Bill Text: TX HB1459 | 2017-2018 | 85th Legislature | Introduced
Bill Title: Relating to limitations on the use of municipal electric utility system revenues by certain municipalities.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2017-03-16 - Referred to State Affairs [HB1459 Detail]
Download: Texas-2017-HB1459-Introduced.html
85R890 NC-F | ||
By: Workman | H.B. No. 1459 |
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relating to limitations on the use of municipal electric utility | ||
system revenues by certain municipalities. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Chapter 552, Local Government Code, is amended | ||
by adding Subchapter I to read as follows: | ||
SUBCHAPTER I. LIMITATIONS ON USE OF MUNICIPAL ELECTRIC UTILITY | ||
SYSTEM REVENUES BY CERTAIN MUNICIPALITIES | ||
Sec. 552.161. DEFINITION. In this subchapter, "revenues" | ||
means the total amount of revenue received as rates for wholesale or | ||
retail electric utility services by a municipal electric utility | ||
system. The term does not include revenues from pass-through fuel | ||
charges or power supply adjustment revenues. | ||
Sec. 552.162. APPLICABILITY. This subchapter applies only | ||
to a municipality with a population of less than 850,000 that owns | ||
an electric utility system with 400,000 or more customers. | ||
Sec. 552.163. LIMITATIONS ON USE OF REVENUE. (a) | ||
Notwithstanding any other law, the governing body of a municipality | ||
may use the revenues from the municipality's electric utility | ||
system only for: | ||
(1) paying the direct costs of operating the system as | ||
described by Subsection (b); and | ||
(2) transferring sums to the municipality as provided | ||
by Section 552.164. | ||
(b) The direct costs of operating the electric utility | ||
system include only: | ||
(1) the cost of operating and maintaining the system, | ||
including the cost of salaries and wages, employee benefits, | ||
vehicle purchases, vehicle maintenance, rents, legal services, and | ||
facility maintenance; | ||
(2) payments on indebtedness incurred by or on behalf | ||
of the system that is secured by revenues of the system; | ||
(3) the cost of replacing reserves required by | ||
agreements entered into by the governing body of the municipality | ||
in connection with the issuance of bonds or other indebtedness | ||
incurred by or on behalf of the system; | ||
(4) the cost of funding reserves considered necessary | ||
by the governing body of the municipality to maintain the financial | ||
and operational integrity of the system; | ||
(5) the cost of funding a rate stabilization fund to | ||
minimize the impact of rate increases on customers of the system; | ||
(6) the cost of capital improvements or equipment for | ||
the system; and | ||
(7) required payments relating to the system to | ||
governmental entities other than the municipality. | ||
Sec. 552.164. TRANSFER OF REVENUE. The governing body of | ||
the municipality may transfer annually to the general fund of the | ||
municipality a sum not to exceed 12 percent of the amount of the | ||
annual revenues of the municipality's electric utility system, as | ||
reported in the municipality's audited financial statements for the | ||
preceding fiscal year. | ||
Sec. 552.165. ACCOUNTING SYSTEM; REPORTS. The governing | ||
body of the municipality shall establish and maintain a discrete | ||
system of accounts, books, financial statements, and reports for | ||
the municipal electric utility system that is separate from the | ||
accounts of the municipality and the municipality's other | ||
utilities, departments, and agencies. | ||
SECTION 2. (a) Subchapter I, Chapter 552, Local Government | ||
Code, as added by this Act, applies only to revenues received by a | ||
municipal electric utility system on or after September 1, 2019. | ||
Revenues received by a municipal electric utility system before | ||
September 1, 2019, are governed by the law applicable to the | ||
revenues immediately before that date, and that law is continued in | ||
effect for that purpose. | ||
(b) Not later than September 1, 2018, the governing body of | ||
a municipality shall establish the accounting system required by | ||
Section 552.165, Local Government Code, as added by this Act. | ||
SECTION 3. This Act takes effect September 1, 2017. |