General Assembly		Raised Bill No. 6954
January Session, 2015		LCO No. 4621
		*04621_______PH_*
Referred to Committee on PUBLIC HEALTH
Introduced by:
(PH)

AN ACT CONCERNING THE DEPARTMENT OF PUBLIC HEALTH'S RECOMMENDATIONS REGARDING WATER COMPANY TAKEOVER PROCEEDINGS AND CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY FOR THE EXPANSION AND CONSTRUCTION OF PUBLIC WATER SYSTEMS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 12-81q of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):

Any municipality may, upon approval by its legislative body or in any town in which the legislative body is a town meeting, by the board of selectmen, abate for a period of up to ten years all or a portion of the property taxes due on and after July 1, 1997, for property owned by an entity that has acquired a water company pursuant to the provisions of section 16-262n, as amended by this act, or 16-262o, as amended by this act. The acquiring entity shall only be entitled to an abatement for those costs incurred by such entity to make improvements on the infrastructure and related property of the acquired water company, when such improvements were ordered by the Public Utilities Regulatory Authority [or] and the Department of Public Health and necessary in order for the entity to provide continuous, adequate water service.

Sec. 2. Section 16-19 of the general statutes is amended by adding subsection (i) as follows (Effective October 1, 2015):

(NEW) (i) A water company, as defined in section 16-1 of the general statutes, shall file with the Department of Public Health, at the time such water company files a proposed amendment of its existing rates with the Public Utilities Regulatory Authority pursuant to this section, a list of all other water companies, as defined in section 16-262n of the general statutes, as amended by this act, that the water company proposing an amendment has voluntarily acquired since its most recent general rate case.

Sec. 3. Section 16-19z of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):

In any proceeding pursuant to section 16-19, as amended by this act, on a rate amendment proposed by a water company, as defined in section 16-1, the Public Utilities Regulatory Authority shall consider including the cost to the company of purchasing, owning or retaining land for water supply protection or future water supply use in the current rate base of the company, subject to the following conditions: (1) The land shall be included in a water supply plan filed and approved pursuant to section 25-32d or shall otherwise be approved by the Commissioner of Public Health pursuant to the general statutes or regulations adopted under the general statutes; (2) the land shall include (A) an area necessary for surface and groundwater supply protection, (B) the impoundment area, (C) a well site, or (D) other appropriate appurtenances such as a tank site or filtration plant site or other necessary facilities; and (3) the purchase, ownership or retention of the land is found by the authority to be prudent considering cost, availability and need. The authority may not require any such company to sell any such land owned by such company as of October 1, 1997, except as provided in section 16-262n, as amended by this act, or section 16-262o, as amended by this act.

Sec. 4. Section 16-46 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):

(a) No public service company shall cease operations as a public service company, dissolve or terminate its corporate existence without the consent of the Public Utilities Regulatory Authority. [, except a water company, as defined in section 16-262n, shall not cease its operations, or unilaterally discontinue the provision of water service to customers without the consent of both the Public Utilities Regulatory Authority and the Department of Public Health. Upon receipt of a request from a water company to cease its operations or discontinue the provision of water service, the Public Utilities Regulatory Authority, in conjunction with the Department of Public Health, shall hold a public hearing and issue a final decision setting forth the actions the water company shall take to ensure a continuous supply of potable water at adequate volume and pressures, in accordance with the procedures and criteria set forth in sections 16-262n to 16-262q, inclusive.]

(b) Any public service company may, with such consent, [or in the case of a water company, as defined in section 16-262n, for which a decision has been issued pursuant to section 16-262o, such water company shall,] dissolve and terminate its corporate existence in the manner provided for dissolution and termination by such company's charter or certificate of incorporation, provided, if such charter or certificate requires stockholder approval, such approval shall be by not less than two-thirds of the voting power of the shares entitled to vote thereon. If there is no provision for dissolution and termination in such charter or certificate, such company may, with the consent of the Public Utilities Regulatory Authority, [or in the case of a water company, the consent of both the Public Utilities Regulatory Authority and the Department of Public Health,] dissolve and terminate its corporate existence in any manner provided in part XIV of chapter 601 in the case of a company organized with capital stock or part XI of chapter 602 in the case of a company organized without capital stock. Such dissolution and termination shall take effect upon (1) for a corporation, the filing with the Secretary of the State of a certificate of dissolution, and (2) for an unincorporated entity, the filing of a certificate of dissolution with the Public Utilities Regulatory Authority. [and the Department of Public Health.] In the event of such cessation, dissolution or termination, all claims and rights of creditors shall constitute liens upon the property and franchises of the company and shall continue in existence as long as may be necessary to preserve the same.

Sec. 5. Section 16-262m of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):

(a) As used in this section and section 8-25a, "water company" means a corporation, company, association, joint stock association, partnership, municipality, state agency, other entity or person, or lessee thereof, owning, leasing, maintaining, operating, managing or controlling any pond, lake, reservoir, stream, well or distributing plant or system employed for the purpose of supplying water to fifteen or more service connections or twenty-five or more persons for at least sixty days in any one year.

(b) No person, including, but not limited to, a water company may begin the construction of a water supply system for the purpose of supplying water to fifteen or more service connections or twenty-five or more persons for at least sixty days in any one year, and no person [or entity] including, but not limited to, a water company, except a water company supplying more than two hundred fifty service connections or one thousand persons, may begin expansion of [such] a water supply system, without having first obtained a certificate of public convenience and necessity from the Department of Public Health.

(c) For systems serving twenty-five or more residents that are not the subject of proceedings under [subsection (c) of] section 16-262n, as amended by this act, [or] section 16-262o, as amended by this act, or section 15 of this act, an application for a certificate of public convenience and necessity shall be on a form prescribed by the [Public Utilities Regulatory Authority, in consultation with the] Department of Public Health, and accompanied by a copy of the applicant's construction or expansion plans, a fee of [one] five hundred dollars and, when an exclusive service area provider has been determined pursuant to section 25-33g, a copy of a signed ownership agreement between the applicant and provider for the exclusive service area, as determined pursuant to section 25-33g, detailing those terms and conditions under which the system will be constructed or expanded and for which the provider will assume service and ownership responsibilities. When an exclusive service area provider has been determined pursuant to section 25-33g, the application shall also be accompanied by a written confirmation from the exclusive service area provider, as the person that will own the water supply system, that such exclusive service area provider has received the application and is prepared to assume responsibility for the water supply system subject to the terms and conditions of the ownership agreement. Written confirmation from the exclusive service area provider shall be on a form prescribed by [said authority and] the department. [Said authority and] The department shall issue a certificate to an applicant upon determining, to [their] its satisfaction, that (1) no interconnection is feasible with a water system owned by, or made available through arrangement with, the provider for the exclusive service area, as determined pursuant to section 25-33g, or with another existing water system where no exclusive service area has been assigned, (2) the applicant will complete the construction or expansion in accordance with engineering standards established by regulation by the [Public Utilities Regulatory Authority] department for water supply systems, (3) ownership of the system will be assigned to the provider for the exclusive service area, when an exclusive service area provider has been determined pursuant to section 25-33g, (4) the proposed construction or expansion will not result in a duplication of water service in the applicable service area, (5) the applicant meets all federal and state standards for water supply systems, (6) the person that will own the water supply system has the financial, managerial and technical resources to (A) operate the proposed water supply system in a reliable and efficient manner, and (B) provide continuous adequate service to consumers served by the water supply system, (7) the proposed water supply system will not adversely affect the adequacy of nearby water supply systems, and (8) any existing or potential threat of pollution that the [Department of Public Health] department deems to be adverse to public health will not affect any new source of water supply. The department, in consultation with the authority, shall determine if the person that will own the water supply system has sufficient financial resources, as described in subdivision (6) of this subsection. Any construction or expansion with respect to which a certificate is required shall thereafter be built, maintained and operated in conformity with the certificate and any terms, limitations or conditions contained therein.

[(d) The Public Utilities Regulatory Authority and the Department of Public Health shall each adopt regulations, in accordance with the provisions of chapter 54, to carry out the purposes of subsections (a) to (c), inclusive, of this section.

(e) (1)] (d) For systems serving twenty-five or more persons, but not twenty-five or more residents, at least sixty days in any one year, an application for a certificate of public convenience and necessity shall be on a form prescribed by the Department of Public Health and accompanied by a copy of the construction or expansion plans and a fee of five hundred dollars. The [Department of Public Health] department shall issue a certificate to an applicant upon determining, to its satisfaction, that: [(A) no] (1) No interconnection is feasible with a water system owned by, or made available through arrangement with, the provider for the exclusive service area, as determined pursuant to section 25-33g or with another existing water system where no existing exclusive service area has been assigned, [(B)] (2) the applicant will complete the construction or expansion in accordance with engineering standards established by regulation by the department for water supply systems, [(C)] (3) ownership of the system will be assigned to the provider for the exclusive service area, as determined pursuant to section 25-33g, if agreeable to the exclusive service area provider and the [Department of Public Health] department, or may remain with the applicant, if agreeable to the [Department of Public Health] department, until such time as the water system for the exclusive service area, as determined by section 25-33g, has made an extension of the water main, after which the applicant shall obtain service from the provider for the exclusive service area, [(D)] (4) the proposed construction or expansion will not result in a duplication of water service in the applicable service area, [(E)] (5) the applicant meets all federal and state standards for water supply systems, [(F)] (6) the person that will own the water supply system has the financial, managerial and technical resources to [(i)] (A) operate the proposed water supply system in a reliable and efficient manner, and [(ii)] (B) provide continuous adequate service to consumers served by the water supply system, [(G)] (7) the proposed water supply system will not adversely affect the adequacy of nearby water supply systems, and [(H)] (8) any existing or potential threat of pollution that the [Department of Public Health] department deems to be adverse to public health will not affect any new source of water supply. Any construction or expansion with respect to which a certificate is required shall thereafter be built, maintained and operated in conformity with the certificate and any terms, limitation or conditions contained therein.

(e) Properties held by the Department of Energy and Environmental Protection and used for, or in support of, fish culture, natural resource conservation or outdoor recreational purposes shall be exempt from the requirements of subdivisions (1), (3) and (4) of [subsection (c) of this section and subparagraphs (A), (C) and (D) of subdivision (1) of subsection (e)] subsections (c) and (d) of this section. All state agencies are exempt from the fee requirements provided in subsections (c) and (d) of this section.

[(2)] (f) The Department of Public Health [shall] may adopt regulations, in accordance with the provisions of chapter 54, to carry out the purposes of this [subsection] section. Such regulations may include measures that encourage water conservation and proper maintenance.

Sec. 6. Section 16-262n of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):

(a) As used in this section, sections 16-262o to 16-262q, inclusive, as amended by this act, and section 16-262s, as amended by this act, "water company" means either (1) a corporation, company, association, joint stock association, partnership, municipality, other entity or person, or lessee thereof, owning, leasing, maintaining, operating, managing or controlling any pond, lake, reservoir, stream, well or distributing plant or system employed for the purpose of supplying water to not less than two service connections or twenty-five persons, or (2) a deficient well system serving existing properties within a defined geographic area with not less than twenty-five persons served by private wells that (A) do not meet public health standards for potable water, (B) have had funding discontinued for filters provided pursuant to subsection (a) of section 22a-471 to respond to documented groundwater contamination, (C) are otherwise unable to serve the existing properties with adequate water quality, volume or pressure, or (D) limit the on-site resolution of documented wastewater disposal issues in the system.

[(b) The Public Utilities Regulatory Authority, in consultation with the Department of Public Health and the Department of Energy and Environmental Protection, may review the economic viability of a water company, except a municipal water company, based upon performance measures of the company's stability and financial condition, technical and managerial expertise and efficiency, and physical condition and capacity of plant. The Public Utilities Regulatory Authority shall make recommendations for improvement or provide counseling to a reviewed water company to assist in improving the company's economic viability.

(c) Whenever any water company fails to comply with an order issued pursuant to section 16-11, 25-32, 25-33 or 25-34, concerning the availability or potability of water or the provision of water at adequate volume and pressure, or if the Public Utilities Regulatory Authority determines a water company does not possess economic viability pursuant to subsection (b) of this section, the Public Utilities Regulatory Authority, the Department of Public Health and, when its participation is required, the Department of Energy and Environmental Protection, may, or following a request from a water company filed pursuant to section 16-46, shall, after notice to public and private water companies, municipal utilities furnishing water service, municipalities or other appropriate governmental agencies in the service area of the water company, conduct a hearing in accordance with the provisions of sections 4-176e, 4-177, 4-177c and 4-180 to determine the actions that may be taken and the expenditures that may be required, including the acquisition of the water company by a suitable public or private entity, to assure the availability and potability of water and the provision of water at adequate volume and pressure to the persons served by the water company at a reasonable cost.]

(b) The Department of Public Health, in consultation with the Public Utilities Regulatory Authority, may review information to determine the sustainability of a water company, except a municipal water company, that shall include, but not be limited to (1) a review of the water company's stability and financial condition, (2) the water company's technical and managerial expertise and efficiency, and (3) the physical condition and capacity of the water company's plant. The department may provide counseling to such water company and may issue such orders to such water company as the department deems necessary for the water company to maintain sustainability. If the department, in consultation with the authority, determines that the water company is not sustainable, the department and the authority shall initiate a proceeding to determine the most suitable entity to acquire the water company. The department and the authority shall, after notice to public and private water companies, municipal water companies, municipalities and other appropriate governmental agencies operating in the service area of the water company, and after offering an opportunity for a hearing, issue a final decision stating the actions the water company and the most suitable entity shall take and the orders with which the water company and the most suitable entity shall comply to ensure the availability and potability of water and the provision of water at adequate volume and pressure to the persons served by the water company at a reasonable cost. The department and the authority shall determine the most suitable entity in accordance with subsection (b) of section 16-262o, as amended by this act. Any decision issued by the department pursuant to this subsection shall constitute a permit issued by the Commissioner of Public Health pursuant to sections 25-32 and 25-37d.

(c) Notwithstanding the provisions of any special act, the department and the authority shall extend the franchise area of the acquiring entity to include the service area of the water company acquired pursuant to this section.

(d) In the case of any proposed acquisition of a water company by another water company, as defined in section 16-1, for which the department and the authority has offered an opportunity for a hearing pursuant to this section, the authority shall require such acquiring water company to implement, and revise quarterly thereafter, a rate surcharge applied to the rates of the acquired water company or of both such acquiring water company and the acquired water company, as determined by the authority, that would recover on a current basis all costs of such acquisition and of needed improvements to the acquired water company's system in accordance with regulations adopted by the authority concerning surcharges. Such surcharge may be designed to recover one hundred per cent of the revenues necessary to provide a net after-tax return on investment actually made in the acquisition and improvement of the acquired water company, at a rate of return equivalent to that authorized for the acquiring water company in its last general rate proceeding.

(e) Not later than sixty days after the issuance of a final decision pursuant to this section, the acquired water company shall properly execute and deliver to the acquiring entity all documents necessary to complete the transfer of title to all real and personal property that is the subject of the final decision, including, but not limited to, land, structures, easements, and every estate, right or interest therein. If the acquired water company fails to deliver such documents in accordance with this subsection, the acquiring entity shall notify the department and the authority of such failure to act. Upon receipt of such notice, the department and the authority shall petition the Superior Court to enforce the provisions of their final decision. Nothing in this subsection shall deprive any entity of the compensation rights set forth in section 16-262q, as amended by this act.

Sec. 7. Section 16-262o of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):

(a) [The Public Utilities Regulatory Authority, in consultation with the Department of Public Health, upon a determination that the costs of improvements to and the acquisition of the water company are necessary and reasonable, shall order the acquisition of the water company by the most suitable public or private entity. In making such determination, the authority] (1) Whenever a water company requests to cease operations as a water company or to unilaterally discontinue the provision of water service to consumers, the Department of Public Health and the Public Utilities Regulatory Authority shall, initiate a proceeding and, after notice to public and private water companies, municipal utilities furnishing water service, municipalities and other appropriate governmental agencies in the service area of the water company, and after offering an opportunity for a hearing, issue a final decision stating the actions such water company or another entity shall take, that may include acquisition of the water company by a suitable public or private entity, to assure the availability and potability of water and the provision of water at adequate volume and pressure to the persons served by the water company at a reasonable cost, and any expenditures that may be required to be made by such water company or other entity.

(2) If the department and the authority determine there will not be an acquisition of such water company, the final decision shall set forth the actions the water company shall take and the orders with which the water company shall comply to ensure the availability and potability of water and the provision of water at adequate volume and pressure to the persons served by the water company at a reasonable cost.

(3) If the department and the authority determine that the water company shall be acquired, the final decision shall state the actions the water company and the most suitable entity shall take and the orders with which the water company and the most suitable entity shall comply to ensure the availability and potability of water and the provision of water at adequate volume and pressure to the persons served by the water company at a reasonable cost. The department and the authority shall determine the most suitable entity in accordance with the provisions of subsection (b) of this section. Any decision issued by the department pursuant to this subdivision shall constitute a permit pursuant to sections 25-32 and 25-37d.

(4) Whenever a water company fails to comply with an order issued by the department pursuant to section 25-32, 25-33 or 25-34 concerning the availability or potability of water or the provision of water at adequate volume and pressure, the department and the authority may initiate a proceeding, as described in this subsection.

(b) (1) When an exclusive service area provider has been determined pursuant to section 25-33g and such exclusive service area provider is the exclusive service area provider for the geographic area in which the water company is located, such exclusive service area provider is the most suitable entity to take over the water company.

(2) If an exclusive service area provider has not been determined pursuant to section 25-33g, the department and the authority, in making the determination regarding the most suitable entity to acquire the water company, shall consider: [(1)] (A) The geographical proximity of the plant of the [acquiring entity] potentially suitable entities to the water company, [(2) whether the acquiring entity has] (B) the financial, managerial and technical [resources] capability of each potentially suitable entity to operate the water company in a reliable and efficient manner and to provide continuous, adequate service to the persons served by the company, [(3)] (C) the current rates [that the acquiring entity charges its] each potentially suitable entity charges their customers, and [(4)] (D) any other factors the [authority deems] department and the authority deem relevant. Such order shall authorize the recovery through rates of all reasonable costs of acquisition and necessary improvements. A public entity acquiring a water company beyond the boundaries of such entity may charge customers served by the acquired company for water service and may, to the extent appropriate, as determined by the governing body of the public entity, recover through rates all reasonable costs of acquisition and necessary improvements.

[(b)] (c) Notwithstanding the provisions of any special act, the [Public Utilities Regulatory Authority] department and the authority shall extend the franchise areas of the acquiring water company to include the service area of the water company acquired pursuant to this section.

[(c)] (d) On and after December 1, 1989, in the case of any proposed acquisition of a water company by another water company, as defined in section 16-1, for which the [Public Utilities Regulatory Authority has provided notice of] department and the authority have offered an opportunity for a hearing pursuant to [section 16-262n] this section, the authority [may, to encourage and facilitate such acquisition, and shall, if it orders such acquisition,] shall require [the] such acquiring water company [, as defined in section 16-1,] to implement, and revise quarterly thereafter, a rate surcharge applied to the rates of the acquired water company or of both the acquiring water company and the acquired water company, as determined by the authority, that would recover on a current basis all costs of such acquisition and of needed improvements to the acquired water company's system. Such surcharge may be designed to recover one hundred per cent of the revenues necessary to provide a net after-tax return on investment actually made in the acquisition and improvement of the acquired water company, at a rate of return equivalent to that authorized for the acquiring water company in its last general rate proceeding. The authority shall, not later than December 1, 1989, adopt regulations, in accordance with chapter 54, to carry out the purposes of this section.

[(d)] (e) Not later than sixty days after the issuance of [an order for an acquisition] a final decision pursuant to this section, the acquired water company shall properly execute and deliver to the acquiring [water company] entity all documents necessary to complete the transfer of title to all real and personal property that is the subject of the [acquisition order] final decision, including, but not limited to, land, structures, easements, and every estate, right or interest therein, to the entity ordered to acquire such water company. If the acquired water company fails to deliver such documents in accordance with this subsection, the acquiring [company] entity shall notify the [Public Utilities Regulatory Authority] department and the authority of such failure to act. Upon receipt of such notice, [the authority] the department and the authority shall petition the Superior Court to enforce the provisions of [its acquisition order] the final decision. Nothing in this subsection shall deprive any entity of the compensation rights set forth in section 16-262q, as amended by this act.

Sec. 8. Section 16-262p of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):

Any recipient of an order pursuant to section 16-262n, as amended by this act, section 16-262o, as amended by this act, or section 15 of this act shall make improvements it determines are necessary within a reasonable time after transfer of the water company to the acquiring entity to assure the availability and potability of water and the provision of water at adequate volume and pressure to the persons served by the water company. The water company shall immediately take the steps necessary for the transfer of the water company to the acquiring company, municipal water authority, municipality or other public or private entity.

Sec. 9. Section 16-262q of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):

Compensation for the acquisition of a water company pursuant to section 16-262n, as amended by this act, section 16-262o, as amended by this act or section 15 of this act shall be determined by the procedures for determining compensation under section 25-42 or by agreement between the parties, provided such agreement is approved by the Department of Public Health and the Public Utilities Regulatory Authority, [in consultation with the Department of Public Health, after] or only the department, after offering an opportunity for a hearing. [, approves such agreement.] The provisions of this section shall not apply to the sale of a private water company to a municipally owned and operated water company providing service in such municipality. In such cases, if the parties determine compensation for such acquisition by agreement the sale may proceed without the approval of the [Public Utilities Regulatory Authority] department.

Sec. 10. Subsection (e) of section 16-262r of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):

(e) Notwithstanding any provision of subdivision (4) of subsection (a) of section 16-19e, the authority, if it deems appropriate, may award a premium rate of return to a provider water company, as defined in section 16-1, in accordance with the provisions of subdivisions (1), (2), (3) and (5) of subsection (a) of section 16-19e, on any water system [which the] that such provider water company voluntarily acquires or acquires pursuant to an order issued under section 16-262n, as amended by this act, or section 16-262o, as amended by this act.

Sec. 11. Section 16-262s of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):

(a) (1) In the case of a proposed acquisition of a water company that is not [economically viable] sustainable, as determined by the Department of Public Health, in consultation with the Public Utilities Regulatory Authority in accordance with the criteria provided in subsection (b) of section 16-262n, as amended by this act, by a water company, as defined in section 16-1, that is [economically viable] sustainable, as determined by the department and the authority in accordance with said criteria, upon petition of [the] such acquiring water company and after notice and hearing, the authority may allow [the] such acquiring water company to implement, and revise quarterly thereafter, a rate surcharge applied to the rates of the acquired water company, or of both [the] such acquiring water company and the acquired water company, as determined by the authority, that would recover on a current basis those costs of such acquisition, including a reasonable acquisition premium, and of needed improvements to the acquired water company's system, to the extent the authority deems such costs appropriate. The regulations adopted by the authority pursuant to section 16-262o, as amended by this act, shall apply for purposes of this section.

(2) The Public Utilities Regulatory Authority may allow the recovery of such reasonable acquisition premium when it is demonstrated that such proposed acquisition shall provide benefits to customers by (A) enhancing system [viability] sustainability, or (B) avoiding capital costs or savings in operating costs, or as otherwise determined by the authority. If an acquisition premium is authorized, the excess of the acquisition cost over the depreciated original cost shall be added to the rate base to be amortized as an addition to expenses over a reasonable period of time with corresponding reductions in the rate base.

(b) In the case of a proposed acquisition of a water company that is not [economically viable] sustainable, as determined by the [Public Utilities Regulatory Authority] department, in consultation with the authority, in accordance with the criteria provided in [subsection (b)] of section 16-262n, as amended by this act, by a water company, as defined in section 16-1, that is [economically viable] sustainable, as determined by the department and the authority in accordance with said criteria, the authority may, as part of [the] such acquiring water company's next general rate case, award a premium rate of return to such acquiring water company when it is demonstrated that such proposed acquisition will provide benefits to customers by (1) enhancing system viability, or (2) avoiding capital costs or saving in operating costs, or as otherwise determined by the authority.

(c) In lieu of all or part of a rate surcharge, the authority may allow [the] such acquiring water company to defer such costs of such acquisition for subsequent collection as part of its next general rate case.

Sec. 12. Subsection (a) of section 16-262y of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):

(a) For purposes of this section, (1) "revenue adjustment mechanism" means a mechanism that reconciles in rates the difference between the actual revenues of a water company and allowed revenues, (2) "actual revenues" means the revenues received or accrued by a water company for water sales for a calendar year, including sales for resale and approved miscellaneous charges, authorized by the Public Utilities Regulatory Authority pursuant to sections 16-19, as amended by this act, and 16-262w, and those revenues authorized for customers acquired pursuant to section 16-43, 16-262n, as amended by this act, or section 16-262o, as amended by this act, [or 16-262s] since the last general rate case of the company, (3) "allowed revenues" means revenues for a water company for water sales for a calendar year, including sales for resale and approved miscellaneous charges, authorized by the authority pursuant to sections 16-19, as amended by this act, and 16-262w, and shall include customer growth from an acquisition approved by the authority pursuant to section 16-43 [,] or by the Department of Public Health and the authority pursuant to section 16-262n, as amended by this act, or section 16-262o, as amended by this act, [or 16-262s] since the last general rate case of such company, and (4) "water company" has the same meaning as provided in section 16-1.

Sec. 13. Section 16-262z of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):

The Public Utilities Regulatory Authority, in consultation with the Department of Public Health, may, upon application of a water company, as defined in section 16-1, order such water company to extend its system to serve properties that the authority determines are served by a deficient well system, as described in subdivision (2) of subsection (a) of section 16-262n, as amended by this act, if the authority determines that the net costs of extending water service are reasonable. The cost recovery, rates and charges of such extension shall be treated in the same manner as provided for acquisitions pursuant to section 16-262n, as amended by this act, or 16-262o, as amended by this act. [or 16-262s.]

Sec. 14. (NEW) (Effective October 1, 2015) (a) Except as provided in subsection (b) of this section, no water company, as defined in section 16-262n of the general statutes, as amended by this act, shall cease its operations or unilaterally discontinue the provision of water service to customers or be voluntarily acquired by an acquiring entity, as defined in section 15 of this act, without the approval of the Department of Public Health and the Public Utilities Regulatory Authority pursuant to section 16-262n of the general statutes, as amended by this act, or section 16-262o of the general statutes, as amended by this act, or the approval of the department pursuant to section 15 of this act.

(b) A water company, as defined in section 16-262n of the general statutes, as amended by this act, that has been voluntarily acquired by a water company, as defined in section 16-1 of the general statutes, may cease operations without the approval of the department or the approval of the department and the authority.

(c) Not later than thirty days after acquiring a water company, as defined in section 16-262n of the general statutes, as amended by this act, the acquiring entity shall file with the department, in the form and manner prescribed by the department, the following information: (1) The name of the acquiring entity; (2) the name of the water company, as defined in section 16-262n of the general statutes, as amended by this act, that has been acquired; and (3) the names, mailing addresses, electronic mail addresses and telephone numbers, including emergency telephone numbers, of the following: (A) The person or entity that owns the acquiring entity, (B) the acquiring entity's designated contact person, and (C) the acquiring entity's operator or operators certified pursuant to section 25-32 of the general statutes that will operate the acquired water company. For purposes of this subsection, "acquiring entity" means the person, including, but not limited to, a water company, as defined in section 16-262n of the general statutes, as amended by this act, that acquired a water company, as defined in section 16-262n of the general statutes, as amended by this act.

Sec. 15. (NEW) (Effective October 1, 2015) (a) As used in this section, (1) "water company" has the same meaning as provided in section 16-262n of the general statutes, as amended by this act, and (2) "acquiring entity" means an entity other than a water company, as defined in section 16-1 of the general statutes.

(b) (1) In the case of a voluntary acquisition of a water company by an acquiring entity, the acquiring entity and the water company requesting to be acquired shall file an application on a form and in the manner prescribed by the Department of Public Health. Such application shall include, but not be limited to, information regarding (A) whether the acquiring entity has the financial, managerial and technical resources to operate the water company in a reliable and efficient manner and to provide continuous, adequate service to the persons served by the water company, (B) the status of the water company, including whether the system or systems owned and operated by such water company require improvements, and (C) the rates the acquiring entity proposes to charge the customers of the water company. The department shall, after making a determination that such application is complete and after offering an opportunity for a hearing, issue a final decision on said application stating the actions the acquiring entity and the water company shall take and the orders with which such acquiring entity and such water company shall comply to ensure a continuous supply of potable water at adequate volume and pressures and at a reasonable cost.

(2) The department shall not consider a request from a water company under subdivision (1) of this subsection until the Commissioner of Public Health has issued to such water company a permit pursuant to sections 25-32 of the general statutes and 25-37d of the general statutes for the transfer of all Class I and Class II water company land owned by such water company to the acquiring entity that is conditional on the department's approval of a request received from a water company pursuant to this section.

(3) If the water company that the acquiring entity is voluntarily acquiring is owned by a municipality and the municipality determines that some or all of the water company land it owns contains a municipal facility, including, but not limited to, a park, beach, playfield, library, or building or other facility necessary and convenient for carrying on the government of the municipality, the municipality may apply for an exemption from subdivision (2) of this subsection in the form and manner prescribed by the commissioner for the water company land that contains a municipal facility.

(c) Not later than sixty days after the issuance of a final decision pursuant to this section, the acquired water company shall properly execute and deliver to the acquiring entity all documents necessary to complete the transfer of title to all real and personal property that is the subject of the final decision, including, but not limited to, land, structures, easements, and every estate, right or interest therein. If the acquired water company fails to deliver such documents in accordance with this subsection, such acquiring entity shall notify the department of such failure to act. Upon receipt of such notice, the department shall petition the Superior Court to enforce the provisions of its final decision.

Sec. 16. (NEW) (Effective October 1, 2015) (a) (1) Whenever a water company, as defined in section 16-262n of the general statutes, as amended by this act, is voluntarily acquired by a water company, as defined in section 16-1 of the general statutes, such acquired water company shall transfer to the acquiring water company all Class I and Class II water company land owned by such voluntarily acquired water company in accordance with the permitting requirements in sections 25-32 of the general statutes and 25-37d of the general statutes.

(2) If such voluntarily acquired water company is owned by a municipality and the municipality determines that some or all of the Class I or Class II, or both, water company land it owns contains a municipal facility, including, but not limited to, a park, beach, playfield, library, or building or other facility necessary and convenient for carrying on the government of the municipality, the municipality may apply for an exemption from subdivision (1) of this subsection in the form and manner prescribed by the Commissioner of Public Health for the water company land that contains a municipal facility.

(b) Any transfer of Class I or Class II water company land without a permit as required by sections 25-32 of the general statutes and 25-37d of the general statutes shall be invalid and void ab initio. The parties to the transaction shall be required by the Department of Public Health to restore any land transferred without a required permit to the condition that it was in at the time of the transaction.

This act shall take effect as follows and shall amend the following sections:
Section 1	October 1, 2015	12-81q
Sec. 2	October 1, 2015	16-19
Sec. 3	October 1, 2015	16-19z
Sec. 4	October 1, 2015	16-46
Sec. 5	October 1, 2015	16-262m
Sec. 6	October 1, 2015	16-262n
Sec. 7	October 1, 2015	16-262o
Sec. 8	October 1, 2015	16-262p
Sec. 9	October 1, 2015	16-262q
Sec. 10	October 1, 2015	16-262r(e)
Sec. 11	October 1, 2015	16-262s
Sec. 12	October 1, 2015	16-262y(a)
Sec. 13	October 1, 2015	16-262z
Sec. 14	October 1, 2015	New section
Sec. 15	October 1, 2015	New section
Sec. 16	October 1, 2015	New section

Statement of Purpose:

To implement the Department of Public Health's recommendations concerning water company takeover proceedings and certificates of public convenience and necessity for the expansion and construction of public water systems.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]