1-1 AN ACT
1-2 relating to school funding loss attributable to electric utility
1-3 restructuring and the use of the system benefit fund.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 39.901, Utilities Code, is amended to
1-6 read as follows:
1-7 Sec. 39.901. School Funding Loss Mechanism. (a) Not later
1-8 than August 31 [March 1] each year, the comptroller shall certify
1-9 to the Texas Education Agency the statewide net loss in electric
1-10 generating facility property value [any property wealth reductions,
1-11 determined by taking the difference between current year and prior
1-12 year appraisal values] attributable to electric utility
1-13 restructuring. In calculating the statewide net loss in electric
1-14 generating facility property value, the comptroller shall:
1-15 (1) subtract current year electric generating facility
1-16 appraisal roll values, as defined by Section 25.24, Tax Code, from
1-17 1999 electric generating facility appraised values in each school
1-18 district;
1-19 (2) sum the resulting property value losses (positive
1-20 differences);
1-21 (3) sum the resulting property value gains (negative
1-22 differences); and
1-23 (4) subtract the absolute value of the property value
1-24 gains, subject to the limitation in Section 39.9011, from the
2-1 absolute value of the property value losses to calculate a
2-2 statewide net loss.
2-3 (b) The Texas Education Agency shall determine the amount
2-4 necessary to compensate the state for the statewide net loss
2-5 certified under Subsection (a) by multiplying the statewide net
2-6 loss by the average adopted property tax rate of the school
2-7 districts that had losses, weighted by the value losses in each
2-8 school district, and dividing the result by 100 [reduction of the
2-9 amount of property taxes recaptured by the state from school
2-10 districts subject to wealth equalization under Chapter 41,
2-11 Education Code, as a result of the property wealth reductions
2-12 certified under Subsection (a)] and shall notify the commission of
2-13 the amount necessary to compensate the state for the reduction.
2-14 The comptroller shall provide the Texas Education Agency the
2-15 electric generating facility value losses in each school district
2-16 used in Subsection (a)(2) for use in calculating the weighted
2-17 average property tax rate.
2-18 (c) [The Texas Education Agency shall determine the amount
2-19 necessary to compensate school districts for lost revenue resulting
2-20 from the property wealth reductions under Subsection (a) and shall
2-21 notify the commission of this amount. The amounts necessary to
2-22 compensate districts shall be the sum of:]
2-23 [(1) decreases in the level of funding to which a
2-24 school district is entitled under Chapters 42 and 46, Education
2-25 Code, that are directly attributable to the decline in property
2-26 values caused by utility restructuring; and]
2-27 [(2) losses of property tax collections incurred by
3-1 school districts that are directly attributable to property value
3-2 declines caused by utility restructuring and that are not accounted
3-3 for under Subdivision (1), including amounts that a school district
3-4 would be entitled to retain under Chapter 41, Education Code.]
3-5 [(d)] The amounts determined by the comptroller and the
3-6 Texas Education Agency under this section, for the purposes of this
3-7 section, are final and may not be appealed.
3-8 (d) [(e)] Not later than May 1 of each year, subject to
3-9 Section 39.903(b), the commission shall transfer from the system
3-10 benefit fund to the foundation school fund the amount [amounts]
3-11 determined by the Texas Education Agency under Subsection (b) to
3-12 the extent that funds are available. [Subsections (b) and (c). If
3-13 in any year the system benefit fund is insufficient to make the
3-14 transfer designated by the Texas Education Agency, the shortfall
3-15 shall be included in the projected revenue requirement for the
3-16 system benefit fund the next time the commission sets the fee under
3-17 Section 39.903, and the shortfall amount shall be transferred to
3-18 the Foundation School Program the following year.] Amounts
3-19 transferred from the system benefit fund under this section may be
3-20 appropriated only for the support of the Foundation School Program
3-21 and are available, in addition to any amounts allocated by the
3-22 General Appropriations Act, to finance actions under Section
3-23 41.002(b) or 42.2521 [42.252(e)], Education Code.
3-24 (e) [(f) The Texas Education Agency shall, on the transfer
3-25 of funds from the system benefit fund to the foundation school
3-26 fund, compensate school districts for losses incurred under
3-27 Subsection (c).]
4-1 [(g)] The commissioner of education and the comptroller
4-2 shall adopt rules necessary to implement this section, including
4-3 rules providing for public input.
4-4 (f) [(h)] This section is effective through the 2006-2007
4-5 school year. This section expires August 31, 2007.
4-6 SECTION 2. Subchapter Z, Chapter 39, Utilities Code, is
4-7 amended by adding Section 39.9011 to read as follows:
4-8 Sec. 39.9011. LIMITATION ON TOTAL PROPERTY VALUE GAINS. (a)
4-9 If the absolute value of the total property value gains calculated
4-10 as required by Section 39.901(a)(3) exceeds 30 percent of the
4-11 absolute value of the property value losses calculated as required
4-12 by Section 39.901(a)(2), the comptroller shall cap the total
4-13 property value gains at 30 percent of the property value losses
4-14 before calculating the statewide net loss required by Section
4-15 39.901(a)(4).
4-16 (b) This section expires May 31, 2003.
4-17 SECTION 3. Section 39.903, Utilities Code, is amended to
4-18 read as follows:
4-19 Sec. 39.903. System Benefit Fund. (a) The system benefit
4-20 fund is an account in the general revenue fund that may be
4-21 appropriated only for the purposes provided by this section.
4-22 Interest earned on the system benefit fund shall be credited to
4-23 [created as a trust fund with the comptroller and shall be
4-24 administered by the commission as trustee on behalf of the
4-25 recipients of money from] the fund.
4-26 (b) The system benefit fund is financed by a nonbypassable
4-27 fee set by the commission in an amount not to exceed 65 [50] cents
5-1 per megawatt hour[, except beginning on January 1, 2002, and ending
5-2 on December 31, 2006, the commission may set the fee in an amount
5-3 not to exceed 65 cents per megawatt hour to the extent necessary to
5-4 collect sufficient revenue to fund the 10 percent reduced rate
5-5 requirements of the program required by Subsection (h)]. The
5-6 system benefit fund fee is allocated to customers based on the
5-7 amount of kilowatt hours used.
5-8 (c) The nonbypassable fee may not be imposed on the retail
5-9 electric customers of a municipally owned utility or electric
5-10 cooperative before the sixth month preceding the date on which the
5-11 utility or cooperative implements customer choice. Money
5-12 distributed from the system benefit fund to a municipally owned
5-13 utility or an electric cooperative shall be proportional to the
5-14 nonbypassable fee paid by the municipally owned utility or the
5-15 electric cooperative, subject to the reimbursement provided by
5-16 Subsection (i). On request by a municipally owned utility or
5-17 electric cooperative, the commission shall reduce the nonbypassable
5-18 fee imposed on retail electric customers served by the municipally
5-19 owned utility or electric cooperative by an amount equal to the
5-20 amount provided by the municipally owned utility or electric
5-21 cooperative or its ratepayers for local low-income programs and
5-22 local programs that educate customers about the retail electric
5-23 market in a neutral and nonpromotional manner.
5-24 (d) The commission shall annually review and approve system
5-25 benefit fund accounts, projected revenue requirements, and proposed
5-26 nonbypassable fees. The commission shall report to the electric
5-27 utility restructuring legislative oversight committee if the system
6-1 benefit fund fee is insufficient to fund the purposes set forth in
6-2 Subsection (e) to the extent required by this section.
6-3 (e) The system benefit fund shall provide funding solely for
6-4 the following regulatory purposes and in the following order of
6-5 priority:
6-6 (1) programs to assist low-income electric customers
6-7 by providing the 10 percent reduced rate prescribed by Subsection
6-8 (h) [provided by Subsections (f)-(l)];
6-9 (2) customer education programs, administrative
6-10 expenses incurred by the commission in implementing and
6-11 administering this chapter, and expenses incurred by the office
6-12 under this chapter; [and]
6-13 (3) programs to assist low-income electric customers
6-14 by providing the targeted energy efficiency programs described by
6-15 Subsection (f)(2);
6-16 (4) the school funding loss mechanism provided by
6-17 Section 39.901; and
6-18 (5) programs to assist low-income electric customers
6-19 by providing the 20 percent reduced rate prescribed by Subsection
6-20 (h).
6-21 (f) Notwithstanding Section 39.106(b), the commission shall
6-22 adopt rules regarding programs to assist low-income electric
6-23 customers on the introduction of customer choice. The programs may
6-24 not be targeted to areas served by municipally owned utilities or
6-25 electric cooperatives that have not adopted customer choice. The
6-26 programs shall include:
6-27 (1) reduced electric rates as provided by Subsections
7-1 (h)-(l); and
7-2 (2) targeted energy efficiency programs to be
7-3 administered by the Texas Department of Housing and Community
7-4 Affairs in coordination with existing weatherization programs.
7-5 (g) Until customer choice is introduced in a power region,
7-6 an electric utility may not reduce, in any manner, programs already
7-7 offered to assist low-income electric customers.
7-8 (h) The commission shall adopt rules for a retail electric
7-9 provider to determine a reduced rate for eligible customers to be
7-10 discounted off the standard retail service package as approved by
7-11 the commission under Section 39.106, or the price to beat
7-12 established by Section 39.202, whichever is lower. Municipally
7-13 owned utilities and electric cooperatives shall establish a reduced
7-14 rate for eligible customers to be discounted off the standard
7-15 retail service package established under Section 40.053 or 41.053,
7-16 as appropriate. The reduced rate for a retail electric provider
7-17 shall result in a total charge that is at least 10 percent and, if
7-18 sufficient money in the system benefit fund is available, up to 20
7-19 percent, lower than the amount the customer would otherwise be
7-20 charged. To the extent the system benefit fund is insufficient to
7-21 fund the initial 10 percent rate reduction, the commission may
7-22 increase the fee to an amount not more than 65 cents per megawatt
7-23 hour, as provided by Subsection (b). For a municipally owned
7-24 utility or electric cooperative, the reduced rate shall be equal to
7-25 an amount that can be fully funded by that portion of the
7-26 nonbypassable fee proceeds paid by the municipally owned utility or
7-27 electric cooperative that is allocated to the utility or
8-1 cooperative by the commission under Subsection (e) for programs for
8-2 low-income customers of the utility or cooperative. The reduced
8-3 rate for municipally owned utilities and electric cooperatives
8-4 under this section is in addition to any rate reduction that may
8-5 result from local programs for low-income customers of the
8-6 municipally owned utilities or electric cooperatives.
8-7 (i) A retail electric provider, municipally owned utility,
8-8 or electric cooperative seeking reimbursement from the system
8-9 benefit fund may not charge an eligible low-income customer a rate
8-10 higher than the appropriate rate determined under Subsection (h).
8-11 A retail electric provider not subject to the price to beat, or a
8-12 municipally owned utility or electric cooperative subject to the
8-13 nonbypassable fee under Subsection (c), shall be reimbursed from
8-14 the system benefit fund for the difference between the reduced rate
8-15 and the rate established under Section 39.106 or, as appropriate,
8-16 the rate established under Section 40.053 or 41.053. A retail
8-17 electric provider who is subject to the price to beat shall be
8-18 reimbursed from the system benefit fund for the difference between
8-19 the reduced rate and the price to beat. The commission shall adopt
8-20 rules providing for the reimbursement.
8-21 (j) The commission shall adopt rules providing for methods
8-22 of enrolling customers eligible to receive reduced rates under
8-23 Subsection (h). The rules must provide for automatic enrollment as
8-24 one enrollment option. The Texas Department of Human Services, on
8-25 request of the commission, shall assist in the adoption and
8-26 implementation of these rules. The commission and the Texas
8-27 Department of Human Services shall enter into a memorandum of
9-1 understanding establishing the respective duties of the commission
9-2 and the department in relation to the automatic enrollment.
9-3 (k) A retail electric provider is prohibited from charging
9-4 the customer a fee for participation in the reduced rate program.
9-5 (l) For the purposes of this section, a "low-income electric
9-6 customer" is an electric customer:
9-7 (1) whose household income is not more than 125
9-8 percent of the federal poverty guidelines; or
9-9 (2) who receives food stamps from the Texas Department
9-10 of Human Services or medical assistance from a state agency
9-11 administering a part of the medical assistance program.
9-12 SECTION 4. This Act takes effect immediately if it receives
9-13 a vote of two-thirds of all members elected to each house, as
9-14 provided by Section 39, Article III, Texas Constitution. If this
9-15 Act does not receive the vote necessary for immediate effect, this
9-16 Act takes effect September 1, 2001.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1902 was passed by the House on May
1, 2001, by a non-record vote; and that the House concurred in
Senate amendments to H.B. No. 1902 on May 25, 2001, by a non-record
vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 1902 was passed by the Senate, with
amendments, on May 23, 2001, by a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: __________________________
Date
__________________________
Governor