88R22823 DIO-F
	By: Guillen	H.B. No. 2701
	Substitute the following for H.B. No. 2701:
	By:  King of Uvalde	C.S.H.B. No. 2701

	A BILL TO BE ENTITLED
	AN ACT
	relating to public utility agencies; providing authority to issue
	bonds; providing authority to impose assessments.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 572.001(3), Local Government Code, is
	amended to read as follows:
	(3)  "Public entity" means a political entity or
	corporate body of this state, including a county, municipality, or
	district or authority created under Section 52, Article III, or
	Section 59, Article XVI, Texas Constitution, or a water supply or
	sewer service corporation.
	SECTION 2.  Section 572.012(a), Local Government Code, is
	amended to read as follows:
	(a)  Each participating public entity may:
	(1)  use the entity's money to plan, acquire,
	construct, own, operate, and maintain its interest in a facility;
	(2)  share in the facility;
	(3)  issue bonds and other securities to raise money
	for a purpose described by Subdivision (1) in the same manner and to
	the same extent and subject to the same conditions as would be
	applicable if the public entity had sole ownership of the facility;
	(4)  acquire, for the use and benefit of each
	participating public entity, land, easements, and property for a
	facility by purchase or by exercising the power of eminent domain;
	[and]
	(5)  transfer or otherwise convey the land, property,
	or property interest or otherwise have the land, property, or
	property interest become vested in other participating public
	entities to the extent and in the manner agreed between the
	entities;
	(6)  make an acquisition described by Subdivision (4)
	through a purchase from a public or private entity; and
	(7)  for the use and benefit of each participating
	public entity, acquire by purchase a public utility, as defined by
	Section 13.002, Water Code, other than an affected county.
	SECTION 3.  Sections 572.051(2) and (3), Local Government
	Code, are amended to read as follows:
	(2)  "Obligation" means a [revenue] bond or note
	secured by a revenue, fee, charge, assessment, or other revenue of
	an agency available for that purpose.
	(3)  "Public utility agency" means an agency created
	under this subchapter by two or more public entities to acquire,
	plan, finance, construct, own, operate, or maintain facilities.
	SECTION 4.  Sections 572.052(c) and (d), Local Government
	Code, are amended to read as follows:
	(c)  A public utility agency is a:
	(1)  separate agency;
	(2)  political subdivision of this state; [and]
	(3)  political entity and corporate body; and
	(4)  retail public utility for the purposes of Chapter
	13, Water Code.
	(d)  A public utility agency may not impose a tax but has all
	the other powers and obligations that are related to facilities and
	that are provided by law to a municipality that owns a facility,
	except as provided by Section 572.061.
	SECTION 5.  Section 572.053, Local Government Code, is
	amended to read as follows:
	Sec. 572.053.  CHANGES IN PUBLIC ENTITIES PARTICIPATING IN
	PUBLIC UTILITY AGENCY. (a) The public entities that participate in
	a public utility agency may by concurrent ordinances add a public
	entity to, or delete a public entity from, participation in the
	public utility agency.
	(b)  A participating public entity may withdraw from a public
	utility agency by providing an ordinance or resolution of the
	governing body of the participating public entity to the agency not
	later than the 180th day before the proposed date of withdrawal. A
	participating public entity may not withdraw from a public utility
	agency under this subsection if bonds, notes, or other obligations
	of the agency are secured by the revenues of the participating
	public entity, unless the agency adopts a resolution approving the
	withdrawal. Upon withdrawal, a participating public entity assumes
	the outstanding debt attributable to that entity from the agency on
	a prorated basis equal to that entity's benefit and has, without
	compensation from the agency, no further rights, duties, or
	obligations relating to the agency or ability to receive service
	from the facilities of the agency.
	SECTION 6.  Section 572.058, Local Government Code, is
	amended by amending Subsection (b) and adding Subsection (c) to
	read as follows:
	(b)  A public utility agency may:
	(1)  perform any act necessary to the full exercise of
	the agency's powers, including acts necessary to acquire, finance,
	own, operate, or manage a facility of the agency;
	(2)  enter into a contract, lease, or agreement,
	including an interlocal contract as authorized by Chapter 791,
	Government Code, with or accept a grant or loan from any of the
	following entities for the management and operation of an agency
	facility or the acquisition, construction, financing, maintenance,
	operation, provision, or receipt of a facility, service, or product
	[a]:
	(A)  a department or agency of the United States;
	(B)  a department, agency, or municipality or
	other political subdivision of this state; or
	(C)  a public or private corporation or person;
	(3)  sell, lease, convey, or otherwise dispose of all
	or a portion of any right, interest, or property the agency
	considers to be unnecessary for the efficient operation or
	maintenance of its facilities; and
	(4)  adopt rules to govern the operation of the agency
	and its employees, facilities, and service.
	(c)  Except as limited by a concurrent ordinance under which
	the public utility agency is created, an agency may exercise any
	right or power granted by general law to a county or municipality or
	a district or authority created under Section 59, Article XVI,
	Texas Constitution, to accomplish the purposes of the agency,
	including issuing bonds payable from special assessments in the
	manner provided by Chapter 372. This subsection does not authorize
	a public utility agency to impose a tax.
	SECTION 7.  Sections 572.061(d) and (e), Local Government
	Code, are amended to read as follows:
	(d)  Notwithstanding Subsection (a), the Public Utility
	Commission of Texas has appellate jurisdiction over [the state
	reserves its power to regulate and control] the rates and charges of
	[by] a public utility agency in the manner provided by Section
	13.043, Water Code.
	(e)  This [Until obligations issued under this subchapter
	have been paid and discharged, this] state pledges to and agrees
	with the purchasers and successive holders of [the] obligations
	issued under this subchapter that in any appeal proceeding
	regarding the public utility agency conducted under Section 13.043,
	Water Code, the Public Utility Commission of Texas [it] will [not
	limit or alter the powers of the agency to] establish [and collect]
	rates and charges that will produce revenue sufficient to pay for
	those items specified in Subsections (a) and (b) and any other
	obligations of the agency in connection with those items.
	SECTION 8.  Section 572.062, Local Government Code, is
	amended by amending Subsections (a) and (b) and adding Subsections
	(b-1) and (b-2) to read as follows:
	(a)  A public utility agency may:
	(1)  issue obligations, including anticipation notes,
	to accomplish the purposes of the agency; and
	(2)  finance or refund the acquisition, construction,
	expansion, and improvement of all or a portion of a facility
	relating to an agency purpose.
	(b)  Except as provided by Subsection (b-1), the [The] public
	utility agency may pledge to the payment of the obligations the
	revenue of all or part of its facilities, including facilities
	acquired after the obligations are issued:
	(1)  revenues received from a public entity by contract
	as authorized by a concurrent ordinance;
	(2)  special assessments:
	(A)  imposed by the agency in the manner provided
	by Chapter 372; or
	(B)  imposed by a public entity and provided by
	contract to the agency; or
	(3)  any other funds of the agency.
	(b-1)  Operation [However, operation] and maintenance
	expenses, including salaries and labor, materials, and repairs of
	facilities necessary to render efficient service, are a first lien
	on and charge against the pledged revenue.
	(b-2)  A public utility agency may not use a facility owned
	by the agency to secure or collateralize a new facility without the
	approval by resolution of each participating public entity
	participating in the joint financing of the new facility. This
	subsection does not apply to the use of revenue from a facility
	owned by the agency to secure or collateralize a new facility.
	SECTION 9.  Subchapter C, Chapter 572, Local Government
	Code, is amended by adding Section 572.065 to read as follows:
	Sec. 572.065.  LIABILITY. Liability for the facilities and
	management of the agency must be transferred to the agency on
	ownership of the facilities by the agency.
	SECTION 10.  Section 13.002, Water Code, is amended by
	adding Subdivision (16-a) and amending Subdivisions (19) and (23)
	to read as follows:
	(16-a)  "Public utility agency" means a public utility
	agency created under Chapter 572, Local Government Code.
	(19)  "Retail public utility" means any person,
	corporation, public utility, water supply or sewer service
	corporation, municipality, public utility agency, political
	subdivision or agency operating, maintaining, or controlling in
	this state facilities for providing potable water service or sewer
	service, or both, for compensation.
	(23)  "Water and sewer utility," "public utility," or
	"utility" means any person, corporation, cooperative corporation,
	affected county, or any combination of these persons or entities,
	other than a municipal corporation, public utility agency, water
	supply or sewer service corporation, or [a] political subdivision
	of the state, except an affected county, or their lessees,
	trustees, and receivers, owning or operating for compensation in
	this state equipment or facilities for the transmission, storage,
	distribution, sale, or provision of potable water to the public or
	for the resale of potable water to the public for any use or for the
	collection, transportation, treatment, or disposal of sewage or
	other operation of a sewage disposal service for the public, other
	than equipment or facilities owned and operated for either purpose
	by a municipality or other political subdivision of this state or a
	water supply or sewer service corporation, but does not include any
	person or corporation not otherwise a public utility that furnishes
	the services or commodity only to itself or its employees or tenants
	as an incident of that employee service or tenancy when that service
	or commodity is not resold to or used by others.
	SECTION 11.  Section 13.043, Water Code, is amended by
	amending Subsections (b), (c), and (i) and adding Subsections (i-1)
	and (j-1) to read as follows:
	(b)  Ratepayers of the following entities may appeal the
	decision of the governing body of the entity affecting their water,
	drainage, or sewer rates to the utility commission:
	(1)  a nonprofit water supply or sewer service
	corporation created and operating under Chapter 67;
	(2)  a utility under the jurisdiction of a municipality
	inside the corporate limits of the municipality;
	(3)  a municipally owned utility, if the ratepayers
	reside outside the corporate limits of the municipality, including
	a decision of a governing body that results in an increase in rates
	when the municipally owned utility takes over the provision of
	service to ratepayers previously served by another retail public
	utility;
	(4)  a district or authority created under Article III,
	Section 52, or Article XVI, Section 59, of the Texas Constitution
	that provides water or sewer service to household users;
	(5)  a public utility agency; and
	(6) [(5)]  a utility owned by an affected county, if the
	ratepayer's rates are actually or may be adversely affected. For
	the purposes of this section ratepayers who reside outside the
	boundaries of the district or authority shall be considered a
	separate class from ratepayers who reside inside those boundaries.
	(c)  An appeal under Subsection (b) must be initiated by
	filing a petition for review with the utility commission and the
	entity providing service within 90 days after the effective day of
	the rate change or, if appealing under Subdivision (b)(2) or (6)
	[(5)], within 90 days after the date on which the governing body of
	the municipality or affected county makes a final decision. The
	petition must be signed by the lesser of 10,000 or 10 percent of
	those ratepayers whose rates have been changed and who are eligible
	to appeal under Subsection (b).
	(i)  The governing body of a municipally owned utility or a
	political subdivision, other than a public utility agency, within
	60 days after the date of a final decision on a rate change, shall
	provide individual written notice to each ratepayer eligible to
	appeal who resides outside the boundaries of the municipality or
	the political subdivision. The notice must include, at a minimum,
	the effective date of the new rates, the new rates, and the location
	where additional information on rates can be obtained. The
	governing body of a municipally owned utility or a political
	subdivision may provide the notice electronically if the utility or
	political subdivision has access to a ratepayer's e-mail address.
	(i-1)  The board of directors of a public utility agency,
	within 60 days after the date of a final decision on a rate change,
	shall provide individual written notice to each ratepayer eligible
	to appeal the rates. The notice must include, at a minimum, the
	effective date of the new rates, the new rates, and the location
	where additional information on rates can be obtained.  The board of
	directors of the public utility agency may provide the notice
	electronically if the agency has access to a ratepayer's e-mail
	address.
	(j-1)  Notwithstanding Subsection (j), in an appeal under
	this section of a rate charged by a public utility agency, the
	utility commission shall ensure that the rate complies with Section
	572.061(e), Local Government Code.
	SECTION 12.  This Act takes effect immediately if it
	receives a vote of two-thirds of all the members elected to each
	house, as provided by Section 39, Article III, Texas Constitution.
	If this Act does not receive the vote necessary for immediate
	effect, this Act takes effect September 1, 2023.