83R10454 JXC-D
By: Rodriguez S.B. No. 1227
A BILL TO BE ENTITLED
AN ACT
relating to the creation of an on-bill repayment program to
encourage improvements to real property related to water
efficiency; authorizing a fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter A, Chapter 5, Property Code, is
amended by adding Section 5.021 to read as follows:
Sec. 5.021. NOTICE OF ON-BILL REPAYMENT OBLIGATIONS. (a) A
seller of residential real property that is subject to an
obligation under Subchapter P, Chapter 13, Water Code, shall give
to the purchaser of the property a written notice that discloses the
obligation.
(b) The seller shall deliver the notice to the purchaser
before the date the executory contract binds the purchaser to
purchase the property.
(c) This section does not apply to a transfer:
(1) under a court order or foreclosure sale;
(2) by a trustee in bankruptcy;
(3) to a mortgagee by a mortgagor or successor in
interest or to a beneficiary of a deed of trust by a trustor or
successor in interest;
(4) by a mortgagee or a beneficiary under a deed of
trust who has acquired the land at a sale conducted under a power of
sale under a deed of trust or a sale under a court-ordered
foreclosure or has acquired the land by a deed in lieu of
foreclosure;
(5) by a fiduciary in the course of the administration
of a decedent's estate, guardianship, conservatorship, or trust;
(6) from one co-owner to another co-owner of an
undivided interest in the real property;
(7) to a spouse or a person in the lineal line of
consanguinity of the seller;
(8) to or from a governmental entity; or
(9) of only a mineral interest, leasehold interest, or
security interest.
(d) A violation of this section does not invalidate a
conveyance. A seller who fails to make a disclosure as required by
this section is liable to the transferee for three times the actual
damages incurred.
SECTION 2. Chapter 13, Water Code, is amended by adding
Subchapter P to read as follows:
SUBCHAPTER P. ON-BILL REPAYMENT PROGRAM
Sec. 13.601. DEFINITIONS. In this subchapter:
(1) "Charge" means an amount included on a retail
water or sewer service bill that is due under an on-bill repayment
program.
(2) "Eligible water improvement" means a water
improvement that meets the requirements for participation in an
on-bill repayment program.
(3) "Improved property" means property on which a
water improvement has been built under an on-bill repayment
program.
(4) "Lender" means a person who provides financing on
an eligible water improvement or to whom payment is owed for
financing an eligible water improvement that is being repaid
through an on-bill repayment program.
(5) "Obligation" means money owed under an agreement
to repay financed eligible water improvements through an on-bill
repayment program.
Sec. 13.602. ON-BILL REPAYMENT PROGRAM. (a) The
commission by rule shall establish an on-bill repayment program to
facilitate financing and repayment of eligible water improvements
between customers, lenders, and retail public utilities.
(b) Under the program, a customer and a lender who finances
an eligible water improvement on the customer's property may agree
to add the customer's loan payments to the customer's retail water
or sewer service bill. The commission shall require the retail
public utility that provides service to the customer to participate
in the program after the commission receives a written request for
participation from the customer or lender.
Sec. 13.603. MASTER SERVICER. (a) The commission shall
appoint a government agency or a private person to administer the
program as master servicer. The master servicer shall:
(1) manage payments and maintain documentation for all
program participants;
(2) collect money paid to retail public utilities
under the program and promptly remit payment to lenders as
applicable; and
(3) perform all other duties assigned by commission
rule.
(b) The commission by rule shall:
(1) authorize the master servicer to collect fees, as
approved by the commission, from on-bill repayment program lenders
to cover costs; and
(2) grant the master servicer any other rights or
powers the commission considers necessary.
Sec. 13.604. PROGRAM STANDARDS. The commission by rule
shall adopt minimum standards for the on-bill repayment program. A
retail public utility may exceed the standards. The minimum
standards must include:
(1) a list of water improvement projects that are
eligible for the on-bill repayment program;
(2) a limitation or prohibition on the removal of
water improvements from a property before an outstanding on-bill
repayment obligation is satisfied;
(3) a requirement that any outstanding obligation
created under the program:
(A) remains in effect regardless of any change in
ownership or possession of the improved property; and
(B) at all times constitutes an obligation of the
retail water or sewer service customer of record on the improved
property;
(4) a requirement that any arrearages on charges under
the program accruing before transfer of the approved property,
unless expressly assumed, remain the responsibility of the retail
water or sewer service customer of record on the improved property
at the time the arrearage accrued; and
(5) a requirement that charges under the program be
included on a customer's retail water or sewer service bill.
Sec. 13.605. FAILURE TO PAY. If a customer fails to pay the
full amount of a monthly charge under the program, the failure to
pay is treated as a failure to pay for retail water or sewer
service.
Sec. 13.606. PARTIAL PAYMENT. The commission shall adopt
rules to determine the division of a partial payment between the
retail water or sewer services billed and the on-bill repayment
program charge.
Sec. 13.607. LENDERS. (a) A lender shall determine loan
eligibility, including credit evaluations.
(b) A lender who participates in the program must work with
the master servicer when providing a loan under the program.
(c) The commission by rule shall approve the financing
structures through which a lender may provide financing under the
on-bill repayment program.
Sec. 13.608. ACCEPTANCE OF OBLIGATION. If a customer
applies for and accepts retail water or sewer service on an improved
property that is subject to an outstanding obligation under an
on-bill repayment program, the customer is considered to have
accepted the obligation for the charges that accrue under the
on-bill repayment program during the receipt of services.
Sec. 13.609. EXCEPTION RELATING TO REMOVING IMPROVEMENT.
Notwithstanding any other provision of this subchapter, the
commission by rule may exempt any eligible water improvement or any
class or category of eligible water improvement from a limitation
or prohibition prescribed by the commission under Section
13.604(3).
Sec. 13.610. RECORD FILED WITH COUNTY CLERK. (a) The
commission by rule shall require a retail public utility or the
utility's agent to record notice of an obligation on an improved
property with the county clerk of the county in which the property
is located.
(b) The notice required by this section does not create a
security interest in the improved property.
(c) On satisfaction of the obligation, the retail public
utility or the utility's agent shall file notice with the county
clerk in the county in which the property is located that the
obligation has been satisfied.
(d) The county clerk shall file notices under this section
with the deed records.
Sec. 13.611. REVENUES FOR RATE PURPOSES. Payments
collected by a utility under this subchapter are not revenues that
may be considered for the purposes of Subchapter F.
SECTION 3. As soon as practicable after the effective date
of this Act, but not later than January 1, 2014, the Texas
Commission on Environmental Quality shall adopt rules to implement
the provisions of this Act.
SECTION 4. This Act takes effect September 1, 2013.