LEGISLATIVE BUDGET BOARD
                          Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                          March 3, 1995



 TO:     Honorable Steve Holzheauser, Chair     IN RE:  House Bill No. 176
         Committee on Energy Resources                  By: Stiles
         House of Representatives
         Austin, Texas






FROM: John Keel, Director

In response to your request for a Fiscal Note on House Bill No.
176 (Relating to components of net income used in establishing
rates of a gas utility.) this office has determined the
following:

The bill would redefine a gas utility's "net income" and would
include only income related to gas utility service determined by
the regulatory authority to be reasonable and necessary.  The
bill would also require that only income tax benefits or
deductions corresponding to  investments or expenses that have
been allowed for rate-setting purposes be included in the
computation of the gas utility's income tax expense. Certain
provisions relating to the treatment of income by affiliated
groups and investment tax credits would be eliminated.

 To the extent that changes altered a gas utility's gross
receipts and  thereby its rate base,  gross receipts tax revenue
could be affected.  However, because changes would occur in
future rate hearings, it is not possible to estimate the fiscal
implication.


The fiscal implication to  the State cannot be determined.

No fiscal implication to units of local government is
anticipated.    




 


Source:   Railroad Commission
          LBB Staff: JK, KW, BR, DF