Water Privatization Referendum Act

The following sample bill is a compilation of Louisiana HB 1726 (2003) and SB 781 (2003), both of which were signed into law in June 2003. Both bills required referendum approval of any contract in excess of $5 million for the privatization of any public sewerage and water board, drainage, disposal, or treatment facility in New Orleans or any municipality with a population in excess of 475,000. The sample bill is also based on the language in Measure F, which passed with 60 percent of the vote on the March 4, 2003, ballot in Stockton, California. The measure requires voter approval for any privatization contract over $5 million relating to their city utilities. An analysis of Measure F prepared by the City Attorney can be found here.

Water Privatization Referendum Act

An Act Requiring a Referendum on the Privatization of Municipal Water Utilities.

BE IT ENACTED BY THE LEGISLATURE OF <insert your state’s name here>:

Section 1. Short Title.

This Act shall be known and may be cited as the “Water Privatization Referendum Act.”

Section 2. Intent.

(A) The Legislature finds that oversight of municipal water utilities affects the health and safety of all citizens and is a community responsibility.

(B) The Legislature further finds that it is the people of the state who own municipal water utilities.

(C) The Legislature further finds that citizens should have the opportunity to vote on privatization of these utilities under certain circumstances.

Section 3. Definitions.

When used in this Act, the following terms are defined as follows:

(A) “Municipal water utilities” means every component and facility of the water storage, treatment, and delivery system of a municipality.

(B) “Municipality” means a city, village, township, or county.

(C) “Private entity” includes any individual, company, or organization that is not an employee or agency within the federal, state, or county government.

(D) “Privatization” means the sale, transfer, or lease of any part of, or any interest in, municipal water utilities by a municipality to a private entity. It also means the assignment to a private entity of the obligation to operate, maintain, and/or collect revenue for municipal water utilities, or any portion thereof, for the benefit and on behalf of the municipality.

(E) “Water treatment system” includes any structure or structures by means of which, prior to discharge into a public water supply system, water is subjected to the addition or abstraction of a substance or substances in order to enhance the safety, palatability, public health, or aesthetic qualities, or reduce the corrosive or hazardous properties of the water used for potable or domestic purposes. A water treatment system includes wastewater systems, including collection systems and treatment systems that generate or collect two thousand five hundred (2,500) or more gallons a day. This does not include any wastewater treatment system operated and maintained exclusively by a single family residence or any wastewater system consisting solely of a gravity flow, nonmechanical septic tank and subsurface treatment and distribution system, or industrial wastewater systems under private ownership.

Section 4. Referendum on the Privatization of Municipal Water Utilities.

Prior to entering into any contract or agreement in excess of five million dollars for the privatization of municipal water utilities, the proposed contract or agreement shall be submitted to the electors of the municipality at the next general municipal election held in accordance with <insert appropriate state election law here>. The proposed contract or agreement shall be published in its entirety in a newspaper of general circulation within the municipality no later than sixty days prior to the election. No such proposed contract or agreement shall become effective unless approved by a majority of the electors voting thereon.

Section 5. Severability.

If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity shall not affect other provisions or applications of this Act, which can be given effect without regard to the invalid provision or application and, to this end, the provisions of this Act are severable.

Section 6. Effective Date.

This Act shall take effect immediately upon enactment.