78R3808 JJT-D

By:  Shapleigh                                                    S.B. No. 326


A BILL TO BE ENTITLED
AN ACT
relating to the regulation of certain sales of water to be transported by pipeline. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Chapter 13, Water Code, is amended by adding Subchapter O to read as follows:
SUBCHAPTER O. REGULATION OF CERTAIN SALES OF WATER TO BE TRANSPORTED BY PIPELINE
Sec. 13.551. APPLICABILITY. (a) This subchapter applies only to the sale of raw or potable groundwater or surface water if the water, before or after the sale, is to be transported by pipeline: (1) 50 miles or more; or (2) from one river basin in this state to another river basin in this state. (b) This subchapter applies to a sale of water by an individual or a business entity. Sec. 13.552. POWER TO ENSURE COMPLIANCE; RATE REGULATION. The commission has all authority and power of the state to ensure that persons who supply or receive water the sale of which is subject to this subchapter comply with their obligations under this subchapter. For this purpose, the commission may: (1) fix and regulate the rates for sales of that water; and (2) adopt rules for determining: (A) the classification of customers and services; and (B) the applicability of rates. Sec. 13.553. JUST AND REASONABLE RATES. The commission shall ensure that the rate for water sold under this subchapter is just and reasonable. Sec. 13.554. FIXING OVERALL REVENUES. In fixing the rate for a sale of water under this subchapter, the commission shall fix the seller's revenues at a level that will: (1) permit the seller a reasonable opportunity to earn a reasonable return on the seller's invested capital used and useful in supplying water to the purchaser over and above the seller's reasonable and necessary operating expenses; and (2) preserve the financial integrity of the seller. Sec. 13.555. FAIR RETURN. The commission may not prescribe any rate for a sale of water under this subchapter that will yield more than a fair return on the invested capital used and useful in supplying water to the purchaser. Sec. 13.556. UNREASONABLE PREFERENCE OR PREJUDICE AS TO RATES OR SERVICES. (a) A person who supplies water the sale of which is subject to this subchapter may not make or grant any unreasonable preference or advantage to any person within any classification or subject any person within any classification to any unreasonable prejudice or disadvantage. (b) A person who supplies water the sale of which is subject to this subchapter may not establish or maintain any unreasonable differences as to rates for water either as between localities or as between classes of service. Sec. 13.557. EQUALITY OF RATES AND SERVICES. (a) A person who supplies water the sale of which is subject to this subchapter may not directly or indirectly by any device or in any manner charge, demand, collect, or receive from any person a greater or lesser compensation for any water supplied by the person than that prescribed in the person's schedule of rates as properly applied to the person to whom the water is supplied. (b) A person may not knowingly receive or accept water from a person for a compensation greater or less than that prescribed in the supplier's schedule of rates as properly applied to the person to whom the water is supplied. Sec. 13.558. DISCRIMINATION; RESTRICTION ON COMPETITION. (a) A person who supplies water the sale of which is subject to this subchapter may not discriminate against any person who provides water in competition with the person or engage in any other practice that tends to restrict or impair that competition. (b) A person who supplies water the sale of which is subject to this subchapter by a pipeline owned or operated by the person: (1) shall receive and transport water delivered to the person by other water suppliers and perform the person's other related duties without discrimination; and (2) may not: (A) discriminate in the transportation of water the sale of which is subject to this subchapter among or against other water suppliers with regard to facilities provided, services rendered, or rates charged under the same or similar circumstances; or (B) discriminate in the transportation of water produced or purchased by the person directly or indirectly. (c) A person may refuse to transport: (1) raw water in a pipeline owned or operated by the person if the pipeline is being used to transport potable water; or (2) potable water in a pipeline owned or operated by the person if the pipeline is being used to transport raw water. Sec. 13.559. CERTIFICATE OF CONVENIENCE AND NECESSITY. (a) A person may not supply to another person water the sale of which is subject to this subchapter unless the person supplying the water obtains from the commission a certificate that the present or future public convenience and necessity require that the water be supplied. (b) In determining whether to grant a certificate of public convenience and necessity, the commission shall ensure that the person supplying the water possesses the financial, managerial, and technical capability to provide continuous and adequate service. Sec. 13.560. CONTINUOUS AND ADEQUATE SERVICE. A person that possesses or is required to possess a certificate of public convenience and necessity issued under Section 13.559 shall render continuous and adequate service. Sec. 13.561. APPROVAL OF WATER SUPPLY CONTRACT. A contract to supply water the sale of which is subject to this subchapter is enforceable only if the contract is approved by the commission after public notice and hearing. SECTION 2. This Act applies only to a contract to supply water that is entered into on or after the effective date of this Act. SECTION 3. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2003.