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A BILL TO BE ENTITLED
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AN ACT
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relating to the authority of a municipality to transfer revenue of a |
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municipal utility to the general fund of the municipality. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 1502.059, Government Code, is amended to |
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read as follows: |
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Sec. 1502.059. TRANSFER OF REVENUE TO GENERAL FUND. |
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Notwithstanding Section 1502.058(a) of this chapter, Section |
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552.049 or Section 552.916, Local Government Code, or a similar law |
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or municipal charter provision, a municipality and its officers and |
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utility trustees may transfer to the municipality's general fund |
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and may use for general or special purposes revenue of any |
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municipally owned utility system in the amount and to the extent |
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authorized in the indenture, deed of trust, or ordinance providing |
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for and securing payment of public securities issued under this |
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chapter or similar law. |
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SECTION 2. Section 552.049, Local Government Code, is |
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amended to read as follows: |
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Sec. 552.049. SEGREGATION OF INCOME. (a) The income of a |
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drainage utility system must be segregated and completely |
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identifiable in municipal accounts. |
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(b) A [If drainage charges are solely for the cost of |
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service, the] municipality may not transfer the income of a |
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drainage utility system [charges in whole or in part] to the |
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municipal general fund [, except for any part collected outside |
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municipal boundaries and except for any part pledged to retire any |
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outstanding indebtedness or obligation incurred, or as a reserve |
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for future construction, repair, or maintenance of the drainage |
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system. If the governing body has levied, in the drainage charge, |
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an amount in contribution to the funding of future system |
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improvements, including replacement, new construction, or |
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extension, that amount is not transferable to the general fund]. |
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SECTION 3. Subchapter Z, Chapter 552, Local Government |
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Code, is amended by adding Section 552.916 to read as follows: |
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Sec. 552.916. PROHIBITION ON TRANSFER OF MUNICIPAL UTILITY |
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REVENUE. (a) In this section, "municipal utility" means any |
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utility owned, operated, or controlled by a municipality or by a |
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nonprofit corporation whose directors are appointed by one or more |
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municipalities. |
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(b) Notwithstanding any other law, a municipality may not |
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transfer revenue from a municipal utility to the general fund of the |
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municipality. |
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SECTION 4. This Act takes effect September 1, 2025. |