H.B. No. 2263
AN ACT
relating to the sale of electric power to certain public customers.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 52.133(d), Natural Resources Code, is
amended to read as follows:
(d) The commissioner, the owner of the soil under Subchapter
F, or the commissioner acting on behalf of and at the direction of
an owner of the soil under Subchapter F, the board, or a board for
lease may negotiate and execute contracts or any other instruments
or agreements necessary to convert that portion of the royalty
taken in kind into other forms of energy, other than [including]
electricity.
SECTION 2. Section 53.026(b), Natural Resources Code, is
amended to read as follows:
(b) The commissioner or the commissioner acting on behalf of
and at the direction of the board or a board for lease may negotiate
and execute a contract or any other instrument or agreement
necessary to convert that portion of the royalty taken in kind to
other forms of energy, other than [including] electricity.
SECTION 3. Section 53.077(b), Natural Resources Code, is
amended to read as follows:
(b) The commissioner, each owner of the soil under this
subchapter, or the commissioner acting on behalf of and at the
direction of the owner of the soil under this subchapter may
negotiate and execute a contract or any other instrument or
agreement necessary to convert that portion of the royalty taken in
kind to other forms of energy, other than [including] electricity.
SECTION 4. Section 182.022, Tax Code, is amended by adding
Subsection (d) to read as follows:
(d) Notwithstanding any other provisions of this chapter, a
tax under this chapter may not be imposed on the gross receipts from
the sale of electricity to a public school district customer.
SECTION 5. Section 35.102, Utilities Code, is transferred
to Subchapter A, Chapter 101, Utilities Code, redesignated as
Section 101.009, Utilities Code, and amended to read as follows:
Sec. 101.009 [35.102]. STATE AUTHORITY TO SELL OR CONVEY
[POWER OR] NATURAL GAS. (a) In this section:
(1) "Commissioner" means the commissioner of the
General Land Office.
(2) "Public retail customer" means a retail customer
that is an agency of this state, a state institution of higher
education, a public school district, a political subdivision of
this state, a military installation of the United States, or a
United States Department of Veterans Affairs facility.
(b) The commissioner, acting on behalf of the state, may
sell or otherwise convey [power or] natural gas generated from
royalties taken in kind as provided by Sections 52.133(f), 53.026,
and 53.077, Natural Resources Code, directly to a public retail
customer [regardless of whether the public retail customer is also
classified as a wholesale customer under other provisions of this
title].
(c) [(b)] To ensure that the state receives the maximum
benefit from the sale of [power or] natural gas generated from
royalties taken in kind, the commissioner shall use all feasible
means to sell that [power or] natural gas first to public retail
customers that are military installations of the United States,
agencies of this state, institutions of higher education, or public
school districts. The remainder of the [power or] natural gas, if
any, may be sold to public retail customers that are political
subdivisions of this state or to a United States Department of
Veterans Affairs facility.
SECTION 6. Section 104.2545(d), Utilities Code, is amended
to read as follows:
(d) In this section, "public retail customer" has the
meaning assigned by Section 101.009 [35.101].
SECTION 7. (a) The heading to Subchapter D, Chapter 35,
Utilities Code, is repealed.
(b) Sections 35.101, 35.103, 35.104, 35.105, and 35.106,
Utilities Code, are repealed.
SECTION 8. The General Land Office or an entity operating
under a contract with the General Land Office may continue to
provide retail electric service in accordance with Subchapter D,
Chapter 35, Utilities Code, as that subchapter existed before the
effective date of this Act, under the terms of an agreement with a
customer entered into before the effective date of this Act, only
until the date the agreement expires. An agreement described by
this section may be extended to a date not later than January 1,
2024.
SECTION 9. The change in law made by this Act does not
affect taxes imposed before the effective date of this Act, and the
law in effect before the effective date of this Act is continued in
effect for purposes of the liability for and collection of those
taxes.
SECTION 10. (a) As soon as practicable after January 1,
2024, the Public Utility Commission of Texas, for an electric
utility regulated under Chapter 36, Utilities Code, shall provide
for the adjustment of the electric utility's billing of a public
school district customer to reflect any decrease in the utility's
tax liability to this state if the decrease is attributable to the
exemption in Section 182.022(d), Tax Code, as added by this Act. An
adjustment must be made effective at the same time as the decrease
of tax liability or as soon after that decrease occurs as is
reasonably practicable. The Public Utility Commission of Texas is
not required to provide for an adjustment if the commission enters
an order for the utility under Subchapter C or D, Chapter 36,
Utilities Code, that accounts for any decrease in the utility's tax
liability attributable to the exemption in Section 182.022(d), Tax
Code, as added by this Act. An adjustment is not a rate case under
Subchapter C or D, Chapter 36, Utilities Code.
(b) As soon as practicable after January 1, 2024, a retail
electric provider, as defined by Section 31.002, Utilities Code,
shall adjust the billing of a public school district customer to
reflect any decrease in the retail electric provider's tax
liability to this state if the decrease is attributable to the
exemption in Section 182.022(d), Tax Code, as added by this Act. An
adjustment must be made effective at the same time as the decrease
of tax liability or as soon after that decrease occurs as is
reasonably practicable.
SECTION 11. (a) Except as provided by Subsection (b) of
this section, this Act takes effect immediately if it receives a
vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2019.
(b) Section 182.022(d), Tax Code, as added by this Act,
takes effect January 1, 2024.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2263 was passed by the House on April
10, 2019, by the following vote: Yeas 146, Nays 0, 1 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2263 was passed by the Senate on
May 2, 2019, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor