Bill Amendment: MS HB1049 | 2026 | Regular Session
Bill Title: Wastewater treatment and rural water associations; bring forward provisions related to.
Status: 2026-03-11 - Died On Calendar [HB1049 Detail]
Download: Mississippi-2026-HB1049-Senate_Committee_Amendment_No_1.html
Pending
COMMITTEE AMENDMENT NO 1 PROPOSED TO
House Bill No. 1049
BY: Committee
Amend by striking all after the enacting clause and inserting in lieu thereof the following:
SECTION 1. As used in Sections 1 through 6 of this act, the following words shall have the meanings ascribed herein unless context clearly requires otherwise:
(a) "Committee" means the Mississippi Rural Water Oversight Committee as created herein.
(b) "Provider" means any provider of retail water service which is a rural water company.
(c) "Provider board" means the governing body of a provider.
(d) "Asset management" means a process for maintaining a desired level of customer service at the best appropriate cost and involves systematic planning for all physical assets, including, but not limited to, pipes, pumps, treatment plants and storage facilities.
SECTION 2. (1) There is hereby established the Mississippi Rural Water Oversight Committee.
(2) The committee shall consist of the following members:
(a) The Mississippi State Director of the United States Department of Agriculture, or his or her designee;
(b) The Director of the Bureau of Public Water Supply of the Mississippi State Department of Health, or his or her designee;
(c) The Executive Director of the Mississippi Department of Environmental Quality, or his or her designee;
(d) A representative of the Drinking Water State Revolving Fund, who shall be the same individual that represents the Mississippi Rural Water Association on the Drinking Water State Revolving Fund board;
(e) The Chief Executive Officer of the Mississippi Rural Water Association, or his or her designee;
(f) One (1) member to be appointed by the Governor of the State of Mississippi; and
(g) One (1) member to be appointed by the Lieutenant Governor of the State of Mississippi.
SECTION 3. (1) (a) By December 1, 2027, and every five (5) years thereafter, each provider shall obtain a rate study and capacity study.
(b) (i) Rates shall adequately address costs for:
1. Operation and maintenance;
2. Debt service;
3. Required reserves;
4. Depreciation;
5. Future capital expenses;
6. An annual audit or agreed-upon procedures and compilation report; and
7. Other expenses as necessary.
(ii) 1. The rates recommended in the rate study that is obtained and chosen by the provider shall be implemented by the provider in the manner provided under the applicable law for modifying rates.
2. Except with regard to required reserves, an increase in rates recommended in the rate study shall be implemented within one (1) year of the receipt of the rate study.
3. If recommended rates increase the provider's rates by fifty percent (50%) or more from the fiscal year before the rate study was completed, the provider may phase in the rate increase over a two-year period.
(2) By December 1, 2027, and every year thereafter, each provider shall develop an asset management plan to be reported to the committee. Plans should consider and account for, at minimum:
(a) The age, location, condition and value of all physical assets;
(b) Performance expectations for water quality, pressure and reliability;
(c) Customer service standards;
(d) Regular maintenance and replacement needs and activities;
(e) Any maintenance schedules;
(f) Procedures and associated costs;
(g) Cost projections; and
(h) Revenue strategies for the future.
(3) By December 1, 2026, the committee shall promulgate rules and regulations concerning the requirements of the rate study, the capacity study and the asset management plan as described herein. The committee shall also determine an entity to provide guidelines for the rate study and capacity study to use as its basis.
(4) In order to effectuate the purposes of Sections 1 through 6 this act, the committee shall be authorized to hire three (3) employees to assist local providers with conducting the required rate and capacity studies, as well as with development of the required asset management plan. Subject to appropriation by the Legislature for such purpose, such employees shall be paid an annual salary via disbursement of Five Hundred Thousand Dollars ($500,000.00) made annually to the committee out of the Local Governments and Rural Water Systems Improvements Revolving Loan Fund as created in Section 41-3-16. Such monies shall be disbursed according to all requirements set forth in Section 41-3-16 and any other applicable provision of law.
(5) A provider shall deposit a minimum of five percent (5%) per annum of gross revenues in a dedicated refurbishment and replacement account within twelve (12) months of implementation of any rate described herein, unless a different amount is determined by a rate study or unless depreciation is being funded in the study.
(6) (a) The committee shall maintain an approved list of entities to conduct rate studies required by this section, including the Mississippi Rural Water Association, professional engineers, certified public accountants, economists and actuaries.
(b) If a provider chooses an entity to conduct the rate study that is not on the approved list of entities, the entity is required to have conducted at least one (1) rate study in the state in the previous five-year period.
(7) New providers seeking approval from the committee shall:
(a) Demonstrate the ability to remain fiscally sustainable;
(b) Complete a technical, financial and managerial capacity review conducted by the committee. The committee shall review the State Health Department's technical, financial and managerial lists. Providers that receive a score of less than seventy (70) points shall be reported to the committee; and
(c) The Chief Executive Officer of the Mississippi Rural Water Association may report any provider to the committee that it deems in violation of the Mississippi Nonprofit Corporation Act.
(8) (a) A provider that plans to undertake a major development project shall obtain a rate study or amend the provider's existing rate study before beginning the major development project to include consideration of the financial impact of the major development project on the fiscal sustainability of the provider.
(b) As used in this subsection, "major development project" means a project that exceeds twenty percent (20%) of gross revenues of the provider for the immediately preceding fiscal year.
(9) A provider shall file its most recent rate study annually with the State Auditor's office at the same time the provider files its audit report or agreed-upon procedures and compilation report.
(10) (a) For the purposes of this section, a provider is in fiscal distress if the provider:
(i) Fails to obtain a rate study as required under this section;
(ii) Fails to implement a completed rate study as required under this section; or
(iii) Has been found by the committee to be in significant noncompliance with the rules of the committee because of inadequate funds for operation and maintenance or inadequate compliance with rules of the committee.
(b) The Mississippi State Department of Health shall maintain and publish on the department's website a list of providers in fiscal distress and/or significant noncompliance.
(c) The committee shall annually identify and notify a provider if the provider is in fiscal distress.
(d) The provider may appeal the finding to the Circuit Courts of Hinds County, Madison County or Rankin County.
(11) (a) A provider found to be in fiscal distress shall file an improvement plan with the committee within ninety (90) days of a finding of fiscal distress. Such plan shall include, but is not limited to including, specific action to be taken to correct financial, technical and managerial deficiencies.
(b) (i) Upon receipt of the improvement plan, the committee, or a party designated by the committee, shall review the improvement plan and:
1. Approve the improvement plan in whole or in part;
2. Modify the improvement plan; or
3. Deny the improvement plan.
(ii) At the time the committee determines that the provider is no longer in fiscal distress, the committee shall remove the fiscal distress designation and notify the provider.
(12) If a provider is found to be in fiscal distress, the provider shall not receive state financial assistance for water operations until an improvement plan that has been approved by the committee is in place, unless the financial assistance is immediately necessary to ensure preservation of the public peace, health and safety, as determined by the committee.
(13) If the provider is found to be in fiscal distress, the provider shall obtain written authorization from the committee prior to:
(a) Incurring additional debt;
(b) Accepting assistance for the refurbishment or replacement of facilities or construction of facilities not within the provider's improvement plan; or
(c) Transferring assets to another entity.
(14) If a provider is found to be in fiscal distress and the board of such provider is non-functional, the committee shall direct the Mississippi Rural Water Association, in conjunction with the Mississippi Department of Health and the Secretary of State, to use all laws available, including the Mississippi Nonprofit Corporation Act, to remove or replace such board or board members.
SECTION 4. (1) Upon reaching seventy-five percent (75%) of a system's total capacity, providers shall make plans to upgrade their utility to increase its capacity design.
(2) Upon commencement of places to upgrade a utility, providers shall also update an asset management plan to prepare such utilities for future economic growth.
(3) Any provider which fails to meet the requirements of this section is subject to a statement of deficiency issued by the Mississippi State Department of Health.
SECTION 5. Nothing in this act shall be construed to conflict with the provisions of 7 USC Section 1926(b).
SECTION 6. Section 41-3-16, Mississippi Code of 1972, is amended as follows:
41-3-16. (1) (a) There is established a local governments and rural water systems improvements revolving loan and grant program to be administered by the State Department of Health, referred to in this section as "department," for the purpose of assisting counties, incorporated municipalities, the Pearl River Valley Water Supply District, other districts and other water organizations that have been granted tax-exempt status under either federal or state law, in making improvements to their water systems, including construction of new water systems or expansion or repair of existing water systems. Loan and grant proceeds may be used by the recipient for planning, professional services, acquisition of interests in land, acquisition of personal property, construction, construction-related services, maintenance, and any other reasonable use which the board, in its discretion, may allow. For purposes of this section, "water systems" has the same meaning as the term "public water system" under Section 41-26-3.
(b) (i) There is created a board to be known as the "Local Governments and Rural Water Systems Improvements Board," referred to in this section as "board," to be composed of the following nine (9) members: the State Health Officer, or his designee, who shall serve as chairman of the board; the Executive Director of the Mississippi Development Authority, or his designee; the Executive Director of the Department of Environmental Quality, or his designee; the Executive Director of the Department of Finance and Administration, or his designee; the Executive Director of the Mississippi Association of Supervisors, or his designee; the Executive Director of the Mississippi Municipal League, or his designee; the Executive Director of the American Council of Engineering Companies of Mississippi, or his designee; the State Director of the United States Department of Agriculture, Rural Development, or his designee; and a manager of a rural water system.
The Governor shall appoint a manager of a rural water system from a list of candidates provided by the Executive Director of the Mississippi Rural Water Association. The Executive Director of the Mississippi Rural Water Association shall provide the Governor a list of candidates which shall contain a minimum of three (3) candidates for each appointment.
(ii) Nonappointed members of the board may designate another representative of their agency or association to serve as an alternate.
(iii) The gubernatorial appointee shall serve a term concurrent with the term of the Governor and until a successor is appointed and qualified. No member, officer or employee of the Board of Directors of the Mississippi Rural Water Association shall be eligible for appointment.
(c) The department, if requested by the board, shall furnish the board with facilities and staff as needed to administer this section. The department may contract, upon approval by the board, for those facilities and staff needed to administer this section, including routine management, as it deems necessary. The board may advertise for or solicit proposals from public or private sources, or both, for administration of this section or any services required for administration of this section or any portion thereof. It is the intent of the Legislature that the board endeavors to ensure that the costs of administration of this section are as low as possible in order to provide the water consumers of Mississippi safe drinking water at affordable prices.
(d) Members of the board may not receive any salary, compensation or per diem for the performance of their duties under this section.
(2) (a) There is created a special fund in the State Treasury to be designated as the "Local Governments and Rural Water Systems Improvements Revolving Loan Fund," referred to in this section as "revolving fund," which fund shall consist of those monies as provided in Sections 6 and 13 of Chapter 521, Laws of 1995. The revolving fund may receive appropriations, bond proceeds, grants, gifts, donations or funds from any source, public or private. Except as otherwise provided in this section, the revolving fund shall be credited with all repayments of principal and interest derived from loans made from the revolving fund. Except as otherwise provided in this section, the monies in the revolving fund may be expended only in amounts appropriated by the Legislature, and the different amounts specifically provided for the loan program and the grant program shall be so designated. Except as otherwise provided in this section, monies in the fund may only be expended for the grant program from the amount designated for such program. The revolving fund shall be maintained in perpetuity for the purposes established in this section and Sections 6 through 20 of Chapter 521, Laws of 1995. Unexpended amounts remaining in the revolving fund at the end of a fiscal year shall not lapse into the State General Fund, and any interest earned on amounts in the revolving fund shall be deposited to the credit of the fund. Monies in the revolving fund may not be used or expended for any purpose except as authorized under this section and Sections 6 through 20 of Chapter 521, Laws of 1995. Any monies in the fund may be used to match any federal funds that are available for the same or related purposes for which funds are used and expended under this section and Sections 6 through 20 of Chapter 521, Laws of 1995. Any federal funds shall be used and expended only in accordance with federal laws, rules and regulations governing the expenditure of those funds. No person shall use any monies from the revolving fund for the acquisition of real property or any interest in real property unless that property is integral to the project funded under this section and the purchase is made from a willing seller. No county, incorporated municipality or district shall acquire any real property or any interest in any real property for a project funded through the revolving fund by condemnation. The board's application of Sections 43-37-1 through 43-37-13 shall be no more stringent or extensive in scope, coverage and effect than federal property acquisition laws and regulations.
(b) There is created a special fund in the State Treasury to be designated as the "Local Governments and Rural Water Systems Emergency Loan Fund," hereinafter referred to as "emergency fund," which fund shall consist of those monies as provided in Sections 6 and 13 of Chapter 521, Laws of 1995. The emergency fund may receive appropriations, bond proceeds, grants, gifts, donations or funds from any source, public or private. Except as otherwise provided in this section, the emergency fund shall be credited with all repayments of principal and interest derived from loans made from the emergency fund. Except as otherwise provided in this section, the monies in the emergency fund may be expended only in amounts appropriated by the Legislature. The emergency fund shall be maintained in perpetuity for the purposes established in this section and Section 6 of Chapter 521, Laws of 1995. Unexpended amounts remaining in the emergency fund at the end of a fiscal year shall not lapse into the State General Fund. Any interest earned on amounts in the emergency fund shall be deposited to the credit of the fund. Monies in the emergency fund may not be used or expended for any purpose except as authorized under this section and Section 6 of Chapter 521, Laws of 1995.
(c) The board created in subsection (1) shall establish loan and grant programs by which loans and grants may be made available to counties, incorporated municipalities, districts or other water organizations that have been granted tax-exempt status under either federal or state law, to assist those counties, incorporated municipalities, districts or water organizations in making water systems improvements, including the construction of new water systems or expansion or repair of existing water systems. Any entity eligible under this section may receive either a loan or a grant, or both. No grant awarded under the program established in this section may be made using funds from the loan program. Grants may be awarded only when the Legislature specifically appropriates funds for that particular purpose. The interest rate on those loans may vary from time to time and from loan to loan, and will be at or below market interest rates as determined by the board. The board shall act as quickly as is practicable and prudent in deciding on any loan request that it receives. Loans from the revolving fund or emergency fund may be made to counties, incorporated municipalities, districts or other water organizations that have been granted tax-exempt status under either federal or state law, as set forth in a loan agreement in amounts not to exceed one hundred percent (100%) of eligible project costs as established by the board. The board may require county, municipal, district or other water organization participation or funding from other sources, or otherwise limit the percentage of costs covered by loans from the revolving fund or the emergency fund. The board may establish a maximum amount for any loan from the revolving fund or emergency fund in order to provide for broad and equitable participation in the programs.
(d) A county that receives a loan from the revolving fund or the emergency fund shall pledge for repayment of the loan any part of the homestead exemption annual tax loss reimbursement to which it may be entitled under Section 27-33-77, as may be required to meet the repayment schedule contained in the loan agreement. An incorporated municipality that receives a loan from the revolving fund or the emergency fund shall pledge for repayment of the loan any part of the sales tax revenue distribution to which it may be entitled under Section 27-65-75, as may be required to meet the repayment schedule contained in the loan agreement. All recipients of such loans shall establish a dedicated source of revenue for repayment of the loan. Before any county or incorporated municipality shall receive any loan, it shall have executed with the Department of Revenue and the board a loan agreement evidencing that loan. The loan agreement shall not be construed to prohibit any recipient from prepaying any part or all of the funds received. The repayment schedule in each loan agreement shall provide for (i) monthly payments, (ii) semiannual payments, or (iii) other periodic payments, the annual total of which shall not exceed the annual total for any other year of the loan by more than fifteen percent (15%). Except as otherwise provided in subsection (4) of this section, the loan agreement shall provide for the repayment of all funds received from the revolving fund within not more than fifteen (15) years or a term as otherwise allowed by the federal Safe Drinking Water Act, and all funds received from the emergency fund within not more than five (5) years from the date of project completion, and any repayment shall commence not later than one (1) year after project completion. The Department of Revenue shall withhold semiannually from counties and monthly from incorporated municipalities from the amount to be remitted to the county or municipality, a sum equal to the next repayment as provided in the loan agreement.
(e) Any county, incorporated municipality, district or other water organization desiring to construct a project approved by the board which receives a loan from the state for that purpose but which is not eligible to pledge for repayment under the provisions of paragraph (d) of this subsection shall repay that loan by making payments each month to the State Treasurer through the Department of Finance and Administration for and on behalf of the board according to Section 7-7-15, to be credited to either the revolving fund or the emergency fund, whichever is appropriate, in lieu of pledging homestead exemption annual tax loss reimbursement or sales tax revenue distribution.
Loan repayments shall be according to a repayment schedule contained in each loan agreement as provided in paragraph (d) of this subsection.
(f) Any district created pursuant to Sections 19-5-151 through 19-5-207 that receives a loan from the revolving fund or the emergency fund shall pledge for repayment of the loan any part of the revenues received by that district pursuant to Sections 19-5-151 through 19-5-207, as may be required to meet the repayment schedule contained in the loan agreement.
(g) The State Auditor, upon request of the board, shall audit the receipts and expenditures of a county, an incorporated municipality, district or other water organization whose loan repayments appear to be in arrears, and if the Auditor finds that the county, incorporated municipality, district or other water organization is in arrears in those repayments, the Auditor shall immediately notify the chairman of the board who may take any action as may be necessary to enforce the terms of the loan agreement, including liquidation and enforcement of the security given for repayment of the loan, and the Executive Director of the Department of Finance and Administration who shall withhold all future payments to the county of homestead exemption annual tax loss reimbursements under Section 27-33-77 and all sums allocated to the county or the incorporated municipality under Section 27-65-75 until such time as the county or the incorporated municipality is again current in its loan repayments as certified by the board.
(h) Subject to appropriation by the Legislature, the Local Governments and Rural Water Systems Improvements Revolving Loan Fund created in paragraph (a) of this subsection (2) shall disburse monies for the purpose of paying the annual salaries of three (3) employees hired by the Mississippi Rural Water Oversight Committee as provided in Section 3 of this act. Such disbursement shall be not less than Five Hundred Thousand Dollars ($500,000.00) annually, to be divided equitably per salary according to the committee's determination. This paragraph (h) shall stand repealed on July 1, 2031.
( * * *i) Except as otherwise provided in
this section, all monies deposited in the revolving fund or the emergency fund,
including loan repayments and interest earned on those repayments, shall be
used only for providing loans or other financial assistance to water systems as
the board deems appropriate. In addition, any amounts in the revolving fund or
the emergency fund may be used to defray the reasonable costs of administering
the revolving fund or the emergency fund and conducting activities under this
section and Sections 6 through 20 of Chapter 521, Laws of 1995, subject to any
limitations established in the federal Safe Drinking Water Act, as amended and
subject to annual appropriation by the Legislature. The department is
authorized, upon approval by the board, to use amounts available to it from the
revolving fund or the emergency fund to contract for those facilities and staff
needed to administer and provide routine management for the funds and loan
program. However, notwithstanding any other provision of law to the contrary,
all or any portion of repayments of principal and interest derived from the
fund uses described in this section may be designated or pledged for repayment
of a loan as provided for in Section 31-25-28 in connection with a loan from
the Mississippi Development Bank.
(3) In administering this section and Sections 6 through 20 of Chapter 521, Laws of 1995, the board created in subsection (1) of this section shall have the following powers and duties:
(a) To supervise the use of all funds made available under this section and Sections 6 through 20 of Chapter 521, Laws of 1995, for local governments and rural water systems improvements;
(b) To promulgate rules and regulations, to make variances and exceptions thereto, and to establish procedures in accordance with this section and Sections 6 through 20 of Chapter 521, Laws of 1995, for the implementation of the local governments and rural water systems improvements revolving loan program;
(c) To require, at the board's discretion, any loan or grant recipient to impose a per connection fee or surcharge or amended water rate schedule or tariff on each customer or any class of customers, benefiting from an improvement financed by a loan or grant made under this section, for repayment of any loan funds provided under this section and Sections 6 through 20 of Chapter 521, Laws of 1995. The board may require any loan or grant recipient to undergo a water system viability analysis and may require a loan or grant recipient to implement any result of the viability analysis. If the loan recipient fails to implement any result of a viability analysis as required by the board, the board may impose a monetary penalty or increase the interest rate on the loan, or both. If the grant recipient fails to implement any result of a viability analysis as required by the board, the board may impose a monetary penalty on the grant;
(d) To review and certify all projects for which funds are authorized to be made available under this section and Sections 6 through 20 of Chapter 521, Laws of 1995, for local governments and rural water systems improvements;
(e) To requisition monies in the Local Governments and Rural Water Systems Improvements Revolving Loan Fund and the Local Governments and Rural Water Systems Emergency Loan Fund and distribute those monies on a project-by-project basis in accordance with this section;
(f) To ensure that the funds made available under this section and Sections 6 through 20 of Chapter 521, Laws of 1995, to a county, an incorporated municipality, a district or a water organization that has been granted tax-exempt status under either federal or state law provide for a distribution of projects and funds among the entities under a priority system established by the board;
(g) To maintain in accordance with generally accepted government accounting standards an accurate record of all monies in the revolving fund and the emergency fund made available to counties, incorporated municipalities, districts or other water organizations under this section and Sections 6 through 20 of Chapter 521, Laws of 1995, and the costs for each project;
(h) To establish policies, procedures and requirements concerning viability and financial capability to repay loans that may be used in approving loans available under this section, including a requirement that all loan recipients have a rate structure which will be sufficient to cover the costs of operation, maintenance, major equipment replacement and repayment of any loans made under this section; and
(i) To file annually with the Legislature a report detailing how monies in the Local Governments and Rural Water Systems Improvements Revolving Loan Fund and the Local Governments and Rural Water Systems Emergency Loan Fund were spent during the preceding fiscal year in each county, incorporated municipality, district or other water organization, the number of projects approved and constructed, and the cost of each project.
For efficient and effective administration of the loan program, revolving fund and emergency fund, the board may authorize the department or the State Health Officer to carry out any or all of the powers and duties enumerated above.
(4) The board may, on a case-by-case basis and to the extent allowed by federal law, renegotiate the payment of principal and interest on loans made under this section to the six (6) most southern counties of the state covered by the Presidential Declaration of Major Disaster for the State of Mississippi (FEMA-1604-DR) dated August 29, 2005, and to incorporated municipalities, districts or other water organizations located in such counties; however, the interest on the loans shall not be forgiven for a period of more than twenty-four (24) months and the maturity of the loans shall not be extended for a period of more than forty-eight (48) months.
SECTION 7. Section 77-3-22, Mississippi Code of 1972, is amended as follows:
77-3-22. Notwithstanding Section 77-3-1(1), if the commission determines that any privately owned water and/or sewer system, or any municipally owned or operated electric utility or water system providing service greater than one (1) mile outside its municipal boundaries and within its jurisdiction is unable or unwilling to adequately serve its customers or has been actually or effectively abandoned by its owner, or that its management is grossly inefficient, irresponsible or unresponsive to the needs of its customers, the commission or its designated representative may petition the Chancery Court of the First Judicial District of Hinds County or the chancery court of any county wherein the public utility does business for an order attaching the assets of the privately owned water and/or sewer system or municipally owned or operated electric utility or water system and placing such system under the sole control and responsibility of a receiver. If the court determines that the petition is proper in all respects and finds, after a hearing thereon, the allegations contained in the petition are true, it shall order that the system be placed in receivership. The court, in its discretion and in consideration of the recommendation of the commission or its designated representative, may appoint a receiver who shall be a responsible individual, partnership, corporation or political subdivision knowledgeable in water, sewer or electric service affairs and who shall maintain control and responsibility for the operation and management of the affairs of such system. The receiver shall operate the system so as to preserve the assets of the system and to serve the best interests of its customers. The receiver shall be compensated from the assets of the system in an amount to be determined by the court.
Control of and responsibility for the system shall remain in the receiver until the court determines that it is in the best interests of the customers that the system be returned to the owner, transferred to another owner or assumed by another operator, system or public service corporation. If the court, after hearing, determines that control of and responsibility for the affairs of the system should not be returned to the legal owner thereof, the receiver may proceed to liquidate the assets of such system in the manner provided by law.
In any court-initiated receivership for a municipally owned or operated electric utility providing service greater than one (1) mile outside its municipal boundaries, the receiver shall assume the responsibilities and obligations of the municipality with regard to any existing wholesale power contract.
Mississippi laws and Mississippi Rules of Civil Procedure generally applicable to receivership shall govern receiverships created under this section.
This section is in addition to the provisions of Section 77-3-21.
SECTION 8. Section 77-3-21, Mississippi Code of 1972, is brought forward 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. Nothing in this paragraph shall be construed to include service for water and sewage.
Notwithstanding Section 77-3-1(1), the commission shall have jurisdiction to investigate whether any municipality that holds a certificate to provide service greater than one (1) mile outside its municipal boundaries is providing reasonably adequate service. Following a hearing and upon making such a finding, the commission shall have full authority to enter any order authorized under this section, including canceling the certificate for the area that extends beyond the municipalities' boundaries.
SECTION 9. Section 77-3-1, Mississippi Code of 1972, is brought forward 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 homeowners 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 10. This act shall take effect and be in force from and after July 1, 2026.
Further, amend by striking the title in its entirety and inserting in lieu thereof the following:
AN ACT TO CREATE THE MISSISSIPPI RURAL WATER OVERSIGHT COMMITTEE; TO DEFINE TERMS; TO SET COMMITTEE MEMBERSHIP; TO REQUIRE PROVIDERS TO OBTAIN A RATE STUDY AND CAPACITY STUDY BY DECEMBER 1, 2027, AND EVERY FIVE YEARS THEREAFTER; TO PROVIDE REQUIREMENTS FOR RATES; TO PROVIDE FOR MODIFICATION OF RATES ACCORDING TO RATE STUDIES; TO REQUIRE PROVIDERS TO DEVELOP AN ASSET MANAGEMENT PLAN BY DECEMBER 1, 2027; TO STIPULATE MINIMUM REQUIREMENTS FOR SUCH ASSET MANAGEMENT PLAN; TO ALLOW THE COMMITTEE TO PROMULGATE RULES AND REGULATIONS CONCERNING THE RATE STUDIES, CAPACITY STUDIES AND ASSET MANAGEMENT PLANS; TO AUTHORIZE THE COMMITTEE TO HIRE THREE EMPLOYEES TO ASSIST PROVIDERS IN COMPLYING WITH THE PURPOSES OF THIS ACT; TO PROVIDE FOR SALARIES OF SUCH EMPLOYEES; TO REQUIRE PROVIDERS TO SET ASIDE A PORTION OF GROSS REVENUES FOR REFURBISHMENT AND REPLACEMENT; TO REQUIRE THE COMMITTEE TO MAINTAIN AN APPROVED LIST OF ENTITIES TO CONDUCT RATE STUDIES; TO PROVIDE GUIDELINES FOR APPROVAL; TO REQUIRE A RATE STUDY OR AMENDMENT BEFORE COMMENCEMENT OF A MAJOR DEVELOPMENT PROJECT; TO REQUIRE RATE STUDIES TO BE FILED WITH THE STATE AUDITOR'S OFFICE; TO DESCRIBE WHEN A PROVIDER IS IN FISCAL DISTRESS; TO REQUIRE THE MISSISSIPPI STATE DEPARTMENT OF HEALTH TO MAINTAIN A LIST OF PROVIDERS IN FISCAL DISTRESS; TO REQUIRE PROVIDERS IN FISCAL DISTRESS TO FILE AN IMPROVEMENT PLAN; TO STIPULATE ACTIONS UPON RECEIPT OF AN IMPROVEMENT PLAN; TO PROHIBIT FISCALLY DISTRESSED PROVIDERS FROM RECEIVING CERTAIN STATE FINANCIAL ASSISTANCE UNTIL AN IMPROVEMENT PLAN IS IN PLACE; TO PROVIDE FOR REMOVAL OF BOARD MEMBERS UPON A FINDING OF FISCAL DISTRESS; TO REQUIRE PROVIDERS AT 75% CAPACITY TO TAKE CERTAIN ACTIONS; TO PROVIDE THAT NOTHING IN THIS ACT SHALL BE CONSTRUED AS CONFLICTING WITH FEDERAL LAW; TO AMEND SECTION 41-3-16, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR PAYMENT OF NEW EMPLOYEES' ANNUAL SALARIES OUT OF THE LOCAL GOVERNMENTS AND RURAL WATER SYSTEMS IMPROVEMENTS REVOLVING LOAN FUND; TO AMEND SECTION 77-3-22, MISSISSIPPI CODE OF 1972, TO AUTHORIZE THE PUBLIC SERVICE COMMISSION TO CANCEL A MUNICIPALITY'S CERTIFICATE TO PROVIDE WATER SERVICE GREATER THAN ONE MILE OUTSIDE OF ITS BOUNDARIES UPON A FINDING OF INADEQUACY OF SERVICE; TO BRING FORWARD SECTIONS 77-3-21 AND 77-3-1, MISSISSIPPI CODE OF 1972, FOR PURPOSE OF POSSIBLE AMENDMENT; AND FOR RELATED PURPOSES.
