H.B. No. 2925 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.