HB0395ham001 101ST GENERAL ASSEMBLY

Rep. Yehiel M. Kalish

Filed: 5/18/2020

10100HB0395ham001 LRB101 03018 JLS 70969 a

AMENDMENT TO HOUSE BILL 395

AMENDMENT NO. ______. Amend House Bill 395 by replacing everything after the enacting clause with the following:

"Section 1. Short title. This Act may be cited as the Water Rate Review Commission Act.

Section 5. Legislative findings. The General Assembly finds that:

(a) Water, wastewater, and storm water services in Illinois are largely provided through various forms of public entities. While private water service rate setting is regulated by the Illinois Commerce Commission, rate setting for publicly-delivered water services, including wastewater and storm water services, is largely the province of units of local government. This rate setting includes the establishment of wholesale service rates between units of local government and the establishment of retail service rates across different customer classes.

(b) Over the last decade water service rates have risen faster than the rate of inflation or incomes, leading to increasing concerns about water affordability. In addition, rising costs have heightened the potential for unregulated local governments to inappropriately employ monopoly power and unequal water service rate setting.

(c) The water sector has established a number of rate setting principles to help ensure that rates are set through an equitable distribution of cost responsibilities and are in conformance with established laws calling for "just, reasonable, and non-discriminatory" rate setting. While industry standard practices continue to evolve, these principles are intended to serve as a benchmark for local government rate setting practices.

(d) In light of the rising costs and the potential for inequitable rate setting for water services, which are essential for human life, regular and consistent review of local government rate setting practices is warranted. Rather than impose a new regulatory mandate or inappropriately expand the purview of the Illinois Commerce Commission to units of local government, it is reasonable to establish a Water Rate Review Commission.

Section 10. Water Rate Review Commission.

(a) There is created the Water Rate Review Commission consisting of members representing State agencies and 5 members appointed by the Governor.

(b) The members representing State agencies shall be:

(1) the Attorney General or his or her designee;

(2) the Director of Commerce and Economic Opportunity or his or her designee;

(3) the Director of Natural Resources or his or her designee; and

(4) the Director of the Environmental Protection Agency or his or her designee.

(c) The Governor shall appoint 5 members as follows:

(1) one member representing units of local government that provide water service;

(2) one member representing water service affordability advocates;

(3) one member representing academicians with expertise in public policy;

(4) one member who is a representative of an environmental justice advocacy organization; and

(5) one member who is a representative of a consumer advocacy organization.

Members appointed by the Governor shall serve a term of 5 years. Members may be reappointed to the Commission. In the event of a vacancy, the Governor shall appoint a qualified person to serve the remainder of the vacated term. The Governor shall designate a member to serve as chairperson of the Commission.

(d) Subject to appropriation, the Department of Commerce and Economic Opportunity shall provide administrative and other necessary support to the Commission.

Section 15. Functions of the Commission.

(a) The Commission shall compile, review, and provide guidance on rate and billing issues relating to publicly-delivered water services. The guidance shall include data, calculations, and cost allocation procedures necessary to appropriately establish rates and charges by customer class. In determining the guidance, the Commission shall consider the following:

(1) the components of a water service bill;

(2) justifications for a change in rates;

(3) ranges of affordability throughout the State;

(4) practices that contribute to inappropriate rate setting;

(5) the extent to which State or local policies contribute to cost increases or variations in rate setting; and

(6) challenges with respect to economically disadvantaged communities in setting water service rates.

(b) The Commission shall provide guidance on customer service practices to improve water service affordability and access.

(c) The Commission shall provide a non-binding mechanism to review rate disputes between units of local government and consumers.".