SENATE, No. 519

STATE OF NEW JERSEY

INTRODUCED JANUARY 29, 1996

By Senator BASSANO

An Act concerning the fixing of rates charged by certain local water supply facilities, amending N.J.S.40A:31-10 and supplementing Title 48 of the Revised Statutes.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New section) Except as provided for certain bulk water rates pursuant to N.J.S.40A:31-23 and except as provided for certain rates charged for water supplied to senior citizens and disabled persons pursuant to section 7 of P.L.1994, c.78 (C.40A:31-10.1), the rates, fees and service charges proposed by a local unit or units operating a water supply facility for supplying water to users within its jurisdiction pursuant to N.J.S.40A:31-10 are subject to regulation and approval by the Board of Public Utilities in accordance with R.S.48:2-21 in the same manner as if the water supply facility were a public utility. In addition, charges in the nature of a connection fee or tapping fee imposed and calculated pursuant to N.J.S.40A:31-11 shall be subject to regulation and approval by the board. As used in this section, "local unit" means a municipality or county.

    2. N.J.S.40A:31-10 is amended to read as follows:

    After the commencement of operation of water supply facilities, the local unit or units may [prescribe] propose and, from time to time, alter rates or rentals to be charged to users of water supply services subject to the approval of the Board of Public Utilities. Rates or rentals being in the nature of use or service charges or annual rental charges, shall be uniform and equitable for the same type and class of use or service of the facilities, except as permitted by section 7 of P.L.1994, c.78 (C.40A:31-10.1). Rates or rentals and types and classes of use and service may be based on any factors which the governing body or bodies of that local unit or units shall deem proper and equitable within the region served.

    In [fixing] proposing rates, rental and other charges for supplying water services, the local unit or units shall establish a rate structure that allows, within the limits of any lawful covenants made with bondholders, the local unit to:

    a. Recover all costs of acquisition, construction or operation, including the costs of raw materials, administration, real or personal property, maintenance, taxes, debt service charges, fees and an amount equal to any operating budget deficit occurring in the immediately preceding fiscal year;

    b. Establish a surplus in an amount sufficient to provide for the reasonable anticipation of any contingency that may affect the operation of the utility, and, at the discretion of the local unit or units, allow for the transfer of moneys from the budget for the water supply facilities to the local budget in accordance with section 5 of P.L.1983, c.111 (C.40A:4-35.1).

    No local unit or units shall, however, impose any rates or rentals in excess of the cost of water actually used for any sprinkler system required to be installed in any residential health care facility pursuant to the "Health Care Facilities Planning Act," P.L.1979, c.136 (C.26:2H-1 et seq.) and regulations promulgated thereunder or in any rooming or boarding house pursuant to the "Rooming and Boarding House Act of 1979," P.L.1979, c.496 (C.55:13B-1 et al.) and regulations promulgated thereunder.

    c. Except as otherwise permitted by section 7 of P.L.1994, c.78 (C.40A:31-10.1), the rates, fees and service charges proposed by a local unit or units pursuant to this section shall not become effective until fixed and approved by the Board of Public Utilities in accordance with R.S. 48:2-21 and any regulations adopted by the board in furtherance thereof.

(cf: P.L.1994, c.78, s.8)

    3. This act shall take effect immediately, but shall remain inoperative until 60 days following its enactment.

STATEMENT

    This bill vests the Board of Public Utilities with the power to fix and regulate rates charged by a local unit or units that operate water supply facilities pursuant to N.J.S.40A:31-1 et seq., in the same manner as if the facilities were public utilities.

    The provisions of the bill do not affect certain bulk water rates charged for water supplied to another local unit pursuant to N.J.S.40A:31-23 or rates charged for water supplied to seniors and disabled persons pursuant to section 7 of P.L.1994, c.78 (C.40A:31-10.1).