HB 1318

relating to a certificate of public convenience and necessity to
provide water or sewer service in an area incorporated or annexed by
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Sections 13.255(c), (d), (e), (f), and (i),
Water Code, are amended to read as follows:
(c)  The utility commission by order shall grant single
certification to the municipality.  [The utility commission shall
also determine in its order the monetary amount that is adequate and
just to compensate the retail public utility for any of the retail
public utility's property the utility commission determines is
being rendered useless or valueless by the single certification.]
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 [such] property and [pursuant to the provisions of
this section, including an award for] 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
(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
(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 property determined by
the utility commission to be rendered useless or valueless by the
granting of single certification]; and
(2)  orders payment to the retail public utility of
adequate and just compensation [for the property] as determined by
the utility commission in its final order under Subsection (c).
(e)  Any party that is aggrieved by a final order of the
utility commission under this section may file an appeal with the
district court of Travis County within 30 days after the order
becomes final.  The hearing in such an appeal before the district
court shall be by trial de novo on all issues.  After the hearing, if
the court determines that the municipally owned utility or
franchised utility is entitled to single certification under the
provisions of this section, the court shall enter a judgment that:
(1)  transfers to the municipally owned utility or
franchised utility title to property requested by the municipality
to be transferred to the municipally owned utility or franchised
utility and located within the singly certificated area [and
property determined by the court or jury to be rendered useless or
valueless by the granting of single certification]; and
(2)  orders payment in accordance with Subsection (g)
to the retail public utility of adequate and just compensation for
the property transferred, and for the property remaining in the
ownership of the retail public utility after single certification
that is damaged or adversely affected, as determined by the court or
(f)  Transfer of property shall be effective on the date the
judgment becomes final.  However, after the judgment of the court is
entered, the municipality or franchised utility may take possession
of transferred [condemned] property pending appeal if the
municipality or franchised utility pays the retail public utility
or pays into the registry of the court, subject to withdrawal by the
retail public utility, the amount, if any, established in the
court's judgment as just and adequate compensation.  To provide
security in the event an appellate court, or the trial court in a
new trial or on remand, awards compensation in excess of the
original award, the municipality or franchised utility, as the case
may be, shall deposit in the registry of the court an additional sum
in the amount of the award, or a surety bond in the same amount
issued by a surety company qualified to do business in this state,
conditioned to secure the payment of an award of compensation
[damages] in excess of the original award of the trial court.  On
application by the municipality or franchised utility, the court
shall order that funds deposited in the registry of the court be
deposited in an interest-bearing account, and that interest
accruing prior to withdrawal of the award by the retail public
utility be paid to the municipality or to the franchised utility.
In the event the municipally owned utility or franchised utility
takes possession of property or provides utility service in the
singly certificated area pending appeal, and a court in a final
judgment in an appeal under this section holds that the grant of
single certification was in error, the retail public utility is
entitled to seek compensation for any damages sustained by it in
accordance with Subsection (g) of this section.
(i)  In the event that a municipality files an application
for single certification on behalf of a franchised utility, the
municipality shall be joined in such application by such franchised
utility, and the franchised utility shall make all payments
required in the court's judgment to adequately and justly
compensate the retail public utility [for any taking or damaging of
property and] for the transfer of property to such franchised
utility and for the property remaining in the ownership of the
retail public utility after single certification that is damaged or
SECTION 2.  The changes in law made by this Act apply 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 is
commenced, and that law is continued in effect for that purpose.
SECTION 3.  This Act takes effect September 1, 2025.