SB 2389

relating to entities authorized to provide water or sewer service.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Sections 572.052(c) and (d), Local Government
Code, are amended to read as follows:
(c)  A public utility agency is a:
(2)  political subdivision of this state; [and]
(3)  political entity and corporate body; and
(4)  retail public utility for the purposes of Chapter
(d)  A public utility agency may not impose a tax but has all
the other powers and obligations that are related to facilities and
that are provided by law to a municipality that owns a facility,
except as provided by Section 572.061.
SECTION 2.  Chapter 572, Local Government Code, is amended
by adding Subchapter D to read as follows:
SUBCHAPTER D.  RECEIVERSHIP AND TEMPORARY MANAGEMENT
Sec. 572.101.  DEFINITIONS.  In this subchapter:
(1)  "Commission" means the Texas Commission on
(2)  "Utility" and "water supply or sewer service
corporation" have the meanings assigned by Section 13.002, Water
(3)  "Utility commission" means the Public Utility
Sec. 572.102.  APPLICABILITY.  (a)  This subchapter applies
only to a utility or water supply or sewer service corporation
providing water or sewer service in the territory of a public
(b)  For purposes of this subchapter, a reference in Chapter
13, Water Code, to a person includes a public utility agency.
Sec. 572.103.  RECEIVERSHIP.  (a)  At the request of the
utility commission or the commission, the attorney general shall
bring suit for the appointment of a receiver that is a public
utility agency in the manner provided by Section 13.412, Water
Code, to collect the assets and carry on the business of a utility
or water supply or sewer service corporation that:
(1)  has abandoned operation of its facilities;
(2)  informs the utility commission or the commission
that the owner is abandoning the system;
(3)  violates a final order of the utility commission
(4)  allows any property owned or controlled by it to be
used in violation of a final order of the utility commission or the
(5)  violates a final judgment issued by a district
court in a suit brought by the attorney general under:
(A)  Chapter 7 or 13, Water Code; or
(B)  Chapter 341, Health and Safety Code;
(6)  is subject to an administrative penalty for a
violation of Subchapter M, Chapter 13, Water Code, or a rule adopted
by the utility commission under that subchapter; or
(7)  violates a final judgment issued by a court in a
proceeding to enforce a provision of a permit issued by a
groundwater conservation district under Chapter 36.
(b)  To facilitate the regionalization of water and sewer
service, the utility commission shall prioritize an application
submitted under Section 13.412(g), Water Code, by a public utility
agency.  The utility commission shall issue an order approving the
acquisition proposed in the application not later than the 120th
day after the date the utility commission determines the
Sec. 572.104.  TEMPORARY MANAGEMENT.  The utility commission
or the commission, after providing to the utility or water supply or
sewer service corporation notice and an opportunity to be heard by
the commissioners at a utility commission or commission meeting,
may authorize a public utility agency to temporarily manage and
operate a utility or water supply or sewer service corporation in
the manner provided by Section 13.4132, Water Code, if the utility
(1)  has discontinued or abandoned operations or the
(2)  has been or is being referred to the attorney
general for the appointment of a receiver under Section 572.103; or
(3)  provides retail water or sewer utility service
through fewer than 10,000 taps or connections and violates a final
order of the commission by failing to:
(A)  provide system capacity that is greater than
the required raw water or groundwater production rate or the
anticipated daily demand of the system;
(B)  provide a minimum pressure of 35 pounds per
square inch throughout the distribution system under normal
(C)  maintain accurate or properly calibrated
testing equipment or other means of monitoring the effectiveness of
a chemical treatment or pathogen inactivation or removal process.
SECTION 3.  Section 13.002, Water Code, is amended by adding
Subdivision (16-a) and amending Subdivisions (19) and (23) to read
(16-a)  "Public utility agency" means a public utility
agency created under Chapter 572, Local Government Code.
(19)  "Retail public utility" means any person,
corporation, public utility, water supply or sewer service
corporation, municipality, public utility agency, political
subdivision or agency operating, maintaining, or controlling in
this state facilities for providing potable water service or sewer
service, or both, for compensation.
(23)  "Water and sewer utility," "public utility," or
"utility" means any person, corporation, cooperative corporation,
affected county, or any combination of these persons or entities,
other than a municipal corporation, public utility agency, water
supply or sewer service corporation, or [a] political subdivision
of the state, except an affected county, or their lessees,
trustees, and receivers, owning or operating for compensation in
this state equipment or facilities for the transmission, storage,
distribution, sale, or provision of potable water to the public or
for the resale of potable water to the public for any use or for the
collection, transportation, treatment, or disposal of sewage or
other operation of a sewage disposal service for the public, other
than equipment or facilities owned and operated for either purpose
by a municipality or other political subdivision of this state or a
water supply or sewer service corporation, but does not include any
person or corporation not otherwise a public utility that furnishes
the services or commodity only to itself or its employees or tenants
as an incident of that employee service or tenancy when that service
or commodity is not resold to or used by others.
SECTION 4.  Section 13.004(a), Water Code, is amended to
(a)  Notwithstanding any other law, the utility commission
has the same jurisdiction over a water supply or sewer service
corporation that the utility commission has under this chapter over
a water and sewer utility if the utility commission finds that the
water supply or sewer service corporation:
(1)  is failing to conduct annual or special meetings
in compliance with Section 67.007; [or]
(2)  is operating in a manner that does not comply with
the requirements for classifications as a nonprofit water supply or
sewer service corporation prescribed by Sections 13.002(11) and
(3)  is operating in a manner that necessitates
appointment of a receiver or temporary manager for the water supply
or sewer service corporation in the manner provided by Subchapter
SECTION 5.  This Act takes effect September 1, 2025.