LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 76th Regular Session
  
                              April 16, 1999
  
  
          TO:  Honorable Ron Lewis, Chair, House Committee on Energy
               Resources
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB 2308 by Hawley (relating to services of a gas utility
               provided to a school district), Committee Report 1st
               House, as Substituted
  
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*  No significant fiscal implication to the State is anticipated.        *
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The bill would amend the Texas Utilities Code to prevent a gas utility or
municipally-owned utility from refusing service to a school district if
pipeline capacity is available on an existing facility of the utility,
unless otherwise prohibited by law.  Services would include the sale of
gas or transportation of gas taken as royalty in-kind owned or operated
by the state.  If the utility and the General Land Office (GLO) could not
agree on a contract rate for service, the Railroad Commission could
determine a fair and reasonable rate for the school district.

The GLO estimates that revenue generated for the Permanent School Fund
could increase by selling gas to school districts.  In addition, the GLO
projects that school districts would realize savings due to buying gas
from the state at lower rates.
  
Local Government Impact
  
Municipal owned utilities could experience some loss of revenues if
school districts choose to  purchase gas from the General Land Office.
Some portion of such losses could be offset by a decrease in costs
associated with providing service to fewer customers.

School districts could experience some savings in utility costs if they
are able to purchase gas at lower rates from the GLO.
  
  
Source Agencies:   305   General Land Office and Veterans' Land Board
LBB Staff:         JK, DE, MF