Relating to a certificate of public convenience and necessity to provide water or sewer service in an area incorporated or annexed by a municipality.

HB 1318 amends Texas Water Code sections to streamline the process for municipalities seeking exclusive authority to provide water or sewer services in areas they've incorporated or annexed. It requires the Public Utility Commission to determine fair compensation for utility companies whose property becomes unusable due to this certification, and mandates that property transfers occur only through court orders in Travis County after compensation is paid. The bill directly affects municipalities seeking service control and utility companies whose assets may be impacted during annexation. Key mechanisms include court-ordered property transfers and compensation calculations based on the Commission's findings, replacing prior administrative processes. This policy change clarifies the legal pathway for municipal utility expansion while ensuring property owners receive defined compensation.