LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session April 12, 1999 TO: Honorable J.E. "Buster" Brown, Chair, Senate Committee on Natural Resources FROM: John Keel, Director, Legislative Budget Board IN RE: SB 1797 by Duncan (relating to services of a gas utility provided to a school district), Committee Report 1st House, Substituted ************************************************************************** * No significant fiscal implication to the State is anticipated. * ************************************************************************** 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, 455 Railroad Commission LBB Staff: JK, DE, MF