§46-30-4  Financial responsibility. –

Published: 2015

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Waters and Navigation


Public Water Supply Systems

SECTION 46-30-4

   § 46-30-4  Financial responsibility. –

(a) The financial obligation for the upgrading of the public water supply

system to be annexed and the continued management and operational

responsibility to bring that system into compliance with the applicable

regulations and on parity with the existing facilities of the governing agency

must be fairly and equitably allocated to the new customers by identifying:

   (1) Capital costs;

   (2) Operational expenses;

   (3) Management support;

   and adding the annexation fee to the governing agency's

existing rate structure currently in effect to be applied to the customer's

accounts, to be annexed.

   (b)(1) Each year the annexation fee to be paid by the new

customers shall be added to the rate apportioned to the existing customers of

the governing agency and shall represent the amortized cost of the capital

expenditures and the appropriate ongoing operational costs adjusted for

inflation. The annexation fee shall in no event be less than ten percent (10%)

the rate levied on the pre-annexation customer base, nor shall it be more than

one hundred percent (100%) of the pre-annexation rate. This legislation is not

intended to limit the governing agency from recovering all costs of service

from its basic customer base. The annexation fee shall constitute a part of the

cost of annexation and shall also be an allocated portion of the cost of

annexation and become a debt of each customer from the small public water

supply system to the governing agency and be collectible in the same manner and

have the benefit of any lien provided for the amounts due for water charges

from the small public water supply system to the governing agency. Subject to

the provisions of § 39-1.1-1 for those small public water supply systems

which are public utilities, all governing agencies may terminate service for

failure of the customer of a small public water supply system to pay the

annexation fee.

   (2) It shall not be necessary for any small public water

supply system or governing agency whose rates may be regulated by the public

utilities commission, pursuant to chapter 1 of title 39, to obtain approval

from the commission for billing of the annexation fee. The public utilities

commission shall not be required, in determining rates for any governing agency

or small public water supply system hereunder, to consider the annexation fees

billed hereunder when determining revenue requirements for the governing agency

or public water supply system.

   (c) The annexation fee shall terminate when the contractual

obligation for amortizing the upgrading of the system petitioning annexation

has been discharged or no later than thirty (30) years from the date of

financing said improvements, whichever comes first.

History of Section.

(P.L. 1995, ch. 267, § 1.)

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