This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0047.ECC
DATE: 1/8/2024
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 47 Municipal Water and Sewer Utility Rates
SPONSOR(S): Robinson, F.
TIED BILLS: IDEN./SIM. BILLS: SB 104
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Energy, Communications & Cybersecurity
Subcommittee
Bauldree Keating
2) Local Administration, Federal Affairs & Special
Districts Subcommittee
3) Commerce Committee
SUMMARY ANALYSIS
Municipalities are authorized by general law to provide water and sewer utility services and to set the rates,
fees, and charges for such services. These utility systems are exempt from the rate-setting jurisdiction of the
Florida Public Service Commission. A municipality that provides water or sewer utility service outside of its
municipal boundaries may impose, subject to limits specified in Florida law, higher rates, fees, and charges on
customers receiving service outside of its boundaries as compared to the rates, fees, and charges imposed on
customers within its boundaries. Most municipal utility systems are governed by the municipality’s governing
body (i.e., the city commission).
The bill states that a municipality which operates a water or sewer utility must charge customers outside its
municipal boundaries the same rates, fees, and charges as it charges customers within its boundaries if:
The customers are located in another municipality, and
The charging municipality uses a facility or water or sewer plant located in the recipient
municipality to serve those customers.
The bill does not appear to impact state government revenues or state or local government expenditures. The
bill may have a negative fiscal impact on certain local revenues. See Fiscal Analysis & Economic Impact
Statement.
The bill provides an effective date of July 1, 2024.
This bill may be a county or municipality mandate requiring a two-thirds vote of the membership of the
House. See Section III.A.1 of the analysis. STORAGE NAME: h0047.ECC PAGE: 2
DATE: 1/8/2024
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Present Situation
Pursuant to s. 2(b), Art. VIII of the State Constitution, municipalities have the governmental, corporate,
and proprietary powers to enable them to conduct municipal government, perform municipal functions,
and render municipal services. Municipalities may exercise any power for municipal purposes, except
when expressly prohibited by law.
1
The legislative body of each municipality has the power to enact
legislation on any subject upon which the state Legislature may act with certain exceptions.
2
Under
their home rule power and as otherwise provided or limited by law or agreement, municipalities may
provide utilities to citizens and entities within the municipality’s corporate boundaries, in unincorporated
areas, and even in other municipalities.
Municipalities are authorized by general law to provide water and sewer utility services.
3
With respect
to public works projects, including water and sewer utility services,
4
municipalities may extend and
execute their corporate powers outside of their corporate limits as “desirable or necessary for the
promotion of the public health, safety and welfare.”
5
A municipality may not extend or apply these
corporate powers within the corporate limits of another municipality.
6
However, it may permit any other
municipality and the owners of lands outside its corporate limits or within the limits of another
municipality to connect with its water and sewer utility facilities and use its services upon agreed terms
and conditions.
7
An informal study conducted in 2014 indicated that approximately 250 municipalities
provide water service and approximately 220 municipalities provide wastewater service. Of these
municipalities, the study found that approximately 140 provide water and/or waste water services to
customers outside of their municipal boundaries, which may include customers in unincorporated areas
of counties or in other municipalities.
8
These utility systems are exempt from the jurisdiction of the
Florida Public Service Commission.
A municipality that operates a water or sewer utility outside of its municipal boundaries may impose
higher rates, fees, and charges on customers receiving service outside of its corporate boundaries as
compared to the rates, fees, and charges imposed on customers within its boundaries. The municipality
can accomplish this in two ways:
First, for customers outside of its boundaries, it may add a surcharge of up to 25 percent of the
rates, fees, and charges imposed on customers within its boundaries. This mechanism does
not require a public hearing.
9
1
Section 166.021(2), F.S., provides that any activity or power which may be exercised by the state or its political
subdivisions is considered a municipal purpose.
2
Pursuant to s. 166.021(3), F.S., a municipality may not enact legislation on the following: the subjects of annexation,
merger, and exercise of extraterritorial power, which require general law or special law; any subject expressly prohibited
by the constitution; any subject expressly preempted to state or county government by the constitution or by general law;
and any subject preempted to a county pursuant to a county charter adopted under the authority of the State constitution.
3
Pursuant to s. 180.06, F.S., a municipality may “provide water and alternative water supplies;” “provide for the collection
and disposal of sewage, including wastewater reuse, and other liquid wastes;” and “construct reservoirs, sewerage
systems, trunk sewers, intercepting sewers, pumping stations, wells, siphons, intakes, pipelines, distribution systems,
purification works, collection systems, treatment and disposal works” to accomplish these purposes.
4
Other public works projects authorized under s. 180.06, F.S., include alternative water supplies, maintenance of water
flow and bodies of water for sanitary purposes, garbage collection and disposal, airports, hospitals, jails, golf courses, gas
plants and distribution systems, and related facilities.
5
S. 180.02(2), F.S.
6
Id.
7
S. 180.19, F.S.
8
Analysis of House Bill 813 (2014), Florida House of Representatives.
9
S. 180.191(1)(a), F.S. STORAGE NAME: h0047.ECC PAGE: 3
DATE: 1/8/2024
Second, it may set separate rates, fees, and charges for customers outside its boundaries
based on the same factors used to set rates for customers within its boundaries. It may add a
surcharge of up to 25 percent of these charges, provided that the total of all such rates, fees,
and charges for service to customers outside its boundaries may not exceed the total charges
to customers within its boundaries by more than 50 percent for corresponding service. Rates
set in this manner require a public hearing at which all users served or to be served by the
water or sewer utilities and all other interested persons will have an opportunity to be heard
concerning the proposed rates.
10
For example, the City of North Miami Beach owns the Norwood Water Treatment Plant, which is
located in Miami Gardens, and charges customers outside of North Miami Beach municipal boundaries
a 25% surcharge, including customers in Miami Gardens.
11
However, there is no central repository for
information concerning municipal water or sewer service rates that identifies municipalities that impose
higher rates on customers outside of the municipal boundaries, the specific mechanism used by such
municipalities to establish such rates, or the level of any additional charge or surcharge imposed.
Effect of the Bill
The bill states that a municipality which operates a water or sewer utility must charge customers
outside its municipal boundaries the same rates, fees, and charges as it charges customers within its
boundaries if:
The customers are located in another municipality, and
The charging municipality uses a facility or water or sewer plant located in the recipient
municipality to serve those customers.
The bill provides an effective date of July 1, 2024.
B. SECTION DIRECTORY:
Section 1: Amends s. 180.191, F.S., relating to limitation on rates charged consumer outside city limits.
Section 2: Provides an effective date of July 1, 2024.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
The bill may have a negative fiscal impact on municipalities which own and operate water or sewer
utilities and serve customers located in another municipality with facilities located in the recipient
municipality, as it reduces the amount that those municipal water and sewer utilities that use such
facilities can charge such customers.
10
S. 180.191(1)(b), F.S.
11
Kevin Ozebek & Leisa Williams, New study reveals how much more some Miami Gardens residents are paying for
water, WSVN (January 19, 2023), https://wsvn.com/news/investigations/new-study-reveals-how-much-more-some-miami-
gardens-residents-are-paying-for-water/ (last visited January 5, 2024). STORAGE NAME: h0047.ECC PAGE: 4
DATE: 1/8/2024
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may result in cost savings to certain municipal water and sewer utility customers located
outside of municipal boundaries.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
The county/municipality mandates provision of Art. VII, section 18(b), of the Florida Constitution may
apply because this bill reduces the amount that certain municipal water and sewer utilities can
charge customers outside of the municipal boundaries. If the bill does qualify as a mandate, final
passage must be approved by two-thirds of the membership of each house of the Legislature.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill does not require or authorize rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
The bill applies to municipal water and sewer utilities that serve customers in another municipality using
a “facility or water sewer plant” located in that other municipality. This provision could be broadly
applied to all municipal water and sewer utilities that serve customers in another municipality if the term
“facility” is construed to include the pipes used to serve those customers.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGE S
Not applicable.