(a) Except as provided by Subsection (d), a person may not begin construction of a public drinking water supply system unless the executive director of the commission approves:
(1) a business plan for the system; and
(2) the plans and specifications for the system.
(b) The prospective owner or operator of the system must submit to the executive director a business plan that demonstrates that the owner or operator of the proposed system has available the financial, managerial, and technical capability to ensure future operation of the system in accordance with applicable laws and rules. The executive director:
(1) shall review the business plan; and
(2) may order the prospective owner or operator of the system to provide adequate financial assurance of ability to operate the system in accordance with applicable laws and rules, in the form of a bond or as specified by the commission, unless the executive director finds that the business plan demonstrates adequate financial capability.

(c) The prospective owner or operator of the proposed system shall provide to the commission completed plans and specifications for review and approval in accordance with commission rules.
(d) A person is not required to file a business plan under Subsection (a)(1) or (b) if the person:
(1) is a county;
(2) is a retail public utility as defined by § 13.002, Water Code, unless that person is a utility as defined by that section;
(3) has executed an agreement with a political subdivision to transfer the ownership and operation of the water supply system to the political subdivision;
(4) is a Class A utility, as defined by § 13.002, Water Code, that has applied for or been granted an amendment of a certificate of convenience and necessity under § 13.258, Water Code, for the area in which the construction of the public drinking water supply system will operate; or
(5) is a noncommunity nontransient water system and the person has demonstrated financial assurance under Chapter 361 or 382 of this code or Chapter 26, Water Code.