Senate Bill 2375

AN ACT TO AMEND SECTION 21-27-7, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT FEES OR CHARGES FOR WATER SERVICES SHALL BE ASSESSED JOINTLY AND SEVERALLY AGAINST USERS OF THE SERVICE AND THE OWNER OF THE PROPERTY FURNISHED THE SERVICE; TO PROVIDE THAT ANY PERSON WHO PAYS AN AMOUNT FOR WATER SERVICES AS PART OF A RENTAL OR LEASE AGREEMENT SHALL NOT BE HELD LIABLE UPON THE FAILURE OF THE OWNER TO PAY FEES; TO PROVIDE THAT FEES SHALL BE A LIEN UPON THE REAL PROPERTY OFFERED THE SERVICE; TO PROVIDE THAT FEES MAY BE ASSESSED ANNUALLY; TO PROHIBIT THE SALE OF PERSONAL PROPERTY TO SATISFY A LIEN UNDER THIS SECTION; TO REQUIRE THE MUNICIPALITY OR RECEIVERSHIP TO NOTIFY THE COUNTY TAX COLLECTOR OF THE UNPAID FEES OR CHARGES; TO PROHIBIT THE TAX COLLECTOR FROM ISSUING OR RENEWING A MOTOR VEHICLE ROAD AND BRIDGE PRIVILEGE LICENSE FOR ANY MOTOR VEHICLE OWNED BY A PERSON WHO IS DELINQUENT IN THE PAYMENT OF CHARGES UNLESS SUCH FEES ARE PAID; TO DETERMINE WAYS LIENS CREATED UNDER THIS SECTION MAY BE DISCHARGED; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 21-27-7, Mississippi Code of 1972, is amended as follows:

21-27-7. (1) (a) The governing authorities of municipalities shall have the power to erect, purchase, maintain and operate waterworks, and to regulate the same, and to prescribe the rates at which water shall be supplied to the users. The rates at which water, wastewater, and sewer services shall be supplied shall be just and reasonable based on the actual cost to operate and maintain the systems, and rates may not be unreasonably preferential, prejudicial or discriminatory but shall be sufficient, equitable and consistent in application to each class of users. While a municipality may set different rates for different classifications of users, a municipality shall not discriminate in setting rates among members of the same classification. The municipal governing authorities shall make a finding on the minutes of the governing body establishing the rate based on the actual cost to operate and maintain the system. A municipality shall not charge a user a fee for services received which is less than the cost incurred by the municipality to provide such services.

(b) The governing authorities of a municipality shall establish and maintain rates and charges in equitable proportion to the use of the services and benefits rendered by the waterworks systems and water treatment facilities serving the municipal area. From time to time the governing authorities shall adjust such rates, to the end that the revenues therefrom will be sufficient at all times to pay the expenses of operating and maintaining such works, facilities and systems and all of the municipality's obligations under any contract or bond resolution with respect thereto. The calculation of a user's bill shall be limited to the actual amount of volumetric usage, plus those fees reasonable and necessary for the cost of capital expenses, system operation and maintenance, and debt service.

(c) If a user's meter is tampered with, unreadable, or otherwise out-of-order, a municipality may render an estimated bill to that user for a period not to exceed six (6) months. In such circumstance, an estimated bill shall be based upon the prior average measured usage of the user or a similar user of the same classification.

(i) Only in the event a municipality is unable to meet the requirement of billing based solely on volumetric usage, such municipality may bill based on a flat fee rate where such municipality has established flat fee billing as its usual and customary billing practice prior to July 1, 2023, and where such municipality is actively billing based upon a flat fee rate as of July 1,2023. In such circumstances, flat fee billing may be utilized until such time as the municipality implements upgrades to its system to provide for volumetric billing. In such circumstance, the municipality may set different flat fee rates for different classifications of users, but the municipality shall not discriminate in setting flat fee rates among members of the same classification, and the municipality shall not charge a user a fee for services received that is less than the cost incurred by the municipality to provide such services.

(ii) The governing authorities of the municipality shall make a finding annually on the minutes of the governing body establishing the rate based upon the actual cost to operate and maintain the system as determined under Generally Accepted Accounting Principles, and the municipality shall not charge a user a fee for services received that is less than the cost incurred by the municipality, or based on the assessed value of the property, to provide such services.

(d) Notice of any change in the rate or rate structure at which services are supplied shall be posted on all bills sent to users at least one (1) month prior to the effective date of the rate change. Notice shall also be posted to the municipality's online web page or bill payment platform, if the municipality has an online web page or bill payment platform.

(e) Nothing in this statute shall be construed as prohibiting a user or governing authority of any municipality from applying for and receiving any federally or privately subsidized payment assistance, grant or other funds.

(f) The governing authority of a municipality may provide for the calculation of a user's bill by a method other than volumetric usage only in exchange for consideration as part of, or in connection with, an incentive contract or other form of benefit or assistance related to the user's location, expansion, or maintenance of its commercial or industrial operation within the municipality, so long as such rate is equitable, fair, and nondiscriminatory, and the municipality shall not charge such user a fee for services received that is less than the cost incurred by the municipality to provide such services.

(2) The governing authorities of municipalities shall have the power to acquire by purchase, donation or condemnation, in the name of the municipality, suitable grounds, within or without the corporate limits, upon which to erect waterworks, and also the right-of-way to and from such works and the right-of-way for laying water pipes within the corporate limits, and from such waterworks to the municipality, and to extend such right-of-way from time to time. The governing authorities shall have the power to contract with any person for the maintenance and operation of waterworks. The authorities shall have the power to contract with any person for the erection and maintenance of waterworks for a term not exceeding twenty-five (25) years, fixing water rates in the contract subject to municipal regulations. A contract for the erection or purchase of waterworks shall not, however, be entered into until submitted to a vote of the qualified electors and approved by a majority of those voting. A contract for maintenance under which the person who will perform such maintenance is wholly or partially responsible for fixing water rates shall not be entered into until submitted to a vote of the qualified electors and approved by a majority of those voting. It shall be unlawful for any municipally owned waterworks to supply water free of charge, or in any amount less than the fixed charges, to any person, firm or corporation, except as is expressly authorized by law.

(3) (a) Fees or charges for services provided by municipally owned water utilities, or by court-initiated receiverships for municipally owned or operated water utilities, shall be assessed jointly and severally against the user of the service and against the owner of the property furnished the service. However, any person who pays, as a part of a rental or lease agreement, an amount for service shall not be held liable upon the failure of the property owner to pay such fees.

(b) Every user assessed the fees or charges provided for and limited by this subsection (3) and the owner of the property occupied by that user shall be jointly and severally liable for the fees and/or charges so assessed. The fees or charges shall be a lien upon the real property offered water service.

At the discretion of the governing body of the municipality or the court-initiated receivership, fees or charges assessed for the service may be assessed annually. If fees or charges are assessed annually, the fees or charges for each calendar year shall be a lien upon the real property offered the service beginning on January 1 of the next immediately succeeding calendar year. The person or entity owing the fees or charges, upon signing a form provided by the governing authority or receivership, may pay the fees or charges in equal installments.

If fees or charges so assessed are assessed on a basis other than annually, the fees or charges shall become a lien on the real property offered the service on the date that the fees or charges become due and payable.

No real or personal property shall be sold to satisfy any lien imposed under this section.

The municipality or receivership shall mail a notice of the lien, including the amount of unpaid fees or charges and a description of the property subject to the lien, to the owner of the property subject to the lien.

(c) The municipal governing body or receivership shall notify the county tax collector of any unpaid fees or charges assessed under this section within ninety (90) days after such fees or charges are due. Upon receipt of a delinquency notice, the tax collector shall not issue or renew a motor vehicle road and bridge privilege license for any motor vehicle owned by a person who is delinquent in the payment of fees or charges, unless such fees or charges, in addition to any other taxes or fees assessed against the motor vehicle, are paid.

(d) Liens created under this section may be discharged as follows:

(i) By filing with the tax collector a receipt or acknowledgment, signed by the municipality or receivership, that the lien has been paid or discharged; or

(ii) By depositing with the tax collector money to the amount of the claim, which money shall be held for the benefit of the municipality or receivership.

SECTION 2. This act shall take effect and be in force from and after July 1, 2026.