85R3703 GRM-F     By: Lucio III H.B. No. 2187       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.