Bill Text: IA HF2101 | 2023-2024 | 90th General Assembly | Enrolled
Bill Title: A bill for an act relating to the acquisition of water, sanitary sewer, and storm water utilities by rate-regulated public utilities. (Formerly HF 473, HF 56.) Effective date: 07/01/2024.
Spectrum: Committee Bill
Status: (Passed) 2024-04-10 - Signed by Governor. H.J. 772. [HF2101 Detail]
Download: Iowa-2023-HF2101-Enrolled.html
House
File
2101
-
Enrolled
House
File
2101
AN
ACT
RELATING
TO
THE
ACQUISITION
OF
WATER,
SANITARY
SEWER,
AND
STORM
WATER
UTILITIES
BY
RATE-REGULATED
PUBLIC
UTILITIES.
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
Section
1.
Section
476.84,
subsection
2,
Code
2024,
is
amended
to
read
as
follows:
2.
a.
A
public
utility
shall
not
acquire,
in
whole
or
in
part,
a
water,
sanitary
sewer,
or
storm
water
utility
with
a
fair
market
value
purchase
price
of
five
hundred
thousand
three
million
dollars
or
more
from
a
non-rate-regulated
entity
described
in
section
476.1,
subsection
3
,
unless
the
board
first
approves
the
acquisition.
In
addition,
if
the
utility
to
be
acquired
is
a
city
utility,
then
the
public
utility
shall
not
acquire
the
city
utility
until
the
city
has
first
met
certified
completion
of
the
requirements
of
section
388.2A
sections
362.3,
364.2,
364.7,
384.84,
388.2,
388.2A,
and
388.6
.
A
certified
completion
submitted
pursuant
to
this
paragraph
shall
contain
an
affirmation
that
the
city
that
is
the
subject
of
the
acquisition
has
timely
and
substantially
complied
in
relation
to
the
acquisition
with
the
applicable
provisions
of
sections
362.3,
364.2,
364.7,
384.84,
388.2,
388.2A,
and
388.6.
b.
If
a
water,
sanitary
sewer,
or
storm
water
utility
that
is
the
subject
of
an
acquisition
meets
the
requirements
of
paragraph
“a”
,
then
the
acquiring
public
utility
may
apply
to
the
board,
prior
to
the
completion
of
the
acquisition,
for
advance
approval
of
a
proposed
initial
tariff
for
providing
House
File
2101,
p.
2
service
to
customers
of
the
acquired
utility.
c.
As
part
of
its
review
of
the
proposed
acquisition,
the
board
shall
specify
in
advance,
by
order
issued
after
a
contested
case
proceeding,
the
ratemaking
principles
that
will
apply
when
the
costs
of
the
acquired
utility
are
included
in
regulated
rates.
The
lesser
of
the
sale
price
or
the
fair
market
value
of
the
acquired
utility
as
established
pursuant
to
section
388.2A,
subsection
2
,
shall
be
used
in
determining
the
applicable
ratemaking
principles.
In
determining
the
applicable
ratemaking
principles,
the
board
shall
not
be
limited
to
traditional
ratemaking
principles
or
traditional
cost
recovery
mechanisms.
Among
the
principles
and
mechanisms
the
board
may
consider,
the
board
has
the
authority
to
approve
ratemaking
principles
that
provide
for
reasonable
restrictions
upon
the
ability
of
the
public
utility
to
seek
an
increase
in
specified
regulated
rates
for
a
period
of
time
after
the
acquisition
takes
place.
The
final
order
including
the
rate
base
and
approving
the
acquisition
shall
consider
reasonable
and
customary
closing
costs,
the
cost
of
appraisals,
and
regulatory
and
legal
expenses
incurred
in
connection
with
the
acquisition.
d.
In
determining
the
applicable
ratemaking
principles,
the
board
shall
find
that
the
proposed
acquisition
will
result
in
just
and
reasonable
rates
to
all
customers
of
the
public
utility,
including
but
not
limited
to
existing
customers
of
the
public
utility.
In
making
this
finding,
the
board
may
consider
any
factor
it
reasonably
concludes
may
affect
future
rates,
including
but
not
limited
to
the
price
paid
for
the
acquired
utility
and
the
projected
cost
of
reasonable
and
prudent
changes
to
investments
in
the
acquired
utility
in
order
to
provide
adequate
safe
and
reliable
services
and
facilities
to
customers.
The
board
shall
consider
whether
there
are
ratemaking
principles
that
will
result
in
just
and
reasonable
rates
to
all
customers
in
determining
whether
to
approve
or
disapprove
a
proposed
acquisition.
e.
(1)
In
determining
the
applicable
ratemaking
principles,
the
board
shall
require
the
public
utility
to
submit
a
purchase
agreement
for
the
acquisition
and
shall
find
that
the
purchase
agreement
includes
terms,
conditions,
requirements,
and
other
House
File
2101,
p.
3
provisions
applicable
to
the
system
to
be
acquired
that
are
in
substantial
compliance
with
the
requirements
in
sections
362.3,
364.2,
364.7,
384.84,
388.2,
388.2A,
and
388.6.
(2)
The
purchase
agreement
shall
include
a
term
allowing
the
parties
thirty
days,
after
final
approval
of
the
ratemaking
principles,
to
terminate
the
purchase
agreement
without
penalty.
e.
f.
If
the
acquisition
involves
a
utility
that
is
an
at-risk
system
as
defined
in
section
455B.199D
,
the
board
shall
issue
a
final
order
on
an
application
for
approval
of
the
acquisition
within
one
hundred
twenty
days
from
the
filing
of
the
application.
For
all
other
acquisitions,
the
board
shall
issue
an
order
within
one
hundred
eighty
days
of
the
filing
date
of
the
application.
f.
g.
Upon
the
approval
of
a
proposal
for
acquisition
by
board
order,
the
parties
subject
to
the
acquisition
shall
have
the
option
of
either
proceeding
with
such
acquisition
or
not,
subject
to
any
termination
provisions
contained
in
the
acquisition
agreement.
g.
h.
Notwithstanding
any
provision
of
this
chapter
to
the
contrary,
the
ratemaking
principles
established
by
the
board
pursuant
to
this
section
shall
be
binding
with
regard
to
the
acquired
utility
in
any
subsequent
rate
proceeding.
______________________________
PAT
GRASSLEY
Speaker
of
the
House
______________________________
AMY
SINCLAIR
President
of
the
Senate
I
hereby
certify
that
this
bill
originated
in
the
House
and
is
known
as
House
File
2101,
Ninetieth
General
Assembly.
______________________________
MEGHAN
NELSON
Chief
Clerk
of
the
House
Approved
_______________,
2024
______________________________
KIM
REYNOLDS
Governor