By: Rosson S.B. No. 1122
A BILL TO BE ENTITLED
AN ACT
1-1 relating to mergers and acquisitions of utilities.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Section 63, Public Utility Regulatory Act
1-4 (Article 1446c, Vernon's Texas Civil Statutes), is amended by
1-5 amending and adding a new subsection (a) and by adding new
1-6 subsections (b) and (c) as follows:
1-7 Sec. 63. (a) No public utility may sell, acquire, lease, or
1-8 rent any plant as an operating unit or system in this state for a
1-9 total consideration in excess of $100,000 or merge or consolidate
1-10 with another public utility operating in this state unless the
1-11 public utility reports such transaction to the commission within a
1-12 reasonable time. All transactions involving the sale of 50 percent
1-13 or more of the stock of a public utility shall also be reported to
1-14 the commission within a reasonable time. No public utility, person
1-15 or corporation required by this section to report a transaction to
1-16 the commission, whether or not organized under the laws of this
1-17 state, shall acquire or control either directly or indirectly any
1-18 public utility organized and doing business in this state without
1-19 first securing authorization to do so from the commission. On the
1-20 filing of a report with the commission, the commission shall hold a
1-21 public hearing <investigate the same with or without public
1-22 hearing,> to determine whether or not the action is consistent with
1-23 the public interest. The commission may not approve and authorize
2-1 the transaction, merger or consolidation unless it finds that it is
2-2 consistent with the public interest. In reaching its determination,
2-3 the commission shall take into consideration the reasonable value
2-4 of the property, facilities, or securities to be acquired, disposed
2-5 of, merged or consolidated. <If the commission finds that such
2-6 transactions are not in the public interest, the commission shall
2-7 take the effect of the transaction into consideration in the
2-8 rate-making proceedings and disallow the effect of such transaction
2-9 if it will unreasonably affect rates or services.> The provisions
2-10 of this section shall not be construed as being applicable to the
2-11 purchase of units of property for replacement or to the addition to
2-12 the facilities of the public utility by construction.
2-13 (b) The commission may not approve the transaction, merger,
2-14 or consolidation unless it finds that the transaction is fair and
2-15 reasonable to employees, to ratepayers, and to all affected public
2-16 utility shareholders.
2-17 (c) It is the burden of the acquiring entity to prove by a
2-18 preponderance of the evidence that an action reported pursuant to
2-19 (a) is consistent with the public interest.
2-20 SECTION 2. This Act takes effect September 1, 1993.
2-21 SECTION 3. The importance of this legislation and the
2-22 crowded condition of the calendars in both houses create an
2-23 emergency and an imperative public necessity that the
2-24 constitutional rule requiring bills to be read on three several
2-25 days in each house be suspended, and this rule is hereby suspended,
3-1 and that this Act take effect and be in force from and after its
3-2 passage, and it is so enacted.