! The Capitol Complex is closed to the public due to COVID-19. All meetings will be held virtually online. View procedures and guidelines for remote public comment

H.B. 17 Enrolled

             1     

INTERLOCAL ACT AMENDMENTS

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Johnny Anderson

             5     
Senate Sponsor: Wayne A. Harper

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill enacts language related to the governance of an interlocal entity.
             10      Highlighted Provisions:
             11          This bill:
             12          .    requires members of an interlocal entity to comply with law that is applicable to
             13      each public agency that is a member;
             14          .    amends provisions governing an interlocal entity's compliance with public meeting
             15      requirements;
             16          .    amends the definition of taxed interlocal entity;
             17          .    exempts a taxed interlocal entity from certain provisions; and
             18          .    makes technical corrections.
             19      Money Appropriated in this Bill:
             20          None
             21      Other Special Clauses:
             22          This bill takes effect on May 12, 2015.
             23      Utah Code Sections Affected:
             24      AMENDS:
             25           11-13-204 , as last amended by Laws of Utah 2010, Chapter 173
             26           11-13-223 , as last amended by Laws of Utah 2007, Chapter 249
             27           11-13-315 , as enacted by Laws of Utah 2013, Chapter 230
             28     
             29      Be it enacted by the Legislature of the state of Utah:


             30          Section 1. Section 11-13-204 is amended to read:
             31           11-13-204. Powers and duties of interlocal entities -- Additional powers of energy
             32      services interlocal entities -- Length of term of agreement and interlocal entity -- Notice to
             33      lieutenant governor -- Recording requirements -- Public Service Commission.
             34          (1) (a) An interlocal entity:
             35          [(i) may:]
             36          [(A)] (i) shall adopt[, amend, and repeal rules,] bylaws, policies, and procedures for the
             37      regulation of its affairs and the conduct of its business;
             38          (ii) may:
             39          (A) amend or repeal a bylaw, policy, or procedure;
             40          (B) sue and be sued;
             41          (C) have an official seal and alter that seal at will;
             42          (D) make and execute contracts and other instruments necessary or convenient for the
             43      performance of its duties and the exercise of its powers and functions;
             44          (E) acquire real or personal property, or an undivided, fractional, or other interest in
             45      real or personal property, necessary or convenient for the purposes contemplated in the
             46      agreement creating the interlocal entity and sell, lease, or otherwise dispose of that property;
             47          (F) directly or by contract with another:
             48          (I) own and acquire facilities and improvements or an undivided, fractional, or other
             49      interest in facilities and improvements;
             50          (II) construct, operate, maintain, and repair facilities and improvements; and
             51          (III) provide the services contemplated in the agreement creating the interlocal entity;
             52          (G) borrow money, incur indebtedness, and issue revenue bonds, notes, or other
             53      obligations and secure their payment by an assignment, pledge, or other conveyance of all or
             54      any part of the revenues and receipts from the facilities, improvements, or services that the
             55      interlocal entity provides;
             56          (H) offer, issue, and sell warrants, options, or other rights related to the bonds, notes, or
             57      other obligations issued by the interlocal entity; and


             58          (I) sell or contract for the sale of the services, output, product, or other benefits
             59      provided by the interlocal entity to:
             60          (I) public agencies inside or outside the state; and
             61          (II) with respect to any excess services, output, product, or benefits, any person on
             62      terms that the interlocal entity considers to be in the best interest of the public agencies that are
             63      parties to the agreement creating the interlocal entity; and
             64          [(ii)] (iii) may not levy, assess, or collect ad valorem property taxes.
             65          (b) An assignment, pledge, or other conveyance under Subsection (1)(a)[(i)](ii)(G)
             66      may, to the extent provided by the documents under which the assignment, pledge, or other
             67      conveyance is made, rank prior in right to any other obligation except taxes or payments in lieu
             68      of taxes payable to the state or its political subdivisions.
             69          (c) (i) (A) Except as provided in Subsection (1)(c)(i)(B), an interlocal entity is subject
             70      to each state law that governs each public agency that is a member of the entity to the extent
             71      that the law governs an activity or action of the public agency in which the interlocal entity is
             72      also engaged.
             73          (B) Subsection (1)(c)(i)(A) does not apply if an interlocal entity is expressly exempt
             74      from the law.
             75          (C) A law described in Subsection (1)(c)(i)(A) does not include a local ordinance or
             76      other local law.
             77          (ii) If a state law that governs a public agency that is a member of the interlocal entity
             78      conflicts with a state law that governs another member entity, the interlocal entity shall choose
             79      and comply with one of the conflicting state laws.
             80          (iii) (A) If a public agency that is a member of the interlocal entity is an institution of
             81      higher education, the interlocal entity shall adopt the policies of the Board of Regents.
             82          (B) If a policy of the Board of Regents adopted by an interlocal entity in accordance
             83      with Subsection (1)(c)(iii)(A) conflicts with a state law that governs a public agency that is a
             84      member entity, the state law governs.
             85          (2) An energy services interlocal entity:


             86          (a) except with respect to any ownership interest it has in facilities providing additional
             87      project capacity, is not subject to:
             88          (i) Part 3, Project Entity Provisions; or
             89          (ii) Title 59, Chapter 8, Gross Receipts Tax on Certain Corporations Not Required to
             90      Pay Corporate Franchise or Income Tax Act; and
             91          (b) may:
             92          (i) own, acquire, and, by itself or by contract with another, construct, operate, and
             93      maintain a facility or improvement for the generation, transmission, and transportation of
             94      electric energy or related fuel supplies;
             95          (ii) enter into a contract to obtain a supply of electric power and energy and ancillary
             96      services, transmission, and transportation services, and supplies of natural gas and fuels
             97      necessary for the operation of generation facilities;
             98          (iii) enter into a contract with public agencies, investor-owned or cooperative utilities,
             99      and others, whether located in or out of the state, for the sale of wholesale services provided by
             100      the energy services interlocal entity; and
             101          (iv) adopt and implement risk management policies and strategies and enter into
             102      transactions and agreements to manage the risks associated with the purchase and sale of
             103      energy, including forward purchase and sale contracts, hedging, tolling and swap agreements,
             104      and other instruments.
             105          (3) Notwithstanding Section 11-13-216 , an agreement creating an interlocal entity or
             106      an amendment to that agreement may provide that the agreement may continue and the
             107      interlocal entity may remain in existence until the latest to occur of:
             108          (a) 50 years after the date of the agreement or amendment;
             109          (b) five years after the interlocal entity has fully paid or otherwise discharged all of its
             110      indebtedness;
             111          (c) five years after the interlocal entity has abandoned, decommissioned, or conveyed
             112      or transferred all of its interest in its facilities and improvements; or
             113          (d) five years after the facilities and improvements of the interlocal entity are no longer


             114      useful in providing the service, output, product, or other benefit of the facilities and
             115      improvements, as determined under the agreement governing the sale of the service, output,
             116      product, or other benefit.
             117          (4) (a) The governing body of each party to the agreement to approve the creation of an
             118      interlocal entity, including an electric interlocal entity and an energy services interlocal entity,
             119      under Section 11-13-203 shall:
             120          (i) within 30 days after the date of the agreement, jointly file with the lieutenant
             121      governor:
             122          (A) a copy of a notice of an impending boundary action, as defined in Section
             123      67-1a-6.5 , that meets the requirements of Subsection 67-1a-6.5 (3); and
             124          (B) if less than all of the territory of any Utah public agency that is a party to the
             125      agreement is included within the interlocal entity, a copy of an approved final local entity plat,
             126      as defined in Section 67-1a-6.5; and
             127          (ii) upon the lieutenant governor's issuance of a certificate of creation under Section
             128      67-1a-6.5 :
             129          (A) if the interlocal entity is located within the boundary of a single county, submit to
             130      the recorder of that county:
             131          (I) the original:
             132          (Aa) notice of an impending boundary action;
             133          (Bb) certificate of creation; and
             134          (Cc) approved final local entity plat, if an approved final local entity plat was required
             135      to be filed with the lieutenant governor under Subsection (4)(a)(i)(B); and
             136          (II) a certified copy of the agreement approving the creation of the interlocal entity; or
             137          (B) if the interlocal entity is located within the boundaries of more than a single
             138      county:
             139          (I) submit to the recorder of one of those counties:
             140          (Aa) the original of the documents listed in Subsections (4)(a)(ii)(A)(I)(Aa), (Bb), and
             141      (Cc); and


             142          (Bb) a certified copy of the agreement approving the creation of the interlocal entity;
             143      and
             144          (II) submit to the recorder of each other county:
             145          (Aa) a certified copy of the documents listed in Subsections (4)(a)(ii)(A)(I)(Aa), (Bb),
             146      and (Cc); and
             147          (Bb) a certified copy of the agreement approving the creation of the interlocal entity.
             148          (b) Upon the lieutenant governor's issuance of a certificate of creation under Section
             149      67-1a-6.5 , the interlocal entity is created.
             150          (c) Until the documents listed in Subsection (4)(a)(ii) are recorded in the office of the
             151      recorder of each county in which the property is located, a newly created interlocal entity may
             152      not charge or collect a fee for service provided to property within the interlocal entity.
             153          (5) Nothing in this section may be construed as expanding the rights of any
             154      municipality or interlocal entity to sell or provide retail service.
             155          (6) Except as provided in Subsection (7):
             156          (a) nothing in this section may be construed to expand or limit the rights of a
             157      municipality to sell or provide retail electric service; and
             158          (b) an energy services interlocal entity may not provide retail electric service to
             159      customers located outside the municipal boundaries of its members.
             160          (7) (a) An energy services interlocal entity created before July 1, 2003, that is
             161      comprised solely of Utah municipalities and that, for a minimum of 50 years before July 1,
             162      2010, provided retail electric service to customers outside the municipal boundaries of its
             163      members, may provide retail electric service outside the municipal boundaries of its members
             164      if:
             165          (i) the energy services interlocal entity:
             166          (A) enters into a written agreement with each public utility holding a certificate of
             167      public convenience and necessity issued by the Public Service Commission to provide service
             168      within an agreed upon geographic area for the energy services interlocal entity to be
             169      responsible to provide electric service in the agreed upon geographic area outside the municipal


             170      boundaries of the members of the energy services interlocal entity; and
             171          (B) obtains a franchise agreement, with the legislative body of the county or other
             172      governmental entity for the geographic area in which the energy services interlocal entity
             173      provides service outside the municipal boundaries of its members; and
             174          (ii) each public utility described in Subsection (7)(a)(i)(A) applies for and obtains from
             175      the Public Service Commission approval of the agreement specified in Subsection (7)(a)(i)(A).
             176          (b) (i) The Public Service Commission shall, after a public hearing held in accordance
             177      with Title 52, Chapter 4, Open and Public Meetings Act, approve an agreement described in
             178      Subsection (7)(a)(ii) if it determines that the agreement is in the public interest in that it
             179      incorporates the customer protections described in Subsection (7)(c) and the franchise
             180      agreement described in Subsection (7)(a)(i)(B) provides a reasonable mechanism using a
             181      neutral arbiter or ombudsman for resolving potential future complaints by customers of the
             182      energy services interlocal entity.
             183          (ii) In approving an agreement, the Public Service Commission shall also amend the
             184      certificate of public convenience and necessity of any public utility described in Subsection
             185      (7)(a)(i) to delete from the geographic area specified in the certificate or certificates of the
             186      public utility the geographic area that the energy services interlocal entity has agreed to serve.
             187          (c) In providing retail electric service to customers outside of the municipal boundaries
             188      of its members, but not within the municipal boundaries of another municipality that grants a
             189      franchise agreement in accordance with Subsection (7)(a)(i)(B), an energy services interlocal
             190      entity shall comply with the following:
             191          (i) the rates and conditions of service for customers outside the municipal boundaries
             192      of the members shall be at least as favorable as the rates and conditions of service for similarly
             193      situated customers within the municipal boundaries of the members;
             194          (ii) the energy services interlocal entity shall operate as a single entity providing
             195      service both inside and outside of the municipal boundaries of its members;
             196          (iii) a general rebate, refund, or other payment made to customers located within the
             197      municipal boundaries of the members shall also be provided to similarly situated customers


             198      located outside the municipal boundaries of the members;
             199          (iv) a schedule of rates and conditions of service, or any change to the rates and
             200      conditions of service, shall be approved by the governing body of the energy services interlocal
             201      entity;
             202          (v) before implementation of any rate increase, the governing body of the energy
             203      services interlocal entity shall first hold a public meeting to take public comment on the
             204      proposed increase, after providing at least 20 days and not more than 60 days' advance written
             205      notice to its customers on the ordinary billing and on the Utah Public Notice Website, created
             206      by Section 63F-1-701 ; and
             207          (vi) the energy services interlocal entity shall file with the Public Service Commission
             208      its current schedule of rates and conditions of service.
             209          (d) The Public Service Commission shall make the schedule of rates and conditions of
             210      service of the energy services interlocal entity available for public inspection.
             211          (e) Nothing in this section:
             212          (i) gives the Public Service Commission jurisdiction over the provision of retail
             213      electric service by an energy services interlocal entity within the municipal boundaries of its
             214      members; or
             215          (ii) makes an energy services interlocal entity a public utility under Title 54, Public
             216      Utilities.
             217          (f) Nothing in this section expands or diminishes the jurisdiction of the Public Service
             218      Commission over a municipality or an association of municipalities organized under Title 11,
             219      Chapter 13, Interlocal Cooperation Act, except as specifically authorized by this section's
             220      language.
             221          (g) (i) An energy services interlocal entity described in Subsection (7)(a) retains its
             222      authority to provide electric service to the extent authorized by Sections 11-13-202 and
             223      11-13-203 and Subsections 11-13-204 (1) through (5).
             224          (ii) Notwithstanding Subsection (7)(g)(i), if the Public Service Commission approves
             225      the agreement described in Subsection (7)(a)(i), the energy services interlocal entity may not


             226      provide retail electric service to customers located outside the municipal boundaries of its
             227      members, except for customers located within the geographic area described in the agreement.
             228          Section 2. Section 11-13-223 is amended to read:
             229           11-13-223. Open and public meetings.
             230          (1) To the extent that an interlocal entity is subject to [or elects, by formal resolution of
             231      its governing body to comply with] the provisions of Title 52, Chapter 4, Open and Public
             232      Meetings Act, it may for purposes of complying with those provisions:
             233          (a) convene and conduct any public meeting by means of a telephonic or
             234      telecommunications conference; and
             235          (b) give public notice of its meeting pursuant to Section 52-4-202 .
             236          (2) In order to convene and conduct a public meeting by means of a telephonic or
             237      telecommunications conference, each interlocal entity shall if it is subject to [or elects by
             238      formal resolution of its governing body to comply with] Title 52, Chapter 4, Open and Public
             239      Meetings Act:
             240          (a) in addition to giving public notice required by Subsection (1) provide:
             241          (i) notice of the telephonic or telecommunications conference to the members of the
             242      governing body at least 24 hours before the meeting so that they may participate in and be
             243      counted as present for all purposes, including the determination that a quorum is present; and
             244          (ii) a description of how the members will be connected to the telephonic or
             245      telecommunications conference;
             246          (b) establish written procedures governing the conduct of any meeting at which one or
             247      more members of the governing body are participating by means of a telephonic or
             248      telecommunications conference;
             249          (c) provide for an anchor location for the public meeting at the principal office of the
             250      governing body; and
             251          (d) provide space and facilities for the physical attendance and participation of
             252      interested persons and the public at the anchor location, including providing for interested
             253      persons and the public to hear by speaker or other equipment all discussions and deliberations


             254      of those members of the governing body participating in the meeting by means of telephonic or
             255      telecommunications conference.
             256          (3) Compliance with the provisions of this section by a governing body constitutes full
             257      and complete compliance by the governing body with the corresponding provisions of Sections
             258      52-4-201 and 52-4-202 , to the extent that those sections are applicable to the governing body.
             259          Section 3. Section 11-13-315 is amended to read:
             260           11-13-315. Taxed interlocal entity.
             261          (1) As used in this section:
             262          (a) "Asset" means funds, money, an account, real or personal property, or personnel.
             263          (b) "Public asset" means:
             264          (i) an asset used by a public entity;
             265          (ii) tax revenue;
             266          (iii) state funds; or
             267          (iv) public funds.
             268          (c) (i) "Taxed interlocal entity" means a project entity that:
             269          (A) is not exempt from a tax or fee in lieu of taxes imposed in accordance with Part 3,
             270      Project Entity Provisions;
             271          (B) does not receive a payment of funds from a federal agency or office, state agency or
             272      office, political subdivision, or other public agency or office other than a payment that does not
             273      materially exceed the greater of the fair market value and the cost of a service provided or
             274      property conveyed by the project entity; and
             275          (C) does not receive, expend, or have the authority to compel payment from tax
             276      revenue.
             277          (ii) [Before and on May 1, 2014, "taxed] "Taxed interlocal entity" includes an
             278      interlocal entity that:
             279          (A) [(I)] was created before 1981 for the purpose of providing power supply at
             280      wholesale to its members; [or]
             281          [(II) is described in Subsection 11-13-204 (7);]


             282          (B) does not receive a payment of funds from a federal agency or office, state agency or
             283      office, political subdivision, or other public agency or office other than a payment that does not
             284      materially exceed the greater of the fair market value and the cost of a service provided or
             285      property conveyed by the interlocal entity; and
             286          (C) does not receive, expend, or have the authority to compel payment from tax
             287      revenue.
             288          (d) (i) "Use" means to use, own, manage, hold, keep safe, maintain, invest, deposit,
             289      administer, receive, expend, appropriate, disburse, or have custody.
             290          (ii) "Use" includes, when constituting a noun, the corresponding nominal form of each
             291      term in Subsection (1)(d)(i), individually.
             292          (2) Notwithstanding any other provision of law, the use of an asset by a taxed interlocal
             293      entity does not constitute the use of a public asset.
             294          (3) Notwithstanding any other provision of law, a taxed interlocal entity's use of an
             295      asset that was a public asset prior to the taxed interlocal entity's use of the asset does not
             296      constitute a taxed interlocal entity's use of a public asset.
             297          (4) Notwithstanding any other provision of law, an official of a project entity is not a
             298      public treasurer.
             299          (5) Notwithstanding any other provision of law, a taxed interlocal entity's governing
             300      body, as described in Section 11-13-206 , shall determine and direct the use of an asset by the
             301      taxed interlocal entity.
             302          (6) (a) A taxed interlocal entity is not subject to the provisions of Title 63G, Chapter
             303      6a, Utah Procurement Code.
             304          (b) An agent of a taxed interlocal entity is not an external procurement unit as defined
             305      in Section 63G-6a-104 .
             306          (7) (a) A taxed interlocal entity is not a participating local entity as defined in Section
             307      63A-3-401 .
             308          (b) For each fiscal year of a taxed interlocal entity, the taxed interlocal entity shall
             309      provide:


             310          (i) the taxed interlocal entity's financial statements for and as of the end of the fiscal
             311      year and the prior fiscal year, including the taxed interlocal entity's balance sheet as of the end
             312      of the fiscal year and the prior fiscal year, and the related statements of revenues and expenses
             313      and of cash flows for the fiscal year; and
             314          (ii) the accompanying auditor's report and management's discussion and analysis with
             315      respect to the taxed interlocal entity's financial statements for and as of the end of the fiscal
             316      year.
             317          (c) The taxed interlocal entity shall provide the information described in Subsections
             318      (7)(b)(i) and (b)(ii):
             319          (i) in a manner described in Subsection 63A-3-405 (3); and
             320          (ii) within a reasonable time after the taxed interlocal entity's independent auditor
             321      delivers to the taxed interlocal entity's governing body the auditor's report with respect to the
             322      financial statements for and as of the end of the fiscal year.
             323          (d) Notwithstanding Subsections (7)(b) and (c) or a taxed interlocal entity's compliance
             324      with one or more of the requirements of Title 63A, Chapter 3, Division of Finance:
             325          (i) the taxed interlocal entity is not subject to Title 63A, Chapter 3, Division of
             326      Finance; and
             327          (ii) the information described in Subsection (7)(b)(i) or (ii) does not constitute public
             328      financial information as defined in Section 63A-3-401 .
             329          (8) (a) A taxed interlocal entity's governing body is not a governing board as defined in
             330      Section 51-2a-102 .
             331          (b) A taxed interlocal entity is not subject to the provisions of Title 51, Chapter 2a,
             332      Accounting Reports from Political Subdivisions, Interlocal Organizations, and Other Local
             333      Entities Act.
             334          (9) (a) A taxed interlocal entity is not subject to the provisions of Subsection
             335      11-13-204 (1)(a)(i) or (c).
             336          (b) In addition to the powers provided in Subsection 11-13-204 (1)(a)(ii), a taxed
             337      interlocal entity may, for the regulation of the entity's affairs and conduct of its business, adopt,


             338      amend, or repeal bylaws, policies, or procedures.
             339          Section 4. Effective date.
             340          This bill takes effect on May 12, 2015.


[Bill Documents][Bills Directory]