| 1 | 1 | | 89R2686 CS-D |
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| 2 | 2 | | By: Cain H.B. No. 4972 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | |
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| 7 | 7 | | A BILL TO BE ENTITLED |
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| 8 | 8 | | AN ACT |
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| 9 | 9 | | relating to the authority of a municipality to transfer revenue of a |
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| 10 | 10 | | municipal utility to the general fund of the municipality. |
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| 11 | 11 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 12 | 12 | | SECTION 1. Section 1502.059, Government Code, is amended to |
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| 13 | 13 | | read as follows: |
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| 14 | 14 | | Sec. 1502.059. TRANSFER OF REVENUE TO GENERAL FUND. |
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| 15 | 15 | | Notwithstanding Section 1502.058(a) of this chapter, Section |
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| 16 | 16 | | 552.049 or Section 552.916, Local Government Code, or a similar law |
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| 17 | 17 | | or municipal charter provision, a municipality and its officers and |
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| 18 | 18 | | utility trustees may transfer to the municipality's general fund |
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| 19 | 19 | | and may use for general or special purposes revenue of any |
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| 20 | 20 | | municipally owned utility system in the amount and to the extent |
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| 21 | 21 | | authorized in the indenture, deed of trust, or ordinance providing |
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| 22 | 22 | | for and securing payment of public securities issued under this |
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| 23 | 23 | | chapter or similar law. |
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| 24 | 24 | | SECTION 2. Section 552.049, Local Government Code, is |
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| 25 | 25 | | amended to read as follows: |
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| 26 | 26 | | Sec. 552.049. SEGREGATION OF INCOME. (a) The income of a |
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| 27 | 27 | | drainage utility system must be segregated and completely |
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| 28 | 28 | | identifiable in municipal accounts. |
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| 29 | 29 | | (b) A [If drainage charges are solely for the cost of |
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| 30 | 30 | | service, the] municipality may not transfer the income of a |
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| 31 | 31 | | drainage utility system [charges in whole or in part] to the |
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| 32 | 32 | | municipal general fund [, except for any part collected outside |
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| 33 | 33 | | municipal boundaries and except for any part pledged to retire any |
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| 34 | 34 | | outstanding indebtedness or obligation incurred, or as a reserve |
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| 35 | 35 | | for future construction, repair, or maintenance of the drainage |
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| 36 | 36 | | system. If the governing body has levied, in the drainage charge, |
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| 37 | 37 | | an amount in contribution to the funding of future system |
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| 38 | 38 | | improvements, including replacement, new construction, or |
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| 39 | 39 | | extension, that amount is not transferable to the general fund]. |
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| 40 | 40 | | SECTION 3. Subchapter Z, Chapter 552, Local Government |
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| 41 | 41 | | Code, is amended by adding Section 552.916 to read as follows: |
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| 42 | 42 | | Sec. 552.916. PROHIBITION ON TRANSFER OF MUNICIPAL UTILITY |
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| 43 | 43 | | REVENUE. (a) In this section, "municipal utility" means any |
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| 44 | 44 | | utility owned, operated, or controlled by a municipality or by a |
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| 45 | 45 | | nonprofit corporation whose directors are appointed by one or more |
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| 46 | 46 | | municipalities. |
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| 47 | 47 | | (b) Notwithstanding any other law, a municipality may not |
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| 48 | 48 | | transfer revenue from a municipal utility to the general fund of the |
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| 49 | 49 | | municipality. |
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| 50 | 50 | | SECTION 4. This Act takes effect September 1, 2025. |
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