1-1 By: Cook (Senate Sponsor - Nixon) H.B. No. 2925 1-2 (In the Senate - Received from the House May 12, 1995; 1-3 May 16, 1995, read first time and referred to Committee on Natural 1-4 Resources; May 19, 1995, reported favorably by the following vote: 1-5 Yeas 10, Nays 0; May 19, 1995, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to the sale or transfer of Water Supply or Sewer Service 1-9 Corporation stock, membership, or other right of participation of 1-10 the person or entity to whom the membership is transferred. 1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-12 SECTION 1. Section 9A, Chapter 76, Acts of the 43rd 1-13 Legislature, 1st Called Session, 1933 (Article 1434a, Vernon's 1-14 Texas Civil Statutes), is amended to read as follows: 1-15 Sec. 9A. (a) A person or entity that owns any stock of, is 1-16 a member of, or has some other right of participation in a 1-17 corporation may not sell or transfer that stock, membership, or 1-18 other right of participation to another person or entity except: 1-19 (1) by will to a transferee who is a person related to 1-20 the testator within the second degree by consanguinity; 1-21 (2) by transfer without compensation to a transferee 1-22 who is a person related to the owner of the stock or other interest 1-23 within the second degree by consanguinity; or 1-24 (3) by transfer without compensation or by sale to the 1-25 corporation. 1-26 (b) Subsection (a) of this section does not apply to a 1-27 person or entity that transfers the membership or other right of 1-28 participation to another person or entity as part of the conveyance 1-29 of real estate from which the membership or other right of 1-30 participation arose. 1-31 (c) The transfer of stock, a membership, or another right of 1-32 participation under this section does not entitle the transferee to 1-33 water or sewer service unless each condition for water or sewer 1-34 service is met as provided in the corporation's published rates, 1-35 charges, and conditions of service. All transfer and service 1-36 applications shall be completed on the corporation's standardized 1-37 forms, and filed with the corporation's office in a timely manner. 1-38 However, the conditions of service may not require a personal 1-39 appearance in the office of the corporation if the transferee 1-40 certifies in writing to the corporation that the transferee accepts 1-41 and agrees to abide by such rates, charges, and conditions of 1-42 service. Water or sewer service provided by the corporation as a 1-43 result of stock, membership, or other right of participation may be 1-44 conditioned on ownership of the real estate designated to receive 1-45 service and from which the membership or other right of 1-46 participation arose. 1-47 (d) The corporation may cancel a person's or other entity's 1-48 stock, membership, or other right of participation if the person or 1-49 other entity fails to meet the conditions for water or sewer 1-50 service prescribed by the corporation's published rates, charges, 1-51 and conditions of service, or fails to comply with any other 1-52 condition placed on the receipt of water or sewer service under the 1-53 stock, membership, or other right of participation authorized under 1-54 Subsection (c) of this section. The corporation may, consistent 1-55 with the limitations prescribed by Subsection (a) of this section, 1-56 reassign canceled stock, or a canceled membership, or other right 1-57 of participation to any person or entity that has legal title to 1-58 the real estate from which the canceled membership or other right 1-59 of participation arose and for which water or sewer service is 1-60 requested, subject to compliance with the conditions for water or 1-61 sewer service prescribed by the corporation's published rates, 1-62 charges, and conditions of service. 1-63 (e) The corporation shall reassign, without limitation under 1-64 Subsection (a), canceled stock, or a canceled membership or other 1-65 right of participation to a person or entity that acquires the real 1-66 estate from which the membership or other right of participation 1-67 arose through judicial or nonjudicial foreclosure, subject to 1-68 compliance with the conditions for water or sewer service 2-1 prescribed by the corporation's published rates, charges, and 2-2 conditions of service. The corporation may require proof of 2-3 ownership resulting from such foreclosure. 2-4 SECTION 2. The importance of this legislation and the 2-5 crowded condition of the calendars in both houses create an 2-6 emergency and an imperative public necessity that the 2-7 constitutional rule requiring bills to be read on three several 2-8 days in each house be suspended, and this rule is hereby suspended, 2-9 and that this Act take effect and be in force from and after its 2-10 passage, and it is so enacted. 2-11 * * * * *