BILL ANALYSIS



C.S.H.B. 877
By: Saunders
3-20-95
Committee Report (Substituted)


BACKGROUND
Aqua Water Supply Corporation (Aqua WSC) is a nonprofit water
supply corporation.  Its service area includes most of Bastrop
County (except for areas within the cities of Bastrop, Elgin, and
Smithville) and small portions of Travis County, Lee County,
Caldwell County, and Williamson County. 

In the context of most water supply corporations, Aqua WSC is a
large and sophisticated system,  with numerous pressure planes,
well sites, storage tanks, and large distribution lines.  The
system currently has over 9500 customers, including several large
users.  It has experienced significant growth during the last year
and expects this growth to continue.

As part of its planning process, Aqua WSC has adopted a subdivision
policy as part of its tariff.  Under this policy, Aqua WSC will
provide a meter to any single user.  However, if a person wishes to
subdivide land and apply for service to multiple tracts, he or she
must pay a fee and request an engineering report from the
corporation.  The report is intended to determine the cost of
providing service to the subdivision.  Upon payment of the cost of
necessary system modifications and the cost of adding capacity to
the system, Aqua WSC enters into a contract with the subdivider to
reserve capacity for a period of years.

Under this system, developers get a firm commitment for service,
and development pays for itself rather than being subsidized by
other users of the system.

This system is only workable if it is strictly enforced by Aqua WSC
and the Texas Natural Resource Conservation Commission (TNRCC),
which has jurisdiction over some aspects of water supply
corporations.  It must be clear under law that the proper recourse
to a consumer is action against a developer who has not complied
with the policy.

H.B. 877 is local bill that applies only to Aqua Water Supply
Corporation.


PURPOSE
H.B. 877 is intended to ensure that Aqua WSC has the ability to
enforce its tariff as it relates to extensions of service to
subdivided land and to ensure that TNRCC action is consistent with
this.

RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency, or institution.

SECTION BY SECTION ANALYSIS
SECTION 1.  Adds a new Section 13.1365 to Subchapter E, Chapter 13,
Water Code, that applies only to a water supply or sewer service
corporation that:
     (1) provides service to more than 8,000 connections, each of
which has a water metering device; 
     (2) has a certificate of convenience and necessity from the
TNRCC that requires the corporation to serve an area that includes
all or part of three or more counties; and
     (3) complies with the requirements of Section 13.136, Water
Code.
Provides that such corporations would be authorized to strictly
enforce the terms of a tariff related to service to subdivided
land. Provides that the TNRCC would be prevented from impairing the
enforcement of the tariff.  Such corporations may not, however,
enforce a tariff that conflicts with Sections 212.012 or 232.0047,
Local Government Code, or another state law.

SECTION 2.  Emergency clause.


COMPARISON OF ORIGINAL TO SUBSTITUTE
The difference between the original (introduced) version of the
bill and the committee substitute is at Section 1 of the bill, at
the newly added Section 13.1365 at subsection (a)(2).  The two
versions of those relevant portions read as follows:

ORIGINAL (INTRODUCED) VERSION:     "....(a) This section applies
only to a water supply or sewer service corporation that:
     (1) provides service to more than 8,000 connections, each of
which has a water metering device; 
     (2) has a certificate of convenience and necessity from the
commission that:
           (A) requires the corporation to serve an area that
includes all or part of three or more counties;
           (B) describes the corporation's service area on an
"area-wide" basis and not on the basis of an existing distribution
system or a specific distance from an existing distribution system;
and
     (3) complies with the requirements of Section 13.136." 

SUBSTITUTED VERSION:     "....(a) This section applies only to a
water supply or sewer service corporation that:
     (1) provides service to more than 8,000 connections, each of
which has a water metering device; 
     (2) has a certificate of convenience and necessity from the
commission that requires the corporation to serve an area that
requires all or part of three or more counties; and
     (3) complies with the requirements of Section 13.136."

SUMMARY OF COMMITTEE ACTION
H.B.877 was considered by the committee in a public hearing on
March 20, 1995.

The committee considered a complete substitute for the bill.
The substitute was adopted without objection.

The following person testified in favor of the bill: 
     Mr. John Burke, representing Aqua Water Supply.

The following persons testified against the bill: None (0).

The following persons testified on the bill: None (0).

The bill was reported favorably as substituted, with the
recommendation that it do pass and be printed and be sent to the
Committee on Local and Consent Calendars, by a record vote of 6
ayes, 0 nays, 0 pnv, 3 absent.