Connecticut 2019 Regular Session

Connecticut Senate Bill SB00222 Compare Versions

Version 1 (Old)

Version 2 (New)

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7	5		General Assembly Committee Bill No. 222
8	6		January Session, 2019
9	7		LCO No. 5716
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12	10		Referred to Committee on ENERGY AND TECHNOLOGY
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14	12
15	13		Introduced by:
16	14		(ET)
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20	18		AN ACT CONCERNING TH E SALE OF MUNICIPAL WATER S UPPLY
21	19		AND WASTEWATER UTILI TY ASSETS.
22	20		Be it enacted by the Senate and House of Representatives in General
23	21		Assembly convened:
24	22
25	23		Section 1. (NEW) (Effective October 1, 2019) (a) For purposes of this 1
26	24		section: 2
27	25		(1) "Municipal" or "municipality" means any unit of government, 3
28	26		including a town, city, borough, consolidated town and city, 4
29	27		consolidated town and borough, district taxing district, public agency 5
30	28		or authority established by the general statutes, a special act or a local 6
31	29		law, ordinance or charter, or any other subdivision of government; 7
32	30		(2) "Municipal water supply system" means a water system owned 8
33	31		by a municipality, including a municipal waterworks system 9
34	32		established by the general statutes, a special act or a local law, 10
35	33		ordinance or charter, or any other subdivision of government; 11
36	34		(3) "Municipal wastewater system" means a sewage or wastewater 12
37	35		system owned by a municipality or otherwise established by the 13
38		-	general statutes, a special act or a local law, ordinance or charter, or 14 Committee Bill No. 222
	36	+	general statutes, a special act or a local law, ordinance or charter, or 14
	37	+	Committee Bill No. 222
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45	42		any other subdivision of government; 15
46	43		(4) "Average fair market value" means the numerical average of the 16
47	44		fair market values of two utility valuation expert appraisals conducted 17
48	45		pursuant to subsection (c) of this section; 18
49	46		(5) "Ratemaking rate base" means the dollar value of the municipal 19
50	47		water supply system or municipal wastewater system; 20
51	48		(6) "Water company" has the same meaning as provided in section 21
52	49		16-1 of the general statutes; and 22
53	50		(7) "Utility valuation expert" means an experienced appraiser. 23
54	51		(b) A municipality may negotiate with a water company for the sale 24
55	52		of a municipal water supply system or municipal wastewater system 25
56	53		to such water company. The municipality and the water company shall 26
57	54		negotiate a sale price. After such sale price is negotiated and agreed 27
58	55		upon, such municipality and water company shall determine the 28
59	56		average fair market value of such municipal water supply system or 29
60	57		municipal wastewater system pursuant to subsection (c) of this section. 30
61	58		(c) To determine the average fair market value of a municipal water 31
62	59		supply system or municipal wastewater system, after a municipality 32
63	60		and a water company have negotiated and agreed upon a sale price 33
64	61		pursuant to subsection (b) of this section, (1) the municipality and the 34
65	62		water company shall jointly engage the services of a licensed engineer 35
66	63		to conduct an assessment of the tangible assets of such municipal 36
67	64		water supply system or municipal wastewater system, (2) the 37
68	65		municipality and the water company shall each engage a utility 38
69	66		valuation expert, (3) each utility valuation expert, using the assessment 39
70	67		conducted pursuant to subdivision (1) of this subsection, shall perform 40
71	68		an appraisal of such municipal water supply system or municipal 41
72	69		wastewater system, which shall include a determination of the fair 42
73	70		market value of such municipal water supply system or municipal 43
74	71		wastewater system pursuant to the Uniform Standards of Professional 44
75		-	~~Appraisal Practice, and (4) each utility valuation expert shall provide 45~~ Committee Bill No. 222
	72	+	Committee Bill No. 222
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	77	+	Appraisal Practice, and (4) each utility valuation expert shall provide 45
82	78		such utility valuation expert's appraisal to the municipality and the 46
83	79		water company within ninety days of engagement pursuant to 47
84	80		subdivision (2) of this subsection. 48
85	81		(d) After the completion of the appraisals pursuant to subsection (c) 49
86	82		of this section, the municipality and the water company shall jointly 50
87	83		submit an application for approval for the sale of such municipal water 51
88	84		supply system or municipal wastewater system to the Public Utilities 52
89	85		Regulatory Authority. The authority may approve such application, 53
90	86		provided the authority shall approve or deny such application not 54
91	87		later than six months after the date on which the application was filed. 55
92	88		(e) If the authority approves such application, the authority shall (1) 56
93	89		determine the ratemaking rate base as the lesser of (A) the sale price 57
94	90		negotiated by the municipality and the water company pursuant to 58
95	91		subsection (b) of this section, and (B) the average fair market value of 59
96	92		such municipal water supply system or municipal wastewater system 60
97	93		as determined by subsection (c) of this section, (2) approve rates and 61
98	94		any applicable surcharges for customers of such municipal water 62
99	95		supply system or municipal wastewater system, (3) permit such water 63
100	96		company to include the ratemaking rate base in such water company's 64
101	97		rate base for ratemaking purposes in its next general rate case, and (4) 65
102	98		permit such water company to include in its rate base the costs 66
103	99		associated with the acquisition of such municipal water supply system 67
104	100		or municipal wastewater system, including (A) transaction and closing 68
105	101		costs, and (B) fees paid to the engineer conducting the assessment of 69
106	102		the assets and the utility valuation experts, provided appraisal fees 70
107	103		that do not exceed five per cent of the fair market value of the 71
108	104		municipal water supply system or municipal wastewater system shall 72
109	105		be presumed to be reasonable. 73
110	106		(f) Nothing in this section shall be construed to supersede any 74
111	107		provisions of the general statutes or municipal charters regarding the 75
112	108		sale or disposition of municipal assets or any provisions of the general 76
113		-	~~statutes regarding the acquisition of a water company. 77~~ Committee Bill No. 222
	109	+	Committee Bill No. 222
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	114	+	statutes regarding the acquisition of a water company. 77
120	115		This act shall take effect as follows and shall amend the following
121	116		sections:
122	117
123	118		Section 1 October 1, 2019 New section
124	119
125		-	ET Joint Favorable
	120	+	Statement of Purpose:
	121	+	To establish a process for the sale of a municipal water supply system
	122	+	or municipal wastewater system.
126	123
	124	+	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline,
	125	+	except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is
	126	+	not underlined.]
	127	+
	128	+	Co-Sponsors: SEN. FORMICA, 20th Dist.
	129	+
	130	+	S.B. 222