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AN ACT
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relating to certificates of public convenience and necessity for |
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water or sewer services. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 13.245, Water Code, is amended by |
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amending Subsection (b) and adding Subsections (c-1) through (c-5) |
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to read as follows: |
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(b) Except as provided by Subsections [Subsection] (c), |
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(c-1), and (c-2), the commission may not grant to a retail public |
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utility a certificate of public convenience and necessity for a |
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service area within the boundaries or extraterritorial |
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jurisdiction of a municipality without the consent of the |
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municipality. The municipality may not unreasonably withhold the |
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consent. As a condition of the consent, a municipality may require |
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that all water and sewer facilities be designed and constructed in |
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accordance with the municipality's standards for facilities. |
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(c-1) If a municipality has not consented under Subsection |
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(b) before the 180th day after the date a landowner or a retail |
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public utility submits to the municipality a formal request for |
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service according to the municipality's application requirements |
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and standards for facilities on the same or substantially similar |
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terms as provided by the retail public utility's application to the |
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commission, including a capital improvements plan required by |
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Section 13.244(d)(3) or a subdivision plat, the commission may |
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grant the certificate of public convenience and necessity without |
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the consent of the municipality if: |
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(1) the commission makes the findings required by |
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Subsection (c); |
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(2) the municipality has not entered into a binding |
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commitment to serve the area that is the subject of the retail |
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public utility's application to the commission before the 180th day |
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after the date the formal request was made; and |
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(3) the landowner or retail public utility that |
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submitted the formal request has not unreasonably refused to: |
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(A) comply with the municipality's service |
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extension and development process; or |
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(B) enter into a contract for water or sewer |
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services with the municipality. |
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(c-2) If a municipality refuses to provide service in the |
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proposed service area, as evidenced by a formal vote of the |
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municipality's governing body or an official notification from the |
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municipality, the commission is not required to make the findings |
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otherwise required by this section and may grant the certificate of |
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public convenience and necessity to the retail public utility at |
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any time after the date of the formal vote or receipt of the |
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official notification. |
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(c-3) The commission must include as a condition of a |
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certificate of public convenience and necessity granted under |
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Subsection (c-1) or (c-2) that all water and sewer facilities be |
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designed and constructed in accordance with the municipality's |
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standards for water and sewer facilities. |
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(c-4) Subsections (c-1), (c-2), and (c-3) do not apply to: |
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(1) a county that borders the United Mexican States |
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and the Gulf of Mexico or a county adjacent to such a county; |
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(2) a county with a population of more than 30,000 and |
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less than 35,000 that borders the Red River; or |
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(3) a county with a population of more than 100,000 and |
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less than 200,000 that borders a county described by Subdivision |
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(2). |
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(c-5) Subsections (c-1), (c-2), and (c-3) do not apply to: |
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(1) a county with a population of 130,000 or more that |
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is adjacent to a county with a population of 1.5 million or more |
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that is within 200 miles of an international border; or |
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(2) a county with a population of more than 40,000 and |
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less than 50,000 that contains a portion of the San Antonio River. |
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SECTION 2. Section 13.2451, Water Code, is amended by |
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amending Subsections (a) and (b) and adding Subsections (b-1), |
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(b-2), and (b-3) to read as follows: |
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(a) Except as provided by Subsection (b), if [If] a |
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municipality extends its extraterritorial jurisdiction to include |
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an area certificated to a retail public utility, the retail public |
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utility may continue and extend service in its area of public |
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convenience and necessity under the rights granted by its |
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certificate and this chapter. |
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(b) The commission may not extend a municipality's |
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certificate of public convenience and necessity beyond its |
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extraterritorial jurisdiction if an owner of land that is located |
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wholly or partly outside the extraterritorial jurisdiction elects |
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to exclude some or all of the landowner's property within a proposed |
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service area in accordance with Section 13.246(h). This subsection |
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does not apply to a transfer of a certificate as approved by the |
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commission. [A municipality that seeks to extend a certificate of
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public convenience and necessity beyond the municipality's
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extraterritorial jurisdiction must ensure that the municipality
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complies with Section 13.241 in relation to the area covered by the
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portion of the certificate that extends beyond the municipality's
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extraterritorial jurisdiction.] |
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(b-1) Subsection (b) does not apply to an extension of |
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extraterritorial jurisdiction in a county that borders the United |
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Mexican States and the Gulf of Mexico or a county adjacent to such a |
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county. |
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(b-2) Subsection (b) does not apply to an extension of |
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extraterritorial jurisdiction in a county: |
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(1) with a population of more than 30,000 and less than |
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35,000 that borders the Red River; or |
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(2) with a population of more than 100,000 and less |
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than 200,000 that borders a county described by Subdivision (1). |
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(b-3) Subsection (b) does not apply to an extension of |
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extraterritorial jurisdiction in a county: |
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(1) with a population of 130,000 or more that is |
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adjacent to a county with a population of 1.5 million or more that |
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is within 200 miles of an international border; or |
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(2) with a population of more than 40,000 and less than |
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50,000 that contains a portion of the San Antonio River. |
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SECTION 3. Subsection (h), Section 13.246, Water Code, is |
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amended to read as follows: |
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(h) Except as provided by Subsection (i), a landowner who |
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owns a tract of land that is at least 25 acres and that is wholly or |
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partially located within the proposed service area may elect to |
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exclude some or all of the landowner's property from the proposed |
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service area by providing written notice to the commission before |
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the 30th day after the date the landowner receives notice of a new |
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application for a certificate of public convenience and necessity |
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or for an amendment to an existing certificate of public |
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convenience and necessity. The landowner's election is effective |
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without a further hearing or other process by the commission. If a |
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landowner makes an election under this subsection, the application |
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shall be modified so that the electing landowner's property is not |
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included in the proposed service area. An applicant for a |
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certificate of public convenience and necessity that has land |
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removed from its proposed certificated service area because of a |
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landowner's election under this subsection may not be required to |
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provide service to the removed land for any reason, including the |
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violation of law or commission rules by the water or sewer system of |
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another person. |
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SECTION 4. Section 13.254, Water Code, is amended by |
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amending Subsections (a), (a-1), (a-2), and (a-3) and adding |
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Subsections (a-5) through (a-11) and (h) to read as follows: |
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(a) The commission at any time after notice and hearing |
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may[, on its own motion or on receipt of a petition described by
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Subsection (a-1),] revoke or amend any certificate of public |
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convenience and necessity with the written consent of the |
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certificate holder or if it finds that: |
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(1) the certificate holder has never provided, is no |
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longer providing, is incapable of providing, or has failed to |
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provide continuous and adequate service in the area, or part of the |
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area, covered by the certificate; |
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(2) in an affected county as defined in Section |
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16.341, the cost of providing service by the certificate holder is |
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so prohibitively expensive as to constitute denial of service, |
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provided that, for commercial developments or for residential |
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developments started after September 1, 1997, in an affected county |
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as defined in Section 16.341, the fact that the cost of obtaining |
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service from the currently certificated retail public utility makes |
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the development economically unfeasible does not render such cost |
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prohibitively expensive in the absence of other relevant factors; |
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(3) the certificate holder has agreed in writing to |
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allow another retail public utility to provide service within its |
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service area, except for an interim period, without amending its |
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certificate; or |
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(4) the certificate holder has failed to file a cease |
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and desist action pursuant to Section 13.252 within 180 days of the |
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date that it became aware that another retail public utility was |
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providing service within its service area, unless the certificate |
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holder demonstrates good cause for its failure to file such action |
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within the 180 days. |
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(a-1) As an alternative to decertification under Subsection |
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(a), the owner of a tract of land that is at least 50 acres and that |
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is not in a platted subdivision actually receiving water or sewer |
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service may petition the commission under this subsection for |
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expedited release of the area from a certificate of public |
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convenience and necessity so that the area may receive service from |
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another retail public utility. The fact that a certificate holder |
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is a borrower under a federal loan program is not a bar to a request |
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under this subsection for the release of the petitioner's land and |
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the receipt of services from an alternative provider. On the day |
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the petitioner submits the petition to the commission, the [The] |
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petitioner shall send [deliver], via certified mail, a copy of the |
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petition to the certificate holder, who may submit information to |
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the commission to controvert information submitted by the |
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petitioner. The petitioner must demonstrate that: |
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(1) a written request for service, other than a |
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request for standard residential or commercial service, has been |
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submitted to the certificate holder, identifying: |
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(A) the area for which service is sought; |
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(B) the timeframe within which service is needed |
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for current and projected service demands in the area; |
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(C) the level and manner of service needed for |
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current and projected service demands in the area; |
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(D) the approximate cost for the alternative |
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provider to provide the service at the same level and manner that is |
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requested from the certificate holder; |
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(E) the flow and pressure requirements and |
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specific infrastructure needs, including line size and system |
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capacity for the required level of fire protection requested; and |
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(F) [(D)] any additional information requested |
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by the certificate holder that is reasonably related to |
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determination of the capacity or cost for providing the service; |
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(2) the certificate holder has been allowed at least |
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90 calendar days to review and respond to the written request and |
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the information it contains; |
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(3) the certificate holder: |
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(A) has refused to provide the service; |
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(B) is not capable of providing the service on a |
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continuous and adequate basis within the timeframe, at the level, |
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at the approximate cost that the alternative provider is capable of |
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providing for a comparable level of service, or in the manner |
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reasonably needed or requested by current and projected service |
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demands in the area; or |
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(C) conditions the provision of service on the |
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payment of costs not properly allocable directly to the |
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petitioner's service request, as determined by the commission; and |
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(4) the alternate retail public utility from which the |
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petitioner will be requesting service possesses the financial, |
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managerial, and technical capability to provide [is capable of
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providing] continuous and adequate service within the timeframe, at |
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the level, at the cost, and in the manner reasonably needed or |
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requested by current and projected service demands in the area. |
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(a-2) A landowner is not entitled to make the election |
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described in Subsection (a-1) or (a-5) but is entitled to contest |
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under Subsection (a) the involuntary certification of its property |
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in a hearing held by the commission if the landowner's property is |
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located: |
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(1) within the boundaries of any municipality or the |
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extraterritorial jurisdiction of a municipality with a population |
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of more than 500,000 and the municipality or retail public utility |
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owned by the municipality is the holder of the certificate; or |
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(2) in a platted subdivision actually receiving water |
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or sewer service. |
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(a-3) Within 60 [90] calendar days from the date the |
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commission determines the petition filed pursuant to Subsection |
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(a-1) to be administratively complete, the commission shall grant |
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the petition unless the commission makes an express finding that |
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the petitioner failed to satisfy the elements required in |
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Subsection (a-1) and supports its finding with separate findings |
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and conclusions for each element based solely on the information |
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provided by the petitioner and the certificate holder. The |
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commission may grant or deny a petition subject to terms and |
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conditions specifically related to the service request of the |
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petitioner and all relevant information submitted by the petitioner |
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and the certificate holder. In addition, the commission may |
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require an award of compensation as otherwise provided by this |
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section. |
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(a-5) As an alternative to decertification under Subsection |
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(a) and expedited release under Subsection (a-1), the owner of a |
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tract of land that is at least 25 acres and that is not receiving |
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water or sewer service may petition for expedited release of the |
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area from a certificate of public convenience and necessity and is |
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entitled to that release if the landowner's property is located in a |
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county with a population of at least one million, a county adjacent |
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to a county with a population of at least one million, or a county |
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with a population of more than 200,000 and less than 220,000 that |
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does not contain a public or private university that had a total |
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enrollment in the most recent fall semester of 40,000 or more, and |
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not in a county that has a population of more than 45,500 and less |
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than 47,500. |
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(a-6) The commission shall grant a petition received under |
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Subsection (a-5) not later than the 60th day after the date the |
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landowner files the petition. The commission may not deny a |
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petition received under Subsection (a-5) based on the fact that a |
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certificate holder is a borrower under a federal loan program. The |
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commission may require an award of compensation by the petitioner |
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to a decertified retail public utility that is the subject of a |
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petition filed under Subsection (a-5) as otherwise provided by this |
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section. |
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(a-7) The utility shall include with the statement of intent |
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provided to each landowner or ratepayer a notice of: |
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(1) a proceeding under this section related to |
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certification or decertification; |
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(2) the reason or reasons for the proposed rate |
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change; and |
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(3) any bill payment assistance program available to |
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low-income ratepayers. |
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(a-8) If a certificate holder has never made service |
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available through planning, design, construction of facilities, or |
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contractual obligations to serve the area a petitioner seeks to |
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have released under Subsection (a-1), the commission is not |
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required to find that the proposed alternative provider is capable |
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of providing better service than the certificate holder, but only |
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that the proposed alternative provider is capable of providing the |
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requested service. |
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(a-9) Subsection (a-8) does not apply to a county that |
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borders the United Mexican States and the Gulf of Mexico or a county |
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adjacent to a county that borders the United Mexican States and the |
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Gulf of Mexico. |
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(a-10) Subsection (a-8) does not apply to a county: |
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(1) with a population of more than 30,000 and less than |
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35,000 that borders the Red River; or |
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(2) with a population of more than 100,000 and less |
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than 200,000 that borders a county described by Subdivision (1). |
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(a-11) Subsection (a-8) does not apply to a county: |
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(1) with a population of 130,000 or more that is |
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adjacent to a county with a population of 1.5 million or more that |
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is within 200 miles of an international border; or |
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(2) with a population of more than 40,000 and less than |
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50,000 that contains a portion of the San Antonio River. |
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(h) A certificate holder that has land removed from its |
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certificated service area in accordance with this section may not |
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be required, after the land is removed, to provide service to the |
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removed land for any reason, including the violation of law or |
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commission rules by a water or sewer system of another person. |
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SECTION 5. The changes made by this Act to Sections 13.245, |
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13.2451, 13.246, and 13.254, Water Code, apply only to: |
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(1) a retail public utility's application for a |
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certificate of public convenience and necessity for a service area |
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in the extraterritorial jurisdiction of a municipality that is made |
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on or after the effective date of this Act; |
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(2) an extension of a municipality's certificate of |
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public convenience and necessity for a service area in the |
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extraterritorial jurisdiction of the municipality on or after the |
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effective date of this Act; and |
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(3) a petition to release an area from a certificate of |
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public convenience and necessity that is made on or after the |
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effective date of this Act. |
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SECTION 6. This Act takes effect September 1, 2011. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I hereby certify that S.B. No. 573 passed the Senate on |
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April 26, 2011, by the following vote: Yeas 26, Nays 5; and that |
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the Senate concurred in House amendments on May 26, 2011, by the |
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following vote: Yeas 25, Nays 6. |
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______________________________ |
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Secretary of the Senate |
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I hereby certify that S.B. No. 573 passed the House, with |
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amendments, on May 25, 2011, by the following vote: Yeas 126, |
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Nays 22, two present not voting. |
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______________________________ |
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Chief Clerk of the House |
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Approved: |
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______________________________ |
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Date |
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______________________________ |
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Governor |