Senate Bill 2371

AN ACT TO CREATE NEW SECTION 51-41-8, MISSISSIPPI CODE OF 1972, TO PROHIBIT A MUNICIPALITY FROM EXERCISING THE POWER OF EMINENT DOMAIN OVER WATER OR SEWER SYSTEM FACILITIES OF A QUALIFIED PUBLIC WATER AUTHORITY IN THE CERTIFICATED AREA UNLESS THE CERTIFICATE OF CONVENIENCE AND NECESSITY IS CANCELLED BY THE MISSISSIPPI PUBLIC SERVICE COMMISSION; TO AMEND SECTIONS 51-41-1, MISSISSIPPI CODE OF 1972, TO REVISE THE LEGISLATIVE INTENT TO PROVIDE CERTAIN NOT-FOR-PROFIT ENTITIES THAT PROVIDE WATER OR SEWER SERVICES TO THE PUBLIC AN OPPORTUNITY TO ACCESS THE TAX-EXEMPT CAPITAL MARKET TO ASSURE CUSTOMERS ARE CHARGED REASONABLE RATES FOR SUCH SERVICES; TO AMEND SECTIONS 51-41-3 AND 77-3-21, MISSISSIPPI CODE OF 1972, IN CONFORMITY TO THE PROVISIONS OF THIS ACT; TO BRING FORWARD SECTIONS 51-41-17 AND 77-3-13, MISSISSIPPI CODE OF 1972, FOR THE PURPOSE OF POSSIBLE AMENDMENTS; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. The following shall be codified as Section 51-41-8, Mississippi Code of 1972:

51-41-8. (1) A municipality or other entity shall not exercise the power of eminent domain over the facilities of a qualified corporation of water authority, unless the Mississippi Public Service Commission, under the authority of Section 77-3-21, cancels the certificate of public convenience and necessity granted to the qualified corporation or water authority under Section 77-3-13, for the service area wherein the facilities are located.

(2) Nothing in this chapter shall be construed as a waiver by any water authority, qualified corporation of water provider, of any right granted to it under federal law.

(3) The Mississippi Public Service Commission shall not have jurisdiction to regulate the rates for the sales of water or sewer services by any not-for-profit corporation, association or water authority created under this chapter.

SECTION 2. Section 51-41-1, Mississippi Code of 1972, is amended as follows:

51-41-1. It is the intent of the Legislature to provide a means, in addition to the incorporation of districts authorized in Sections 19-1-151 through 19-5-207, by which not-for-profit corporations or associations involved in the * * * service of providing water or sewer services to members of the public and others for compensation may convert their entity status from that of a body corporate to that of a body politic, thereby allowing those entities the opportunity to access the tax-exempt capital markets and thereby assuring the State of Mississippi and the customers of those entities of * * * water or sewer services at reasonable rates.

SECTION 3. Section 51-41-3, Mississippi Code of 1972, is amended as follows:

51-41-3. As used in this chapter, unless the context otherwise requires:

(a) "Board" means the board of directors of the water authority;

(b) "Bond" means any bond, promissory note, lease purchase agreement or other evidence of indebtedness of any nature along with all debt securing instruments of every nature related thereto;

(c) "Indenture" means a mortgage, an indenture of mortgage, deed of trust, trust agreement, loan agreement, security agreement or trust indenture executed by the water authority as security for any bonds;

(d) "Project" means any raw or potable water or wastewater intake, treatment, distribution, transmission, storage, pumping, well site, well field or other facility or system, or any combination of the foregoing, that has as its purpose the providing of * * * ~~raw or potable~~ water or sewer services for compensation to members of the public and commercial, industrial or other users or the treatment of wastewater, along with any and all other appurtenances, equipment, betterments or improvements related thereto. The above projects may include any lands, or interest in any lands, deemed by the board to be desirable in connection with the projects, and necessary equipment for the proper functioning and operation of the buildings or facilities involved;

(e) "Qualified corporation" means any not-for-profit corporation or association that provides, distributes, transmits, treats, pumps or stores raw or potable water or provides sewer service to or for the benefit of members of the general public and commercial, industrial and other users for compensation;

(f) "United States" means the United States of America or any of its agencies or instrumentalities;

(g) "State" means the State of Mississippi; and

(h) "Water authority" means that body politic and governmental entity organized under the provisions of this chapter.

SECTION 4. Section 77-3-21, Mississippi Code of 1972, is amended as follows:

77-3-21. The commission may, after a hearing had upon due notice, make such findings as may be supported by proof as to whether any utility holding a certificate under the provisions of this article is rendering reasonably adequate service in any area covered by such utility's certificate. In the event the commission finds that such utility is not rendering reasonably adequate service the commission may enter an order specifying in what particulars such utility has failed to render reasonably adequate service and order that such failure be corrected within a reasonable time, such time to be fixed in such order. If the utility so ordered to correct such a failure fails to comply with such order of the commission and the commission finds that cancellation of its certificate would be in the best interest of the consuming public served by the holder of the certificate, its certificate for the area affected may be revoked and cancelled by the commission.

Prior to any municipality exercising the power of eminent domain as provided in Section 77-3-17, the commission shall determine that the certificate of public convenience and necessity granted to the utility pursuant to Section 77-3-13 for the service area wherein such facilities are located, shall be cancelled as provided in this section. * * *

SECTION 5. Section 51-41-17, Mississippi Code of 1972, is brought forward as follows:

51-41-17. The water authority shall have the following powers, acting either individually or jointly with other water authorities or public entities, together with all powers incidental thereto or necessary to the discharge thereof:

(a) To have succession in its designated name;

(b) To sue and be sued and to prosecute and defend suits in any court having jurisdiction of the subject matter and of the parties;

(d) To adopt and alter bylaws for the regulations and conduct of its affairs and business;

(e) To acquire, whether by purchase, gift, lease, devise, or otherwise, property of every description which the board may deem necessary to the acquisition, construction, equipment, improvement, enlargement, operation, administration or maintenance of a project, and to hold title thereto;

(f) To construct, enlarge, equip, improve, maintain, consolidate, administer and operate one or more projects;

(g) To borrow money, including interim construction financing, for any of its purposes;

(h) To sell and issue its bonds;

(i) To sell and issue refunding bonds;

(j) To secure any of its bonds by pledge and indenture as provided in this chapter;

(k) To appoint, employ and compensate such general managers, executive directors, agents, architects, engineers, attorneys, accountants and other persons and employees as the business of the water authority may require;

(l) To provide for such insurance as the board may deem advisable;

(m) To invest in obligations that are direct or guaranteed obligations of the United States of America, or other securities in which public funds may be invested by any other political subdivision under the laws of this state, any of its funds that the board may determine are not presently needed for its operational purposes;

(n) To contract, lease and make lease agreements respecting its properties or any part thereof;

(o) To exercise the power of eminent domain in accordance with the procedures prescribed by Title 11, Chapter 27, Mississippi Code of 1972;

(p) To sell, convey or otherwise dispose of any of its properties or projects; and

(q) To exercise and hold the authority and power granted to water supply systems and sewer systems under Sections 19-5-173, 19-5-175, 19-5-177 and 19-5-203.

SECTION 6. Section 77-3-13, Mississippi Code of 1972, is brought forward as follows:

77-3-13. (1) The commission shall issue a certificate of convenience and necessity to any person engaged in the construction or operation of such equipment or facility as is mentioned in subsection (1) of Section 77-3-11 on March 29, 1956, for the construction or operation then being conducted, without requiring proof that public convenience and necessity will be served by such construction or operation, and without further proceedings, if application for such certificate is made to the commission within six (6) months after March 29, 1956. Any utility covered by this chapter which has heretofore been under the jurisdiction of the commission shall, upon application within six (6) months of March 29, 1956, be issued a certificate authorizing it to conduct operations and make extensions within any area covered by its service area map or maps on file with the commission on March 29, 1956.

(2) The commission shall issue a certificate of convenience and necessity to any person engaged in the construction or operation of a sewage disposal service as mentioned in subsection (2) of Section 77-3-11 on August 9, 1968, for the construction or operation then being conducted, without requiring proof that public convenience and necessity will be served by such construction or operation, and without further proceedings, if application for such certificate is made to the commission within six (6) months after August 9, 1968. Pending the filing of such application and the issuance of a certificate, the continuance of such construction or operation shall be lawful.

Except as otherwise specifically provided by subsection (2) of Section 77-3-11 or by this subsection, that portion of the business of a public utility dealing with the operation of a sewage disposal service as provided by subsection (2) of Section 77-3-11 shall be subject to provisions of this chapter, in like manner and with like effect as if such business had been included within the definition of a "public utility" in the original enactment of this chapter.

(3) In all other cases, the commission shall set the matter for hearing, and shall give reasonable notice of the hearing thereon to all interested persons, as in its judgment may be necessary under its rules and regulations, involving the financial ability and good faith of the applicant, the necessity for additional services and such other matters as the commission deems relevant. The commission may issue a certificate of public convenience and necessity, or refuse to issue the same or issue it for the establishment or construction of a portion only of the contemplated plant, route, line or system, or extension thereof, or for the partial exercise only of such right or privilege, and may attach to the exercise of the rights granted by the certificate such reasonable terms and conditions as to time or otherwise as, in its judgment, the public convenience, necessity and protection may require, and may forfeit such certificate after issuance for noncompliance with its terms, or provide therein for an ipso facto forfeiture of the same for failure to exercise the rights granted within the time fixed by the certificate. However, nothing in this section shall be construed as requiring such certificate for a municipally owned plant, project or development, route, line or system or extension thereof in areas within one (1) mile of the corporate boundaries which are not certificated to another utility, and nothing in this chapter or other provision of law shall be construed as allowing a municipally owned plant, project or development, route, line or system or extension thereof in areas certificated to another utility. No certificate shall be required for extensions or additions within the corporate limits of a municipality being served by the holder of a certificate of convenience and necessity.

(4) The commission shall, prior to issuing a certificate of public convenience and necessity to a public utility for any new construction, extension or addition to its property, ascertain that all labor, materials, property or services to be rendered for any proposed project will be supplied at reasonable prices. The commission shall, after issuance of a certificate for facilities estimated to cost Five Million Dollars ($5,000,000.00) or more or estimated to cost an amount equal to one percent (1%) of the rate base allowed by the commission in the utility's last rate case, whichever is greater, assign the public utilities staff to monitor such projects, to inspect periodically construction in progress, and to report to the commission any variances or deviations as found, if any, and to file progress reports thereon with the commission. Such public utility shall file a similar report with the commission at such times and in such form as the commission shall require, including any substantial changes in plans and specifications, cost allocations, construction schedule and funds available to complete the project.

(5) The commission may issue a temporary certificate in cases of emergency, to assure maintenance of adequate service or to serve particular customers, without notice or hearing, pending the determination of an application for a certificate, and may by regulation exempt from the requirements of Sections 77-3-11 through 77-3-21: (a) temporary acts or operations for which the issuance of a certificate will not be required in the public interest; and (b) extensions or additions of service facilities outside of municipalities under such general rules as will promote the prompt availability of such service to prospective users, and at the same time prevent unnecessary and uneconomic duplication of such facilities as between two (2) or more persons.

(6) Prior to the acquisition pursuant to Section 77-3-17, or other provisions of law, by any public agency, authority, district, state or other agency, institution or political subdivision thereof, of any certificate of public convenience and necessity or portion thereof, service areas or portion thereof, or operating rights or portion thereof, issued or granted by the commission pursuant to the provisions of this section and/or the facilities or other properties and equipment of the utility providing service therein of any regulated utility, as defined in Section 77-3-3(d)(i), (ii) and (iii), the commission shall first determine if such service area, certificate of public convenience and necessity, or operating right, or portions thereof, should be cancelled as provided in Section 77-3-21.

(7) Before the acquisition pursuant to any negotiated purchase agreement entered into before 1987, by any public agency, authority, district, state or other agency, institution or political subdivision thereof, of any certificate of public convenience and necessity or portion thereof, service areas or portion thereof, or operating rights or portion thereof, issued or granted by the commission pursuant to this section and/or the facilities or other properties and equipment of the utility providing service therein of any regulated utility defined in Section 77-3-3(d)(i), the commission first shall determine that such service area, certificate of public convenience and necessity, or operating right, or portions thereof, shall be cancelled as provided in Section 77-3-21.

(8) Notwithstanding any provision of this section to the contrary, the certificate as applied for may be granted without a hearing in uncontested cases; however, the commission may hear any uncontested case if it determines that the public interest will be served thereby.

SECTION 7. This act shall take effect and be in force from and after July 1, 2013.