Texas Water Code
§ 13.255 — SINGLE CERTIFICATION IN INCORPORATED OR ANNEXED AREAS
WA § 13.255Title 2. WATER ADMINISTRATION · Part B. WATER RIGHTS · Ch. 13. WATER RATES AND SERVICES · Art. G. CERTIFICATES OF CONVENIENCE AND NECESSITY
Statute text
View on source(a)In the event that an area is incorporated or annexed by a municipality, either before or after the effective date of this section, the municipality and a retail public utility that provides water or sewer service to all or part of the area pursuant to a certificate of convenience and necessity may agree in writing that all or part of the area may be served by a municipally owned utility, by a franchised utility, or by the retail public utility. In this section, the phrase "franchised utility" shall mean a retail public utility that has been granted a franchise by a municipality to provide water or sewer service inside municipal boundaries. The agreement may provide for single or dual certification of all or part of the area, for the purchase of facilities or property, and for such other or additional terms that the parties may agree on. If a franchised utility is to serve the area, the franchised utility shall also be a party to the agreement. The executed agreement shall be filed with the utility commission, and the utility commission, on receipt of the agreement, shall incorporate the terms of the agreement into the respective certificates of convenience and necessity of the parties to the agreement.
(b)If an agreement is not executed within 180 days after the municipality, in writing, notifies the retail public utility of its intent to provide service to the incorporated or annexed area, and if the municipality desires and intends to provide retail utility service to the area, the municipality, prior to providing service to the area, shall file an application with the utility commission to grant single certification to the municipally owned water or sewer utility or to a franchised utility. If an application for single certification is filed, the utility commission shall fix a time and place for a hearing and give notice of the hearing to the municipality and franchised utility, if any, and notice of the application and hearing to the retail public utility. (b-1) On the day a municipality submits an application for single certification to the utility commission under this section, the municipality shall send, via certified mail or hand delivery, a copy of the application to the retail public utility.
(c)The utility commission by order shall grant single certification to the municipality. If the municipality in its application has requested the transfer of specified property of the retail public utility to the municipality or to a franchised utility, the utility commission shall also determine in its order the adequate and just compensation to be paid, under the provisions of this section, for the transferred property and damages to or adverse effects on property remaining in the ownership of the retail public utility after single certification. The order of the utility commission shall not be effective to transfer property. A transfer of property may be obtained under this section only by a court judgment rendered under Subsection (d) or (e). The grant of single certification by the utility commission takes effect on the date the municipality or franchised utility, as the case may be, pays adequate and just compensation pursuant to court order, or pays an amount into the registry of the court or to the retail public utility under Subsection (f). If the court judgment provides that the retail public utility is not entitled to any compensation, the grant of single certification takes effect when the court judgment becomes final. (c-1) The utility commission by rule shall require the municipality or franchised utility to submit a report to the utility commission verifying that the municipality or franchised utility has paid all required adequate and just compensation to the retail public utility as provided by Subsection (c). (c-2) The municipality or franchised utility must provide to each customer of the retail public utility being acquired an individual written notice within 60 days after the effective date for the transfer specified in the court judgment. The notice must clearly advise the customer of the identity of the new service provider, the reason for the transfer, the rates to be charged by the new service provider, and the effective date of those rates. (c-3) Before filing an appeal under Subsection (e) and not later than the seventh day after the date the utility commission issues a final order under Subsection (c), the retail public utility may appeal the final order to the utility commission in a separate hearing before the utility commission.
(d)In the event the final order of the utility commission is not appealed within 30 days, the municipality may request the district court of Travis County to enter a judgment consistent with the order of the utility commission. In such event, the court shall render a judgment that:
(1)transfers to the municipally owned utility or franchised utility title to property to be transferred to the municipally owned utility or franchised utility as delineated by the utility commission's final order; and
(2)orders payment to the retail public utility of adequate and just compensation as determined by the utility commission in its final order under Subsection (c).
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Legislative history
Acts 2005, 79th Leg., Ch. 1145 (H.B. 2876), Sec. 10, eff. September 1, 2005. Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 2.56, eff. September 1, 2013. Acts 2013, 83rd Leg., R.S., Ch. 171 (S.B. 567), Sec. 56, eff. September 1, 2013. Acts 2021, 87th Leg., R.S., Ch. 226 (H.B. 837), Sec. 3, eff. September 1, 2021. Acts 2023, 88th Leg., R.S., Ch. 718 (H.B. 2442), Sec. 2, eff. September 1, 2023. Acts 2025, 89th Leg., R.S., Ch. 382 (H.B. 1318), Sec. 1, eff. September 1, 2025.