Texas 2019 - 86th Regular

Texas House Bill HB1826 Compare Versions

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1	1	86R5758 JXC-D
2	2	By: King of Uvalde H.B. No. 1826
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the procedure for amending or revoking certificates of
8	8	public convenience and necessity issued to certain water utilities.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 13.254, Water Code, is amended to read as
11	11	follows:
12	12	Sec. 13.254. REVOCATION OR AMENDMENT OF CERTIFICATE. (a)
13	13	The utility commission at any time after notice and hearing may
14	14	revoke or amend any certificate of public convenience and
15	15	necessity:
16	16	(1) with the written consent of the certificate
17	17	holder; or
18	18	(2) if the utility commission finds that:
19	19	(A) [(1)] the certificate holder has never
20	20	provided, is no longer providing, is incapable of providing, or has
21	21	failed to provide continuous and adequate service in the area, or
22	22	part of the area, covered by the certificate;
23	23	(B) [(2)] in an affected county as defined in
24	24	Section 16.341, the cost of providing service by the certificate
25	25	holder is so prohibitively expensive as to constitute denial of
26	26	service, provided that, for commercial developments or for
27	27	residential developments started after September 1, 1997, in an
28	28	affected county as defined in Section 16.341, the fact that the cost
29	29	of obtaining service from the currently certificated retail public
30	30	utility makes the development economically unfeasible does not
31	31	render such cost prohibitively expensive in the absence of other
32	32	relevant factors;
33	33	(C) [(3)] the certificate holder has agreed in
34	34	writing to allow another retail public utility to provide service
35	35	within its service area, except for an interim period, without
36	36	amending its certificate; or
37	37	(D) [(4)] the certificate holder has failed to
38	38	file a cease and desist action pursuant to Section 13.252 within 180
39	39	days of the date that it became aware that another retail public
40	40	utility was providing service within its service area, unless the
41	41	certificate holder demonstrates good cause for its failure to file
42	42	such action within the 180 days.
43	43	(b) For a proceeding under Subsection (a) in which another
44	44	retail public utility proposes to provide service in the
45	45	decertified area and the certificate holder has not agreed to the
46	46	decertification, the utility commission shall issue an initial
47	47	order to revoke or amend the certificate and follow the process in
48	48	this section to require that the alternate retail public utility
49	49	provide compensation to the certificate holder.
50	50	(c) [(a-1)] As an alternative to decertification under
51	51	Subsection (a), the owner of a tract of land that is at least 50
52	52	acres and that is not in a platted subdivision actually receiving
53	53	water or sewer service may petition the utility commission under
54	54	this subsection for expedited release of the area from a
55	55	certificate of public convenience and necessity so that the area
56	56	may receive service from another retail public utility. The fact
57	57	that a certificate holder is a borrower under a federal loan program
58	58	is not a bar to a request under this subsection for the release of
59	59	the petitioner's land and the receipt of services from an
60	60	alternative provider. [On the day the petitioner submits the
61	61	petition to the utility commission, the petitioner shall send, via
62	62	certified mail, a copy of the petition to the certificate holder,
63	63	who may submit information to the utility commission to controvert
64	64	information submitted by the petitioner.] The petitioner must
65	65	demonstrate in the petition that:
66	66	(1) a written request for service, other than a
67	67	request for standard residential or commercial service, has been
68	68	submitted to the certificate holder, identifying:
69	69	(A) the area for which service is sought;
70	70	(B) the timeframe within which service is needed
71	71	for current and projected service demands in the area;
72	72	(C) the level and manner of service needed for
73	73	current and projected service demands in the area;
74	74	(D) the approximate cost for the alternative
75	75	provider to provide the service at the same level and manner that is
76	76	requested from the certificate holder;
77	77	(E) the flow and pressure requirements and
78	78	specific infrastructure needs, including line size and system
79	79	capacity for the required level of fire protection requested; and
80	80	(F) any additional information requested by the
81	81	certificate holder that is reasonably related to determination of
82	82	the capacity or cost for providing the service;
83	83	(2) the certificate holder has been allowed at least
84	84	90 calendar days to review and respond to the written request and
85	85	the information it contains;
86	86	(3) the certificate holder:
87	87	(A) has refused to provide the service;
88	88	(B) is not capable of providing the service on a
89	89	continuous and adequate basis within the timeframe, at the level,
90	90	at the approximate cost that the alternative provider is capable of
91	91	providing for a comparable level of service, or in the manner
92	92	reasonably needed or requested by current and projected service
93	93	demands in the area; or
94	94	(C) conditions the provision of service on the
95	95	payment of costs not properly allocable directly to the
96	96	petitioner's service request, as determined by the utility
97	97	commission; and
98	98	(4) the alternate retail public utility from which the
99	99	petitioner will be requesting service possesses the financial,
100	100	managerial, and technical capability to provide continuous and
101	101	adequate service within the timeframe, at the level, at the cost,
102	102	and in the manner reasonably needed or requested by current and
103	103	projected service demands in the area.
104	104	(d) A landowner who intends to file a petition under
105	105	Subsection (c) shall provide to the certificate holder notice of
106	106	the landowner's intent to file the petition at least 30 days before
107	107	the date the landowner files the petition. The notice must specify
108	108	the tract of land to be decertified. On the day the landowner
109	109	submits the petition to the utility commission under Subsection
110	110	(c), the landowner by certified mail shall send a copy of the
111	111	petition to the certificate holder. The certificate holder may
112	112	submit to the utility commission information to controvert
113	113	information submitted by the landowner.
114	114	(e) [(a-2)] A landowner is not entitled to make the election
115	115	described in Subsection (c) [(a-1)] or (h) [(a-5)] but is entitled
116	116	to contest under Subsection (a) the involuntary certification of
117	117	its property in a hearing held by the utility commission if the
118	118	landowner's property is located:
119	119	(1) within the boundaries of any municipality or the
120	120	extraterritorial jurisdiction of a municipality with a population
121	121	of more than 500,000 and the municipality or retail public utility
122	122	owned by the municipality is the holder of the certificate; or
123	123	(2) in a platted subdivision actually receiving water
124	124	or sewer service.
125	125	(f) Not later than the 60th day after [(a-3) Within 60
126	126	calendar days from] the date the utility commission determines a
127	127	[the] petition filed pursuant to Subsection (c) [(a-1)] to be
128	128	administratively complete, the utility commission shall issue an
129	129	initial order granting [grant] the petition unless the utility
130	130	commission makes an express finding that the petitioner failed to
131	131	satisfy the elements required in Subsection (c) [(a-1)] and
132	132	supports its finding with separate findings and conclusions for
133	133	each element based solely on the information provided by the
134	134	petitioner and the certificate holder. The utility commission may
135	135	grant or deny a petition subject to terms and conditions
136	136	specifically related to the service request of the petitioner and
137	137	all relevant information submitted by the petitioner and the
138	138	certificate holder. [In addition, the utility commission may
139	139	require an award of compensation as otherwise provided by this
140	140	section.]
141	141	(g) [(a-4)] Chapter 2001, Government Code, does not apply to
142	142	a [any] petition filed under Subsection (c) [(a-1)]. The decision
143	143	of the utility commission on the petition is final after any
144	144	reconsideration authorized by the utility commission's rules and
145	145	may not be appealed.
146	146	(h) [(a-5)] As an alternative to decertification under
147	147	Subsection (a) and expedited release under Subsection (c) [(a-1)],
148	148	the owner of a tract of land that is at least 25 acres and that is
149	149	not receiving water or sewer service may petition for expedited
150	150	release of the area from a certificate of public convenience and
151	151	necessity and is entitled to that release if the landowner's
152	152	property:
153	153	(1) is located in a county:
154	154	(A) with a population of at least one million or
155	155	that is[, a county] adjacent to a county with a population of at
156	156	least one million; or
157	157	(B) [, or a county] with a population of more than
158	158	200,000 and less than 220,000 that does not contain a public or
159	159	private university that had a total enrollment in the most recent
160	160	fall semester of 40,000 or more; and
161	161	(2) is not located[, and not] in a county that has a
162	162	population of more than 45,500 and less than 47,500.
163	163	(i) A landowner who intends to file a petition under
164	164	Subsection (h) shall provide to the certificate holder notice of
165	165	the landowner's intent to file the petition at least 30 days before
166	166	the date the landowner files the petition. The notice must specify
167	167	the tract of land to be decertified.
168	168	(j) [(a-6)] The utility commission shall issue an initial
169	169	order granting [grant] a petition received under Subsection (h)
170	170	[(a-5)] not later than the 60th day after the date the landowner
171	171	files the petition. The utility commission may not deny a petition
172	172	received under Subsection (h) [(a-5)] based on the fact that a
173	173	certificate holder is a borrower under a federal loan program. [The
174	174	utility commission may require an award of compensation by the
175	175	petitioner to a decertified retail public utility that is the
176	176	subject of a petition filed under Subsection (a-5) as otherwise
177	177	provided by this section.]
178	178	(k) A [(a-7) The] utility shall include with the statement
179	179	of intent provided to each landowner or ratepayer a notice of:
180	180	(1) a proceeding under this section related to
181	181	certification or decertification;
182	182	(2) the reason or reasons for the proposed rate
183	183	change; and
184	184	(3) any bill payment assistance program available to
185	185	low-income ratepayers.
186	186	(l) [(a-8)] If a certificate holder has never made service
187	187	available through planning, design, construction of facilities, or
188	188	contractual obligations to serve the area a petitioner seeks to
189	189	have released under Subsection (c) [(a-1)], the utility commission
190	190	is not required to find that the proposed alternative provider is
191	191	capable of providing better service than the certificate holder,
192	192	but only that the proposed alternative provider is capable of
193	193	providing the requested service.
194	194	(m) [(a-9)] Subsection (l) [(a-8)] does not apply to a
195	195	county:
196	196	(1) that borders the United Mexican States and the
197	197	Gulf of Mexico or a county adjacent to a county that borders the
198	198	United Mexican States and the Gulf of Mexico;
199	199	(2) [.
200	200	[(a-10) Subsection (a-8) does not apply to a county:
201	201	[(1)] with a population of more than 30,000 and less
202	202	than 35,000 that borders the Red River;
203	203	(3) [or
204	204	[(2)] with a population of more than 100,000 and less
205	205	than 200,000 that borders a county described by Subdivision (2);
206	206	(4) [(1).
207	207	[(a-11) Subsection (a-8) does not apply to a county:
208	208	[(1)] with a population of 130,000 or more that is
209	209	adjacent to a county with a population of 1.5 million or more that
210	210	is within 200 miles of an international border; or
211	211	(5) [(2)] with a population of more than 40,000 and
212	212	less than 50,000 that contains a portion of the San Antonio River.
213	213	(n) [(b)] Upon written request from the certificate holder,
214	214	the utility commission may cancel the certificate of a utility or
215	215	water supply corporation authorized by rule to operate without a
216	216	certificate of public convenience and necessity under Section
217	217	13.242(c).
218	218	(o) [(c)] If the certificate of any retail public utility is
219	219	revoked or amended under this section, the utility commission may
220	220	require one or more retail public utilities with their consent to
221	221	provide service in the decertified area [in question]. An [The]
222	222	order of the utility commission issued under this subsection shall
223	223	not be effective to transfer property.
224	224	(p) In an initial order issued under Subsection (b), (f), or
225	225	(j), the utility commission shall require the certificate holder,
226	226	not later than the 20th day after the date the order is issued, to
227	227	submit to the utility commission and, as applicable, the petitioner
228	228	and any retail public utility that intends to provide service to the
229	229	decertified area the following information, which must be current
230	230	as of the date the information is provided:
231	231	(1) the number of potable water connections the
232	232	certificate holder could have served in the decertified area at a
233	233	density of one connection per acre while maintaining 0.6 gallons
234	234	per minute of potable water supply to each connection with the
235	235	groundwater supply, surface water supply, and treated water
236	236	purchase contract supply available to the certificate holder;
237	237	(2) the number of wastewater connections the
238	238	certificate holder could have served in the decertified area at a
239	239	density of one connection per acre while maintaining 200 gallons
240	240	per day of wastewater treatment capacity to each connection with
241	241	the combined wastewater treatment plant capacity and wastewater
242	242	treatment wholesale contract capacity available to the certificate
243	243	holder;
244	244	(3) the certificate holder's base monthly retail rate;
245	245	and
246	246	(4) any additional supporting evidence or
247	247	documentation for the information described by Subdivision (1),
248	248	(2), or (3) if required by the utility commission.
249	249	(q) Not later than the 30th day after the date the utility
250	250	commission receives the information required to be submitted under
251	251	Subsection (p), the utility commission shall issue a second order
252	252	requiring that just and adequate compensation be paid to the
253	253	certificate holder and establishing the amount of compensation.
254	254	Compensation is just and adequate if the compensation is in an
255	255	amount equal to the certificate holder's base monthly retail rate
256	256	multiplied by the number of water and wastewater connections the
257	257	certificate holder could have served in the decertified area for a
258	258	period of 10 years. For an area decertified under Subsection (a),
259	259	the alternate retail public utility that intends to serve the area
260	260	shall pay the compensation. For an area decertified under
261	261	Subsection (c) or (h), the petitioner shall pay the compensation.
262	262	(r) Notwithstanding Subsection (q), the retail public
263	263	utility or petitioner may, before the date the utility commission
264	264	is authorized to issue a second order under Subsection (q), request
265	265	that the utility commission notify the retail public utility or
266	266	petitioner of the amount of compensation the utility commission
267	267	intends to order and request a hearing on the issue of compensation
268	268	before the utility commission to be held before the second order may
269	269	be issued. The utility commission is not required to hold the
270	270	hearing unless the requestor deposits the amount of compensation
271	271	the utility commission intends to order into the registry of the
272	272	district court of Travis County, pending the outcome of the
273	273	hearing.
274	274	(s) The utility commission shall conduct a hearing under
275	275	Subsection (r) not later than the 60th day after the date of the
276	276	request. At the hearing, the utility commission shall consider
277	277	evidence relating to all information submitted under Subsection
278	278	(p). The utility commission shall issue the second order after the
279	279	hearing.
280	280	(t) When compensation has been paid according to the
281	281	requirements of the second order, the utility commission shall
282	282	issue a third order to finalize the decertification of the retail
283	283	public utility. The third order must be made effective as of the
284	284	date the compensation is paid.
285	285	(u) [(d) A retail public utility may not in any way render
286	286	retail water or sewer service directly or indirectly to the public
287	287	in an area that has been decertified under this section without
288	288	providing compensation for any property that the utility commission
289	289	determines is rendered useless or valueless to the decertified
290	290	retail public utility as a result of the decertification.
291	291	[(e) The determination of the monetary amount of
292	292	compensation, if any, shall be determined at the time another
293	293	retail public utility seeks to provide service in the previously
294	294	decertified area and before service is actually provided. The
295	295	utility commission shall ensure that the monetary amount of
296	296	compensation is determined not later than the 90th calendar day
297	297	after the date on which a retail public utility notifies the utility
298	298	commission of its intent to provide service to the decertified
299	299	area.
300	300	[(f) The monetary amount shall be determined by a qualified
301	301	individual or firm serving as independent appraiser agreed upon by
302	302	the decertified retail public utility and the retail public utility
303	303	seeking to serve the area. The determination of compensation by the
304	304	independent appraiser shall be binding on the utility commission.
305	305	The costs of the independent appraiser shall be borne by the retail
306	306	public utility seeking to serve the area.
307	307	[(g) For the purpose of implementing this section, the value
308	308	of real property owned and utilized by the retail public utility for
309	309	its facilities shall be determined according to the standards set
310	310	forth in Chapter 21, Property Code, governing actions in eminent
311	311	domain and the value of personal property shall be determined
312	312	according to the factors in this subsection. The factors ensuring
313	313	that the compensation to a retail public utility is just and
314	314	adequate shall include: the amount of the retail public utility's
315	315	debt allocable for service to the area in question; the value of the
316	316	service facilities of the retail public utility located within the
317	317	area in question; the amount of any expenditures for planning,
318	318	design, or construction of service facilities that are allocable to
319	319	service to the area in question; the amount of the retail public
320	320	utility's contractual obligations allocable to the area in
321	321	question; any demonstrated impairment of service or increase of
322	322	cost to consumers of the retail public utility remaining after the
323	323	decertification; the impact on future revenues lost from existing
324	324	customers; necessary and reasonable legal expenses and
325	325	professional fees; and other relevant factors. The utility
326	326	commission shall adopt rules governing the evaluation of these
327	327	factors.
328	328	[(g-1) If the retail public utilities cannot agree on an
329	329	independent appraiser within 10 calendar days after the date on
330	330	which the retail public utility notifies the utility commission of
331	331	its intent to provide service to the decertified area, each retail
332	332	public utility shall engage its own appraiser at its own expense,
333	333	and each appraisal shall be submitted to the utility commission
334	334	within 60 calendar days. After receiving the appraisals, the
335	335	utility commission shall appoint a third appraiser who shall make a
336	336	determination of the compensation within 30 days. The determination
337	337	may not be less than the lower appraisal or more than the higher
338	338	appraisal. Each retail public utility shall pay half the cost of the
339	339	third appraisal.
340	340	[(h)] A certificate holder that has land removed from its
341	341	certificated service area in accordance with this section may not
342	342	be required, after the land is removed, to provide service to the
343	343	removed land for any reason, including the violation of law or
344	344	utility commission or commission rules by a water or sewer system of
345	345	another person.
346	346	SECTION 2. The changes in law made by this Act apply only to
347	347	a proceeding affecting a certificate of public convenience and
348	348	necessity that commences on or after the effective date of this Act.
349	349	A proceeding affecting a certificate of public convenience and
350	350	necessity that commenced before the effective date of this Act is
351	351	governed by the law in effect on the date the proceeding is
352	352	commenced, and that law is continued in effect for that purpose.
353	353	SECTION 3. This Act takes effect September 1, 2019.