Senate Bill 2433

AN ACT TO AMEND SECTIONS 77-3-1 AND 77-3-3, MISSISSIPPI CODE OF 1972, TO EXEMPT ELIGIBLE HOMEOWNERS ASSOCIATIONS IN ELIGIBLE MUNICIPALITIES FROM CERTAIN UTILITY REGULATION WHEN PROVIDING WATER TO THEIR OWN RESIDENTS; TO CREATE NEW SECTION 77-3-99, MISSISSIPPI CODE OF 1972, TO CLARIFY CONTINUING OBLIGATIONS ON THE PART OF THE ELIGIBLE MUNICIPALITY; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 77-3-1, Mississippi Code of 1972, is amended as follows:

77-3-1. (1) Except as otherwise provided in Section 77-3-6, any public utility as defined in paragraph (d) of Section 77-3-3, owned or operated by a municipality shall not be subject to the provisions of this article, except as to extension of utilities greater than one (1) mile outside corporate boundaries after March 29, 1956.

(2) The provisions of this chapter shall not apply to the distribution of water by an eligible homeowners association only to its residents, irrespective of the subdivision's location inside of an area subject to a Certificate of Public Convenience and Necessity held by an eligible municipality. Additionally, the provisions of this chapter shall not apply to any entity supplying water to an eligible homeowner's association for purposes of supplying water only to its residents. These provisions shall not apply whether an eligible homeowners association elects to provide water to its residents on a full-time basis or opts for an emergency connection to a private water source for use only when water from an eligible municipality is unavailable, unreliable or unsafe.

SECTION 2. Section 77-3-3, Mississippi Code of 1972, is amended as follows:

77-3-3. As used in this chapter:

(a) The term "corporation" includes a private or public corporation, a municipality, an association, a joint-stock association or a business trust.

(b) The term "person" includes a natural person, a partnership of two (2) or more persons having a joint or common interest, a cooperative, nonprofit, limited dividend or mutual association, a corporation, or any other legal entity.

(d) The term "public utility" includes persons and corporations, or their lessees, trustees and receivers now or hereafter owning or operating in this state equipment or facilities for:

(i) The generation, manufacture, transmission or distribution of electricity to or for the public for compensation;

(ii) The transmission, sale, sale for resale, or distribution of natural, artificial, or mixed natural and artificial gas to the public for compensation by means of transportation, transmission, or distribution facilities and equipment located within this state; however, the term shall not include the production and gathering of natural gas, the sale of natural gas in or within the vicinity of the field where produced, or the distribution or sale of liquefied petroleum gas or the sale to the ultimate consumer of natural gas for use as a motor vehicle fuel;

(iii) The transmission, conveyance or reception of any message over wire, of writing, signs, signals, pictures and sounds of all kinds by or for the public, where such service is offered to the public for compensation, and the furnishing, or the furnishing and maintenance, of equipment or facilities to the public, for compensation, for use as a private communications system or part thereof; however, no person or corporation not otherwise a public utility within the meaning of this chapter shall be deemed such solely because of engaging in this state in the furnishing, for private use as last aforementioned, and moreover, nothing in this chapter shall be construed to apply to television stations, radio stations, community television antenna services, video services, Voice over Internet Protocol services ("VoIP"), any wireless services, including commercial mobile services, Internet Protocol ("IP") - enabled services or broadband services; and

(iv) The transmission, distribution, sale or resale of water to the public for compensation, or the collection, transmission, treatment or disposal of sewage, or otherwise operating a sewage disposal service, to or for the public for compensation.

The term "public utility" shall not include any person not otherwise a public utility, who furnishes the services or commodity described in this paragraph only to himself, his employees or tenants as an incident of such employee service or tenancy, if such services are not sold or resold to such tenants or employees on a metered or consumption basis other than the submetering authorized under Section 77-3-97.

A public utility's business other than of the character defined in subparagraphs (i) through (iv) of this paragraph is not subject to the provisions of this chapter.

(e) The term "rate" means and includes every compensation, charge, fare, toll, customer deposit, rental and classification, or the formula or method by which such may be determined, or any of them, demanded, observed, charged or collected by any public utility for any service, product or commodity described in this section, offered by it to the public, and any rules, regulations, practices or contracts relating to any such compensation, charge, fare, toll, rental or classification; however, the term "rate" shall not include charges for electrical current furnished, delivered or sold by one (1) public utility to another for resale.

(f) The word "commission" shall refer to the Public Service Commission of the State of Mississippi, as now existing, unless otherwise indicated.

(g) The term "affiliated interest" or "affiliate" includes:

(i) Any person or corporation owning or holding, directly or indirectly, twenty-five percent (25%) or more of the voting securities of a public utility;

(ii) Any person or corporation in any chain of successive ownership of twenty-five percent (25%) or more of the voting securities of a public utility;

(iii) Any corporation of which fifteen percent (15%) or more of the voting securities is owned or controlled, directly or indirectly, by a public utility;

(iv) Any corporation of which twenty-five percent (25%) or more of the voting securities is owned or controlled, directly or indirectly, by any person or corporation that owns or controls, directly or indirectly, twenty-five percent (25%) or more of the voting securities of any public utility or by any person or corporation in any chain of successive ownership of twenty-five percent (25%) of such securities;

(v) Any person who is an officer or director of a public utility or of any corporation in any chain of successive ownership of fifteen percent (15%) or more of voting securities of a public utility; or

(vi) Any person or corporation that the commission, after notice and hearing, determines actually exercises any substantial influence or control over the policies and actions of a public utility, or over which a public utility exercises such control, or that is under a common control with a public utility, such control being the possession, directly or indirectly, of the power to direct or cause the discretion of the management and policies of another, whether such power is established through ownership of voting securities or by any other direct or indirect means.

However, the term "affiliated interest" or "affiliate" shall not include a joint agency organized pursuant to Section 77-5-701 et seq., nor a member municipality thereof.

(h) The term "facilities" includes all the plant and equipment of a public utility, used or useful in furnishing public utility service, including all real and personal property without limitation, and any and all means and instrumentalities in any manner owned, operated, leased, licensed, used, controlled, furnished or supplied for, by or in connection with its public utility business.

(i) The term "cost of service" includes operating expenses, taxes, depreciation, net revenue and operating revenue requirement at a claimed rate of return from public utility operations.

(j) The term "lead-lag study" includes an analysis to determine the amount of capital which investors in a public utility, the rates of which are subject to regulation under the provisions of this chapter, must provide to meet the day-to-day operating costs of the public utility prior to the time such costs are recovered from customers, and the measurement of (i) the lag in collecting from the customer the cost of providing service, and (ii) the lag in paying the cost of providing service by the public utility.

(k) The term "broadband services" means any service that consists of or includes a high-speed access capability to transmit at a rate that is not less than two hundred (200) kilobits per second either in the upstream or downstream direction and either:

(i) Is used to provide access to the internet, or

(ii) Provides computer processing, information storage, information content or protocol conversion, including any service applications or information service provided over such high-speed access service.

(l) The term "video services" means video programming services without regard to delivery technology, including Internet Protocol technology ("Internet Protocol television or IPTV") and video programming provided as a part of a service that enables users to access content, information, email or other services offered over the public internet. The term "video programming" means any programming as defined in 47 USCS Section 522(20).

(m) The term "Voice over Internet Protocol services" or "VoIP services" means any service that: (i) enables real-time, two-way voice communications that originate from or terminate to the user's location in Internet Protocol or any successor protocol; (ii) uses a broadband connection from the user's location; and (iii) permits users generally to receive calls that originate on the Public Switched Telephone Network and to terminate calls to the Public Switched Telephone Network.

(n) The term "commercial mobile services" means any services as defined in 47 USCS Section 332(d).

(o) The term "Internet Protocol-enabled services" or "IP-enabled services" means any service, capability, functionality, or application provided using Internet Protocol, or any successor protocol, that enables an end user to send or receive a communication in Internet Protocol format, or any successor format, regardless of whether the communications is voice, data or video. Nothing contained in this paragraph shall apply to retail services that are tariffed by the commission.

(p) "Broadband service provider" means an entity that provides broadband services to others on a wholesale basis or to end-use customers on a retail basis.

(q) "Broadband operator" means a broadband service provider that uses the electric delivery system of any public utility of the type as defined in paragraph (d)(i) of this section with the public utility's consent to provide broadband services.

(r) "Electric delivery system" means the poles, lines, fiber, cables, broadband system, materials, equipment, easements and other facilities or properties used by any public utility of the type as defined in paragraph (d)(i) of this section to deliver or facilitate the delivery, sale or use of electric energy.

(s) "Eligible municipality" means any municipality with a population of greater than One Hundred Thousand (100,000) according to the latest decennial census which has been the subject of litigation by the United States Environmental Protection Agency for violations of the Safe Drinking Water Act, 42 USC Section 300(f) et seq.

(t) "Eligible homeowners association" means any homeowners association created and governed by restrictive covenants, if the subdivision subject to these covenants:

(i) Was constructed prior to 1970 outside of municipal boundaries;

(ii) Was subsequently annexed by an eligible municipality, irrespective of whether the municipality was an eligible municipality at the time of annexation or subsequently became eligible; and

(iii) Is adjacent to which a ground water well system originally designed to supply the subdivision which continues to provide drinking water to a private user is located.

SECTION 3. The following shall be codified as Section 77-3-99, Mississippi Code of 1972:

77-3-99. (1) In the event an eligible homeowners association elects to provide water service to its residents, the eligible municipality shall sell and convey any water assets to the homeowners association that the association deems necessary to supply its residents with water. These assets shall include, without limitation, main water lines, service lines to residential buildings, meters, and any other assets located within the subdivision that are owned by the municipality and used for the purpose of delivering water, which the homeowners association has determined are necessary or useful to provide its residents with water. The homeowners association shall pay the municipality fair market value for such assets, which value shall be determined by an independent appraisal conducted by an appraiser of the eligible homeowners association's choosing. At such time as the eligible homeowners association closes on the municipal water assets, it shall obtain as a function of law an easement in municipal roads and rights-of-way through or under which these assets reside, and on municipal roads adjacent to these roads, which will allow the homeowners association to repair, replace or improve these assets as needed at its cost, including repairing any damage to municipal roads that result from these repairs or replacements.

(2) The provisions of this chapter shall continue to apply to sewer services and the eligible municipality shall continue to furnish sewage disposal services to the residents of the eligible homeowners association on the same terms at which they are offered to other residents of the municipality.

(3) If an eligible homeowners association elects to provide water to its residents, the eligible municipality shall continue to provide water service to the residents of this subdivision until such time as the homeowners association notifies the municipality in writing that it is prepared to begin providing water service to the subdivision's residents.

(4) Nothing in this chapter shall be construed to diminish or eliminate the eligible municipality's continued obligation to provide emergency fire suppression services to a subdivision, the eligible homeowners association of which has elected to provide its residents with water.

SECTION 4. This act shall take effect and be in force from and after July 1, 2023.