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By:  Guillen                                                      H.B. No. 3284



A BILL TO BE ENTITLED

AN ACT

relating to requiring voter approval for certain rate increases by 
water and sewer utilities.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter E, Chapter 13, Water Code, is amended 
by adding Section 13.146 to read as follows:
	Sec. 13.146.  CERTAIN PROPOSED RATE INCREASES.  (a)  This 
section does not apply to a proposed increase in rates if the 
increase is necessary to ensure the provision of continuous and 
adequate services to the customers of a water or sewer utility.
	(b)  A water or sewer utility may not cumulatively increase 
rates by 25 percent or more in a calendar year unless a majority of 
the members/customers in the water or sewer utility affected by the 
proposed rate increase, voting in an election called and held for 
that purpose, approve the proposed rate increase.  A governing body 
of a water or sewer utility may call the election.  The election 
must be held in accordance with the Election Code.
	(c)  If a majority of the voters in the water or sewer utility 
affected by the proposed rate increase, voting in the election, 
approve the proposed rate increase, the water or sewer utility may 
increase the rates.
	(d)  If a majority of the voters in the water or sewer utility 
affected by the proposed rate increase, voting in the election, do 
not approve the proposed rate increase, the water or sewer utility 
may not increase the rates.
	(e)  This section does not affect the requirement that the 
water or sewer utility obtain approval of a rate increase under 
Subchapter F.
	SECTION 2.  This Act takes effect September 1, 2005.