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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 utility |
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system 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 552, Local Government Code, is amended |
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by adding Subchapter I to read as follows: |
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SUBCHAPTER I. LIMITATIONS ON USE OF MUNICIPAL ELECTRIC UTILITY |
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SYSTEM REVENUES BY CERTAIN MUNICIPALITIES |
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Sec. 552.161. DEFINITION. In this subchapter, "revenues" |
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means the total amount of revenue received as rates for wholesale or |
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retail electric utility services by a municipal electric utility |
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system. The term does not include revenues from pass-through fuel |
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charges or power supply adjustment revenues. |
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Sec. 552.162. APPLICABILITY. This subchapter applies only |
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to a municipality with a population of less than 850,000 that owns |
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an electric utility system with 400,000 or more customers. |
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Sec. 552.163. LIMITATIONS ON USE OF REVENUE. (a) |
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Notwithstanding any other law, the governing body of a municipality |
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may use the revenues from the municipality's electric utility |
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system only for: |
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(1) paying the direct costs of operating the system as |
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described by Subsection (b); and |
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(2) transferring sums to the municipality as provided |
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by Section 552.164. |
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(b) The direct costs of operating the electric utility |
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system include only: |
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(1) the cost of operating and maintaining the system, |
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including the cost of salaries and wages, employee benefits, |
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vehicle purchases, vehicle maintenance, rents, legal services, and |
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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; |
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(3) the cost of replacing reserves required by |
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agreements entered into by the governing body of the municipality |
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in connection with the issuance of bonds or other indebtedness |
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incurred by or on behalf of the system; |
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(4) the cost of funding reserves considered necessary |
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by the governing body of the municipality to maintain the financial |
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and operational integrity of the system; |
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(5) the cost of funding a rate stabilization fund to |
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minimize the impact of rate increases on customers of the system; |
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(6) the cost of capital improvements or equipment for |
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the system; and |
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(7) required payments relating to the system to |
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governmental entities other than the municipality. |
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Sec. 552.164. TRANSFER OF REVENUE. The governing body of |
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the municipality may transfer annually to the general fund of the |
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municipality a sum not to exceed 12 percent of the amount of the |
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annual revenues of the municipality's electric utility system, as |
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reported in the municipality's audited financial statements for the |
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preceding fiscal year. |
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Sec. 552.165. ACCOUNTING SYSTEM; REPORTS. The governing |
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body of the municipality shall establish and maintain a discrete |
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system of accounts, books, financial statements, and reports for |
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the municipal electric utility system that is separate from the |
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accounts of the municipality and the municipality's other |
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utilities, departments, and agencies. |
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SECTION 2. (a) Subchapter I, Chapter 552, Local Government |
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Code, as added by this Act, applies only to revenues received by a |
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municipal electric utility system on or after September 1, 2019. |
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Revenues received by a municipal electric utility system before |
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September 1, 2019, are governed by the law applicable to the |
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revenues immediately before that date, and that law is continued in |
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effect for that purpose. |
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(b) Not later than September 1, 2018, the governing body of |
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a municipality shall establish the accounting system required by |
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Section 552.165, Local Government Code, as added by this Act. |
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SECTION 3. This Act takes effect September 1, 2017. |