88R19380 CXP-F
By: Thompson of Harris H.B. No. 4763
Substitute the following for H.B. No. 4763:
By: King of Uvalde C.S.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. The utility commission shall approve a transaction to
which this section applies without an owner's signature required by
other law 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
commission under Section 13.4132 as a temporary manager of a
utility, utility in receivership, or utility in supervision, who 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, utility in receivership, or utility in
supervision, its facilities, and, if applicable, its certificated
service area. The expedited process must:
(1) waive public notice requirements regardless of
whether the person elects to charge initial rates in accordance
with Section 13.3011 or use a voluntary valuation determined under
Section 13.305;
(2) require approval of the acquisition transaction if
the 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), 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 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 committed by the acquired utility for which no
enforcement action has been completed at the time of acquisition.
SECTION 2. This Act takes effect September 1, 2023.