By Turner of Harris                                   H.B. No. 2231
         77R2759 MTB-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the acquisition of certain water utilities by a
 1-3     municipality.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Subchapter G, Chapter 13, Water Code, is amended
 1-6     by adding Section 13.2541 to read as follows:
 1-7           Sec. 13.2541.  REVOCATION OF CERTIFICATE WHEN SERVICE
 1-8     PROVIDED TO A MUNICIPALITY. (a)  On request of a municipality
 1-9     served by a  retail public utility, the commission at any time
1-10     after notice and hearing may revoke the retail public utility's
1-11     certificate of public convenience and necessity if it finds that
1-12     the retail public utility:
1-13                 (1)  has never provided, is no longer providing, or has
1-14     failed to provide continuous and adequate service in the
1-15     municipality requesting the revocation; or
1-16                 (2)  has been grossly or continuously mismanaged or has
1-17     grossly or continuously not complied with this chapter, commission
1-18     rules, or commission orders.
1-19           (b)  If the certificate of a retail public utility is revoked
1-20     under Subsection (a), the municipality that requested the
1-21     revocation shall operate the decertified retail public utility for
1-22     an interim period prescribed by commission rule and shall request
1-23     commission approval to acquire the decertified retail public
1-24     utility's facilities and to transfer the decertified retail public
 2-1     utility's certificate of convenience and necessity to the
 2-2     municipality.  The municipality must apply in accordance with
 2-3     Subchapter H.
 2-4           (c)  The compensation paid to the decertified retail public
 2-5     utility for its facilities shall be determined by a qualified
 2-6     individual or firm serving as independent appraiser agreed upon by
 2-7     the decertified retail public utility and the municipality.  The
 2-8     determination of compensation by the independent appraiser shall be
 2-9     binding on the commission.  The municipality shall pay the costs of
2-10     the independent appraiser.  For the purpose of implementing this
2-11     section, the value of real property shall be determined according
2-12     to the standards prescribed by Chapter 21, Property Code, governing
2-13     actions in eminent domain.
2-14           (d)  The commission shall determine whether the municipality
2-15     shall pay the compensation in a lump sum or over a specified
2-16     period.
2-17           SECTION 2. This Act takes effect September 1, 2001.