HB 1277 (Busatta Cabrera) and SB 1510 (Brodeur) impose restrictions on the use of municipal water, wastewater, gas or electric utility revenues to fund general government services and impose restrictions on the imposition of water and wastewater extraterritorial surcharges. The bills specify that the portion of utility revenues transferred may not exceed the transfer rates specified in the bills. The specified transfer rates for gas and electric utility revenues are based on the average midpoints of the rates of return on equity approved by the Public Service Commission for investor-owned utilities. The transfer rates for water and wastewater utilities are based on the rate of return on equity established by the Public Service Commission for water and wastewater utilities regulated by the Commission. The bills require further reductions in the allowable transfer rate based on the percentage of the utility’s retail customers located outside the municipality’s boundaries. The bills further specify that these reductions do not apply if the utility service is governed by a utility authority board that, through the election of voting members from outside the municipal boundaries, provides for proportionate representation of customers located outside the municipal boundaries. With respect to extraterritorial surcharges, the bills eliminate the first 25% extraterritorial surcharge that may be imposed without a public hearing. The bills eliminate the second 25% surcharge that may be imposed after a public hearing. In addition, the bills provide that rates, fees and charges that may be imposed on extraterritorial customers shall not exceed 25% (reduced from the 50% allowed under current law) of the total amount the municipality charges customers served within the municipality for corresponding service. (O’Hara)