BILL ANALYSIS



H.B. 1935
By: R. Lewis
4-18-95
Committee Report (Amended)


BACKGROUND
Section 13.255 of the Texas Water Code is designed to allow orderly
expansion of utility service by municipalities into previously
unincorporated areas generally served by non-profit water supply or
sewer service corporations.  Some non-profit water supply or sewer
service corporations have converted to special utility districts in
order to qualify for tax exempt and various other types of funding. 
The legislature, when allowing the non-profits to convert to
special utility districts, unintentionally failed to include such
utility districts under Section 13.255(j).  As a result, there is
currently no statutory means available which would allow the
orderly expansion of utility service by a municipality which
annexes previously unincorporated areas.

PURPOSE
To correct the unintended omission of special utility districts
from the provisions of section 13.255 of the Water Code and allow
for the orderly expansion of utility service by municipalities into
areas being served by non-profit corporations which have converted
to special utility districts.

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.  Amends Section 13.255(j), Water Code, by adding special
utility districts which have converted from a non-profit water
supply or sewer service corporation in order that municipalities
may expand utility service.

Section 2.  Emergency clause.



EXPLANATION OF AMENDMENTS
COMMITTEE AMENDMENT NO.1:   (1) On page 1, lines 11-12, deletes the
words "that converted from a nonprofit water supply or sewer
service corporation", thus making Section 13.255(j), Water Code,
applicable to any special utility district. 
(2) Adds a new Section 2 to read as follows:
     Section 13.255, Water Code, is amended to add a new subsection
(1) to read as follows:
     (1) The compensation provided under subsection (g) shall be
determined by a qualified     individual or firm to serve as
independent appraiser, who shall be selected by the affected     retail public utility.  The determination of compensation by
the independent appraiser shall    be binding on the commission. 
The costs of the independent appraiser shall be borne by    the
municipality.
(3) Adds a new Section 3 to read as follows:
     Section 3.  Section 13.255, Water Code, is amended to add a
new subsection (m) to read    as follows:
     (m) The commission shall deny an application for single
certification by a municipality    which fails to demonstrate
compliance with the commission's minimum requirements for   public
drinking water systems.
(4) Adds a new Section 4 to read as follows:
     Section 4.  Section 13.255(g), Water Code, is amended to read
as follows:
     (g) For the purpose of implementing this section, the value of
real property shall be   determined [by the commission and/or the
court] according to the standards set forth in    Chapter 21,
Property Code, governing actions in eminent domain; the value of
personal   property shall be determined according to the [rules to
be promulgated by the commission   pursuant to the] factors in this
subsection.  The factors ensuring [Such rules shall assure]      that the compensation to a retail public utility for the
taking, [and] damaging, and/or loss     of personal property,
including the retail public utility's business, is just and
adequate,  [and] shall, at a minimum, include [take into account
the following factors]:  impact on      the existing indebtedness
of the retail public utility and its ability to repay that debt,
the  value of the service facilities [personal and real property]
of the retail public utility  located within the area in question,
the amount of any expenditures for planning, design    or
construction of service facilities outside the incorporated or
annexed area which are   allocable to service to the area in
question, the amount of the retail public utility's    contractual
obligations allocable to the area in question, any demonstrated
impairment of  service or increase of cost to consumers of the
retail public utility remaining after the    single certification,
the impact on future revenues and expenses of the retail public
utility,   necessary and reasonable legal expenses and professional
fees, factors relevant to     maintaining the current financial
integrity of the retail public utility, and other relevant  factors.
(5) Renumbers Section 2 appropriately.


SUMMARY OF COMMITTEE ACTION
H.B.1935 was considered by the committee in a public hearing on
April 18, 1995.
The following person testified in favor of the bill:
     Mr. Tommy Duck, representing Texas Rural Water Association.
The following person testified against the bill: 
     Ms. Pam Thompson, representing herself and CODA (Citizens
Organized to Defend Austin).
The following persons testified on the bill: None (0).

The committee considered one (1) amendment to the bill.  The
amendment was adopted without objection.
The bill was reported favorably as amended, 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 8 ayes, 0 nays, 0
pnv, and 1 absent.