(1) By agreement between the parties, subject to the approval of the Board of Public Utilities, in consultation with the Department of Environmental Protection, and after the holding of a joint public hearing by the board and the department; or

(2) Through use of the power of eminent domain by the appropriate agencies or, the provisions of section 34 of P.L.1957, c.183 (C. 40:14B-34) to the contrary notwithstanding, the designated acquiring public or private entity.

b. Compensation shall be the commercially reasonable value as determined by agreement between the small water company, small sewer company, or both, and the designated acquiring public or private entity, as approved by the board and the department, or the appraised value as established through eminent domain proceedings. Upon remittance of the compensation as set forth herein, the designated acquiring public or private entity shall obtain title to the assets of the small water company, small sewer company, or both, free and clear of all liens, claims and encumbrances, judgments, security interests, fines, penalties, and outstanding taxes incurred by the small water company, small sewer company, or both. The acquiring public or private entity shall place in escrow or deposit in court so much of the compensation amount as necessary to satisfy any liens, claims and encumbrances, judgments, security interests, fines, penalties, and outstanding taxes which are of record or of which the designated acquiring public or private entity has actual knowledge.

Nothing contained herein shall waive, or impair the right of any creditor, including a secured creditor, to obtain payment directly from the owner or operator of the small water company or small sewer company from the proceeds of any acquisition concluded pursuant to the provisions of P.L.1981, c.347 (C. 58:11-59 et seq.), section 1 of P.L.1981, c.389 (C. 58:11-63) and P.L.1999, c.296 (C. 58:11-63.1 et al.).

No fines or penalties incurred by the owner or operator of a small water company or small sewer company shall be a liability of the owner or operator of the designated acquiring public or private entity, of the service users of the acquired small water company or small sewer company or any service user of the water supply or sewer system of the designated acquiring public or private entity. Any such incurred penalties shall remain the sole liability of the owner or operator who incurred the penalties.

c. If a small water company and a small sewer company serve a common residential development, were established by the developer to service that development, and are under common control and ownership, and if the small water company or the small sewer company, or both, have failed to comply with an order of the Department of Environmental Protection and are subject to the provisions of section 1 of P.L.1981, c.347 (C. 58:11-59), they may be treated as one company for the purposes of sections 1 through 4 of P.L.1981, c.347 (C. 58:11-59 through 58:11-62), section 1 of P.L.1981, c.389 (C. 58:11-63) and P.L.1999, c.296 (C. 58:11-63.1 et al.), provided that the proceeds of the acquisition shall be segregated and distributed based on the commercially reasonable or appraised value of each company.

L.1981,c.347,s.2; amended 1999, c.296, s.3.