By Solomons H.B. No. 644
75R2585 JJT-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to protection of public drinking water systems.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 341.031(a), Health and Safety Code, is
1-5 amended to read as follows:
1-6 (a) Public drinking water must be free from deleterious
1-7 matter and must comply with the standards established by the
1-8 commission[, the United States Public Health Service,] or the
1-9 United States Environmental Protection Agency. The commission may
1-10 adopt and enforce rules to implement the federal Safe Drinking
1-11 Water Act (42 U.S.C. Section 300f et seq.).
1-12 SECTION 2. Subchapter C, Chapter 341, Health and Safety
1-13 Code, is amended by adding Section 341.0315 to read as follows:
1-14 Sec. 341.0315. PUBLIC DRINKING WATER SUPPLY SYSTEM
1-15 REQUIREMENTS. (a) To preserve the public health, safety, and
1-16 welfare, the commission shall ensure that public drinking water
1-17 supply systems:
1-18 (1) supply safe drinking water in adequate quantities;
1-19 (2) are financially stable; and
1-20 (3) are technically sound.
1-21 (b) The commission shall encourage and promote the
1-22 development and use of regional and areawide drinking water supply
1-23 systems.
1-24 (c) Each public drinking water supply system shall provide
2-1 an adequate and safe drinking water supply. The supply must meet
2-2 the requirements of Section 341.031 and commission rules.
2-3 SECTION 3. Subchapter C, Chapter 341, Health and Safety
2-4 Code, is amended by amending Section 341.035 and by adding Sections
2-5 341.0351-341.0356 to read as follows:
2-6 Sec. 341.035. APPROVED PLANS REQUIRED FOR PUBLIC WATER
2-7 SUPPLIES. (a) Except as provided by Subsection (d), a person may
2-8 not begin construction of a public drinking water supply system
2-9 unless:
2-10 (1) the executive director approves a business plan
2-11 for the system; and
2-12 (2) the commission approves the plans and
2-13 specifications for the system.
2-14 (b) The prospective owner or operator of the system must
2-15 provide the executive director a business plan that demonstrates
2-16 the system has available the financial, managerial, and technical
2-17 resources adequate to ensure future operation of the system in
2-18 accordance with applicable laws and rules. The executive director
2-19 shall:
2-20 (1) review the business plan; and
2-21 (2) order the prospective owner or operator of the
2-22 system to provide adequate financial assurance of ability to
2-23 operate the system in accordance with applicable laws and rules, in
2-24 the form of a bond or as specified by the commission, unless the
2-25 executive director finds the business plan demonstrates adequate
2-26 financial capability.
2-27 (c) The prospective owner or operator of the system shall
3-1 provide to the commission [A person contemplating establishing a
3-2 drinking water supply system for public use must submit] completed
3-3 plans and specifications for review and approval in accordance with
3-4 commission rules adopting standards.
3-5 (d) A person is not required to file a business plan under
3-6 Subsection (a) or (b) if the person:
3-7 (1) is a county;
3-8 (2) is a retail public utility as defined by Section
3-9 13.002, Water Code, unless that person is a water and sewer utility
3-10 as defined by that section; or
3-11 (3) has executed an agreement with a political
3-12 subdivision to transfer the ownership and operation of the water
3-13 supply system to the political subdivision [to the commission
3-14 before construction of the system. The commission shall approve
3-15 plans that conform to the state's water safety laws. The water
3-16 supply system may be established only on the commission's
3-17 approval].
3-18 Sec. 341.0351. NOTIFICATION OF SYSTEM CHANGES. [(b)] Any
3-19 agency, including a municipality, supplying a drinking water
3-20 service to the public that intends to make a material or major
3-21 change in a water supply system that may affect the sanitary
3-22 features of that utility must give written notice of that intention
3-23 to the commission before making the change.
3-24 Sec. 341.0352. ADVERTISED QUALITY OF WATER SUPPLY. [(c)] A
3-25 water supply system owner, manager, or operator or an agent of a
3-26 water supply system owner, manager, or operator may not advertise
3-27 or announce a water supply as being of a quality other than the
4-1 quality that is disclosed by the commission's latest rating.
4-2 Sec. 341.0353. DRINKING WATER SUPPLY COMPARATIVE RATING
4-3 INFORMATION. [(d)] The commission shall assemble and tabulate all
4-4 necessary information [data] relating to public drinking water
4-5 supplies at least once each year and as often during the year as
4-6 conditions demand or justify. The information [data] forms the
4-7 basis of an official comparative rating of public drinking water
4-8 supply systems.
4-9 Sec. 341.0354. HIGHWAY SIGNS FOR APPROVED SYSTEM RATING.
4-10 [(e)] A water supply system that attains an approved rating is
4-11 entitled to erect signs of a design approved by the commission on
4-12 highways approaching the municipality in which the water supply
4-13 system is located. The signs shall be immediately removed on
4-14 notice from the commission if the water supply system does not
4-15 continue to meet the specified standards.
4-16 Sec. 341.0355. FINANCIAL ASSURANCE FOR CERTAIN SYSTEMS. The
4-17 commission shall require the owner or operator of a public drinking
4-18 water supply system that was constructed without the approval
4-19 required by Section 341.035 and that has a history of noncompliance
4-20 with this subchapter or commission rules or is subject to a
4-21 commission enforcement action to:
4-22 (1) provide the executive director with a business
4-23 plan that demonstrates that the system has available the financial,
4-24 managerial, and technical resources adequate to ensure future
4-25 operation of the system in accordance with applicable laws and
4-26 rules; and
4-27 (2) provide adequate financial assurance of the
5-1 ability to operate the system in accordance with applicable laws
5-2 and rules in the form of a bond or as specified by the commission.
5-3 Sec. 341.0356. ORDER TO STOP OPERATIONS. (a) A public
5-4 water supply system shall stop operations on receipt of a written
5-5 order of the executive director or the commission issued under this
5-6 section.
5-7 (b) The executive director or the commission may order a
5-8 public water supply system to stop operations if:
5-9 (1) the system was constructed without the approval
5-10 required by Section 341.035; or
5-11 (2) the executive director determines the system
5-12 presents an imminent health hazard.
5-13 (c) An order issued under this section may be delivered by
5-14 personal service or by mail.
5-15 (d) A water supply system subject to an order under this
5-16 section, on written request, is entitled to an opportunity for an
5-17 expedited hearing at a commission agenda.
5-18 (e) The public water supply system may not resume operations
5-19 until the commission, the executive director, or a court authorizes
5-20 the resumption.
5-21 SECTION 4. Sections 341.047(a) and (b), Health and Safety
5-22 Code, are amended to read as follows:
5-23 (a) A person commits an offense if the person:
5-24 (1) violates a provision of Section 341.031;
5-25 (2) violates a provision of Section 341.032(a) or (b);
5-26 (3) violates a provision of Section 341.033(a)-(f);
5-27 (4) constructs a drinking water supply system without
6-1 submitting completed plans and specifications as required by
6-2 Section 341.035(c) [341.035(a)];
6-3 (5) begins construction of [establishes] a drinking
6-4 water supply system without the commission's approval as required
6-5 by Section 341.035(a);
6-6 (6) violates a provision of Section 341.0351 or
6-7 341.0352 [341.035(b) or (c)];
6-8 (7) fails to remove a sign as required by Section
6-9 341.0354 [341.035(e)]; or
6-10 (8) violates a provision of Section 341.036.
6-11 (b) An offense under Subsection (a) is a Class C misdemeanor
6-12 [punishable by a fine of not less than $100].
6-13 SECTION 5. Sections 341.048(b)-(i), Health and Safety Code,
6-14 are amended to read as follows:
6-15 (b) A person who causes, suffers, allows, or permits a
6-16 violation under this subchapter shall be assessed a civil penalty
6-17 of not less than $50 nor more than $10,000 [$500] for each
6-18 violation. Each day of a continuing violation is a separate
6-19 violation.
6-20 (c) [If it is shown on a trial of the defendant that the
6-21 defendant has previously been assessed a civil penalty under this
6-22 section within a year before the date on which the violation being
6-23 tried occurred, the defendant shall be assessed a civil penalty of
6-24 not less than $50 nor more than $1,000 for each subsequent
6-25 violation under this subchapter. Each day of a continuing
6-26 violation is a separate violation.]
6-27 [(d)] If it appears that a person has violated, is
7-1 violating, or threatens to violate a provision under this
7-2 subchapter, the commission, a county, or a municipality may
7-3 institute a civil suit in a district court for:
7-4 (1) injunctive relief to restrain the person from
7-5 continuing the violation or threat of violation;
7-6 (2) the assessment and recovery of a civil penalty; or
7-7 (3) both injunctive relief and a civil penalty.
7-8 (d) [(e)] The commission is a necessary and indispensable
7-9 party in a suit brought by a county or municipality under this
7-10 section.
7-11 (e) [(f)] On the commission's request, the attorney general
7-12 shall institute a suit in the name of the state for injunctive
7-13 relief, to recover a civil penalty, or for both injunctive relief
7-14 and civil penalty.
7-15 (f) [(g)] The suit may be brought in:
7-16 (1) Travis County;
7-17 (2) [, in] the county in which the defendant resides;
7-18 or
7-19 (3) [, or in] the county in which the violation or
7-20 threat of violation occurs.
7-21 (g) [(h)] In a suit under this section to enjoin a violation
7-22 or threat of violation of this subchapter, the court shall grant
7-23 the state, county, or municipality, without bond or other
7-24 undertaking, any injunction that the facts may warrant including
7-25 temporary restraining orders, temporary injunctions after notice
7-26 and hearing, and permanent injunctions.
7-27 (h) [(i)] Civil penalties recovered in a suit brought under
8-1 this section by a county or municipality shall be equally divided
8-2 between:
8-3 (1) the state; and
8-4 (2) the county or municipality that first brought the
8-5 suit.
8-6 SECTION 6. Section 341.049(a), Health and Safety Code, is
8-7 amended to read as follows:
8-8 (a) If a person causes, suffers, allows, or permits a
8-9 violation of this subchapter or a rule or order adopted under this
8-10 subchapter, the commission may assess a penalty against that person
8-11 as provided by this section. The penalty shall not be less than
8-12 $50 nor more than $10,000 [$500] for each violation. Each day of a
8-13 continuing violation may be considered a separate violation.
8-14 SECTION 7. Section 13.301, Water Code, is amended to read as
8-15 follows:
8-16 Sec. 13.301. REPORT OF SALE, MERGER, ETC.; INVESTIGATION;
8-17 DISALLOWANCE OF TRANSACTION. (a) A utility or a water supply or
8-18 sewer service corporation, on or before the 120th day before the
8-19 effective date of a sale, acquisition, lease, or rental of a water
8-20 or sewer system that is required by law to possess a certificate of
8-21 public convenience and necessity or the effective date of a merger
8-22 or consolidation with such a water supply or sewer service
8-23 corporation, shall:
8-24 (1) file a written application with [notify] the
8-25 commission; and
8-26 (2) [give public notice] unless public notice is
8-27 waived by the executive director for good cause shown, give public
9-1 notice of the action [at least 120 days before the effective date
9-2 of any sale, acquisition, lease, or rental of any water or sewer
9-3 system required by law to possess a certificate of public
9-4 convenience and necessity or of any merger or consolidation with
9-5 such a utility or water supply or sewer service corporation].
9-6 (b) If the person purchasing or acquiring the water or sewer
9-7 system is a utility, the application must include a business plan
9-8 that demonstrates the system has available the financial,
9-9 managerial, and technical resources adequate to provide continuous
9-10 and adequate service to the service area being acquired and to all
9-11 service areas for which the utility is certificated. If the
9-12 executive director finds that the utility has not demonstrated
9-13 adequate financial capability to provide that service, the
9-14 executive director may order the utility to provide adequate
9-15 financial assurance in the form of a bond or as specified by the
9-16 commission.
9-17 (c) The commission shall, with or without a public hearing,
9-18 investigate the sale, acquisition, lease, or rental to determine
9-19 whether the transaction will serve the public interest.
9-20 (d) [(c)] Before the expiration of the 120-day notification
9-21 period, the executive director shall notify all known parties to
9-22 the transaction of the executive director's decision whether to
9-23 request that the commission hold a public hearing to determine if
9-24 the transaction will serve the public interest. The executive
9-25 director may request a hearing if:
9-26 (1) the application filed with [notification to] the
9-27 commission or the public notice was improper;
10-1 (2) the person purchasing or acquiring the water or
10-2 sewer system is inexperienced as a utility service provider;
10-3 (3) the person or an affiliated interest of the person
10-4 purchasing or acquiring the water or sewer system has a history of:
10-5 (A) noncompliance with the requirements of the
10-6 commission or the Texas Department of Health; or
10-7 (B) [of] continuing mismanagement or misuse of
10-8 revenues as a utility service provider;
10-9 (4) the person purchasing or acquiring the water or
10-10 sewer system cannot demonstrate the financial ability to provide
10-11 the necessary capital investment to ensure the provision of
10-12 continuous and adequate service to the customers of the water or
10-13 sewer system; or
10-14 (5) there are concerns that the transaction may not
10-15 serve the public interest, after the application of the
10-16 considerations provided by Section 13.246(c) for determining
10-17 whether to grant a certificate of convenience and necessity.
10-18 (e) [(d)] Unless the executive director requests that a
10-19 public hearing be held, the sale, acquisition, lease, or rental may
10-20 be completed as proposed:
10-21 (1) at the end of the 120-day period; or
10-22 (2) [may be completed] at any time after the executive
10-23 director notifies the utility or water supply or sewer service
10-24 corporation that a hearing will not be requested.
10-25 (f) If a hearing is requested or if the utility or water
10-26 supply or sewer service corporation fails to make the application
10-27 as [provide the] required [notification] or to provide public
11-1 notice, the sale, acquisition, lease, or rental may not be
11-2 completed unless the commission determines that the proposed
11-3 transaction serves the public interest.
11-4 (g) A sale, acquisition, lease, or rental of any water or
11-5 sewer system required by law to possess a certificate of public
11-6 convenience and necessity that is not completed in accordance with
11-7 the provisions of this section is void.
11-8 (h) [(e)] This section does not apply to:
11-9 (1) the purchase of replacement property; or
11-10 (2) [to] a transaction under Section 13.255 of this
11-11 code.
11-12 (i) [(f)] If a public utility facility or system is sold and
11-13 the facility or system was partially or wholly constructed with
11-14 customer contributions in aid of construction derived from specific
11-15 surcharges approved by the regulatory authority over and above
11-16 revenues required for normal operating expenses and return, the
11-17 public utility may not sell or transfer any of its assets, its
11-18 certificate of convenience and necessity, or its controlling
11-19 interest in an incorporated utility, unless the utility provides to
11-20 the purchaser or transferee before the date of the sale or transfer
11-21 a written disclosure relating to the contributions. The disclosure
11-22 must contain, at a minimum, the total dollar amount of the
11-23 contributions and a statement that the contributed property or
11-24 capital may not be included in invested capital or allowed
11-25 depreciation expense by the regulatory authority in rate-making
11-26 proceedings.
11-27 (j) [(g)] A utility or a water supply or sewer service
12-1 corporation that proposes to sell, assign, lease, or rent its
12-2 facilities shall notify the other party to the transaction of the
12-3 requirements of this section before signing an agreement to sell,
12-4 assign, lease, or rent its facilities.
12-5 SECTION 8. Section 13.302, Water Code, is amended to read as
12-6 follows:
12-7 Sec. 13.302. PURCHASE OF VOTING STOCK IN ANOTHER PUBLIC
12-8 UTILITY: REPORT. (a) A utility may not purchase voting stock in
12-9 another utility doing business in this state and a person may not
12-10 acquire a controlling interest in a utility doing business in this
12-11 state unless the person or utility files a written application with
12-12 [notifies] the commission [of the proposed purchase or acquisition]
12-13 not later than the 61st day before the date on which the
12-14 transaction is to occur. If a utility proposes to acquire a
12-15 controlling interest in another utility, the application must
12-16 include a business plan that demonstrates that the utility
12-17 acquiring the controlling interest has available the financial,
12-18 managerial, and technical resources adequate to provide continuous
12-19 and adequate service. If the executive director finds that the
12-20 utility has not demonstrated adequate financial capability to
12-21 provide that service, the executive director may order the utility
12-22 to provide adequate financial assurance in the form of a bond or as
12-23 specified by the commission.
12-24 (b) The executive director may request that the commission
12-25 hold a public hearing on the transaction if the executive director
12-26 believes that a criterion [criteria] prescribed by Section
12-27 13.301(d) [13.301(c)] of this code applies.
13-1 (c) Unless the executive director requests that a public
13-2 hearing be held, the purchase or acquisition may be completed as
13-3 proposed:
13-4 (1) at the end of the 60-day period; or
13-5 (2) [may be completed] at any time after the executive
13-6 director notifies the person or utility that a hearing will not be
13-7 requested.
13-8 (d) If a hearing is requested or if the person or utility
13-9 fails to make the application to the commission as [provide the]
13-10 required [notification to the commission], the purchase or
13-11 acquisition may not be completed unless the commission determines
13-12 that the proposed transaction serves the public interest. A
13-13 purchase or acquisition that is not completed in accordance with
13-14 the provisions of this section is void.
13-15 SECTION 9. Section 13.411, Water Code, is amended to read as
13-16 follows:
13-17 Sec. 13.411. ACTION TO ENJOIN OR REQUIRE COMPLIANCE. (a)
13-18 If it appears to the commission that any retail public utility or
13-19 any other person or corporation is engaged in or is about to engage
13-20 in any act in violation of this chapter or of any order or rule of
13-21 the commission entered or adopted under this chapter or that any
13-22 retail public utility or any other person or corporation is failing
13-23 to comply with this chapter or with any rule or order, the attorney
13-24 general on request of the commission, in addition to any other
13-25 remedies provided in this chapter, shall bring an action in a court
13-26 of competent jurisdiction in the name of and on behalf of the
13-27 commission against the retail public utility or other person or
14-1 corporation to enjoin the commencement or continuation of any act
14-2 or to require compliance with this chapter or the rule or order.
14-3 (b) If the executive director determines that the failure of
14-4 the owner or operator of a water utility to properly operate,
14-5 maintain, or provide adequate facilities presents an imminent
14-6 threat to human health or safety, the executive director shall
14-7 immediately:
14-8 (1) notify the utility's representative; and
14-9 (2) initiate enforcement action consistent with:
14-10 (A) this subchapter; and
14-11 (B) procedures adopted by the commission.
14-12 SECTION 10. Section 13.412, Water Code, is amended by
14-13 amending Subsection (a) and by adding Subsection (f) to read as
14-14 follows:
14-15 (a) At the request of the commission, the attorney general
14-16 shall bring suit for the appointment of a receiver to collect the
14-17 assets and carry on the business of a water or sewer utility that:
14-18 (1) has abandoned operation of its facilities;
14-19 (2) [or] violates a final order of the commission;
14-20 (3) [or] allows any property owned or controlled by it
14-21 to be used in violation of a final order of the commission;
14-22 (4) fails to pay a bill or obligation owed to a retail
14-23 public utility or to an electric or gas utility so that the utility
14-24 has issued a notice of discontinuance of necessary services;
14-25 (5) fails to provide appropriate water or wastewater
14-26 treatment so that a potential health hazard results;
14-27 (6) fails adequately to maintain a facility so that a
15-1 potential results for:
15-2 (A) low pressure;
15-3 (B) an extended outage;
15-4 (C) repeated service interruptions; or
15-5 (D) a health hazard;
15-6 (7) fails to provide customers adequate notice of a
15-7 health hazard or potential health hazard;
15-8 (8) fails to secure an alternative available water
15-9 supply during an outage;
15-10 (9) displays a pattern of hostility towards or
15-11 repeatedly fails to respond to the commission or the utility's
15-12 customers;
15-13 (10) fails to provide the commission with adequate
15-14 information on how to contact the utility for normal business and
15-15 emergency purposes; or
15-16 (11) informs the commission that the owner is
15-17 abandoning the system.
15-18 (f) Notwithstanding Section 64.031, Civil Practice and
15-19 Remedies Code, a receiver appointed under this section may apply to
15-20 the commission for approval to acquire the water and sewer
15-21 utility's facilities and transfer the utility's certificate of
15-22 convenience and necessity. The receiver must apply in accordance
15-23 with this chapter.
15-24 SECTION 11. Sections 13.4132(a) and (c), Water Code, are
15-25 amended to read as follows:
15-26 (a) The commission, after providing to the utility notice
15-27 and an opportunity for a hearing at a commission agenda, may
16-1 authorize a willing person to temporarily manage and operate a
16-2 utility if the utility:
16-3 (1) [that] has discontinued or abandoned operations or
16-4 the provision of services;
16-5 (2) has been or is being referred to the attorney
16-6 general for the appointment of a receiver under Section 13.412 of
16-7 this code;
16-8 (3) fails to pay a bill or obligation owed to a retail
16-9 public utility or to an electric or gas utility so that the utility
16-10 has issued a notice of discontinuance of necessary services;
16-11 (4) fails to provide appropriate water or wastewater
16-12 treatment so that a potential health hazard results;
16-13 (5) fails adequately to maintain a facility so that a
16-14 potential results for:
16-15 (A) low pressure;
16-16 (B) an extended outage;
16-17 (C) repeated service interruptions; or
16-18 (D) a health hazard;
16-19 (6) fails to provide customers adequate notice of a
16-20 health hazard or potential health hazard;
16-21 (7) fails to secure an alternative available water
16-22 supply during an outage;
16-23 (8) displays a pattern of hostility towards or
16-24 repeatedly fails to respond to the commission or the utility's
16-25 customers;
16-26 (9) fails to provide the commission with adequate
16-27 information on how to contact the utility for normal business and
17-1 emergency purposes; or
17-2 (10) informs the commission that the owner is
17-3 abandoning the system.
17-4 (c) A person appointed under this section has the powers and
17-5 duties necessary to ensure the continued operation of the utility
17-6 and the provision of continuous and adequate services to customers,
17-7 including the power and duty to:
17-8 (1) read meters;
17-9 (2) bill for utility services;
17-10 (3) collect revenues;
17-11 (4) disburse funds;
17-12 (5) access all system components; and
17-13 (6) [(5)] request rate increases.
17-14 SECTION 12. This Act takes effect September 1, 1997.
17-15 SECTION 13. (a) The requirement of Section 341.035, Health
17-16 and Safety Code, as amended by this Act, that certain persons must
17-17 provide the executive director of the Texas Natural Resource
17-18 Conservation Commission with a business plan, applies only to the
17-19 prospective owner or operator of a public drinking water supply
17-20 system for which construction begins on or after September 1, 1997.
17-21 (b) Section 341.0355, Health and Safety Code, as added by
17-22 this Act, applies to the owner or operator of a public drinking
17-23 water supply system regardless of the date construction of the
17-24 system began.
17-25 SECTION 14. (a) A change in law made by this Act that
17-26 applies to a criminal, civil, or administrative penalty applies
17-27 only to an offense committed or violation that occurs on or after
18-1 the effective date of this Act.
18-2 (b) An offense committed or violation that occurs before the
18-3 effective date of this Act is governed by the law in effect
18-4 immediately before that date and that law is continued in effect
18-5 for that purpose.
18-6 SECTION 15. The importance of this legislation and the
18-7 crowded condition of the calendars in both houses create an
18-8 emergency and an imperative public necessity that the
18-9 constitutional rule requiring bills to be read on three several
18-10 days in each house be suspended, and this rule is hereby suspended.