SB924

Regular Session

Relating to entities that provide video services.

ModeratePlan for compliance

Low Cost

Effective:2025-09-01

Enforcing Agencies

Public Utility Commission of Texas (PUC) • Municipalities (limited to Right-of-Way management and existing franchise enforcement)

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: September 1, 2025
Compliance Deadline: September 1, 2025
*Note:* Billing systems must be updated to cease pass-through fee collection on streaming services by this date to avoid over-collection liability.
Agency Rulemaking: The Public Utility Commission of Texas (PUC) is not explicitly mandated to issue new rules immediately. However, expect a "regulatory gray zone" regarding the technical distinction between "managed IPTV" (taxable) and "streaming" (exempt) until the PUC or courts provide clarification.

Immediate Action Plan

Immediate: Consult outside counsel to determine if the January 1, 2025 "Litigation Snapshot" applies to your entity.
By July 1, 2025: Audit billing codes to ensure streaming revenue is isolated from gross revenue calculations for franchise fees.
By August 1, 2025: Finalize allocation methodologies for bundled service packages to defend against future municipal audits.
By September 1, 2025: Cease all pass-through franchise fee collections on streaming and satellite products.

Operational Changes Required

Contracts

Municipal Franchise Agreements: Review definitions of "Gross Revenue." You must notify municipalities that your remittance calculations will decrease effective September 1, 2025, due to the statutory exclusion of streaming revenue.
Content Partner Agreements: If you bundle third-party streaming services (e.g., Netflix, Peacock) into cable packages, ensure tax/fee responsibility clauses reflect that these are now non-assessable services in Texas.

Hiring/Training

Billing & Finance Teams: Staff must be trained on the new revenue recognition rules. They must understand that "Internet protocol technology" services may still be taxable, while "streaming content" is not.
Customer Service: Prepare scripts to explain to customers why certain fees have disappeared from their bills or why fees remain on traditional cable packages but not on app-based add-ons.

Reporting & Record-Keeping

Revenue Segregation: You must implement strict accounting codes to separate revenue derived from "streaming content" from "video programming provided through wireline facilities."
Bundle Allocation Methodologies: For bundled services (Broadband + Video + Streaming), you must document and retain the methodology used to allocate revenue to the non-taxable streaming portion. Municipalities will audit this allocation aggressively.
Technical Delivery Logs: Maintain technical proof of delivery methods to substantiate that specific services are accessed via the public Internet (exempt) rather than a managed private network (potentially taxable).

Fees & Costs

Franchise Fee Remittance: Expect a reduction in total franchise fees remitted to municipalities.
Pass-Through Cessation: You must stop collecting the 5% franchise fee recovery from customers on streaming and satellite line items. Continued collection post-September 1, 2025, creates immediate class-action risk.

Strategic Ambiguities & Considerations

Managed IPTV vs. Streaming: The statute defines "Video Service" to include services delivered via "Internet protocol technology" but excludes "streaming content." If you deliver a proprietary video service over your own managed IP network (not the public internet), municipalities will likely argue this remains a taxable "Video Service."
Retroactive Liability (The "Litigation Snapshot"): Section 66.017(b) creates a liability trap. If your entity was involved in litigation regarding Chapter 66 as of January 1, 2025, this law does *not* absolve you of liability for fees on services provided prior to September 1, 2025.

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Legislative Timeline

This bill's path through the Texas Legislature

TopicsElectronic Information Systems Utilities Utilities--telecommunications Videotape & Film Television

Official Analysis

View HRO Analysis View All Bill Documents

BILL ANALYSIS

Senate Research Center	S.B. 924
89R8029 CXP-F	By: Hancock
	Business & Commerce
	3/13/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

A cable franchise fee is an annual fee charged by local governments to a private cable television company as compensation for occupying a right-of-way for its cable lines. A telecommunications provider that installs lines in a city's right-of-way pays the city for the right to occupy that right-of way. Current law states that the provider pays the city five percent of their gross revenue.

Many municipalities across the country are attempting to compel satellite TV and video streaming providers to pay cable franchise fees, despite these services not requiring cable lines. If they are successful, customers could pay five percent more for satellite TV and each of their video streaming bills.

S.B. 924 would add clarifying language to prohibit municipalities from charging a cable franchise on a video service provider.

As proposed, S.B. 924 amends current law relating to entities that provide cable services or video services.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Sections 66.002(2) and (10), Utilities Code, as follows:

(2) Provides that the term "cable service" does not include any video programming accessed via a service that enables users to access content, information, e-mail, or other services offered over the Internet, including streaming content.

(10) Provides that the term "video service" does not include any video service provided by a commercial mobile service provider as defined in 47 U.S.C. Section 332(d), direct-to-home satellite services, as defined in 47 U.S.C. Section 303(v), that are transmitted from a satellite directly to a customer's premises without using or accessing a portion of the public right-of-way or any video programming accessed via a service that enables users to access content, information, e-mail, or other services offered over the Internet, including streaming content. Makes nonsubstantive changes.

SECTION 2. Effective date: upon passage or September 1, 2025.

Senate Authors

Sen. Kelly HancockRepublican · Primary Author

House Sponsor

Rep. Charlie GerenRepublican · Primary Sponsor

Bill Text(with markup)

S.B. No. 924

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to entities that provide video services.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Section 66.002(10), Utilities Code, is amended
	to read as follows:
	(10) "Video service" means video programming services
	provided through wireline facilities located at least in part in
	the public right-of-way without regard to delivery technology,
	including Internet protocol technology. The term [~~This definition~~]
	does not include:
	(A) any video service provided by a commercial
	mobile service provider as defined in 47 U.S.C. Section 332(d);
	(B) direct-to-home satellite services, as
	defined in 47 U.S.C. Section 303(v), that are transmitted from a
	satellite directly to a customer's premises without using or
	accessing a portion of the public right-of-way; or
	(C) any video programming accessed via a service
	that enables users to access content, information, e-mail, or other
	services offered over the Internet, including streaming content.
	SECTION 2. Chapter 66, Utilities Code, is amended by adding
	Section 66.017 to read as follows:
	Sec. 66.017. PRESERVATION OF CERTAIN DUTIES. (a) The
	enactment of Sections 66.002(10)(B) and (C) does not affect the
	obligation of a person who holds a state-issued certificate of
	franchise authority on September 1, 2025, to provide the
	compensation required under this chapter for use of a public
	right-of-way.
	(b) The enactment of Sections 66.002(10)(B) and (C) does not
	affect the application of this chapter to compensation with respect
	to services described by those sections provided before September
	1, 2025, by a person who was involved in litigation regarding this
	chapter on January 1, 2025.
	SECTION 3. It is the intent of the legislature that the
	changes in law made by this Act do not affect the existing right of a
	municipality to bring an action against a holder or non-holder of a
	state-issued certificate of franchise authority in a court of
	competent jurisdiction under Chapter 66, Utilities Code.
	SECTION 4. This Act takes effect September 1, 2025.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


March 17, 2025

TO:	Honorable Charles Schwertner, Chair, Senate Committee on Business & Commerce

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB924 by Hancock (Relating to entities that provide cable services or video services.), As Introduced

No significant fiscal implication to the State is anticipated.

It is assumed that any costs associated with the bill could be absorbed using existing resources.

Local Government Impact

No significant fiscal implication to units of local government is anticipated.

Source Agencies:

473 Public Utility Commission of Texas

LBB Staff:

JMc, RStu, GDZ, JBel

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Frequently Asked Questions

Common questions about SB924

What does Texas SB924 do?

SB924 amends the Texas Utilities Code to explicitly exclude streaming content, direct-to-home satellite, and commercial mobile services from the definition of "Video Service. " This legislation prohibits municipalities from assessing the 5% gross revenue franchise fee on these specific services, requiring State-Issued Certificate of Franchise Authority (SICFA) holders to strictly segregate taxable "managed" video revenue from non-taxable "streaming" revenue. Implementation Timeline Effective Date: September 1, 2025 Compliance Deadline: September 1, 2025 Note: Billing systems must be updated to cease pass-through fee collection on streaming services by this date to avoid over-collection liability.

Who authored SB924?

SB924 was authored by Texas Senator Kelly Hancock during the Regular Session.

When was SB924 signed into law?

SB924 was signed into law by Governor Greg Abbott on June 20, 2025.

Which agencies enforce SB924?

SB924 is enforced by Public Utility Commission of Texas (PUC) and Municipalities (limited to Right-of-Way management and existing franchise enforcement).

How urgent is compliance with SB924?

The compliance urgency for SB924 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of SB924?

The cost impact of SB924 is estimated as "low". This may vary based on industry and implementation requirements.

What topics does SB924 address?

SB924 addresses topics including electronic information systems, utilities, utilities--telecommunications, videotape & film and television.

Legislative data provided by LegiScanLast updated: November 25, 2025

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