83R10454 JXC-D
  By: Rodriguez S.B. No. 1227
  relating to the creation of an on-bill repayment program to
  encourage improvements to real property related to water
  efficiency; authorizing a fee.
         SECTION 1.  Subchapter A, Chapter 5, Property Code, is
  amended by adding Section 5.021 to read as follows:
  seller of residential real property that is subject to an
  obligation under Subchapter P, Chapter 13, Water Code, shall give
  to the purchaser of the property a written notice that discloses the
         (b)  The seller shall deliver the notice to the purchaser
  before the date the executory contract binds the purchaser to
  purchase the property.
         (c)  This section does not apply to a transfer:
               (1)  under a court order or foreclosure sale;
               (2)  by a trustee in bankruptcy;
               (3)  to a mortgagee by a mortgagor or successor in
  interest or to a beneficiary of a deed of trust by a trustor or
  successor in interest;
               (4)  by a mortgagee or a beneficiary under a deed of
  trust who has acquired the land at a sale conducted under a power of
  sale under a deed of trust or a sale under a court-ordered
  foreclosure or has acquired the land by a deed in lieu of
               (5)  by a fiduciary in the course of the administration
  of a decedent's estate, guardianship, conservatorship, or trust;
               (6)  from one co-owner to another co-owner of an
  undivided interest in the real property;
               (7)  to a spouse or a person in the lineal line of
  consanguinity of the seller;
               (8)  to or from a governmental entity; or
               (9)  of only a mineral interest, leasehold interest, or
  security interest.
         (d)  A violation of this section does not invalidate a
  conveyance.  A seller who fails to make a disclosure as required by
  this section is liable to the transferee for three times the actual
  damages incurred.
         SECTION 2.  Chapter 13, Water Code, is amended by adding
  Subchapter P to read as follows:
         Sec. 13.601.  DEFINITIONS. In this subchapter:
               (1)  "Charge" means an amount included on a retail
  water or sewer service bill that is due under an on-bill repayment
               (2)  "Eligible water improvement" means a water
  improvement that meets the requirements for participation in an
  on-bill repayment program.
               (3)  "Improved property" means property on which a
  water improvement has been built under an on-bill repayment
               (4)  "Lender" means a person who provides financing on
  an eligible water improvement or to whom payment is owed for
  financing an eligible water improvement that is being repaid
  through an on-bill repayment program.
               (5)  "Obligation" means money owed under an agreement
  to repay financed eligible water improvements through an on-bill
  repayment program.
         Sec. 13.602.  ON-BILL REPAYMENT PROGRAM. (a) The
  commission by rule shall establish an on-bill repayment program to
  facilitate financing and repayment of eligible water improvements
  between customers, lenders, and retail public utilities.
         (b)  Under the program, a customer and a lender who finances
  an eligible water improvement on the customer's property may agree
  to add the customer's loan payments to the customer's retail water
  or sewer service bill. The commission shall require the retail
  public utility that provides service to the customer to participate
  in the program after the commission receives a written request for
  participation from the customer or lender.
         Sec. 13.603.  MASTER SERVICER. (a) The commission shall
  appoint a government agency or a private person to administer the
  program as master servicer. The master servicer shall:
               (1)  manage payments and maintain documentation for all
  program participants;
               (2)  collect money paid to retail public utilities
  under the program and promptly remit payment to lenders as
  applicable; and
               (3)  perform all other duties assigned by commission
         (b)  The commission by rule shall:
               (1)  authorize the master servicer to collect fees, as
  approved by the commission, from on-bill repayment program lenders
  to cover costs; and
               (2)  grant the master servicer any other rights or
  powers the commission considers necessary.
         Sec. 13.604.  PROGRAM STANDARDS. The commission by rule
  shall adopt minimum standards for the on-bill repayment program. A
  retail public utility may exceed the standards. The minimum
  standards must include:
               (1)  a list of water improvement projects that are
  eligible for the on-bill repayment program;
               (2)  a limitation or prohibition on the removal of
  water improvements from a property before an outstanding on-bill
  repayment obligation is satisfied;
               (3)  a requirement that any outstanding obligation
  created under the program:
                     (A)  remains in effect regardless of any change in
  ownership or possession of the improved property; and
                     (B)  at all times constitutes an obligation of the
  retail water or sewer service customer of record on the improved
               (4)  a requirement that any arrearages on charges under
  the program accruing before transfer of the approved property,
  unless expressly assumed, remain the responsibility of the retail
  water or sewer service customer of record on the improved property
  at the time the arrearage accrued; and
               (5)  a requirement that charges under the program be
  included on a customer's retail water or sewer service bill.
         Sec. 13.605.  FAILURE TO PAY. If a customer fails to pay the
  full amount of a monthly charge under the program, the failure to
  pay is treated as a failure to pay for retail water or sewer
         Sec. 13.606.  PARTIAL PAYMENT. The commission shall adopt
  rules to determine the division of a partial payment between the
  retail water or sewer services billed and the on-bill repayment
  program charge.
         Sec. 13.607.  LENDERS. (a) A lender shall determine loan
  eligibility, including credit evaluations.
         (b)  A lender who participates in the program must work with
  the master servicer when providing a loan under the program.
         (c)  The commission by rule shall approve the financing
  structures through which a lender may provide financing under the
  on-bill repayment program.
         Sec. 13.608.  ACCEPTANCE OF OBLIGATION. If a customer
  applies for and accepts retail water or sewer service on an improved
  property that is subject to an outstanding obligation under an
  on-bill repayment program, the customer is considered to have
  accepted the obligation for the charges that accrue under the
  on-bill repayment program during the receipt of services.
  Notwithstanding any other provision of this subchapter, the
  commission by rule may exempt any eligible water improvement or any
  class or category of eligible water improvement from a limitation
  or prohibition prescribed by the commission under Section
         Sec. 13.610.  RECORD FILED WITH COUNTY CLERK. (a)  The
  commission by rule shall require a retail public utility or the
  utility's agent to record notice of an obligation on an improved
  property with the county clerk of the county in which the property
  is located.
         (b)  The notice required by this section does not create a
  security interest in the improved property.
         (c)  On satisfaction of the obligation, the retail public
  utility or the utility's agent shall file notice with the county
  clerk in the county in which the property is located that the
  obligation has been satisfied.
         (d)  The county clerk shall file notices under this section
  with the deed records.
         Sec. 13.611.  REVENUES FOR RATE PURPOSES. Payments
  collected by a utility under this subchapter are not revenues that
  may be considered for the purposes of Subchapter F.
         SECTION 3.  As soon as practicable after the effective date
  of this Act, but not later than January 1, 2014, the Texas
  Commission on Environmental Quality shall adopt rules to implement
  the provisions of this Act.
         SECTION 4.  This Act takes effect September 1, 2013.