2023S0217-2 03/08/23
 
  By: Alvarado S.B. No. 1965
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to requirements for the purchase or acquisition of certain
  water and sewer systems.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 13.301, Water Code, is amended by
  amending Subsection (h) and adding Subsections (l), (m), and (n) to
  read as follows:
         (h)  A sale, acquisition, lease, or rental of any water or
  sewer system owned by an entity required by law to possess a
  certificate of public convenience and necessity, or a sale or
  acquisition of or merger or consolidation with such an entity, that
  is not completed in accordance with the provisions of this section
  is void. Notwithstanding any other law that requires a system
  owner's signature, the utility commission shall approve a
  transaction to which this section applies if the owner has
  abandoned operation of the facilities that are the subject of the
  transaction and cannot be located or does not respond to an
  application filed under Subsection (l).
         (l)  Notwithstanding any other provision of this section,
  the utility commission by rule shall adopt an expedited process
  that allows a person appointed by the utility commission or the
  commission under Section 13.4132 as a temporary manager that is
  also an operator of a Class A or Class B utility to apply for utility
  commission approval of the person's acquisition of the stock,
  ownership interest, or assets of the temporarily managed and
  operated utility, its facilities, and its certificated service
  area, if one has been granted to the utility. The expedited process
  must:
               (1)  waive public notice requirements;
               (2)  be approved if the acquisition transaction is
  considered to be in the public interest; and
               (3)  provide that:
                     (A)  the person's appointment is considered
  sufficient to demonstrate adequate financial, managerial, and
  technical capability for providing continuous and adequate service
  to the service area to be acquired and any areas currently
  certificated to the person; and
                     (B)  all used and useful invested capital and just
  and reasonable operations and maintenance costs incurred by the
  person during the person's appointment as temporary manager and
  operator of the utility, utility in receivership, or utility in
  supervision to be acquired are considered to be a regulatory asset
  for the person and are recoverable in the person's next
  comprehensive rate proceeding or system improvement charge
  application.
         (m) If a temporary rate under Section 13.046 is adopted
  during the period described by Subsection (l)(3)(B), then all used
  and useful invested capital and just and reasonable operations and
  maintenance costs incurred by the person in excess of costs covered
  by the temporary rate are considered to be a regulatory asset for
  the person and are recoverable in the person's next comprehensive
  rate proceeding or system improvement charge application.
         (n)  The utility commission and the commission shall provide
  a reasonable period for a person acquiring a utility under
  Subsection (l) to bring the acquired utility into compliance with
  utility commission and commission rules before imposing a penalty
  for any violation present in the acquired utility at the time of
  acquisition.
         SECTION 2.  This Act takes effect September 1, 2023.