HB2326: Waterworks systems; regulation.


HOUSE BILL NO. 2326
AMENDMENT IN THE NATURE OF A SUBSTITUTE
(Proposed by the House Committee on Commerce and Labor
on February 3, 2011)
(Patron Prior to Substitute--Delegate Lingamfelter)
A BILL to amend and reenact § 32.1-174.1 of the Code of Virginia, relating to the regulation of waterworks systems.

Be it enacted by the General Assembly of Virginia:

1.  That § 32.1-174.1 of the Code of Virginia is amended and reenacted as follows:

§ 32.1-174.1. Bonds of permit holders.

A. The Board may by regulation require owners holding or issued permits for waterworks pursuant to this article, to post bonds or deposit funds to be placed in escrow.

B. The Board or the governing body of a county, city or town in which a waterworks is located may request the circuit court having jurisdiction where the waterworks is located to order forfeiture of the owner's bond or escrow account when:

1. The owner fails to pay the electric utility bills for the waterworks;

2. The owner ceases to operate the waterworks; or

3. The owner fails to provide water to his customers for a period of time greater than forty-eight hours except when a natural disaster prevents the owner from supplying water upon revocation of the Waterworks Operation Permit by the Board or Commissioner pursuant to § 32.1-174.

The If the foregoing condition is met, the court shall order forfeiture of such bond or escrow account, in whole or in part, if any of the three foregoing conditions is met unless the court finds the forfeiture would result in manifest injustice.

C. In addition to ordering such forfeiture, the court may, with the concurrence of the governing body of the county, city or town in which the waterworks is located, place the waterworks in receivership naming the county, city, or town, or any public service authority created by the county, city or town, as receiver.

D. Any sums forfeited pursuant to subdivision 1 of subsection B of this section shall be paid in the amount of such forfeiture to the electric utility supplying electrical power to the waterworks. Any sums forfeited pursuant to subdivision 2 or 3 of subsection B shall be paid in the amount of such forfeiture to the county, city or town in which the waterworks is located (i) if the county, city, or town, or a public service authority created by the county, city or town, initiates eminent domain proceedings for the condemnation of the waterworks within one year of the date of the order of forfeiture or (ii) if the county, city, town or public service authority operates the waterworks pursuant to a decree of an appropriate circuit court vesting receivership of the waterworks in the county, city, town or public service authority. If the governing body of the county, city, or town, or a public service authority created by the county, city or town, fails to initiate such condemnation proceedings within one year of the date of forfeiture of any bond or to accept receivership of the waterworks from the circuit court, the funds forfeited shall be paid to the general fund of the Commonwealth.

E. The Board may adopt regulations for determining the amount of the bond or funds to be placed in escrow based upon the number of persons served, the number of connections served, the age and condition of the waterworks system infrastructure, the cost of maintaining, repairing, or replacing the waterworks system infrastructure, and the water supply capacity of the permit holder.

F. No state, local or other governmental agency shall be required to post a bond or deposit funds. The Board may, by regulation, exempt classes of permit holders from such requirements if the Board determines such classes present no significant risks to public health and safety.

G. An acceptable bond for the purposes of this section shall be a bond issued by a fidelity or surety company authorized to do business in Virginia, a personal bond secured by such collateral as the Board may require or a cash bond.

HOUSE BILL NO. 2326
Offered January 12, 2011
Prefiled January 12, 2011
A BILL to amend and reenact § 13.1-620 of the Code of Virginia, relating to small water or sewer companies.
Patron-- Lingamfelter

Committee Referral Pending

Be it enacted by the General Assembly of Virginia:

1.  That § 13.1-620 of the Code of Virginia is amended and reenacted as follows:

§ 13.1-620. Special kinds of business.

A. If any corporation is to conduct the business of a bank or trust company, that shall be stated in the articles of incorporation and the corporation shall not have power to conduct other business except as may be related to or incidental to the banking or trust company business.

B. If any corporation is to conduct the business of an insurance company, that shall be stated in the articles of incorporation and the articles shall further set forth the class or classes of insurance the corporation proposes to undertake and the corporation shall not have power to conduct other business except as may be related to or incidental to the insurance business.

C. If any corporation is to conduct the business of a savings and loan association or savings bank, that shall be stated in the articles of incorporation and the corporation shall not have power to conduct other business except as may be related to or incidental to the stated business.

D. If any corporation is to conduct the business of a railroad or other public service company, that shall be stated in the articles of incorporation and a brief description of the business shall be included. Otherwise the corporation shall not have the power to conduct a public service business or to exercise any of the privileges of a public service company. No corporation shall be organized under this chapter for the purpose of conducting in this Commonwealth more than one kind of public service business except that the telephone and telegraph businesses or the water and sewer businesses may be combined, but this provision shall not limit the powers of domestic corporations existing on January 1, 1986. No corporation organized under this chapter to conduct the business of a public service company shall have general business powers in this Commonwealth. Corporations organized under this chapter to conduct the business of a public service company may, however, conduct in this Commonwealth other public service business or nonpublic service business so far as may be related to or incidental to its stated business as a public service company and in any other state such business as may be authorized or permitted by the laws thereof. Nothing in this subsection shall limit the powers of such corporation in respect of the securities of other corporations or of limited liability companies.

E. If one or more of the purposes set forth in the articles of incorporation is to own, manage or control any plant or equipment or any part of a plant or equipment within the Commonwealth for the conveyance of telephone messages or for the production, transmission, delivery or furnishing of heat, light, power or water, including heated or chilled water, or sewerage facilities, either directly or indirectly, to or for the public, the Commission shall not issue a certificate of incorporation unless the articles of incorporation expressly state that the corporation is to conduct business as a public service company.

F. Whether or not classified elsewhere in the Code as public service companies the following are not required to incorporate as public service companies: a person authorized by the Federal Communications Commission to provide commercial mobile service, household goods carriers, petroleum tank truck carriers, bottled gas companies, taxicab companies, community television companies, charter party carriers, restricted parcel carriers, sight-seeing carriers, companies excluded from the definition of "public utility" by subdivision (b) (4) of § 56-265.1 (b)(4) or by § 56-1.2 and compressed natural gas filling stations.

G. A water or sewer company that proposes to serve more than fifty 25 customers shall incorporate as a public service company. A water or sewer company shall not serve more than fifty 25 customers unless its articles of incorporation state that the corporation is to conduct business as a public service company. The two preceding sentences shall not apply to a water or sewer company incorporated before and operating a water or sewer system on January 1, 1970; however, as to any water or sewer system serving more than fifty 25 customers, upon application to the Commission by a majority of the customers or by the company, a hearing may be held after thirty 30 days' notice to the company and the system's customers or a majority thereof, and the Commission may order such, if any, improvements or rate changes or both as are just and reasonable. Upon ordering into effect any rate changes or improvements found to be just and reasonable, the water or sewer system shall remain subject to the Commission's regulatory authority in the same manner as a public utility for such reasonable period as the Commission may direct. Nothing in this subsection shall apply to persons described in § 56-1.2.