Bill Text: IA SSB3008 | 2019-2020 | 88th General Assembly | Introduced
Bill Title: A bill for an act relating to the disposal and acquisition of city water utilities, including at-risk systems.
Spectrum: Committee Bill
Status: (N/A - Dead) 2020-02-18 - Committee report approving bill, renumbered as SF 2312. [SSB3008 Detail]
Download: Iowa-2019-SSB3008-Introduced.html
Senate
Study
Bill
3008
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
COMMERCE
BILL
BY
CHAIRPERSON
DAWSON)
A
BILL
FOR
An
Act
relating
to
the
disposal
and
acquisition
of
city
water
1
utilities,
including
at-risk
systems.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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Section
1.
Section
388.2A,
subsection
2,
paragraphs
a
and
b,
1
Code
2020,
are
amended
to
read
as
follows:
2
a.
(1)
The
governing
body
of
the
city
utility
shall
3
determine
the
fair
market
value
of
the
utility
system
after
4
obtaining
two
appraisals
an
appraisal
of
the
system’s
fair
5
market
value.
One
The
appraisal
shall
be
obtained
from
an
6
independent
appraiser
selected
by
the
governing
body,
and
the
7
other
appraisal
shall
be
obtained
from
an
independent
appraiser
8
approved
by
the
Iowa
utilities
board.
Both
appraisals
For
9
systems
with
more
than
two
thousand
connections,
a
second
10
appraisal
shall
be
obtained
from
an
independent
appraiser
11
selected
by
the
governing
body.
Appraisals
shall
be
conducted
12
in
conformance
with
the
uniform
standards
of
professional
13
appraisal
practice
or
substantially
similar
standards.
14
(2)
Any
appraisal
obtained
pursuant
to
this
paragraph
15
shall
consider
the
depreciated
value
of
the
capital
assets
16
to
be
sold,
the
loss
of
future
revenues
to
the
city
utility,
17
including
the
right
to
generate
surpluses,
and
the
cost
of
any
18
capital
improvements
reasonably
necessary
to
provide
adequate
19
service
and
facilities
to
the
city
utility’s
customers.
20
b.
After
considering
the
appraisal
or
appraisals
obtained
21
pursuant
to
paragraph
“a”
,
as
applicable,
the
governing
body
22
shall
establish
the
city
utility’s
fair
market
value.
The
fair
23
market
value
shall
be
the
greater
of
any
of
the
following:
24
(1)
The
appraisal
or,
in
the
case
of
a
system
with
more
than
25
two
thousand
connections,
the
average
of
the
two
appraisals
26
obtained
pursuant
to
paragraph
“a”
.
27
(2)
The
depreciated
value
of
the
capital
assets
to
be
sold.
28
(3)
The
amount
necessary
to
retire
all
of
the
city’s
29
outstanding
revenue
and
general
obligations
issued
for
purposes
30
of
the
city
utility.
31
Sec.
2.
NEW
SECTION
.
455B.199D
At-risk
utility
systems.
32
1.
For
purposes
of
this
section,
“at-risk
system”
means
a
33
city
drinking
water,
sanitary
sewage,
or
storm
water
drainage
34
system
that
the
city
determines
meets
any
of
the
following
35
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criteria:
1
a.
The
system
serves
a
disadvantaged
community
as
described
2
in
section
455B.199B.
3
b.
The
system
includes
a
water
treatment
plant,
water
4
distribution
system,
or
wastewater
treatment
plant
that
has
5
not
been
operated
by
a
competent
operator
pursuant
to
section
6
455B.223
within
the
previous
twelve
months.
7
c.
The
system
serves
two
thousand
or
fewer
connections.
8
d.
The
system
violated
one
or
more
state
or
federal
9
statutory
or
regulatory
requirements
in
a
manner
that
affects
10
the
safety,
adequacy,
or
efficiency
of
its
services
or
11
facilities.
12
2.
A
new
owner
of
an
at-risk
system
following
disposal
of
13
the
system
by
sale
pursuant
to
section
388.2A
may
provide
to
14
the
department
proof
of
the
availability
of
financial
resources
15
to
meet
system
upgrade
requirements
and
a
revised
timetable
16
for
compliance
with
department
rules.
The
department
shall
17
agree
to
the
revised
timetable
if
the
department
determines
18
the
revised
timetable
is
reasonable
based
on
the
information
19
provided
by
the
new
owner.
20
Sec.
3.
Section
476.84,
subsection
2,
Code
2020,
is
amended
21
by
adding
the
following
new
paragraph:
22
NEW
PARAGRAPH
.
0e.
If
the
acquisition
involves
a
utility
23
that
is
an
at-risk
system
as
defined
in
section
455B.199D,
the
24
board
shall
issue
a
final
order
on
an
application
for
approval
25
of
the
acquisition
within
one
hundred
eighty
days
of
the
filing
26
date
of
the
application.
27
EXPLANATION
28
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
29
the
explanation’s
substance
by
the
members
of
the
general
assembly.
30
This
bill
relates
to
the
disposal
and
acquisition
of
city
31
water
utilities.
32
Current
law
requires
the
governing
body
of
a
city
utility
33
to
determine
the
fair
market
value
of
the
utility
system
by
34
obtaining
the
average
of
two
appraisals
from
an
independent
35
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appraiser,
among
other
factors.
The
bill
requires
a
governing
1
body
to
seek
two
appraisals
only
when
the
system
has
more
than
2
2,000
connections;
otherwise
the
governing
body
only
needs
to
3
seek
one
appraisal.
4
The
bill
defines
the
term
“at-risk
system”
as
it
relates
5
to
city
water
utilities.
Under
the
bill,
when
a
city
utility
6
system
that
is
disposed
of
by
sale
is
an
at-risk
system,
the
7
new
owner
may
provide
to
the
department
of
natural
resources
8
proof
of
the
availability
of
financial
resources
to
meet
9
system
upgrade
requirements
and
provide
a
revised
timetable
10
for
compliance
with
department
rules.
If
the
department
11
determines
that
the
revised
timetable
is
reasonable
based
on
12
the
information
provided
by
the
new
owner,
the
department
shall
13
agree
to
the
timetable.
14
The
bill
requires
the
utilities
board
within
the
utilities
15
division
of
the
department
of
commerce
to
issue
a
final
order
16
within
180
days
when
a
public
utility
applies
for
approval
of
17
the
acquisition
of
an
at-risk
system.
18
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