88R6989 DIO-D
	By: Perry	S.B. No. 2441

	A BILL TO BE ENTITLED
	AN ACT
	relating to the transfer of functions relating to the economic
	regulation of water and sewer service from the Public Utility
	Commission of Texas and the Office of Public Utility Counsel to the
	Water Public Utility Commission and the Office of Water Public
	Utility Counsel; creating a criminal offense.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 11.041(f), Water Code, is amended to
	read as follows:
	(f)  The commission shall hold a hearing on the complaint at
	the time and place stated in the order. It may hear evidence orally
	or by affidavit in support of or against the complaint, and it may
	hear arguments. The Water Public Utility Commission [utility
	commission] may participate in the hearing if necessary to present
	evidence on the price or rental demanded for the available water.
	On completion of the hearing, the commission shall render a written
	decision.
	SECTION 2.  Section 12.013(b), Water Code, is amended to
	read as follows:
	(b)  In this section:
	(1)  "Utility commission" means the Water Public
	Utility Commission.
	(2)  "Political[, "political] subdivision" means
	incorporated cities, towns or villages, counties, river
	authorities, water districts, and other special purpose districts.
	SECTION 3.  Section 13.002(22-a), Water Code, is amended to
	read as follows:
	(22-a)  "Utility commission" means the Water Public
	Utility Commission [of Texas].
	SECTION 4.  Section 13.017, Water Code, is amended to read as
	follows:
	Sec. 13.017.  OFFICE OF WATER PUBLIC UTILITY COUNSEL; POWERS
	AND DUTIES. (a) In this section, "counsellor" and "office" have
	the meanings assigned by Section 14A.002 [11.003, Utilities Code].
	(b)  The independent Office of Water Public Utility Counsel
	represents the interests of residential and small commercial
	consumers under this chapter. The office:
	(1)  shall assess the effect of utility rate changes
	and other regulatory actions on residential consumers in this
	state;
	(2)  shall advocate in the office's own name a position
	determined by the counsellor to be most advantageous to a
	substantial number of residential consumers;
	(3)  may appear or intervene, as a party or otherwise,
	as a matter of right on behalf of:
	(A)  residential consumers, as a class, in any
	proceeding before the utility commission, including an alternative
	dispute resolution proceeding; and
	(B)  small commercial consumers, as a class, in
	any proceeding in which the counsellor determines that small
	commercial consumers are in need of representation, including an
	alternative dispute resolution proceeding;
	(4)  may initiate or intervene as a matter of right or
	otherwise appear in a judicial proceeding:
	(A)  that involves an action taken by an
	administrative agency in a proceeding, including an alternative
	dispute resolution proceeding, in which the counsellor is
	authorized to appear; or
	(B)  in which the counsellor determines that
	residential consumers or small commercial consumers are in need of
	representation;
	(5)  is entitled to the same access as a party, other
	than utility commission staff, to records gathered by the utility
	commission under Section 13.133;
	(6)  is entitled to discovery of any nonprivileged
	matter that is relevant to the subject matter of a proceeding or
	petition before the utility commission;
	(7)  may represent an individual residential or small
	commercial consumer with respect to the consumer's disputed
	complaint concerning retail utility services that is unresolved
	before the utility commission;
	(8)  may recommend legislation to the legislature that
	the office determines would positively affect the interests of
	residential and small commercial consumers; and
	(9)  may conduct consumer outreach and education
	programs for residential and small commercial consumers.
	(c)  This section does not:
	(1)  affect a duty the office is required to perform
	under other law; or
	(2)  limit the authority of the utility commission to
	represent residential or small commercial consumers.
	(d)  The appearance of the counsellor in a proceeding does
	not preclude the appearance of other parties on behalf of
	residential or small commercial consumers. The counsellor may not
	be grouped with any other party.
	SECTION 5.  Subtitle B, Title 2, Water Code, is amended by
	adding Chapters 14 and 14A to read as follows:
	CHAPTER 14. WATER PUBLIC UTILITY COMMISSION
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec. 14.001.  WATER PUBLIC UTILITY COMMISSION. The Water
	Public Utility Commission exercises the jurisdiction and powers
	conferred by this subtitle.
	Sec. 14.002.  DEFINITIONS. In this chapter:
	(1)  "Affiliate" has the meaning assigned by Section
	13.002.
	(2)  "Commission" means the Water Public Utility
	Commission.
	(3)  "Commissioner" means a member of the Water Public
	Utility Commission.
	(4)  "Executive director" means the executive director
	of the commission.
	(5)  "Retail public utility" has the meaning assigned
	by Section 13.002.
	Sec. 14.003.  COMMISSION OFFICE. (a) The principal office
	of the commission is in Austin.
	(b)  The commission's office shall be open daily during usual
	business hours. The commission's office is not required to be open
	on Saturday, Sunday, or a legal holiday.
	Sec. 14.004.  SEAL. (a) The commission has a seal bearing
	the inscription: "Water Public Utility Commission."
	(b)  The seal shall be affixed to each record and to an
	authentication of a copy of a record. The commission may require
	the seal to be affixed to other instruments.
	(c)  A court of this state shall take judicial notice of the
	seal.
	Sec. 14.005.  REPRESENTATION BY ATTORNEY GENERAL. The
	attorney general shall represent the commission in a matter before
	a state court, a court of the United States, or a federal public
	utility regulatory commission.
	Sec. 14.006.  APPLICATION OF SUNSET ACT. The Water Public
	Utility Commission is subject to Chapter 325, Government Code
	(Texas Sunset Act). Unless continued in existence as provided by
	that chapter, the commission is abolished September 1, 2035.
	SUBCHAPTER B. COMMISSION APPOINTMENT AND FUNCTIONS
	Sec. 14.051.  APPOINTMENT; TERM. (a) The commission is
	composed of five commissioners appointed by the governor with the
	advice and consent of the senate.
	(b)  An appointment to the commission shall be made without
	regard to the race, color, disability, sex, religion, age, or
	national origin of the appointee.
	(c)  In making appointments to the commission, the governor
	shall appoint:
	(1)  one individual with expertise in rural retail
	public utilities;
	(2)  one individual with expertise in urban retail
	public utilities;
	(3)  one individual with expertise in financial matters
	of retail public utilities;
	(4)  one individual with expertise in legal matters of
	retail public utilities; and
	(5)  one individual with general expertise in retail
	public utilities.
	(d)  Commissioners serve staggered six-year terms.
	Sec. 14.052.  PRESIDING OFFICER. (a) The governor shall
	designate a commissioner as the presiding officer.
	(b)  The presiding officer serves in that capacity at the
	pleasure of the governor.
	Sec. 14.053.  PRESIDING OFFICER QUALIFICATIONS. The
	commissioner designated as the presiding officer must be a resident
	of this state.
	Sec. 14.054.  MEMBERSHIP QUALIFICATIONS. (a) To be
	eligible for appointment, a commissioner must:
	(1)  be a qualified voter;
	(2)  be a citizen of the United States;
	(3)  be a resident of this state; and
	(4)  be a competent and experienced administrator.
	(b)  A person is not eligible for appointment as a
	commissioner if the person:
	(1)  at any time during the one year preceding
	appointment:
	(A)  personally served as an officer, director,
	owner, employee, partner, or legal representative of a retail
	public utility regulated by the commission or of an affiliate or
	direct competitor of a retail public utility regulated by the
	commission;
	(B)  owned or controlled, directly or indirectly,
	more than a 10 percent interest in a retail public utility regulated
	by the commission or in an affiliate or direct competitor of a
	retail public utility regulated by the commission; or
	(C)  served as an executive officer listed under
	Section 1, Article IV, Texas Constitution, other than the secretary
	of state, or a member of the legislature; or
	(2)  is not qualified to serve under Section 14.151,
	14.152, or 14.153.
	Sec. 14.055.  REMOVAL OF COMMISSIONER. (a) It is a ground
	for removal from the commission if a commissioner:
	(1)  does not have at the time of appointment or
	maintain during service on the commission the qualifications
	required by Section 14.053;
	(2)  violates a prohibition provided by Section 14.054
	or by Subchapter D;
	(3)  cannot discharge the commissioner's duties for a
	substantial part of the term for which the commissioner is
	appointed because of illness or disability; or
	(4)  is absent from more than half of the regularly
	scheduled commission meetings that the commissioner is eligible to
	attend during a calendar year unless the absence is excused by
	majority vote of the commission.
	(b)  The validity of an action of the commission is not
	affected by the fact that the action is taken when a ground for
	removal of a commissioner exists.
	(c)  If the executive director has knowledge that a potential
	ground for removal exists, the executive director shall notify the
	presiding officer of the commission of the potential ground. The
	presiding officer shall then notify the governor and the attorney
	general that a potential ground for removal exists. If the
	potential ground for removal involves the presiding officer, the
	executive director shall notify the next highest officer of the
	commission, who shall notify the governor and the attorney general
	that a potential ground for removal exists.
	Sec. 14.056.  PROHIBITION ON SEEKING ANOTHER OFFICE. A
	person may not seek nomination or election to another civil office
	of this state or of the United States while serving as a
	commissioner. If a commissioner files for nomination or election
	to another civil office of this state or of the United States, the
	person's office as commissioner immediately becomes vacant, and the
	governor shall appoint a successor.
	Sec. 14.057.  EFFECT OF VACANCY. A vacancy or
	disqualification does not prevent the remaining commissioner or
	commissioners from exercising the powers of the commission.
	Sec. 14.058.  COMPENSATION. The annual salary of the
	commissioners is determined by the legislature.
	Sec. 14.059.  MEETINGS. The commission shall hold meetings
	at its office and at other convenient places in this state as
	expedient and necessary for the proper performance of the
	commission's duties.
	Sec. 14.060.  TRAINING PROGRAM FOR COMMISSIONERS. (a)
	Before a commissioner may assume the commissioner's duties and
	before the commissioner may be confirmed by the senate, the
	commissioner must complete at least one course of the training
	program established under this section.
	(b)  A training program established under this section shall
	provide information to the commissioner regarding:
	(1)  the enabling legislation that created the
	commission and its policymaking body to which the commissioner is
	appointed to serve;
	(2)  the programs operated by the commission;
	(3)  the role and functions of the commission;
	(4)  the rules of the commission with an emphasis on the
	rules that relate to disciplinary and investigatory authority;
	(5)  the current budget for the commission;
	(6)  the results of the most recent formal audit of the
	commission;
	(7)  the requirements of Chapters 551, 552, and 2001,
	Government Code;
	(8)  the requirements of the conflict of interest laws
	and other laws relating to public officials; and
	(9)  any applicable ethics policies adopted by the
	commission or the Texas Ethics Commission.
	(c)  A person who is appointed to the commission is entitled
	to reimbursement, as provided by the General Appropriations Act,
	for the travel expenses incurred in attending the training program
	regardless of whether the attendance at the program occurs before
	or after the person qualifies for office.
	Sec. 14.061.  FORMER COMMISSIONER: LOBBYING RESTRICTED. A
	former member of the commission may not, before the first
	anniversary of the date the member ceases to be a member of the
	commission, engage in an activity before the commission that
	requires registration under Chapter 305, Government Code.
	SUBCHAPTER C. COMMISSION PERSONNEL
	Sec. 14.101.  COMMISSION EMPLOYEES. The commission shall
	employ:
	(1)  an executive director; and
	(2)  officers and other employees the commission
	considers necessary to administer this subtitle.
	Sec. 14.102.  DUTIES OF EMPLOYEES. The commission shall
	develop and implement policies that clearly separate the
	policymaking responsibilities of the commission and the management
	responsibilities of the commission employees.
	Sec. 14.103.  DUTIES OF EXECUTIVE DIRECTOR. The executive
	director is responsible for the daily operations of the commission
	and shall coordinate the activities of commission employees.
	Sec. 14.104.  CAREER LADDER PROGRAM; PERFORMANCE
	EVALUATIONS; MERIT PAY. (a) The executive director or the
	executive director's designee shall develop an intra-agency career
	ladder program that addresses opportunities for mobility and
	advancement for commission employees. The program shall require
	intra-agency posting of each position concurrently with any public
	posting.
	(b)  The executive director or the executive director's
	designee shall develop a system of annual performance evaluations
	that are based on documented employee performance. Merit pay for
	commission employees must be based on the system established under
	this subsection.
	Sec. 14.105.  EQUAL EMPLOYMENT OPPORTUNITY POLICY
	STATEMENT. (a) The executive director or the executive director's
	designee shall prepare and maintain a written policy statement to
	ensure implementation of a program of equal employment opportunity
	under which all personnel transactions are made without regard to
	race, color, disability, sex, religion, age, or national origin.
	(b)  The policy statement under Subsection (a) must include:
	(1)  personnel policies, including policies related to
	recruitment, evaluation, selection, appointment, training, and
	promotion of personnel, that are in compliance with the
	requirements of Chapter 21, Labor Code;
	(2)  a comprehensive analysis of the commission
	workforce that meets federal and state guidelines;
	(3)  procedures by which a determination can be made
	about the extent of underuse in the commission workforce of all
	persons for whom federal or state guidelines encourage a more
	equitable balance; and
	(4)  reasonable methods to appropriately address the
	underuse.
	(c)  A policy statement prepared under Subsection (b) must:
	(1)  cover an annual period;
	(2)  be updated at least annually;
	(3)  be reviewed by the Civil Rights Division of the
	Texas Workforce Commission for compliance with Subsection (b)(1);
	and
	(4)  be filed with the governor's office.
	(d)  The governor's office shall deliver a biennial report to
	the legislature based on the information received under Subsection
	(c). The report may be made separately or as a part of other
	biennial reports to the legislature.
	SUBCHAPTER D. PROHIBITED RELATIONSHIPS AND ACTIVITIES
	Sec. 14.151.  REGISTERED LOBBYIST. A person required to
	register as a lobbyist under Chapter 305, Government Code, because
	of the person's activities for compensation on behalf of a
	profession related to the operation of the commission may not serve
	as a commissioner.
	Sec. 14.152.  CONFLICT OF INTEREST. (a) A person is not
	eligible for appointment as a commissioner or employment as
	executive director of the commission if:
	(1)  the person serves on the board of directors of a
	company that supplies utility-related services or utility-related
	products to regulated or unregulated retail public utilities; or
	(2)  the person or the person's spouse:
	(A)  is employed by or participates in the
	management of a business entity or other organization that is
	regulated by or receives funds from the commission;
	(B)  directly or indirectly owns or controls more
	than a 10 percent interest in:
	(i)  a business entity or other organization
	that is regulated by or receives funds from the commission; or
	(ii)  a retail public utility competitor or
	supplier or another entity affected by a commission decision in a
	manner other than by the setting of rates for that class of
	customer;
	(C)  uses or receives a substantial amount of
	tangible goods, services, or funds from the commission, other than
	compensation or reimbursement authorized by law for commission
	membership, attendance, or expenses; or
	(D)  notwithstanding Paragraph (B), has an
	interest in a mutual fund or retirement fund in which more than 10
	percent of the fund's holdings at the time of appointment is in a
	single retail public utility, retail public utility competitor, or
	retail public utility supplier in this state and the person does not
	disclose this information to the governor, senate, commission, or
	other entity, as appropriate.
	(b)  A person otherwise ineligible because of Subsection
	(a)(2)(B) may be appointed to the commission and serve as a
	commissioner or may be employed as executive director if the
	person:
	(1)  notifies the attorney general and commission that
	the person is ineligible because of Subsection (a)(2)(B); and
	(2)  divests the person or the person's spouse of the
	ownership or control:
	(A)  before beginning service or employment; or
	(B)  if the person is already serving or employed,
	within a reasonable time.
	Sec. 14.153.  RELATIONSHIP WITH TRADE ASSOCIATION. A person
	may not serve as a commissioner or be a commission employee who is
	employed in a "bona fide executive, administrative, or professional
	capacity," as that phrase is used for purposes of establishing an
	exemption to the overtime provisions of the federal Fair Labor
	Standards Act of 1938 (29 U.S.C. Section 201 et seq.), if the person
	is:
	(1)  an officer, employee, or paid consultant of a
	trade association; or
	(2)  the spouse of an officer, manager, or paid
	consultant of a trade association.
	Sec. 14.154.  PROHIBITED ACTIVITIES. (a) During the period
	of service with the commission, a commissioner or commission
	employee may not:
	(1)  have a pecuniary interest, including an interest
	as an officer, director, partner, owner, employee, attorney, or
	consultant, in:
	(A)  a retail public utility or affiliate; or
	(B)  a person a significant portion of whose
	business consists of furnishing goods or services to retail public
	utilities or affiliates; or
	(2)  accept a gift, gratuity, or entertainment from:
	(A)  a retail public utility, affiliate, or direct
	competitor of a retail public utility;
	(B)  a person a significant portion of whose
	business consists of furnishing goods or services to retail public
	utilities, affiliates, or direct competitors of retail public
	utilities; or
	(C)  an agent, representative, attorney,
	employee, officer, owner, director, or partner of a person
	described by Paragraph (A) or (B).
	(b)  A commissioner or a commission employee may not directly
	or indirectly solicit, request from, or suggest or recommend to a
	retail public utility or an agent, representative, attorney,
	employee, officer, owner, director, or partner of a retail public
	utility the appointment to a position or the employment of a person
	by the retail public utility or affiliate.
	(c)  A person may not give or offer to give a gift, gratuity,
	employment, or entertainment to a commissioner or commission
	employee if that person is:
	(1)  a retail public utility, affiliate, or direct
	competitor of a retail public utility;
	(2)  a person who furnishes goods or services to a
	retail public utility, affiliate, or direct competitor of a retail
	public utility; or
	(3)  an agent, representative, attorney, employee,
	officer, owner, director, or partner of a person described by
	Subdivision (1) or (2).
	(d)  A retail public utility, affiliate, or direct
	competitor of a retail public utility or a person furnishing goods
	or services to a retail public utility, affiliate, or direct
	competitor of a retail public utility may not aid, abet, or
	participate with a commissioner, commission employee, or former
	commission employee in conduct that violates Subsection (a)(2) or
	(c).
	(e)  Subsection (a)(1) does not apply to an interest in a
	nonprofit group or association, other than a trade association,
	that is solely supported by gratuitous contributions of money,
	property, or services.
	(f)  It is not a violation of this section if a commissioner
	or commission employee, on becoming the owner of stocks, bonds, or
	another pecuniary interest in a retail public utility, affiliate,
	or direct competitor of a retail public utility otherwise than
	voluntarily, informs the commission and the attorney general of the
	ownership and divests the ownership or interest within a reasonable
	time.
	(g)  It is not a violation of this section if a pecuniary
	interest is held indirectly by ownership of an interest in a
	retirement system, institution, or fund that in the normal course
	of business invests in diverse securities independently of the
	control of the commissioner or commission employee.
	(h)  This section does not apply to a contract for a retail
	public utility product or service or equipment for use of a retail
	public utility product when a commissioner or commission employee
	is acting as a consumer.
	(i)  In this section, a "pecuniary interest" includes
	income, compensation, and payment of any kind, in addition to an
	ownership interest.
	Sec. 14.155.  PROHIBITION ON EMPLOYMENT OR REPRESENTATION.
	(a) A commissioner, a commission employee, or an employee of the
	State Office of Administrative Hearings involved in hearing cases
	for the commission may not:
	(1)  be employed by a retail public utility that was in
	the scope of the commissioner's or employee's official
	responsibility while the commissioner or employee was associated
	with the commission or the State Office of Administrative Hearings;
	or
	(2)  represent a person before the commission or State
	Office of Administrative Hearings or a court in a matter:
	(A)  in which the commissioner or employee was
	personally involved while associated with the commission or State
	Office of Administrative Hearings; or
	(B)  that was within the commissioner's or
	employee's official responsibility while the commissioner or
	employee was associated with the commission or State Office of
	Administrative Hearings.
	(b)  The prohibition of Subsection (a)(1) applies until the:
	(1)  second anniversary of the date the commissioner
	ceases to serve as a commissioner; and
	(2)  first anniversary of the date the employee's
	employment with the commission or State Office of Administrative
	Hearings ceases.
	(c)  The prohibition of Subsection (a)(2) applies while a
	commissioner, commission employee, or employee of the State Office
	of Administrative Hearings involved in hearing utility cases is
	associated with the commission or State Office of Administrative
	Hearings and at any time after.
	Sec. 14.156.  QUALIFICATIONS AND STANDARDS OF CONDUCT
	INFORMATION. The executive director or the executive director's
	designee shall provide to commissioners and commission employees as
	often as necessary information regarding their:
	(1)  qualifications for office or employment under this
	chapter; and
	(2)  responsibilities under applicable laws relating
	to standards of conduct for state officers and employees.
	SUBCHAPTER E. PUBLIC INTEREST INFORMATION AND REPORTS
	Sec. 14.201.  PUBLIC INTEREST INFORMATION. (a) The
	commission shall prepare information of public interest describing
	the functions of the commission and the commission's procedures by
	which a complaint is filed with and resolved by the commission. The
	commission shall make the information available to the public and
	appropriate state agencies.
	(b)  The commission by rule shall establish methods by which
	consumers and service recipients are notified of the name, mailing
	address, and telephone number of the commission for the purpose of
	directing complaints to the commission.
	Sec. 14.202.  PUBLIC PARTICIPATION. (a) The commission
	shall develop and implement policies that provide the public with a
	reasonable opportunity to appear before the commission and to speak
	on any issue under the jurisdiction of the commission.
	(b)  The commission shall comply with federal and state laws
	related to program and facility accessibility.
	(c)  The commission shall prepare and maintain a written plan
	that describes how a person who does not speak English may be
	provided reasonable access to the commission's programs and
	services.
	Sec. 14.203.  BIENNIAL REPORT. Not later than January 15 of
	each odd-numbered year, the commission shall prepare a written
	report that includes suggestions regarding modification and
	improvement of the commission's statutory authority and for the
	improvement of retail public utility regulation in general that the
	commission considers appropriate for protecting and furthering the
	interest of the public.
	Sec. 14.204.  INTERNET FOR HEARINGS AND MEETINGS. The
	commission shall make publicly accessible without charge live
	Internet video of all public hearings and meetings the commission
	holds for viewing from the commission's Internet website. The
	commission may recover the costs of administering this section by
	imposing an assessment against a retail public utility.
	CHAPTER 14A. OFFICE OF WATER PUBLIC UTILITY COUNSEL
	SUBCHAPTER A. GENERAL PROVISIONS; POWERS AND DUTIES
	Sec. 14A.001.  OFFICE OF WATER PUBLIC UTILITY COUNSEL. The
	independent office of water public utility counsel represents the
	interests of residential and small commercial consumers.
	Sec. 14A.002.  DEFINITIONS. In this chapter:
	(1)  "Commission" has the meaning assigned by Section
	14.002.
	(2)  "Counsellor" means the water public utility
	counsel.
	(3)  "Office" means the Office of Water Public Utility
	Counsel.
	(4)  "Proceeding" has the meaning assigned by Section
	13.002.
	Sec. 14A.003.  APPLICATION OF SUNSET ACT. The Office of
	Water Public Utility Counsel is subject to Chapter 325, Government
	Code (Texas Sunset Act). Unless continued in existence as provided
	by that chapter, the office is abolished September 1, 2035.
	Sec. 14A.004.  OFFICE POWERS AND DUTIES. The office has the
	powers and duties assigned by Section 13.017.
	Sec. 14A.005.  ALTERNATIVE DISPUTE RESOLUTION PROCEDURES.
	(a) The counsellor shall develop and implement a policy to
	encourage the use of appropriate alternative dispute resolution
	procedures under Chapter 2009, Government Code, to assist in the
	resolution of internal disputes under the office's jurisdiction.
	(b)  The office's procedures relating to alternative dispute
	resolution must conform, to the extent possible, to any model
	guidelines issued by the State Office of Administrative Hearings
	for the use of alternative dispute resolution by state agencies.
	(c)  The counsellor shall designate a trained person to:
	(1)  coordinate the implementation of the policy
	adopted under Subsection (a);
	(2)  serve as a resource for any training needed to
	implement the procedures for alternative dispute resolution; and
	(3)  collect data concerning the effectiveness of those
	procedures, as implemented by the office.
	Sec. 14A.006.  COMPLAINTS. (a) The office shall maintain a
	system to promptly and efficiently act on complaints filed with the
	office that the office has the authority to resolve. The office
	shall maintain information about parties to the complaint, the
	subject matter of the complaint, a summary of the results of the
	review or investigation of the complaint, and its disposition.
	(b)  The office shall make information available describing
	its procedures for complaint investigation and resolution.
	(c)  The office shall periodically notify the complaint
	parties of the status of the complaint until final disposition.
	Sec. 14A.007.  TECHNOLOGY POLICY. The counsellor shall
	implement a policy requiring the office to use appropriate
	technological solutions to improve the office's ability to perform
	its functions. The policy must ensure that the public is able to
	interact with the office on the Internet.
	SUBCHAPTER B. WATER PUBLIC UTILITY COUNSEL
	Sec. 14A.021.  APPOINTMENT; TERM. (a) The chief executive
	of the office is the counsellor.
	(b)  The counsellor is appointed by the governor with the
	advice and consent of the senate.
	(c)  The appointment of the counsellor shall be made without
	regard to the race, color, disability, sex, religion, age, or
	national origin of the appointee.
	(d)  The counsellor serves a two-year term that expires on
	February 1 of the final year of the term.
	Sec. 14A.022.  QUALIFICATIONS. (a) The counsellor must:
	(1)  be licensed to practice law in this state and a
	resident of this state;
	(2)  have demonstrated a strong commitment to and
	involvement in efforts to safeguard the rights of the public; and
	(3)  possess the knowledge and experience necessary to
	practice effectively in utility proceedings.
	(b)  A person is not eligible for appointment as counsellor
	if:
	(1)  the person or the person's spouse:
	(A)  is employed by or participates in the
	management of a business entity or other organization that is
	regulated by or receives funds from the commission;
	(B)  directly or indirectly owns or controls more
	than a 10 percent interest or a pecuniary interest with a value
	exceeding $10,000 in:
	(i)  a business entity or other organization
	that is regulated by or receives funds from the commission or the
	office; or
	(ii)  a retail public utility competitor,
	retail public utility supplier, or other entity affected by a
	commission decision in a manner other than by the setting of rates
	for that class of customer;
	(C)  uses or receives a substantial amount of
	tangible goods, services, or funds from the commission or the
	office, other than compensation or reimbursement authorized by law
	for service as counsellor or for commission membership, attendance,
	or expenses; or
	(D)  notwithstanding Paragraph (B), has an
	interest in a mutual fund or retirement fund in which more than 10
	percent of the fund's holdings is in a single retail public utility,
	retail public utility competitor, or retail public utility supplier
	in this state and the person does not disclose this information to
	the governor, senate, or other entity, as appropriate; or
	(2)  the person is not qualified to serve under Section
	14A.042.
	(c)  A person otherwise ineligible because of Subsection
	(b)(1)(B) may be appointed and serve as counsellor if the person:
	(1)  notifies the attorney general and commission that
	the person is ineligible because of Subsection (b)(1)(B); and
	(2)  divests the person or the person's spouse of the
	ownership or control:
	(A)  before beginning service; or
	(B)  if the person is already serving, within a
	reasonable time.
	Sec. 14A.023.  GROUNDS FOR REMOVAL. (a) It is a ground for
	removal from office if the counsellor:
	(1)  does not have at the time of taking office or
	maintain during service as counsellor the qualifications required
	by Section 14A.022;
	(2)  is ineligible for service as counsellor under
	Section 14A.022, 14A.042, or 14A.043; or
	(3)  cannot discharge the counsellor's duties for a
	substantial part of the term for which the counsellor is appointed
	because of illness or disability.
	(b)  The validity of an action of the office is not affected
	by the fact that the action is taken when a ground for removal of the
	counsellor exists.
	(c)  If an employee has knowledge that a potential ground for
	removal of the counsellor exists, the employee shall notify the
	next highest ranking employee of the office, other than the
	counsellor, who shall then notify the governor and the attorney
	general that a potential ground for removal exists.
	Sec. 14A.024.  PROHIBITED ACTS. (a) The counsellor may not
	have a direct or indirect interest in a retail public utility
	company regulated under this subtitle, its parent, or its
	subsidiary companies, corporations, or cooperatives or a retail
	public utility competitor, retail public utility supplier, or other
	entity affected in a manner other than by the setting of rates for
	that class of customer.
	(b)  The prohibition under Subsection (a) applies during the
	period of the counsellor's service.
	SUBCHAPTER C. OFFICE PERSONNEL
	Sec. 14A.041.  PERSONNEL. The counsellor may employ
	lawyers, economists, engineers, consultants, statisticians,
	accountants, clerical staff, and other employees as the counsellor
	considers necessary to carry out this chapter.
	Sec. 14A.042.  CONFLICT OF INTEREST. (a) In this section,
	"Texas trade association" means a cooperative and voluntarily
	joined statewide association of business or professional
	competitors in this state designed to assist its members and its
	industry or profession in dealing with mutual business or
	professional problems and in promoting their common interest.
	(b)  A person may not serve as counsellor or be an employee of
	the office employed in a "bona fide executive, administrative, or
	professional capacity," as that phrase is used for purposes of
	establishing an exemption to the overtime provisions of the federal
	Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.) if
	the person is:
	(1)  an officer, employee, or paid consultant of a
	Texas trade association in the field of retail public utilities; or
	(2)  the spouse of an officer, manager, or paid
	consultant of a Texas trade association in the field of retail
	public utilities.
	(c)  A person may not serve as counsellor or act as the
	general counsel to the office if the person is required to register
	as a lobbyist under Chapter 305, Government Code, because of the
	person's activities for compensation on behalf of a profession
	related to the operation of the office.
	Sec. 14A.043.  PROHIBITION ON EMPLOYMENT OR REPRESENTATION.
	(a) A former counsel may not make any communication to or
	appearance before the commission or an officer or employee of the
	commission before the second anniversary of the date the person
	ceases to serve as counsel if the communication or appearance is
	made:
	(1)  on behalf of another person in connection with any
	matter on which the person seeks official action; or
	(2)  with the intent to influence a commission decision
	or action, unless acting on the person's own behalf and without
	remuneration.
	(b)  A former counsel may not represent any person or receive
	compensation for services rendered on behalf of any person
	regarding a matter before the commission before the second
	anniversary of the date the person ceases to serve as counsel.
	(c)  A person commits an offense if the person violates this
	section. An offense under this subsection is a Class A misdemeanor.
	(d)  An employee of the office may not:
	(1)  be employed by a retail public utility that was in
	the scope of the employee's official responsibility while the
	employee was associated with the office; or
	(2)  represent a person before the commission or a
	court in a matter:
	(A)  in which the employee was personally involved
	while associated with the office; or
	(B)  that was within the employee's official
	responsibility while the employee was associated with the office.
	(e)  The prohibition of Subsection (d)(1) applies until the
	first anniversary of the date the employee's employment with the
	office ceases.
	(f)  The prohibition of Subsection (d)(2) applies while an
	employee of the office is associated with the office and at any time
	after.
	(g)  For purposes of this section, "person" includes a water
	cooperative.
	Sec. 14A.044.  CAREER LADDER PROGRAM; PERFORMANCE
	EVALUATIONS; MERIT PAY. (a) The counsellor or the counsellor's
	designee shall develop an intra-agency career ladder program that
	addresses opportunities for mobility and advancement for office
	employees. The program shall require intra-agency postings of each
	position concurrently with any public posting.
	(b)  The counsellor or the counsellor's designee shall
	develop a system of annual performance evaluations that are based
	on documented employee performance. Merit pay for office employees
	must be based on the system established under this subsection.
	Sec. 14A.045.  EQUAL EMPLOYMENT OPPORTUNITY POLICY
	STATEMENT. (a) The counsellor or the counsellor's designee shall
	prepare and maintain a written policy statement to ensure
	implementation of a program of equal employment opportunity under
	which all personnel transactions are made without regard to race,
	color, disability, sex, religion, age, or national origin.
	(b)  The policy statement under Subsection (a) must include:
	(1)  personnel policies, including policies related to
	recruitment, evaluation, selection, appointment, training, and
	promotion of personnel, that are in compliance with the
	requirements of Chapter 21, Labor Code;
	(2)  a comprehensive analysis of the office workforce
	that meets federal and state guidelines;
	(3)  procedures by which a determination can be made
	about the extent of underuse in the office workforce of all persons
	for whom federal or state guidelines encourage a more equitable
	balance; and
	(4)  reasonable methods to appropriately address the
	underuse.
	(c)  A policy statement prepared under Subsection (b) must:
	(1)  cover an annual period;
	(2)  be updated at least annually;
	(3)  be reviewed by the Civil Rights Division of the
	Texas Workforce Commission for compliance with Subsection (b)(1);
	and
	(4)  be filed with the governor's office.
	(d)  The governor's office shall deliver a biennial report to
	the legislature based on the information received under Subsection
	(c). The report may be made separately or as a part of other
	biennial reports to the legislature.
	Sec. 14A.046.  QUALIFICATIONS AND STANDARDS OF CONDUCT
	INFORMATION. The office shall provide to office employees as often
	as necessary information regarding their:
	(1)  qualifications for employment under this chapter;
	and
	(2)  responsibilities under applicable laws relating
	to standards of conduct for employees.
	SUBCHAPTER D. PUBLIC INTEREST INFORMATION AND REPORTS
	Sec. 14A.061.  PUBLIC INTEREST INFORMATION. The office
	shall prepare information of public interest describing the
	functions of the office. The office shall make the information
	available to the public and appropriate state agencies.
	Sec. 14A.062.  PUBLIC PARTICIPATION. (a) The office shall
	comply with federal and state laws related to program and facility
	accessibility.
	(b)  The office shall prepare and maintain a written plan
	that describes how a person who does not speak English may be
	provided reasonable access to the office's programs and services.
	Sec. 14A.063.  ANNUAL REPORT. The office shall prepare
	annually a report on the office's activities during the preceding
	year and submit the report to the standing legislative committees
	that have jurisdiction over the office, the house appropriations
	committee, and the senate finance committee. At a minimum, the
	report must include:
	(1)  a list of the types of activities conducted by the
	office and the time spent by the office on each activity;
	(2)  the number of hours billed by the office for
	representing residential or small commercial consumers in
	proceedings;
	(3)  the number of staff positions and the type of work
	performed by each position; and
	(4)  the office's rate of success in representing
	residential or small commercial consumers in appealing commission
	decisions.
	Sec. 14A.064.  PUBLIC HEARING. (a) The office annually
	shall conduct a public hearing to assist the office in developing a
	plan of priorities and to give the public, including residential
	and small commercial consumers, an opportunity to comment on the
	office's functions and effectiveness.
	(b)  A public hearing held under this section is not subject
	to Chapter 551, Government Code.
	(c)  The office shall file notice of a public hearing held
	under this section with the secretary of state for publication in
	the Texas Register.
	SECTION 6.  Section 49.352(c), Water Code, is amended to
	read as follows:
	(c)  For purposes of this section, a municipality may obtain
	single certification in the manner provided by Section 13.255,
	except that the municipality may file an application with the Water
	Public Utility Commission [of Texas] to grant single certification
	immediately after the municipality provides notice of intent to
	provide service as required by Section 13.255(b).
	SECTION 7.  Section 2003.049, Government Code, is amended by
	amending Subsection (a) and adding Subsection (a-1) to read as
	follows:
	(a)  The office shall perform contested case hearings for:
	(1)  the Public Utility Commission of Texas as
	prescribed by the Public Utility Regulatory Act of 1995 and other
	applicable law; and
	(2)  the Water Public Utility Commission as prescribed
	by Subtitle B, Title 2, Water Code.
	(a-1)  In this section, "commission" means the Public
	Utility Commission of Texas or the Water Public Utility Commission.
	SECTION 8.  Section 7201.004(b), Special District Local Laws
	Code, is amended to read as follows:
	(b)  This section does not apply to:
	(1)  rules or regulations concerning potable water
	quality standards; or
	(2)  conflicts relating to service areas or
	certificates issued to the corporation or district by the Water
	Public Utility Commission or a predecessor agency [of Texas or the
	Texas Commission on Environmental Quality].
	SECTION 9.  Section 7201.005(c), Special District Local Laws
	Code, is amended to read as follows:
	(c)  District boundaries may be modified in accordance with
	Chapters 13 and 49, Water Code, except that the boundaries must
	include all territory in any area included under a certificate of
	convenience and necessity issued by the Water Public Utility
	Commission or a predecessor agency [of Texas or the Texas
	Commission on Environmental Quality to the district].
	SECTION 10.  Section 7201.102, Special District Local Laws
	Code, is amended to read as follows:
	Sec. 7201.102.  PROVISION OF SERVICE. The district shall at
	all times operate and construct necessary improvements within the
	certificated areas established by the Water Public Utility
	Commission or a predecessor agency [of Texas or the Texas
	Commission on Environmental Quality] to provide uninterrupted,
	continuous, and adequate service to existing and future customers
	for water, sewer, and contract services.
	SECTION 11.  Section 7886.0101(4), Special District Local
	Laws Code, is amended to read as follows:
	(4)  "Utility commission" means the Water Public
	Utility Commission [of Texas].
	SECTION 12.  Section 7958.0101(6), Special District Local
	Laws Code, is amended to read as follows:
	(6)  "Utility commission" means the Water Public
	Utility Commission [of Texas].
	SECTION 13.  Section 8281.103, Special District Local Laws
	Code, is amended to read as follows:
	Sec. 8281.103.  LIMITATION ON PROVIDING WATER TO CERTAIN
	USERS. Notwithstanding any other provision of this chapter, the
	district may not compete with the City of Mabank in providing water
	to household users unless the district receives permission from the
	Water Public Utility Commission [of Texas], with the consent of
	that city.
	SECTION 14.  Section 8363.106(b), Special District Local
	Laws Code, is amended to read as follows:
	(b)  In relation to a retail public utility that provides
	water or sewer service to all or part of the area of the district
	under a certificate of public convenience and necessity, the
	district may exercise the powers given to a municipality provided
	by Section 13.255, Water Code, as if the district were a
	municipality that had annexed the area of the district. The Water
	Public Utility Commission [of Texas] shall grant single
	certification as to the city as provided by Section 13.255(c),
	Water Code, in the event that the district applies for the
	certification on the city's behalf in the manner provided by
	Section 13.255(b), Water Code.
	SECTION 15.  Section 8363.251(a), Special District Local
	Laws Code, is amended to read as follows:
	(a)  The city may dissolve the district by ordinance after
	provision is made for all debts incurred by the district if one or
	more of the following does not occur:
	(1)  on or before the 90th day after the effective date
	of the Act enacting this chapter, the city receives one or more
	petitions requesting annexation of all territory in the district
	remaining in the extraterritorial jurisdiction of the city;
	(2)  on or before the last day of the ninth month after
	the effective date of the Act enacting this chapter, the city adopts
	one or more ordinances annexing all territory in the district
	remaining in the city's extraterritorial jurisdiction;
	(3)  on or before the last day of the third year after
	the effective date of the Act enacting this chapter, the Water
	Public Utility Commission [of Texas] issues an order approving the
	sale and transfer of a certificate of public convenience and
	necessity authorizing the city to provide retail water service to
	territory in the district; or
	(4)  by the end of the fifth year after the effective
	date of the Act enacting this chapter, the district has completed
	construction of internal streets and water and sanitary sewer
	facilities sufficient to serve at least 100 residential lots in the
	district.
	SECTION 16.  Section 8801.201, Special District Local Laws
	Code, is amended to read as follows:
	Sec. 8801.201.  APPEAL OF SURFACE WATER RATES. (a) A person
	who is required to convert to surface water under this chapter and
	who purchases that water supply wholesale from a political
	subdivision as defined by Section 12.013(b), Water Code, may appeal
	to the Water Public Utility Commission [of Texas] the rates the
	political subdivision charges to the person. Chapter 12, Water
	Code, and rules adopted under that chapter apply to an appeal under
	this section.
	(b)  The Water Public Utility Commission [of Texas] shall
	hear the appeal not later than the 180th day after the date the
	appeal is filed.
	(c)  The Water Public Utility Commission [of Texas] shall
	issue a final decision on the appeal not later than the 60th day
	after the date the hearing ends.
	SECTION 17.  Section 8803.151(1), Special District Local
	Laws Code, is amended to read as follows:
	(1)  "Commission" means the Water Public Utility
	Commission [of Texas].
	SECTION 18.  Section 8808.151(1), Special District Local
	Laws Code, is amended to read as follows:
	(1)  "Commission" means the Water Public Utility
	Commission [of Texas].
	SECTION 19.  Section 11002.151, Special District Local Laws
	Code, is amended to read as follows:
	Sec. 11002.151.  DEFINITION. In this subchapter, "receiving
	entity" means the entity that holds a certificate of convenience
	and necessity issued by the Water Public Utility Commission [of
	Texas] for the territory included in the district.
	SECTION 20.  Section 11.002(21), Water Code, is repealed.
	SECTION 21.  (a)  On September 1, 2024, the following are
	transferred from the Public Utility Commission of Texas to the
	Water Public Utility Commission:
	(1)  the powers, duties, functions, programs, and
	activities of the Public Utility Commission of Texas relating to
	the economic regulation of water and sewer service, including the
	issuance and transfer of certificates of convenience and necessity,
	the determination of rates, and the administration of hearings and
	proceedings involving those matters, as provided by this Act;
	(2)  any obligations and contracts of the Public
	Utility Commission of Texas that are directly related to
	implementing a power, duty, function, program, or activity
	transferred under this Act; and
	(3)  all property and records in the custody of the
	Public Utility Commission of Texas that are related to a power,
	duty, function, program, or activity transferred under this Act and
	all funds appropriated by the legislature for that power, duty,
	function, program, or activity.
	(b)  The Public Utility Commission of Texas shall continue to
	carry out that commission's duties related to the economic
	regulation of water and sewer service under the law as it existed
	immediately before the effective date of this Act until September
	1, 2024, and the former law is continued in effect for that purpose.
	(c)  The Public Utility Commission of Texas and the Water
	Public Utility Commission shall enter into a memorandum of
	understanding that:
	(1)  identifies in detail the applicable powers and
	duties that are transferred by this Act;
	(2)  establishes a plan for the identification and
	transfer of the records, personnel, property, and unspent
	appropriations of the Public Utility Commission of Texas that are
	used for purposes of that commission's powers and duties directly
	related to the economic regulation of water and sewer service; and
	(3)  establishes a plan for the transfer of all pending
	applications, hearings, rulemaking proceedings, and orders
	relating to the economic regulation of water and sewer service from
	the Public Utility Commission of Texas to the Water Public Utility
	Commission.
	(d)  The memorandum of understanding under this section:
	(1)  is not required to be adopted by rule; and
	(2)  must be completed by August 1, 2024.
	(e)  The executive directors of the Public Utility
	Commission of Texas and the Water Public Utility Commission may
	agree in the memorandum of understanding under this section to
	transfer to the Water Public Utility Commission any personnel of
	the Public Utility Commission of Texas whose functions
	predominantly involve powers, duties, obligations, functions, and
	activities related to the economic regulation of water and sewer
	service.
	(f)  On or after September 1, 2023, the Office of Water
	Public Utility Counsel may initiate or intervene in a contested
	case before the Public Utility Commission of Texas that the office
	would be entitled to initiate or intervene in if the case were
	before the Water Public Utility Commission, as authorized by
	Chapter 14A, Water Code, as added by this Act.
	(g)  The Public Utility Commission of Texas and the Water
	Public Utility Commission shall appoint a transition team to
	accomplish the purposes of this section. The transition team may
	consult with the Office of Public Utility Counsel and the Office of
	Water Public Utility Counsel to accomplish the purposes of this
	section.
	(h)  A rule, form, policy, procedure, or decision of the
	Public Utility Commission of Texas related to a power, duty,
	function, program, or activity transferred under this Act continues
	in effect as a rule, form, policy, procedure, or decision of the
	Water Public Utility Commission and remains in effect until amended
	or replaced by that agency. Notwithstanding any other law,
	beginning September 1, 2023, the Water Public Utility Commission
	may propose rules, forms, policies, and procedures related to a
	function to be transferred to the Water Public Utility Commission
	under this Act.
	(i)  The Public Utility Commission of Texas and the Water
	Public Utility Commission shall adopt rules to implement the
	changes in law made by this Act not later than September 1, 2025.
	SECTION 22.  This Act takes effect September 1, 2023.