Court Opinion

ID: 4130040
Source: CourtListenerOpinion
Date Created: 2017-02-18 00:59:30.402015+00
Date Added: 2024-06-11T14:31:30.129587
License: Public Domain

QBfficeof the !Zlttornep@enera
                                               iState of PCexae
DAN MORALES                                        July 13, 1992
 ATTORNEYGENERAL

     Honorable John Sharp                            Opinion No. DM-141
     Comptroller of Public Accounts
     L B. J. State Office Building                  Re: Whether the procedure for adjusting the
     Austin, Texas 78774                            rate of assessment the Public Utility Commis-
                                                    sion specified in title 16 of the Texas
                                                    Administrative Code sections 21.182 and 23.5
                                                    satisfies V.T.C.S. art. 1446c, section 78, which
                                                    requires the commission to adjust the rate of
                                                    assessment “subject to the approval of the
                                                    Legislature,” and related questions (RQ-329)

     Dear Mr. Sharp:

             You have requested our opinion on the issue of adjustments to the rate of
     assessment imposed under the Public Utility Regulatory Act (the PURA), V.T.C.S.
     art. 1446~. Article XII of the PURA establishes a method by which the Public
     Utility Commission (the PUC or the commission) must raise revenues sufficient to
     cover the expenses of the PUC and the Office of Public Utility Counsel (the
     OPUC). Section 78 of the PURA requires each public utility’ within the PUC’s
     jurisdiction to pay an assessment calculated as a percentage of the public utility’s
     gross receipts. Section 78 reads, in pertinent part, as follows:

                       An assessment is hereby imposed upon each public utility
                  within the [PUC’s] jurisdiction. . . serving the ultimate consumer
                  equal to one-sixth of one percent of its gross receipts* from
                  rates3 charged the ultimate consumers in Texas for the purpose
                  of defraying the costs and expenses incurred in the

              ISee V.T.C.S. art. 14&c, 5 3(c) (dctining “public utiliv);    16 TA.C. 0 233 (same).

             2See 34 TAX.     8 3.%3(a)(l)   (defining “gross receipts”).

             3See V.T.C.S. art. 1446c, 5 3(d) (deftiS         “rate”); 34 TA.C.   5 35U(a)(2)   (same); 16 TA.C.
     55 212,233   (same).

                                                         p.    726
Honorable John Sharp - Page 2                      (DM-141)

              administration of this Act.’ Thereafter the commission shall,
              subject to the approval of the Legislature, adjust this assessment
              to provide a level of income sufkient to fund the commission
              and the office of public utility counsel.. . . Recovery of costs
              under this section by the office of Public Utility Counsel shall
              not exceed $175,000 per annum, Nothing in this Act or any
              other provision of law shah prohibit interexchange telecomnk
              ications carriers who do not provide local exchange telephone
              service from collecting the fee fmposed under this Act as an
              additional item separately stated on the customer big as “Utility
              Gross Receipts Assessment.

V.T.C.S. 14&c, 0 78 (footnotes added). The comptroller of public accounts must
collect the assessments and deposit them into the state’s general revenue fund.
V.T.C.S. art. 1446c, 0 80, see 34 TAG sub&. U (stating procedures for paying
public utilities gross receipts “tax”); 16 TAC. 0 23.11(i) (same).

        Your questions focus on the procedure by which the commission must adjust
the level of assessment. As we explain, we conclude that section 78 of the PURA
does not delegate power to the PVC, thus, only the legislature can change the level
of the assessment.

       The legislature adopted the PURA in 1975, imposing at that time an
assessment of one-sixth of one percent of gross receipts of utility companies. See
Acts 1975,64th Leg., ch. 721. From the time the legislature enacted the PURA in
1975 until February 1992, neither the legislature nor the PUC adjusted the rate of
assessment. However, in February 1992 the PUC adopted two rules relating to
adjustments to the rate of assessments the state collects pursuant to section 78 of the
PURA. See Public Utility Comm’n, 17 Ten Reg. 1539-42 (1992); 16 Tex. Reg. 5941
(1991). The rules will become effective August 17, 1992 17 Tex. Reg. at 1540,
1542. only one of the rules, which wig be coditled as title 16 of the Texas
Administrative Code section 21.182, is germane to your questions:’

           ‘See dw 34 TAC. 5 3X3(b)         (asses&     each public utility within PUCr juhdicth   W
qlul    to on*sixth of one percent of its gross receipts from rates chuged to ultim8te ==-=I-

          ~nrtthottnotgcrmplletopurquestionwillbcEoditicd~titlc16dthTcns
Admiiah           Code ) 235.   S&ion   235 is a substantive rule that ad&cases how the public utilitk’
rates   will bc   adjusted to r&         the adjustmats in the -cot.          See 17 Tn. Rcg WO-42

                                                  p.   727
Honorable John Sharp - Page 3                      (DM-141)

       Title 16 of the Texas Administrative Code section 21.182 is a procedural rule
that establishes the process by which the PUC shag adjust the assessment following
each legislative session in which the PUCs and OPUC’s budgets are set.6 See 17
Ten Reg. 153940 (1992); 16 Tex. Reg. 5941(1991). Under section 21.182(a), after
the legislature has set the PUC’s and the OPUC’s budgets, the PUC shall issue an
order which adjusts the level of assessment collected pursuant to section 78 of the
PURA so that the amount collected wig cover, as closely as possible, the PUC’s and
OPUC’s administrative costs, as well as employee fringe benefits for which the PUC
and the OPUC do not directly pay. In addition, section 21.182(b) permits the PUC
to adjust the level of assessment after any legislative or gubernatorial action that

(footnote continued)~
(1992).   we mkrstand     that some questions exist concerning the validity of I 235.   The questions you
po%llowevcr,dontirquirethalwcconsi&ri235.

          sscdion 21.182 of title 16 of the Texas Admii          Code reads as follows:

16 TAC.    i 2l.182.

                                                  p.      720
Honorable John Sharp - Page 4                      (DM-141)

changes the PUCs and the OPUC’s budgets in the aggregate by an amount greater
than twenty-five percent. Section 21.182 does not require the PUC to inform the
legislature of the proposed adjustment before ordering the adjustment.7

        In addition to promulgating section 21.182, the PUC adopted an order
lowering the level of assessment from one-sixth of one percent, as specified in
section 78, to one-sixteenth of one percent. This order, like section 21.182 of title 16
of the Texas Administrative Code, will become effective on August 17, 1992.
Notably, the PUC enacted this order without previously seeking or obtaining
legislative approval of the proposed adjustment. Indeed, at the time the PUC
adopted the order, the legislature was not in session and was not scheduled to meet
in regular session until January 1993.

        We understand you to ask, first, whether the PUCs order lowering the level
of assessment is invalid because the PUC failed to seek legislative approval before
issuing the order; and second, whether the procedure the PUC establishes for
adjusting the level of assessments in title 16 of the Texas Administrative Code
section 21.182 is fnvalid because the rule does not require that the PUC obtain the
legislature’s approval on tlte proposed adjustment before it becomes effective.
Third, you ask whether section 316.045 of the Government Code, which establishes
a procedure a state agency must follow when it proposes to reduce the fees it
collects, applies to the PUC in this situation. As we determine that the PUC’s order
and title 16 of the Texas Administrative Code section 21.182 are invalid under
section 78, we do not consider your third question.

        Section 78 of the PURA requires the PUC to adjust the assessment “subject
to the approval of the Legislature.” If section 78 provides that the legislature’s
authority to adjust the assessment is contingent upon receiving a recommendation
from the PUC, it is constitutionally invalid because tlte state constitution vests
legislative power solely in the Senate and House of Representatives. See Ten
Const. art. III, 0 1. We must presume that thfs statute is constitutional, however,
and construe the statute in a way that harmonizes with the constitution. Attorney

        ~llndcrtitlc16oftbeT~MminHtrPtinCodcf21.~thcPUCnmrnccdinform
the legislahue that it has adjusted the level of assessment.   section 21.182 requires the PUC to idorm
only the comptroller t&t the PUC has adjusted the level d atssasment.         16 TAC.    j 21.182(c);   see
V.T.C.S. art. 1446c, f 80 (rquirhg PUC to not@ comptroller d public accmmts d any adjustment
that PUC makes to level d assessment).

                                                 p.    729
Honorable John Sharp - Page 5           (DM-141)

General Opinion M-240 (1968) at 3; SUTHERLAND,STATUTORYCONSTRUCTION
0 45.11, at 48-50 (1992).

        On its face, section 78 provides that the PUC effectively czumot adjust the
assessment; legislative action is necessary to adjust the assessment. In our opinion,
therefore, section 78 does not delegate to the PUC any authority to adjust the level
of the assessment. Clearly, any PUC attempts to adjust the level of the assessment
of its own accord are r&m vires. Consequently, title 16 of the Texas Administrative
Code section 21.182, because it establishes a procedure whereby the PUC acting on
its own can adjust the level of the assessment, is invalid Likewise, the PUC order
that attempts to reduce the level of the assessment from one-sixth of one percent to
one-sixteenth of one percent is invalid.

                                SUMMARY

              Section 78 of the Public Utility Regulatory Act does not
         delegate any authority to the Public Utility Commission to
         adjust the level of assessment. Thus, only the legislature is
         authorized to adjust the level of assessment. An order the PUC
         has adopted, to be effective August 17, 1992, reducing the level
         of assessment, is without authority and therefore invalid.
         Likewise, title 16 of the Texas Administrative Code section
         21.182, setting forth the procedure the PUC must use to adjust
         the level of assessment, is invalid

                                                   DAN      MORALES
                                                   Attorney General of Texas

                                        p.   730
Honorable John Sharp - Page 6        (DM-141)

WILL PRYOR
First Assistant Attorney General

MARYKEILER
Deputy Assistant Attorney General

RENEAHICKS
Special Assistant Attorney General

MADELEINE B. JOHNSON
Chair, Opinion Committee

Prepared by Kymberly K. Oltrogge
Assistant Attorney General

                                       p.   731