By:  Laubenberg                                                   H.B. No. 3538



A BILL TO BE ENTITLED

AN ACT

relating to appraisals acquired by municipalities from rural water 
supply corporations.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 13.255, Local Government Code, as 
amended by Chapter 1375, Acts of the 76th Legislature, Regular 
Session, 1999, is amended to read as follows:
	Section 13.255.  SINGLE CERTIFICATION IN INCORPORATED OR 
ANNEXED AREAS       
	(m)  The valuation of the retail public utility's 
certificate of convenience and necessity area being acquired shall 
not exceed a value per unit (acre or other definable unit of 
measure) that if applied (multiplied by the entire retail public 
utility's certificate of convenience and necessity area) to the 
entirety of the retail public utility's certificate of convenience 
and necessity area, would exceed the net book value of the retail 
public utility as of the date determined by application of 
Subsection (b).  In addition, if the retail public utility's 
certificate of convenience and necessity area being acquired 
includes customers that will be lost to it, the valuation of the 
certificate of convenience and necessity area being acquired shall 
be increased to include the amount of debt per customer located in 
the area being lost.
	(n)  If the retail public utility's certificate of 
convenience and necessity area being acquired includes 
infrastructure used to deliver water service to other portions of 
its service area, the acquiring retail public utility shall be 
required to provide a replacement connection to the portion of the 
system which would otherwise be severed.
	(o)  If the retail public utility's certificate of 
convenience and necessity area being acquired includes water 
service infrastructure that will be lost to it, such value shall be 
deemed to have been included in the valuation made pursuant to 
Subsection (g) above, and no additional compensation shall be 
required.
	(m) (p)  The commission shall deny an application for single 
certification by a municipality that fails to demonstrate 
compliance with the commission's minimum requirements for public 
drinking water systems.
	SECTION 2.  This Act takes effect September 1, 2003.