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A BILL TO BE ENTITLED
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AN ACT
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relating to requirements for the purchase or acquisition of certain |
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water and sewer systems. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 13.301, Water Code, is amended by |
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amending Subsection (h) and adding Subsections (l), (m), and (n) to |
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read as follows: |
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(h) A sale, acquisition, lease, or rental of any water or |
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sewer system owned by an entity required by law to possess a |
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certificate of public convenience and necessity, or a sale or |
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acquisition of or merger or consolidation with such an entity, that |
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is not completed in accordance with the provisions of this section |
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is void. Notwithstanding any other law that requires a system |
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owner's signature, the utility commission shall approve a |
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transaction to which this section applies if the owner has |
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abandoned operation of the facilities that are the subject of the |
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transaction and cannot be located or does not respond to an |
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application filed under Subsection (l). |
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(l) Notwithstanding any other provision of this section, |
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the utility commission by rule shall adopt an expedited process |
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that allows a person appointed by the utility commission or the |
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commission under Section 13.4132 as a temporary manager that is |
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also an operator of a Class A or Class B utility to apply for utility |
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commission approval of the person's acquisition of the stock, |
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ownership interest, or assets of the temporarily managed and |
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operated utility, its facilities, and its certificated service |
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area, if one has been granted to the utility. The expedited process |
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must: |
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(1) waive public notice requirements; |
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(2) be approved if the acquisition transaction is |
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considered to be in the public interest; and |
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(3) provide that: |
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(A) the person's appointment is considered |
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sufficient to demonstrate adequate financial, managerial, and |
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technical capability for providing continuous and adequate service |
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to the service area to be acquired and any areas currently |
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certificated to the person; and |
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(B) all used and useful invested capital and just |
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and reasonable operations and maintenance costs incurred by the |
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person during the person's appointment as temporary manager and |
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operator of the utility, utility in receivership, or utility in |
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supervision to be acquired are considered to be a regulatory asset |
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for the person and are recoverable in the person's next |
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comprehensive rate proceeding or system improvement charge |
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application. |
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(m) If a temporary rate under Section 13.046 is adopted |
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during the period described by Subsection (l)(3)(B), then all used |
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and useful invested capital and just and reasonable operations and |
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maintenance costs incurred by the person in excess of costs covered |
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by the temporary rate are considered to be a regulatory asset for |
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the person and are recoverable in the person's next comprehensive |
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rate proceeding or system improvement charge application. |
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(n) The utility commission and the commission shall provide |
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a reasonable period for a person acquiring a utility under |
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Subsection (l) to bring the acquired utility into compliance with |
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utility commission and commission rules before imposing a penalty |
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for any violation present in the acquired utility at the time of |
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acquisition. |
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SECTION 2. This Act takes effect September 1, 2023. |