First Regular Session 116th General Assembly (2009)
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HOUSE ENROLLED ACT No. 1278
AN ACT to amend the Indiana Code concerning water and utilities.
Be it enacted by the General Assembly of the State of Indiana:
SECTION 1. IC 8-1-2-92 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2009]: Sec. 92.
(a) Every license, permit, or
franchise granted after April 30, 1913, to any public utility shall have
the effect of an indeterminate permit subject to the provisions of this
chapter, and subject to the provisions that:
(1) the license, franchise, or permit may be revoked by the
commission for cause; or
that
(2) the municipality may purchase
or condemn the property
of
such public utility, as provided in
this section. IC 8-1.5-2,
IC 36-9-23, or IC 36-9-25, as applicable.
Any such municipality is authorized to purchase such property and
every such public utility is required to sell such property at the value
and according to the terms and conditions as provided in
this chapter.
IC 8-1.5-2, IC 36-9-23, or IC 36-9-25, as applicable.
(b) If this chapter should be repealed or annulled, then all such
indeterminate franchises, permits, or grants shall cease and become
inoperative, and in place thereof such utility shall be reinstated in the
possession and enjoyment of the license, permit, or franchise
surrendered by such utility at the time of the issue of the indeterminate
franchise, permit, or grant; but in no event shall such reinstated license,
permit, or franchise be terminated within a less period than five (5)
years from the date of the repeal or annulment of this chapter.
SOURCE: IC 8-1-2-93; (09)HE1278.1.2. -->
SECTION 2. IC 8-1-2-93 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2009]: Sec. 93. Any public utility accepting or
operating under any indeterminate license, permit, or franchise granted
after April 30, 1913, shall by acceptance of any such indeterminate
license, permit, or franchise be deemed to have consented to a future
purchase or condemnation of its property including property located
in contiguous territory within six (6) miles of the corporate limits of
such municipality by the municipality in which such utility is located,
at the value and under the terms and conditions as provided in this
chapter, IC 8-1.5-2, IC 36-9-23, or IC 36-9-25, as applicable, and
shall thereby be deemed to have waived the right of requiring the
necessity of such taking to be established by the judgment of a court,
and to have waived all other remedies and rights relative to
condemnation, except such rights and remedies as are provided in this
chapter IC 8-1.5-2, IC 36-9-23, or IC 36-9-25, as applicable, and
shall have been deemed to have consented to the revocation of its
license, permit, or franchise by the commission for cause.
SOURCE: IC 8-1.5-2-7; (09)HE1278.1.3. -->
SECTION 3. IC 8-1.5-2-7 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 7. (a) A certificate of
public convenience and necessity is not required as a condition
precedent to the owning, leasing, acquisition, construction, or operation
of a utility by a municipality, even if there is a public utility engaged in
a similar service. The acquisition of electric utility property and
assignment of a municipal electric utility's service area are, however,
subject to the provisions of IC 8-1-2.3 and IC 8-1-2-95.1.
(b) A municipality that wants to own and operate a utility where
there is a public utility engaged in a similar service:
(1) under a franchise granted by the municipality; or
(2) under an indeterminate permit as defined in IC 8-1-2-1;
may, after a hearing as provided by section 10 of this chapter, and an
election as provided by section 16 of this chapter, declare by ordinance
that public convenience and necessity require the establishment of a
municipally owned utility.
SOURCE: IC 8-1.5-2-8; (09)HE1278.1.4. -->
SECTION 4. IC 8-1.5-2-8 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 8. Before a municipal
legislative body:
(1) proposes to construct or acquire a utility; and
(2) makes a determination as to public convenience and necessity;
it may appropriate out of its general fund an amount not exceeding five
percent (5%) of the total estimated cost of constructing or acquiring the
utility, as necessary to pay the expenses of a preliminary investigation,
surveys, plans, specifications, and appraisals, including engineering
and legal expenses in constructing or acquiring the utility. Any action
by the municipal legislative body in making an appropriation is final
and not subject to review by the department of local government
finance. The municipal legislative body may renew or adjust the
appropriation on an annual basis until the construction or
acquisition of the utility is complete.
SOURCE: IC 8-1.5-3-8; (09)HE1278.1.5. -->
SECTION 5. IC 8-1.5-3-8 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 8. (a) A municipality
owning a utility under this chapter shall furnish reasonably adequate
services and facilities.
(b) The rates and charges made by a municipality for a service
rendered or to be rendered, either directly or in connection therewith,
must be nondiscriminatory, reasonable, and just.
(c) "Reasonable and just rates and charges for services" means rates
and charges that produce sufficient revenue to:
(1) pay all the legal and other necessary expenses incident to the
operation of the utility, including:
(A) maintenance costs;
(B) operating charges;
(C) upkeep;
(D) repairs;
(E) depreciation;
and
(F) interest charges on bonds or other obligations, including
leases;
and
(G) costs associated with the acquisition of utility property
under IC 8-1.5-2;
(2) provide a sinking fund for the liquidation of bonds or other
obligations, including leases;
(3) provide a debt service reserve for bonds or other obligations,
including leases, in an amount established by the municipality,
not to exceed the maximum annual debt service on the bonds or
obligations or the maximum annual lease rentals;
(4) provide adequate money for working capital;
(5) provide adequate money for making extensions and
replacements to the extent not provided for through depreciation
in subdivision (1); and
(6) provide money for the payment of any taxes that may be
assessed against the utility.
(d) It is the intent of this section that the rates and charges produce
an income sufficient to maintain the utility property in a sound physical
and financial condition to render adequate and efficient service. Rates
and charges too low to meet these requirements are unlawful.
(e) The board may recommend to the municipal legislative body
rates and charges sufficient to include a reasonable return on the utility
plant of the municipality.
(f) Rates and charges established under this section are subject to
the approval of:
(1) the municipal legislative body by ordinance; and
(2) the commission, in accordance with the procedures set forth
in IC 8-1-2.
The commission shall approve rates and charges that are sufficient, in
addition to the cash revenue requirements set forth in subsection (c), to
include a reasonable return on the utility plant of the municipality if the
legislative body so elects.
(g) Except for a municipally owned utility taxed under IC 6-1.1-8-3,
the commission shall approve rates and charges sufficient to
compensate the municipality for taxes that would be due the
municipality on the utility property were it privately owned. These rates
and charges in lieu of taxes may be transferred to the municipal general
fund, if the legislative body so elects.
(h) The commission shall grant a request that an increase in rates
and charges not be effective until after the occurrence of a future event
if the legislative body so requests.
(i) A municipality that acquires and operates a utility under
IC 8-1.5-2 by exercising the power of eminent domain may not
impose a special rate, charge, surcharge, or other fee, other than
rates and charges approved under this section or otherwise
authorized by law, on the customers of the utility in order to pay
for the costs associated with acquiring the utility through the
exercise of the power of eminent domain.
SOURCE: IC 32-24-2-6; (09)HE1278.1.6. -->
SECTION 6. IC 32-24-2-6 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 6. (a) This chapter
applies if the works board of a municipality wants to acquire property
for the use of the municipality or to open, change, lay out, or vacate a
street, an alley, or a public place in the municipality, including a
proposed street or alley crossings of railways or other rights-of-way.
However, this chapter does not apply if a municipality wants to
acquire the property of a public utility (as defined in IC 8-1-2-1).
(b) The works board must adopt a resolution that the municipality
wants to acquire the property. The resolution must describe the
property that may be injuriously or beneficially affected. The board
shall have notice of the resolution published in a newspaper of general
circulation published in the municipality once each week for two (2)
consecutive weeks. The notice must name a date, at least ten (10) days
after the last publication, at which time the board will receive or hear
remonstrances from persons interested in or affected by the proceeding.
(c) The works board shall consider the remonstrances, if any, and
then take final action, confirming, modifying, or rescinding its original
resolution. This action is conclusive as to all persons.
SOURCE: ; (09)HE1278.1.7. -->
SECTION 7. [EFFECTIVE UPON PASSAGE] (a) The general
assembly urges the legislative council to assign to an interim or
statutory study committee the topic of water rights, drainage, and
utilities (including utility easements). If a committee is assigned the
topic recommended for study by this SECTION, the committee
shall consider the following:
(1) Water and drainage issues as they relate to urban and
rural areas.
(2) Water and drainage issues as they affect the:
(A) construction of Class 2 structures;
(B) development of land for residential purposes;
(C) development of land for commercial and industrial
purposes; and
(D) operation of utilities (including utility easements).
(3) The appropriate role of drainage boards.
(4) The appropriate role of condemnation with respect to
water rights, drainage, and water utilities (including utility
easements).
(5) Whether the common enemy doctrine of water diversion
should be retained, modified, or abrogated.
(b) This SECTION expires January 1, 2010.
SOURCE: IC 8-1.5-2-11; IC 8-1.5-2-16.
; (09)HE1278.1.8. -->
SECTION 8. THE FOLLOWING ARE REPEALED [EFFECTIVE
JULY 1, 2009]: IC 8-1.5-2-11; IC 8-1.5-2-16.
SOURCE: ; (09)HE1278.1.9. -->
SECTION 9.
An emergency is declared for this act.
HEA 1278 _ CC 1
Figure
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