Water Code § 13.412

Sec. 13.412. RECEIVERSHIP. (a) At the request of the utility commission or the commission, the attorney general shall bring suit for the appointment of a receiver to collect the assets and carry on the business of a water or sewer utility 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; or (5) violates a final judgment issued by a district court in a suit brought by the attorney general under: (A) this chapter; (B) Chapter 7; or (C) Chapter 341, Health and Safety Code. (b) The court shall appoint a receiver if an appointment is necessary: (1) to guarantee the collection of assessments, fees, penalties, or interest; (2) to guarantee continuous and adequate service to the customers of the utility; or (3) to prevent continued or repeated violation of the final order. (c) The receiver shall execute a bond to assure the proper performance of the receiver's duties in an amount to be set by the court. (d) After appointment and execution of bond, the receiver shall take possession of the assets of the utility specified by the court. Until discharged by the court, the receiver shall perform the duties that the court directs to preserve the assets and carry on the business of the utility and shall strictly observe the final order involved. (e) On a showing of good cause by the utility, the court may dissolve the receivership and order the assets and control of the business returned to the utility. (f) For purposes of this section and Section 13.4132, abandonment may include but is not limited to: (1) failure to pay a bill or obligation owed to a retail public utility or to an electric or gas utility with the result that the utility service provider has issued a notice of discontinuance of necessary services; (2) failure to provide appropriate water or wastewater treatment so that a potential health hazard results; (3) failure to adequately maintain facilities, resulting in potential health hazards, extended outages, or repeated service interruptions; (4) failure to provide customers adequate notice of a health hazard or potential health hazard; (5) failure to secure an alternative available water supply during an outage; (6) displaying a pattern of hostility toward or repeatedly failing to respond to the utility commission or the commission or the utility's customers; and (7) failure to provide the utility commission or the commission with adequate information on how to contact the utility for normal business and emergency purposes. (g) Notwithstanding Section 64.021, Civil Practice and Remedies Code, a receiver appointed under this section may be a person, a municipally owned utility, a county, a water supply or sewer service corporation, a public utility agency, or a district or authority created under Section 52, Article III, or Section 59, Article XVI, Texas Constitution, and may seek approval from the utility commission and the commission to acquire the water or sewer utility's facilities and transfer the utility's certificate of convenience and necessity. The receiver must apply in accordance with Subchapter H. Added by Acts 1985, 69th Leg., ch. 795, Sec. 3.005, eff. Sept. 1, 1985. Amended by Acts 1991, 72nd Leg., ch. 678, Sec. 12, eff. Sept. 1, 1991; Acts 1997, 75th Leg., ch. 1010, Sec. 6.13, eff. Sept. 1, 1997. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600), Sec. 2.70, eff. September 1, 2013. Acts 2013, 83rd Leg., R.S., Ch. 171 (S.B. 567), Sec. 70, eff. September 1, 2013. Acts 2017, 85th Leg., R.S., Ch. 117 (H.B. 294), Sec. 1, eff. September 1, 2017. Acts 2025, 89th Leg., R.S., Ch. 776 (S.B. 740), Sec. 7, eff. September 1, 2025.