AB1065: Bill Text

LRB-5651/1

KSH/MES:skg/mkd:kat

1995 - 1996 LEGISLATURE

1995 Assembly BILL 1065

March 21, 1996 - Introduced by Representatives Duff, Hoven, Schneiders, Jensen, Urban, Underheim, Huebsch, Goetsch and Grothman, cosponsored by Senators Farrow, Panzer and Huelsman. Referred to Committee on Environment and Utilities.

AB1065,2,13 An Act to repeal 66.898 (4) (c), 66.899 and 66.912 (5); to amend 20.155 (1) (title), 20.155 (1) (g), 66.076 (1m), 66.076 (7), 66.076 (8), 66.886 (2) (a) 1., 66.888 (2) (b), 66.892 (2) (a), 66.892 (2) (d), 66.894 (1) (intro.), 66.898 (3), 66.898 (4) (a), 66.898 (4) (b), 66.90 (1), 66.904 (1), 66.91 (intro.), 66.91 (1) (g), 66.91 (5) (a), 66.91 (5) (b) 1., 66.91 (5) (b) 3. a., 66.91 (5) (b) 3. b., 66.91 (5) (c) 1., 66.91 (5) (c) 2., 66.91 (5) (d) 1., 66.91 (5) (e), 66.912 (2) (a), 66.912 (2) (b), 66.912 (2) (c), 66.912 (3), 196.02 (1), 196.02 (2), 196.02 (4) (a), 196.02 (4) (c), 196.02 (5), 196.02 (6), 196.03 (1), 196.05, 196.06, 196.07, 196.09 (1), 196.09 (2), 196.09 (3), 196.09 (4), 196.09 (5), 196.09 (6) (a), 196.09 (6) (b), 196.09 (7) (intro.), 196.09 (8), 196.10, 196.11 (1), 196.12 (title), 196.12 (1) (intro.), 196.13, 196.14, 196.15, 196.16 (1), 196.16 (2), 196.17 (1), 196.171 (1), 196.171 (2), 196.18, 196.19 (1), 196.19 (2), 196.19 (3), 196.19 (4), 196.19 (6), 196.20 (1), 196.20 (2) (a) 2., 196.20 (2) (b), 196.21, 196.22, 196.24 (1), 196.25 (1), 196.25 (2), 196.26 (1), 196.26 (1m), 196.26 (2) (a), 196.26 (2) (b), 196.28 (1), 196.28 (3), 196.30, 196.31 (1) (intro.), 196.31 (2), 196.37 (3), 196.39, 196.44 (1), 196.44 (2), 196.49 (2), 196.49 (3) (a), 196.49 (3) (b) (intro.), 196.49 (3) (b) 1., 196.49 (3) (b) 3., 196.49 (6), 196.525 (1) (intro.), 196.525 (2), 196.525 (3), 196.58 (1) (a), 196.58 (1) (b), 196.58 (4), 196.58 (5), 196.60 (1), 196.60 (3), 196.604, 196.61, 196.635 (intro.), 196.635 (1), 196.64 (title), 196.64 (1), 196.643 (1), 196.645 (1) (intro.), 196.65 (1) (intro.), 196.65 (1) (e), 196.65 (2), 196.66 (1), 196.66 (2), 196.66 (3) (a), 196.66 (3) (b) (intro.), 196.66 (3) (b) 1., 196.66 (3) (b) 3., 196.66 (4) (b), 196.68, 196.69, 196.70, 196.72 (title), 196.72 (1) (a), 196.72 (2), 196.78, 196.79 (1), 196.80 (3), 196.81 (1), 196.85 (1), 196.85 (2), 196.85 (3), 196.85 (4) (a) and 196.85 (5); to repeal and recreate 196.44 (2); and to create 66.891, 196.01 (6m), 196.02 (13), 196.49 (3) (e) and 196.80 (1s) of the statutes; relating to: regulation and supervision by the public service commission of a metropolitan sewerage district established by a lst class city, the sale or lease of metropolitan sewerage district assets under certain circumstances, authorizing the dissolution of a metropolitan sewerage district, distribution of excess reserves of a district, granting rule-making authority, making an appropriation and providing penalties.

Analysis by the Legislative Reference Bureau

PSC regulation and supervision of MMSD

This bill subjects metropolitan sewerage districts established by a 1st class city to regulation and supervision by the public service commission (PSC). Currently, this bill only applies to the Milwaukee Metropolitan Sewerage District (MMSD). Under current law, MMSD is subject to limited PSC oversight through a complaint process. Under current law, upon complaint to the PSC by any MMSD user that MMSD charges, rules and practices are unreasonable or unjustly discriminatory, according to the standards and criteria which the PSC is required to follow under state or federal law, or upon complaint of a holder of MMSD debt that charges are inadequate, the PSC is required to investigate the complaint. If there appears to be sufficient cause, the PSC may hold a public hearing. After the hearing, if the PSC determines that the charges, rules or practices complained of are unreasonable or unjustly discriminatory, the PSC may issue an order fixing MMSD charges, rules and practices and may make any other order that it determines to be just and reasonable, including ordering a refund. Current law also provides for a PSC audit of MMSD's books, records and practices upon the request of any municipality or county located wholly or partly within the boundaries of MMSD.

This bill subjects MMSD to regulation and supervision by the PSC in much the same manner as any public utility. The changes made by the bill include the following:

1. The PSC is granted general authority to supervise and regulate MMSD and to do all things necessary and convenient to this end. The PSC is directed to investigate neglect or violation of the laws by MMSD and to report violations to the attorney general. The PSC may assess MMSD a portion of the costs reasonably attributable to the performance of its utility regulatory duties.

2. Governing bodies of municipalities served by MMSD are also given certain powers with respect to MMSD. These governing bodies may, by contract, ordinance or resolution, determine the quality and character of the service provided by MMSD, set the terms and conditions upon which MMSD may occupy the streets, highways or other public places within the municipality, require MMSD to add or extend its physical plant within the municipality, designate the location and nature of the addition or extension, the time within which it must be completed, and any condition under which it must be constructed. However, if the PSC determines, upon complaint and after a hearing, that the contract, ordinance or resolution is unreasonable, the contract, ordinance or resolution is void.

3. MMSD is required to keep its books and records in the manner and form prescribed by the PSC. In addition to filing an annual report with the PSC, MMSD is required to provide accounts and reports, in the manner prescribed by the PSC, concerning the following: depreciation, salaries and wages, legal expenses, taxes and rentals, the quantity and value of material used, receipts from residuals, by-products, services or other sales, total and net cost, gross and net profit, dividends and interest and surplus or reserve.

4. The PSC is empowered to obtain any information from MMSD necessary for the PSC to perform its duties, including examining the books and records of MMSD and examining employes and agents of MMSD under oath. The PSC may bill MMSD for the costs of investigating the books, accounts, practices and activities of MMSD.

5. The PSC may establish classifications of service for services provided by MMSD. Similarly, the bill requires the PSC to prescribe suitable and convenient standard commercial units of products or services provided by MMSD. The bill requires the PSC to establish rules and standards to secure the accuracy of all meters and appliances used to measure MMSD services and to provide for the examination and testing of these meters and appliances.

6. MMSD may enter into any reasonable arrangement with its consumers or employes for the division or distribution of surplus profits or providing for a sliding scale for charges, subject to PSC approval. MMSD is prohibited from making any loan to its officers and commissioners.

7. MMSD may enter, at any reasonable time, any place supplied with sewerage service by MMSD for the purpose of supplying or regulating the supply of sewerage services provided by MMSD.

8. MMSD is required to file with the PSC schedules showing all rates, tolls and charges which it has established for sewerage services provided by MMSD. The rate schedules must include all rules or regulations applicable to the rendition or discontinuance of service and may not be changed, except pursuant to the PSC rate review process. MMSD is prohibited from charging or collecting any compensation for the provision of services that is more or less than that specified in its rate schedules, and MMSD is subject to a number of provisions limiting the ability of MMSD to make rebates, concessions or otherwise discriminate in the provision of service. The PSC may at any time, with notice to MMSD and opportunity for a hearing, rescind, alter or amend any PSC order applicable to MMSD including orders fixing MMSD rates, tolls or charges.

9. MMSD is prohibited from beginning the construction, installation or operation of any new plant, equipment, property or facility unless it has complied with any applicable PSC order or rule. For the first year after the bill becomes law, MMSD may not proceed with any project with a total cost in excess of $1,000,000 unless the PSC has certified that public convenience and necessity require the project. After the first year, the dollar threshold for public convenience and necessity review is to be set by the PSC by rule. MMSD is required to file its estimate of the annual rate of depreciation required for each of its classes of fixed capital and the composite annual rate of depreciation required for fixed capital as an aggregate. These estimates are subject to PSC review and revision. MMSD is required to credit to its depreciation reserve an amount required to account for depreciation at the percentage established. Only losses on property actually retired from service may be charged against the depreciation reserve.

10. MMSD may not dissolve, reorganize, acquire the stock of a public utility, abandon or discontinue any service, or sell, acquire, lease or rent MMSD plant or property without PSC approval. In addition, voluntary dissolution of MMSD also requires approval of the department of natural resources.

11. MMSD is required to provide adequate service and facilities and the charges for such services must be reasonable and just. In addition to the existing procedure under which the PSC may hear complaints regarding MMSD charges, rules and practices, the bill subjects MMSD to the same PSC complaint process used for complaints against public utilities. The bill also permits MMSD to file a complaint with the PSC regarding any matter affecting the services that it provides.

12. Commissioners, officers, employes and agents of MMSD are liable for treble damages for injury caused by wilfully or reckless violations of certain provisions.

Sale or lease of MMSD assets; dissolution of MMSD

The bill requires MMSD to sell or lease any or all MMSD assets and facilities, subject to PSC review and approval and subject to several conditions. Before the MMSD commission is required to enter into a lease or sale agreement, the PSC must determine that the lease or sale will be in the best interests of the district's ratepayers. In addition, the PSC must determine that, under the lease or sale, the employes of the district who are covered by a collective bargaining agreement and who perform functions in relation to the assets or facilities that are leased or sold will continue to perform those functions after the lease or sale, until the expiration date of their collective bargaining agreement or for 2 years after the effective date of this bill, whichever is sooner.

The bill authorizes the PSC to, upon demand, inspect the books and records of MMSD and examine MMSD commissioners, agents and employes in order to obtain information bearing on the determinations that the PSC is to make regarding the sale or lease of MMSD assets and facilities. If the PSC makes those determinations and the PSC believes that the MMSD commission has not acted in the best interests of MMSD's ratepayers in selling or leasing its assets and facilities, the PSC may appoint an individual to negotiate and enter into agreements for the sale or lease of MMSD's assets and facilities. This individual is given the authority to enter into those agreements on behalf of MMSD and MMSD is obligated to pay all costs incurred by the individual in exercising that authority.

The proceeds of any sale or lease of the assets must be distributed to the state and municipalities in MMSD's boundaries in proportion to the amounts paid by the state and municipalities for certain MMSD capital costs. The bill also authorizes MMSD to dissolve, subject to PSC review and approval, if all of the district's assets and facilities are sold, if all of MMSD's outstanding indebtedness is retired and if all bonds issued by the district are paid off.

Other

This bill requires the MMSD commission to develop and implement a plan to refund to Milwaukee County residents excess reserves that are held by MMSD, as determined by the PSC. The bill also requires the PSC to study the likely effects of any sale or lease of MMSD assets on the rates charged for sewerage service in the district.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB1065, s. 1 Section 1. 20.155 (1) (title) of the statutes is amended to read:

AB1065,5,2 20.155 (1) (title) Regulation of public utilities and regulated districts.

AB1065, s. 2 Section 2. 20.155 (1) (g) of the statutes is amended to read:

AB1065,6,2 20.155 (1) (g) (title) Utility regulation Regulation of utilities and regulated districts. The amounts in the schedule for the regulation of utilities and regulated districts. Ninety percent of all moneys received by the commission under s. 184.10 (3), 196.85 or 196.855 shall be credited to this appropriation. Ninety percent of all receipts from the sale of miscellaneous printed reports and other copied material, the cost of which was originally paid under this paragraph, shall be credited to this appropriation.

AB1065, s. 3 Section 3. 66.076 (1m) of the statutes is amended to read:

AB1065,6,6 66.076 (1m) In this section, "municipality" means any town, village, city or metropolitan sewerage district created under ss. 66.20 to 66.26 or under ss. 66.88 to 66.918.

AB1065, s. 4 Section 4. 66.076 (7) of the statutes is amended to read:

AB1065,6,12 66.076 (7) Sewerage service charges shall be collected and taxed and shall be a lien upon the property served in the same manner as water rates are taxed and collected under s. 66.069 (1) or 66.071 (1) (e), so far as applicable , except that charges of a metropolitan sewerage district created under ss. 66.88 to 66.918 shall be assessed and collected as provided in s. 66.91 (5).

AB1065, s. 5 Section 5. 66.076 (8) of the statutes is amended to read:

AB1065,6,19 66.076 (8) The governing body of any municipality, and the officials in charge of the management of the sewerage system as well as other officers of the municipality, shall be governed in the discharge of their powers and duties under this section by s. 66.069 or 66.071 (1) (e), which are hereby made a part of this section so far as applicable and not inconsistent herewith or, in the case of a metropolitan sewerage district created under ss. 66.88 to 66.918, by ss. 66.91 and 66.912.

AB1065, s. 6 Section 6. 66.886 (2) (a) 1. of the statutes is amended to read:

AB1065,6,25 66.886 (2) (a) 1. No resolution adopted by the commission under s. 66.91 (1), (3) (c) or (6), 67.05 (1) or 67.12 (12), no proposed schedule of charges under s. 66.076, 66.898 (4), 66.899 or 66.91 (5) (b) 3., no decision to borrow against taxes under s. 67.12 (1) and no decision to borrow under s. 24.61 (3) (a) 7. is valid unless adopted by an affirmative vote of at least a two-thirds majority of all commissioners.

AB1065, s. 7 Section 7. 66.888 (2) (b) of the statutes is amended to read:

AB1065,7,3 66.888 (2) (b) The name of a district created under s. 66.882 (1) (b) is the Milwaukee metropolitan sewerage district Metropolitan Sewerage District.

AB1065, s. 8 Section 8. 66.891 of the statutes is created to read:

AB1065,7,7 66.891 Dissolution of the district; sale or lease of district assets and facilities. (1) General authority. The commission shall, subject to s. 196.80, lease or sell any or all of the district's assets and facilities if all of the following apply:

AB1065,7,9 (a) The public service commission determines that a lease or sale will be in the best interests of the district's ratepayers.

AB1065,7,19 (b) The public service commission determines that, under the terms of any lease or sale agreement, the employes of the district who cease to be employes of the district on the effective date of the lease or sale and who are performing functions in relation to the assets or facilities that are leased or sold and who are covered by a collective bargaining agreement under subch. IV of ch. 111, which is in effect on the day before the effective date of the lease or sale, shall continue to perform the functions that they perform on the day before the effective date of the lease or sale, after the lease or sale until the expiration date of the collective bargaining agreement that applies to such employes or for 2 years following the effective date of this paragraph .... [revisor inserts date], whichever is sooner.

AB1065,7,23 (2) Dissolution of the district. Subject to s. 196.78, after retiring all outstanding indebtedness of the district and paying off all bonds issued by the district, the commission may dissolve the district if all of the district's assets and facilities are sold under sub. (1).

AB1065,8,3 (3) Application of proceeds. The proceeds of any sale or lease under sub. (1) (a) to an entity other than the state shall be distributed, in a manner approved by the public service commission, to the state and municipalities in proportion to the amounts paid by the state and municipalities for capital costs since the district was reorganized under s. 66.882 (1) (b).