By:  Madla                                            S.B. No. 1264
         99S0825/1                           
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to municipal regulation of and fee assessment for the use
 1-2     of a public right-of-way.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Chapter 214, Local Government Code, is amended by
 1-5     adding Subchapter D to read as follows:
 1-6                          SUBCHAPTER D.  PIPELINES
 1-7           Sec. 214.201.  DEFINITIONS.  In this subchapter:
 1-8                 (1)  "Commission" means the Railroad Commission of
 1-9     Texas.
1-10                 (2)  "Local distribution company" means a person that
1-11     owns or operates a line of pipe within a municipal service area and
1-12     holds itself out to residential customers generally within the
1-13     municipal service area to provide public utility service through
1-14     the line of pipe for a fee.
1-15                 (3)  "Pipeline" means a line of pipe, including all
1-16     space between the outer walls of the pipe, for conveying materials,
1-17     including natural gas, natural gas liquids, crude oil and oil
1-18     products, and other hydrocarbons and components thereof, but does
1-19     not include a line of pipe owned or operated by a local
1-20     distribution company.
1-21                 (4)  "Public right-of-way" means a county, municipal,
1-22     or other public highway, road, street, alley, sidewalk, drain, or
1-23     other right-of-way or easement.
1-24           Sec. 214.202.  PERMISSIBLE REGULATION.  (a)  A municipality
 2-1     by ordinance may regulate the placement, construction, or removal
 2-2     of a pipeline in the municipality to avoid interference by the
 2-3     pipeline with the use of a public right-of-way over which the
 2-4     municipality exercises control or in which it owns an interest, to
 2-5     the extent regulation is within the police power of the
 2-6     municipality to enact and is not proscribed by federal or other
 2-7     state law. However, a municipality may not unreasonably withhold,
 2-8     condition, or delay its consent to the placement, construction, or
 2-9     removal of a pipeline on, along, under, over, or across a public
2-10     right-of-way.
2-11           (b)  Nothing in this section shall be construed to limit or
2-12     restrict the right of a municipality to grant a franchise to a
2-13     local distribution company.
2-14           Sec. 214.203.  REGULATORY FEES.  (a)  A municipality by
2-15     ordinance may impose regulatory fees, including fees for
2-16     construction permits, on the owner or operator of a pipeline
2-17     located on, along, under, over, or across a public right-of-way
2-18     within a municipality.  The regulatory fees may not exceed amounts
2-19     reasonably necessary to cover the actual cost of regulation
2-20     permitted by this subchapter.  Except as authorized by this
2-21     section, a municipality may not impose a fee or otherwise charge,
2-22     whether as rental, consent charge, including in connection with any
2-23     consent under Chapter 181, Utilities Code, or otherwise, for the
2-24     placement, construction, maintenance, repair, replacement,
2-25     operation, use, benefit of use, or removal of a pipeline by any
2-26     person, including an owner or operator of a pipeline or a person
 3-1     who transports or markets through a pipeline, on, along, under,
 3-2     over, or across a public right-of-way.
 3-3           (b)  Nothing in this section shall be construed to limit or
 3-4     restrict the right of a municipality to impose a franchise fee on a
 3-5     local distribution company.
 3-6           (c)  Any person may appeal to the commission from any action
 3-7     to impose a fee on such person for the placement, construction,
 3-8     maintenance, repair, replacement, operation, use, or removal of a
 3-9     pipeline on, along, under, over, or across a public right-of-way.
3-10     The commission shall hear the appeal de novo.  Unless the
3-11     municipality establishes that the fee is authorized by this
3-12     section, the commission shall declare the fee invalid or order the
3-13     fee reduced to the amount authorized by this section.  The
3-14     commission has exclusive jurisdiction to determine whether the fee
3-15     is authorized by this section.  An appeal to the commission under
3-16     this section must be filed not later than the 180th day after the
3-17     date of receipt from the municipality of written notice of the fee
3-18     or December 31, 1999, whichever is later.  Neither payment of a fee
3-19     under protest nor acceptance of an ordinance shall waive or
3-20     otherwise defeat the right of appeal granted by this section.
3-21           (d)  Any party to an appeal to the commission under this
3-22     section may petition a district court in Travis County for judicial
3-23     review of the decision of the commission under the substantial
3-24     evidence rule.  The petition must be filed not later than the 30th
3-25     day after the effective date of the decision.
3-26           (e)  No municipality may bring suit to collect a fee for the
 4-1     placement, construction, maintenance, repair, replacement,
 4-2     operation, use, or removal of a pipeline on, along, under, over, or
 4-3     across a public right-of-way during any period earlier than two
 4-4     years before commencement of the suit.
 4-5           SECTION 2.  Section 182.025, Tax Code, is amended to read as
 4-6     follows:
 4-7           Sec. 182.025.  CHARGES BY A CITY.  (a)  An incorporated city
 4-8     or town may, by ordinance, make a reasonable lawful charge for the
 4-9     use of a city street, alley, or public way by a public utility in
4-10     the course of its business.
4-11           (b)  Subject to Subsection (d), the [The] total charges,
4-12     however designated or measured, may not exceed two percent of the
4-13     gross receipts of the public utility for the sale of gas, electric
4-14     energy, or water within the city.
4-15           (c)  If a public utility taxed under this subchapter pays a
4-16     special tax, rental, contribution, or charge under a contract or
4-17     franchise executed before May 1, 1941, the city shall credit the
4-18     payment against the amount owed by the public utility on any charge
4-19     allowable under Subsection (a) [of this section].
4-20           (d)  Notwithstanding Subsections (a), (b), and (c), an
4-21     incorporated city or town may not charge any person for the use of
4-22     a city street, alley, or public way for the sale, transport, or
4-23     distribution of natural gas, except that an incorporated city or
4-24     town may charge a local distribution company for the sale of
4-25     natural gas by the local distribution company in the course of its
4-26     business under Subsections (a), (b), and (c), and, subject to
 5-1     Subsection (e), may charge for natural gas transported or
 5-2     distributed by a local distribution company for a person other than
 5-3     the local distribution company for delivery to an end-user who
 5-4     consumes such natural gas within the incorporated city or town,
 5-5     total charges, however designated or measured, not to exceed the
 5-6     greater of (i) two percent or (ii) the percentage of gross receipts
 5-7     payable to the incorporated city or town with respect to sales of
 5-8     natural gas by the local distribution company under the provisions
 5-9     of the contract, agreement, or franchise made between the
5-10     incorporated city or town and the local distribution company, of
5-11     the imputed value of such natural gas as defined in Subsection (h).
5-12           (e)  An incorporated city or town may not impose a charge on
5-13     natural gas transported or distributed for others by a local
5-14     distribution company under Subsection (d) if, on or after September
5-15     1, 1999, the incorporated city or town commences or continues to
5-16     prosecute against any person one or more lawsuits for the recovery
5-17     of charges for, arising out of, or related to the use of city
5-18     streets, alleys, or public ways for the sale, transport, or
5-19     distribution of natural gas at any time prior to September 1, 1999,
5-20     except for charges made under a contract, agreement, or franchise
5-21     made between the incorporated city or town and the local
5-22     distribution company and provided such charges are only imposed on
5-23     and asserted against such local distribution company.
5-24           (f)  After December 31, 1999, an incorporated city or town
5-25     may not commence a lawsuit against any person to recover charges
5-26     for the use of city streets, alleys, or public ways prior to
 6-1     September 1, 1999, for the sale, delivery, transport, or
 6-2     distribution of natural gas other than a charge made under a
 6-3     contract, agreement, or franchise made between an incorporated city
 6-4     or town and a local distribution company and provided such charge
 6-5     is only imposed on and asserted against such local distribution
 6-6     company.
 6-7           (g)  Any charge imposed by an incorporated city or town under
 6-8     Subsection (d) shall be imposed on the end-user who consumes the
 6-9     natural gas within the incorporated city or town but shall be
6-10     collected and remitted to the incorporated city or town by the
6-11     local distribution company.
6-12           (h)  In this section:
6-13                 (1)  "Imputed value of natural gas" means, for natural
6-14     gas delivered by the local distribution company in a calendar
6-15     month, the sum of:
6-16                       (A)  the Delivered Spot-Gas Price, Houston Ship
6-17     Channel/Beaumont Texas index (large packages only) as first
6-18     reported for such calendar month by Inside F.E.R.C.'s Gas Market
6-19     Report, published by The McGraw-Hill Companies, Inc., or, if such
6-20     index is no longer reported, such index as shall be selected and
6-21     announced by the Railroad Commission of Texas; and
6-22                       (B)  the published tariff charge for
6-23     transportation of such natural gas by the local distribution
6-24     company from the point the natural gas first enters the local
6-25     distribution company's local distribution pipeline system to the
6-26     point of delivery of such system.
 7-1                 (2)  "Local distribution company" means a person that
 7-2     owns or operates a line of pipe within a municipal service area and
 7-3     holds itself out to residential customers generally within the
 7-4     municipal service area to provide public utility service through
 7-5     the line of pipe for a fee.
 7-6           SECTION 3.  (a)  This Act takes effect September 1, 1999.
 7-7           (b)  Section 1 of this Act applies to any action or
 7-8     proceeding relating to the regulation of pipelines in a
 7-9     municipality without regard to whether the action was commenced
7-10     before, on, or after the effective date of this Act.
7-11           SECTION 4.  The importance of this legislation and the
7-12     crowded condition of the calendars in both houses create an
7-13     emergency and an imperative public necessity that the
7-14     constitutional rule requiring bills to be read on three several
7-15     days in each house be suspended, and this rule is hereby suspended.