Municipal Utilities Extraterritorial Surcharges Bill Up Tuesday in Senate Committee

On Tuesday, February 10, at 3:00 p.m., CS/SB 1724 (Martin) will be considered by the Senate Community Affairs Committee.

CS/SB 1724 would eliminate statutory authority for utilities to impose an automatic 25% surcharge on extraterritorial water and sewer service. Instead, a water and sewer utility may, after holding a public hearing, set separate rates, fees, and charges for extraterritorial customers based on the same factors used to set rates, fees, and charges for customers within the municipality. Such separate rates, fees, and charges may not exceed those for customers within the municipality by more than 25%.

CS/SB 1724 provides that utilities that have pledged currently authorized surcharge revenues for debt service may continue to impose the current law surcharge until such debt is retired or renewed. The effective date of this change in surcharge authority is July 1, 2026.

If this passes, utilities will need to adjust rates for extraterritorial customers unless they want to charge the same rate as the municipal customers, potentially resulting in municipal customers subsidizing extraterritorial customers. 

Please contact Senators on the Senate Community Affairs Committee and ask them to extend the effective date of the bill for 3 years (to 2029) so that the utility has time to:

• Conduct a new rate study
• Adjust planned projects impacted by the revenue loss
• Revise/renegotiate interlocal agreements

Click here for committee contact information.

Provision of Municipal Utility Service to Property Owners Outside City Limits

CS/SB 1014 (Mayfield) will also be considered by the Senate Community Affairs Committee. The bill would require city-owned utilities to serve residential properties outside city limits upon request if sufficient capacity exists and the property is within a half mile of a main line. The utility cannot condition service on annexation. The bill allows property owners to take legal action if a city utility denies service and to recover attorney fees if they win.

Click here to watch the committee meeting on the Florida Channel.

Please contact Rebecca O'Hara with any questions.