84R15213 T
By: Workman H.B. No. 3958
A BILL TO BE ENTITLED
AN ACT
relating to limitations on the use of municipal electric system
revenues by certain municipalities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 33, Utilities Code, is amended by adding
Subchapter F to read as follows:
SUBCHAPTER F. LIMITATIONS ON THE USE OF MUNICIPAL ELECTRIC
SYSTEM REVENUES BY CERTAIN MUNICIPALITIES.
Sec. 33.124. (a) This section applies only to a
municipality with a population of less than 850,000 that is served
by a municipally owned electric utility system with 400,000 or more
customers.
(b) For purposes of this section, "revenues" means the total
sales revenues of a municipal electric utility, and does not
include revenues from pass-through fuel charges or power supply
adjustment revenues.
(c) Notwithstanding any other law, including a municipal
ordinance or provision of a municipal charter, the governing body
of a municipality subject to this section shall use the revenues
from its electric system for the sole purposes of (i) paying the
direct costs of operating the system and (ii) transferring sums to
the municipality to the extent permitted under Subsection (e) of
this section. Except as otherwise authorized under Subsection (e)
of this section, a municipality shall not spend, divert, allocate,
donate, or in any other manner use revenues from the utility for
any purpose not explicitly authorized by this section.
(d) The direct costs of operating the electric system solely
include the following:
(1) the cost of operating and maintaining the system,
including but not limited to the cost of salaries and wages,
employee benefits, vehicle purchases, vehicle maintenance, rents,
legal services and facility maintenance;
(2) payments on indebtedness incurred by or on behalf
of the system that is secured by revenues of the system, and the
cost of replacing reserves required by agreements entered into by
the governing body of the municipality in connection with the
issuance of bonds or other indebtedness incurred by or on behalf of
the system;
(3) reserves deemed necessary by the governing body of
the municipality to maintain the financial and operational
integrity of the system;
(4) a rate stabilization fund to minimize the impact
of rate increases on customers of the system;
(5) the cost of capital improvements or equipment;
and
(6) required payments to governmental units other than
the municipality.
(e) The governing body of the municipality may transfer
annually to the general fund of the municipality a sum not to exceed
12 percent (12%) of the amount of the annual sales revenues of the
system, as reported in the municipality's audited financial
statements for the preceding fiscal year.
(f) Not later than the first anniversary of the effective
date of this Act, the governing body of the municipality shall
establish and maintain a discrete system of accounts, books,
financial statements, and reports for the municipal electric
system that is separate from the accounts of the municipality and
its other utilities, departments, and agencies.
SECTION 2. Sections 33.124 (c), (d), and (e), Utilities
Code, as added by this Act, apply to all uses of revenues by the
utility and general fund transfers made by the governing body of the
municipality after the second anniversary of the effective date of
this Act.
SECTION 3. This Act takes effect September 1, 2015.