HB177INTRODUCED
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WV31EE-1
By Representatives Carns, Faulkner
RFD: Commerce and Small Business
First Read: 21-Mar-23
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5 WV31EE-1 03/21/2023 ZAK (L)cr 2023-805
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SYNOPSIS:
Existing law specifies the composition, manner
of appointment, and length of terms of members of
municipal water works boards that, on January 1, 2015,
or thereafter serves customers or has assets in four or
more counties other than the county where the
authorizing municipality is located.
This bill would further provide for the
composition, manner of appointment, and length of terms
of the members of these municipal water works boards.
This bill would provide certain qualifications
for board members as well as place limits on the
employment of a director by the board after his or her
term.
This bill would provide for the conversion of
these municipal water works boards into regional
boards.
Existing law also provides a procedure for and
circumstances under which these water works boards may
amend their articles of incorporation.
This bill would further provide for the amending
of these boards' articles of incorporation.
This bill would place these boards under the
ethics laws of Alabama and provide for yearly training
on the subject.
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This bill also would require these boards to
prepare certain financial records to be made available
to the public.
A BILL
TO BE ENTITLED
AN ACT
Relating to municipal water works boards; to amend
Section 11-50-300, Code of Alabama 1975, and to add Sections
11-50-300.1, 11-50-300.2, 11-50-300.3, 11-50-300.4,
11-50-300.5, 11-50-300.6, 11-50-300.7, and 11-50-300.8 to the
Code of Alabama 1975, to further provide for the composition,
manner of appointment, and length of terms of members of
certain municipal water works boards; to provide
qualifications for and place limits on the employment of
directors; to provide for conversion of these boards to
regional boards; to further provide for these boards to amend
their articles of incorporation; to subject these boards to
the ethics laws of Alabama and require training on the matter;
to require these boards to produce certain financial records;
and to repeal Sections 11-50-301, 11-50-302, 11-50-303, and
11-50-304, Code of Alabama 1975, relating to certain municipal
water works boards.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 11-50-300, Code of Alabama 1975, is
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amended to read as follows:
"§11-50-300
(a) Notwithstanding any other provisions of law, this
division shall apply to any municipal water works board
authorized to be incorporated by a municipality which, on
January 1, 2015, either served water customers or has assets
in four or more counties other than the county where the
authorizing municipality is principally located, or after
January 1, 2015, either serves water customers or has assets
in four or more counties other than the county where the
authorizing municipality is located, and the organization and
operation of the board, shall be subject to this division.
(b) The powers or rights provided in this division for
a regional board are cumulative and independent of any powers
or rights provided in any other provisions of the enabling
statute. Except as expressly set forth herein, neither this
division nor anything contained in this division shall be
construed as a restriction or limitation upon any power,
right, or remedy which any board may have pursuant to the
enabling statute.
(c) To the extent this division conflicts with any
other provision in the enabling statute this division shall
control.
(d) This division does not apply to a municipal
utilities board which operates a water works system and an
electric distribution system nor to an entity which serves
only wholesale water customers."
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Section 2. Sections 11-50-300.1, 11-50-300.2,
11-50-300.3, 11-50-300.4, 11-50-300.5, 11-50-300.6,
11-50-300.7, and 11-50-300.8 are added to the Code of Alabama
1975 to read as follows:
§11-50-300.1
For the purposes of this division, the following terms
have the following meanings:
(1) AUTHORIZING MUNICIPALITY. A municipality that
authorized the organization of a board that is converted to a
regional board pursuant to this division.
(2) BOARD. A board organized pursuant to the enabling
statute.
(3) CONVERSION DATE. The date upon which a board is
converted to a regional board pursuant to this division.
(4) ENABLING STATUTE. Divisions 1 through 3 of Article
8 of Chapter 50 of Title 11 of the Code of Alabama 1975.
(5) ENGINEERING BACKGROUND. Capability as evidenced by
a degree from an accredited school of engineering or
experience in an engineering discipline.
(6) ETHICS ACT. Chapter 25 of Title 36 of the Code of
Alabama 1975.
(7) FINANCIAL BACKGROUND. Capability evidenced by a
successful career in banking or other field in which the
candidate under consideration has demonstrated sound financial
management skills in connection with long-term financing.
(8) REGIONAL BOARD. A board that meets the requirements
of Section 11-50-300(a).
(9) SPONSORING MAYOR. The mayor of the authorizing
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municipality of a board that has been converted to a regional
board pursuant to this division.
§11-50-300.2
(a) On the effective date of the act adding this
section, a board that meets the requirements of Section
11-50-300(a) as of the date of filing the bill adding this
section shall be converted to a regional board.
(b) A board that meets the requirements of Section
11-50-300(a) after the effective date of the act adding this
section shall be converted to a regional board 30 days after
the board meets the requirements.
(c) If the certificate of incorporation or bylaws of a
regional board conflicts with this division, this division
shall control.
§11-50-300.3
(a) The term of the existing directors of the board
shall terminate on the conversion date, notwithstanding the
term or terms for which the existing directors of the board
were appointed or elected. The term of office for directors
appointed by the Governor or the sponsoring mayor shall begin
on the conversion date, or if any such appointment is made
after the conversion date, on the date specified in the
appointment.
(b) Appointment of a director by the Governor or the
sponsoring mayor shall be evidenced by an order acknowledged
before an officer authorized by the laws of this state to take
acknowledgment of deeds and shall be filed in the office of
the judge of probate where the board's original certificate of
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incorporation was filed.
(c) The board of directors of a regional board shall be
reorganized and comprised as follows:
(l) The board of directors shall consist of seven
members. Four of the members shall be appointed by the
sponsoring mayor and three of the members shall be appointed
by the Governor.
(2) All members of the board of directors shall be
residents of a county in which the regional board serves
customers.
(3) All members of the board of directors must be well
experienced in business affairs of the complexity of the
operation of a water or sewer system.
(4) Elected public officials may be appointed as
directors.
(5) A person who has had a business relationship with
the regional board in the two-year period prior to
appointment, or who was employed by a firm that has had a
business relationship with the regional board in the two-year
period prior to appointment, shall not be appointed as a
director.
(6) One member appointed by the sponsoring mayor must
have an engineering background and one member appointed by the
sponsoring mayor must have a financial background. One member
appointed by the Governor must have an engineering background
and one member appointed by the Governor must have a financial
background.
(d) The Governor or sponsoring mayor may exercise his
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or her discretion in determining whether a person appointed as
a director meets the qualifications provided in this section.
Any person appointed as a director shall be presumed qualified
unless and until a court of competent jurisdiction makes a
final determination, from which no further appeal is
available, that such person is not qualified as a director.
The official acts of any person appointed as a director shall
be valid and binding as official acts of a director for all
purposes, whether or not that person is subsequently
determined by a court of competent jurisdiction to be
qualified or not.
(e) Members of the board of directors shall serve for a
term of five years. A person appointed to fill a vacancy on
the board shall serve the remainder of the term of the vacant
seat. All board members shall continue to serve until a
successor is appointed and qualified. The members of the board
of directors shall be appointed to hold office for staggered
terms. Of the first four members appointed to the regional
board by the sponsoring mayor, the first term of office of one
member shall be one year, of another two members shall be
three years, and of the fourth member shall be five years, as
shall be designated at the time of their appointment, and
thereafter the term of office of each member shall be five
years. Of the first three members appointed to the regional
board by the Governor, the first term of office of one member
shall be one year, of another member shall be three years, and
of the third member shall be five years, as shall be
designated at the time of their appointment, and thereafter
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the term of office of each member shall be five years.
(f) Members may not serve for more than two full terms.
In addition to the two full terms, members may serve one
additional partial term in the event a member is first
appointed to a term that terminates less than five years after
the date of his or her appointment. Persons who have served
two or more terms on the governing body of a board prior to
its conversion to a regional board may not serve as a member.
(g) Any director may be removed for good cause by the
public official who appointed the director if the public
official conducts a hearing that gives the director an
opportunity to address the cause or causes for removal.
(h) Each member of the board of directors shall serve
without compensation, but may be reimbursed for necessary
expenses actually incurred by him or her in connection with
the performance of his or her duties.
(i) A majority of directors then serving shall
constitute a quorum for the transaction of business of the
board of directors, and any meeting of the board of directors
may be adjourned from time to time by a majority of the
members present. No vacancy in the membership of the board of
directors shall impair the right of a quorum to exercise all
the powers and perform all the duties of the board of
directors.
(j) The board of directors shall adopt and maintain
bylaws, not inconsistent with this division, for the
regulation and conduct of its affairs and the operation of the
regional board. The bylaws of the board of directors may
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provide for such committees as the board of directors deems
necessary or desirable to make recommendations to the full
board of directors.
§11-50-300.4
(a) A regional board shall amend its certificate of
incorporation after the conversion date to acknowledge that
the regional board has met the requirements of Section
11-50-300(a), change its name to reflect the regional nature
of such regional board, and make any other amendment that is
not inconsistent with this division or the enabling statute.
(b) An amendment of the regional board's certificate of
incorporation shall be made in the following manner:
(1) The board of directors of the regional board shall
first adopt a resolution setting forth in full the proposed
amendment to the certificate of incorporation.
(2) Consent of the Governor and the sponsoring mayor
shall be required for amendment of the certificate of
incorporation. Consent of the Governor and the sponsoring
mayor shall be evidenced by an order acknowledged before an
officer authorized by the laws of this state to take
acknowledgment of deeds.
(3) The amendment shall recite the adoption of the
resolution by the board of directors and consent by the
Governor and the sponsoring mayor.
(4) After the amendment is executed by the chair or
vice-chair of the regional board and acknowledged before an
officer authorized by the laws of this state to take
acknowledgment of deeds, the amendment and the consents
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executed by the Governor and sponsoring mayor shall be filed
in the office of the judge of probate where the board's
original certificate of incorporation was filed. The amendment
shall be effective upon filing.
§11-50-300.5
(a) Directors and employees of a regional board shall
be subject to the provisions of the Ethics Act.
(b) Each year members of the board of directors shall
participate in 10 hours of training on the duties and best
practices of directors of organizations engaged in the
operation of water or sewer systems, the obligations of
directors under the Ethics Act, and the reporting requirements
under this division.
§11-50-300.6
(a) A regional board shall prepare customary and
appropriate financial statements and other reports, including:
(1) An annual budget in monthly form.
(2) Monthly financial statements with comparison to
budget.
(3) Annual financial statements with comparison to
budget.
(4) Annual financial statements audited by an
independent auditor.
(5) A five-year operating plan with annual revisions
and appropriate comparisons of actual to plan.
(6) A 10-year capital plan.
(b) All statements shall be accompanied by appropriate
operating statistics, actual and projected, and the five-year
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operating plan and 10-year capital plan shall be reviewed and
commented upon by a nationally recognized firm of consulting
engineers with expertise in the design, construction, repair,
and operation of water and sewer systems and with no conflicts
in reviewing the work.
(c) The reports required by this section shall be made
available to the public on a website maintained by the
regional board.
§11-50-300.7
For a period of 24 months after a person ceases to be a
director of a regional board, that person may not be employed
by the regional board or by any firm that performs work for
the regional board.
§11-50-300.8
A regional board shall employ a chief executive officer
with full authority to manage the operations of the regional
board, subject to policy directives and other governance
decisions adopted by the board of directors. Employees of a
regional board shall report to the chief executive officer and
may not be ordered or directed by members of the board of
directors. Employment contracts, construction contracts,
consulting contracts, engineering contracts, and other
contracts between the regional board and other persons shall
be recommended by the chief executive officer, except for the
employment contract of the chief executive officer, which
shall be recommended by the board of directors.
Section 3. Sections 11-50-301, 11-50-302, 11-50-303,
and 11-50-304, Code of Alabama 1975, relating to certain
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municipal water works boards, are repealed.
Section 4. This act shall become effective immediately
following its passage and approval by the Governor, or its
otherwise becoming law.
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