2023S0217-2 03/08/23
By: Thompson of Harris H.B. No. 4763
A BILL TO BE ENTITLED
AN ACT
relating to requirements for the purchase or acquisition of certain
water and sewer systems.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 13.301, Water Code, is amended by
amending Subsection (h) and adding Subsections (l), (m), and (n) to
read as follows:
(h) A sale, acquisition, lease, or rental of any water or
sewer system owned by an entity required by law to possess a
certificate of public convenience and necessity, or a sale or
acquisition of or merger or consolidation with such an entity, that
is not completed in accordance with the provisions of this section
is void. Notwithstanding any other law that requires a system
owner's signature, the utility commission shall approve a
transaction to which this section applies if the owner has
abandoned operation of the facilities that are the subject of the
transaction and cannot be located or does not respond to an
application filed under Subsection (l).
(l) Notwithstanding any other provision of this section,
the utility commission by rule shall adopt an expedited process
that allows a person appointed by the utility commission or the
commission under Section 13.4132 as a temporary manager that is
also an operator of a Class A or Class B utility to apply for utility
commission approval of the person's acquisition of the stock,
ownership interest, or assets of the temporarily managed and
operated utility, its facilities, and its certificated service
area, if one has been granted to the utility. The expedited process
must:
(1) waive public notice requirements;
(2) be approved if the acquisition transaction is
considered to be in the public interest; and
(3) provide that:
(A) the person's appointment is considered
sufficient to demonstrate adequate financial, managerial, and
technical capability for providing continuous and adequate service
to the service area to be acquired and any areas currently
certificated to the person; and
(B) all used and useful invested capital and just
and reasonable operations and maintenance costs incurred by the
person during the person's appointment as temporary manager and
operator of the utility, utility in receivership, or utility in
supervision to be acquired are considered to be a regulatory asset
for the person and are recoverable in the person's next
comprehensive rate proceeding or system improvement charge
application.
(m) If a temporary rate under Section 13.046 is adopted
during the period described by Subsection (l)(3)(B), then all used
and useful invested capital and just and reasonable operations and
maintenance costs incurred by the person in excess of costs covered
by the temporary rate are considered to be a regulatory asset for
the person and are recoverable in the person's next comprehensive
rate proceeding or system improvement charge application.
(n) The utility commission and the commission shall provide
a reasonable period for a person acquiring a utility under
Subsection (l) to bring the acquired utility into compliance with
utility commission and commission rules before imposing a penalty
for any violation present in the acquired utility at the time of
acquisition.
SECTION 2. This Act takes effect September 1, 2023.