Bill > HB4972

This bill modifies existing Texas state law regarding how municipalities can transfer revenue from municipal utility systems to their general fund. The bill makes significant changes to three different sections of Texas law, primarily restricting municipalities' ability to transfer utility revenue. Under the new provisions, municipalities would be prohibited from transferring income from drainage utility systems and other municipal utilities to their general fund, with some exceptions for revenue transfers that are already authorized in existing bond or trust agreements. A new definition is introduced for "municipal utility," which includes utilities owned or controlled by a municipality or by a nonprofit corporation with municipally-appointed directors. The bill specifically amends sections in the Government Code and Local Government Code to clarify and limit municipal revenue transfer practices, effectively creating stricter guidelines about how utility revenues can be used. These changes aim to provide more transparency and potentially protect utility revenues from being used for general municipal expenses, ensuring that utility income is more directly tied to utility operations and improvements. The bill is set to take effect on September 1, 2025, giving municipalities time to adjust their financial practices to comply with the new restrictions.

Government Affairs

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB4972