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A BILL TO BE ENTITLED
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AN ACT
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relating to limitations on the use of municipal electric system |
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revenues by certain municipalities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 33, Utilities Code, is amended by adding |
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Subchapter F to read as follows: |
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SUBCHAPTER F. LIMITATIONS ON THE USE OF MUNICIPAL ELECTRIC |
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SYSTEM REVENUES BY CERTAIN MUNICIPALITIES. |
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Sec. 33.124. (a) This section applies only to a |
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municipality with a population of less than 850,000 that is served |
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by a municipally owned electric utility system with 400,000 or more |
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customers. |
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(b) For purposes of this section, "revenues" means the total |
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sales revenues of a municipal electric utility, and does not |
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include revenues from pass-through fuel charges or power supply |
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adjustment revenues. |
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(c) Notwithstanding any other law, including a municipal |
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ordinance or provision of a municipal charter, the governing body |
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of a municipality subject to this section shall use the revenues |
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from its electric system for the sole purposes of (i) paying the |
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direct costs of operating the system and (ii) transferring sums to |
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the municipality to the extent permitted under Subsection (e) of |
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this section. Except as otherwise authorized under Subsection (e) |
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of this section, a municipality shall not spend, divert, allocate, |
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donate, or in any other manner use revenues from the utility for |
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any purpose not explicitly authorized by this section. |
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(d) The direct costs of operating the electric system solely |
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include the following: |
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(1) the cost of operating and maintaining the system, |
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including but not limited to the cost of salaries and wages, |
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employee benefits, vehicle purchases, vehicle maintenance, rents, |
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legal services and facility maintenance; |
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(2) payments on indebtedness incurred by or on behalf |
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of the system that is secured by revenues of the system, and the |
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cost of replacing reserves required by agreements entered into by |
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the governing body of the municipality in connection with the |
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issuance of bonds or other indebtedness incurred by or on behalf of |
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the system; |
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(3) reserves deemed necessary by the governing body of |
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the municipality to maintain the financial and operational |
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integrity of the system; |
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(4) a rate stabilization fund to minimize the impact |
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of rate increases on customers of the system; |
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(5) the cost of capital improvements or equipment; |
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and |
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(6) required payments to governmental units other than |
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the municipality. |
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(e) The governing body of the municipality may transfer |
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annually to the general fund of the municipality a sum not to exceed |
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12 percent (12%) of the amount of the annual sales revenues of the |
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system, as reported in the municipality's audited financial |
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statements for the preceding fiscal year. |
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(f) Not later than the first anniversary of the effective |
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date of this Act, the governing body of the municipality shall |
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establish and maintain a discrete system of accounts, books, |
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financial statements, and reports for the municipal electric |
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system that is separate from the accounts of the municipality and |
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its other utilities, departments, and agencies. |
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SECTION 2. Sections 33.124 (c), (d), and (e), Utilities |
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Code, as added by this Act, apply to all uses of revenues by the |
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utility and general fund transfers made by the governing body of the |
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municipality after the second anniversary of the effective date of |
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this Act. |
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SECTION 3. This Act takes effect September 1, 2015. |