(a) The comptroller of the treasury shall file with the Tennessee board of utility regulation a copy of the audited annual financial report of any financially distressed utility system within sixty (60) days from the date that the audit is filed with the comptroller of the treasury, for administrative review by the board.
(b) A utility system is financially distressed when it has a deficit total net position in any one (1) year, has a deficit unrestricted net position in any one (1) year, has a negative change in net position for two (2) consecutive years without regard to any grants or capital contributions, or is currently in default on any of its debt instruments.
(c) (1) The comptroller of the treasury shall refer a utility system to the board if the utility system:(A) Fails to complete and submit to the comptroller for administrative review an audited annual financial report for two (2) consecutive years;(B) Is found to have used utility funds to pay non-utility expenses, used non-utility funds to pay utility expenses, or transferred utility funds to any other non-utility fund or account, unless the use or transfer is allowed by law; or(C) Is found to have made an illegal payment or transfer of funds.(2) The board is authorized to take one (1) or more remedial actions as described under § 7-82-706(b) for a financially distressed utility system.
(1) The comptroller of the treasury shall refer a utility system to the board if the utility system:(A) Fails to complete and submit to the comptroller for administrative review an audited annual financial report for two (2) consecutive years;(B) Is found to have used utility funds to pay non-utility expenses, used non-utility funds to pay utility expenses, or transferred utility funds to any other non-utility fund or account, unless the use or transfer is allowed by law; or(C) Is found to have made an illegal payment or transfer of funds.
(A) Fails to complete and submit to the comptroller for administrative review an audited annual financial report for two (2) consecutive years;
(B) Is found to have used utility funds to pay non-utility expenses, used non-utility funds to pay utility expenses, or transferred utility funds to any other non-utility fund or account, unless the use or transfer is allowed by law; or
(C) Is found to have made an illegal payment or transfer of funds.
(2) The board is authorized to take one (1) or more remedial actions as described under § 7-82-706(b) for a financially distressed utility system.
(d) After reviewing the audited annual financial report and operations of the financially distressed utility system, and after holding a public hearing, which may be held as part of a regularly scheduled or specially called board meeting, the board may prescribe a rate structure to be adopted by the financially distressed utility system to:(1) Eliminate the utility system's negative changes in net position;(2) Liquidate any deficit total net position, in an orderly fashion; or(3) Cure a default on any indebtedness of the utility system.
(1) Eliminate the utility system's negative changes in net position;
(2) Liquidate any deficit total net position, in an orderly fashion; or
(3) Cure a default on any indebtedness of the utility system.
(e) In the event the governing body of the financially distressed utility system fails to adopt the prescribed rate structure described in accordance with subsection (d), the board shall petition the chancery court in a jurisdiction in which the utility system is operating or in the chancery court of Davidson County to require the adoption of the rate structure prescribed by the board. The court may also order other remedies that, in the court's discretion, may be required to cause the utility system to operate in accordance with state law and in a financially self-sufficient manner.
(f) Notwithstanding any other law to the contrary, this section does not preclude a public utility system from operating water and sewer systems as individual or combined entities.
(g) (1) (A) Notwithstanding another law to the contrary, the board does not have jurisdiction over a utility system for the purpose of reporting negative change in net position annually if the utility system:(i) Supplies wholesale water service only or treats wastewater for wholesale use only, unless otherwise allowed under subdivision (g)(3); and(ii) Is approved by the board under subdivision (g)(2).(B) Notwithstanding subdivision (g)(1)(A), the utility system must be referred to the board if the utility system:(i) Has a deficit total net position in any one (1) year;(ii) Has a deficit unrestricted net position for any one (1) year; or(iii) Is currently in default on any of its debt instruments, as described under this section.(2) Any utility system proposing to supply wholesale water service only or to treat wastewater for wholesale use only under subdivision (g)(1) must first obtain approval from the board by submitting a plan of service to the board for approval. Upon receipt of a request for approval of a plan of service, board staff may request any additional information as may be required to properly review the proposed plan of service. Once board staff determines the request is complete, the board must review the request at the next available board meeting; provided, however, that the board meeting date must be no more than ninety (90) days from the date of the submission of the plan of service unless agreed to in writing by board staff and the utility system. Upon receipt of approval, if the utility system's plan of service is materially amended in the discretion of board staff, then the utility system must obtain subsequent board approval of such amendment under the same requirements as the original plan of service approval.(3) The board has discretion to allow for the provision of a minimal amount of retail service by a utility system primarily serving as a wholesale provider when the board determines such allowance is in the public's interest.
(1) (A) Notwithstanding another law to the contrary, the board does not have jurisdiction over a utility system for the purpose of reporting negative change in net position annually if the utility system:(i) Supplies wholesale water service only or treats wastewater for wholesale use only, unless otherwise allowed under subdivision (g)(3); and(ii) Is approved by the board under subdivision (g)(2).(B) Notwithstanding subdivision (g)(1)(A), the utility system must be referred to the board if the utility system:(i) Has a deficit total net position in any one (1) year;(ii) Has a deficit unrestricted net position for any one (1) year; or(iii) Is currently in default on any of its debt instruments, as described under this section.
(A) Notwithstanding another law to the contrary, the board does not have jurisdiction over a utility system for the purpose of reporting negative change in net position annually if the utility system:(i) Supplies wholesale water service only or treats wastewater for wholesale use only, unless otherwise allowed under subdivision (g)(3); and(ii) Is approved by the board under subdivision (g)(2).
(i) Supplies wholesale water service only or treats wastewater for wholesale use only, unless otherwise allowed under subdivision (g)(3); and
(ii) Is approved by the board under subdivision (g)(2).
(B) Notwithstanding subdivision (g)(1)(A), the utility system must be referred to the board if the utility system:(i) Has a deficit total net position in any one (1) year;(ii) Has a deficit unrestricted net position for any one (1) year; or(iii) Is currently in default on any of its debt instruments, as described under this section.
(i) Has a deficit total net position in any one (1) year;
(ii) Has a deficit unrestricted net position for any one (1) year; or
(iii) Is currently in default on any of its debt instruments, as described under this section.
(2) Any utility system proposing to supply wholesale water service only or to treat wastewater for wholesale use only under subdivision (g)(1) must first obtain approval from the board by submitting a plan of service to the board for approval. Upon receipt of a request for approval of a plan of service, board staff may request any additional information as may be required to properly review the proposed plan of service. Once board staff determines the request is complete, the board must review the request at the next available board meeting; provided, however, that the board meeting date must be no more than ninety (90) days from the date of the submission of the plan of service unless agreed to in writing by board staff and the utility system. Upon receipt of approval, if the utility system's plan of service is materially amended in the discretion of board staff, then the utility system must obtain subsequent board approval of such amendment under the same requirements as the original plan of service approval.
(3) The board has discretion to allow for the provision of a minimal amount of retail service by a utility system primarily serving as a wholesale provider when the board determines such allowance is in the public's interest.
(h) As used in this section, “change in net position” means total revenues less all grants, capital contributions, and expenses.
(i) The financial distress designation for a utility system continues until:(1) The board issues an order closing the utility system's financial distress case; or(2) For a period of two (2) or more consecutive years, the utility system does not meet any criteria for financial distress, as described in subsection (b), and the board has not:(A) Included the utility system on a board meeting agenda; or(B) Discussed the utility system at a board meeting, regardless of whether the utility system was on the meeting agenda.
(1) The board issues an order closing the utility system's financial distress case; or
(2) For a period of two (2) or more consecutive years, the utility system does not meet any criteria for financial distress, as described in subsection (b), and the board has not:(A) Included the utility system on a board meeting agenda; or(B) Discussed the utility system at a board meeting, regardless of whether the utility system was on the meeting agenda.
(A) Included the utility system on a board meeting agenda; or
(B) Discussed the utility system at a board meeting, regardless of whether the utility system was on the meeting agenda.