The proposed bill establishes a new section, 366.16, in the Florida Statutes, which allows municipalities to transfer a portion of their public utility earnings to their general fund for specific public utility purposes. The bill sets a maximum transfer limit of 10% of the municipality's general fund for utilities serving customers within the municipality, while for those serving customers outside the municipality, the transfer percentage is variable and decreases as the number of external customers increases. These transfer percentages must be established or reestablished through a local referendum, requiring a majority vote. In cases of disaster or emergency, municipalities can exceed the 10% limit with a four-fifths vote of the governing body, but any excess must be repaid within three fiscal years.

Additionally, the bill prohibits municipalities from transferring public utility earnings for nonpublic utility purposes, such as restricted revenues or grant funds designated for specific uses. If a municipality violates this prohibition, it will be ineligible to receive certain state funds for infrastructure projects. The bill also mandates that municipalities disclose the details of any transfers in their annual budget and financial reports, including the amount transferred, its percentage of public utility earnings, and the purpose of the transfer. The act is set to take effect on July 1, 2026.