House File 310 - Introduced HOUSE FILE 310 BY COMMITTEE ON COMMERCE (SUCCESSOR TO HSB 13) A BILL FOR An Act relating to municipal utilities, by restricting the 1 regulatory authority of the Iowa utilities board with 2 regard to certain services, and authorizing city utilities 3 to require deposits for gas or electric services for 4 residential rental properties. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 1666HV (3) 87 gh/nh

H.F. 310 Section 1. Section 384.84, subsection 3, Code 2017, is 1 amended to read as follows: 2 3. a. A city utility or enterprise service to a property 3 or premises, including services of sewer systems, storm water 4 drainage systems, sewage treatment, solid waste collection, 5 water, solid waste disposal, or any of these services, may be 6 discontinued or disconnected if the account for the service 7 becomes delinquent. Gas or electric service provided by a city 8 utility or enterprise shall be discontinued or disconnected 9 only as provided by section 476.20 , subsections 1 through 4, 10 and discontinuance or disconnection of those services are 11 is subject to rules adopted by the utilities board of the 12 department of commerce. 13 b. If more than one city utility or enterprise service is 14 billed to a property or premises as a combined service account, 15 all of the services may be discontinued or disconnected if the 16 account becomes delinquent. 17 c. A city utility or enterprise service to a property or 18 premises shall not be discontinued or disconnected unless prior 19 written notice is sent, by ordinary mail, to the account holder 20 in whose name the delinquent rates or charges were incurred, 21 informing the account holder of the nature of the delinquency 22 and affording the account holder the opportunity for a hearing 23 prior to discontinuance or disconnection of service. If the 24 account holder is a tenant, and if the owner or landlord of the 25 property or premises has made a written request for notice, the 26 notice shall also be given to the owner or landlord. If the 27 account holder is a tenant and requests a change of name for 28 service under the account, such request shall be sent to the 29 owner or landlord of the property if the owner or landlord has 30 made a written request for notice of any change of name for 31 service under the account to the rental property. 32 d. (1) If a delinquent amount is owed by an account 33 holder for a utility service associated with a prior property 34 or premises, a city utility, city enterprise, or combined 35 -1- LSB 1666HV (3) 87 gh/nh 1/ 6

H.F. 310 city enterprise may withhold service from the same account 1 holder at any new property or premises until such time as 2 the account holder pays the delinquent amount owing on the 3 account associated with the prior property or premises. A city 4 utility, city enterprise, or combined city enterprise shall not 5 withhold service from, or discontinue or disconnect service 6 to, a subsequent owner who obtains fee simple title of the 7 prior property or premises unless such delinquent amount has 8 been certified in a timely manner to the county treasurer as 9 provided in subsection 4 , paragraph “a” , subparagraphs (1) and 10 (2). 11 (2) Delinquent amounts that have not been certified in 12 a timely manner to the county treasurer are not collectible 13 against any subsequent owner of the property or premises. 14 e. (1) A legal entity created pursuant to chapter 28E 15 by a city or cities, or other political subdivisions, and 16 public or private agencies for the purposes of providing 17 wastewater, sewer system, storm water drainage, or sewage 18 treatment services shall have the same powers and duties as a 19 city utility or enterprise under this subsection with respect 20 to account holders and subsequent owners, or with respect to 21 properties and premises, associated with a delinquent account 22 under this subsection . 23 (2) The governing body of a city utility, combined city 24 utility, city enterprise, or combined city enterprise may 25 enter into an agreement with a legal entity described in 26 subparagraph (1) to discontinue or disconnect water service 27 to a property or premises if an account owed the legal entity 28 for wastewater, sewer system, storm water drainage, or sewage 29 treatment services provided to that customer’s property or 30 premises becomes delinquent. The customer shall be responsible 31 for all costs associated with discontinuing or disconnecting 32 and reestablishing water service disconnected pursuant to this 33 paragraph “e” . 34 (3) This paragraph “e” shall not apply to a property or 35 -2- LSB 1666HV (3) 87 gh/nh 2/ 6

H.F. 310 premises if, prior to July 1, 2015, the account holder for 1 that property or premises had an established account with a 2 legal entity described in subparagraph (1) for the provision 3 of wastewater, sewer system, storm water drainage, or sewage 4 treatment services to the property or premises. 5 f. (1) A legal entity providing wastewater, sewer system, 6 storm water drainage, or sewage treatment services to a city or 7 cities or other political subdivisions pursuant to a franchise 8 or other agreement shall have the same powers and duties as a 9 city utility or enterprise under this subsection with respect 10 to account holders and subsequent owners, or with respect to 11 properties and premises, associated with a delinquent account 12 under this subsection . 13 (2) The governing body of a city utility, combined city 14 utility, city enterprise, or combined city enterprise may 15 enter into an agreement with a legal entity described in 16 subparagraph (1) to discontinue or disconnect water service 17 to a property or premises if an account owed the legal entity 18 for wastewater, sewer system, storm water drainage, or sewage 19 treatment services provided to that customer’s property or 20 premises becomes delinquent. The customer shall be responsible 21 for all costs associated with discontinuing or disconnecting 22 and reestablishing water service disconnected pursuant to this 23 paragraph “f” . 24 (3) This paragraph “f” shall not apply to a property or 25 premises if, prior to July 1, 2015, the account holder for 26 that property or premises had an established account with a 27 legal entity described in subparagraph (1) for the provision 28 of wastewater, sewer system, storm water drainage, or sewage 29 treatment services to the property or premises. 30 Sec. 2. Section 384.84, subsection 4, paragraphs b and e, 31 Code 2017, are amended to read as follows: 32 b. The lien under paragraph “a” may be imposed upon a 33 property or premises even if a city utility or enterprise 34 service to the property or premises has been or may be 35 -3- LSB 1666HV (3) 87 gh/nh 3/ 6

H.F. 310 discontinued or disconnected as provided in this section . 1 e. Residential rental property where a charge for any of the 2 services of sewer systems, storm water drainage systems, sewage 3 treatment, solid waste collection, and solid waste disposal 4 is paid directly to the city utility or enterprise by the 5 tenant is exempt from a lien for delinquent rates or charges 6 associated with such services if the landlord gives written 7 notice to the city utility or enterprise that the property 8 is residential rental property and that the tenant is liable 9 for the rates or charges. A city utility or enterprise may 10 require a deposit not exceeding the usual cost of ninety days 11 of the services of gas, electric, sewer systems, storm water 12 drainage systems, sewage treatment, solid waste collection, and 13 solid waste disposal to be paid to the utility or enterprise. 14 Upon receipt, the utility or enterprise shall acknowledge the 15 notice and deposit. A written notice shall contain the name 16 of the tenant responsible for the charges, the address of the 17 residential rental property that the tenant is to occupy, and 18 the date that the occupancy begins. A change in tenant shall 19 require a new written notice to be given to the city utility or 20 enterprise within thirty business days of the change in tenant. 21 When the tenant moves from the rental property, the city 22 utility or enterprise shall return the deposit if the charges 23 for the services of gas, electric, sewer systems, storm water 24 drainage systems, sewage treatment, solid waste collection, 25 and solid waste disposal are paid in full. A change in the 26 ownership of the residential rental property shall require 27 written notice of such change to be given to the city utility 28 or enterprise within thirty business days of the completion 29 of the change of ownership. The lien exemption for rental 30 property does not apply to charges for repairs related to a 31 service of sewer systems, storm water drainage systems, sewage 32 treatment, solid waste collection, and solid waste disposal if 33 the repair charges become delinquent. 34 Sec. 3. Section 384.84, subsection 8, paragraphs b and c, 35 -4- LSB 1666HV (3) 87 gh/nh 4/ 6

H.F. 310 Code 2017, are amended to read as follows: 1 b. Two or more city utilities, combined utility systems, 2 city enterprises, or combined city enterprises, including city 3 utilities established pursuant to chapter 388 , may contract 4 pursuant to chapter 28E for joint billing or collection, or 5 both, of combined service accounts for utility or enterprise 6 services, or both. The contracts may provide for the 7 discontinuance or disconnection of one or more of the city 8 utility or enterprise services if a delinquency occurs in the 9 payment of any charges billed under a combined service account. 10 c. One or more city utilities or combined utility systems, 11 including city utilities established pursuant to chapter 388 , 12 may contract pursuant to chapter 28E with one or more sanitary 13 districts established pursuant to chapter 358 for joint billing 14 or collection, or both, of combined service accounts from 15 utility services and sanitary district services. The contracts 16 may provide for the discontinuance or disconnection of one or 17 more of the city water utility services or sanitary district 18 services if a delinquency occurs in the payment of any charges 19 billed under a combined service account. 20 Sec. 4. Section 476.1B, subsection 1, paragraph e, Code 21 2017, is amended to read as follows: 22 e. Disconnection of service, as set forth in section 476.20 , 23 subsections 1 through 4 . 24 Sec. 5. Section 476.20, subsection 5, paragraph a, 25 unnumbered paragraph 1, Code 2017, is amended to read as 26 follows: 27 The board shall establish rules which shall be uniform with 28 respect to all public utilities furnishing gas or electricity 29 relating to deposits which may be required by the public 30 utility for the initiation or reinstatement of service. This 31 subsection shall not apply to municipally owned utilities, 32 which shall be governed by the provisions of section 384.84 33 with respect to deposits and payment plans for delinquent 34 amounts owed. Municipally owned utilities shall not be subject 35 -5- LSB 1666HV (3) 87 gh/nh 5/ 6

H.F. 310 to the board’s rules in regards to deposits and payment plans 1 for delinquent amounts owed and repayment of past due debt. 2 EXPLANATION 3 The inclusion of this explanation does not constitute agreement with 4 the explanation’s substance by the members of the general assembly. 5 This bill relates to municipal utilities. 6 The bill modifies the terminology throughout Code section 7 384.84(3), which relates to the discontinuance of services by 8 city utilities, by changing references to the discontinuance of 9 services to also include the disconnection of services. 10 Currently, Code section 476.1B provides that a municipally 11 owned utility is not subject to regulation by the Iowa 12 utilities board, subject to certain specified exceptions. One 13 such exception is with regard to disconnection of service, 14 as provided in Code section 476.20. The bill modifies this 15 reference to Code section 476.20 to limit the applicability 16 of board regulation to subsections 1 through 4 of the Code 17 section. This renders provisions contained in Code section 18 476.20, subsection 5, regarding the board establishing rules 19 relating to deposits which may be required by a utility for 20 the initiation or reinstatement of service, inapplicable to 21 municipal utilities. 22 Current Code section 476.20(5) requires the board to 23 establish uniform rules for public utilities with respect 24 to deposits required for the initiation or reinstatement of 25 service. The bill provides that Code section 476.20(5) does 26 not apply to municipally owned utilities, which are governed by 27 the provisions of Code section 384.84 with respect to deposits 28 and payment plans for delinquent amounts owed. The bill also 29 provides that municipally owned utilities are not subject to 30 the board’s rules in regards to deposits and payment plans for 31 delinquent amounts owed and repayment of past due debt. 32 -6- LSB 1666HV (3) 87 gh/nh 6/ 6