Plain Text Law

Title 20 — Subtitle 73. Construction of New Water and Sewage Disposal Systems

Chapter 01. General Regulations

Regulation .01 Prior Authorization.Copy Citation

A.
A person may not commence the construction of a privately owned water system or sewage disposal (sewerage) system for public use without the prior authorization of the Commission pursuant to Public Utilities Article, §5-204, Annotated Code of Maryland, and the provisions of this subtitle.
B.
A person seeking prior authorization pursuant to Public Utilities Article, §5-204, Annotated Code of Maryland, shall file an application with the Commission which contains the information and documents set forth in this subtitle in order to meet their burden of fully disclosing plans to finance, construct, and operate the proposed system.

Regulation .02 Application.Copy Citation

A.
Unless specifically exempted by the provisions of Public Utilities Article, §5-204, Annotated Code of Maryland, a person shall apply to the Commission, before construction, for authority to construct a water system, sewage disposal system, or both, to be devoted to public use.
B.
Water company applicants claiming “not-for-gain” status shall submit full and complete documentation supporting this claim for review and determination by the Commission, as required by these regulations.
C.
Sewage disposal company applicants, whether “for-gain” or not, shall fully comply with all provisions of this subtitle, the law, and COMAR 20.75.
D.
Water company applicants shall fully comply with all provisions of this subtitle, the law, and COMAR 20.70.

Regulation .03 Definitions.Copy Citation

A.
The definitions set forth in COMAR 20.70.01.03 and COMAR 20.75.01.03 apply to words used in this subtitle.
B.
“Applicant” means the person applying for authority to construct a system and includes the person upon whose behalf an application is made.
C.
“Person” has the meaning stated in Public Utilities Article, §1-101, Annotated Code of Maryland.
D.
“Sewerage” and “sewage disposal” shall refer to the disposal or disposition of household, animal and human waste, refuse, and slops.
E.
“System” means, when used alone, a water system, a sewage disposal system, or both, as appropriate.

Regulation .04 Time Limitations Upon Applications.Copy Citation

A.
A person proposing to construct a water system, sewage disposal system, or both, for public use shall apply to the Commission for prior authority to construct the system and to exercise its franchises or rights within one calendar year of:
(1)
If appropriate, the granting of a local franchise or official notice that a local franchise is not required; or
(2)
The filing with and acceptance of the applicant's articles of incorporation by the Maryland Department of Assessments and Taxation.
B.
Upon an applicant's request and showing of good cause, the Commission may grant an extension of time.
C.
Failure to apply to the Commission within the time limits set forth in §A of this regulation may result in forfeitures as set forth in Public Utilities Article, §13-205, Annotated Code of Maryland.

Chapter 02. Accounting, Financial, and General Information

Regulation .01 General.Copy Citation

Each application for authority to construct a system shall be accompanied by the information required by this chapter.

Regulation .02 Corporate Status.Copy Citation

A.
If an applicant is incorporated, it shall file:
(1)
A certified copy of the charter or articles of incorporation, together with any amendments;
(2)
A copy of the bylaws, together with any amendments;
(3)
Any stock issuance statements; and
(4)
The amount and classes of stock for which the applicant will seek the authority of the Commission to issue and the stated or par value of the shares.
B.
The applicant shall describe the relationship, if any, with a land or home developer concerning the formation, construction, and operation of the proposed system.
C.
An applicant shall submit documentary evidence clearly showing that it is an entity separate from any land or business activity not related to the normal and incidental activities of a water, sewage disposal, or water and sewage disposal company and that it shall keep and maintain books, accounts, and records of expenses, and revenues attributable solely to its operations.

Regulation .03 Capital Structure.Copy Citation

An applicant shall have a minimum equity participation of 25 percent and shall fully disclose all financial and capitalization arrangements to be entered into, and shall provide the details and methods of payment by any person or party of obligations, assessments, fees, and charges resulting from these arrangements.

Regulation .04 Debts and Obligations.Copy Citation

A.
An applicant shall separately describe each mortgage, deed of trust, or other lien upon any property of the applicant to be used in the operation of the proposed system.
B.
In each description required by §A of this regulation, the applicant shall, at a minimum, set forth:
(1)
The date of execution of the described obligation;
(2)
The name, or names, of the trustee or trustees;
(3)
The amount of indebtedness authorized to be secured by the described obligation;
(4)
The amount of the indebtedness actually secured by the described obligation; and
(5)
A description of the mortgaged property or collateral.
C.
The applicant shall describe the number and amount of bonds and debentures authorized and issued under each mortgage, describing each class of bond and debenture separately, giving date of issue, par value, rate of interest, date of maturity, and how the obligation is secured.
D.
If the applicant is unincorporated, it shall describe the amount and type of investments to be made by the proprietor or partners and any limitation on the investments.
E.
The applicant shall describe any other indebtedness incurred by him, giving same by classes, and describing security, if any.

Regulation .05 Franchise.Copy Citation

A.
Except as provided in §B of this regulation, the applicant shall submit certified copies of each necessary franchise issued by the State or by a political subdivision of the State.
B.
If franchises are not necessary, the applicant shall submit an affidavit, made under oath and signed by the officers or owners of the proposed system or systems, stating that local franchises are not required.

Regulation .06 Local Approval.Copy Citation

A.
The applicant shall submit documentary evidence indicating that:
(1)
It has received the required consent of the proper local authorities to the proposed system or systems; and
(2)
The proposed project has been accepted and included in the appropriate county's master water and sewerage plan.
B.
The applicant shall also submit:
(1)
A statement from the area public works or sanitary authority as to its jurisdiction, its construction requirements as they pertain to the applicant, and its agreement that the applicant should provide water service, or sewerage service, or both; and
(2)
A map showing the area within which the applicant has requested authority to exercise franchise or rights for the rendering of water service, sewage disposal service, or both.

Regulation .07 Rates and Revenues.Copy Citation

A.
The applicant shall submit a schedule or schedules of the proposed rates and charges under which service is to be furnished.
B.
The schedule or schedules required to be submitted by §A of this regulation shall include any connection fees and any availability or demand charges proposed to be collected from users of the system.
C.
The applicant shall file:
(1)
A detailed pro forma statement of anticipated revenues and expenses based on a full calendar year's operation under the proposed tariff schedule of rates; and
(2)
A pro forma balance sheet showing the applicant's financial condition at the close of the calendar year referred to in §C(1) of this regulation.

Regulation .08 Establishment of Rates.Copy Citation

A.
In establishing rates, depreciation expense will be permitted only against investor-supplied plant, as determined by the Commission.
B.
Rebuttable Presumption of Contributed Plant.
(1)
An applicant under Public Utilities Article, §5-204, Annotated Code of Maryland, shall be rebuttably presumed to consist of entirely contributed plant for which the total cost and investment either has been or will be recovered.
(2)
Proof of actual investment by investors, organizers, and owners of an applicant may be established by the presentation to the Commission of the books, records, accounts, audited financial statements, and other pertinent documents and testimony of all persons, corporations, and business entities (except regulated financial institutions engaged in the financing, construction, and the operation of the applicants for the period of financing and construction).

Regulation .09 Prior Commission Approval of Borrowings.Copy Citation

Any long-term borrowing, payable in whole or in part more than 12 months after date of issuance, by a water or sewage disposal company regulated by the Commission shall be void and of no force and effect unless made with the prior approval of, or until approved by, the Commission.

Regulation .10 Records and Record Keeping.Copy Citation

A.
If authorization is granted by the Commission, the applicant shall keep accurate records of the actual costs of the water system, the sewerage system, or both, and shall keep an accurate account of the revenues received and expenses incurred in connection with the operation of the system.
B.
The records shall be kept in accordance with the “Uniform System of Accounts for Water Utilities” or the “Uniform System of Accounts for Sewerage Utilities”, as amended, which are subject to modification by the Commission.
C.
Copies of the accounting systems referred to in §B of this regulation can be purchased from the National Association of Regulatory Utility Commissioners, 1102 Interstate Commerce Commission Building, Washington, D.C. 20044.
D.
For the purpose of applying the appropriate systems of accounts, water and sewage disposal companies are divided into the following four classes:
(1)
Class A—Annual utility operating revenues of $500,000 or more;
(2)
Class B—Annual utility operating revenues of $250,000 or more but less than $500,000;
(3)
Class C—Annual utility operating revenues of $50,000 or more but less than $250,000; or
(4)
Class D—Annual utility operating revenues of less than $50,000.

Chapter 03. Engineering Information

Regulation .01 General.Copy Citation

Each application for authority to construct a system shall be accompanied by the information required by this chapter.

Regulation .02 Development Plans.Copy Citation

A.
The applicant shall submit a statement of its plan for developing the service area, which shall include the number of customers expected to be connected to the water system or sewage disposal system, or both, each year until the service area is completely developed.
B.
If the service area is to be developed by definite stages then the area to be covered by each stage shall be shown with the plans.

Regulation .03 Plans, Specifications, and Permits.Copy Citation

The applicant shall file:
A.
A set of complete plans and specifications as approved by the local public works or sanitary authority and the Department of the Environment for the proposed water system, sewage disposal system, or both;
B.
A copy of the State construction permit;
C.
A copy of the discharge permit, if applicable;
D.
A copy of the water appropriation permit if applicable; and
E.
Copies of any other necessary and appropriate federal, State, or local permits.

Regulation .04 System Design Data.Copy Citation

A.
If not included in the information submitted in accordance with Regulation .02 of this chapter, the applicant shall submit the information required by §§B and C of this regulation.
B.
For water systems, the applicant shall submit the following information:
(1)
The demand used in designing the system, including:
(a)
Number and type of service,
(b)
Estimated average daily demand,
(c)
Estimated peak daily demand,
(d)
Required fire flow; and
(2)
The source or sources of supply for the system, including data on the chemical, mineral, and bacteriological characteristics of the source.
C.
For sewage disposal systems, the applicant shall submit the following information:
(1)
The plant loading, including:
(a)
Average daily flow (gallons per day);
(b)
Peak daily flow (gallons per day);
(c)
Pounds of biochemical oxygen demand per day; and
(2)
Effluent limitations if not shown on the State of Maryland discharge permit.

Regulation .05 Construction Information.Copy Citation

The applicant shall submit a brief description and estimated cost of the proposed construction under each three-digit code classification of Utility Plant Accounts as set forth in the most recent publication of “Uniform System of Accounts for Class Water/Sewer Utilities” by the National Association of Regulatory Utility Commissioners, Washington, D. C.

Chapter 04. Other Information

Regulation .01 General.Copy Citation

Each application for authority to construct a system shall be accompanied by the information required by this chapter.

Regulation .02 Index to Application.Copy Citation

The applicant shall submit a list of all documents, maps, exhibits, permits, and other items with its application.

Regulation .03 Additional Material.Copy Citation

In addition to the documents, data, and information required to be submitted with an application by this subtitle, the Commission may require the applicant before or at the public hearing to furnish additional material that may be necessary to establish that the proposed water system, sewage disposal system, or both, are in the public interest.

Regulation .04 Ownership and Easements.Copy Citation

A.
Except as provided in §B of this regulation, the applicant shall submit documentary evidence showing:
(1)
Its ownership, in fee simple absolute, of the land where water and sewage treatment facilities and other necessary structures and facilities are located; and
(2)
Its acquisition of easements, rights-of-way, or both, for all water and sewer pipelines and appurtenances located on private property.
B.
If pipelines are to be located in public or dedicated streets and roads, the applicant shall:
(1)
Inform the Commission of this in its application; and
(2)
Show that it retains the rights of ownership and maintenance of those pipelines.

Regulation .05 Existence of Availability or Demand Charges.Copy Citation

A.
In a statement filed with the application, the applicant shall disclose whether or not purchasers of unimproved land, located in the proposed service area of the applicant, will be subject to an availability or a similar type of demand charge to be collected by the land developer-seller, by the applicant, or by any other party or organization.
B.
If an availability or a similar type of demand charge is proposed by the applicant or any other party, the application shall contain the justification and derivation of this charge, together with documents showing compliance with the provisions and requirements of §§E and F, of this regulation.
C.
Any proposed availability or demand charge is subject to acceptance and approval by the Commission.
D.
If approved, the tariffs and rate schedules of the applicant shall contain the information set forth in §F, of this regulation.
E.
Any contract of sale between the buyer of unimproved or improved land in the service area of the applicant, or authorized water company, sewage disposal company, or both, and the seller shall contain a provision stating that the buyer will be required to make payment of an availability or similar type of demand charge to the seller, to the authorized water company, sewage disposal company, or both, or to another authorized third party or organization, as appropriate.
F.
If the seller of the unimproved or improved land or any third party or organization is to collect the availability charge, the contract of sale shall contain a further provision stating:
(1)
The dollar amount and billing period of the charge;
(2)
That this charge will expire when the landowner (buyer) improves his property, connects to the utility system, and receives water service, sewage disposal service, or both, from the authorized water or sewage disposal company at approved rates;
(3)
That this charge is either to defray the utility's operating expenses or to defray construction costs of the plant or system, or both, at specified percentages; and
(4)
That money collected from the charges will be remitted no less frequently than every 3 months to the authorized public service company, which shall account for that money in accordance with the Uniform System of Accounts.

Regulation .06 Approval of Availability or Demand Charges.Copy Citation

If an availability charge is approved and is to be collected, in whole or in part, for the purpose of recovery of capital investment, its collection, in whole or in part, shall cease when that capital investment has been recovered, even though the payers remain unconnected to the system.

Regulation .07 Contract of Sale.Copy Citation

A.
The applicant shall obtain and submit with his application a representative copy of a contract of sale to be used, or that is used, by the developer for the sale of unimproved or improved residential property in the service area of the applicant, if the contract imposes upon the property purchaser the payment to any person or party of any estimated or actual deferred or other charge associated with the proposed water or sewage disposal company and for the rendition of water or sewage disposal service or services.
B.
These charges may be, but are not limited to, connection fees, availability charges, consumption charges, and any type of assessment.
C.
Nothing in this regulation is to be construed to indicate that any of the above charges, as well as all other rates and charges, are permissible but are subject to acceptance and approval by the Commission.

Regulation .08 Affidavit.Copy Citation

An applicant seeking Commission authority to exercise its franchise shall submit an affidavit signed by its principal officials that it will strictly and completely abide by and follow current, effective Commission regulations governing service or its own regulations approved by the Commission.

Chapter 05. Conditions Upon Approval

Regulation .01 General.Copy Citation

The provisions set forth in this chapter shall be complied with by any person applying to the Commission under Public Utilities Article, §5-204, Annotated Code of Maryland, when the application is approved by the Commission.

Regulation .02 Compliance With the Law.Copy Citation

Applicants, if granted authorization to begin construction of a water or sewage disposal system, shall comply with all provisions of the Public Utilities Article, Annotated Code of Maryland.

Regulation .03 Copy of Rates.Copy Citation

A.
Upon acceptance by the Commission of the proposed rates and charges required to be filed with the application by COMAR 20.73.02.07, all known potential or current customers or users shall be provided with a written copy of the accepted rates and charges by the applicant.
B.
Temporary Rates.
(1)
If any proposed rate or charge is accepted by the Commission on a temporary, provisional basis, that rate or charge shall be subject to any condition and requirement ordered or directed by the Commission.
(2)
Any subsequent revisions to the accepted temporary, provisional rates and charges shall be filed with the Commission pursuant to the provisions of Public Utilities Article, §4-203, Annotated Code of Maryland.
C.
All current and known potential customers or users of the services provided by the system shall be provided with a copy of any revised or final rates and charges as approved by the Commission.

Regulation .04 As-Built Plans.Copy Citation

Upon receiving Commission authority to construct, each applicant shall prepare and permanently retain a complete set of “as-built” plans for the system.

Regulation .05 Actual Costs of Plant.Copy Citation

A.
The applicant shall record the actual cost of any subsequent plant construction and the date when the construction was placed into service in accordance with the Uniform System of Accounts, and shall retain bills, invoices, and any other document showing actual costs.
B.
The applicant may consult with the Commission's Rate Research and Economics Division as to suggested methods in using this cost of plant construction information to determine annual depreciation methods and rates.