| TO: | Honorable Troy Fraser, Chair, Senate Committee on Natural Resources |
| FROM: | John S O'Brien, Director, Legislative Budget Board |
| IN RE: | SB573 by Nichols (Relating to certificates of public convenience and necessity for water or sewer services.), Committee Report 1st House, Substituted |
The bill would create a new expedited Certificate of Convenience and Necessity (CNN) release process for landowners in counties with a population of 1 million-including adjacent counties, as well as counties with a population of between 200,000 and 220,000.
The bill would reduce the acreage requirement for an expedited release from a CCN from 50 acres to 25 acres. The bill also would delete the current petition requirements for an expedited release, other than the requirement that the petitioner not be in a platted subdivision. The bill also would shorten the Texas Commission on Environmental Quality (TCEQ)’s review period from 90 to 60 days and require the TCEQ to approve all petitions. The bill also would a limitation that the TCEQ may not deny a petition based on the fact that a CCN holder is a borrower under a federal loan program.
The bill's passage is not expected to have a significant fiscal impact on the TCEQ.
A local government which holds a CCN could be negatively impacted if landowners would be
released from such a CCN without cause, especially if: multiple areas would be removed from a CCN;
the local government would have already made expenditures to provide services to the area being
released; and if the local government was anticipating to recoup such costs through revenues from
providing service. Although some of the costs of losing areas from a CNN could be recouped, because
the Water Code specifies that compensation may be awarded to a CCN holder if an area is removed
from a CCN, this compensation would likely be limited and uncertain, because the award of
compensation would not occur until another retail public utility would propose to serve the area.
The cost to a local government resulting from passage of the bill would depend on the number of areas
being removed from a CNN service area, the amount of expenditures the local government would
have made to provide service to these areas, the amount of revenue the local government anticipated to
collect to recoup such costs, and whether another CCN would propose to serve the areas being
removed.
| Source Agencies: | 582 Commission on Environmental Quality
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| LBB Staff: | JOB, SZ, TL
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