Texas 2025 - 89th Regular

Texas Senate Bill SB1169 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		By: Hinojosa of Nueces S.B. No. 1169
	2	+	(In the Senate - Filed February 7, 2025; February 28, 2025,
	3	+	read first time and referred to Committee on Local Government;
	4	+	March 18, 2025, rereferred to Committee on Water, Agriculture and
	5	+	Rural Affairs; April 16, 2025, reported adversely, with favorable
	6	+	Committee Substitute by the following vote: Yeas 7, Nays 0;
	7	+	April 16, 2025, sent to printer.)
	8	+	Click here to see the committee vote
	9	+	COMMITTEE SUBSTITUTE FOR S.B. No. 1169 By: Hancock
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6	14		A BILL TO BE ENTITLED
7	15		AN ACT
8	16		relating to the provision of water or sewer service by public
9	17		entities operating jointly or concurrently.
10	18		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	19		SECTION 1. Section 572.001(3), Local Government Code, is
12	20		amended to read as follows:
13	21		(3) "Public entity" means a political entity or
14	22		corporate body of this state, including a county, municipality, or
15	23		district or authority created under Section 52, Article III, or
16	24		Section 59, Article XVI, Texas Constitution, or a water supply or
17	25		sewer service corporation.
18	26		SECTION 2. Section 572.012(a), Local Government Code, is
19	27		amended to read as follows:
20	28		(a) Each participating public entity may:
21	29		(1) use the entity's money to plan, acquire,
22	30		construct, own, operate, and maintain its interest in a facility;
23	31		(2) share in the facility;
24	32		(3) issue bonds and other securities to raise money
25	33		for a purpose described by Subdivision (1) in the same manner and to
26	34		the same extent and subject to the same conditions as would be
27	35		applicable if the public entity had sole ownership of the facility;
28	36		(4) acquire, for the use and benefit of each
29	37		participating public entity, land, easements, and property for a
30	38		facility by purchase or by exercising the power of eminent domain;
31	39		[and]
32	40		(5) transfer or otherwise convey the land, property,
33	41		or property interest or otherwise have the land, property, or
34	42		property interest become vested in other participating public
35	43		entities to the extent and in the manner agreed between the
36	44		entities;
37	45		(6) make an acquisition described by Subdivision (4)
38	46		through a purchase from a public or private entity; and
39	47		(7) for the use and benefit of each participating
40	48		public entity, acquire by purchase a public utility, as defined by
41	49		Section 13.002, Water Code, other than an affected county.
42	50		SECTION 3. Sections 572.051(2) and (3), Local Government
43	51		Code, are amended to read as follows:
44	52		(2) "Obligation" means a [revenue] bond or note
45	53		secured by a fee, a charge, an assessment, or other revenue of an
46	54		agency available for that purpose.
47	55		(3) "Public utility agency" means an agency created
48	56		under this subchapter by two or more public entities to acquire,
49	57		plan, finance, construct, own, operate, or maintain facilities.
50	58		SECTION 4. Sections 572.052(c) and (d), Local Government
51	59		Code, are amended to read as follows:
52	60		(c) A public utility agency is a:
53	61		(1) separate agency;
54	62		(2) political subdivision of this state; [and]
55	63		(3) political entity and corporate body; and
56	64		(4) retail public utility for the purposes of Chapter
57	65		13, Water Code.
58	66		(d) A public utility agency may not impose a tax but has all
59	67		the other powers and obligations that are related to facilities and
60	68		that are provided by law to a municipality that owns a facility,
61	69		except as provided by Section 572.061.
62	70		SECTION 5. Section 572.053, Local Government Code, is
63	71		amended to read as follows:
64	72		Sec. 572.053. CHANGES IN PUBLIC ENTITIES PARTICIPATING IN
65	73		PUBLIC UTILITY AGENCY. (a) The public entities that participate in
66	74		a public utility agency may by concurrent ordinances add a public
67	75		entity to, or delete a public entity from, participation in the
68	76		public utility agency.
69	77		(b) A participating public entity may withdraw from a public
70	78		utility agency by providing an ordinance or resolution of the
71	79		governing body of the participating public entity to the agency not
72	80		later than the 180th day before the proposed date of withdrawal. A
73	81		participating public entity may not withdraw from a public utility
74	82		agency under this subsection if bonds, notes, or other obligations
75	83		of the agency are secured by the revenues of the participating
76	84		public entity, unless the agency adopts a resolution approving the
77	85		withdrawal. Upon withdrawal, a participating public entity assumes
78	86		the outstanding debt attributable to that entity from the agency on
79	87		a prorated basis equal to that entity's benefit and has, without
80	88		compensation from the agency, no further rights, duties, or
81	89		obligations relating to the agency or ability to receive service
82	90		from the facilities of the agency.
83	91		SECTION 6. Section 572.058(b), Local Government Code, is
84	92		amended to read as follows:
85	93		(b) A public utility agency may:
86	94		(1) perform any act necessary to the full exercise of
87	95		the agency's powers, including acts necessary to acquire, finance,
88	96		own, operate, or manage a facility of the agency;
89	97		(2) enter into a contract, lease, or agreement,
90	98		including an interlocal contract as authorized by Chapter 791,
91	99		Government Code, with or accept a grant or loan from any of the
92	100		following entities for the management and operation of an agency
93	101		facility or the acquisition, construction, financing, maintenance,
94	102		operation, provision, or receipt of a facility, service, or product
95	103		[a]:
96	104		(A) a department or agency of the United States;
97	105		(B) a department, agency, or municipality or
98	106		other political subdivision of this state; or
99	107		(C) a public or private corporation or person;
100	108		(3) sell, lease, convey, or otherwise dispose of all
101	109		or a portion of any right, interest, or property the agency
102	110		considers to be unnecessary for the efficient operation or
103	111		maintenance of its facilities; and
104	112		(4) adopt rules to govern the operation of the agency
105	113		and its employees, facilities, and service.
106	114		SECTION 7. Subchapter C, Chapter 572, Local Government
107	115		Code, is amended by adding Section 572.0581 to read as follows:
108	116		Sec. 572.0581. NO POWER OF EMINENT DOMAIN. Except as
109	117		provided by Section 572.0585, a public utility agency does not have
110	118		the power of eminent domain.
111	119		SECTION 8. Sections 572.061(d) and (e), Local Government
112	120		Code, are amended to read as follows:
113	121		(d) Notwithstanding Subsection (a), the Public Utility
114	122		Commission of Texas has appellate jurisdiction over [the state
115	123		reserves its power to regulate and control] the rates and charges of
116	124		[by] a public utility agency in the manner provided by Section
117	125		13.043, Water Code.
118	126		(e) This [Until obligations issued under this subchapter
119	127		have been paid and discharged, this] state pledges to and agrees
120	128		with the purchasers and successive holders of [the] obligations
121	129		issued under this subchapter that in any appeal proceeding
122	130		regarding the public utility agency conducted under Section 13.043,
123	131		Water Code, the Public Utility Commission of Texas [it] will [not
124	132		limit or alter the powers of the agency to] establish [and collect]
125	133		rates and charges that will produce revenue sufficient to pay for
126	134		those items specified in Subsections (a) and (b) and any other
127	135		obligations of the agency in connection with those items.
128	136		SECTION 9. Section 572.062, Local Government Code, is
129	137		amended by amending Subsections (a) and (b) and adding Subsections
130	138		(b-1) and (b-2) to read as follows:
131	139		(a) A public utility agency may:
132	140		(1) issue obligations, including anticipation notes,
133	141		to accomplish the purposes of the agency; and
134	142		(2) finance or refund the acquisition, construction,
135	143		expansion, and improvement of all or a portion of a facility
136	144		relating to an agency purpose.
137	145		(b) Except as provided by Subsection (b-1), the [The] public
138	146		utility agency may pledge to the payment of the obligations:
139	147		(1) the revenue of all or part of its facilities,
140	148		including facilities acquired after the obligations are issued;
141	149		(2) revenues received from a public entity by contract
142	150		as authorized by a concurrent ordinance;
143	151		(3) special assessments imposed by a public entity and
144	152		provided by contract to the agency; or
145	153		(4) any other funds of the agency.
146	154		(b-1) Operation [However, operation] and maintenance
147	155		expenses, including salaries and labor, materials, and repairs of
148	156		facilities necessary to render efficient service, are a first lien
149	157		on and charge against the pledged revenue.
150	158		(b-2) A public utility agency may not use a facility owned
151	159		by the agency to secure or collateralize a new facility without the
152	160		approval by resolution of each participating public entity
153	161		participating in the joint financing of the new facility. This
154	162		subsection does not apply to the use of revenue from a facility
155	163		owned by the agency to secure or collateralize a new facility.
156	164		SECTION 10. Subchapter C, Chapter 572, Local Government
157	165		Code, is amended by adding Sections 572.065 and 572.066 to read as
158	166		follows:
159	167		Sec. 572.065. LIABILITY. Liability for the facilities and
160	168		management of the public utility agency must be transferred to the
161	169		agency on ownership of the facilities by the agency.
162	170		Sec. 572.066. INFRASTRUCTURE INVESTMENTS. A public utility
163	171		agency may create a funding mechanism to jointly invest in and
164	172		leverage funding for water infrastructure in Texas with the North
165	173		American Development Bank.
166	174		SECTION 11. Chapter 572, Local Government Code, is amended
167	175		by adding Subchapter D to read as follows:
168	176		SUBCHAPTER D. RECEIVERSHIP AND TEMPORARY MANAGEMENT
169	177		Sec. 572.101. DEFINITIONS. In this subchapter:
170	178		(1) "Commission" means the Texas Commission on
171	179		Environmental Quality.
172	180		(2) "Utility" and "water supply or sewer service
173	181		corporation" have the meanings assigned by Section 13.002, Water
174	182		Code.
175	183		(3) "Utility commission" means the Public Utility
176	184		Commission of Texas.
177	185		Sec. 572.102. APPLICABILITY; JURISDICTION. (a) For
178	186		purposes of this subchapter, a reference in Chapter 13, Water Code,
179	187		to a person includes a public utility agency.
180	188		(b) For purposes of this subchapter, the utility commission
181	189		has the same jurisdiction over a water supply or sewer service
182	190		corporation that the utility commission has over a utility under
183	191		Chapter 13, Water Code.
184	192		Sec. 572.103. RECEIVERSHIP. (a) At the request of the
185	193		utility commission or the commission, the attorney general shall
186	194		bring suit for the appointment of a receiver that is a public
187	195		utility agency in the manner provided by Section 13.412, Water
188	196		Code, to collect the assets and carry on the business of a utility
189	197		or water supply or sewer service corporation that:
190	198		(1) has abandoned operation of its facilities;
191	199		(2) informs the utility commission or the commission
192	200		that the owner is abandoning the system;
193	201		(3) violates a final order of the utility commission
194	202		or the commission;
195	203		(4) allows any property owned or controlled by it to be
196	204		used in violation of a final order of the utility commission or the
197	205		commission;
198	206		(5) violates a final judgment issued by a district
199	207		court in a suit brought by the attorney general under:
200	208		(A) Chapter 7 or 13, Water Code; or
201	209		(B) Chapter 341, Health and Safety Code; or
202	210		(6) violates a final judgment issued by a court in a
203	211		proceeding to enforce a provision of a permit issued by a
204	212		groundwater conservation district under Chapter 36, Water Code.
205	213		(b) To facilitate the regionalization of water and sewer
206	214		service, the utility commission shall prioritize an application
207	215		submitted under Section 13.412(g), Water Code, by a public utility
208	216		agency. The utility commission shall issue an order approving the
209	217		acquisition proposed in the application not later than the 120th
210	218		day after the date the utility commission determines the
211	219		application is complete.
212	220		Sec. 572.104. TEMPORARY MANAGEMENT. The utility commission
213	221		or the commission, after providing to the utility or water supply or
214	222		sewer service corporation notice and an opportunity to be heard by
215	223		the commissioners at a utility commission or commission meeting,
216	224		may authorize a public utility agency to temporarily manage and
217	225		operate a utility or water supply or sewer service corporation in
218	226		the manner provided by Section 13.4132, Water Code, if the utility
219	227		or corporation:
220	228		(1) has discontinued or abandoned operations or the
221	229		provision of services;
222	230		(2) has been or is being referred to the attorney
223	231		general for the appointment of a receiver under Section 572.103;
224	232		(3) violates a final order of the utility commission
225	233		or the commission; or
226	234		(4) allows any property owned or controlled by it to be
227	235		used in violation of a final order of the utility commission or the
228	236		commission.
229	237		SECTION 12. Section 13.002, Water Code, is amended by
230	238		adding Subdivision (16-a) and amending Subdivisions (19) and (23)
231	239		to read as follows:
232	240		(16-a) "Public utility agency" means a public utility
233	241		agency created under Chapter 572, Local Government Code.
234	242		(19) "Retail public utility" means any person,
235	243		corporation, public utility, water supply or sewer service
236	244		corporation, municipality, public utility agency, political
237	245		subdivision or agency operating, maintaining, or controlling in
238	246		this state facilities for providing potable water service or sewer
239	247		service, or both, for compensation.
240	248		(23) "Water and sewer utility," "public utility," or
241	249		"utility" means any person, corporation, cooperative corporation,
242	250		affected county, or any combination of these persons or entities,
243	251		other than a municipal corporation, public utility agency, water
244	252		supply or sewer service corporation, or [a] political subdivision
245	253		of the state, except an affected county, or their lessees,
246	254		trustees, and receivers, owning or operating for compensation in
247	255		this state equipment or facilities for the transmission, storage,
248	256		distribution, sale, or provision of potable water to the public or
249	257		for the resale of potable water to the public for any use or for the
250	258		collection, transportation, treatment, or disposal of sewage or
251	259		other operation of a sewage disposal service for the public, other
252	260		than equipment or facilities owned and operated for either purpose
253	261		by a municipality or other political subdivision of this state or a
254	262		water supply or sewer service corporation, but does not include any
255	263		person or corporation not otherwise a public utility that furnishes
256	264		the services or commodity only to itself or its employees or tenants
257	265		as an incident of that employee service or tenancy when that service
258	266		or commodity is not resold to or used by others.
259	267		SECTION 13. Section 13.043, Water Code, is amended by
260	268		amending Subsections (b), (c), and (i) and adding Subsections (i-1)
261	269		and (j-1) to read as follows:
262	270		(b) Ratepayers of the following entities may appeal the
263	271		decision of the governing body of the entity affecting their water,
264	272		drainage, or sewer rates to the utility commission:
265	273		(1) a nonprofit water supply or sewer service
266	274		corporation created and operating under Chapter 67;
267	275		(2) a utility under the jurisdiction of a municipality
268	276		inside the corporate limits of the municipality;
269	277		(3) a municipally owned utility, if the ratepayers
270	278		reside outside the corporate limits of the municipality, including
271	279		a decision of a governing body that results in an increase in rates
272	280		when the municipally owned utility takes over the provision of
273	281		service to ratepayers previously served by another retail public
274	282		utility;
275	283		(4) a district or authority created under Article III,
276	284		Section 52, or Article XVI, Section 59, of the Texas Constitution
277	285		that provides water or sewer service to household users;
278	286		(5) a public utility agency; and
279	287		(6) [(5)] a utility owned by an affected county, if the
280	288		ratepayer's rates are actually or may be adversely affected. For
281	289		the purposes of this section ratepayers who reside outside the
282	290		boundaries of the district or authority shall be considered a
283	291		separate class from ratepayers who reside inside those boundaries.
284	292		(c) An appeal under Subsection (b) must be initiated by
285	293		filing a petition for review with the utility commission and the
286	294		entity providing service within 90 days after the effective day of
287	295		the rate change or, if appealing under Subdivision (b)(2) or (6)
288	296		[(5)], within 90 days after the date on which the governing body of
289	297		the municipality or affected county makes a final decision. The
290	298		petition must be signed by the lesser of 10,000 or 10 percent of
291	299		those ratepayers whose rates have been changed and who are eligible
292	300		to appeal under Subsection (b).
293	301		(i) The governing body of a municipally owned utility or a
294	302		political subdivision, other than a public utility agency, within
295	303		60 days after the date of a final decision on a rate change, shall
296	304		provide individual written notice to each ratepayer eligible to
297	305		appeal who resides outside the boundaries of the municipality or
298	306		the political subdivision. The notice must include, at a minimum,
299	307		the effective date of the new rates, the new rates, and the location
300	308		where additional information on rates can be obtained. The
301	309		governing body of a municipally owned utility or a political
302	310		subdivision may provide the notice electronically if the utility or
303	311		political subdivision has access to a ratepayer's e-mail address.
304	312		(i-1) The board of directors of a public utility agency,
305	313		within 60 days after the date of a final decision on a rate change,
306	314		shall provide individual written notice to each ratepayer eligible
307	315		to appeal the rates. The notice must include, at a minimum, the
308	316		effective date of the new rates, the new rates, and the location
309	317		where additional information on rates can be obtained. The board of
310	318		directors of the public utility agency may provide the notice
311	319		electronically if the agency has access to a ratepayer's e-mail
312	320		address.
313	321		(j-1) Notwithstanding Subsection (j), in an appeal under
314	322		this section of a rate charged by a public utility agency, the
315	323		utility commission shall ensure that the rate complies with Section
316	324		572.061(e), Local Government Code.
317	325		SECTION 14. Section 13.242, Water Code, is amended by
318	326		adding Subsection (e) to read as follows:
319	327		(e) The utility commission may by rule allow a public
320	328		utility agency that includes a water supply or sewer service
321	329		corporation as a participant in the agency to render retail water or
322	330		sewer service without a certificate of public convenience and
323	331		necessity.
324	332		SECTION 15. This Act takes effect immediately if it
325	333		receives a vote of two-thirds of all the members elected to each
326	334		house, as provided by Section 39, Article III, Texas Constitution.
327	335		If this Act does not receive the vote necessary for immediate
328	336		effect, this Act takes effect September 1, 2025.
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