Can a Texas water supply corporation refuse to extend water service to a new home when the subdivision's developer didn't follow its service rules?

TX AG Opinion GA-0781: Does a water supply corporation have to refuse service, or just have the option, when a subdivision developer broke its rules?

Plain-English summary

A state representative asked how to read the phrase "is not required to extend service" in Water Code section 13.2502(a). The question was whether that language means a water supply corporation has a choice about serving an applicant, or whether it is forbidden from serving the way section 13.2501 forbids it under different facts.

Some background ties the sections together. A water supply corporation is a member-owned, member-controlled nonprofit that provides potable water for compensation under chapter 67 of the Water Code. Section 13.250 sets the general rule: a retail public utility with a certificate of public convenience and necessity must serve every consumer in its certified area and provide continuous, adequate service, with limited exceptions like discontinuing service for nonpayment or nonuse. Section 13.2501 adds a hard exception, the certificate holder "shall refuse to serve" a customer when state law prohibits the connection (for example, where plat-compliance certification under Local Government Code section 212.012 is missing). Section 13.2502 adds a softer exception: notwithstanding section 13.250, a corporation "is not required to extend" service to an applicant in a subdivision if it documents both that the developer failed to follow the corporation's subdivision service-extension policy in its tariff, and that the applicant bought the property after the corporation gave the required notice of its subdivision rules.

The Attorney General read the plain words. "Is not required to extend service" gives the corporation discretion; it lifts the section 13.250 mandate for these specific applicants without ordering the corporation to turn them away. Reading it as a prohibition would mean adding words the Legislature did not write, and Texas courts do not add words that are not implicitly in the statute. The opinion pointed to section 13.2501's "shall refuse to serve" as proof the Legislature knew how to command refusal when it wanted to, and chose the permissive "is not required" in section 13.2502(a) instead. So a corporation that documents the two conditions may, but does not have to, serve the applicant. The opinion added one caveat in a footnote: it did not address section 13.041(d), which lets the Texas Commission on Environmental Quality compel temporary service in an emergency.

Currency note

This opinion was issued in 2010. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Water Code sections 13.250, 13.2501, and 13.2502, and the related Local Government Code plat provisions, may have been amended since 2010. Confirm the current statutes before relying on anything below.

Who this opinion affected (as of 2010)

Water supply corporations: The opinion told them that when they documented the two conditions in section 13.2502(a), the duty to serve everyone in the certified area did not apply to that applicant, so they could choose whether to serve. Section 13.2502 did not force them to refuse.

Homebuyers and service applicants in new subdivisions: The opinion told them that if their subdivision's developer failed to follow the corporation's service-extension policy and they bought after the corporation's notice, the corporation was free to decline to extend service, but was not required to decline.

Subdivision developers: The opinion underscored that a developer's failure to comply with the corporation's tariff service-extension policy was the trigger that let the corporation withhold service from later buyers.

Common questions

If a subdivision developer ignored the water corporation's rules, can the corporation still hook up my house?
Yes. Under this opinion, the corporation may choose to serve you; section 13.2502(a) does not prohibit service, it just removes the mandatory duty to serve in that situation.

What two things does the corporation have to document to use this exception?
That the developer failed to comply with the corporation's subdivision service-extension policy in its tariff, and that the applicant purchased the property after the corporation gave notice of its subdivision rules.

How is this different from section 13.2501?
Section 13.2501 says the certificate holder "shall refuse to serve" when another law prohibits the connection. That is mandatory. Section 13.2502(a) only says the corporation "is not required to" serve, which the opinion read as discretionary.

Can a corporation ever be forced to provide water here?
The opinion noted, without deciding, that section 13.041(d) lets the Texas Commission on Environmental Quality compel temporary service in an emergency. It expressly did not address those circumstances.

Background and statutory framework

A water supply corporation is a nonprofit organized under chapter 67 of the Water Code that provides potable water for compensation and is member-owned and member-controlled (Tex. Water Code Ann. § 13.002(24) (Vernon 2008)); it is a "retail public utility" for purposes of chapter 13 (id. § 13.002(19)). Section 13.250 requires a retail public utility holding a certificate of public convenience and necessity to serve every consumer in its certified area and render continuous and adequate service, subject to exceptions for nonpayment, nonuse, or similar reasons (id. § 13.250(a), (b)). Section 13.2501 requires the certificate holder to refuse service when prohibited under Local Government Code section 212.012 or the repealed section 232.0047 (id. § 13.2501; Tex. Loc. Gov't Code Ann. §§ 212.0115, .012(a), (b)(4) (Vernon Supp. 2009)).

Section 13.2502(a) provides that, notwithstanding section 13.250, the corporation "is not required to extend" retail water service to a subdivision applicant if it documents that the developer failed to comply with the corporation's subdivision service-extension policy in its tariff and that the applicant purchased the property after the corporation's notice (Tex. Water Code Ann. § 13.2502(a); 30 Tex. Admin. Code § 291.85(e) (2009)). Giving effect to the Legislature's intent as expressed in the statute's plain language (Galbraith Eng'g Consultants, Inc. v. Pochucha, 290 S.W.3d 863, 867 (Tex. 2009); Tex. Gov't Code Ann. § 312.005 (Vernon 2005)), the opinion held "is not required" grants discretion and does not prohibit service, declining to add words the statute does not contain (Lee v. City of Houston, 807 S.W.2d 290, 294-95 (Tex. 1991); Jones v. Liberty Mutual Ins. Co., 745 S.W.2d 901, 902 (Tex. 1988)), and contrasting the mandatory "shall refuse to serve" in section 13.2501 (Laidlaw Waste Sys., Inc. v. City of Wilmer, 904 S.W.2d 656, 659 (Tex. 1995)). The opinion did not address the Texas Commission on Environmental Quality's emergency authority under section 13.041(d).

Citations

Statutes:

• Tex. Water Code Ann. §§ 13.002(19), 13.002(24), 13.250(a), 13.250(b), 13.2501, 13.2502(a), 13.041(d) (Vernon 2008)
• Tex. Gov't Code Ann. § 312.005 (Vernon 2005)
• Tex. Loc. Gov't Code Ann. §§ 212.0115, .012(a), (b)(4) (Vernon Supp. 2009)
• 30 Tex. Admin. Code § 291.85(e) (2009)

Cases:

• Galbraith Eng'g Consultants, Inc. v. Pochucha, 290 S.W.3d 863 (Tex. 2009)
• Lee v. City of Houston, 807 S.W.2d 290 (Tex. 1991)
• Jones v. Liberty Mutual Ins. Co., 745 S.W.2d 901 (Tex. 1988)
• Laidlaw Waste Sys., Inc. v. City of Wilmer, 904 S.W.2d 656 (Tex. 1995)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0781
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2010/ga0781.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

ATTORNEY GENERAL OF TEXAS

GREG ABBOTT

June 14, 2010

The Honorable Byron Cook
Chair, Committee on Environmental Regulation
Texas House of Representatives
Post Office Box 2910
Austin, Texas 78768-2910

Opinion No. GA-0781

Re: Whether a water supply corporation has the option of refusing to extend service under sections 13.2501 and 13.2502, Water Code (RQ-0850-GA)

Dear Representative Cook:

You ask whether a water supply corporation that "receives a request for water service in a situation as described in 13.2502(a)" of the Water Code has discretion to provide water service to the applicant or, alternatively, "is prohibited from providing water service."¹

A water supply corporation is defined for purposes of chapter 13 of the Water Code as "a nonprofit corporation organized and operating under Chapter 67 [of the Water Code] that provides potable water service . . . for compensation and that has adopted and is operating in accordance with by-laws or articles of incorporation which ensure that it is member-owned and member-controlled." TEX. WATER CODE ANN. § 13.002(24) (Vernon 2008). Section 13.250 of the Water Code mandates that "[e]xcept as provided by this section or Section 13.2501 of this code, any retail public utility that possesses or is required to possess a certificate of public convenience and necessity shall serve every consumer within its certified area and shall render continuous and adequate service within the area or areas."² Id. § 13.250(a).

Section 13.250 includes certain exceptions to the general duty to serve all consumers within the certified area, including the authority to "discontinue, reduce, or impair service" for nonpayment of certain charges, for nonuse, or for "other similar reasons in the usual course of business." Id. § 13.250(b). In addition, section 13.2501 of the Water Code requires that "[t]he holder of a certificate of public convenience and necessity shall refuse to serve a customer within its certified area if the holder of the certificate is prohibited from providing the service under Section 212.012 or 232.0047, Local Government Code." Id. § 13.2501.³

Along with the exceptions found in sections 13.250 and 13.2501, section 13.2502 creates an additional exception to the duty to serve all consumers within the certified area:

Notwithstanding Section 13.250, a water supply . . . corporation . . . is not required to extend retail water . . . service within the certificated area of the corporation . . . to a service applicant in a subdivision if the corporation or special utility district documents that:

(1) the developer of the subdivision has failed to comply with the subdivision service extension policy of the corporation . . . as set forth in the tariff of the corporation . . . ; and

(2) the service applicant purchased the property after the corporation . . . gave notice as provided by this section of the rules of the corporation . . . applicable to service to subdivisions from the corporation . . . .

Id. § 13.2502(a); see also 30 TEX. ADMIN. CODE § 291.85(e) (2009) (Tex. Comm'n on Envtl. Quality, Response to Requests for Service by a Retail Public Utility Within Its Certified Area) (allowing the same exception by administrative rule); Tex. Att'y Gen. LO-96-035, at 4 (explaining that the language "[n]otwithstanding any other provision" used in a constitutional provision created an exception to what was otherwise the rule of law). You ask whether the phrase "not required to extend . . . service" in subsection 13.2502(a) means that the water supply corporation "(1) may or may not, at its option, provide water service to the applicant, or (2) is prohibited from providing water service as with the wording in section 13.2501, 'shall refuse to serve[.]'" Request Letter.

"In construing statutes, our primary objective is to give effect to the Legislature's intent as expressed in the statute's language." Galbraith Eng'g Consultants, Inc. v. Pochucha, 290 S.W.3d 863, 867 (Tex. 2009) (quoting TEX. GOV'T CODE ANN. § 312.005 (Vernon 2005)). If the words of a statute are clear and unambiguous, we apply them according to their plain and common meaning. Id. Section 13.2502 states that a water supply corporation "is not required to extend retail water . . . service" when the conditions in subsections (1) and (2) of that provision exist. TEX. WATER CODE ANN. § 13.2502(a) (Vernon 2008) (emphasis added). By using the language "is not required," the Legislature has given water supply corporations discretion under these circumstances. Thus, under a plain-language construction of the statute, a water supply corporation has discretion as to whether to serve specific applicants that fall within the limited conditions of subsection 13.2502(a). In other words, the requirement found in section 13.250 of the Water Code requiring a water supply corporation to "serve every consumer within its certified area" is not mandatory with regard to those applicants.

Although a water supply corporation is not required to serve applicants falling under the subsection 13.2502(a) exception, nothing in the plain language of section 13.2502 prohibits water supply corporations from extending such service. To construe the statute in such a way would require adding language to the statute, and we will not "add words that are not implicitly contained in the language of the statute." Lee v. City of Houston, 807 S.W.2d 290, 294-95 (Tex. 1991) (citing Jones v. Liberty Mutual Ins. Co., 745 S.W.2d 901, 902 (Tex. 1988)). Furthermore, as you note, in section 13.2501 the Legislature required that a water service corporation "shall refuse to serve a customer" within the corporation's certified area under other conditions. TEX. WATER CODE ANN. § 13.2501 (Vernon 2008) (emphasis added). Had the Legislature wanted to use this stronger language in subsection 13.2502(a), it knew how to do so. See Laidlaw Waste Sys., Inc. v. City of Wilmer, 904 S.W.2d 656, 659 (Tex. 1995) ("When the Legislature employs a term in one section of a statute and excludes it in another section, the term should not be implied where excluded."). Thus, if a water supply corporation receives a request for water service from an applicant and can document that the conditions in subsection 13.2502(a) of the Water Code exist, the water supply corporation may, but is not required to, provide water service to the applicant under that statute.⁴

[Footnote 1: Request Letter (available at http://www.texasattorneygeneral.gov).]

[Footnote 2: Section 13.250 specifically applies to a "retail public utility;" however, that term is defined to include a "water supply or sewer service corporation . . . operating, maintaining, or controlling in this state facilities for providing potable water service or sewer service, or both, for compensation." TEX. WATER CODE ANN. § 13.002(19) (Vernon 2008).]

[Footnote 3: Section 212.012 of the Local Government Code prohibits a water supply corporation, among other entities, from serving or connecting any land with water, sewer, electricity, gas, or other utility service unless the water supply corporation has been presented with or otherwise holds a certificate issued under section 212.0115, certifying compliance with plat requirements of the municipality. TEX. LOC. GOV'T CODE ANN. §§ 212.0115, .012(a), (b)(4) (Vernon Supp. 2009). Section 232.0047 of the Local Government Code was repealed in 1995. Act of May 28, 1995, 74th Leg., R.S., ch. 979, § 29, 1995 Tex. Gen. Laws 4895, 4911.]

[Footnote 4: Subsection 13.041(d) of the Water Code authorizes the Texas Commission on Environmental Quality to compel water service corporations to provide temporary water service in the event of an emergency. TEX. WATER CODE ANN. § 13.041(d) (Vernon 2008). This opinion should not be read to address those limited circumstances.]

SUMMARY

Pursuant to subsection 13.2502(a) of the Water Code, if a water supply corporation receives a request for water service from an applicant and can document that the conditions in that subsection exist, the water supply corporation may, but is not required to, provide water service to the applicant.

Very truly yours,

GREG ABBOTT
Attorney General of Texas

ANDREW WEBER
First Assistant Attorney General

JONATHAN K. FRELS
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Virginia K. Hoelscher
Assistant Attorney General, Opinion Committee