By:  Lucio                                                        S.B. No. 1208


A BILL TO BE ENTITLED

AN ACT

relating to cost based transportation rates for natural gas.                  
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 104.2545, Utilities Code, is amended to 
read as follows: 
	Sec. 104.2545.  Required Service to School District Public 
Retail Customer
	(a)  In this section, "service site" means facilities or 
buildings operated by a school district public retail customer or a 
group of adjacent facilities or buildings operated by a school 
district public retail customer within one contiguous geographical 
area.
	(b)  Unless the utility is prohibited by other law from 
providing the service and if sufficient pipeline capacity is 
available on an existing facility of the utility to provide the 
service, a gas utility or municipally owned utility may not refuse 
to provide service to a school districtpublic retail customer at a 
service site, at rates established as provided by Subsection (c), 
the following services:
		(1)  the sale of gas;                                                         
		(2)  the transportation of an annual average of 10 
million British thermal units or more each day of gas that is:
			(A)  taken as a royalty in kind; and                                         
			(B)  owned by the state or managed by a marketing 
program operated by the state or by a state agency; or
		(3)  a combination of the services described by 
Subdivisions (1) and (2).   
	(c)  A utility shall provide a service described by 
Subsection (b) at rates provided by a written contract negotiated 
between the utility and the state or a state agency.  If the utility 
and the state or state agency are not able to agree to a contract 
rate, a fair and reasonable rate may be determined for the school 
district public retail customer, as a rate for a separate class of 
service, by the railroad commission. pursuant to Subchapter E of 
this Chapter.
	(d)  Public Retail Customer as used herein shall have the 
same meaning as such term is defined in Utilities Code Section 
35.101.
	SECTION 2.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2003.