74R8684 CBH-F
By Johnson H.B. No. 2387
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of retail water or sewer service
1-3 utilities.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subdivisions (11) and (24), Section 13.002, Water
1-6 Code, are amended to read as follows:
1-7 (11) "Member" means a person who holds a membership in
1-8 a water supply or sewer service corporation and who either receives
1-9 water or sewer utility service from the corporation or <and who> is
1-10 a record owner of a fee simple title to property in an area served
1-11 by a water supply or sewer service corporation. <The term does not
1-12 include a person or entity that holds an interest in property
1-13 solely as security for the performance of an obligation, or that
1-14 only builds on or develops the property for sale to others.> In
1-15 determining member control of a water supply or sewer service
1-16 corporation, a person is entitled to only one vote regardless of
1-17 the number of memberships the person owns.
1-18 (24) "Water supply or sewer service corporation" means
1-19 a nonprofit, member-owned, member-controlled corporation organized
1-20 and operating under Chapter 76, Acts of the 43rd Legislature, 1st
1-21 Called Session, 1933 (Article 1434a, Vernon's Texas Civil Statutes)
1-22 that provides potable water service or sewer service for
1-23 compensation. The term does not include a corporation that
1-24 provides retail water or sewer service to a person who is not a
2-1 member, except that the corporation may provide retail water or
2-2 sewer service to a person who is not a member if the person only
2-3 builds on or develops property to sell to another and the service
2-4 is provided on an interim basis before the property is sold.
2-5 SECTION 2. Section 13.043(g), Water Code, is amended to read
2-6 as follows:
2-7 (g) An applicant for service from a water supply or sewer
2-8 service corporation may appeal to the commission a decision of the
2-9 water supply or sewer service corporation affecting the amount to
2-10 be paid to obtain service other than <in addition to> the regular
2-11 membership or tap fees. In addition to the factors specified under
2-12 Subsection (j), in an appeal brought under this subsection the
2-13 commission shall determine whether the amount paid by the applicant
2-14 is consistent with the tariff of the water supply or sewer service
2-15 corporation and is reasonably related to the cost of installing
2-16 on-site and off-site facilities to provide service to that
2-17 applicant. If the commission finds the amount charged to be
2-18 clearly unreasonable, it shall establish the fee to be paid for
2-19 that applicant. An appeal under this subsection must be initiated
2-20 within 90 days after the date written notice is provided to the
2-21 applicant or member of the water supply or sewer service
2-22 corporation's decision relating to the applicant's initial request
2-23 for that service. A determination made by the commission on an
2-24 appeal under this subsection is binding on all similarly situated
2-25 applicants for service, and the commission may not consider other
2-26 appeals on the same issue until the applicable provisions of the
2-27 tariff of the water supply or sewer service corporation are
3-1 amended.
3-2 SECTION 3. Section 13.139(d), Water Code, is amended to read
3-3 as follows:
3-4 (d) Not later than the 90th day after the date on which a
3-5 retail public utility that has a certificate of public convenience
3-6 and necessity reaches 85 percent of its capacity, as compared to
3-7 the <Texas Department of Health's> minimum capacity requirements
3-8 for a public drinking water system, the retail public utility shall
3-9 submit to the executive director a planning report that includes
3-10 details on how the retail public utility will provide the expected
3-11 service to the remaining areas within the boundaries of its
3-12 certificated area. The executive director may waive the reporting
3-13 requirement if the executive director finds that the projected
3-14 growth of the area will not require the utility to exceed its
3-15 capacity. The commission by rule may require the submission of
3-16 revised reports at specified intervals.
3-17 SECTION 4. Section 13.187(d), Water Code, is amended to read
3-18 as follows:
3-19 (d) Except to implement a rate <an approved purchased water
3-20 pass through> adjustment provision approved by the regulatory
3-21 authority by rule or ordinance, as applicable, or to adjust the
3-22 rates of a newly acquired utility system, a utility or two or more
3-23 utilities under common control and ownership may not file a
3-24 statement of intent to increase its rates more than once in a
3-25 12-month period, unless the regulatory authority determines that a
3-26 financial hardship exists. If the regulatory authority requires
3-27 the utility to deliver a corrected statement of intent, the utility
4-1 is not considered to be in violation of the 12-month filing
4-2 requirement.
4-3 SECTION 5. Section 13.250(b), Water Code, is amended to read
4-4 as follows:
4-5 (b) Unless the commission issues a certificate that neither
4-6 the present nor future convenience and necessity will be adversely
4-7 affected, the holder of a certificate or a person who possesses
4-8 facilities used to provide utility service shall not discontinue,
4-9 reduce, or impair service to a certified service area or part of a
4-10 certified service area except for:
4-11 (1) nonpayment of charges for services provided by the
4-12 certificate holder or a person who possesses facilities used to
4-13 provide utility service;
4-14 (2) nonpayment of charges for sewer service provided
4-15 by another retail public utility under an agreement between the
4-16 retail public utility and the certificate holder or a person who
4-17 possesses facilities used to provide utility service or under a
4-18 commission-ordered arrangement between the two service providers
4-19 <commission order>;
4-20 (3) nonuse; or
4-21 (4) other similar reasons in the usual course of
4-22 business.
4-23 SECTION 6. Subchapter G, Chapter 13, Water Code, is amended
4-24 by adding Section 13.2502 to read as follows:
4-25 Sec. 13.2502. SERVICE EXTENSIONS BY WATER SUPPLY AND SEWER
4-26 SERVICE CORPORATION OR SPECIAL UTILITY DISTRICT. (a)
4-27 Notwithstanding Section 13.250, a water supply or sewer service
5-1 corporation or a special utility district organized under Chapter
5-2 65 is not required to extend retail water or sewer utility service
5-3 within the certificated area of the corporation or special utility
5-4 district to a service applicant in a subdivision if the corporation
5-5 or special utility district documents that:
5-6 (1) the developer of the subdivision has failed to
5-7 comply with the subdivision service extension policy of the
5-8 corporation or special utility district as set forth in the tariff
5-9 of the corporation or the policies of the special utility district;
5-10 and
5-11 (2) the service applicant purchased the property after
5-12 the corporation or special utility district gave notice as provided
5-13 by this section of the rules of the corporation or special utility
5-14 district applicable to service to subdivisions from the corporation
5-15 or special utility district.
5-16 (b) Publication of notice in a newspaper of general
5-17 circulation in each county in which the corporation or special
5-18 utility district is certificated for utility service of the
5-19 requirement to comply with the subdivision service extension policy
5-20 constitutes notice under this section. The notice must be
5-21 published once a week for two consecutive weeks on a biennial basis
5-22 and must contain information describing the subdivision service
5-23 extension policy of the corporation or special utility district.
5-24 The corporation or special utility district must be able to provide
5-25 proof of publication through an affidavit of the publisher of the
5-26 newspaper that specifies each county in which the newspaper is
5-27 generally circulated.
6-1 (c) As an alternative to publication of notice as provided
6-2 by Subsection (b), a corporation or special utility district may
6-3 demonstrate by any reasonable means that a developer has been
6-4 notified for purposes of this section, including:
6-5 (1) an agreement executed by the developer;
6-6 (2) correspondence with the developer that sets forth
6-7 the subdivision service extension policy; or
6-8 (3) any other documentation that reasonably
6-9 establishes that the developer should be aware of the subdivision
6-10 service extension policy.
6-11 (d) This section does not limit or extend the jurisdiction
6-12 of the commission under Section 13.043(g).
6-13 (e) For purposes of this section:
6-14 (1) "Developer" means a person who subdivides land or
6-15 requests more than two water or sewer service connections on a
6-16 single contiguous tract of land.
6-17 (2) "Service applicant" means a person, other than a
6-18 developer, who applies for retail water or sewer utility service.
6-19 SECTION 7. Section 13.301(c), Water Code, is amended to read
6-20 as follows:
6-21 (c) Before the expiration of the 120-day notification
6-22 period, the executive director shall notify all known parties to
6-23 the transaction of the executive director's decision whether to
6-24 request that the commission hold a public hearing to determine if
6-25 the transaction will serve the public interest. The executive
6-26 director may request a hearing if:
6-27 (1) the notification to the commission or the public
7-1 notice was improper;
7-2 (2) the person purchasing or acquiring the water or
7-3 sewer system is inexperienced as a utility service provider;
7-4 (3) the person or an affiliated interest of the person
7-5 purchasing or acquiring the water or sewer system has a history of
7-6 noncompliance with the requirements of the commission or the Texas
7-7 Department of Health or of continuing mismanagement or misuse of
7-8 revenues as a utility service provider; <or>
7-9 (4) the person purchasing or acquiring the water or
7-10 sewer system cannot demonstrate the financial ability to provide
7-11 the necessary capital investment to ensure the provision of
7-12 continuous and adequate service to the customers of the water or
7-13 sewer system; or
7-14 (5) there are concerns that the transaction may not
7-15 serve the public interest, after the application of the
7-16 considerations provided by Section 13.246(c) for determining
7-17 whether to grant a certificate of convenience and necessity.
7-18 SECTION 8. Section 13.304, Water Code, is amended to read as
7-19 follows:
7-20 Sec. 13.304. FORECLOSURE REPORT. (a) A utility that receives
7-21 notice that all or a portion of the utility's facilities or
7-22 property used to provide utility service are being posted for
7-23 foreclosure shall notify the commission in writing of that fact not
7-24 later than the 10th day after the date on which the utility
7-25 receives the notice.
7-26 (b) A financial institution that forecloses on a utility or
7-27 on any part of the utility's facilities or property that are used
8-1 to provide utility service is not required to provide the 120-day
8-2 notice prescribed by Section 13.301, but shall provide written
8-3 notice to the commission before the 30th day preceding the date on
8-4 which the foreclosure is completed.
8-5 (c) The financial institution may operate the utility for an
8-6 interim period prescribed by commission rule before transferring or
8-7 otherwise obtaining a certificate of convenience and necessity. A
8-8 financial institution that operates a utility during an interim
8-9 period under this subsection is subject to each commission rule to
8-10 which the utility was subject and in the same manner.
8-11 SECTION 9. This Act takes effect September 1, 1995.
8-12 SECTION 10. The importance of this legislation and the
8-13 crowded condition of the calendars in both houses create an
8-14 emergency and an imperative public necessity that the
8-15 constitutional rule requiring bills to be read on three several
8-16 days in each house be suspended, and this rule is hereby suspended.