Substitute House Bill No. 6550
          Substitute House Bill No. 6550

               PUBLIC ACT NO. 97-69


AN ACT CONCERNING TRANSFERS OF WATER COMPANIES.


    Be  it  enacted  by  the  Senate  and House of
Representatives in General Assembly convened:
    Section  1. Section  16-262n  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a)  As used  in  this  section  and  sections
16-262o to 16-262q,  inclusive,  AND  SECTION 2 OF
THIS ACT, "water  company"  means  a  corporation,
company,  association,  joint  stock  association,
partnership, municipality, other entity or person,
or lessee thereof,  owning,  leasing, maintaining,
operating, managing or controlling any pond, lake,
reservoir, stream, well  or  distributing plant or
system employed for the purpose of supplying water
to  not  less  than  two  service  connections  or
twenty-five persons.
    (b) The Department  of Public Utility Control,
in  consultation with  the  Department  of  Public
Health  and  the   Department   of   Environmental
Protection, may review the economic viability of a
water company, except  a  municipal water company,
based upon performance  measures  of the company's
stability and financial  condition,  technical and
managerial expertise and  efficiency, and physical
condition and capacity of plant. The Department of
Public Utility Control  shall make recommendations
for  improvement  or   provide   counseling  to  a
reviewed water company  to assist in improving the
company's economic viability.
    (c) Whenever any water company fails to comply
with an order  issued  pursuant  to section 16-11,
25-32, 25-33 or 25-34, concerning the availability
or potability of  water  or the provision of water
at  adequate  volume   and  pressure,  or  if  the
Department of Public  Utility Control determines a
water company does  not possess economic viability
pursuant to subsection  (b)  of  this section, the
Department   of  Public   Utility   Control,   the
Department  of  Public   Health   and,   when  its
participation  is  required,   the  Department  of
Environmental  Protection,  may,  or  following  a
request from a  water  company  filed  pursuant to
section 16-46, shall,  after  notice to public and
private  water  companies,   municipal   utilities
furnishing water service,  municipalities or other
appropriate governmental agencies  in  the service
area of the  water  company,  conduct a hearing in
accordance with the provisions of sections 4-176e,
4-177, 4-177c and  4-180  to determine the actions
that may be taken and the expenditures that may be
required, including the  acquisition  of the water
company by [the most] A suitable public or private
entity, to assure  the availability and potability
of water and  the  provision  of water at adequate
volume and pressure  to  the persons served by the
water company at a reasonable cost.
    Sec.  2. (NEW)  In  the  case  of  a  proposed
acquisition  of  a   water  company  that  is  not
economically   viable,  as   determined   by   the
Department of Public Utility Control in accordance
with the criteria  provided  in  subsection (b) of
section 16-262n of  the  general  statutes,  by  a
water  company that  is  economically  viable,  as
determined by the  department  in  accordance with
said  criteria, upon  petition  of  the  acquiring
water company and  after  notice  and hearing, the
department may allow  the  acquiring water company
to implement, and  revise  quarterly thereafter, a
rate  surcharge  applied   to  the  rates  of  the
acquired water company  or  of  both the acquiring
water company and  the  acquired water company, as
determined by the  department,  that would recover
on a current basis those costs of such acquisition
and of needed  improvements  to the acquired water
company's system, to  the  extent  the  department
deems  such  costs  appropriate.  The  regulations
adopted  by the  department  pursuant  to  section
16-262o of the  general  statutes  shall apply for
purposes of this section.
    Sec. 3. This  act  shall  take  effect July 1,
1997.

Approved May 27, 1997