BILL ANALYSIS

Senate Research Center	C.S.S.B. 1842
85R17950 GRM-F	By: Lucio
	Intergovernmental Relations
	4/18/2017
	Committee Report (Substituted)

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

A municipal utility district (MUD) has the power to incur debt, levy taxes, charge for services, enter into contracts, and obtain easements. There are over 800 MUDs in Texas. MUD infrastructure, development, and maintenance costs are often covered by issuing tax-supported debt or utility fees.

A Class �A" Utility is a retail public utility that provides water and/or sewer service through 10,000 or more taps or connections. Class �A� utilities have full-time infrastructure operators and offer regional rates subject to oversight by the Public Utility Commission (PUC).

Class �A� utilities are uniquely qualified to work with MUDs to meet their infrastructure development and infrastructure needs. As proposed, a public utility partnership (PUP) between Class �A� utilities and MUDs could alleviate some of the MUD debt burden, and allow investment in other MUD community projects and facilities.

S.B. 1842 allows a Class �A� utility to provide service within the boundaries of a MUD with the approval of an application with PUC.

The committee substitute removes unnecessary language which is already reflected in statute and provides technical corrections for clarification.

C.S.S.B. 1842 amends current law relating to an application for the amendment of a certificate of public convenience and necessity in an area inside the boundaries of a political subdivision.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 13.002, Water Code, by adding Subdivision (13-a), to define �municipal utility district.�

SECTION 2. Amends Subchapter G, Chapter 13, Water Code, by adding Section 13.258, as follows:

Sec. 13.258. UTILITY�S APPLICATION FOR SERVICE INSIDE MUNICIPAL UTILITY DISTRICT UNDER CONTRACT. (a) Authorizes a Class A utility, notwithstanding any other provision of this chapter (Water Rates and Services), to apply to the Texas Commission on Environmental Quality to provide services inside the boundaries of a municipal utility district (district).

(b) Requires an application under this section to be accompanied by:

(1) information identifying the applicant;

(2) the name of the district;

(3) the written consent of the district that holds the certificate of convenience and necessity;

(4) a written statement by the district that the application is supported by a contract between the district and the utility for the utility to provide services inside the boundaries of the district; and

(5) a description of the proposed service area by a metes and bounds survey certified by certain surveyors; the Texas State Plane Coordinate System; verifiable landmarks, including roads, creeks, or railroad lines; or, if a recorded plat of the area exists, lot and block number.

(c) Prohibits the Public Utility Commission of Texas (PUC), for an application under this section, from requiring any information other than the information required by this section.

(d) Requires PUC, not later than the 60th day after the date an applicant files an application, to review whether the application is complete. Requires PUC, if PUC finds that the application is complete, to find that the application is necessary for the service, accommodation, convenience, or safety of the public and grant the application.

(e) Provides that PUC�s decision under this section becomes final after reconsideration, if any, authorized by PUC rule and prohibits the decision from being appealed.

(f) Provides that the consent of a municipality is not required for PUC to grant an application as provided by Subsection (a) for an area that is in the municipality�s extraterritorial jurisdiction.

(g) Provides that Sections 13.241(d) (relating to requirements of the applicant before PUC grants a new certificate of convenience and necessity for a certain area) and 13.245 (Municipal Boundaries or Extraterritorial Jurisdiction of Certain Municipalities) do not apply to an application under this section.

(h) Provides that Chapter 2001 (Administrative Procedure), Government Code, does not apply to an application for an amendment of a certificate of public convenience and necessity under this section.

SECTION 3. Amends Section 341.035(d), Health and Safety Code, as follows:

(d) Provides that a person is not required to file a business plan under Subsection (a)(1) (relating to prohibiting a person from beginning construction of a certain system unless a business plan for the system is approved) or (b) (relating to a certain business plan submitted by the prospective owner or operator of the system, as required) if the person is a Class A utility, as defined by Section 13.002 (Definitions), Water Code, that has applied for or been granted an application to provide service under Section 13.258, Water Code, for the area in which the construction of the public drinking water supply system will operate. Redesignates existing Subdivision (4) as Subdivision (5). Makes a nonsubstantive change.

SECTION 4. Makes application of this Act prospective.

SECTION 5. Effective date: September 1, 2017.