H.B. No. 1318 amends the Water Code regarding the process for municipalities to obtain a certificate of public convenience and necessity for providing water or sewer services in areas that have been incorporated or annexed. The bill specifies that the utility commission will grant single certification to the municipality and will determine adequate and just compensation for any property transferred from a retail public utility to the municipality or a franchised utility. Notably, the bill removes previous language that required the utility commission to assess compensation for property deemed useless or valueless due to the certification. Instead, it emphasizes compensation for property transferred and for any adverse effects on property that remains with the retail public utility.

Additionally, the bill introduces a new subsection that outlines how courts should assess damages or adverse effects on property remaining with the retail public utility after certification. It clarifies that municipalities or franchised utilities may take possession of transferred property pending appeal, provided they pay the established compensation. The bill also mandates that if a municipality files for certification on behalf of a franchised utility, both entities must be joined in the application, and the franchised utility is responsible for compensating the retail public utility for any damages or property transfers. The changes will apply only to proceedings that commence after the effective date of the Act, which is set for September 1, 2025.

Statutes affected:
Introduced: Water Code 13.255 (Water Code 13)
House Committee Report: Water Code 13.255 (Water Code 13)
Engrossed: Water Code 13.255 (Water Code 13)
Senate Committee Report: Water Code 13.255 (Water Code 13)
Enrolled: Water Code 13.255 (Water Code 13)