By Cook H.B. No. 2925
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the sale or transfer of Water Supply or Sewer Service
1-3 Corporation stock, membership, or other right of participation of
1-4 the person or entity to whom the membership is transferred.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 9A, Chapter 76, Acts of the 43rd
1-7 Legislature, 1st Called Session, 1933 (Article 1434a, Vernon's
1-8 Texas Civil Statutes), is amended to read as follows:
1-9 Sec. 9A. (a) A person or entity that owns any stock of, is
1-10 a member of, or has some other right of participation in a
1-11 corporation may not sell or transfer that stock, membership, or
1-12 other right of participation to another person or entity except:
1-13 (1) by will to a transferee who is a person related to
1-14 the testator within the second degree by consanguinity;
1-15 (2) by transfer without compensation to a transferee
1-16 who is a person related to the owner of the stock or other interest
1-17 within the second degree by consanguinity; or
1-18 (3) by transfer without compensation or by sale to the
1-19 corporation.
1-20 (b) Subsection (a) of this section does not apply to a
1-21 person or entity that transfers the membership or other right of
1-22 participation to another person or entity as part of the conveyance
1-23 of real estate from which the membership or other right of
2-1 participation arose.
2-2 (c) The transfer of stock, a membership, or another right of
2-3 participation under this section does not entitle the transferee to
2-4 water or sewer service unless each condition for water or sewer
2-5 service is met as provided in the corporation's published rates,
2-6 charges, and conditions of service. All transfer and service
2-7 applications shall be completed on the corporation's standardized
2-8 forms, and filed with the corporation's office in a timely manner.
2-9 However, the conditions of service may not require a personal
2-10 appearance in the office of the corporation if the transferee
2-11 certifies in writing to the corporation that the transferee accepts
2-12 and agrees to abide by such rates, charges, and conditions of
2-13 service. Water or sewer service provided by the corporation as a
2-14 result of stock, membership, or other right of participation may be
2-15 conditioned on ownership of the real estate designated to receive
2-16 service and from which the membership or other right of
2-17 participation arose.
2-18 (d) The corporation may cancel a person's or other entity's
2-19 stock, membership, or other right of participation if the person or
2-20 other entity fails to meet the conditions for water or sewer
2-21 service prescribed by the corporation's published rates, charges,
2-22 and conditions of service, or fails to comply with any other
2-23 condition placed on the receipt of water or sewer service under the
2-24 stock, membership, or other right of participation authorized under
2-25 Subsection (c) of this section. The corporation may, consistent
3-1 with the limitations prescribed by Subsection (a) of this section,
3-2 reassign canceled stock, or a canceled membership, or other right
3-3 of participation to any person or entity that has legal title to
3-4 the real estate from which the canceled membership or other right
3-5 of participation arose and for which water or sewer service is
3-6 requested, subject to compliance with the conditions for water or
3-7 sewer service prescribed by the corporation's published rates,
3-8 charges, and conditions of service.
3-9 (e) The corporation shall reassign, without limitation under
3-10 Subsection (a), canceled stock, or a canceled membership or other
3-11 right of participation to a person or entity that acquires the real
3-12 estate from which the membership or other right of participation
3-13 arose through judicial or nonjudicial foreclosure, subject to
3-14 compliance with the conditions for water or sewer service
3-15 prescribed by the corporation's published rates, charges, and
3-16 conditions of service. The corporation may require proof of
3-17 ownership resulting from such foreclosure.
3-18 SECTION 2. The importance of this legislation and the
3-19 crowded condition of the calendars in both houses create an
3-20 emergency and an imperative public necessity that the
3-21 constitutional rule requiring bills to be read on three several
3-22 days in each house be suspended, and this rule is hereby suspended,
3-23 and that this Act take effect and be in force from and after its
3-24 passage, and it is so enacted.