(1) With respect to areas outside of cities, a board of county commissioners may, by ordinance or by regulation or order adopted pursuant to an ordinance or regulation:

(a) Prescribe the quality and character of and rates for collection service, and the minimum requirements to guarantee maintenance of service.

(b) Divide the unincorporated area into service areas, grant franchises to persons for collection service within service areas, and establish and collect fees from persons holding franchises.

(c) Prescribe a procedure for issuance, renewal or denial of a franchise to a person providing or proposing to provide collection service.

(d) Establish an agency to be responsible for investigation or inspection of collection service proposed or provided under a franchise or proposed franchise, such agency to have authority to order modifications, additions or extensions to the physical equipment, facilities, plan or service as shall be reasonable and necessary in the public interest.

(e) Regulate solid waste management.

(2) With respect to areas outside of cities, a board of county commissioners may adopt ordinances to provide for:

(a) The licensing of disposal sites as an alternative to franchising of service.

(b) The regulation, licensing or franchising of salvage businesses or the operation of salvage sites where such action is found necessary to implement any part of a solid waste management plan applicable in the county. Such an ordinance shall grant the same authority and prescribe the same procedures as provided for other franchises or licenses under this section.

(3)(a) When a city annexes all or a portion of a service area previously franchised by a county, the city, county and affected persons or local government units providing collection service shall attempt to reach an agreement to protect the extent and quality of service in areas remaining outside the city, to protect the quality of service within the city and to protect the rights of affected persons or local government units providing collection service.

(b) A city and county may, with permission of the city collector and the county franchisee, provide by prior agreement that an area, or portion of an area, annexed by the city but previously franchised by the county shall continue to be served by the county franchisee for at least 10 years after the effective date of the annexation.

(c) A city with permission of the city collector, or a city-regulated collector with permission of the city, may provide by prior agreement that an area, or portion of an area, annexed by the city but previously served by a collector located in an unfranchised area of the county shall continue to be served by the county collector or shall be transferred to the city collector with compensation from the city collector to the county collector.

(d) Where no agreement has been reached under paragraph (a), (b) or (c) of this subsection, upon annexation of territory to a city the county-franchised collector may continue to serve the annexed area until:

(A) The county collector is compensated by the city collector for the collection service in the annexed area, which compensation shall be the sum of the fair market value of the service at the time of the annexation and applicable severance damages; or

(B) The expiration of the longer of the county franchise term or the term of the current city license, contract or franchise regulating solid waste collection. However, the term shall not include any renewals or extensions made after the effective date of the annexation and the total term shall not exceed 10 years after the effective date of the annexation.

(e) Nothing in this subsection shall restrict the right of a county to franchise, license or regulate solid waste management or any portion thereof as otherwise provided in subsections (1) and (2) of this section. [1971 c.648 § 16; 1977 c.639 § 1; 1993 c.357 § 1; 1993 c.560 § 15a]