Texas 2011 - 82nd Regular

Texas House Bill HB2400 Compare Versions

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1	1	82R19661 RWG-D
2	2	By: Miller of Comal H.B. No. 2400
3	3	Substitute the following for H.B. No. 2400:
4	4	By: Martinez Fischer C.S.H.B. No. 2400
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the powers and duties of the Texas Commission on
10	10	Environmental Quality and other entities regarding water and sewer
11	11	utilities and certain conservation and reclamation districts.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Section 13.002(22), Water Code, is amended to
14	14	read as follows:
15	15	(22) "Test year" means the annualized period for which
16	16	costs are to be analyzed and rates established [most recent
17	17	12-month period for which representative operating data for a
18	18	retail public utility are available. A utility rate filing must be
19	19	based on a test year that ended less than 12 months before the date
20	20	on which the utility made the rate filing].
21	21	SECTION 2. Section 13.145(a), Water Code, is amended to
22	22	read as follows:
23	23	(a) A utility may consolidate more than one system under a
24	24	single tariff on a regional basis [only] if[:
25	25	[(1) the systems under the tariff are substantially
26	26	similar in terms of facilities, quality of service, and cost of
27	27	service; and
28	28	[(2)] the tariff provides for rates that promote water
29	29	conservation for single-family residences and landscape
30	30	irrigation.
31	31	SECTION 3. Section 13.185(d), Water Code, is amended to
32	32	read as follows:
33	33	(d) Net income is the total revenues of the utility less all
34	34	reasonable and necessary expenses as determined by the regulatory
35	35	authority. The regulatory authority shall base a utility's
36	36	expenses on information for either, at the utility's choice, a
37	37	historic test year that is the most recent 12-month period that
38	38	ended less than 12 months before the filing date of the rate
39	39	application or the future test year of the 12-month period ending on
40	40	the first anniversary of the filing date of the rate application for
41	41	which representative and supporting information for the utility is
42	42	available. The regulatory authority shall determine expenses and
43	43	revenues in a manner consistent with Subsections (e) through (h) of
44	44	this section.
45	45	SECTION 4. Sections 13.187(a), (b), (d), (e), (f), (k),
46	46	(o), and (p), Water Code, are amended to read as follows:
47	47	(a) A utility may not make changes in its rates except by
48	48	delivering a statement of intent to each ratepayer and [with] the
49	49	regulatory authority having original jurisdiction at least 90 [60]
50	50	days before the proposed effective date of the proposed change. The
51	51	proposed effective date of the new rates must be the first day of a
52	52	billing period, and the new rates may not apply to service received
53	53	before the proposed effective date of the new rates. The statement
54	54	of intent must include:
55	55	(1) the utility's name, address, current rates, and
56	56	proposed rates [information required by the regulatory authority's
57	57	rules];
58	58	(2) a billing comparison regarding the existing water
59	59	or sewer rate and the new water or sewer rate computed that shows
60	60	the monthly water charges generated for use of the following
61	61	amounts of water and the monthly sewer charges generated if the
62	62	amount used was the same as a customer's winter monthly average,
63	63	unless the utility proposes a flat rate for sewer service, for the
64	64	use of:
65	65	(A) 5,000 [10,000] gallons of water or sewer;
66	66	[and]
67	67	(B) 10,000 [30,000] gallons of water or sewer;
68	68	[and]
69	69	(C) 15,000 gallons of water or sewer; and
70	70	(D) 30,000 gallons of water or sewer;
71	71	(3) the effective date of the proposed rates;
72	72	(4) information on the procedure for protesting a rate
73	73	change, the minimum number of protests needed to ensure a hearing,
74	74	and the length of the protest period;
75	75	(5) contact information for the commission and the
76	76	office of public interest counsel;
77	77	(6) a brief description of the contested case hearing
78	78	process; and
79	79	(7) any additional information required by the
80	80	regulatory authority's rules [a billing comparison regarding the
81	81	existing sewer rate and the new sewer rate computed for the use of
82	82	10,000 gallons, unless the utility proposes a flat rate for sewer
83	83	services].
84	84	(b) A copy of the statement of intent shall be mailed or
85	85	delivered to the appropriate offices of each affected municipality,
86	86	to the executive director, and to any [other] affected persons as
87	87	required by the regulatory authority's rules.
88	88	(d) If [Except as provided by Subsection (d-1), if] the
89	89	application or the statement of intent is not substantially
90	90	complete or does not comply with the regulatory authority's rules,
91	91	it may be rejected and the proposed effective date of the rate
92	92	change may be suspended until a properly completed application is
93	93	accepted by the regulatory authority and a proper statement of
94	94	intent is provided. The commission may also suspend the proposed
95	95	effective date of any rate change if the utility does not have a
96	96	certificate of public convenience and necessity or a completed
97	97	application for a certificate or to transfer a certificate pending
98	98	before the commission or if the utility is delinquent in paying the
99	99	assessment and any applicable penalties or interest required by
100	100	Section 5.701(n) of this code.
101	101	(e) The regulatory authority shall hold a hearing on the
102	102	proposed rate increase if [If], before the 61st [91st] day after the
103	103	[effective] date the statement of intent was provided to the
104	104	authority and each ratepayer under Subsection (a) [of the rate
105	105	change], the regulatory authority receives a complaint from any
106	106	affected municipality, or from the lesser of 1,000 or 10 percent of
107	107	the ratepayers of the utility over whose rates the regulatory
108	108	authority has original jurisdiction[, the regulatory authority
109	109	shall set the matter for hearing].
110	110	(f) The regulatory authority may set the matter for hearing
111	111	on its own motion at any time within 90 [120] days after the
112	112	[effective] date the statement of intent was provided to the
113	113	authority and each ratepayer under Subsection (a) [of the rate
114	114	change]. If more than half of the ratepayers of the utility receive
115	115	service in a county with a population of more than 2.5 million, the
116	116	hearing must be held at a location in that county.
117	117	(k) If the regulatory authority sets the matter for
118	118	[receives at least the number of complaints from ratepayers
119	119	required for the regulatory authority to set] a hearing under
120	120	Subsection (e), the regulatory authority shall [may], pending the
121	121	hearing and a decision, suspend the date the rate change would
122	122	otherwise be effective until the date the regulatory authority
123	123	issues a final decision on the matter. The administrative law judge
124	124	shall issue a proposal for decision not later than the 120th day
125	125	after the last date of the preliminary hearing. The commission
126	126	shall issue a final decision not later than the 60th day after the
127	127	date the administrative law judge issues the proposal for decision.
128	128	The executive director may extend the process if the commission
129	129	determines that an extension is necessary to protect a party's
130	130	right to due process or other constitutional right. [Except as
131	131	provided by Subsection (d-1), the proposed rate may not be
132	132	suspended for longer than:
133	133	[(1) 90 days by a local regulatory authority; or
134	134	[(2) 150 days by the commission.]
135	135	(o) If the [a] regulatory authority does not set a hearing
136	136	on the proposed rate increase under Subsection (e) or (f), [other
137	137	than the commission establishes interim rates or an escrow account,
138	138	the regulatory authority must make a final determination on the
139	139	rates not later than the first anniversary of the effective date of
140	140	the interim rates or escrowed rates or] the rates are automatically
141	141	approved as requested by the utility.
142	142	(p) Except to implement a rate adjustment provision
143	143	approved by the regulatory authority by rule or ordinance, as
144	144	applicable, or to adjust the rates of a newly acquired utility
145	145	system, a utility or two or more utilities under common control and
146	146	ownership may not file a statement of intent to increase its rates
147	147	for the same customer more than once in a 12-month period, unless
148	148	the regulatory authority determines that a financial hardship
149	149	exists. If the regulatory authority requires the utility to
150	150	deliver a corrected statement of intent, the utility is not
151	151	considered to be in violation of the 12-month filing requirement.
152	152	SECTION 5. Subchapter F, Chapter 13, Water Code, is amended
153	153	by adding Section 13.193 to read as follows:
154	154	Sec. 13.193. UTILITY FACILITIES CONSTRUCTION AND
155	155	IMPROVEMENT CHARGE. (a) Notwithstanding any other provision of
156	156	this chapter, a utility may assess a utility facilities
157	157	construction and improvement charge to recover the depreciation and
158	158	return on investment of a utility facilities construction and
159	159	improvement project that:
160	160	(1) is completed and placed into service between two
161	161	consecutive statements of intent to change the utility's rates or
162	162	tariff filed under Section 13.187; and
163	163	(2) serves the utility's certificated service area,
164	164	including a facility used for:
165	165	(A) the production, transmission, storage,
166	166	distribution, or provision of potable or recycled water to the
167	167	public; or
168	168	(B) the collection, transportation, treatment,
169	169	or disposal of sewage.
170	170	(b) The commission by rule shall require a utility that
171	171	proposes to assess a utility facilities construction and
172	172	improvement charge under this section:
173	173	(1) to file a tariff establishing a just and
174	174	reasonable manner for calculating the charge; and
175	175	(2) to receive the executive director's approval of
176	176	the tariff.
177	177	(c) In adopting rules under Subsection (b), the commission
178	178	shall ensure that:
179	179	(1) not later than the 60th day before a utility's
180	180	proposed inclusion of a charge or a proposed increase of a charge in
181	181	a tariff under this section, the utility submits to the executive
182	182	director for review of a project's eligibility a written notice
183	183	that contains:
184	184	(A) the amount of the proposed charge or increase
185	185	of a charge;
186	186	(B) the proposed implementation date for the
187	187	charge or increase of a charge;
188	188	(C) a list of completed, eligible capital
189	189	projects, and related depreciation and return on investment for
190	190	which the utility seeks reimbursement through the charge or
191	191	increase of a charge; and
192	192	(D) a calculation of the projected total annual
193	193	increase in revenue due to the charge or increase of a charge;
194	194	(2) the total amount the utility is authorized to
195	195	recover annually through a charge assessed under this section and
196	196	the amount the utility actually recovers are subject to annual
197	197	audit by the executive director;
198	198	(3) the amount of the charge the utility requests
199	199	authorization to assess is based on the amount necessary to ensure
200	200	that the charge yields a rate of return on invested capital that is
201	201	equal to:
202	202	(A) the rate of return approved for the utility
203	203	in the utility's most recent approved base rate or tariff change
204	204	application filed under Section 13.187; or
205	205	(B) the rate of return proposed by the utility,
206	206	if the rates in the utility's most recent base rate or tariff change
207	207	application were approved by settlement;
208	208	(4) the cumulative annual amount the utility proposes
209	209	to recover from the charge does not exceed an amount equal to 10
210	210	percent of the utility's annual revenue;
211	211	(5) the utility does not implement an increase under
212	212	this section more often than twice every calendar year;
213	213	(6) the charge is applied to each customer included in
214	214	the tariff;
215	215	(7) the utility provides to each customer written
216	216	notice of the charge on the initial tariff filing that proposes to
217	217	implement the charge; and
218	218	(8) the charge is subject to a true-up or
219	219	reconciliation at the utility's next rate case filed under Section
220	220	13.187.
221	221	(d) Notwithstanding any other provision of this code, the
222	222	implementation of a utility facilities construction and
223	223	improvement charge or an increase in a utility facilities
224	224	construction and improvement charge is not subject to a contested
225	225	case hearing under Chapter 2001, Government Code.
226	226	(e) A utility may not collect the charge after the first
227	227	anniversary of the completion of a utility facilities construction
228	228	and improvement project.
229	229	(f) This section does not apply to a utility that has in
230	230	place a negotiated stay-out agreement on September 1, 2011.
231	231	SECTION 6. Section 13.242(c), Water Code, is amended to
232	232	read as follows:
233	233	(c) The commission may by rule allow a municipality or
234	234	utility or water supply corporation to render retail water or sewer
235	235	service without a certificate of public convenience and necessity
236	236	if the municipality has given notice under Section 13.255 [of this
237	237	code] that it intends to provide retail water or sewer service to an
238	238	area or if the utility or water supply corporation has less than 15
239	239	potential connections and is not within the certificated area of
240	240	another retail public utility.
241	241	SECTION 7. Section 13.248, Water Code, is amended to read as
242	242	follows:
243	243	Sec. 13.248. CONTRACTS VALID AND ENFORCEABLE. Contracts
244	244	between retail public utilities designating areas to be served and
245	245	customers to be served by those retail public utilities, when
246	246	approved by the commission or the executive director after public
247	247	notice [and hearing], are valid and enforceable and are
248	248	incorporated into the appropriate areas of public convenience and
249	249	necessity.
250	250	SECTION 8. Section 49.321, Water Code, is amended to read as
251	251	follows:
252	252	Sec. 49.321. DISSOLUTION AUTHORITY. After notice [and
253	253	hearing], the commission or executive director may dissolve any
254	254	district that is inactive for a period of five consecutive years and
255	255	has no outstanding bonded indebtedness.
256	256	SECTION 9. Section 49.324, Water Code, is amended to read as
257	257	follows:
258	258	Sec. 49.324. ORDER OF DISSOLUTION. The commission or the
259	259	executive director may enter an order dissolving the district [at
260	260	the conclusion of the hearing] if the commission or executive
261	261	director [it] finds that the district has performed none of the
262	262	functions for which it was created for a period of five consecutive
263	263	years [before the day of the proceeding] and that the district has
264	264	no outstanding bonded indebtedness.
265	265	SECTION 10. Section 49.326(a), Water Code, is amended to
266	266	read as follows:
267	267	(a) Appeals from an [a commission] order dissolving a
268	268	district shall be filed and heard in the district court of any of
269	269	the counties in which the land is located.
270	270	SECTION 11. Section 54.030(b), Water Code, is amended to
271	271	read as follows:
272	272	(b) The governing body of a district which desires to
273	273	convert into a district operating under this chapter shall adopt
274	274	and enter in the minutes of the governing body a resolution
275	275	declaring that in its judgment, conversion into a municipal utility
276	276	district operating under this chapter and under Article XVI,
277	277	Section 59, of the Texas Constitution, would serve the best
278	278	interest of the district and would be a benefit to the land and
279	279	property included in the district. The resolution shall also
280	280	request that the commission approve [to hold a hearing on the
281	281	question of] the conversion of the district.
282	282	SECTION 12. Section 54.032, Water Code, is amended to read
283	283	as follows:
284	284	Sec. 54.032. CONVERSION OF DISTRICT: NOTICE. (a) Notice
285	285	of the conversion [hearing] shall be given by publishing notice in a
286	286	newspaper with general circulation in the county or counties in
287	287	which the district is located.
288	288	(b) The notice shall be published once a week for two
289	289	consecutive weeks [with the first publication to be made not less
290	290	than 14 full days before the time set for the hearing].
291	291	(c) The notice shall:
292	292	(1) [state the time and place of the hearing;
293	293	[(2)] set out the resolution adopted by the district
294	294	in full; and
295	295	(2) [(3)] notify all interested persons how they may
296	296	offer comments [to appear and offer testimony] for or against the
297	297	proposal contained in the resolution.
298	298	SECTION 13. Section 54.033, Water Code, is amended to read
299	299	as follows:
300	300	Sec. 54.033. CONVERSION OF DISTRICT; FINDINGS. (a) If
301	301	[After a hearing, if] the commission or the executive director
302	302	finds that conversion of the district into one operating under this
303	303	chapter would serve the best interest of the district and would be a
304	304	benefit to the land and property included in the district, the
305	305	commission or executive director [it] shall enter an order making
306	306	this finding and the district shall become a district operating
307	307	under this chapter and no confirmation election shall be required.
308	308	(b) If the commission or the executive director finds that
309	309	the conversion of the district would not serve the best interest of
310	310	the district and would not be a benefit to the land and property
311	311	included in the district, the commission or executive director [it]
312	312	shall enter an order against conversion of the district into one
313	313	operating under this chapter.
314	314	(c) The findings of the commission or the executive director
315	315	entered under this section shall be subject to appeal or review
316	316	within 30 days after entry of the order [of the commission] granting
317	317	or denying the conversion.
318	318	(d) A copy of the [commission] order converting a district
319	319	shall be filed in the deed records of the county or counties in
320	320	which the district is located.
321	321	SECTION 14. The following are repealed:
322	322	(1) Sections 13.187(d-1), (i), (j), (l), (m), and (n),
323	323	Water Code; and
324	324	(2) Sections 49.322 and 54.031, Water Code.
325	325	SECTION 15. Except as otherwise provided by this Act, this
326	326	Act applies only to a statement of intent filed on or after the
327	327	effective date of this Act. A rate change to which a statement of
328	328	intent filed before the effective date of this Act applies is
329	329	governed by the law in effect on the date the statement was filed,
330	330	and that law is continued in effect for that purpose.
331	331	SECTION 16. This Act takes effect September 1, 2011.