Texas 2023 - 88th Regular

Texas House Bill HB2701 Compare Versions

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1	1	88R22823 DIO-F
2	2	By: Guillen H.B. No. 2701
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to public utility agencies; providing authority to issue
8	8	bonds; providing authority to impose assessments.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 572.001(3), Local Government Code, is
11	11	amended to read as follows:
12	12	(3) "Public entity" means a political entity or
13	13	corporate body of this state, including a county, municipality, or
14	14	district or authority created under Section 52, Article III, or
15	15	Section 59, Article XVI, Texas Constitution, or a water supply or
16	16	sewer service corporation.
17	17	SECTION 2. Section 572.012(a), Local Government Code, is
18	18	amended to read as follows:
19	19	(a) Each participating public entity may:
20	20	(1) use the entity's money to plan, acquire,
21	21	construct, own, operate, and maintain its interest in a facility;
22	22	(2) share in the facility;
23	23	(3) issue bonds and other securities to raise money
24	24	for a purpose described by Subdivision (1) in the same manner and to
25	25	the same extent and subject to the same conditions as would be
26	26	applicable if the public entity had sole ownership of the facility;
27	27	(4) acquire, for the use and benefit of each
28	28	participating public entity, land, easements, and property for a
29	29	facility by purchase or by exercising the power of eminent domain;
30	30	[and]
31	31	(5) transfer or otherwise convey the land, property,
32	32	or property interest or otherwise have the land, property, or
33	33	property interest become vested in other participating public
34	34	entities to the extent and in the manner agreed between the
35	35	entities;
36	36	(6) make an acquisition described by Subdivision (4)
37	37	through a purchase from a public or private entity; and
38	38	(7) for the use and benefit of each participating
39	39	public entity, acquire by purchase a public utility, as defined by
40	40	Section 13.002, Water Code, other than an affected county.
41	41	SECTION 3. Sections 572.051(2) and (3), Local Government
42	42	Code, are amended to read as follows:
43	43	(2) "Obligation" means a [revenue] bond or note
44	44	secured by a revenue, fee, charge, assessment, or other revenue of
45	45	an agency available for that purpose.
46	46	(3) "Public utility agency" means an agency created
47	47	under this subchapter by two or more public entities to acquire,
48	48	plan, finance, construct, own, operate, or maintain facilities.
49	49	SECTION 4. Sections 572.052(c) and (d), Local Government
50	50	Code, are amended to read as follows:
51	51	(c) A public utility agency is a:
52	52	(1) separate agency;
53	53	(2) political subdivision of this state; [and]
54	54	(3) political entity and corporate body; and
55	55	(4) retail public utility for the purposes of Chapter
56	56	13, Water Code.
57	57	(d) A public utility agency may not impose a tax but has all
58	58	the other powers and obligations that are related to facilities and
59	59	that are provided by law to a municipality that owns a facility,
60	60	except as provided by Section 572.061.
61	61	SECTION 5. Section 572.053, Local Government Code, is
62	62	amended to read as follows:
63	63	Sec. 572.053. CHANGES IN PUBLIC ENTITIES PARTICIPATING IN
64	64	PUBLIC UTILITY AGENCY. (a) The public entities that participate in
65	65	a public utility agency may by concurrent ordinances add a public
66	66	entity to, or delete a public entity from, participation in the
67	67	public utility agency.
68	68	(b) A participating public entity may withdraw from a public
69	69	utility agency by providing an ordinance or resolution of the
70	70	governing body of the participating public entity to the agency not
71	71	later than the 180th day before the proposed date of withdrawal. A
72	72	participating public entity may not withdraw from a public utility
73	73	agency under this subsection if bonds, notes, or other obligations
74	74	of the agency are secured by the revenues of the participating
75	75	public entity, unless the agency adopts a resolution approving the
76	76	withdrawal. Upon withdrawal, a participating public entity assumes
77	77	the outstanding debt attributable to that entity from the agency on
78	78	a prorated basis equal to that entity's benefit and has, without
79	79	compensation from the agency, no further rights, duties, or
80	80	obligations relating to the agency or ability to receive service
81	81	from the facilities of the agency.
82	82	SECTION 6. Section 572.058, Local Government Code, is
83	83	amended by amending Subsection (b) and adding Subsection (c) to
84	84	read as follows:
85	85	(b) A public utility agency may:
86	86	(1) perform any act necessary to the full exercise of
87	87	the agency's powers, including acts necessary to acquire, finance,
88	88	own, operate, or manage a facility of the agency;
89	89	(2) enter into a contract, lease, or agreement,
90	90	including an interlocal contract as authorized by Chapter 791,
91	91	Government Code, with or accept a grant or loan from any of the
92	92	following entities for the management and operation of an agency
93	93	facility or the acquisition, construction, financing, maintenance,
94	94	operation, provision, or receipt of a facility, service, or product
95	95	[a]:
96	96	(A) a department or agency of the United States;
97	97	(B) a department, agency, or municipality or
98	98	other political subdivision of this state; or
99	99	(C) a public or private corporation or person;
100	100	(3) sell, lease, convey, or otherwise dispose of all
101	101	or a portion of any right, interest, or property the agency
102	102	considers to be unnecessary for the efficient operation or
103	103	maintenance of its facilities; and
104	104	(4) adopt rules to govern the operation of the agency
105	105	and its employees, facilities, and service.
106	106	(c) Except as limited by a concurrent ordinance under which
107	107	the public utility agency is created, an agency may exercise any
108	108	right or power granted by general law to a county or municipality or
109	109	a district or authority created under Section 59, Article XVI,
110	110	Texas Constitution, to accomplish the purposes of the agency,
111	111	including issuing bonds payable from special assessments in the
112	112	manner provided by Chapter 372. This subsection does not authorize
113	113	a public utility agency to impose a tax.
114	114	SECTION 7. Sections 572.061(d) and (e), Local Government
115	115	Code, are amended to read as follows:
116	116	(d) Notwithstanding Subsection (a), the Public Utility
117	117	Commission of Texas has appellate jurisdiction over [the state
118	118	reserves its power to regulate and control] the rates and charges of
119	119	[by] a public utility agency in the manner provided by Section
120	120	13.043, Water Code.
121	121	(e) This [Until obligations issued under this subchapter
122	122	have been paid and discharged, this] state pledges to and agrees
123	123	with the purchasers and successive holders of [the] obligations
124	124	issued under this subchapter that in any appeal proceeding
125	125	regarding the public utility agency conducted under Section 13.043,
126	126	Water Code, the Public Utility Commission of Texas [it] will [not
127	127	limit or alter the powers of the agency to] establish [and collect]
128	128	rates and charges that will produce revenue sufficient to pay for
129	129	those items specified in Subsections (a) and (b) and any other
130	130	obligations of the agency in connection with those items.
131	131	SECTION 8. Section 572.062, Local Government Code, is
132	132	amended by amending Subsections (a) and (b) and adding Subsections
133	133	(b-1) and (b-2) to read as follows:
134	134	(a) A public utility agency may:
135	135	(1) issue obligations, including anticipation notes,
136	136	to accomplish the purposes of the agency; and
137	137	(2) finance or refund the acquisition, construction,
138	138	expansion, and improvement of all or a portion of a facility
139	139	relating to an agency purpose.
140	140	(b) Except as provided by Subsection (b-1), the [The] public
141	141	utility agency may pledge to the payment of the obligations the
142	142	revenue of all or part of its facilities, including facilities
143	143	acquired after the obligations are issued:
144	144	(1) revenues received from a public entity by contract
145	145	as authorized by a concurrent ordinance;
146	146	(2) special assessments:
147	147	(A) imposed by the agency in the manner provided
148	148	by Chapter 372; or
149	149	(B) imposed by a public entity and provided by
150	150	contract to the agency; or
151	151	(3) any other funds of the agency.
152	152	(b-1) Operation [However, operation] and maintenance
153	153	expenses, including salaries and labor, materials, and repairs of
154	154	facilities necessary to render efficient service, are a first lien
155	155	on and charge against the pledged revenue.
156	156	(b-2) A public utility agency may not use a facility owned
157	157	by the agency to secure or collateralize a new facility without the
158	158	approval by resolution of each participating public entity
159	159	participating in the joint financing of the new facility. This
160	160	subsection does not apply to the use of revenue from a facility
161	161	owned by the agency to secure or collateralize a new facility.
162	162	SECTION 9. Subchapter C, Chapter 572, Local Government
163	163	Code, is amended by adding Section 572.065 to read as follows:
164	164	Sec. 572.065. LIABILITY. Liability for the facilities and
165	165	management of the agency must be transferred to the agency on
166	166	ownership of the facilities by the agency.
167	167	SECTION 10. Section 13.002, Water Code, is amended by
168	168	adding Subdivision (16-a) and amending Subdivisions (19) and (23)
169	169	to read as follows:
170	170	(16-a) "Public utility agency" means a public utility
171	171	agency created under Chapter 572, Local Government Code.
172	172	(19) "Retail public utility" means any person,
173	173	corporation, public utility, water supply or sewer service
174	174	corporation, municipality, public utility agency, political
175	175	subdivision or agency operating, maintaining, or controlling in
176	176	this state facilities for providing potable water service or sewer
177	177	service, or both, for compensation.
178	178	(23) "Water and sewer utility," "public utility," or
179	179	"utility" means any person, corporation, cooperative corporation,
180	180	affected county, or any combination of these persons or entities,
181	181	other than a municipal corporation, public utility agency, water
182	182	supply or sewer service corporation, or [a] political subdivision
183	183	of the state, except an affected county, or their lessees,
184	184	trustees, and receivers, owning or operating for compensation in
185	185	this state equipment or facilities for the transmission, storage,
186	186	distribution, sale, or provision of potable water to the public or
187	187	for the resale of potable water to the public for any use or for the
188	188	collection, transportation, treatment, or disposal of sewage or
189	189	other operation of a sewage disposal service for the public, other
190	190	than equipment or facilities owned and operated for either purpose
191	191	by a municipality or other political subdivision of this state or a
192	192	water supply or sewer service corporation, but does not include any
193	193	person or corporation not otherwise a public utility that furnishes
194	194	the services or commodity only to itself or its employees or tenants
195	195	as an incident of that employee service or tenancy when that service
196	196	or commodity is not resold to or used by others.
197	197	SECTION 11. Section 13.043, Water Code, is amended by
198	198	amending Subsections (b), (c), and (i) and adding Subsections (i-1)
199	199	and (j-1) to read as follows:
200	200	(b) Ratepayers of the following entities may appeal the
201	201	decision of the governing body of the entity affecting their water,
202	202	drainage, or sewer rates to the utility commission:
203	203	(1) a nonprofit water supply or sewer service
204	204	corporation created and operating under Chapter 67;
205	205	(2) a utility under the jurisdiction of a municipality
206	206	inside the corporate limits of the municipality;
207	207	(3) a municipally owned utility, if the ratepayers
208	208	reside outside the corporate limits of the municipality, including
209	209	a decision of a governing body that results in an increase in rates
210	210	when the municipally owned utility takes over the provision of
211	211	service to ratepayers previously served by another retail public
212	212	utility;
213	213	(4) a district or authority created under Article III,
214	214	Section 52, or Article XVI, Section 59, of the Texas Constitution
215	215	that provides water or sewer service to household users;
216	216	(5) a public utility agency; and
217	217	(6) [(5)] a utility owned by an affected county, if the
218	218	ratepayer's rates are actually or may be adversely affected. For
219	219	the purposes of this section ratepayers who reside outside the
220	220	boundaries of the district or authority shall be considered a
221	221	separate class from ratepayers who reside inside those boundaries.
222	222	(c) An appeal under Subsection (b) must be initiated by
223	223	filing a petition for review with the utility commission and the
224	224	entity providing service within 90 days after the effective day of
225	225	the rate change or, if appealing under Subdivision (b)(2) or (6)
226	226	[(5)], within 90 days after the date on which the governing body of
227	227	the municipality or affected county makes a final decision. The
228	228	petition must be signed by the lesser of 10,000 or 10 percent of
229	229	those ratepayers whose rates have been changed and who are eligible
230	230	to appeal under Subsection (b).
231	231	(i) The governing body of a municipally owned utility or a
232	232	political subdivision, other than a public utility agency, within
233	233	60 days after the date of a final decision on a rate change, shall
234	234	provide individual written notice to each ratepayer eligible to
235	235	appeal who resides outside the boundaries of the municipality or
236	236	the political subdivision. The notice must include, at a minimum,
237	237	the effective date of the new rates, the new rates, and the location
238	238	where additional information on rates can be obtained. The
239	239	governing body of a municipally owned utility or a political
240	240	subdivision may provide the notice electronically if the utility or
241	241	political subdivision has access to a ratepayer's e-mail address.
242	242	(i-1) The board of directors of a public utility agency,
243	243	within 60 days after the date of a final decision on a rate change,
244	244	shall provide individual written notice to each ratepayer eligible
245	245	to appeal the rates. The notice must include, at a minimum, the
246	246	effective date of the new rates, the new rates, and the location
247	247	where additional information on rates can be obtained. The board of
248	248	directors of the public utility agency may provide the notice
249	249	electronically if the agency has access to a ratepayer's e-mail
250	250	address.
251	251	(j-1) Notwithstanding Subsection (j), in an appeal under
252	252	this section of a rate charged by a public utility agency, the
253	253	utility commission shall ensure that the rate complies with Section
254	254	572.061(e), Local Government Code.
255	255	SECTION 12. This Act takes effect immediately if it
256	256	receives a vote of two-thirds of all the members elected to each
257	257	house, as provided by Section 39, Article III, Texas Constitution.
258	258	If this Act does not receive the vote necessary for immediate
259	259	effect, this Act takes effect September 1, 2023.