85R3703 GRM-F
	By: Miles	S.B. No. 1985

	A BILL TO BE ENTITLED
	AN ACT
	relating to the revocation or amendment of a certificate of public
	convenience and necessity for water utilities in a service area.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 13.254, Water Code, is amended by
	amending Subsections (a-3), (a-4), (d), (e), (f), and (g) and
	adding Subsection (a-12) to read as follows:
	(a-3)  Within 90 [60] calendar days from the date the utility
	commission determines the petition filed pursuant to Subsection
	(a-1) to be administratively complete, the utility commission shall
	grant the petition unless the utility commission makes an express
	finding that the petitioner failed to satisfy the elements required
	in Subsection (a-1) and supports its finding with separate findings
	and conclusions for each element based solely on the information
	provided by the petitioner and the certificate holder. The utility
	commission may grant or deny a petition subject to terms and
	conditions specifically related to the service request of the
	petitioner and all relevant information submitted by the petitioner
	and the certificate holder. In addition, the utility commission
	may require an award of compensation as otherwise provided by this
	section.
	(a-4)  Chapter 2001, Government Code, does not apply to any
	petition filed under Subsection (a-1). [The decision of the
	utility commission on the petition is final after any
	reconsideration authorized by the utility commission's rules and
	may not be appealed.]
	(a-12)  The utility commission may not grant a petition
	received under Subsection (a-5) if, before the 30th day after the
	date the landowner files the petition under Subsection (a-5), the
	certificate holder demonstrates that the certificate holder,
	through planning, design, construction of facilities, or
	contractual obligations to serve the tract of land, has made
	service available to the tract. On the utility commission's
	determination that the certificate holder has made the
	demonstration, the utility commission shall inform the petitioner
	that:
	(1)  the tract of land is not eligible for expedited
	release under Subsection (a-5); and
	(2)  the landowner may seek expedited release under
	Subsection (a-1) if that subsection is applicable.
	(d)  A petitioner whose petition under Subsection (a-1) or
	(a-5) has been granted shall provide just and adequate [retail
	public utility may not in any way render retail water or sewer
	service directly or indirectly to the public in an area that has
	been decertified under this section without providing]
	compensation in accordance with Subsection (g), as determined by
	[for any property that] the utility commission [determines is
	rendered useless or valueless to the decertified retail public
	utility as a result of the decertification]. A utility commission
	order following a petition under Subsection (a-1) or (a-5) to
	revoke or amend a certificate takes effect on the date the
	petitioner pays the compensation or deposits an equal amount into
	the registry of the district court under Subsection (f).
	(e)  The utility commission shall conduct a hearing to
	determine [determination of] the monetary amount of compensation a
	petitioner under Subsection (a-1) or (a-5) must pay in accordance
	with Chapter 2001, Government Code. The utility commission shall
	make the determination [, if any, shall be determined at the time
	another retail public utility seeks to provide service in the
	previously decertified area and before service is actually
	provided. The utility commission shall ensure that the monetary
	amount of compensation is determined] not later than the 90th
	calendar day after the date on which [a retail public utility
	notifies] the utility commission revokes or amends a certificate
	[of its intent to provide service to the decertified area].
	(f)  If either party to a proceeding following a petition
	under Subsection (a-1) or (a-5) appeals the utility commission
	order to revoke or amend a certificate or the compensation order,
	the [The] monetary amount of compensation [shall be] determined by
	the utility commission shall be deposited into the registry of the
	district court of Travis County pending the outcome of the appeal [a
	qualified individual or firm serving as independent appraiser
	agreed upon by the decertified retail public utility and the retail
	public utility seeking to serve the area. The determination of
	compensation by the independent appraiser shall be binding on the
	utility commission. The costs of the independent appraiser shall
	be borne by the retail public utility seeking to serve the area].
	(g)  For the purpose of implementing this section, the value
	of real property owned and utilized by the retail public utility for
	its facilities shall be determined according to the standards set
	forth in Chapter 21, Property Code, governing actions in eminent
	domain and the value of personal property shall be determined
	according to the factors in this subsection. The factors ensuring
	that the compensation to a retail public utility is just and
	adequate shall include: the amount of the retail public utility's
	debt allocable for service to the area in question; the value of the
	service facilities of the retail public utility located within the
	area in question; the amount of any expenditures for planning,
	design, or construction of service facilities that are allocable to
	service to the area in question; the amount of the retail public
	utility's contractual obligations allocable to the area in
	question; any demonstrated impairment of service or increase of
	cost to consumers of the retail public utility remaining after the
	decertification; the impact of [on] future revenues lost [from
	existing customers]; necessary and reasonable legal expenses and
	professional fees; and other relevant factors. The utility
	commission shall adopt rules governing the evaluation of these
	factors.
	SECTION 2.  Section 13.255, Water Code, is amended by
	amending Subsections (g) and (l) to read as follows:
	(g)  For the purpose of implementing this section, the value
	of real property owned and utilized by the retail public utility for
	its facilities shall be determined according to the standards set
	forth in Chapter 21, Property Code, governing actions in eminent
	domain; the value of personal property shall be determined
	according to the factors in this subsection. The factors ensuring
	that the compensation to a retail public utility is just and
	adequate, shall, at a minimum, include: impact on the existing
	indebtedness of the retail public utility and its ability to repay
	that debt, the value of the service facilities of the retail public
	utility located within the area in question, the amount of any
	expenditures for planning, design, or construction of service
	facilities outside the incorporated or annexed area that are
	allocable to service to the area in question, the amount of the
	retail public utility's contractual obligations allocable to the
	area in question, any demonstrated impairment of service or
	increase of cost to consumers of the retail public utility
	remaining after the single certification, the impact of [on] future
	revenues lost [from existing customers], necessary and reasonable
	legal expenses and professional fees, factors relevant to
	maintaining the current financial integrity of the retail public
	utility, and other relevant factors.
	(l)  For an area incorporated or annexed by a municipality,
	the compensation provided under Subsection (g) shall be determined
	by the utility commission in accordance with Chapter 2001,
	Government Code [a qualified individual or firm to serve as
	independent appraiser, who shall be selected by the affected retail
	public utility, and the costs of the appraiser shall be paid by the
	municipality. For an area annexed by a municipality, the
	compensation provided under Subsection (g) shall be determined by a
	qualified individual or firm to which the municipality and the
	retail public utility agree to serve as independent appraiser. If
	the retail public utility and the municipality are unable to agree
	on a single individual or firm to serve as the independent appraiser
	before the 11th day after the date the retail public utility or
	municipality notifies the other party of the impasse, the retail
	public utility and municipality each shall appoint a qualified
	individual or firm to serve as independent appraiser. On or before
	the 10th business day after the date of their appointment, the
	independent appraisers shall meet to reach an agreed determination
	of the amount of compensation. If the appraisers are unable to
	agree on a determination before the 16th business day after the date
	of their first meeting under this subsection, the retail public
	utility or municipality may petition the utility commission or a
	person the utility commission designates for the purpose to appoint
	a third qualified independent appraiser to reconcile the appraisals
	of the two originally appointed appraisers. The determination of
	the third appraiser may not be less than the lesser or more than the
	greater of the two original appraisals. The costs of the
	independent appraisers for an annexed area shall be shared equally
	by the retail public utility and the municipality. The
	determination of compensation under this subsection is binding on
	the utility commission].
	SECTION 3.  Section 13.254(g-1), Water Code, is repealed.
	SECTION 4.  The change in law made by this Act applies only
	to a proceeding affecting a certificate of public convenience and
	necessity that commences on or after the effective date of this Act.
	A proceeding affecting a certificate of public convenience and
	necessity that commenced before the effective date of this Act is
	governed by the law in effect on the date the proceeding commenced,
	and that law is continued in effect for that purpose.
	SECTION 5.  This Act takes effect September 1, 2017.