TX HB4972

Prohibits municipalities from transferring revenue from municipal utilities to the municipality's general fund, applying to any utility owned, operated, or controlled by a municipality or by a nonprofit corporation with municipally-appointed directors

Removes existing exceptions that previously allowed municipalities to transfer drainage utility charges to the general fund under certain conditions, including for amounts collected outside municipal boundaries or pledged for debt retirement

Requires drainage utility system income to remain segregated and identifiable in municipal accounts, with no transfers to the general fund permitted

Creates an exception allowing revenue transfers only to the extent specifically authorized in the indenture, deed of trust, or ordinance governing public securities issued for the utility system

Takes effect September 1, 2025