The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Regulated Industries
BILL: SB 202
INTRODUCER: Senator Jones
SUBJECT: Municipal Water and Sewer Utility Rates
DATE: March 11, 2025
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Schrader Imhof RI Pre-meeting
2. CA
3. RC
I. Summary:
SB 202 creates an exception to the maximum rates that may be charged to municipal water and
sewer utility customers who are outside of the corresponding municipality’s boundaries. The bill
provides that if a municipal utility provides water or sewer services to another municipality and
serves that other municipality using a facility or water or sewer plant located within that other
municipality, then the utility must charge its customers within that other municipality the same
rates, fees, and charges as it does for those customers within its own municipal boundaries.
The bill has an effective date of July 1, 2025.
II. Present Situation:
Florida Public Service Commission
The Florida Public Service Commission (PSC) is an arm of the legislative branch of
government.
1
The role of the PSC is to ensure Florida’s consumers receive utility services,
including electric, natural gas, telephone, water, and wastewater, in a safe and reliable manner
and at fair prices.
2
In order to do so, the PSC exercises authority over utilities in one or more of
the following areas: rate base or economic regulation; competitive market oversight; and
monitoring of safety, reliability, and service issues.
3
PSC authority over municipal utilities is
more limited, however.
1
Section 350.001, F.S.
2
See Florida Public Service Commission, Florida Public Service Commission Homepage, http://www.psc.state.fl.us (last
visited Feb. 13, 2025).
3
Florida Public Service Commission, About the PSC, https://www.psc.state.fl.us/about (last visited Feb. 13, 2025).
REVISED: BILL: SB 202 Page 2
Water and Wastewater Utilities
Florida’s Water and Wastewater System Regulatory Law, ch. 367, F.S., regulates water and
wastewater systems in the state. Section 367.011, F.S., grants the PSC exclusive jurisdiction over
each utility with respect to its authority, service, and rates. For the chapter, a “utility” is defined
as “a water or wastewater utility and, except as provided in s. 367.022, F.S., includes every
person, lessee, trustee, or receiver owning, operating, managing, or controlling a system, or
proposing construction of a system, who is providing, or proposes to provide, water or
wastewater service to the public for compensation.” In 2023, the PSC had jurisdiction over 146
investor-owned water and/or waste-water utilities in 38 of Florida’s 67 counties.
4
Section 367.022, F.S., exempts certain types of water and wastewater operations from PSC
jurisdiction and the provisions of ch. 367, F.S. (except as expressly provided in the chapter).
Such exempt operations include: municipal water and wastewater systems, public lodging
systems that only provide service to their guests, systems with a 100-person or less capacity,
landlords that include service to their tenants without specific compensation for such service, and
mobile home parks operating both as a mobile home park and a mobile home subdivision that
provide “service within the park and subdivision to a combination of both tenants and lot owners,
provided that the service to tenants is without specific compensation,” and others.
5
The PSC also
does not regulate utilities in counties that have exempted themselves from PSC regulation
pursuant to s. 367.171, F.S. However, under s. 367.171(7), F.S., the PSC retains exclusive
jurisdiction over all utility systems whose service crosses county boundaries, except for utility
systems that are subject to interlocal utility agreements.
Municipal Water and Sewer Utilities in Florida
A municipality
6
may establish a utility by resolution or ordinance under s. 180.03, F.S. A
municipality may establish a service area within its municipal boundary or within five miles of
its corporate limits of the municipality.
7
Under s. 180.19, F.S., a municipality may permit another municipality and the owners or
association of owners of lands outside of its corporate limits or within another municipality’s
corporate limits to connect to its utilities upon such terms and conditions as may be agreed upon
between the municipalities.
Municipal Water and Sewer Utility Rate Setting
The PSC does not have jurisdiction over municipal water and sewer utilities, and as such, has no
authority over the rates for such utilities. Municipally-owned water and sewer utility rates and
revenues are regulated by their respective local governments, sometimes through a utility board
or commission.
4
Florida Public Service Commission, 2024 Facts and Figures of the Florida Utility Industry,
https://www.floridapsc.com/pscfiles/website-files/PDF/Publications/Reports/General/FactsAndFigures/April%202024.pdf
(last visited Mar. 5, 2025).
5
Section 367.022, F.S.
6
Defined by s. 180.01, F.S., “as any city, town, or village duly incorporated under the laws of the state.”
7
Section 180.02, F.S., see also s. 180.06, F.S. BILL: SB 202 Page 3
Municipal Water and Sewer Utility Rates for Customers Outside of Corporate Limits
Section 180.191, F.S., provides limitations on the rates that can be charged to customers outside
their municipal boundaries. The first option is that such a municipality may charge the same rates
outside as inside its municipal boundaries, but may add a surcharge of not more than 25 percent
to those outside the boundaries.
8
The fixing of rates, fees, or charges for customers outside of the
municipal boundaries, in this manner, does not require a public hearing.
Alternatively, a municipality may charge rates that are just and equitable and based upon the
same factors used in fixing the rates for the customers within the boundaries of the municipality.
In addition, the municipality may add a 25 percent surcharge. When a municipality uses this
methodology, the total of all rates, fees, and charges for the services charged to customers
outside the municipal boundaries may not be more than 50 percent in excess of the total amount
the municipality charges consumers within its municipal boundaries, for corresponding service.
9
Under this scenario, the rates, fees, and charges may not be set until a public hearing is held and
the users, owners, tenants, occupants of property served or to be served, and all other interested
parties have an opportunity to be heard on the rates, fees, and charges. Any change in the rates,
fees, and charges must also have a public hearing unless the change is applied pro rata to all
classes of service, both inside and outside of the municipality.
10
The provisions of s. 180.191, F.S., may be enforced by civil action. Whenever any municipality
violates, or if reasonable grounds exist to believe that a municipality is about to violate,
s. 180.191, F.S., an aggrieved party may seek preventive relief, including an application for a
permanent or temporary injunction, restraining order, or other order.
11
A prevailing party under
such an action may seek treble damages and, in addition, a reasonable attorney’s fee as part of
the cost.
12
City of Miami Gardens v. City of North Miami Beach
The Norwood Water Treatment Plant (Norwood Plant), operated by the City of North Miami
Beach (NMB), treats and distributes water for North Miami Beach’s municipal water and
wastewater utility which provides service to customers in NMB and the City of Miami Gardens.
Though owned by NMB, the plant is physically located outside of the geographic boundaries of
that municipality in what is now, as of May 13, 2003,
13
within the geographic boundaries of
Miami Gardens.
14
On January 7, 2003, NMB adopted an ordinance, pursuant to s. 180.191, F.S., increasing the
surcharge on its water and wastewater customers residing outside of its municipal boundaries.
On May 22, 2017, NMB entered into an agreement for a private entity to maintain, repair and
manage the Norwood Plant; however, NMB retained ownership of the plant.
15
8
Section 180.191(1)(a), F.S.
9
Section 180.191(1)(b), F.S.
10
Id.
11
Section 180.191(2), F.S.
12
Section 180.191(4), F.S.
13
Miami Gardens was incorporated on May 13, 2003.
14
City of Miami Gardens v. City of N. Miami Beach, 346 So. 3d 648, 650–51 (Fla. 3d DCA 2022). The City of North Miami
Beach operated the Norwood Plant before the City of Miami Gardens was incorporated.
15
Id. BILL: SB 202 Page 4
In December of 2018, Miami Gardens brought a class action lawsuit, which sought to represent
not only itself, but also its residents who purchase water from the Norwood Plant. In part, Miami
Gardens sought a declaratory judgment seeking the answers to three questions:
• If NMB assigned to a private contractor all operational responsibility for water
utilities it owns that are located outside its geographical bounds, is NMB still
“operating” those water utilities?
• If NMB is no longer “operating” water utilities it owns that are located outside its
geographical bounds, may NMB lawfully charge a 25 percent surcharge on water
provided to consumers within the City of Miami Gardens?
• Does s. 180.191, F.S., provide for the imposition of a 25 percent surcharge per billing
cycle by NMB upon the City of Miami Gardens and the members of the class for
water drawn from the aquifer located within the boundaries of the City of Miami
Gardens which is processed in and never leaves the boundaries of the municipality?
16
After the parties were given a chance to resolve the dispute for six months, the trial court
eventually dismissed the complaint on four bases:
• NMB had terminated the contract with the private entity to operate the Norwood Plant, and
thus the complaint was moot;
• The complaint was not supported by the plain language of s. 180.191(1), F.S;
• Statute of limitations, as the complaint had been filed 15 years after Miami Gardens was
incorporated and 16 years after the surcharge had been put in place (citing to the four-year
statute of limitations provided in s. 95.11(3), F.S; and
• Sovereign immunity.
17
Miami Gardens appealed this dismissal to the Florida Third District Court of Appeal. The Third
District Court reversed the dismissal and remanded the case back to the trial court, stating that:
• Sovereign immunity did not bar the claims of Miami Gardens. The court found that
sovereign immunity did not apply in this matter since s. 180.191(4), F.S., clearly provides a
financial damages remedy for actions pursuant to s. 180.191, F.S. In addition, the court found
that sovereign immunity did not apply to refunds of previously paid illegal fees;
• Miami Gardens’ allegation that an NMB-owned water treatment plant, contracted to be
operated by a private party, was not entitled to assess a 25 percent surcharge on non-NMB
residents, was sufficient to state a claim under s. 180.191, F.S.; and
• The matter was not moot, even though, since October 30, 2019, NMB had removed the
surcharges for the services supplied to the City of Miami Gardens itself (but not for other
residential and business customers) and, as of August 6, 2020, NMB had terminated its
contract with the private entity operating the plant. The court found that Miami Gardens and
its class still had a case and controversy as to whether it, and its residents, were due a refund
and that the cessation of the surcharge was not permanent.
18
16
Id.
17
Id at 653.
18
Id at 653-58. BILL: SB 202 Page 5
On January 16, 2025, the trial court issued a final order approving a settlement that pays $9
million to Miami Gardens and its class from NMB.
19
III. Effect of Proposed Changes:
Section 1 of the bill creates an exception to the maximum rates that may be charged to municipal
water and sewer utility customers that are outside of the municipality’s boundaries under s.
180.191, F.S. The bill provides that if a municipal utility provides water and sewer services to a
second municipality, and serves that second municipality using a facility or water or sewer plant
located within that second municipality, that municipality must charge the customers within that
second municipality the same rates, fees, and charges as the customers within its own municipal
boundaries.
The bill provides the following definitions:
• “Facility” means a water treatment facility, wastewater treatment facility, intake station,
pumping station, well, and other physical components of a water or wastewater system. The
term “facility” in the bill does not include facilities that transport water from the point of
entry to a wastewater treatment facility, or from a water source or treatment facility to the
customer.
• “Wastewater treatment facility” means a facility that accepts and treats domestic or industrial
wastewater.
• “Water treatment facility” means a facility within a water system which can alter the
physical, chemical, or bacteriological quality of water.
Section 2 of the bill provides an effective date of the bill of July 1, 2025.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
Article VII, s. 18 of the Florida Constitution governs laws that require counties and
municipalities to spend funds, limit the ability of counties and municipalities to raise
revenue, or reduce the percentage of state tax shared with counties and municipalities.
Subsection (b) of Art. VII, s. 18 of the Florida Constitution provides that except upon
approval of each house of the Legislature by two-thirds vote of the membership, the
legislature may not enact, amend, or repeal any general law if the anticipated effect of
doing so would be to reduce the authority that municipalities or counties have to raise
revenue in the aggregate, as such authority existed on February 1, 1989. However, the
19
City of Miami Gardens v. City of North Miami Beach, No. 2018-042450-CA-01 (Fla. 11th Cir. Ct. Jan. 16, 2025)(final
order and judgment approving settlement agreement). BILL: SB 202 Page 6
mandates requirements do not apply to laws having an insignificant impact,
20
which is
$2.37 million or less for Fiscal Year 2024-2025.
21
The Revenue Estimating Conference has not reviewed SB 202. Staff estimates an
indeterminate impact to municipal utility revenues.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
None.
E. Other Constitutional Issues:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
B. Private Sector Impact:
Municipal water and sewer utility customers that are located in a different municipality
than the municipality that operates the utility may see a water and sewer rate reduction
under the provisions of the bill if that customer’s municipality contains facilities or water
or sewer plants for the utility.
C. Government Sector Impact:
Municipal governments that operate a municipal water and sewer utility, with facilities or
water or sewer plants located in a second municipality, may see a reduction in utility
revenue under the provisions of the bill.
20
FLA. CONST. art. VII, s. 18(d). An insignificant fiscal impact is the amount not greater than the average statewide
population for the applicable fiscal year multiplied by $0.10. See Florida Senate Committee on Community Affairs, Interim
Report 2012-115: Insignificant Impact, (September 2011), available at
http://www.flsenate.gov/PublishedContent/Session/2012/InterimReports/2012-115ca.pdf (last visited Mar. 5, 2025).
21
Based on the Demographic Estimating Conference’s estimated population adopted on February 6, 2025. The conference
packet is available at http://edr.state.fl.us/Content/conferences/population/index.cfm (last visited Mar. 5, 2025). BILL: SB 202 Page 7
VI. Technical Deficiencies:
None.
VII. Related Issues:
None.
VIII. Statutes Affected:
This bill substantially amends section 180.191 of the Florida Statutes.
IX. Additional Information:
A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
None.
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.