First Regular Session Sixty-seventh General Assembly STATE OF COLORADO INTRODUCED LLS NO. 09-0398.01 Kate Meyer HOUSE BILL 09-1006 HOUSE SPONSORSHIP Kerr J., McNulty SENATE SPONSORSHIP Kopp, House Committees Senate Committees Local Government A BILL FOR AN ACT Concerning standards for the establishment of rates by municipalities for sewerage system service provided to users outside municipal boundaries in urban areas where such users comprise more than fifty percent of all users. Bill Summary (Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.) Requires cities or towns setting sewerage system rates for owners of property outside the boundaries of the city or town, if the owners comprise more than 50% of all owners of property receiving the sewerage system service, to base the rates on the actual cost of providing the service. Prohibits cities or towns from imposing arbitrarily higher sewerage system rates on owners of property located outside of the city or town or from discriminating against such owners solely on the basis of the location of their properties. Requires a city or town to conduct a public hearing prior to fixing, changing, revising, or imposing a revised sewerage system rate on owners of property located outside the boundaries of the city or town. Allows certain persons affected by sewerage system rates to challenge the rates in court. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Part 7 article 35 of title 31, Colorado Revised Statutes, is amended BY THE ADDITION OF THE FOLLOWING NEW SECTIONS to read: 31-35-700.2. Legislative declaration. The general assembly hereby finds, determines, and declares that it is the policy of the state of Colorado to encourage the development of cost-effective, regional sewage treatment facilities, and that the fair and nondiscriminatory imposition of rates by a city or town for sewerage system service provided to users of the service who are outside the boundaries of the city or town, and therefore unable to vote in any city or town election, is necessary to encourage the development of such facilities. The general assembly further finds and declares that sewerage system rates should reflect the actual costs of providing the sewerage system service in order to provide the city or town with adequate revenues for system operation, maintenance, and replacement and environmental and operational upgrades. Hence, the general assembly finds, determines, and declares that the bases on which sewerage system rates for extraterritorial users are established is a matter of statewide concern. Accordingly, this part 7 shall preempt any local government resolution or ordinance or home rule or territorial charter provision, with respect to sewerage system rates for extraterritorial users, to the contrary. 31-35-700.3. Definitions. As used in this part 7, unless the context otherwise requires: (1) "City or town" shall have the same meaning as set forth for "municipality" in section 31-1-101, but shall not include any local governmental entity created pursuant to article 1 of title 29, C.R.S., or article 1 of title 32, C.R.S. (2) "Owners of property" means any public or private users of a sewerage system, including any owners or occupants of any real property connected with or receiving service from the sewerage system. (3) "Rates" means rates, tolls, fees, or charges. (4) "Sewerage system" means a system or facility with a design capacity to receive more than two thousand gallons of domestic wastewater per day that treats, neutralizes, stabilizes, or disposes of domestic wastewater. "Sewerage system" also includes appurtenances to such system or facility, including, but not limited to, collector and interceptor lines, outfall sewers and pumping stations, and equipment related to such appurtenances. "Sewerage system" does not include an industrial wastewater treatment plant or complex whose primary function is the treatment of industrial wastes, notwithstanding the fact that human wastes generated incidentally to the industrial processes are treated in such plant or complex. (5) "Urban area" means an area designated as urban in the latest federal decennial census. SECTION 2. 31-35-701, Colorado Revised Statutes, is amended to read: 31-35-701. Cities or towns may provide service outside boundaries - determination of rates. (1) Any city or town owning an established sewerage system may, by ordinance, fix just, reasonable, and necessary rates for the connection with and use of the sewerage system, directly or indirectly, by owners of property situated in unincorporated territory without outside the boundaries of said city or town. (2) In addition to the provisions of subsection (1) of this section, any rates adopted by a city or town for the provision of service from a sewerage system in an urban area in Colorado to owners of property located outside the boundaries of the city or town, which owners of property represent more than fifty percent of the total number of owners of property receiving the service, shall: (a) Be based upon the actual cost of providing the service; (b) Not be arbitrarily higher than any rates imposed on owners of property located within the boundaries of the city or town; and (c) Not discriminate against owners of property located outside the boundaries of the city or town solely on the basis of such location. SECTION 3. 31-35-705, Colorado Revised Statutes, is amended to read: 31-35-705. Protest - board of adjustment - public hearing - cause of action. (1) Unless subsection (2) of this section applies, any owner of property affected by the terms of said ordinance may protest in writing to the governing body of such city or town as to the amount of the rate affecting such property at any time within two weeks after the first publication of said ordinance and notice. The governing body shall sit as a board of adjustment, pursuant to the authority of this part 7, and shall hear and determine all such protests received pursuant to this section and determine the fairness of said rates. If the rates prescribed in the proposed ordinance are determined to be unreasonable, the governing body shall amend such ordinance before final passage to conform to its findings in the premises. The final determination of the governing body shall be conclusive in the premises. (2) A city or town shall not fix, change, revise, or impose a rate described in section 31-35-701 (2) until the city or town holds a public hearing, at which the city or town shall set forth the rate-setting criteria used to fix, change, or revise the rate that it seeks to impose upon owners of property located outside the boundaries of the city or town. Such owners of property and any other interested parties, including sanitation districts and water and sanitation districts created pursuant to article 1 of title 32, C.R.S., and authorities created pursuant to article 1 of title 29, C.R.S., shall have an opportunity to be heard concerning the proposed rate. The city or town shall consider all public comments prior to adopting or approving a rate to be imposed on owners of property located outside the boundaries of the city or town. (3) Affected owners of property or an authority created pursuant to article 1 of title 29, C.R.S., or article 1 of title 32, C.R.S., or a sanitation district or water and sanitation district created pursuant to article 1 of title 32, C.R.S., that includes property served by the sewerage system may challenge a rate subject to section 31-35-701 (2) in a court of competent jurisdiction on the grounds that the rate violates section 31-35-701. SECTION 4. Act subject to petition - effective date - applicability. (1) This act shall take effect January 1, 2010. (2) However, if a referendum petition is filed against this act or an item, section, or part of this act during the 90-day period after final adjournment of the general assembly that is allowed for submitting a referendum petition pursuant to article V, section 1 (3) of the state constitution, then the act, item, section, or part, shall not take effect unless approved by the people at a biennial regular general election and shall take effect on the date specified in subsection (1) or on the date of the official declaration of the vote thereon by proclamation of the governor, whichever is later. (3) The provisions of this act shall apply to sewerage system rates imposed on or after the applicable effective date of this act.