Bill Text: IN HB1307 | 2013 | Regular Session | Engrossed
Bill Title: Municipally owned utilities.
Spectrum: Partisan Bill (Republican 4-0)
Status: (Passed) 2013-05-13 - Public Law 270 [HB1307 Detail]
Download: Indiana-2013-HB1307-Engrossed.html
Citations Affected: IC 8-1; IC 8-1.5.
Synopsis: Municipally owned utilities. Provides that a municipality or
a municipally owned utility may not purchase the property of a utility
company that provides water or sewer service (including a regional
sewer and water district) unless the utility regulatory commission
(IURC): (1) finds that the utility company has continued violations of
the IURC's orders or the law regulating the utility company after the
IURC has ordered compliance; or (2) finds after a review that the utility
company has severe deficiencies that the utility company has failed to
remedy. Provides that a utility may petition a court to stay proceedings
of a municipality or a municipally owned utility to acquire the utility.
Establishes a procedure for extraterritorial customers of certain
municipally owned utilities to petition the IURC for review of rates and
charges.
Effective: Upon passage; July 1, 2013.
(SENATE SPONSOR _ MERRITT)
January 23, 2013, read first time and referred to Committee on Utilities and Energy.
February 7, 2013, amended, reported _ Do Pass.
February 11, 2013, read second time, ordered engrossed.
February 12, 2013, engrossed. Read third time, passed. Yeas 70, nays 28.
February 25, 2013, read first time and referred to Committee on Utilities.
April 1, 2013, amended, reported favorably _ Do Pass.
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in
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Conflict reconciliation: Text in a statute in this style type or
A BILL FOR AN ACT to amend the Indiana Code concerning
utilities.
(1) the license, franchise, or permit may be revoked by the commission for cause; or
(2) except as provided in IC 8-1-30-6, the municipality may purchase or condemn the property as provided in IC 8-1.5-2, IC 36-9-23, or IC 36-9-25, as applicable.
(b) If this chapter should be repealed or annulled, then all such
indeterminate franchises, permits, or grants shall cease and become
inoperative, and in place thereof such utility shall be reinstated in the
possession and enjoyment of the license, permit, or franchise
surrendered by such utility at the time of the issue of the indeterminate
franchise, permit, or grant; but in no event shall such reinstated license,
permit, or franchise be terminated within a less period than five (5)
years from the date of the repeal or annulment of this chapter.
(1) the commission makes a finding under IC 8-1-30-4; and
(2) the procedures and requirements of IC 8-1-30 have been complied with and satisfied.
(b) Any public utility accepting or operating under any indeterminate license, permit, or franchise granted after April 30, 1913, shall by acceptance of any such indeterminate license, permit, or franchise be deemed to have consented to a future purchase or condemnation of its property including property located in contiguous territory within six (6) miles of the corporate limits of such municipality by the municipality in which such utility is located, at the value and under the terms and conditions as provided in IC 8-1.5-2, IC 36-9-23, or IC 36-9-25, as applicable, and shall thereby be deemed to have waived the right of requiring the necessity of such taking to be established by the judgment of a court, and to have waived all other remedies and rights relative to condemnation, except such rights and remedies as are provided in IC 8-1.5-2, IC 36-9-23, or IC 36-9-25, as applicable, and shall have been deemed to have consented to the revocation of its license, permit, or franchise by the commission for cause.
(1) the commission has made all necessary findings under section 4 of this chapter; and
(2) the procedures and requirements of this chapter have been complied with and satisfied.
UPON PASSAGE]: Sec. 7. (a) A certificate of public convenience and
necessity is not required as a condition precedent to the owning,
leasing, acquisition, construction, or operation of a utility by a
municipality, even if there is a public utility engaged in a similar
service. The acquisition of electric utility property and assignment of
a municipal electric utility's service area are, however, subject to the
provisions of IC 8-1-2.3 and IC 8-1-2-95.1.
(b) Subsection (c) applies to the following:
(1) A municipality that wants to acquire an existing utility,
including by purchase or condemnation under IC 8-1-2-92,
IC 8-1-2-93, or otherwise.
(2) A municipality that wants to own and operate a utility in a
location where, or contiguous to where, there is a public utility
engaged in a similar service:
(1) (A) under a franchise granted by the municipality; or
(2) (B) under an indeterminate permit as defined in IC 8-1-2-1.
However, subsection (c) does not apply to a municipality that owns
and operates a municipally owned utility as of July 1, 2012.
(c) Before a municipality described in subsection (b) may after
a hearing as provided by section 10 of this chapter, declare by
ordinance that public convenience and necessity require the
establishment of a municipally owned utility, the municipality shall
conduct a hearing under section 10 of this chapter.
(1) the acquisition of electric utility property or the assignment of
service areas covered by IC 8-1-2.3 and IC 8-1-2-95.1; or
(2) the acquisition of water or sewer utility property unless
the requirements of IC 8-1-30 are satisfied.
(b) The court shall stay further action by the municipality under the ordinance adopted under section 7 of this chapter pending the court's determination.
(c) The court shall try the cause without delay and without a jury and review the evidence de novo.
(b) As used in this section:
(1) "utility"; and
(2) "works";
have the meaning set forth for those terms in section 8.1 of this chapter.
(c) This subsection applies if a municipal legislative body adopts an ordinance under section 8.1 of this chapter or under IC 36-9-23-26 that is in effect on March 31, 2012, and that imposes rates and charges on users of the works for service to property located outside the corporate boundaries of the municipality that exceed by more than fifteen percent (15%), but not more than fifty percent (50%), the rates and charges imposed on users of the works for service to property located within the corporate boundaries of the municipality. Not later than September 30, 2012, the municipality may petition the commission to approve the percentage difference between rates and charges established in the ordinance for property within and property outside the corporate boundaries. In the petition, the municipality shall set forth the following:
(1) The date on which the ordinance took effect.
(2) The percentage difference between rates and charges imposed on users of the works for service to property located outside the corporate boundaries of the municipality and to property located
within the corporate boundaries of the municipality.
(3) Whether the works that is the subject of the ordinance is a
water utility works, a wastewater utility works, or both a water
and wastewater utility works.
If the commission determines that a petition filed under this subsection
satisfies the requirements of this subsection, the commission shall
approve the petition, including the percentage difference between rates
and charges described in subdivision (2). If the commission determines
that a petition filed under this subsection does not satisfy the
requirements of this subsection, the commission shall disapprove the
petition. However, if the percentage difference imposed in the
ordinance was the subject of an objecting petition that was filed under
section 8.2 of this chapter or under IC 36-9-23-26.1 and sustained on
final judgment or appeal, as applicable, by a court, the percentage
difference is considered approved without the filing of a petition under
this subsection.
(d) If a municipality that files, or that is exempt from filing, a
petition under subsection (c) adopts an ordinance under section 8.1 of
this chapter after March 31, 2012, that imposes rates and charges on
users of the works for service to property located outside the corporate
boundaries of the municipality that exceed the rates and charges
imposed on users of the works for service to property located within the
corporate boundaries of the municipality by more than the sum of the
percentage difference approved or considered approved by the
commission under subsection (c) plus fifteen percent (15%), either or
both of the following may petition the commission to review and
adjust, if necessary, the rates and charges imposed on users of the
works for service to property located outside the corporate boundaries
of the municipality:
(1) The municipality.
(2) The lesser of:
(A) ten percent (10%) of all; or
(B) twenty-five (25);
users of the works whose property is located outside the corporate
boundaries of the municipality.
A petition filed under this subsection must be filed not more than
fourteen (14) days after the date on which the ordinance referred to in
this subsection is adopted. A petition may not be filed under this
subsection if a petition has already been filed under section 8.2 of this
chapter appealing the same rates and charges.
(e) If a municipal legislative body, other than a municipal legislative
body described in subsection (c), adopts an ordinance under section 8.1
of this chapter or under IC 36-9-23-26 after March 31, 2012, that
imposes rates and charges on users of the works for service to property
located outside the corporate boundaries of the municipality that
exceed the rates and charges imposed on users of the works for service
to property located within the corporate boundaries of the municipality
by more than fifteen percent (15%), either or both of the following may
petition the commission to review and adjust, if necessary, the rates and
charges imposed on users of the works for service to property located
outside the corporate boundaries of the municipality:
(1) The municipality.
(2) The lesser of:
(A) ten percent (10%) of all; or
(B) twenty-five (25);
users of the works whose property is located outside the corporate
boundaries of the municipality.
A petition must be filed not more than fourteen (14) days after the date
on which the ordinance is adopted. A petition may not be filed under
this subsection if a petition has already been filed under section 8.2 of
this chapter or under IC 36-9-23-26.1 appealing the same rates and
charges.
(f) The filing of a petition with the commission under subsection (d)
or (e) stays the ordinance adopted under section 8.1 of this chapter or
under IC 36-9-23-26. The rates and charges in effect before the
adoption of the ordinance remain in effect until:
(1) the commission approves or disapproves the petition, or the
petition is dismissed under subsection (g); and
(2) if applicable, the commission adjusts the rates and charges
imposed by the ordinance on users of the works whose property
is located outside the corporate boundaries of the municipality.
(g) The commission shall prescribe the form and manner in which
a petition must be filed under subsection (d), or (e), or (m). The burden
of proof to demonstrate that the proposed rates and charges are
nondiscriminatory, reasonable, and just is on the municipality,
regardless of who petitions the commission. If the commission fails to
approve or disapprove a petition within one hundred twenty (120) days
after the petition is filed in the form and manner prescribed by the
commission, the petition is dismissed, and the ordinance adopted under
section 8.1 of this chapter or under IC 36-9-23-26 takes or remains in
effect, as applicable. A petition is automatically disapproved if the
petitioner has filed a petition under section 8.2 of this chapter or under
IC 36-9-23-26.1 with respect to the same rate ordinance.
(h) For purposes of determining whether the percentage difference
between rates and charges imposed on users of the works for service to
property located outside the corporate boundaries of the municipality
and the rates and charges imposed on users of the works for service to
property located within the corporate boundaries of the municipality is
nondiscriminatory, reasonable, and just under section 8 of this chapter,
the commission:
(1) may consider the benefit and expense to all users of the works
of extending the works outside the corporate boundaries of the
municipality; and
(2) may not consider any connection fees or capital surcharges
imposed on users of the works for service to property that is
located outside the corporate boundaries of the municipality that
are specifically designated to pay for the costs associated with
main extensions to the users of the works.
(i) If the commission determines that the percentage difference
between the rates and charges imposed on users of the works for
service to property located outside the corporate boundaries of the
municipality and the rates and charges imposed on users of the works
for service to property located within the corporate boundaries of the
municipality is not nondiscriminatory, reasonable, and just under
section 8 of this chapter, the commission may:
(1) establish nondiscriminatory, reasonable, and just rates and
charges for users of the works for service to property located
outside the corporate boundaries of the municipality; and
(2) order the municipal legislative body to adopt an ordinance
imposing the nondiscriminatory, reasonable, and just rates and
charges.
However, with respect to rates and charges imposed in an ordinance
that was the subject of an objecting petition filed under section 8.2 of
this chapter or under IC 36-9-23-26.1 and sustained on final judgment
or appeal, as applicable, by a court, the commission may not establish
rates and charges such that the percentage difference between rates and
charges established by the commission is less than the percentage
difference between rates and charges imposed in the ordinance.
(j) This section does not:
(1) authorize the commission to review or revise rates and charges
imposed on users of the works for service to property located
within the corporate boundaries of the municipality; or
(2) otherwise return or subject a utility to the jurisdiction of the
commission for the approval of rates and charges.
(k) The commission may adopt rules under IC 4-22-2 to implement
this section.
(l) The commission may not impose a fee with respect to proceedings under this section.
(m) This subsection applies if a municipal legislative body, other than a municipal legislative body described in subsection (c), adopts an ordinance under section 8.1 of this chapter or under IC 36-9-23-26 that is in effect on March 31, 2012, and that imposes rates and charges on users of the works for service to property located outside the corporate boundaries of the municipality that exceed by more than fifty percent (50%) the rates and charges imposed on users of the works for service to property located anywhere within the corporate boundaries of the municipality. Not later than December 31, 2013, either or both of the following may petition the commission to review and adjust, if necessary, the rates and charges imposed on users of the works for service to property located outside the corporate boundaries of the municipality:
(1) The municipality.
(2) Subject to subsection (o), the lesser of:
(A) ten percent (10%) of all; or
(B) twenty-five (25);
users of the works whose property is located outside the corporate boundaries of the municipality.
A petition filed by a group of users under subdivision (2) must be accompanied by a written verification described in subsection (o)(2).
(n) The rates and charges established in an ordinance described in subsection (m) remain in effect until:
(1) the commission approves or disapproves the petition, or the petition is dismissed under subsection (g); and
(2) if applicable, the commission adjusts the rates and charges imposed by the ordinance on users of the works whose property is located outside the corporate boundaries of the municipality.
(o) Before a group of users described in subsection (m)(2) may petition the commission under subsection (m), the following conditions must be satisfied:
(1) At least twenty (20) days before filing a petition with the commission under subsection (m), the group of users must file the petition with the municipal legislative body.
(2) Not more than ten (10) days after the petition is filed under subdivision (1), the municipal legislative body must issue written verification to the group of users that the rates and charges imposed on the users exceed by more than fifty
percent (50%) the rates and charges imposed on users of the
works whose property is located within the corporate
boundaries of the municipality.
