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.