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Alabama House Bill HB177

Alabama 2023 Regular Session

Alabama House Bill HB177 Compare Versions

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11 HB177INTRODUCED
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33 WV31EE-1
44 By Representatives Carns, Faulkner
55 RFD: Commerce and Small Business
66 First Read: 21-Mar-23
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1111 5 WV31EE-1 03/21/2023 ZAK (L)cr 2023-805
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1313 SYNOPSIS:
1414 Existing law specifies the composition, manner
1515 of appointment, and length of terms of members of
1616 municipal water works boards that, on January 1, 2015,
1717 or thereafter serves customers or has assets in four or
1818 more counties other than the county where the
1919 authorizing municipality is located.
2020 This bill would further provide for the
2121 composition, manner of appointment, and length of terms
2222 of the members of these municipal water works boards.
2323 This bill would provide certain qualifications
2424 for board members as well as place limits on the
2525 employment of a director by the board after his or her
2626 term.
2727 This bill would provide for the conversion of
2828 these municipal water works boards into regional
2929 boards.
3030 Existing law also provides a procedure for and
3131 circumstances under which these water works boards may
3232 amend their articles of incorporation.
3333 This bill would further provide for the amending
3434 of these boards' articles of incorporation.
3535 This bill would place these boards under the
3636 ethics laws of Alabama and provide for yearly training
3737 on the subject.
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6767 This bill also would require these boards to
6868 prepare certain financial records to be made available
6969 to the public.
7070 A BILL
7171 TO BE ENTITLED
7272 AN ACT
7373 Relating to municipal water works boards; to amend
7474 Section 11-50-300, Code of Alabama 1975, and to add Sections
7575 11-50-300.1, 11-50-300.2, 11-50-300.3, 11-50-300.4,
7676 11-50-300.5, 11-50-300.6, 11-50-300.7, and 11-50-300.8 to the
7777 Code of Alabama 1975, to further provide for the composition,
7878 manner of appointment, and length of terms of members of
7979 certain municipal water works boards; to provide
8080 qualifications for and place limits on the employment of
8181 directors; to provide for conversion of these boards to
8282 regional boards; to further provide for these boards to amend
8383 their articles of incorporation; to subject these boards to
8484 the ethics laws of Alabama and require training on the matter;
8585 to require these boards to produce certain financial records;
8686 and to repeal Sections 11-50-301, 11-50-302, 11-50-303, and
8787 11-50-304, Code of Alabama 1975, relating to certain municipal
8888 water works boards.
8989 BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
9090 Section 1. Section 11-50-300, Code of Alabama 1975, is
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120120 amended to read as follows:
121121 "§11-50-300
122122 (a) Notwithstanding any other provisions of law, this
123123 division shall apply to any municipal water works board
124124 authorized to be incorporated by a municipality which, on
125125 January 1, 2015, either served water customers or has assets
126126 in four or more counties other than the county where the
127127 authorizing municipality is principally located, or after
128128 January 1, 2015, either serves water customers or has assets
129129 in four or more counties other than the county where the
130130 authorizing municipality is located, and the organization and
131131 operation of the board, shall be subject to this division.
132132 (b) The powers or rights provided in this division for
133133 a regional board are cumulative and independent of any powers
134134 or rights provided in any other provisions of the enabling
135135 statute. Except as expressly set forth herein, neither this
136136 division nor anything contained in this division shall be
137137 construed as a restriction or limitation upon any power,
138138 right, or remedy which any board may have pursuant to the
139139 enabling statute.
140140 (c) To the extent this division conflicts with any
141141 other provision in the enabling statute this division shall
142142 control.
143143 (d) This division does not apply to a municipal
144144 utilities board which operates a water works system and an
145145 electric distribution system nor to an entity which serves
146146 only wholesale water customers."
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175175 Section 2. Sections 11-50-300.1, 11-50-300.2,
176176 11-50-300.3, 11-50-300.4, 11-50-300.5, 11-50-300.6,
177177 11-50-300.7, and 11-50-300.8 are added to the Code of Alabama
178178 1975 to read as follows:
179179 §11-50-300.1
180180 For the purposes of this division, the following terms
181181 have the following meanings:
182182 (1) AUTHORIZING MUNICIPALITY. A municipality that
183183 authorized the organization of a board that is converted to a
184184 regional board pursuant to this division.
185185 (2) BOARD. A board organized pursuant to the enabling
186186 statute.
187187 (3) CONVERSION DATE. The date upon which a board is
188188 converted to a regional board pursuant to this division.
189189 (4) ENABLING STATUTE. Divisions 1 through 3 of Article
190190 8 of Chapter 50 of Title 11 of the Code of Alabama 1975.
191191 (5) ENGINEERING BACKGROUND. Capability as evidenced by
192192 a degree from an accredited school of engineering or
193193 experience in an engineering discipline.
194194 (6) ETHICS ACT. Chapter 25 of Title 36 of the Code of
195195 Alabama 1975.
196196 (7) FINANCIAL BACKGROUND. Capability evidenced by a
197197 successful career in banking or other field in which the
198198 candidate under consideration has demonstrated sound financial
199199 management skills in connection with long-term financing.
200200 (8) REGIONAL BOARD. A board that meets the requirements
201201 of Section 11-50-300(a).
202202 (9) SPONSORING MAYOR. The mayor of the authorizing
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232232 municipality of a board that has been converted to a regional
233233 board pursuant to this division.
234234 §11-50-300.2
235235 (a) On the effective date of the act adding this
236236 section, a board that meets the requirements of Section
237237 11-50-300(a) as of the date of filing the bill adding this
238238 section shall be converted to a regional board.
239239 (b) A board that meets the requirements of Section
240240 11-50-300(a) after the effective date of the act adding this
241241 section shall be converted to a regional board 30 days after
242242 the board meets the requirements.
243243 (c) If the certificate of incorporation or bylaws of a
244244 regional board conflicts with this division, this division
245245 shall control.
246246 §11-50-300.3
247247 (a) The term of the existing directors of the board
248248 shall terminate on the conversion date, notwithstanding the
249249 term or terms for which the existing directors of the board
250250 were appointed or elected. The term of office for directors
251251 appointed by the Governor or the sponsoring mayor shall begin
252252 on the conversion date, or if any such appointment is made
253253 after the conversion date, on the date specified in the
254254 appointment.
255255 (b) Appointment of a director by the Governor or the
256256 sponsoring mayor shall be evidenced by an order acknowledged
257257 before an officer authorized by the laws of this state to take
258258 acknowledgment of deeds and shall be filed in the office of
259259 the judge of probate where the board's original certificate of
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289289 incorporation was filed.
290290 (c) The board of directors of a regional board shall be
291291 reorganized and comprised as follows:
292292 (l) The board of directors shall consist of seven
293293 members. Four of the members shall be appointed by the
294294 sponsoring mayor and three of the members shall be appointed
295295 by the Governor.
296296 (2) All members of the board of directors shall be
297297 residents of a county in which the regional board serves
298298 customers.
299299 (3) All members of the board of directors must be well
300300 experienced in business affairs of the complexity of the
301301 operation of a water or sewer system.
302302 (4) Elected public officials may be appointed as
303303 directors.
304304 (5) A person who has had a business relationship with
305305 the regional board in the two-year period prior to
306306 appointment, or who was employed by a firm that has had a
307307 business relationship with the regional board in the two-year
308308 period prior to appointment, shall not be appointed as a
309309 director.
310310 (6) One member appointed by the sponsoring mayor must
311311 have an engineering background and one member appointed by the
312312 sponsoring mayor must have a financial background. One member
313313 appointed by the Governor must have an engineering background
314314 and one member appointed by the Governor must have a financial
315315 background.
316316 (d) The Governor or sponsoring mayor may exercise his
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346346 or her discretion in determining whether a person appointed as
347347 a director meets the qualifications provided in this section.
348348 Any person appointed as a director shall be presumed qualified
349349 unless and until a court of competent jurisdiction makes a
350350 final determination, from which no further appeal is
351351 available, that such person is not qualified as a director.
352352 The official acts of any person appointed as a director shall
353353 be valid and binding as official acts of a director for all
354354 purposes, whether or not that person is subsequently
355355 determined by a court of competent jurisdiction to be
356356 qualified or not.
357357 (e) Members of the board of directors shall serve for a
358358 term of five years. A person appointed to fill a vacancy on
359359 the board shall serve the remainder of the term of the vacant
360360 seat. All board members shall continue to serve until a
361361 successor is appointed and qualified. The members of the board
362362 of directors shall be appointed to hold office for staggered
363363 terms. Of the first four members appointed to the regional
364364 board by the sponsoring mayor, the first term of office of one
365365 member shall be one year, of another two members shall be
366366 three years, and of the fourth member shall be five years, as
367367 shall be designated at the time of their appointment, and
368368 thereafter the term of office of each member shall be five
369369 years. Of the first three members appointed to the regional
370370 board by the Governor, the first term of office of one member
371371 shall be one year, of another member shall be three years, and
372372 of the third member shall be five years, as shall be
373373 designated at the time of their appointment, and thereafter
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403403 the term of office of each member shall be five years.
404404 (f) Members may not serve for more than two full terms.
405405 In addition to the two full terms, members may serve one
406406 additional partial term in the event a member is first
407407 appointed to a term that terminates less than five years after
408408 the date of his or her appointment. Persons who have served
409409 two or more terms on the governing body of a board prior to
410410 its conversion to a regional board may not serve as a member.
411411 (g) Any director may be removed for good cause by the
412412 public official who appointed the director if the public
413413 official conducts a hearing that gives the director an
414414 opportunity to address the cause or causes for removal.
415415 (h) Each member of the board of directors shall serve
416416 without compensation, but may be reimbursed for necessary
417417 expenses actually incurred by him or her in connection with
418418 the performance of his or her duties.
419419 (i) A majority of directors then serving shall
420420 constitute a quorum for the transaction of business of the
421421 board of directors, and any meeting of the board of directors
422422 may be adjourned from time to time by a majority of the
423423 members present. No vacancy in the membership of the board of
424424 directors shall impair the right of a quorum to exercise all
425425 the powers and perform all the duties of the board of
426426 directors.
427427 (j) The board of directors shall adopt and maintain
428428 bylaws, not inconsistent with this division, for the
429429 regulation and conduct of its affairs and the operation of the
430430 regional board. The bylaws of the board of directors may
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460460 provide for such committees as the board of directors deems
461461 necessary or desirable to make recommendations to the full
462462 board of directors.
463463 §11-50-300.4
464464 (a) A regional board shall amend its certificate of
465465 incorporation after the conversion date to acknowledge that
466466 the regional board has met the requirements of Section
467467 11-50-300(a), change its name to reflect the regional nature
468468 of such regional board, and make any other amendment that is
469469 not inconsistent with this division or the enabling statute.
470470 (b) An amendment of the regional board's certificate of
471471 incorporation shall be made in the following manner:
472472 (1) The board of directors of the regional board shall
473473 first adopt a resolution setting forth in full the proposed
474474 amendment to the certificate of incorporation.
475475 (2) Consent of the Governor and the sponsoring mayor
476476 shall be required for amendment of the certificate of
477477 incorporation. Consent of the Governor and the sponsoring
478478 mayor shall be evidenced by an order acknowledged before an
479479 officer authorized by the laws of this state to take
480480 acknowledgment of deeds.
481481 (3) The amendment shall recite the adoption of the
482482 resolution by the board of directors and consent by the
483483 Governor and the sponsoring mayor.
484484 (4) After the amendment is executed by the chair or
485485 vice-chair of the regional board and acknowledged before an
486486 officer authorized by the laws of this state to take
487487 acknowledgment of deeds, the amendment and the consents
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517517 executed by the Governor and sponsoring mayor shall be filed
518518 in the office of the judge of probate where the board's
519519 original certificate of incorporation was filed. The amendment
520520 shall be effective upon filing.
521521 §11-50-300.5
522522 (a) Directors and employees of a regional board shall
523523 be subject to the provisions of the Ethics Act.
524524 (b) Each year members of the board of directors shall
525525 participate in 10 hours of training on the duties and best
526526 practices of directors of organizations engaged in the
527527 operation of water or sewer systems, the obligations of
528528 directors under the Ethics Act, and the reporting requirements
529529 under this division.
530530 §11-50-300.6
531531 (a) A regional board shall prepare customary and
532532 appropriate financial statements and other reports, including:
533533 (1) An annual budget in monthly form.
534534 (2) Monthly financial statements with comparison to
535535 budget.
536536 (3) Annual financial statements with comparison to
537537 budget.
538538 (4) Annual financial statements audited by an
539539 independent auditor.
540540 (5) A five-year operating plan with annual revisions
541541 and appropriate comparisons of actual to plan.
542542 (6) A 10-year capital plan.
543543 (b) All statements shall be accompanied by appropriate
544544 operating statistics, actual and projected, and the five-year
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574574 operating plan and 10-year capital plan shall be reviewed and
575575 commented upon by a nationally recognized firm of consulting
576576 engineers with expertise in the design, construction, repair,
577577 and operation of water and sewer systems and with no conflicts
578578 in reviewing the work.
579579 (c) The reports required by this section shall be made
580580 available to the public on a website maintained by the
581581 regional board.
582582 §11-50-300.7
583583 For a period of 24 months after a person ceases to be a
584584 director of a regional board, that person may not be employed
585585 by the regional board or by any firm that performs work for
586586 the regional board.
587587 §11-50-300.8
588588 A regional board shall employ a chief executive officer
589589 with full authority to manage the operations of the regional
590590 board, subject to policy directives and other governance
591591 decisions adopted by the board of directors. Employees of a
592592 regional board shall report to the chief executive officer and
593593 may not be ordered or directed by members of the board of
594594 directors. Employment contracts, construction contracts,
595595 consulting contracts, engineering contracts, and other
596596 contracts between the regional board and other persons shall
597597 be recommended by the chief executive officer, except for the
598598 employment contract of the chief executive officer, which
599599 shall be recommended by the board of directors.
600600 Section 3. Sections 11-50-301, 11-50-302, 11-50-303,
601601 and 11-50-304, Code of Alabama 1975, relating to certain
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631631 municipal water works boards, are repealed.
632632 Section 4. This act shall become effective immediately
633633 following its passage and approval by the Governor, or its
634634 otherwise becoming law.
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