Bill Summary – FastDemocracy

HOUSE OF REPRESENTATIVES LOCAL BILL STAFF ANALYSIS
BILL #:     CS/HB 1633 Okaloosa Gas District, Okaloosa, Santa Rosa, and Walton Counties
SPONSOR(S): State Affairs Committee, Drake
TIED BILLS:       IDEN./SIM. BILLS:
    REFERENCE                                                         ACTION                 ANALYST              STAFF DIRECTOR or
                                                                                                                  BUDGET/POLICY CHIEF
    1) Local Administration & Veterans Affairs                        15 Y, 0 N              Darden               Miller
       Subcommittee
    2) Tourism, Infrastructure & Energy Subcommittee                  14 Y, 3 N              Willson              Keating
    3) State Affairs Committee                                        20 Y, 0 N, As          Miller               Williamson
                                                                      CS
                                                        SUMMARY ANALYSIS
The Okaloosa Gas District (District) is an independent special district formed in 1953 to own and operate
natural gas transmission and distribution systems in Okaloosa County. The service area of the District has
since expanded to include portions of Santa Rosa and Walton Counties. The District provides natural gas
services to approximately 45,000 residential and commercial customers, as well as several military
installations.
A five-member board of directors governs the District, with four members appointed by the city commissions of
the members of the District and one member appointed by the Okaloosa County Board of County
Commissioners. Members of the board do not receive compensation, but are entitled to reimbursement for
expenses and a “director’s fee” of up to $25 per month for board meetings they attend.
The bill expands the service area of the District to include all of Santa Rosa and Walton Counties, clarifying
areas that would be included in the present boundaries of the District but for their explicit exclusion in the
charter: the City of Milton and its rights to serve gas customers within its territorial grants, the City of Defuniak
Springs and its gas distribution system, the Town of Jay, and the City of Gulf Breeze and certain adjoining
areas. The bill provides that a defined area that is currently claimed as service area by both the District and
City of Gulf Breeze is neither included nor excluded from the service area of the District, but that the Florida
Public Service Commission will make a final determination of its status.
The bill also expands the District’s board of directors to include members appointed by the county
commissions of Santa Rosa and Walton Counties and increases the maximum “director’s fee” to $244 per
month.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h1633e.SAC
DATE: 4/15/2021
                                                        FULL ANALYSIS
                                                   I. SUBSTANTIVE ANALYSIS
    A. EFFECT OF PROPOSED CHANGES:
         Background
         The Okaloosa Gas District (District) is an independent special district formed in 1953 to own and
         operate natural gas transmission and distribution systems in Okaloosa County.1 The service area of the
         District has since expanded to include portions of Santa Rosa and Walton Counties.2 The District
         provides natural gas services to approximately 45,000 residential and commercial customers, as well
         as several military installations.3 The District also sells natural gas to the cities of Milton and Gulf
         Breeze for distribution by their municipal utility systems.
         The District projects annual revenues for fiscal year 2020-2021 of $48.6 million, derived almost entirely
         from gas sale revenues.4
         The District’s charter states that the municipalities of Crestview, Niceville, Valparaiso, and Fort Walton
         Beach are “members” of the District.5 Other municipalities in Okaloosa County may join the District by
         adopting a resolution, filed with the Secretary of State, requesting to join the District and stating the
         municipality will be bound by the duties applicable to other members. The board of directors of the
         District must approve this request for it to take effect. The charter also provides that other municipalities
         in counties adjoining Okaloosa County may become members of the District if their membership has
         been authorized by special act.
         A five-member board of directors governs the District, with one member appointed by the governing
         body of each member municipality and one member appointed by the Okaloosa County Board of
         County Commissioners.6 Members of the board serve a four-year term. Elected officials may serve as
         members of the board, except that no member of the Okaloosa County Board of County
         Commissioners may serve as a member.
         Members of the board of directors do not receive compensation, but are reimbursed for actual
         expenses incurred in the performance of their official duties and may receive, subject to the discretion
         of the board, a “director’s fee” of up to $25 for each director’s meeting attended, not to exceed one
         meeting per month.
         The City of Milton7 provides natural gas services to customers within service areas designated by law
         in 19618 and 1971.9
         Effect of Proposed Changes
         The bill expands the service area of the District to include all of Santa Rosa and Walton Counties,
         clarifying areas that would be included in the present boundaries of the District but for their explicit
         exclusion in the charter: the City of Milton and its rights to serve gas customers within its territorial
         grants, the City of Defuniak Springs and its gas distribution system, the Town of Jay, and the City of
         Gulf Breeze and certain adjoining areas. The bill also provides that a defined service area that is
         presently claimed by both the District and the City of Gulf Breeze is neither included nor excluded from
1 Ch. 29334, Laws of Fla. (1953).
2 See ch. 2000-443, s. 2(3), Laws of Fla.
3 About Us, Okaloosa Gas District, https://www.okaloosagas.com/about-us (last visited Mar. 18, 2021).
4 FY 2021 Budget, Okaloosa Gas District, available at https://www.okaloosagas.com/district-documents (last visited Mar. 18, 2021).
5 Ch. 2000-443, s. 2(5), Laws of Fla.
6 Ch. 2000-443, s. 2(8), Laws of Fla.
7 Formerly known as the Town of Milton. See ch. 13105, Laws of Fla. (1927). The City was re-chartered and renamed the
City of Milton in 1959. See ch. 59-1574, Laws of Fla.
8 Ch. 61-2489, Laws of Fla.
9 Ch. 71-773, Laws of Fla.
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        the service area of the District, but the Florida Public Service Commission will make a final
        determination of its status.
        The bill expands the board of directors of the District to include:
            One member appointed by the Santa Rosa County Board of County Commissioners; and
            One member appointed by the Walton County Board of County Commissioners.
        The bill increases the maximum “director’s fee” paid to members of the board from $25 to $244,
        reflecting inflation since the initial amount was set in 1953.10
     B. SECTION DIRECTORY:
        Section 1:        Amends ch. 2000-443, Laws of Fla., to expand and clarify the territorial limits of the
                          District, revise the membership of its board, and increase the meeting attendance fee
                          paid to each member of the board.
        Section 2:        Provides an effective date of upon becoming a law.
                               II. NOTICE/REFERENDUM AND OTHER REQUIREMENTS
     A. NOTICE PUBLISHED?              Yes [x]     No []
        IF YES, WHEN?             January 31, 2021
        WHERE?                    The Northwest Florida Daily News, a daily newspaper of general circulation
                                  distributed in Okaloosa, Santa Rosa, and Walton Counties.
     B. REFERENDUM(S) REQUIRED?                   Yes []     No [x]
        IF YES, WHEN?
     C. LOCAL BILL CERTIFICATION FILED?                    Yes [x]    No []
     D. ECONOMIC IMPACT STATEMENT FILED?                        Yes [x]       No []
                                                           III. COMMENTS
     A. CONSTITUTIONAL ISSUES:
        None.
     B. RULE-MAKING AUTHORITY:
        The bill neither provides authority for nor requires rulemaking by executive branch agencies.
     C. DRAFTING ISSUES OR OTHER COMMENTS:
        None.
                            IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
On April 15, 2021, the State Affairs Committee adopted an amendment and reported the bill favorably as a
committee substitute. The amendment clarified the boundaries of the District in relation to the City of Milton
and its rights to serve gas customers, and the City of DeFuniak Springs and its gas distribution system.
10$25.00 in January, 1953, had the buying power of approximately $244.81 in December, 2020. See U.S. Bureau of Labor Statistics,
“CPI Inflation Calculator,” at CPI Inflation Calculator (bls.gov) (last visited April 15, 2021).
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This analysis is drawn to the committee substitute adopted by the State Affairs Committee.
STORAGE NAME: h1633e.SAC                                                                     PAGE: 4
DATE: 4/15/2021