HBA-NLM, PDH H.B. 1362 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1362 By: Clark Land & Resource Management 2/25/1999 Introduced BACKGROUND AND PURPOSE Currently, Section 13.255, Water Code, provides a mechanism for municipalities in Texas to be granted a single certification to provide water and sewer service for areas within their corporate limits when the certificate of convenience and necessity for those areas was previously held by another retail public utility. This situation generally arises when a previously rural area is incorporated or is annexed into a municipality due to urban growth. Currently, the municipality compensates the retail public utility for the transferred service area and infrastructure. This compensation is determined by an appraiser selected solely by the retail public utility with the cost of the appraiser to be paid by the municipality. The appraiser's decision is binding on the Texas Natural Resource Conservation Commission (TNRCC). The current law may create an appearance of unfairness and, if a dispute arises, the municipality's only recourse is to take legal action. H.B. 1362 provides a statutory due process mechanism whereby disputes over an appraiser's qualifications may be equitably resolved by the parties or TNRCC. The bill authorizes the retail public utility and the municipality to each select an appraiser if they cannot agree on a single appraiser and authorizes a retail public utility or a municipality to petition TNRCC to appoint a third appraiser if the two appraisers cannot agree on a compensation amount. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 13.255, Water Code, by amending Subsection (l) and adding Subsection (n), as follows: (l) Requires the amount of compensation to be paid to a retail public utility (utility) under this section, rather than the compensation provided under Subsection (g), to be determined by a qualified individual or firm to serve as independent appraiser, who shall be selected by the affected utility, except as provided under Subsection (n). Subsection (g) provides guidelines to ensure that the compensation to a utility for the taking, damaging, and/or loss of personal property is just and adequate. (n) Requires that the amount of compensation to be paid to the utility be determined by a qualified individual or firm serving as an independent appraiser agreed upon by the utility and municipality if the affected utility is located in an area annexed under Sections 43.023 (Authority of General-Law Municipality with Population of More Than 5,000 to Annex Area on Petition and Election of Area Voters), 43.024 (Authority of Type A General-Law Municipality to Annex Area on Request of Area Voters), 43.025 (Authority of Type B General-Law Municipality to Annex Area on Request of Area Voters), or 43.028 (Authority of Municipalities to Annex Sparsely Occupied Area on Petition of Area Landowners), Local Government Code. Requires that the utility and municipality appoint an individual or firm to serve as an independent appraiser within 10 days after the utility or municipality notifies the other of an impasse if the utility and the municipality are unable to agree on a single individual or firm to serve as independent appraiser. Requires the independent appraisers to meet within 10 working days after their appointment to attempt to reach an agreed determination of the amount of compensation. Authorizes the utility or the municipality to petition the Texas Natural Resource Conservation Commission (commission), or a person designated by the commission for this purpose, to appoint a third independent appraiser to reconcile the appraisals of the other appraisers if the appraisers are unable to agree on a determination of compensation within 16 days after the first meeting. Prohibits the determination of the third appraiser from being less than the lesser or more than the greater of the two appraisals. Provides that a determination of compensation reached under this subsection is binding on the commission. Requires the utility and the municipality to share equally the costs of a third appraiser appointed under this subsection. SECTION 2.Emergency clause. Effective date: upon passage.