HB227: Public water and sewer utilities and authorities; service contracts.


HOUSE BILL NO. 227
AMENDMENT IN THE NATURE OF A SUBSTITUTE
(Proposed by the Senate Committee on Local Government
on February 25, 2014)
(Patron Prior to Substitute--Delegate Cole)
A BILL to amend and reenact § 38.2-2618 of the Code of Virginia and to amend the Code of Virginia by adding sections numbered 15.2-2111.1 and 15.2-5121.1, relating to the authority of localities and water and waste authorities to establish and operate programs providing utility line service contracts.

Be it enacted by the General Assembly of Virginia:

1. That § 38.2-2618 of the Code of Virginia is amended and reenacted and that the Code of Virginia is amended by adding sections numbered 15.2-2111.1 and 15.2-5121.1 as follows:

§ 15.2-2111.1. Water or sewer line service contract program.

Any locality that operates a water supply system or sewage system or water supply and sewage system may by ordinance establish and operate a program under which the locality enters into a contract or agreement with a utility customer for a separately stated consideration for a specific duration to perform, or cause to be performed, the repair, replacement, or maintenance of any water or sewer line or related system of the customer's residential dwelling due to a defect in materials, workmanship, inherent defect, or normal wear and tear. Any locality that establishes and operates a program shall contract with a state licensed private sector plumber to effect any repairs as a result of the program.

Notwithstanding any other provision of law, no such service contract program may be established or operated using funds derived from water or sewer connection fees and no such fees may be increased in order to fund, directly or indirectly, the establishment or operation of such a program.

§ 15.2-5121.1. Water or sewer line service contract program.

Any authority that operates a water supply system or sewage system or water supply and sewage system may establish and operate a program under which the authority enters into a contract or agreement with a customer for a separately stated consideration for a specific duration to perform, or cause to be performed, the repair, replacement, or maintenance of any water or sewer line or related system of the customer's residential dwelling due to a defect in materials, workmanship, inherent defect, or normal wear and tear. Any authority that establishes and operates a program shall contract with a state licensed private sector plumber to effect any repairs as a result of the program.

Notwithstanding any other provision of law, no such service contract program may be established or operated using funds derived from water or sewer connection fees and no such fees may be increased in order to fund, directly or indirectly, the establishment or operation of such a program.

§ 38.2-2618. Exemptions.

A. The following are exempt from this article:

1. Warranties;

2. Maintenance agreements; and

3. Warranties, service contracts, or maintenance agreements offered by public utilities on their transmission devices to the extent they are regulated by the Commission.

B. Any person in compliance with Article 1 (§ 38.2-2600 et seq.) of this chapter shall be exempt from this article.

C. Any home service contract provider that has a net worth in excess of $100 million shall be exempt from this article.

D. Any locality described in § 15.2-2111.1 or any authority described in § 15.2-5121.1 that issues, sells, or offers for sale in the Commonwealth a home service contract under which the locality or authority agrees to perform or cause to be performed the repair, replacement, or maintenance of any water or sewer line or related system of the customer's residential dwelling due to a defect in materials, workmanship, inherent defect, or normal wear and tear shall be exempt from this article, provided that such locality or authority (i) maintains an unencumbered fund balance reserved for such home service contract program in an amount not less than 20 percent of the premiums charged on its contracts currently in force or $100,000, whichever is greater and (ii) insures all home service contracts under a reimbursement insurance policy issued by an insurer licensed, registered, or otherwise authorized to do business in the Commonwealth that meets the qualifications set forth in subsection E of § 38.2-2619..

E. Home service contract providers licensed under this article shall not be subject to the provisions of the Virginia Consumer Protection Act (§ 59.1-196 et seq.).


HOUSE BILL NO. 227
House Amendments in [ ] -- January 29, 2014
A BILL to amend and reenact § 38.2-2618 of the Code of Virginia and to amend the Code of Virginia by adding sections numbered 15.2-2111.1 and 15.2-5121.1, relating to the authority of localities and water and waste authorities to establish and operate programs providing utility line service contracts.
Patron Prior to Engrossment--Delegate Cole

Referred to Committee on Counties, Cities and Towns

Be it enacted by the General Assembly of Virginia:

1. That § 38.2-2618 of the Code of Virginia is amended and reenacted and that the Code of Virginia is amended by adding sections numbered 15.2-2111.1 and 15.2-5121.1 as follows:

§ 15.2-2111.1. Water or sewer line service contract program.

Any locality that operates a water supply system or sewage system or water supply and sewage system may by ordinance establish and operate a program under which the locality enters into a contract or agreement with a utility customer for a separately stated consideration for a specific duration to perform, or cause to be performed, the repair, replacement, or maintenance of any water or sewer line or related system of the customer's residential dwelling due to a defect in materials, workmanship, inherent defect, or normal wear and tear. [ Any locality that establishes and operates a program shall contract with a state licensed plumber to effect any repairs as a result of the program. ]

 [ Notwithstanding any other provision of law, no such service contract program may be established or operated using funds derived from water or sewer connection fees and no such fees may be increased in order to fund, directly or indirectly, the establishment or operation of such a program. ]

§ 15.2-5121.1. Water or sewer line service contract program.

Any authority that operates a water supply system or sewage system or water supply and sewage system may establish and operate a program under which the authority enters into a contract or agreement with a customer for a separately stated consideration for a specific duration to perform, or cause to be performed, the repair, replacement, or maintenance of any water or sewer line or related system of the customer's residential dwelling due to a defect in materials, workmanship, inherent defect, or normal wear and tear. [ Any authority that establishes and operates a program shall contract with a state licensed plumber to effect any repairs as a result of the program. ]

 [ Notwithstanding any other provision of law, no such service contract program may be established or operated using funds derived from water or sewer connection fees and no such fees may be increased in order to fund, directly or indirectly, the establishment or operation of such a program. ]

§ 38.2-2618. Exemptions.

A. The following are exempt from this article:

1. Warranties;

2. Maintenance agreements; and

3. Warranties, service contracts, or maintenance agreements offered by public utilities on their transmission devices to the extent they are regulated by the Commission.

B. Any person in compliance with Article 1 (§ 38.2-2600 et seq.) of this chapter shall be exempt from this article.

C. Any home service contract provider that has a net worth in excess of $100 million shall be exempt from this article.

D. Any locality described in § 15.2-2111.1 or any authority described in § 15.2-5121.1 that issues, sells, or offers for sale in the Commonwealth a home service contract under which the locality or authority agrees to perform or cause to be performed the repair, replacement, or maintenance of any water or sewer line or related system of the customer's residential dwelling due to a defect in materials, workmanship, inherent defect, or normal wear and tear shall be exempt from this article.

E. Home service contract providers licensed under this article shall not be subject to the provisions of the Virginia Consumer Protection Act (§ 59.1-196 et seq.).

HOUSE BILL NO. 227

Offered January 8, 2014
Prefiled December 27, 2013
A BILL to amend and reenact § 38.2-2618 of the Code of Virginia and to amend the Code of Virginia by adding sections numbered 15.2-2111.1 and 15.2-5121.1, relating to the authority of localities and water and waste authorities to establish and operate programs providing utility line service contracts.
Patron-- Cole

Committee Referral Pending

Be it enacted by the General Assembly of Virginia:

1. That § 38.2-2618 of the Code of Virginia is amended and reenacted and that the Code of Virginia is amended by adding sections numbered 15.2-2111.1 and 15.2-5121.1 as follows:

§ 15.2-2111.1. Water or sewer line service contract program.

Any locality that operates a water supply system or sewage system or water supply and sewage system may by ordinance establish and operate a program under which the locality enters into a contract or agreement with a utility customer for a separately stated consideration for a specific duration to perform, or cause to be performed, the repair, replacement, or maintenance of any water or sewer line or related system of the customer's residential dwelling due to a defect in materials, workmanship, inherent defect, or normal wear and tear.

§ 15.2-5121.1. Water or sewer line service contract program.

Any authority that operates a water supply system or sewage system or water supply and sewage system may establish and operate a program under which the authority enters into a contract or agreement with a customer for a separately stated consideration for a specific duration to perform, or cause to be performed, the repair, replacement, or maintenance of any water or sewer line or related system of the customer's residential dwelling due to a defect in materials, workmanship, inherent defect, or normal wear and tear.

§ 38.2-2618. Exemptions.

A. The following are exempt from this article:

1. Warranties;

2. Maintenance agreements; and

3. Warranties, service contracts, or maintenance agreements offered by public utilities on their transmission devices to the extent they are regulated by the Commission.

B. Any person in compliance with Article 1 (§ 38.2-2600 et seq.) of this chapter shall be exempt from this article.

C. Any home service contract provider that has a net worth in excess of $100 million shall be exempt from this article.

D. Any locality described in § 15.2-2111.1 or any authority described in § 15.2-5121.1 that issues, sells, or offers for sale in the Commonwealth a home service contract under which the locality or authority agrees to perform or cause to be performed the repair, replacement, or maintenance of any water or sewer line or related system of the customer's residential dwelling due to a defect in materials, workmanship, inherent defect, or normal wear and tear shall be exempt from this article.

E. Home service contract providers licensed under this article shall not be subject to the provisions of the Virginia Consumer Protection Act (§ 59.1-196 et seq.).