(a) Applicability. This section applies to a requested area that also meets the following criteria:
  (1) the requested area has been incorporated or annexed by a municipality;
  (2) a retail public utility provides service to the requested area under a certificate of convenience and necessity (CCN); and
  (3) the retail public utility that holds the CCN under which the requested area is currently certificated is one of the following:
    (A) a water supply or sewer service corporation, a special utility district under chapter 65 of the Texas Water Code, or a fresh water supply district under chapter 53 of the Texas Water Code; or
    (B) not a water supply or sewer service corporation, and its service area is located entirely within the boundaries of a municipality that has a population of at least 1.7 million according to the most recent federal census.
(b) Definitions. In this section, the following words and terms have the definitions provided by this subsection.
  (1) Impaired property--Property remaining in the ownership of the current CCN holder after single certification that would sustain damages from the transfer of property to the municipality.
  (2) Franchised utility--A retail public utility that has been granted a franchise by a municipality to provide service inside the municipal boundaries.
  (3) Current CCN holder--The retail public utility that holds a CCN to provide service to the municipality's requested area.
  (4) Transferred property--Property that the municipality has requested be transferred to it or to a franchised utility from the current CCN holder.
  (5) Useless or valueless property--Property that would be rendered useless or valueless to the current CCN holder by single certification.
(c) Notice of intent to provide service in incorporated or annexed area. A municipality that intends to provide service itself or through a franchised utility to all or part of an annexed or incorporated area shall notify the current CCN holder in writing of the municipality's intent. The written notice to the current CCN holder shall specify the following information:
  (1) the municipality's requested area;
  (2) any transferred property;
  (3) the municipal ordinance or other action that annexed or incorporated the municipality's requested area;
  (4) what kind of service will be provided;
  (5) whether a municipally owned utility or franchised utility will provide the service; and
  (6) the municipally owned utility's or the franchised utility's identity and contact information.
(d) Written agreement regarding service to area. The municipality and the current CCN holder may agree in writing that all or part of the area incorporated or annexed by the municipality may receive service from a municipally owned utility, a franchised utility, or the current CCN holder, or any combination of those entities.
  (1) If a franchised utility is to provide service to any part of the area, the franchised utility shall also be a party to the agreement.
  (2) The executed agreement may provide for single or dual certification of all or part of the area incorporated or annexed by the municipality, for the purchase of facilities or property, and may contain any other terms agreed to by the parties.
  (3) The executed agreement shall be filed with the commission. The commission shall incorporate the agreement's terms into the respective CCNs of the municipality, current CCN holder, and franchised utility, as appropriate.
(e) Application for single certification. If an agreement is not executed within 180 calendar days after the municipality provides written notice under subsection (c) of this section and the municipality intends to provide service to the municipality's requested area, the municipality shall submit an application to the commission to grant single certification to a municipally owned utility or a franchised utility.
  (1) If a franchised utility will provide service to any part of the municipality's requested area, the franchised utility shall join the application.
  (2) The application shall include all of the information listed in this paragraph.
    (A) The application shall identify the municipal ordinance or other action that annexed or incorporated the municipality's requested area.
    (B) The application shall identify the type of service that will be provided to the municipality's requested area.
    (C) The application shall identify the municipally owned utility or franchised utility that will provide service to the municipality's requested area and, if each will serve part of the area, the area that each will serve.
    (D) The application shall identify contact information for the current CCN holder.
    (E) The application shall demonstrate compliance with the TCEQ's minimum requirements for public drinking water systems if the municipality owns a public drinking water system.
    (F) The application shall demonstrate that at least 180 calendar days have passed since the date that the municipality provided written notice under subsection (c) of this section.
    (G) The application shall identify with specificity any property that the municipality requests be transferred from the current CCN holder.
    (H) The application shall identify the boundaries of the municipality's incorporated area or extraterritorial jurisdiction by providing digital-mapping data in a shapefile (SHP) format georeferenced in either NAD 83 Texas State Plane Coordinate System (US feet) or in NAD 83 Texas Statewide Mapping System (meters). The digital mapping data shall include a single, continuous polygon record.
    (I) The application shall identify the municipality's requested area by providing mapping information to clearly identify the area the municipality is seeking in accordance with §24.257 of this title relating to Mapping Requirements for Certificate of Convenience and Necessity Application. Commission staff may request additional mapping information after the application is submitted.
  (3) Within 30 calendar days of the filing of the application, commission staff shall file a recommendation regarding whether the application meets the requirements of this subsection.
(f) Notices for single-certification application. The applicant shall send a copy of the application to the current CCN holder by certified mail or hand-delivery on the same day that the applicant submits the application to the commission.
(g) Response to single-certification application. The current CCN holder shall file a response to the application for single certification in conformance with this subsection.
  (1) The response shall be filed within 40 calendar days of the filing of the application.
  (2) The response shall state the following information:
    (A) whether the single certification is agreed to; and
    (B) if there is no agreement for single certification, any conditions that, if met, would cause the current CCN holder to agree to single certification.
  (3) In its response, the current CCN holder shall identify any useless or valueless property, or impaired property, that would result from certification of the municipality's requested area to the municipality.
  (4) There is a rebuttable presumption that there is no useless or valueless property or impaired property if the current CCN holder fails to timely respond as required under paragraph (1) of this subsection. Upon motion and proof of service consistent with the requirements of subsection (f) of this section, the presiding officer may issue an order determining that there is no useless or valueless property or impaired property.
(h) Referral to SOAH.
  (1) Within 50 calendar days of the filing of the application, a presiding officer shall determine whether an application for single certification meets the requirements of subsection (e) of this section.
  (2) If the presiding officer determines that the application meets the requirements of subsection (e) of this section, the application shall be referred to the State Office of Administrative Hearings (SOAH) for a hearing. SOAH shall fix a time and place for a hearing on the application and shall notify the current CCN holder, municipality, and franchised utility, if any, of the hearing.
  (3) Except as provided under paragraph (4) of this subsection, if the presiding officer determines that the application does not meet the requirements of subsection (e) of this section, the applicant shall supplement its application to correct the identified deficiencies within a timeframe, and under a process, established by the presiding officer.
Cont'd...