By Turner of Harris                                    H.B. No. 724
         77R1506 MTB-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the transfer of the Texas Natural Resource Conservation
 1-3     Commission's powers and duties regarding water rates and services
 1-4     to the Public Utility Commission of Texas.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1.  Section 5.013(a), Water Code, is amended to read
 1-7     as follows:
 1-8           (a)  The commission has general jurisdiction over:
 1-9                 (1)  water and water rights including the issuance of
1-10     water rights permits, water rights adjudication, cancellation of
1-11     water rights, and enforcement of water rights;
1-12                 (2)  continuing supervision over districts created
1-13     under Article III, Sections 52(b)(1) and (2), and Article XVI,
1-14     Section 59, of the Texas Constitution;
1-15                 (3)  the state's water quality program including
1-16     issuance of permits, enforcement of water quality rules, standards,
1-17     orders, and permits, and water quality planning;
1-18                 (4)  the state's weather modification program including
1-19     the issuance of permits and licenses and the enforcement of
1-20     permits, licenses, rules, standards, and orders relating to weather
1-21     modification;
1-22                 (5)  the determination of the feasibility of certain
1-23     federal projects;
1-24                 (6)  the adoption and enforcement of rules and
 2-1     performance of other acts relating to the safe construction,
 2-2     maintenance, and removal of dams;
 2-3                 (7)  conduct of the state's hazardous spill prevention
 2-4     and control program;
 2-5                 (8)  the administration of the state's program relating
 2-6     to inactive hazardous substance, pollutant, and contaminant
 2-7     disposal facilities;
 2-8                 (9)  the administration of a portion of the state's
 2-9     injection well program;
2-10                 (10)  the administration of the state's programs
2-11     involving underground water and water wells and drilled and mined
2-12     shafts;
2-13                 (11)  the state's responsibilities relating to regional
2-14     waste disposal;
2-15                 (12)  the responsibilities assigned to the commission
2-16     by Chapters 361, 363, 382, 401, and 402, Health and Safety Code;
2-17                 (13)  the administration of the national flood
2-18     insurance program; and
2-19                 (14)  [administration of the state's water rate program
2-20     under Chapter 13 of this code; and]
2-21                 [(15)]  any other areas assigned to the commission by
2-22     this code and other laws of this state.
2-23           SECTION 2.  Section 5.235(n), Water Code, is amended to read
2-24     as follows:
2-25           (n)[(1)  Each provider of potable water or sewer utility
2-26     service shall collect a regulatory assessment from each retail
2-27     customer as follows:]
 3-1                       [(A)  A public utility as defined in Section
 3-2     13.002 of this code shall collect from each retail customer a
 3-3     regulatory assessment equal to one percent of the charge for retail
 3-4     water or sewer service.]
 3-5                       [(B)  A water supply or sewer service corporation
 3-6     as defined in Section 13.002 of this code shall collect from each
 3-7     retail customer a regulatory assessment equal to one-half of one
 3-8     percent of the charge for retail water or sewer service.]
 3-9                       [(C)  A district as defined in Section 49.001 of
3-10     this code that provides potable water or sewer utility service to
3-11     retail customers shall collect from each retail customer a
3-12     regulatory assessment equal to one-half of one percent of the
3-13     charge for retail water or sewer service.]
3-14                 [(2)  The regulatory assessment may be listed on the
3-15     customer's bill as a separate item and shall be collected in
3-16     addition to other charges for utility services.]
3-17                 [(3)  The commission shall use the assessments
3-18     collected under this subsection solely to pay costs and expenses
3-19     incurred by the commission in the regulation of districts, water
3-20     supply or sewer service corporations, and public utilities under
3-21     Chapter 13, Water Code.]
3-22                 [(4)  The commission shall annually use a portion of
3-23     the assessments to provide on-site technical assistance and
3-24     training to public utilities, water supply or sewer service
3-25     corporations, and districts.  The commission shall contract with
3-26     others to provide the services.]
3-27                 [(5)  The commission by rule may establish due dates,
 4-1     collection procedures, and penalties for late payment related to
 4-2     regulatory assessments under this subsection.  The executive
 4-3     director shall collect all assessments from the utility service
 4-4     providers.]
 4-5                 [(6)]  The commission shall assess a penalty against a
 4-6     municipality with a population of more than 1.5 million that does
 4-7     not provide municipal water and sewer services in an annexed area
 4-8     in accordance with Section 43.0565, Local Government Code.  A
 4-9     penalty assessed under this subsection [paragraph] shall be not
4-10     more than $1,000 for each day the services are not provided after
4-11     March 1, 1998, for areas annexed before January 1, 1993, or not
4-12     provided within 4 1/2 years after the effective date of the
4-13     annexation for areas annexed on or after January 1, 1993.  A
4-14     penalty collected under this subsection [paragraph] shall be
4-15     deposited to the credit of the water resource management account to
4-16     be used to provide water and sewer service to residents of the
4-17     city.
4-18                 [(7)  The regulatory assessment does not apply to water
4-19     that has not been treated for the purpose of human consumption.]
4-20           SECTION 3.  Section 5.311(a), Water Code, is amended to read
4-21     as follows:
4-22           (a)  The commission may delegate to an administrative law
4-23     judge of the State Office of Administrative Hearings the
4-24     responsibility to hear any matter before the commission [and to
4-25     issue interlocutory orders related to interim rates under Chapter
4-26     13].
4-27           SECTION 4.  Section 13.011(b), Water Code, is amended to read
 5-1     as follows:
 5-2           (b)  The executive director and the commission's staff are
 5-3     responsible for the gathering of information relating to all
 5-4     matters within the jurisdiction of the commission under this
 5-5     subchapter.  The duties of the executive director and the staff
 5-6     include:
 5-7                 (1)  accumulation of evidence and other information
 5-8     from water and sewer utilities and from the commission [and the
 5-9     board] and from other sources for the purposes specified by this
5-10     chapter;
5-11                 (2)  preparation and presentation of evidence before
5-12     the commission or its appointed examiner in proceedings;
5-13                 (3)  conducting investigations of water and sewer
5-14     utilities under the jurisdiction of the commission;
5-15                 (4)  preparation of recommendations that the commission
5-16     undertake an investigation of any matter within its jurisdiction;
5-17                 (5)  preparation of recommendations and a report for
5-18     inclusion in the annual report of the commission;
5-19                 (6)  protection and representation of the public
5-20     interest, together with the public interest advocate, before the
5-21     commission; and
5-22                 (7)  other activities that are reasonably necessary to
5-23     enable the executive director and the staff to perform their
5-24     duties.
5-25           SECTION 5.  Sections 13.002(5) and (8), Water Code, are
5-26     amended to read as follows:
5-27                 (5)  "Commission" means the Public  Utility [Texas
 6-1     Natural Resource Conservation] Commission of Texas.
 6-2                 (8)  "Executive director" means the executive director
 6-3     of the Public Utility [Texas Natural Resource Conservation]
 6-4     Commission of Texas.
 6-5           SECTION 6.  Subchapter B, Chapter 13, Water Code, is amended
 6-6     by adding Section 13.017 to read as follows:
 6-7           Sec. 13.017.  FEES. (a)  The fee for filing an application
 6-8     for setting or adjusting rates is $100 plus the cost of required
 6-9     notice.
6-10           (b)  Each provider of potable water or sewer utility service
6-11     shall collect a regulatory assessment from each retail customer.  A
6-12     public utility shall collect from each retail customer a regulatory
6-13     assessment equal to one percent of the charge for retail water or
6-14     sewer service.  A water supply or sewer service corporation shall
6-15     collect from each retail customer a regulatory assessment equal to
6-16     one-half of one percent of the charge for retail water or sewer
6-17     service.  A "district," as that term is defined by Section 49.001,
6-18     that provides potable water or sewer utility service to retail
6-19     customers shall collect from each retail customer a regulatory
6-20     assessment equal to one-half of one percent of the charge for
6-21     retail water or sewer service.
6-22           (c)  The regulatory assessment may be listed on the
6-23     customer's bill as a separate item and shall be collected in
6-24     addition to other charges for utility services.
6-25           (d)  The commission shall use the assessments collected under
6-26     this section solely to pay costs and expenses incurred by the
6-27     commission in the regulation of districts, water supply or sewer
 7-1     service corporations, and public utilities under this chapter.
 7-2           (e)  The commission shall annually use a portion of the
 7-3     assessments to provide on-site technical assistance and training to
 7-4     public utilities, water supply or sewer service corporations, and
 7-5     districts.  The commission shall contract with others to provide
 7-6     the services.
 7-7           (f)  The commission by rule may establish due dates,
 7-8     collection procedures, and penalties for late payment related to
 7-9     regulatory assessments under this section.  The executive director
7-10     shall collect all assessments from the utility service providers.
7-11           (g)  The regulatory assessment does not apply to water that
7-12     has not been treated for the purpose of human consumption.
7-13           SECTION 7.  Section 50.502(a), Water Code, is amended to read
7-14     as follows:
7-15           (a)  The owner of property in a district on which the
7-16     district has imposed a tax but to which the district does not
7-17     provide services may petition the board to exclude the property
7-18     from the district if:
7-19                 (1)  the owner or the owner's predecessor in interest
7-20     has requested the district to provide services to the property and
7-21     the district has declined to provide services;
7-22                 (2)  all taxes the district has levied and assessed
7-23     against the property and all fees and assessments the district has
7-24     imposed against the property or the owner that are due and payable
7-25     on or before the date of the petition are fully paid; and
7-26                 (3)  the property is located in an area:
7-27                       (A)  separated from the remainder of the district
 8-1     by a United States highway or interstate highway constructed by the
 8-2     Texas Department of Transportation or a predecessor of the
 8-3     department and the highway causes the provision of service by the
 8-4     district to be financially unfeasible; or
 8-5                       (B)  for which the Public Utility Commission of
 8-6     Texas [commission] or a predecessor of the Public Utility
 8-7     Commission of Texas [commission] has issued a certificate of
 8-8     convenience and necessity under Subchapter G, Chapter 13, Water
 8-9     Code, and service is being provided under that certificate.
8-10           SECTION 8.  Sections 11.003(15) and (16), Utilities Code, are
8-11     amended to read as follows:
8-12                 (15)  "Proceeding" means a hearing, investigation,
8-13     inquiry, or other procedure for finding facts or making a decision
8-14     under this title or Chapter 13, Water Code.  The term includes a
8-15     denial of relief or dismissal of a complaint.
8-16                 (16)  "Rate" includes:
8-17                       (A)  any compensation, tariff, charge, fare,
8-18     toll, rental, or classification that is directly or indirectly
8-19     demanded, observed, charged, or collected by a public utility for a
8-20     service, product, or commodity described in the definition of
8-21     utility in Section 31.002 or 51.002, or in Section 13.002, Water
8-22     Code; and
8-23                       (B)  a rule, practice, or contract affecting the
8-24     compensation, tariff, charge, fare, toll, rental, or
8-25     classification.
8-26           SECTION 9.  Section 11.004, Utilities Code, is amended to
8-27     read as follows:
 9-1           Sec. 11.004.  DEFINITION OF UTILITY. (a)  In Subtitle A,
 9-2     "public utility" or "utility" means:
 9-3                 (1)  an electric utility, as that term is defined by
 9-4     Section 31.002; or
 9-5                 (2)  a public utility or utility, as those terms are
 9-6     defined by Section 51.002.
 9-7           (b)  In this chapter, and in Chapters 12-15, "utility"
 9-8     includes a "water and sewer utility" as that term is defined by
 9-9     Section 13.002, Water Code.
9-10           SECTION 10.  Section 13.003(a), Utilities Code, is amended to
9-11     read as follows:
9-12           (a)  The office:
9-13                 (1)  shall assess the effect of utility rate changes
9-14     and other regulatory actions on residential consumers in this
9-15     state;
9-16                 (2)  shall advocate in the office's own name a position
9-17     determined by the counsellor to be most advantageous to a
9-18     substantial number of residential consumers;
9-19                 (3)  may appear or intervene, as a party or otherwise,
9-20     as a matter of right on behalf of:
9-21                       (A)  residential consumers, as a class, in any
9-22     proceeding before the commission, including an alternative dispute
9-23     resolution proceeding; and
9-24                       (B)  small commercial consumers, as a class, in
9-25     any proceeding in which the counsellor determines that small
9-26     commercial consumers are in need of representation, including an
9-27     alternative dispute resolution proceeding;
 10-1                (4)  may initiate or intervene as a matter of right or
 10-2    otherwise appear in a judicial proceeding:
 10-3                      (A)  that involves an action taken by an
 10-4    administrative agency in a proceeding, including an alternative
 10-5    dispute resolution proceeding, in which the counsellor is
 10-6    authorized to appear; [or]
 10-7                      (B)  in which the counsellor determines that
 10-8    residential electricity consumers or small commercial electricity
 10-9    consumers are in need of representation; or
10-10                      (C)  in which the counsellor determines that
10-11    residential or small commercial consumers of water or sewer utility
10-12    service are in need of representation;
10-13                (5)  is entitled to the same access as a party, other
10-14    than commission staff, to records gathered by the commission under
10-15    Section 14.204 or under Section 13.133(a), Water Code;
10-16                (6)  is entitled to discovery of any nonprivileged
10-17    matter that is relevant to the subject matter of a proceeding or
10-18    petition before the commission;
10-19                (7)  may represent an individual residential or small
10-20    commercial consumer with respect to the consumer's disputed
10-21    complaint concerning utility services that is unresolved before the
10-22    commission; and   
10-23                (8)  may recommend legislation to the legislature that
10-24    the office determines would positively affect the interests of
10-25    residential and small commercial consumers.
10-26          SECTION 11.  Section 402.047(e), Local Government Code, is
10-27    amended to read as follows:
 11-1          (e)  Users residing within the established service area, but
 11-2    outside the municipality's boundaries, may appeal rates established
 11-3    for drainage charges to the Public Utility [Texas Natural Resource
 11-4    Conservation] Commission of Texas as authorized by Section
 11-5    13.043(b), [of the] Water Code.
 11-6          SECTION 12.  The following provisions of the Water Code are
 11-7    repealed:
 11-8                (1)  Section 5.235(d); and
 11-9                (2)  Section 13.002(4).
11-10          SECTION 13.  (a)  On September 1, 2001:
11-11                (1)  all of the rights, powers, duties, functions,
11-12    programs, and activities assigned to the Texas Natural Resource
11-13    Conservation Commission or to the commission's officers or
11-14    employees by Chapter 13, Water Code, that are related to water
11-15    rates and services are transferred to the Public Utility Commission
11-16    of Texas;
11-17                (2)  all funds, obligations, contracts, property, and
11-18    records of the Texas Natural Resource Conservation Commission
11-19    relating to water rates and services are transferred to the Public
11-20    Utility Commission of Texas;
11-21                (3)  all employees of the Texas Natural Resource
11-22    Conservation Commission  who perform duties relating to water rates
11-23    and services become employees of the Public Utility Commission of
11-24    Texas, to be assigned duties by the executive director of the
11-25    commission; and
11-26                (4)  all appropriations to the Texas Natural Resource
11-27    Conservation Commission for activities related to water rates and
 12-1    services are transferred to the Public Utility Commission of Texas.
 12-2          (b)  Money collected by the Texas Natural Resource
 12-3    Conservation Commission for fees related to applications pending
 12-4    before the commission on September 1, 2001, are transferred to the
 12-5    Public Utility Commission of Texas on that date.  The application
 12-6    fees may not be assessed again for the same applications.
 12-7          (c)  A rule or form adopted by the Texas Natural Resource
 12-8    Conservation Commission that relates to water rates and services is
 12-9    a rule or form of the Public Utility Commission of Texas and
12-10    remains in effect until altered by the commission.  The secretary
12-11    of state is authorized to adopt rules as necessary to expedite the
12-12    implementation of this subsection.
12-13          (d)  A reference in law to the Texas Natural Resource
12-14    Conservation Commission that relates to water rates and services
12-15    means the Public Utility Commission of Texas or the executive
12-16    director of the commission, as appropriate.
12-17          SECTION 14.  (a)  The transfer of powers, duties, functions,
12-18    programs, and activities under this Act does not affect or impair
12-19    any act done, any obligation, right, order, license, permit, rule,
12-20    criterion, standard, or requirement existing, any investigation
12-21    begun, or any penalty accrued under former law, and that law
12-22    remains in effect for any action concerning those matters.
12-23          (b)  An action brought or proceeding commenced before the
12-24    effective date of this Act, including a contested case or a remand
12-25    of an action or proceeding by a reviewing court, is governed by the
12-26    law and rules applicable to the action or proceeding before the
12-27    effective date of this Act.
 13-1          SECTION 15. This Act takes effect September 1, 2001.