MO
Missouri Senate Bill SB5

Missouri 2025 Regular Session

Missouri Senate Bill SB5 Compare Versions

Only one version of the bill is available at this time.
OldNewDifferences
11
22 EXPLANATION-Matter enclosed in bold-faced brackets [thus] in this bill is not enacted
33 and is intended to be omitted in the law.
44 FIRST REGULAR SESSION
55 SENATE BILL NO. 5
66 103RD GENERAL ASSEMBLY
77 INTRODUCED BY SENATOR CIERPIOT.
88 0121S.03I KRISTINA MARTIN, Secretary
99 AN ACT
1010 To repeal sections 137.122, 204.300, 204.610, 393.150, 393.320, and 393.1506, RSMo, and to
1111 enact in lieu thereof six new sections relating to utilities.
1212
1313 Be it enacted by the General Assembly of the State of Missouri, as follows:
1414 Section A. Sections 137.122, 204.300, 204.610, 393.150, 1
1515 393.320, and 393.1506, RSMo, are repealed and six new sections 2
1616 enacted in lieu thereof, to be known as sections 137.122, 3
1717 204.300, 204.610, 393.150, 393.320, and 393.1506, to read as 4
1818 follows:5
1919 137.122. 1. As used in this section, the following 1
2020 terms mean: 2
2121 (1) "Business personal property", tangible personal 3
2222 property which is used in a trade or business or used for 4
2323 production of income and which has a determinable life of 5
2424 longer than one year except that supplies used by a business 6
2525 shall also be considered business personal property, but 7
2626 shall not include livestock, fa rm machinery, grain and other 8
2727 agricultural crops in an unmanufactured condition, property 9
2828 subject to the motor vehicle registration provisions of 10
2929 chapter 301, property assessed under section 137.078, the 11
3030 property of rural electric cooperatives under ch apter 394, 12
3131 or property assessed by the state tax commission under 13
3232 chapters 151, 153, and 155, section 137.022, and sections 14
3333 137.1000 to 137.1030; 15
3434 (2) "Class life", the class life of property as set 16
3535 out in the federal Modified Accelerated Cost Rec overy System 17 SB 5 2
3636 life tables or their successors under the Internal Revenue 18
3737 Code as amended; 19
3838 (3) "Economic or functional obsolescence", a loss in 20
3939 value of personal property above and beyond physical 21
4040 deterioration and age of the property. Such loss may be the 22
4141 result of economic or functional obsolescence or both; 23
4242 (4) "Original cost", the price the current owner, the 24
4343 taxpayer, paid for the item without freight, installation, 25
4444 or sales or use tax. In the case of acquisition of items of 26
4545 personal property as part of an acquisition of an entity, 27
4646 the original cost shall be the historical cost of those 28
4747 assets remaining in place and in use and the placed -in- 29
4848 service date shall be the date of acquisition by the entity 30
4949 being acquired; 31
5050 (5) "Placed in service", property is placed in service 32
5151 when it is ready and available for a specific use, whether 33
5252 in a business activity, an income -producing activity, a tax - 34
5353 exempt activity, or a personal activity. Even if the 35
5454 property is not being used, the property is in service when 36
5555 it is ready and available for its specific use; 37
5656 (6) "Recovery period", the period over which the 38
5757 original cost of depreciable tangible personal property 39
5858 shall be depreciated for property tax purposes and shall be 40
5959 the same as the recovery period allowed for such property 41
6060 under the Internal Revenue Code. 42
6161 2. To establish uniformity in the assessment of 43
6262 depreciable tangible personal property, each assessor shall 44
6363 use the standardized schedule of depreciation in this 45
6464 section to determine the assessed valuation of depreciable 46
6565 tangible personal property for the purpose of estimating the 47
6666 value of such property subject to taxation under this 48
6767 chapter. 49 SB 5 3
6868 3. For purposes of this section, and to estimate the 50
6969 value of depreciable tangible personal property for mass 51
7070 appraisal purposes, each assessor shall value depreciable 52
7171 tangible personal property by applying the class life and 53
7272 recovery period to the original cost of the property 54
7373 according to the following depreci ation schedule. The 55
7474 percentage shown for the first year shall be the percentage 56
7575 of the original cost used for January first of the year 57
7676 following the year of acquisition of the property, and the 58
7777 percentage shown for each succeeding year shall be the 59
7878 percentage of the original cost used for January first of 60
7979 the respective succeeding year as follows: 61
8080 62 Year Recovery Period in Years
8181 63 3 5 7 10 15 20
8282 64 1 75.00 85.00 89.29 92.50 95.00 96.25
8383 65 2 37.50 59.50 70.16 78.62 85.50 89.03
8484 66 3 12.50 41.65 55.13 66.83 76.95 82.35
8585 67 4 5.00 24.99 42.88 56.81 69.25 76.18
8686 68 5 10.00 30.63 48.07 62.32 70.46
8787 69 6 18.38 39.33 56.09 65.18
8888 70 7 10.00 30.59 50.19 60.29
8989 71 8 21.85 44.29 55.77
9090 72 9 15.00 38.38 51.31
9191 73 10 32.48 46.85
9292 74 11 26.57 42.38
9393 75 12 20.67 37.92
9494 76 13 15.00 33.46
9595 77 14 29.00
9696 78 15 24.54 SB 5 4
9797 Depreciable tangible personal property in all recovery 81
9898 periods shall continue in subsequent years to have the 82
9999 depreciation factor last listed in the appropriate column so 83
100100 long as it is owned or held by the taxpayer. The state tax 84
101101 commission shall study and analyze the values established by 85
102102 this method of assessment and in every odd -numbered year 86
103103 make recommendations to the joint committee on tax policy 87
104104 pertaining to any changes in this methodology, if any, that 88
105105 are warranted. 89
106106 4. Such estimate of value determined under this 90
107107 section shall be presumed to be correct for the purpose of 91
108108 determining the true value in money of the depreciable 92
109109 tangible personal property, but such estimation may be 93
110110 disproved by a taxpayer by substantial and persuasive 94
111111 evidence of the true value in money under any method 95
112112 determined by the state tax commission to be correct, 96
113113 including, but not limited to, an appraisal of the tangible 97
114114 personal property specifically utilizing generally a ccepted 98
115115 appraisal techniques, and contained in a narrative appraisal 99
116116 report in accordance with the Uniform Standards of 100
117117 Professional Appraisal Practice or by proof of economic or 101
118118 functional obsolescence or evidence of excessive physical 102
119119 deterioration. For purposes of appeal of the provisions of 103
120120 this section, the salvage or scrap value of depreciable 104
121121 tangible personal property may only be considered if the 105
122122 property is not in use as of the assessment date. 106
123123 5. This section shall not apply to bus iness personal 107
124124 property placed in service before January 2, 2006. Nothing 108
125125 79 16 20.08
126126 80 17 20.00 SB 5 5
127127 in this section shall create a presumption as to the proper 109
128128 method of determining the assessed valuation of business 110
129129 personal property placed in service before January 2, 2006. 111
130130 6. The provisions of this section are not intended to 112
131131 modify the definition of tangible personal property as 113
132132 defined in section 137.010. 114
133133 7. (1) As of January 1, 2026, this section shall 115
134134 apply to all real property, placed in service at any t ime, 116
135135 that is stationary property used for transportation or 117
136136 storage of liquid and gaseous products including water, 118
137137 sewage, and natural gas that is not propane or LP gas, but 119
138138 not including petroleum products. 120
139139 (2) To estimate the value of the real property 121
140140 described in this subsection, each assessor shall value such 122
141141 property by applying a twenty -year recovery period to the 123
142142 original cost of the property according to the twenty -year 124
143143 depreciation schedule set forth in subsection 3 of this 125
144144 section. Notwithstanding subsection 5 of this section, the 126
145145 presumption as to the proper method of determining the 127
146146 assessed value of such property shall apply regardless of 128
147147 when such property was placed in service. 129
148148 (3) Each taxpayer owning real property described in 130
149149 this subsection shall provide to an assessor, no later than 131
150150 May first of the applicable tax year, the original cost and 132
151151 year placed in service of such property summarized in a 133
152152 format that is substantially similar to the real property 134
153153 reporting and valuation forms contained in section 7.4 of 135
154154 the state tax commission assessor manual (revision date 136
155155 March 23, 2016, or any revision adopted by the state tax 137
156156 commission thereafter). Upon the written request of the 138
157157 assessor, such information s hall be provided for each taxing 139
158158 district within the assessor's jurisdiction. If requested 140 SB 5 6
159159 by the taxpayer, the assessor shall provide to the taxpayer 141
160160 geographic information system maps in readable layers on 142
161161 which a taxpayer may provide the informatio n in this 143
162162 subsection. The taxpayer shall certify under penalty of 144
163163 perjury that the information provided to the assessor 145
164164 pursuant to this subsection is accurate to the best of its 146
165165 knowledge. All information provided to an assessor pursuant 147
166166 to this subsection shall be considered proprietary 148
167167 information and shall be accessible only to the assessor and 149
168168 the assessor's staff for internal use only. 150
169169 204.300. 1. In all counties except counties of the 1
170170 first classification which have a charter form of government 2
171171 and which contain all or any portion of a city with a 3
172172 population of three hundred fifty thousand or more 4
173173 inhabitants, the governing body of the county, by 5
174174 resolution, order, or ordinance, shall appoint five 6
175175 trustees, the majority of whom shall reside within the 7
176176 boundaries of the district. In the event the district 8
177177 extends into any county bordering the county in which the 9
178178 greater portion of the district lies, the presiding 10
179179 commissioner or other chief executive officer of the 11
180180 adjoining county shall be an additional member of the 12
181181 appointed board of trustees. Subject to the provisions of 13
182182 section 105.454, the trustees may be paid reasonable 14
183183 compensation by the district for their services [; except 15
184184 that, any compensation schedule shall be approved by 16
185185 resolution of the board of trustees ] outside their duties as 17
186186 trustees. Each trustee of the board may receive an 18
187187 attendance fee not to exceed one hundred dollars for 19
188188 attending each regularly called board meeting, or specia l 20
189189 meeting, but shall not be paid for attending more than two 21
190190 meetings in any calendar month, except that in a county of 22 SB 5 7
191191 the first classification, a trustee shall not be paid for 23
192192 attending more than four meetings in any calendar month. 24
193193 However, no trustee shall be paid more than one attendance 25
194194 fee if such trustee attends more than one board meeting in a 26
195195 calendar week. Each trustee of the board shall be 27
196196 reimbursed for his or her actual expenditures in the 28
197197 performance of his or her duties on behalf of the district. 29
198198 The board of trustees shall be responsible for the control 30
199199 and operation of the sewer district. The term of each board 31
200200 member shall be five years; except that, members of the 32
201201 governing body of the county sitting upon the board shall 33
202202 not serve beyond the expiration of their term as members of 34
203203 such governing body of the county. The first board of 35
204204 trustees shall be appointed for terms ranging from one to 36
205205 five years so as to establish one vacancy per year 37
206206 thereafter. If the governing body of the county with the 38
207207 right of appointment under this section fails to appoint a 39
208208 trustee to fill a vacancy on the board within sixty days 40
209209 after receiving written notice from the common sewer 41
210210 district of the existence of such vacancy, then the vacancy 42
211211 may be filled by a majority of the remaining members then in 43
212212 office of the board of trustees of such common sewer 44
213213 district. Subject to the provisions of section 105.454, the 45
214214 trustees may be paid reasonable compensation by the district 46
215215 for their services[; except that, any compensation schedule 47
216216 shall be approved by resolution, order, or ordinance of the 48
217217 governing body of the county. Any and all expenses incurred 49
218218 in the performance of their duties shall be reimbursed by 50
219219 the district] outside their duties as trustees. Each 51
220220 trustee of the board may receive an attendance fee not to 52
221221 exceed one hundred dollars for attending each regularly 53
222222 called board meeting, or special meeting, but shall not be 54 SB 5 8
223223 paid for attending more than two meetings in any calendar 55
224224 month, except that in a county of the first classification, 56
225225 a trustee shall not be paid for attending more than four 57
226226 meetings in any calendar month. However, no trustee shall 58
227227 be paid more than one attendance fee if such trustee attends 59
228228 more than one board meeting in a calendar week. Each 60
229229 trustee of the board shall be reimbursed for his or her 61
230230 actual expenditures in the performance of his or her duties 62
231231 on behalf of the district . The board of trustees shall have 63
232232 the power to employ an d fix the compensation of such staff 64
233233 as may be necessary to discharge the business and purposes 65
234234 of the district, including clerks, attorneys, administrative 66
235235 assistants, and any other necessary personnel. The board of 67
236236 trustees shall select a treasurer, who may be either a 68
237237 member of the board of trustees or another qualified 69
238238 individual. The treasurer selected by the board shall give 70
239239 such bond as may be required by the board of trustees. The 71
240240 board of trustees shall appoint the sewer engineer for the 72
241241 county in which the greater part of the district lies as 73
242242 chief engineer for the district, and the sewer engineer 74
243243 shall have the same powers, responsibilities and duties in 75
244244 regard to planning, construction and maintenance of the 76
245245 sewers, and treatment facilities of the district as he now 77
246246 has by virtue of law in regard to the sewer facilities 78
247247 within the county for which he is elected. If there is no 79
248248 sewer engineer in the county in which the greater part of 80
249249 the district lies, the board of trustees ma y employ a 81
250250 registered professional engineer as chief engineer for the 82
251251 district under such terms and conditions as may be necessary 83
252252 to discharge the business and purposes of the district. The 84
253253 provisions of this subsection shall not apply to any county 85
254254 of the first classification which has a charter form of 86 SB 5 9
255255 government and which contains all or any portion of a city 87
256256 with a population of three hundred fifty thousand or more 88
257257 inhabitants. 89
258258 2. In any county of the first classification which has 90
259259 a charter form of government and which contains all or any 91
260260 portion of a city with a population of three hundred fifty 92
261261 thousand or more inhabitants, [and in any county of the 93
262262 first classification without a charter form of government 94
263263 and which has a populati on of more than sixty -three thousand 95
264264 seven hundred but less than seventy -five thousand,] there 96
265265 shall be a ten-member board of trustees to consist of the 97
266266 county executive, the mayors of the five cities constituting 98
267267 the largest users by flow during the p revious fiscal year, 99
268268 the mayors of three cities which are not among the five 100
269269 largest users and who are members of the advisory board of 101
270270 the district established pursuant to section 204.310, and 102
271271 one member of the county legislature to be appointed by th e 103
272272 county executive, with the concurrence of the county 104
273273 legislature. If the county executive does not appoint such 105
274274 members of the county legislature to the board of trustees 106
275275 within sixty days, the county legislature shall make the 107
276276 appointments. The advisory board members shall be appointed 108
277277 annually by the advisory board. In the event the district 109
278278 extends into any county bordering the county in which the 110
279279 greater portion of the district lies, the number of members 111
280280 on the board of trustees shall be increased to a total of 112
281281 eleven and the presiding commissioner or county executive of 113
282282 the adjoining county shall be an additional member of the 114
283283 board of trustees. The trustees of a district with an 115
284284 eleven-member board and located in two counties shall 116
285285 receive no compensation for their services [,] but may be 117
286286 compensated for their reasonable expenses normally incurred 118 SB 5 10
287287 in the performance of their duties. Each trustee of a ten - 119
288288 member board may receive an attendance fee not to exceed one 120
289289 hundred dollars for attending each regularly called board 121
290290 meeting, or special meeting, but shall not be paid for 122
291291 attending more than two meetings in any calendar month. 123
292292 However, no trustee of a ten -member board shall be paid more 124
293293 than one attendance fee if such tru stee attends more than 125
294294 one board meeting in a calendar week. Each trustee of a ten - 126
295295 member board shall be reimbursed for his or her actual 127
296296 expenditures in the performance of his or her duties on 128
297297 behalf of the district. Subject to the provisions of 129
298298 section 105.454, the trustees of a ten -member board may be 130
299299 paid reasonable compensation by the district for their 131
300300 services outside their duties as trustees. The board of 132
301301 trustees may employ and fix the compensation of such staff 133
302302 as may be necessary to d ischarge the business and purposes 134
303303 of the district, including clerks, attorneys, administrative 135
304304 assistants, and any other necessary personnel. The board of 136
305305 trustees may employ and fix the duties and compensation of 137
306306 an administrator for the district. The administrator shall 138
307307 be the chief executive officer of the district subject to 139
308308 the supervision and direction of the board of trustees and 140
309309 shall exercise the powers, responsibilities and duties 141
310310 heretofore exercised by the chief engineer prior to 142
311311 September 28, 1983. The administrator of the district may, 143
312312 with the approval of the board of trustees, retain 144
313313 consulting engineers for the district under such terms and 145
314314 conditions as may be necessary to discharge the business and 146
315315 purposes of the district . The provisions of this subsection 147
316316 shall only apply to counties of the first classification 148
317317 which have a charter form of government and which contain 149 SB 5 11
318318 all or any portion of a city with a population of three 150
319319 hundred fifty thousand or more inhabitants. 151
320320 204.610. 1. There shall be five trustees, appointed 1
321321 or elected as provided for in the circuit court decree or 2
322322 amended decree of incorporation for a reorganized common 3
323323 sewer district, who shall reside within the boundaries of 4
324324 the district. Each trustee shall be a voter of the district 5
325325 and shall have resided in said district for twelve months 6
326326 immediately prior to the trustee's election or appointment. 7
327327 A trustee shall be at least twenty -five years of age and 8
328328 shall not be delinqu ent in the payment of taxes at the time 9
329329 of the trustee's election or appointment. Regardless of 10
330330 whether or not the trustees are elected or appointed, in the 11
331331 event the district extends into any county bordering the 12
332332 county in which the greater portion o f the district lies, 13
333333 the presiding commissioner or other chief executive officer 14
334334 of the adjoining county shall be an additional member of the 15
335335 board of trustees, or the governing body of such bordering 16
336336 county may appoint a citizen from such county to se rve as an 17
337337 additional member of the board of trustees. Said additional 18
338338 trustee shall meet the qualifications set forth in this 19
339339 section for a trustee. 20
340340 2. [The trustees shall receive no compensation for 21
341341 their services but may be compensated for reasonable 22
342342 expenses normally incurred in the performance of their 23
343343 duties.] Each trustee of the board may receive an attendance 24
344344 fee not to exceed one hundred dollars for attending each 25
345345 regularly called board meeting, or special meeting, but 26
346346 shall not be paid for attending more than two meetings in 27
347347 any calendar month. However, no trustee shall be paid more 28
348348 than one attendance fee if such trustee attends more than 29
349349 one board meeting in a calendar week. Each trustee of the 30 SB 5 12
350350 board shall be reimbursed for h is or her actual expenditures 31
351351 in the performance of his or her duties on behalf of the 32
352352 district. Subject to the provisions of section 105.454, the 33
353353 trustees may be paid reasonable compensation by the district 34
354354 for their services outside their duties as trustees. The 35
355355 board of trustees may employ and fix the compensation of 36
356356 such staff as may be necessary to discharge the business and 37
357357 purposes of the district, including clerks, attorneys, 38
358358 administrative assistants, and any other necessary 39
359359 personnel. The board of trustees may employ and fix the 40
360360 duties and compensation of an administrator for the 41
361361 district. The administrator shall be the chief executive 42
362362 officer of the district subject to the supervision and 43
363363 direction of the board of trustees. The administrator of 44
364364 the district may, with the approval of the board of 45
365365 trustees, retain consulting engineers for the district under 46
366366 such terms and conditions as may be necessary to discharge 47
367367 the business and purposes of the district. 48
368368 3. Except as provided in subsection 1 of this section, 49
369369 the term of office of a trustee shall be five years. The 50
370370 remaining trustees shall appoint a person qualified under 51
371371 this section to fill any vacancy on the board. The initial 52
372372 trustees appointed by the circuit co urt shall serve until 53
373373 the first Tuesday after the first Monday in June or until 54
374374 the first Tuesday after the first Monday in April, depending 55
375375 upon the resolution of the trustees. In the event that the 56
376376 trustees are elected, said elections shall be condu cted by 57
377377 the appropriate election authority under chapter 115. 58
378378 Otherwise, trustees shall be appointed by the county 59
379379 commission in accordance with the qualifications set forth 60
380380 in subsection 1 of this section. 61 SB 5 13
381381 4. Notwithstanding any other provision of law, if 62
382382 there is only one candidate for the post of trustee, then no 63
383383 election shall be held, and the candidate shall assume the 64
384384 responsibilities of office at the same time and in the same 65
385385 manner as if elected. If there is no candidate for the post 66
386386 of trustee, then no election shall be held for that post and 67
387387 it shall be considered vacant, to be filled under the 68
388388 provisions of subsection 3 of this section. 69
389389 393.150. 1. Whenever there shall be filed with the 1
390390 commission by any ga s corporation, electrical corporation, 2
391391 water corporation or sewer corporation any schedule stating 3
392392 a new rate or charge, or any new form of contract or 4
393393 agreement, or any new rule, regulation or practice relating 5
394394 to any rate, charge or service or to any general privilege 6
395395 or facility, the commission shall have, and it is hereby 7
396396 given, authority, either upon complaint or upon its own 8
397397 initiative without complaint, at once, and if it so orders 9
398398 without answer or other formal pleading by the interested 10
399399 gas corporation, electrical corporation, water corporation 11
400400 or sewer corporation, but upon reasonable notice, to enter 12
401401 upon a hearing concerning the propriety of such rate, 13
402402 charge, form of contract or agreement, rule, regulation or 14
403403 practice, and pending s uch hearing and the decision thereon, 15
404404 the commission upon filing with such schedule, and 16
405405 delivering to the gas corporation, electrical corporation, 17
406406 water corporation or sewer corporation affected thereby, a 18
407407 statement in writing of its reasons for such suspension, may 19
408408 suspend the operation of such schedule and defer the use of 20
409409 such rate, charge, form of contract or agreement, rule, 21
410410 regulation or practice, but not for a longer period than one 22
411411 hundred and twenty days beyond the time when such rate, 23
412412 charge, form of contract or agreement, rule, regulation or 24 SB 5 14
413413 practice would otherwise go into effect; and after full 25
414414 hearing, whether completed before or after the rate, charge, 26
415415 form of contract or agreement, rule, regulation or practice 27
416416 goes into effect, the commission may make such order in 28
417417 reference to such rate, charge, form of contract or 29
418418 agreement, rule, regulation or practice as would be proper 30
419419 in a proceeding initiated after the rate, charge, form of 31
420420 contract or agreement, rule, regulation or pr actice had 32
421421 become effective. 33
422422 2. If any such hearing cannot be concluded within the 34
423423 period of suspension, as above stated, the commission may, 35
424424 in its discretion, extend the time of suspension for a 36
425425 further period not exceeding six months , the last day of 37
426426 which period shall be considered the operation of law date . 38
427427 At any hearing involving a rate sought to be increased, the 39
428428 burden of proof to show that the increased rate or proposed 40
429429 increased rate is just and reasonable shall be upon the gas 41
430430 corporation, electrical corporation, water corporation or 42
431431 sewer corporation, and the commission shall give to the 43
432432 hearing and decision of such questions preference over all 44
433433 other questions pending before it and decide the same as 45
434434 speedily as possible. 46
435435 3. (1) Beginning July 1, 2026, the test year for 47
436436 proceedings under this section shall, if requested by a gas 48
437437 corporation, water corporation or sewer corporation, be a 49
438438 future year consisting of the first twelve full calendar 50
439439 months after the operat ion of law date determined as 51
440440 provided in subsections 1 and 2 of this section for 52
441441 schedules stating new base rates filed by a gas corporation, 53
442442 water corporation, or sewer corporation under this section, 54
443443 unless the commission makes a determination that using a 55
444444 future test year under this section is detrimental to the 56 SB 5 15
445445 public interest. For ratemaking purposes, the projected 57
446446 total rate base at the end of the future test year as 58
447447 authorized by the commission shall be used to establish new 59
448448 base rates. Unless otherwise ordered by the commission, new 60
449449 base rates shall not go into effect before the first day of 61
450450 the future test year. 62
451451 (2) With respect to gas corporations, water 63
452452 corporations, or sewer corporations that elect to utilize a 64
453453 future test year and notwithstanding section 393.270 to the 65
454454 contrary, within forty -five days of the end of the future 66
455455 test year, such gas corporation, water corporation, or sewer 67
456456 corporation shall update its base rates that were approved 68
457457 by the commission in its re port and order issued under 69
458458 subsections 1 and 2 of this section to reflect the total 70
459459 rate base, annualized depreciation expense, income tax 71
460460 expense, payroll expense, employee benefits (other than 72
461461 pensions and other post -retirement benefits) and rate ca se 73
462462 expense at the end of the future test year. The total 74
463463 ending rate base and expense items reflected in this update 75
464464 shall not be greater than the total ending rate base and 76
465465 expense items approved by the commission in its report and 77
466466 order establishing base rates. The commission and parties 78
467467 to the case shall have sixty days to review the accuracy of 79
468468 the updated information provided by a gas corporation, water 80
469469 corporation, or sewer corporation. The commission shall 81
470470 order the corporation to file ne w tariff sheets that reflect 82
471471 the update, unless any party who was a party to the rate 83
472472 case files a request for a hearing at which point the 84
473473 commission shall suspend the filed tariffs and order a 85
474474 procedural schedule. 86
475475 4. A gas corporation, water co rporation, or sewer 87
476476 corporation that requests a test year under subsection 3 of 88 SB 5 16
477477 this section shall not recover the costs of any plant 89
478478 investments made during the test year period under any of 90
479479 the mechanisms provided for in sections 393.1000, 393.1003, 91
480480 393.1006, 393.1009, 393.1012, 393.1015, 393.1500, 393.1503, 92
481481 393.1506, or 393.1509. 93
482482 5. For a gas corporation, water corporation, or sewer 94
483483 corporation that elected to use a future test year, a 95
484484 reconciliation of the rate base at the end of the futur e 96
485485 test year shall be provided to the commission within forty - 97
486486 five days of the end of the future test year. If the actual 98
487487 rate base is less than the rate base used to set base rates 99
488488 in the prior general rate proceeding under subsections 1 and 100
489489 2 of this section, and notwithstanding section 393.270 to 101
490490 the contrary, the portion of the annual revenue requirement 102
491491 comprising the rate base difference shall be returned to 103
492492 customers. The revenue requirement shall be calculated 104
493493 using rate base, depreciation expense, income tax expense, 105
494494 and the pre-tax rate of return from the prior general rate 106
495495 proceeding under subsections 1 and 2 of this section. The 107
496496 difference in revenue requirement shall be placed into a 108
497497 regulatory liability to be returned to customer s in the next 109
498498 general rate proceeding with such regulatory liability to 110
499499 accrue carrying costs at the utility's weighted average cost 111
500500 of capital. 112
501501 6. The commission may take into account any change in 113
502502 business risk to the corporation resulting from 114
503503 implementation of the adjustment mechanism in setting the 115
504504 corporation's allowed return in any rate proceeding, in 116
505505 addition to any other changes in business risk experienced 117
506506 by the corporation. 118
507507 7. For a gas corporation, water corporation, or sewe r 119
508508 corporation that elected to use a future test year, a 120 SB 5 17
509509 reconciliation of payroll expense, employee benefits except 121
510510 for pensions and other post -retirement benefits, and rate 122
511511 case expense at the end of the future test year shall be 123
512512 provided to the comm ission within forty-five days of the end 124
513513 of the future test year. If the actual amounts for these 125
514514 expenses are less than the amounts used to calculate the 126
515515 revenue requirement in the prior general rate proceeding 127
516516 under subsections 1 and 2 of this secti on, and 128
517517 notwithstanding section 393.270 to the contrary, the 129
518518 differences shall be returned to customers. The difference 130
519519 in revenue requirement shall be placed into a regulatory 131
520520 liability to be returned to customers in the next general 132
521521 rate case with such regulatory liability to accrue carrying 133
522522 costs at the utility's weighted average cost of capital. 134
523523 8. The commission may promulgate rules to implement 135
524524 the provisions of this section. Any rule or portion of a 136
525525 rule, as that term is defined in se ction 536.010, that is 137
526526 created under the authority delegated in this section shall 138
527527 become effective only if it complies with and is subject to 139
528528 all of the provisions of chapter 536 and, if applicable, 140
529529 section 536.028. This section and chapter 536 are 141
530530 nonseverable and if any of the powers vested with the 142
531531 general assembly pursuant to chapter 536 to review, to delay 143
532532 the effective date, or to disapprove and annul a rule are 144
533533 subsequently held unconstitutional, then the grant of 145
534534 rulemaking authority and any rule proposed or adopted after 146
535535 August 28, 2025, shall be invalid and void. 147
536536 9. For purposes of this section, the following terms 148
537537 shall mean: 149
538538 (1) "Base rates", rates or charges for public utility 150
539539 service other than rates or charges under a ny rate 151
540540 adjustment mechanism including, but not limited to, those 152 SB 5 18
541541 approved under the provisions of sections 386.266, 393.1000, 153
542542 393.1009, 393.1030, 393.1075, and 393.1500; 154
543543 (2) "Revenue requirement", the amount of retail 155
544544 revenues from base rates ch arged to retail customers for 156
545545 public utility service needed for a public utility to 157
546546 recover its cost to provide utility service including 158
547547 reasonable and necessary expenses, prudent investments, and 159
548548 the cost of capital. 160
549549 393.320. 1. As used in this section, the following 1
550550 terms mean: 2
551551 (1) "Large water public utility", a public utility : 3
552552 (a) That regularly provides water service [or sewer 4
553553 service] to more than eight thousand customer connections , 5
554554 regularly provides sewer s ervice to more than eight thousand 6
555555 customer connections, or regularly provides a combination of 7
556556 either to more than eight thousand customer connections; and 8
557557 (b) That provides safe and adequate service but shall 9
558558 not include a sewer district establi shed under Section 10
559559 30(a), Article VI of the Missouri Constitution, sewer 11
560560 districts established under the provisions of chapter 204, 12
561561 249, or 250, public water supply districts established under 13
562562 the provisions of chapter 247, or municipalities that own 14
563563 water or sewer systems; 15
564564 (2) "Small water utility", a public utility that 16
565565 regularly provides water service or sewer service to eight 17
566566 thousand or fewer customer connections; a water district 18
567567 established under the provisions of chapter 247 that 19
568568 regularly provides water or sewer service to eight thousand 20
569569 or fewer customer connections; a sewer district established 21
570570 under the provisions of chapter 204, 249, or 250 that 22
571571 regularly provides sewer service to eight thousand or fewer 23
572572 customer connections; or a water system or sewer system 24 SB 5 19
573573 owned by a municipality that regularly provides water 25
574574 service or sewer service to eight thousand or fewer customer 26
575575 connections; and all other entities that regularly provide 27
576576 water service or sewer service to eight thou sand or fewer 28
577577 customer connections. 29
578578 2. The procedures contained in this section may be 30
579579 chosen by a large water public utility, and if so chosen 31
580580 shall be used by the public service commission to establish 32
581581 the ratemaking rate base of a small water utility during an 33
582582 acquisition. 34
583583 3. (1) An appraisal shall be performed by three 35
584584 appraisers. One appraiser shall be appointed by the small 36
585585 water utility, one appraiser shall be appointed by the large 37
586586 water public utility, and the third appraiser shall be 38
587587 appointed by the two appraisers so appointed. Each of the 39
588588 appraisers shall be a disinterested person who is a 40
589589 certified general appraiser under chapter 339. 41
590590 (2) The appraisers shall: 42
591591 (a) Jointly prepare an appraisal of the fair mar ket 43
592592 value of the water system and/or sewer system. The 44
593593 determination of fair market value shall be in accordance 45
594594 with Missouri law and with the Uniform Standards of 46
595595 Professional Appraisal Practice; and 47
596596 (b) Return their appraisal, in writing, to the small 48
597597 water utility and large water public utility in a reasonable 49
598598 and timely manner. 50
599599 (3) If all three appraisers cannot agree as to the 51
600600 appraised value, the appraisal, when signed by two of the 52
601601 appraisers, constitutes a good and valid apprai sal. 53
602602 4. Nothing in this section shall prohibit a party from 54
603603 declining to proceed with an acquisition or be deemed as 55
604604 establishing the final purchase price of an acquisition. 56 SB 5 20
605605 5. (1) The lesser of the purchase price or the 57
606606 appraised value, together with the reasonable and prudent 58
607607 transaction, closing, and transition costs incurred by the 59
608608 large water public utility, shall constitute the ratemaking 60
609609 rate base for the small water utility as acquired by the 61
610610 acquiring large water public utility; provided, however, 62
611611 that if the small water utility is a public utility subject 63
612612 to chapter 386 and the small water utility completed a rate 64
613613 case prior to the acquisition, the public service commission 65
614614 may select as the ratemaking rate base for the smal l water 66
615615 utility as acquired by the acquiring large water public 67
616616 utility a ratemaking rate base in between: 68
617617 (a) The lesser of the purchase price or the appraised 69
618618 value, together with the reasonable and prudent transaction, 70
619619 closing, and transition costs incurred by the large water 71
620620 public utility unless such transaction, closing, and 72
621621 transition costs are elsewhere recoverable in rates; and 73
622622 (b) The ratemaking rate base of the small water 74
623623 utility as ordered by the public service commission in the 75
624624 small water utility's last previous rate case as adjusted by 76
625625 improvements and depreciation reserve since the previous 77
626626 rate case together with the transaction, closing, and 78
627627 transition costs incurred by the large water public utility 79
628628 unless such transaction, closing, and transition costs are 80
629629 elsewhere recoverable in rates. If the small water utility 81
630630 and large water public utility proceed with the sale, any 82
631631 past-due fees due to the state from the small water utility 83
632632 or its customers under chapter 640 or 644 shall be resolved 84
633633 prior to the transfer of ownership or the liability for such 85
634634 past-due fees becomes the responsibility of the large water 86
635635 public utility. Such fees shall not be included in the 87
636636 large water public utility's rate base. 88 SB 5 21
637637 (2) The public service commission shall issue its 89
638638 decision establishing the ratemaking rate base of the small 90
639639 water utility in its order approving the acquisition. For 91
640640 any acquisition with an appraised value of five million 92
641641 dollars or less, such deci sion shall be issued within six 93
642642 months from the submission of the application by the large 94
643643 public water utility to acquire the small water utility. 95
644644 (3) Prior to the expiration of the six -month period, 96
645645 the public service commission staff or the off ice of public 97
646646 counsel may request, upon a showing of good cause, from the 98
647647 public service commission an extension for approval of the 99
648648 application for an additional thirty days. 100
649649 6. Upon the date of the acquisition of a small water 101
650650 utility by a large water public utility, whether or not the 102
651651 procedures for establishing ratemaking rate base provided by 103
652652 this section have been utilized, the small water utility 104
653653 shall, for ratemaking purposes, become part of an existing 105
654654 service area, as defined by the public service commission, 106
655655 of the acquiring large water public utility that is either 107
656656 contiguous to the small water utility, the closest 108
657657 geographically to the small water utility, or best suited 109
658658 due to operational or other factors. This consolidation 110
659659 shall be approved by the public service commission in its 111
660660 order approving the acquisition. 112
661661 7. Any new permit issued pursuant to chapters 640 and 113
662662 644, when a small water utility is acquired by a large water 114
663663 public utility, shall include a plan to resolve all 115
664664 outstanding permit compliance issues. After the transfer of 116
665665 ownership, the acquiring large public water utility shall 117
666666 continue providing service to all customers that were served 118
667667 by the small water utility at the time of sale. 119 SB 5 22
668668 8. This section is intended for the specific and 120
669669 unique purpose of determining the ratemaking rate base of 121
670670 small water utilities and shall be exclusively applied to 122
671671 large water public utilities in the acquisition of a small 123
672672 water utility. This section is not intended to apply beyond 124
673673 its specific purpose and shall not be construed in any 125
674674 manner to apply to electric corporations, natural gas 126
675675 corporations, or any other utility regulated by the public 127
676676 service commission. 128
677677 393.1506. 1. Notwithstanding any provisions of 1
678678 chapter 386 and this chapter to the contrary, a water or 2
679679 sewer corporation that provides water [or sewer] service to 3
680680 more than eight thousand customer connections , sewer service 4
681681 to more than eight thousand customer connec tions, or a 5
682682 combination of either to more than eight thousand customer 6
683683 connections may file a petition and proposed rate schedules 7
684684 with the commission to establish or change a WSIRA that will 8
685685 provide for the recovery of the appropriate pretax revenues 9
686686 associated with the eligible infrastructure system projects, 10
687687 less the appropriate pretax revenues associated with any 11
688688 retired utility plant that is being replaced by the eligible 12
689689 infrastructure system projects. The WSIRA shall not produce 13
690690 revenues in excess of fifteen percent of the water or sewer 14
691691 corporation's base revenue requirement approved by the 15
692692 commission in the water or sewer corporation's most recent 16
693693 general rate proceeding; provided, however, that neither 17
694694 WSIRA revenues attributable to r eplacement of customer -owned 18
695695 lead service lines, nor any reconciliation amounts described 19
696696 in subdivision (2) of subsection 5 of section 393.1509, 20
697697 shall count toward the program cap. The WSIRA and any 21
698698 future changes thereto shall be calculated and impl emented 22
699699 in accordance with the provisions of sections 393.1503 to 23 SB 5 23
700700 393.1509. WSIRA revenues shall be subject to refund based 24
701701 upon a finding and order of the commission, to the extent 25
702702 provided in subsections 5 and 8 of section 393.1509. 26
703703 2. The commission shall not approve a WSIRA for a 27
704704 water or sewer corporation that has not had a general rate 28
705705 proceeding decided or dismissed by issuance of a commission 29
706706 order within the past three years of the filing of a 30
707707 petition pursuant to this section unless the water or sewer 31
708708 corporation has filed for or is the subject of a new general 32
709709 rate proceeding. 33
710710 3. In no event shall a water or sewer corporation 34
711711 collect a WSIRA for a period exceeding three years unless 35
712712 the water or sewer corporation has filed for or is the 36
713713 subject of a pending general rate proceeding; provided that 37
714714 the WSIRA may be collected until the effective date of new 38
715715 rate schedules established as a result of the new general 39
716716 rate proceeding or until the subject general rate proceeding 40
717717 is otherwise decided or dismissed by issuance of a 41
718718 commission order without new rates being established. 42
719719 4. Except as provided in this subsection, in no event 43
720720 shall a water or sewer corporation collect a WSIRA if also 44
721721 collecting revenues from a c ommission approved 45
722722 infrastructure system replacement surcharge as provided in 46
723723 sections 393.1000 to 393.1006. In no event shall a customer 47
724724 be charged both an infrastructure system replacement 48
725725 surcharge as provided in sections 393.1000 to 393.1006 and a 49
726726 WSIRA. In the event a water or sewer corporation is 50
727727 collecting infrastructure system replacement surcharge 51
728728 revenues under sections 393.1000 to 393.1006, that was 52
729729 approved prior to August 28, 2021, when the initial WSIRA is 53 SB 5 24
730730 filed, the approved infras tructure system replacement 54
731731 surcharge revenues shall be included in the new WSIRA filing. 55
732732