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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. The utility commission shall approve a transaction to |
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which this section applies without an owner's signature required by |
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other law if the owner has abandoned operation of the facilities |
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that are the subject of the transaction and cannot be located or |
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does not respond to an 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 |
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commission under Section 13.4132 as a temporary manager of a |
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utility, utility in receivership, or utility in supervision, who 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, utility in receivership, or utility in |
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supervision, its facilities, and, if applicable, its certificated |
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service area. The expedited process must: |
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(1) waive public notice requirements regardless of |
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whether the person elects to charge initial rates in accordance |
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with Section 13.3011 or use a voluntary valuation determined under |
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Section 13.305; |
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(2) require approval of the acquisition transaction if |
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the transaction is 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), all used and |
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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 commission shall provide a |
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reasonable period for a person acquiring a utility under Subsection |
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(l) to bring the acquired utility into compliance with utility |
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commission and commission rules before imposing a penalty for any |
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violation committed by the acquired utility for which no |
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enforcement action has been completed at the time of acquisition. |
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SECTION 2. This Act takes effect September 1, 2023. |
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