85R3703 GRM-F

By: Lucio III H.B. No. 2187

A BILL TO BE ENTITLED

AN ACT

relating to the revocation or amendment of a certificate of public convenience and necessity for water utilities in a service area.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 13.254, Water Code, is amended by amending Subsections (a-3), (a-4), (d), (e), (f), and (g) and adding Subsection (a-12) to read as follows:

(a-3) Within 90 [60] calendar days from the date the utility commission determines the petition filed pursuant to Subsection (a-1) to be administratively complete, the utility commission shall grant the petition unless the utility commission makes an express finding that the petitioner failed to satisfy the elements required in Subsection (a-1) and supports its finding with separate findings and conclusions for each element based solely on the information provided by the petitioner and the certificate holder. The utility commission may grant or deny a petition subject to terms and conditions specifically related to the service request of the petitioner and all relevant information submitted by the petitioner and the certificate holder. In addition, the utility commission may require an award of compensation as otherwise provided by this section.

(a-4) Chapter 2001, Government Code, does not apply to any petition filed under Subsection (a-1). [The decision of the utility commission on the petition is final after any reconsideration authorized by the utility commission's rules and may not be appealed.]

(a-12) The utility commission may not grant a petition received under Subsection (a-5) if, before the 30th day after the date the landowner files the petition under Subsection (a-5), the certificate holder demonstrates that the certificate holder, through planning, design, construction of facilities, or contractual obligations to serve the tract of land, has made service available to the tract. On the utility commission's determination that the certificate holder has made the demonstration, the utility commission shall inform the petitioner that:

(1) the tract of land is not eligible for expedited release under Subsection (a-5); and

(2) the landowner may seek expedited release under Subsection (a-1) if that subsection is applicable.

(d) A petitioner whose petition under Subsection (a-1) or (a-5) has been granted shall provide just and adequate [retail public utility may not in any way render retail water or sewer service directly or indirectly to the public in an area that has been decertified under this section without providing] compensation in accordance with Subsection (g), as determined by [for any property that] the utility commission [determines is rendered useless or valueless to the decertified retail public utility as a result of the decertification]. A utility commission order following a petition under Subsection (a-1) or (a-5) to revoke or amend a certificate takes effect on the date the petitioner pays the compensation or deposits an equal amount into the registry of the district court under Subsection (f).

(e) The utility commission shall conduct a hearing to determine [determination of] the monetary amount of compensation a petitioner under Subsection (a-1) or (a-5) must pay in accordance with Chapter 2001, Government Code. The utility commission shall make the determination [, if any, shall be determined at the time another retail public utility seeks to provide service in the previously decertified area and before service is actually provided. The utility commission shall ensure that the monetary amount of compensation is determined] not later than the 90th calendar day after the date on which [a retail public utility notifies] the utility commission revokes or amends a certificate [of its intent to provide service to the decertified area].

(f) If either party to a proceeding following a petition under Subsection (a-1) or (a-5) appeals the utility commission order to revoke or amend a certificate or the compensation order, the [The] monetary amount of compensation [shall be] determined by the utility commission shall be deposited into the registry of the district court of Travis County pending the outcome of the appeal [a qualified individual or firm serving as independent appraiser agreed upon by the decertified retail public utility and the retail public utility seeking to serve the area. The determination of compensation by the independent appraiser shall be binding on the utility commission. The costs of the independent appraiser shall be borne by the retail public utility seeking to serve the area].

(g) For the purpose of implementing this section, the value of real property owned and utilized by the retail public utility for its facilities shall be determined according to the standards set forth in Chapter 21, Property Code, governing actions in eminent domain and the value of personal property shall be determined according to the factors in this subsection. The factors ensuring that the compensation to a retail public utility is just and adequate shall include: the amount of the retail public utility's debt allocable for service to the area in question; the value of the service facilities of the retail public utility located within the area in question; the amount of any expenditures for planning, design, or construction of service facilities that are allocable to service to the area in question; the amount of the retail public utility's contractual obligations allocable to the area in question; any demonstrated impairment of service or increase of cost to consumers of the retail public utility remaining after the decertification; the impact of [on] future revenues lost [from existing customers]; necessary and reasonable legal expenses and professional fees; and other relevant factors. The utility commission shall adopt rules governing the evaluation of these factors.

SECTION 2. Section 13.255, Water Code, is amended by amending Subsections (g) and (l) to read as follows:

(g) For the purpose of implementing this section, the value of real property owned and utilized by the retail public utility for its facilities shall be determined according to the standards set forth in Chapter 21, Property Code, governing actions in eminent domain; the value of personal property shall be determined according to the factors in this subsection. The factors ensuring that the compensation to a retail public utility is just and adequate, shall, at a minimum, include: impact on the existing indebtedness of the retail public utility and its ability to repay that debt, the value of the service facilities of the retail public utility located within the area in question, the amount of any expenditures for planning, design, or construction of service facilities outside the incorporated or annexed area that are allocable to service to the area in question, the amount of the retail public utility's contractual obligations allocable to the area in question, any demonstrated impairment of service or increase of cost to consumers of the retail public utility remaining after the single certification, the impact of [on] future revenues lost [from existing customers], necessary and reasonable legal expenses and professional fees, factors relevant to maintaining the current financial integrity of the retail public utility, and other relevant factors.

(l) For an area incorporated or annexed by a municipality, the compensation provided under Subsection (g) shall be determined by the utility commission in accordance with Chapter 2001, Government Code [a qualified individual or firm to serve as independent appraiser, who shall be selected by the affected retail public utility, and the costs of the appraiser shall be paid by the municipality. For an area annexed by a municipality, the compensation provided under Subsection (g) shall be determined by a qualified individual or firm to which the municipality and the retail public utility agree to serve as independent appraiser. If the retail public utility and the municipality are unable to agree on a single individual or firm to serve as the independent appraiser before the 11th day after the date the retail public utility or municipality notifies the other party of the impasse, the retail public utility and municipality each shall appoint a qualified individual or firm to serve as independent appraiser. On or before the 10th business day after the date of their appointment, the independent appraisers shall meet to reach an agreed determination of the amount of compensation. If the appraisers are unable to agree on a determination before the 16th business day after the date of their first meeting under this subsection, the retail public utility or municipality may petition the utility commission or a person the utility commission designates for the purpose to appoint a third qualified independent appraiser to reconcile the appraisals of the two originally appointed appraisers. The determination of the third appraiser may not be less than the lesser or more than the greater of the two original appraisals. The costs of the independent appraisers for an annexed area shall be shared equally by the retail public utility and the municipality. The determination of compensation under this subsection is binding on the utility commission].

SECTION 3. Section 13.254(g-1), Water Code, is repealed.

SECTION 4. The change in law made by this Act applies only to a proceeding affecting a certificate of public convenience and necessity that commences on or after the effective date of this Act. A proceeding affecting a certificate of public convenience and necessity that commenced before the effective date of this Act is governed by the law in effect on the date the proceeding commenced, and that law is continued in effect for that purpose.

SECTION 5. This Act takes effect September 1, 2017.