LRB-5570/2
KSH/MES:skg/mkd:kat
1995 - 1996 LEGISLATURE
March 7, 1996 - Introduced by Senators Farrow, Panzer and Huelsman,
cosponsored by Representatives
Duff, Hoven, Schneiders, Jensen, Urban,
Underheim, Huebsch, Goetsch and Grothman. Referred to Committee on
Environment and Energy.
SB614,2,13
1An Act to repeal 66.898 (4) (c), 66.899 and 66.912 (5);
to amend 20.155 (1) (title),
220.155 (1) (g), 66.076 (1m), 66.076 (7), 66.076 (8), 66.886 (2) (a) 1., 66.888 (2) (b),
366.892 (2) (a), 66.892 (2) (d), 66.894 (1) (intro.), 66.898 (3), 66.898 (4) (a), 66.898
4(4) (b), 66.90 (1), 66.904 (1), 66.91 (intro.), 66.91 (1) (g), 66.91 (5) (a), 66.91 (5)
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
6(5) (d) 1., 66.91 (5) (e), 66.912 (2) (a), 66.912 (2) (b), 66.912 (2) (c), 66.912 (3),
7196.02 (1), 196.02 (2), 196.02 (4) (a), 196.02 (4) (c), 196.02 (5), 196.02 (6), 196.03
8(1), 196.05, 196.06, 196.07, 196.09 (1), 196.09 (2), 196.09 (3), 196.09 (4), 196.09
9(5), 196.09 (6) (a), 196.09 (6) (b), 196.09 (7) (intro.), 196.09 (8), 196.10, 196.11
10(1), 196.12 (title), 196.12 (1) (intro.), 196.13, 196.14, 196.15, 196.16 (1), 196.16
11(2), 196.17 (1), 196.171 (1), 196.171 (2), 196.18, 196.19 (1), 196.19 (2), 196.19 (3),
12196.19 (4), 196.19 (6), 196.20 (1), 196.20 (2) (a) 2., 196.20 (2) (b), 196.21, 196.22,
13196.24 (1), 196.25 (1), 196.25 (2), 196.26 (1), 196.26 (1m), 196.26 (2) (a), 196.26
14(2) (b), 196.28 (1), 196.28 (3), 196.30, 196.31 (1) (intro.), 196.31 (2), 196.37 (3),
15196.39, 196.44 (1), 196.44 (2), 196.49 (2), 196.49 (3) (a), 196.49 (3) (b) (intro.),
16196.49 (3) (b) 1., 196.49 (3) (b) 3., 196.49 (6), 196.525 (1) (intro.), 196.525 (2),
17196.525 (3), 196.58 (1) (a), 196.58 (1) (b), 196.58 (4), 196.58 (5), 196.60 (1),
1196.60 (3), 196.604, 196.61, 196.635 (intro.), 196.635 (1), 196.64 (title), 196.64
2(1), 196.643 (1), 196.645 (1) (intro.), 196.65 (1) (intro.), 196.65 (1) (e), 196.65 (2),
3196.66 (1), 196.66 (2), 196.66 (3) (a), 196.66 (3) (b) (intro.), 196.66 (3) (b) 1.,
4196.66 (3) (b) 3., 196.66 (4) (b), 196.68, 196.69, 196.70, 196.72 (title), 196.72 (1)
5(a), 196.72 (2), 196.78, 196.79 (1), 196.80 (3), 196.81 (1), 196.85 (1), 196.85 (2),
6196.85 (3), 196.85 (4) (a) and 196.85 (5);
to repeal and recreate 196.44 (2); and
7to create 66.891, 196.01 (6m), 196.02 (13), 196.49 (3) (e) and 196.80 (1s) of the
8statutes;
relating to: regulation and supervision by the public service
9commission of a metropolitan sewerage district established by a lst class city,
10the sale or lease of metropolitan sewerage district assets under certain
11circumstances, authorizing the dissolution of a metropolitan sewerage district,
12distribution of excess reserves of a district, granting rule-making authority,
13making 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:
SB614, s. 1
1Section
1. 20.155 (1) (title) of the statutes is amended to read:
SB614,5,22
20.155
(1) (title)
Regulation of public utilities and regulated districts.
SB614, s. 2
3Section
2. 20.155 (1) (g) of the statutes is amended to read:
SB614,6,24
20.155
(1) (g) (title)
Utility regulation Regulation of utilities and regulated
5districts. The amounts in the schedule for the regulation of utilities
and regulated
6districts. Ninety percent of all moneys received by the commission under s. 184.10
7(3), 196.85 or 196.855 shall be credited to this appropriation. Ninety percent of all
8receipts from the sale of miscellaneous printed reports and other copied material, the
1cost of which was originally paid under this paragraph, shall be credited to this
2appropriation.
SB614, s. 3
3Section
3. 66.076 (1m) of the statutes is amended to read:
SB614,6,64
66.076
(1m) In this section, "municipality" means any town, village, city or
5metropolitan sewerage district created under ss. 66.20 to 66.26
or under ss. 66.88 to
666.918.
SB614, s. 4
7Section
4. 66.076 (7) of the statutes is amended to read:
SB614,6,128
66.076
(7) Sewerage service charges shall be collected and taxed and shall be
9a lien upon the property served in the same manner as water rates are taxed and
10collected under s. 66.069 (1) or 66.071 (1) (e), so far as applicable
, except that charges
11of a metropolitan sewerage district created under ss. 66.88 to 66.918 shall be
12assessed and collected as provided in s. 66.91 (5).
SB614, s. 5
13Section
5. 66.076 (8) of the statutes is amended to read:
SB614,6,1914
66.076
(8) The governing body of any municipality, and the officials in charge
15of the management of the sewerage system as well as other officers of the
16municipality, shall be governed in the discharge of their powers and duties under this
17section by s. 66.069 or 66.071 (1) (e), which are hereby made a part of this section so
18far as applicable and not inconsistent herewith
or, in the case of a metropolitan
19sewerage district created under ss. 66.88 to 66.918, by ss. 66.91 and 66.912.
SB614, s. 6
20Section
6. 66.886 (2) (a) 1. of the statutes is amended to read:
SB614,6,2521
66.886
(2) (a) 1. No resolution adopted by the commission under s. 66.91 (1),
22(3) (c) or (6), 67.05 (1) or 67.12 (12), no
proposed schedule of charges under s. 66.076,
2366.898 (4)
, 66.899 or 66.91 (5) (b) 3., no decision to borrow against taxes under s.
2467.12 (1) and no decision to borrow under s. 24.61 (3) (a) 7. is valid unless adopted
25by an affirmative vote of at least a two-thirds majority of all commissioners.
SB614, s. 7
1Section
7. 66.888 (2) (b) of the statutes is amended to read:
SB614,7,32
66.888
(2) (b) The name of a district created under s. 66.882 (1) (b) is the
3Milwaukee
metropolitan sewerage district Metropolitan Sewerage District.
SB614, s. 8
4Section
8. 66.891 of the statutes is created to read:
SB614,7,7
566.891 Dissolution of the district; sale or lease of district assets and
6facilities. (1) General authority. The commission shall, subject to s. 196.80, lease
7or sell any or all of the district's assets and facilities if all of the following apply:
SB614,7,98
(a) The public service commission determines that a lease or sale will be in the
9best interests of the district's ratepayers.
SB614,7,1910
(b) The public service commission determines that, under the terms of any
11lease or sale agreement, the employes of the district who cease to be employes of the
12district on the effective date of the lease or sale and who are performing functions in
13relation to the assets or facilities that are leased or sold and who are covered by a
14collective bargaining agreement under subch. IV of ch. 111, which is in effect on the
15day before the effective date of the lease or sale, shall continue to perform the
16functions that they perform on the day before the effective date of the lease or sale,
17after the lease or sale until the expiration date of the collective bargaining agreement
18that applies to such employes or for 2 years following the effective date of this
19paragraph .... [revisor inserts date], whichever is sooner.
SB614,7,23
20(2) Dissolution of the district. Subject to s. 196.78, after retiring all
21outstanding indebtedness of the district and paying off all bonds issued by the
22district, the commission may dissolve the district if all of the district's assets and
23facilities are sold under sub. (1).
SB614,8,3
24(3) Application of proceeds. The proceeds of any sale or lease under sub. (1)
25(a) to an entity other than the state shall be distributed, in a manner approved by
1the public service commission, to the state and municipalities in proportion to the
2amounts paid by the state and municipalities for capital costs since the district was
3reorganized under s. 66.882 (1) (b).
SB614, s. 9
4Section
9. 66.892 (2) (a) of the statutes is amended to read: