85R890 NC-F
By: Buckingham S.B. No. 2070
A BILL TO BE ENTITLED
AN ACT
relating to limitations on the use of municipal electric utility
system revenues by certain municipalities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 552, Local Government Code, is amended
by adding Subchapter I to read as follows:
SUBCHAPTER I. LIMITATIONS ON USE OF MUNICIPAL ELECTRIC UTILITY
SYSTEM REVENUES BY CERTAIN MUNICIPALITIES
Sec. 552.161. DEFINITION. In this subchapter, "revenues"
means the total amount of revenue received as rates for wholesale or
retail electric utility services by a municipal electric utility
system. The term does not include revenues from pass-through fuel
charges or power supply adjustment revenues.
Sec. 552.162. APPLICABILITY. This subchapter applies only
to a municipality with a population of less than 850,000 that owns
an electric utility system with 400,000 or more customers.
Sec. 552.163. LIMITATIONS ON USE OF REVENUE. (a)
Notwithstanding any other law, the governing body of a municipality
may use the revenues from the municipality's electric utility
system only for:
(1) paying the direct costs of operating the system as
described by Subsection (b); and
(2) transferring sums to the municipality as provided
by Section 552.164.
(b) The direct costs of operating the electric utility
system include only:
(1) the cost of operating and maintaining the system,
including 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;
(3) 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;
(4) the cost of funding reserves considered necessary
by the governing body of the municipality to maintain the financial
and operational integrity of the system;
(5) the cost of funding a rate stabilization fund to
minimize the impact of rate increases on customers of the system;
(6) the cost of capital improvements or equipment for
the system; and
(7) required payments relating to the system to
governmental entities other than the municipality.
Sec. 552.164. TRANSFER OF REVENUE. The governing body of
the municipality may transfer annually to the general fund of the
municipality a sum not to exceed 12 percent of the amount of the
annual revenues of the municipality's electric utility system, as
reported in the municipality's audited financial statements for the
preceding fiscal year.
Sec. 552.165. ACCOUNTING SYSTEM; REPORTS. The governing
body of the municipality shall establish and maintain a discrete
system of accounts, books, financial statements, and reports for
the municipal electric utility system that is separate from the
accounts of the municipality and the municipality's other
utilities, departments, and agencies.
SECTION 2. (a) Subchapter I, Chapter 552, Local Government
Code, as added by this Act, applies only to revenues received by a
municipal electric utility system on or after September 1, 2019.
Revenues received by a municipal electric utility system before
September 1, 2019, are governed by the law applicable to the
revenues immediately before that date, and that law is continued in
effect for that purpose.
(b) Not later than September 1, 2018, the governing body of
a municipality shall establish the accounting system required by
Section 552.165, Local Government Code, as added by this Act.
SECTION 3. This Act takes effect September 1, 2017.