HBA-JLV, AMW H.B. 724 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 724
By: Turner, Sylvester
Environmental Regulation
3/18/2001
Introduced



BACKGROUND AND PURPOSE 

The regulation of water utilities, historically managed by the Public
Utility Commission (PUC), was transferred in the early 1980's to the Texas
Natural Resource Conservation Commission (TNRCC).  More recently, municipal
water systems have come under review because of the need to make
infrastructure investments to bring these systems in to compliance with
state and federal standards.  As a result of this need, an increasing
number of energy companies have initiated movements towards buying or
taking over the operations of aging municipal water systems.  As Texas
approaches a deregulated electric market, the purchase of water utilities
presents new opportunities for growth.  The PUC's regulatory authority over
electric utilities and the movement towards these utilities in acquiring
municipal water systems provides PUC with the incentive and authority to
then provide oversight over water utilities.  House Bill 724 transfers
TNRCC's powers and duties regarding water rates and services to the PUC.    

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Public Utility Commission of Texas
in SECTION 6 (Section 13.017, Water Code) and the secretary of state in
SECTION 13 of this bill. 

ANALYSIS

House Bill 724 amends the Water, Utilities, and Local Government codes to
transfer the Texas Natural Resource Conservation Commission's (TNRCC)
powers and duties regarding water rates and services to the Public Utility
Commission of Texas (PUC).   The bill amends the Water Code to transfer
TNRCC's general jurisdiction over administration of the state's water rate
program. 

H.B. 724 also sets forth provisions regarding the transfer from TNRCC to
PUC of all: 

 _rights, powers, duties, functions, programs, and activities related to
water rates and services; 
 
 _funds, obligations, contracts, property, and records relating to water
rates and services; 

 _employees who perform duties relating to water rates and services; and

 _appropriations for activities related to water rates and services.

The bill removes the Texas Water Development Board from serving as a source
of evidence and information gathered by the executive director and staff of
PUC for the purposes of regulating water rates and services. 

H.B. 724 amends the Utilities Code to authorize the Office of the Public
Utility Counsel to initiate or intervene as a matter of right or otherwise
appear in a judicial proceeding in which the public utility counselor
determines that residential or small commercial consumers of water or sewer
utility service are  in need of representation. 

The bill transfers any money collected by TNRCC for fees related to
applications pending before September 1, 2001, rules or forms adopted by
TNRCC relating to water rates and services, and references in law to TNRCC
relating to water rates and services to PUC.  The bill also authorizes the
secretary of state to adopt rules as necessary to expedite the
implementation of this transfer. 

EFFECTIVE DATE

September 1, 2001.