchised area. However, a for-profit privately owned or
  348  investor-owned public water system that regularly serves 1,500
  349  service connections or more within a single certified or
  350  franchised area may qualify for a loan only if the proposed
  351  project will result in the consolidation of two or more public
  352  water systems. The department may provide loan guarantees,
  353  purchase loan insurance, and refinance local debt through the
  354  issue of new loans for projects approved by the department.
  355  Public water systems may borrow funds made available pursuant to
  356  this section and may pledge any revenues or other adequate
  357  security available to them to repay any funds borrowed.
  358         (a) The department shall administer loans so that amounts
  359  credited to the Drinking Water Revolving Loan Trust Fund in any
  360  fiscal year are reserved for the following purposes:
  361         1. At least 15 percent for qualifying small public water
  362  systems.
  363         2. Up to 15 percent for qualifying financially
  364  disadvantaged communities.
  365         (b) If an insufficient number of the projects for which
  366  funds are reserved under this subsection have been submitted to
  367  the department at the time the funding priority list authorized
  368  under this section is adopted, the reservation of these funds no
  369  longer applies. The department may award the unreserved funds as
  370  otherwise provided in this section.
  371         Section 10. This act shall take effect July 1, 2016.