BILL ANALYSIS


                                                    C.S.H.B. 1783
                                         By: Yarbrough (Whitmire)
                                      Intergovernmental Relations
                                                         05-17-95
                            Senate Committee Report (Substituted)
BACKGROUND

Investor-owned public utilities are required to pay a fee to use
county road easements while municipal utility districts, cities,
and gas companies are not required to pay a fee.

The Texas Natural Resource Conservation Commission is actively
promoting regionalization through combining utilities or
stimulating growth of existing utilities in all areas of Texas. 
One of the potential barriers to the formation of large sewer
utilities is the fees mandated by counties.

Various investor-owned public utilities are proposing to extend
sewer service into areas that at present are being served by
failing septic tanks.  An assessment of a fee for installing sewer
lines means that the additional cost will be passed on to new
customers.  Some customers might choose not to connect because of
the price.

PURPOSE

As proposed, C.S.H.B. 1783 prohibits a county with a population of
more than 2.8 million from charging a water and sewer utility for
the installation or replacement of a water or sewer line in the
county's right-of-way.

RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority is granted
to a retail public utility that provides water service under
SECTION 2 (Chapter 13O, Water Code) of this bill.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 13G, Water Code, by adding Section
13.256, as follows:

     Sec. 13.256.  COUNTY FEE.  (a)  Prohibits a county with a
     population of more than 2.8 million from charging a water and
     sewer utility a fee for the privilege of installing or
     replacing a water or sewer line in the county's right-of-way,
     notwithstanding any other provision of law.
     
     (b)  Provides that this section does not affect a franchise
       agreement or other contract entered into before September 1,
       1995.
       
       SECTION 2.   Amends Chapter 13, Water Code, by adding Subchapter O,
as follows:

     SUBCHAPTER O.  NON-COMSUMPTIVE WATER SERVICE FEE.  
     
     (a)  Authorizes a retail public utility to provide non-competitive water service for the operation of a geothermal
     heat pump that circulates the water in a closed loop and
     returns it to the water main.
     
     (b)  Authorizes a retail public utility that provides water
     service to adopt reasonable rules and procedures for the
     installation, operation, and removal of a geothermal heat
     pump.
     
     (c)  Authorizes a retail public utility that provides water
     service to a geothermal heat pump to charge a reasonable fee
     for the installation, inspection, and operation of the heat
     pump.
SECTION 3. Effective date: September 1, 1995.

SECTION 4. Emergency clause.