HB4972 - Relating to the authority of a municipality to transfer revenue of a municipal utility to the general fund of the municipality.

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