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.