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A BILL TO BE ENTITLED
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AN ACT
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relating to the creation of an on-bill repayment program to |
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encourage improvements to real property related to water |
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efficiency; authorizing a fee. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter A, Chapter 5, Property Code, is |
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amended by adding Section 5.021 to read as follows: |
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Sec. 5.021. NOTICE OF ON-BILL REPAYMENT OBLIGATIONS. (a) A |
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seller of residential real property that is subject to an |
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obligation under Subchapter P, Chapter 13, Water Code, shall give |
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to the purchaser of the property a written notice that discloses the |
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obligation. |
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(b) The seller shall deliver the notice to the purchaser |
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before the date the executory contract binds the purchaser to |
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purchase the property. |
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(c) This section does not apply to a transfer: |
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(1) under a court order or foreclosure sale; |
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(2) by a trustee in bankruptcy; |
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(3) to a mortgagee by a mortgagor or successor in |
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interest or to a beneficiary of a deed of trust by a trustor or |
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successor in interest; |
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(4) by a mortgagee or a beneficiary under a deed of |
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trust who has acquired the land at a sale conducted under a power of |
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sale under a deed of trust or a sale under a court-ordered |
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foreclosure or has acquired the land by a deed in lieu of |
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foreclosure; |
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(5) by a fiduciary in the course of the administration |
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of a decedent's estate, guardianship, conservatorship, or trust; |
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(6) from one co-owner to another co-owner of an |
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undivided interest in the real property; |
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(7) to a spouse or a person in the lineal line of |
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consanguinity of the seller; |
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(8) to or from a governmental entity; or |
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(9) of only a mineral interest, leasehold interest, or |
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security interest. |
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(d) A violation of this section does not invalidate a |
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conveyance. A seller who fails to make a disclosure as required by |
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this section is liable to the transferee for three times the actual |
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damages incurred. |
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SECTION 2. Chapter 13, Water Code, is amended by adding |
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Subchapter P to read as follows: |
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SUBCHAPTER P. ON-BILL REPAYMENT PROGRAM |
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Sec. 13.601. DEFINITIONS. In this subchapter: |
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(1) "Charge" means an amount included on a retail |
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water or sewer service bill that is due under an on-bill repayment |
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program. |
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(2) "Eligible water improvement" means a water |
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improvement that meets the requirements for participation in an |
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on-bill repayment program. |
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(3) "Improved property" means property on which a |
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water improvement has been built under an on-bill repayment |
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program. |
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(4) "Lender" means a person who provides financing on |
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an eligible water improvement or to whom payment is owed for |
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financing an eligible water improvement that is being repaid |
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through an on-bill repayment program. |
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(5) "Obligation" means money owed under an agreement |
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to repay financed eligible water improvements through an on-bill |
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repayment program. |
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Sec. 13.602. ON-BILL REPAYMENT PROGRAM. (a) The |
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commission by rule shall establish an on-bill repayment program to |
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facilitate financing and repayment of eligible water improvements |
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between customers, lenders, and retail public utilities. |
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(b) Under the program, a customer and a lender who finances |
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an eligible water improvement on the customer's property may agree |
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to add the customer's loan payments to the customer's retail water |
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or sewer service bill. The commission shall require the retail |
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public utility that provides service to the customer to participate |
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in the program after the commission receives a written request for |
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participation from the customer or lender. |
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Sec. 13.603. MASTER SERVICER. (a) The commission shall |
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appoint a government agency or a private person to administer the |
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program as master servicer. The master servicer shall: |
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(1) manage payments and maintain documentation for all |
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program participants; |
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(2) collect money paid to retail public utilities |
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under the program and promptly remit payment to lenders as |
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applicable; and |
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(3) perform all other duties assigned by commission |
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rule. |
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(b) The commission by rule shall: |
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(1) authorize the master servicer to collect fees, as |
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approved by the commission, from on-bill repayment program lenders |
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to cover costs; and |
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(2) grant the master servicer any other rights or |
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powers the commission considers necessary. |
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Sec. 13.604. PROGRAM STANDARDS. The commission by rule |
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shall adopt minimum standards for the on-bill repayment program. A |
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retail public utility may exceed the standards. The minimum |
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standards must include: |
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(1) a list of water improvement projects that are |
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eligible for the on-bill repayment program; |
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(2) a limitation or prohibition on the removal of |
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water improvements from a property before an outstanding on-bill |
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repayment obligation is satisfied; |
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(3) a requirement that any outstanding obligation |
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created under the program: |
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(A) remains in effect regardless of any change in |
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ownership or possession of the improved property; and |
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(B) at all times constitutes an obligation of the |
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retail water or sewer service customer of record on the improved |
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property; |
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(4) a requirement that any arrearages on charges under |
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the program accruing before transfer of the approved property, |
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unless expressly assumed, remain the responsibility of the retail |
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water or sewer service customer of record on the improved property |
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at the time the arrearage accrued; and |
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(5) a requirement that charges under the program be |
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included on a customer's retail water or sewer service bill. |
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Sec. 13.605. FAILURE TO PAY. If a customer fails to pay the |
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full amount of a monthly charge under the program, the failure to |
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pay is treated as a failure to pay for retail water or sewer |
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service. |
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Sec. 13.606. PARTIAL PAYMENT. The commission shall adopt |
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rules to determine the division of a partial payment between the |
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retail water or sewer services billed and the on-bill repayment |
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program charge. |
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Sec. 13.607. LENDERS. (a) A lender shall determine loan |
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eligibility, including credit evaluations. |
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(b) A lender who participates in the program must work with |
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the master servicer when providing a loan under the program. |
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(c) The commission by rule shall approve the financing |
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structures through which a lender may provide financing under the |
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on-bill repayment program. |
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Sec. 13.608. ACCEPTANCE OF OBLIGATION. If a customer |
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applies for and accepts retail water or sewer service on an improved |
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property that is subject to an outstanding obligation under an |
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on-bill repayment program, the customer is considered to have |
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accepted the obligation for the charges that accrue under the |
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on-bill repayment program during the receipt of services. |
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Sec. 13.609. EXCEPTION RELATING TO REMOVING IMPROVEMENT. |
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Notwithstanding any other provision of this subchapter, the |
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commission by rule may exempt any eligible water improvement or any |
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class or category of eligible water improvement from a limitation |
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or prohibition prescribed by the commission under Section |
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13.604(3). |
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Sec. 13.610. RECORD FILED WITH COUNTY CLERK. (a) The |
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commission by rule shall require a retail public utility or the |
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utility's agent to record notice of an obligation on an improved |
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property with the county clerk of the county in which the property |
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is located. |
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(b) The notice required by this section does not create a |
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security interest in the improved property. |
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(c) On satisfaction of the obligation, the retail public |
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utility or the utility's agent shall file notice with the county |
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clerk in the county in which the property is located that the |
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obligation has been satisfied. |
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(d) The county clerk shall file notices under this section |
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with the deed records. |
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Sec. 13.611. REVENUES FOR RATE PURPOSES. Payments |
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collected by a utility under this subchapter are not revenues that |
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may be considered for the purposes of Subchapter F. |
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SECTION 3. As soon as practicable after the effective date |
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of this Act, but not later than January 1, 2014, the Texas |
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Commission on Environmental Quality shall adopt rules to implement |
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the provisions of this Act. |
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SECTION 4. This Act takes effect September 1, 2013. |