By: Alvarado  S.B. No. 1965
         (In the Senate - Filed March 8, 2023; March 21, 2023, read
  first time and referred to Committee on Water, Agriculture & Rural
  Affairs; April 4, 2023, reported adversely, with favorable
  Committee Substitute by the following vote:  Yeas 8, Nays 0;
  April 4, 2023, sent to printer.)
Click here to see the committee vote
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 1965 By:  Perry
 
 
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. The utility commission shall approve a transaction to
  which this section applies without an owner's signature required by
  other law 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
  commission under Section 13.4132 as a temporary manager of a
  utility, utility in receivership, or utility in supervision, who 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, utility in receivership, or utility in
  supervision, its facilities, and, if applicable, its certificated
  service area. The expedited process must:
               (1)  waive public notice requirements regardless of
  whether the person elects to charge initial rates in accordance
  with Section 13.3011 or use a voluntary valuation determined under
  Section 13.305;
               (2)  require approval of the acquisition transaction if
  the 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), 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 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 committed by the acquired utility for which no
  enforcement action has been completed at the time of acquisition.
         SECTION 2.  This Act takes effect September 1, 2023.
 
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