Texas 2013 - 83rd Regular

Texas Senate Bill SB1162 Compare Versions

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1	1	By: Watson, Nichols S.B. No. 1162
2	2	(In the Senate - Filed March 5, 2013; March 12, 2013, read
3	3	first time and referred to Committee on Natural Resources;
4	4	April 10, 2013, reported favorably by the following vote: Yeas 9,
5	5	Nays 0; April 10, 2013, sent to printer.)
6	6
7	7
8	8	A BILL TO BE ENTITLED
9	9	AN ACT
10	10	relating to requirements for the purchase or acquisition of a water
11	11	or sewer system.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Section 13.301, Water Code, is amended by
14	14	amending Subsections (a), (d), (e), (f), and (g) and adding
15	15	Subsections (a-1), (a-2), (a-3), and (e-1) to read as follows:
16	16	(a) A utility or a water supply or sewer service
17	17	corporation, on or before the 120th day before the effective date of
18	18	a sale, acquisition, lease, or rental of a water or sewer system
19	19	that is required by law to possess a certificate of public
20	20	convenience and necessity or the effective date of a merger or
21	21	consolidation with such a utility or water supply or sewer service
22	22	corporation, shall:
23	23	(1) file a written application with the commission
24	24	electronically; and
25	25	(2) [unless public notice is waived by the executive
26	26	director for good cause shown,] give public notice of the action.
27	27	(a-1) The commission shall post the application on the
28	28	commission's Internet website not later than the 30th day after the
29	29	date the application is accepted for filing.
30	30	(a-2) For a proposed sale, acquisition, lease, rental,
31	31	merger, or consolidation transaction subject to Subsection (a) that
32	32	involves more than one utility or water supply or sewer service
33	33	corporation, or that involves a single utility or water supply or
34	34	sewer service corporation and a political subdivision's water or
35	35	sewer system, at the time notice is given under Subsection (a)(2),
36	36	the parties to the proposed transaction jointly shall mail written
37	37	notice to each affected customer in accordance with commission
38	38	rules. The written notice must include:
39	39	(1) a comparison of the rates and quality-of-service
40	40	records of the parties;
41	41	(2) the purchase price or lease rate of the sale,
42	42	acquisition, lease, or rental;
43	43	(3) the anticipated transaction costs, including
44	44	legal fees, regulatory fees, and interest;
45	45	(4) a disclosure of:
46	46	(A) any investments or expenses any party to the
47	47	transaction anticipates it will make during the next 24 months for
48	48	infrastructure improvement to a water or sewer system involved in
49	49	the transaction; and
50	50	(B) the estimated effect the investments or
51	51	expenses will have on rates;
52	52	(5) the expected closing date of the transaction;
53	53	(6) the estimated date by which customers to be
54	54	affected by the transaction will be required to pay service fees in
55	55	an amount different than service fees payable by those customers on
56	56	the date of the application;
57	57	(7) any plans to implement a rate change during the
58	58	pendency of the proposed transaction; and
59	59	(8) notice to the customer that the customer can make a
60	60	written request for a public hearing to the commission.
61	61	(a-3) Notwithstanding any other provision of this section,
62	62	the executive director may waive the notice requirement if the
63	63	sale, acquisition, lease, rental, merger, or consolidation
64	64	transaction involves two or more parties, and all but one are in
65	65	receivership, are under temporary management, or have been referred
66	66	for the appointment of a temporary management or receivership.
67	67	(d) After the parties to the proposed transaction have made
68	68	the application as required by this section and provided notice as
69	69	required by this section, the [The] commission shall, with or
70	70	without a public hearing, investigate the sale, acquisition, lease,
71	71	[or] rental, merger, or consolidation to determine whether the
72	72	proposed transaction will serve the public interest. In making the
73	73	determination, the commission shall consider:
74	74	(1) the factors listed under Section 13.246(c);
75	75	(2) the anticipated benefits of the transaction;
76	76	(3) the anticipated costs of the transaction;
77	77	(4) whether the price to be paid for the assets is
78	78	excessive; and
79	79	(5) if the applicant intends to consolidate water or
80	80	sewer systems under a single tariff, whether the systems being
81	81	consolidated have substantially similar facilities, quality of
82	82	service, and cost of service.
83	83	(e) On [Before] the expiration of the 120-day notification
84	84	period, the executive director shall notify all known parties to
85	85	the transaction of the executive director's decision whether to
86	86	request that the commission hold a public hearing to determine if
87	87	the transaction will serve the public interest. The executive
88	88	director shall request a public hearing if, before the expiration
89	89	of the 120-day notification period, at least 10 percent of the
90	90	customers of a utility or a water supply or sewer service
91	91	corporation subject to Subsection (a-2) make a written request for
92	92	a public hearing. The executive director may request a hearing if:
93	93	(1) the application filed with the commission or the
94	94	public notice was improper;
95	95	(2) the person purchasing or acquiring the water or
96	96	sewer system has not demonstrated adequate financial, managerial,
97	97	and technical capability for providing continuous and adequate
98	98	service to the service area being acquired and to any areas
99	99	currently certificated to the person;
100	100	(3) the person or an affiliated interest of the person
101	101	purchasing or acquiring the water or sewer system has a history of:
102	102	(A) noncompliance with the requirements of the
103	103	commission [or the Texas Department of Health]; or
104	104	(B) continuing mismanagement or misuse of
105	105	revenues as a utility service provider;
106	106	(4) the person purchasing or acquiring the water or
107	107	sewer system cannot demonstrate the financial ability to provide
108	108	the necessary capital investment to ensure the provision of
109	109	continuous and adequate service to the customers of the water or
110	110	sewer system; or
111	111	(5) there are concerns that the transaction may not
112	112	serve the public interest, after the application of the
113	113	considerations provided by Subsection (d) [Section 13.246(c) for
114	114	determining whether to grant a certificate of convenience and
115	115	necessity].
116	116	(e-1) The commission shall hold a public hearing at the
117	117	request of the executive director.
118	118	(f) Unless the executive director requests that a public
119	119	hearing be held, the sale, acquisition, lease, [or] rental, merger,
120	120	or consolidation may be completed as proposed:
121	121	(1) at the end of the 120-day period; or
122	122	(2) at any time after the executive director notifies
123	123	the utility or water supply or sewer service corporation that a
124	124	hearing will not be requested.
125	125	(g) If a public hearing is requested by the executive
126	126	director [or if the utility or water supply or sewer service
127	127	corporation fails to make the application as required or to provide
128	128	public notice], the sale, acquisition, lease, [or] rental, merger,
129	129	or consolidation may not be completed unless the commission
130	130	determines after a public hearing that the proposed transaction
131	131	serves the public interest.
132	132	SECTION 2. Section 13.301, Water Code, as amended by this
133	133	Act, applies only to a sale, acquisition, lease, rental, merger, or
134	134	consolidation for which an application is filed with the Texas
135	135	Commission on Environmental Quality on or after January 1, 2014. A
136	136	sale, acquisition, lease, rental, merger, or consolidation for
137	137	which an application is filed before January 1, 2014, is governed by
138	138	the law in effect immediately before the effective date of this Act,
139	139	and that law is continued in effect for that purpose.
140	140	SECTION 3. The changes in law made by this Act do not affect
141	141	a transfer of state agency functions as provided by another Act of
142	142	the 83rd Legislature, Regular Session, 2013, that becomes law. To
143	143	the extent functions of the Texas Commission on Environmental
144	144	Quality affected by the changes in law are transferred to another
145	145	agency, references to the commission in Section 13.301, Water Code,
146	146	as amended by this Act, shall be construed as references to the
147	147	other agency.
148	148	SECTION 4. This Act takes effect September 1, 2013.
149	149	* * * * *