Section 1. Definitions 

1. “Public entity” means a political entity or corporate body of this state, including a county, municipality, or district or authority or a water supply or sewer service corporation.  
2. “Obligation” means a bond or note secured by a fee, a charge, an assessment, or other revenue of an agency available for that purpose.  
3. “Public utility agency” means an agency created under this subchapter by two or more public entities to acquire, plan, finance, construct, own, operate, or maintain facilities.  
4. “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.  

Section 2. Acceptable Uses  

• (A) Each participating public entity may:  
  1. Use the entity’s money to plan, acquire, construct, own, operate, and maintain its interest in a facility; 
  2. Share in the facility;  
  3. Issue bonds and other securities to raise money for a purpose described in Subdivision (1) in the same manner and to the same extent and subject to the same conditions as would be applicable if the public entity had sole ownership of the facility;  
  4. Acquire, for the use and benefit of each participating public entity, land, easements, and property for a facility by purchase or by exercising the power of eminent domain;   
  5. Transfer or otherwise convey the land, property, or property interest or otherwise have the land, property, or property interest become vested in other participating public entities to the extent and in the manner agreed between the entities;
  6. Make an acquisition described by Subdivision (4) through a purchase from a public or private entity; and  
  7. For the use and benefit of each participating public entity, acquire by purchase a public utility other than an affected county.  

Section 3. Authority Of Public Utility Agencies  

• (A)  A public utility agency is a:  
  1. Separate agency;  
  2. Political subdivision of this state;   
  3. Political entity and corporate body; and  
  4. Retail public utility for the purposes of [State core regulating retail water and sewer utilities].   
• (B) 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 [State code regulating gratuities].   

Section 4. Changes In Public Entities Participating In Public Utility Agency 

• (A) The public entities that participate in a public utility agency may by concurrent ordinances add a public entity to, or delete a public entity from, participation in the public utility agency.  
• (B) A participating public entity may withdraw from a public utility agency by providing an ordinance or resolution of the governing body of the participating public entity to the agency not later than the 180th day before the proposed date of withdrawal.   
  1. A participating public entity may not withdraw from a public utility agency under this subsection if bonds, notes, or other obligations of the agency are secured by the revenues of the participating public entity, unless the agency adopts a resolution approving the withdrawal.  
     • a. Upon withdrawal, a participating public entity assumes the outstanding debt attributable to that entity from the agency on a prorated basis equal to that entity’s benefit and has, without compensation from the agency, no further rights, duties, or obligations relating to the agency or ability to receive service from the facilities of the agency.  

Section 5. Powers And Authority of a Public Utility Agency 

• (A) A public utility agency may:  
  1. Perform any act necessary to the full exercise of the agency’s powers, including acts necessary to acquire, finance, own, operate, or manage a facility of the agency;  
  2. Enter into a contract, lease, or agreement, including an interlocal contract with or accept a grant or loan from any of the following entities for the management and operation of an agency facility or the acquisition, construction, financing, maintenance, operation, provision, or receipt of a facility, service, or product: 
     • a.  A department or agency of the United States;  
     • b. A department, agency, or municipality or other political subdivision of this state; or  
     • c.  A public or private corporation or person;  
  3. Sell, lease, convey, or otherwise dispose of all or a portion of any right, interest, or property the agency considers to be unnecessary for the efficient operation or maintenance of its facilities; and  
  4. Adopt rules to govern the operation of the agency and its employees, facilities, and service.  

Section 6. No power Of Eminent domain 

• (A) A public utility agency does not have the power of eminent domain.  

Section 7. Rate Authority And State Pledge 

• (A) The Public Utility Commission of {State] has appellate jurisdiction over the rates and charges of a public utility agency in the manner provided by [State water code].  
  1. In contracting with a public or private entity for wastewater collection, transmission, treatment, or disposal services or for water conservation, storage, transportation, treatment, or distribution, a public utility agency must charge rates sufficient to produce revenue adequate to:  
     • a. Pay all expenses of operation and maintenance;  
     • b. Pay when due the principal of and interest on obligations issued under this subchapter;  
     • c. Pay the principal of and interest on any legal debt of the agency;  
     • d. Pay when due all sinking and reserve fund payments;  and  
     • e. Fulfill any agreements made with the holders of any   
  2. A public utility agency may also establish a reasonable depreciation and emergency fund.  
  3. [State] pledges to and agrees with the purchasers and successive holders of obligations issued under this section that in any appeal proceeding regarding the public utility agency conducted under Subsection (1) will establish rates and charges that will produce revenue sufficient to pay for those items specified in Subsections (1) and (2) and any other obligations of the agency in connection with those items.  

Section 8.  Public utility Agency Financing And Obligations 

• (A) A public utility agency may:  
  1. Issue obligations, including anticipation notes, to accomplish the purposes of the agency; and   
  2. Finance or refund the acquisition, construction, expansion, and improvement of all or a portion of a facility relating to an agency purpose.  
• (B) The public utility agency may pledge to the payment of the obligations:  
  1. The revenue of all or part of its facilities, including facilities acquired after the obligations are issued;  
  2. revenues received from a public entity by contract as authorized by a concurrent ordinance;  
  3. special assessments imposed by a public entity and provided by contract to the agency; or  
  4. any other funds of the agency.  
• (C) Operation and maintenance expenses, including salaries and labor, materials, and repairs of facilities necessary to render efficient service, are a first lien on and charge against the pledged revenue.  
• (D) A public utility agency may not use a facility owned by the agency to secure or collateralize a new facility without the approval by resolution of each participating public entity participating in the joint financing of the new facility. This section does not apply to the use of revenue from a facility owned by the agency to secure or collateralize a new facility.  

Section 9. Liability 

• (A) Liability for the facilities and management of the public utility agency must be transferred to the agency on ownership of the facilities by the agency.  

Section 10. Infrastructure Investments 

• (A) A public utility agency may create a funding mechanism to jointly invest in and leverage funding for water infrastructure.  

Section 11.  Receivership and Temporary Management 

• (A) A “Commission” means the [State Commission on Environmental Quality].  

• (B) “Utility commission” means the [State Public Utility Commission] of xxx.  

Section 12. 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 [State 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 or the 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 commission;  
  5. Violates a final judgment issued by a district court in a suit brought by the attorney general; or  
  6. Violates a final judgment issued by a court in a proceeding to enforce a provision of a permit issued by a groundwater conservation.  
• (B) 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 application is complete.  

Section 13. Temporary Management 

• (A) 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 if the utility or corporation:  
  1. Has discontinued or abandoned operations or the provision of services;  
  2. Has been or is being referred to the attorney general for the appointment of a receiver;  
  3. Violates a final order of the utility commission or the commission; or  
  4. Allows any property owned or controlled by it to be used in violation of a final order of the utility commission or the commission.  

Section 14.  Notice Requirements for Rate Changes 

• (A) The board of directors of a public utility agency, within 60 days after the date of the final decision on a rate change, shall provide individual written notice to each ratepayer eligible to appeal the rates. The notice must include, at a minimum, the effective date of the new rates, the new rates, and the location where additional information on rates can be obtained.  The board of directors of the public utility agency may provide the notice electronically if the agency has access to a ratepayer’s e-mail address.  

Section 15. Certificate Exemption for Retail Service 

• (A) The utility commission may by rule allow a public utility agency that includes a water supply or sewer service corporation as a participant in the agency to render retail water or sewer service without a certificate of public convenience and necessity.