82R1887 RWG-F
	By: Miller of Comal	H.B. No. 2399

	A BILL TO BE ENTITLED
	AN ACT
	relating to allowing a water and sewer utility to assess a utility
	facilities construction and improvement charge to recover certain
	costs associated with certain construction and improvement
	projects.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subchapter F, Chapter 13, Water Code, is amended
	by adding Section 13.193 to read as follows:
	Sec. 13.193.  UTILITY FACILITIES CONSTRUCTION AND
	IMPROVEMENT CHARGE. (a) Notwithstanding any other provision of
	this chapter, a utility may assess a utility facilities
	construction and improvement charge to recover the depreciation and
	return on investment of a utility facilities construction and
	improvement project that:
	(1)  is completed and placed into service between two
	consecutive statements of intent to change the utility's rates or
	tariff filed under Section 13.187; and
	(2)  serves the utility's certificated service area,
	including a facility used for:
	(A)  the production, transmission, storage,
	distribution, or provision of potable or recycled water to the
	public; or
	(B)  the collection, transportation, treatment,
	or disposal of sewage.
	(b)  The commission by rule shall require a utility that
	proposes to assess a utility facilities construction and
	improvement charge under this section:
	(1)  to file a tariff establishing a just and
	reasonable manner for calculating the charge; and
	(2)  to receive the executive director's approval of
	the tariff.
	(c)  In adopting rules under Subsection (b), the commission
	shall ensure that:
	(1)  not later than the 60th day before a utility's
	proposed inclusion of a charge or a proposed increase of a charge in
	a tariff under this section, the utility submits to the executive
	director for review of a project's eligibility a written notice
	that contains:
	(A)  the amount of the proposed charge or increase
	of a charge;
	(B)  the proposed implementation date for the
	charge or increase of a charge;
	(C)  a list of completed, eligible capital
	projects, and related depreciation and return on investment for
	which the utility seeks reimbursement through the charge or
	increase of a charge; and
	(D)  a calculation of the projected total annual
	increase in revenue due to the charge or increase of a charge;
	(2)  the total amount the utility is authorized to
	recover annually through a charge assessed under this section and
	the amount the utility actually recovers are subject to annual
	audit by the executive director;
	(3)  the amount of the charge the utility requests
	authorization to assess is based on the amount necessary to ensure
	that the charge yields a rate of return on invested capital that is
	equal to:
	(A)  the rate of return approved for the utility
	in the utility's most recent approved base rate or tariff change
	application filed under Section 13.187; or
	(B)  the rate of return proposed by the utility,
	if the rates in the utility's most recent base rate or tariff change
	application were approved by settlement;
	(4)  the cumulative annual amount the utility proposes
	to recover from the charge does not exceed an amount equal to 10
	percent of the utility's annual revenue;
	(5)  the utility does not implement an increase under
	this section more often than twice every calendar year;
	(6)  the charge is applied to each customer included in
	the tariff;
	(7)  the utility provides to each customer written
	notice of the charge on the initial tariff filing that proposes to
	implement the charge; and
	(8)  the charge is subject to a true-up or
	reconciliation at the utility's next rate case filed under Section
	13.187.
	(d)  Notwithstanding any other provision of this code, the
	implementation of a utility facilities construction and
	improvement charge or an increase in a utility facilities
	construction and improvement charge is not subject to a contested
	case hearing under Chapter 2001, Government Code.
	(e)  This section does not apply to a utility that has in
	place a negotiated stay-out agreement on September 1, 2011.
	SECTION 2.  The changes in law made by Section 13.193, Water
	Code, as added by this Act, apply only to a project that is
	completed and placed into service on or after the effective date of
	this Act. A project that is completed and placed into service before
	the effective date of this Act is subject to the law in effect at
	that time, and that law is continued in effect for that purpose.
	SECTION 3.  The Texas Commission on Environmental Quality
	shall adopt rules consistent with Section 13.193, Water Code, as
	added by this Act, not later than December 1, 2011.
	SECTION 4.  This Act takes effect September 1, 2011.