An Act To Establish the Locally Governed Water District Act LR 0927(02)
Maine Legislature, Session 121, LD 1359
Committee Amendment CA_A_S131 (Senate)

COMMITTEE AMENDMENT "A" to S.P. 447, L.D. 1359, Bill, 
"An 
Act To Establish the Locally Governed Water District Act" 
Amend the bill by striking out everything after the enacting 
clause and before the summary and inserting in its place the 
following: 
'Sec. 1. 3S-A MRSA c. 62 is enacted to read: 
CBAP'l'ER 62 
LOCALLy GOVERRED WATER DISTRICTS 
§6201. 
Short title 
This chapter may be known and cited as "the Locally Governed 
Water District Act. " 
§6202. 
Definitions 
As 
used in this 
chapter, 
unless 
the 
context otherwise 
indicates, the following terms have the following meanings. 
1. 
Charter. 
"Charter" has the same meaning as set forth in 
section 6402, subsection 1. 
2. 
Consumer-owned vater utility. 
"Consumer-owned water 
utility" has the same meaning as set forth in section 6101, 
subsection I-A. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A .. to S.P. 447, L.D. 1359 
3. 
Governing botlY. 
"Governing body" has the same meaning 
as set forth in section 6101, subsection I-B. 
4. 
Locally governed water district. 
"Locally governed 
water district" means a 
consumer-owned water utility that has 
been selected by the commission to participate in the pilot 
project described in section 6203. 
5. 
Water 
district: 
district. 
"Water 
district" 
or 
"district" has the same meaning as set forth in section 6101, 
subsection 3. 
§6203. 
Local governance pilot project 
1. 
Local governance pilot project. 
The commission shall 
establish a local governance pilot project. referred to in this 
chapter as "the pilot project," to determine whether economic 
regulation 
of 
consumer-owned 
water 
utilities 
should 
be 
transferred to the local level in a 
manner similar to other 
quasi-municipal entities in the State. 
The 
commission shall 
oversee the pilot project in accordance with this section. 
2. 
Designation of participants. 
Within 6 months after the 
effective date of this section, the commission shall designate no 
more than 10~ of the consumer-owned water utilities operating in 
the State to participate in the pilot project. 
The participating 
utilities must include at least one representative from each of 
the following classes of utilities: 
A. 
A large utility serving an area with a population of 
100,000 or more people; 
B. 
A medium-sized utility serving an area with a population 
over 10,000 people but under 100,000 people; and 
C. 
A small utility serving an area with a population of 
10,000 or less people. 
At least one of the participating utilities must be a municipal 
water department. 
3. 
Election by participating water utility. 
To qualify for 
designation by the commission under subsection 2, the governing 
body of the consumer-owned water utility must affirmatively vote 
to participate in the pilot project. 
The election must be 
certified by the secretary or clerk of the utility. 
Prior to 
taking the vote, the utility shall hold a public hearing at which 
the Public Advocate and any customers of the utility may testify 
and may question the utility's officials regarding participation 
in the pilot project. Public notice of the time, date, location 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT .. 4, to S.P. 447, L.D. 1359 
and purpose of the hearing must be made no less than 14 days in 
advance of the hearing in a newspaper of general circulation in 
the area encompassed by the utility. 
In addition, the utility 
shall provide one notice to each of its customers containing the 
same information in the public notice, which notice must be 
distributed by mail or other similar means no less than 14 days 
prior to the hearing. 
A copy of the notice must be provided 
concurrently to the commission and the Public Advocate. 
4. 
Municipal 
~roval. 
If the governing 
body of the 
consumer-owned water utility yotes to participate in the pilot 
project pursuant to subsection 3, then the municipal officers of 
a municipality within the consumer-owned water utility's service 
area shall vote on whether to approve the utility's election. 
For utilities serving more than one municipality, the approval of 
municipalities representing a majority of the population within 
the utility's service area is required. 
Prior to requesting a 
vote by any municipality under this subsection, the utility shall 
provide to the clerk of the municipality a copy of the utility's 
certified vote pursuant to subsection 3. 
5. 
Term 
of 
pilot 
project. 
Once 
designated 
by 
the 
commission as a locally governed water district. a utility is a 
locally governed water district until June 1, 
2007. 
At the 
expiration 
of 
the pilot project, 
a 
locally 
goyerned 
water 
district resumes business as a consumer-owned water utility. 
The 
commission may discontinue the project prior to February 1, 2007 
for one or more of the utilities if it determines, following 
notice 
and 
public 
hearing, 
that 
local 
governance 
by 
the 
participating utility is not in the public interest. 
Public 
notice of the time, date, location and purpose of the hearing 
must be made no less than 14 days in advance of the hearing in a 
newspaper of general circulation in the area encompassed by the 
utility. 
6. 
AsseSsments. 
During the term of the pilot project. 
locally governed water districts shall continue 
to 
pay 
any 
required assessments according to the terms of section 116. 
§6204. 
Scope 
1. 
Chapter governs affairs. 
Notwithstanding 
any other 
provision of this Title, except as specifically provided in 
subsection 
2, 
this 
chapter 
governs 
the 
affairs 
of 
locally 
governed water districts. 
2. 
Regulation of districts. 
To the extent applicable to 
water utilities, the following' laws apply to locally governed 
water districts: 
COMMITTEE AMENDMENT 
~-
,~ 
COMMITTEE AMENDMENT .. A· to S.P. 447, L.D. 1359 
A. 
Section 706, subsections 3. 4. 5 and 6; 
B. 
Section 761. subsection 3; 
C. 
Section 2102; 
D. 
Any 
provision 
of 
this 
Title 
that 
authorizes 
a 
consumer-owned water utility to enter into 
a 
lease and 
leaseback transaction with respect to some or all of its 
property. including any requirement that such transaction be 
approved by the commission under section 1101; 
E. 
Section 2110. but only to the extent the governing body 
of 
a 
locally governed 
water 
district 
consents 
to 
the 
extension of service under section 2110; 
F. 
Sections 2303, 2307. 2308 and 2309; 
G. 
Chapter 25; 
H. 
Section 6103; 
I. 
Section 6109; 
J. 
Section 6110; 
K. 
5~~tiQn 211l. 
L. 
Chapter 24, as applicable pursuant tQ the express terms 
of that chapter or the express terms Qf the charter of the 
locally gQverned water district. except that: 
(1) 
SectiQn 2401. subsectiQn 3 and sectiQn 2414 do not 
apply; and 
(2) 
NQtwithstanding sectiQn 2408. 
subsection 2 
and 
sectiQn 2409. the provisiQns Qf sections 6701. 6702. 
2703 and 2704 dQ not apply. 
M. 
Section 6704-A: 
N. 
SectiQn 2705. and 
O. 
5ectiQn 2702. 
The applicatiQn Qf these laws is not intended tQ permit the 
commissiQn tQ issue any Qrder or cQnditiQn regulating locally 
gQverned water districts except as specifically permitted under 
this chapter. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,A II to S.P. 447, L.D. 1359 
This section may not be interpreted to affect the scope or 
application of any provision of law outside this Title. 
Although 
this chapter provides for a reduced level of regulation by the 
commission of locally governed water districts, the districts 
remain water utilities for purposes of the applicable provisions 
of this Title listed in subsection 2 and for all laws outside of 
this Title. 
Any reference outside this Title to entities that 
include 
water 
utilities, 
including, 
but 
not 
limited 
to, 
references 
to 
public 
utilities, 
water 
districts 
and 
public 
service corporations, includes locally governed water districts. 
§6205. 
Establishment of rates 
1. 
Authority. 
The governing body of a 
locally governed 
water district shall establish rates, tolls, deposits, customer 
contributions and charges in accordance with this section. 
2. 
Provide 
revenue. 
The 
governing 
body of 
a 
locally 
governed water district may establish rates or charges to provide 
revenue to the district in order to carry out any lawful purpose 
of 
the 
locally governed water district, 
including, 
but not 
limited to: 
A. 
Paying 
the 
current 
expenses 
for 
operating 
and 
maintaining 
the 
water 
system 
and 
providing 
for 
normal 
renewals and replacements; 
B. 
Providing for 
the 
payment 
of 
the 
interest 
on 
the 
indebtedness created or assumed by the district; 
C. 
Creating a sinking fund for the extinguishment of term 
indebtedness; 
D. 
Providing 
annual 
principal 
payments 
on 
serial 
indebtedness created or assumed by the district; 
E. 
Providing for a contingency reserve fund to pay losses 
of the district in the event of insufficient revenues; 
F. 
Providing for a water supply protection fund to acquire 
interests in land in order to protect the district's sources 
of supply; 
G. 
Providing for system developments related to an increase 
in demand for service; and 
H. 
Providing for capital improvements and expansions to the 
system. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT .. A 
.. to S.P. 447, L.D. 1359 
3. 
Process. 
Before the adoption of a 
new rate schedule 
under this section, the governing body of a locally governed 
water district shall hold a public hearing regarding the proposed 
rate schedule. 
The governing body shall publish the proposed 
rate schedule and notice of the hearing in a newspaper having a 
general circulation in the district not less than 7 days prior to 
the hearing. 
The district shall mail to each ratepayer a notice 
of the public hearing and the proposed new rate schedule not less 
than 14 days prior to the hearing. Once a proposed rate schedule 
becomes final, a copy of the rate schedule must remain on file at 
the main office of the district for public information. 
4. 
Just and reasoDahle rates. 
The governing body of a 
locally governed water district shall establish rates that are 
just 
and 
reasonable 
and 
that 
do 
not 
give 
any 
undue 
or 
unreasonable preference, advantage, prejudice or disadvantage to 
a particular person. 
This subsection is not intended to limit 
the ability of 
a 
locally governed water district to 
charge 
different 
rates 
or 
enter 
into 
special 
contracts 
upon 
a 
determination by the governing body that such a practice is in 
the best interest of the district. 
5. 
Fire protection charges: cost allocation. 
A locally 
governed water district shall allocate as a percentage of gross 
revenue its charges for water service for fire protection in 
accordance with the standards, terms and conditions established 
in· any 
commission 
rules 
governing 
such 
allocation 
for 
consumer-owned water utilities, or, if no such rules exist, based 
on the results of a full allocation study of the district'S water 
system. 
§6206. 
Eminent domain 
A 
locally 
governed 
water 
district 
has 
eminent 
domain 
authority as specified in its charter, except that any provision 
in the charter that refers to a section of this Title that by the 
terms of this chapter does not apply to the district does not 
cause that section to apply. 
§6207. 
Annual audit 
A locally governed water district shall conduct an annual 
audit of its books and records by an independent accountant. 
Within 3 months after the audit is completed, the district shall 
submit a copy of the audit to the commission. 
For good cause 
shown, the commission may extend the deadline for submitting a 
copy of the audit. 
§6208. 
Service standards: appeal 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT 'A" to S.P. 447, L.D. 1359 
1. 
Commission 
review 
. of 
customer 
cOlQPlaints. 
The 
commission by rule shall establish procedures to review customer 
complaints related to locally governed water districts concerning 
denial 
or 
termination 
of 
service, 
terms 
and 
conditions 
of 
service, billing, metering or collection for service and any 
other 
matters 
the 
commission 
determines 
appropriate. 
The 
procedures may be the same as those that apply to other water 
districts. 
The commission's decisions under procedures adopted 
pursuant to this subsection are subject to appeal in the same 
manner as any other decision of the commission. 
2. 
Right of a,ppea1. 
Except as otherwise provided in the 
charter of a locally governed water district and except in the 
case of a complaint subject to review by the commission pursuant 
to subsection 1, any person aggrieved by a final decision of the 
district has a right to appeal to the Superior Court on guestions 
of law in the same manner as an appeal taken to the Law Court 
from a judgment of the Superior Court in a civil action. 
3. 
Other actions. 
A person may bring an action under the 
Maine Rules of Civil Procedure, Rule 80B to review any action or 
failure or refusal to act by a locally governed water district if 
the action or failure or refusal to act is not subject to review 
by the commission pursuant to subsection 1. Nothing in this 
section may be interpreted to limit any rights of action or 
appeal that may exist by operation of other law. 
§6209. 
Relation to private and special laws 
This chapter is not intended to limit or restrict the terms 
of a private and special law or a valid charter of a locally 
governed water district. except that a law or charter may not 
prohibit or interfere with the ability of a consumer-owned water 
utility to make an election under section 6203, subsection 3. 
§6210. 
Rules 
The commission has authority to adopt rules to carry out 
this chapter. 
Rules adopted pursuant to this chapter are routine 
technical rules as defined in Title 5, chapter 375, subchapter 
2-A. 
Sec. 2. Interim report. 
No later than October 31, 2006, the 
Public Utilities Commission shall submit an interim report that 
includes the commission's findings and recommendations concerning 
the local governance pilot project established in this Act for 
presentation to the joint stand,ing committee of the Legislature 
having jurisdiction over public utilities matters.' 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT I~" to S.P. 447, L.D. 1359 
SUMMARY 
This amendment makes the following changes to the bill. It: 
1. 
Changes 
certain references 
to 
"water 
"water utilities" to clarify that municipal water 
participate in the local governance pilot project; 
districts" to 
departments may 
to 
2. 
Requires participants in the pilot project to continue 
pay 
Public 
Utilities 
Commission 
and 
Public 
Advocate 
assessments; 
3. 
Provides 
participant 
remains 
oversight; 
that 
sale 
subject 
of 
to 
land 
Public 
by 
a 
pilot 
project 
Utilities 
Commission 
4. 
Removes the provision of the bill authorizing a pilot 
project participant to adopt a local appeal process and replaces 
it with 
a 
directive 
that 
the 
Public 
Utilities 
Commission 
establish procedures to review customer complaints concerning 
denial 
or 
termination 
of 
service, 
terms 
and 
conditions 
of 
service, billing, metering or collection for service and any 
other matters the commission determines appropriate; and 
5. 
Provides that 
a 
pilot project participant may 
take 
advantage 
of 
any 
authorization 
under 
existing 
law 
for 
a 
consumer-owned water utility to enter a 
lease and leaseback 
transaction, subject to Public Utilities Commission approval. 
FISCAL :\OTE REQ{jlRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 05/07/03 frac::.. 
Office of Fiscal and Program Review 
LD 1359 
An Act To Establish the Locally Governed Water District Act 
LR 0927(02) 
Fiscal Note for Bill as Amended by Committee Amendment~" 5-)3/ 
Committee: Utilities and Energy 
Fiscal Note Required: Yes 
Fiscal Note 
Minor cost increase - Other Special Revenue Funds 
LR0927(2) - Fiscal Note - Page 1 of 1