Texas 2015 - 84th Regular

Texas Senate Bill SB745 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	84R1033 JXC-F
2	2	By: Estes S.B. No. 745
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the governance of certain municipal power agencies;
8	8	providing authority to issue bonds.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Chapter 163, Utilities Code, is amended by
11	11	adding Subchapter C-1 to read as follows:
12	12	SUBCHAPTER C-1. ALTERNATE GOVERNANCE FOR CERTAIN MUNICIPAL POWER
13	13	AGENCIES
14	14	Sec. 163.071. DEFINITIONS. In this subchapter:
15	15	(1) "Agency" means a municipal power agency for which
16	16	concurrent ordinances are adopted under Section 163.073.
17	17	(2) "Bond" includes a note, but does not include a
18	18	nonnegotiable purchase money note issued under Section 163.067 or
19	19	163.087.
20	20	(3) "Concurrent ordinance" means an ordinance or order
21	21	adopted under this subchapter by all of the participating public
22	22	entities of an agency.
23	23	(4) "Obligations" means revenue bonds or notes.
24	24	Sec. 163.072. CONSTRUCTION. This subchapter shall be
25	25	liberally construed to carry out its purpose.
26	26	Sec. 163.073. APPLICABILITY; ALTERNATE GOVERNANCE. (a)
27	27	This subchapter applies to a municipal power agency created by two
28	28	or more public entities under Subchapter C or a predecessor
29	29	statute, including an agency re-created under Section 163.055 or a
30	30	predecessor statute.
31	31	(b) The participating public entities of a municipal power
32	32	agency may by concurrent ordinance elect to apply this subchapter
33	33	to the agency as an alternative to Subchapter C.
34	34	(c) Concurrent ordinances described by this section must,
35	35	as adopted by each public entity:
36	36	(1) contain identical provisions; and
37	37	(2) state that the public entity has elected that the
38	38	agency shall, on and after the date designated in the ordinance, be
39	39	governed by the provisions of this subchapter.
40	40	Sec. 163.074. CONFLICTS WITH OTHER LAW. This subchapter
41	41	prevails to the extent of a conflict between this subchapter and any
42	42	other law, including:
43	43	(1) a law regulating the affairs of a municipal
44	44	corporation; or
45	45	(2) a home-rule charter provision.
46	46	Sec. 163.075. NATURE OF AGENCY. (a) An agency is a:
47	47	(1) separate municipal corporation;
48	48	(2) political subdivision of this state; and
49	49	(3) political entity and corporate body.
50	50	(b) An agency may not impose a tax but has all the other
51	51	powers relating to municipally owned utilities and provided by law
52	52	to a municipality that owns a public utility.
53	53	Sec. 163.076. ADDITION OR REMOVAL OF PUBLIC ENTITIES. (a)
54	54	The public entities that created or re-created an agency may by
55	55	concurrent ordinances:
56	56	(1) add a new public entity as a participating public
57	57	entity in the agency; or
58	58	(2) remove a public entity from participation in the
59	59	agency.
60	60	(b) Concurrent ordinances described by this section must,
61	61	as adopted by each public entity:
62	62	(1) contain identical provisions;
63	63	(2) define the boundaries of the agency to include the
64	64	territory within the boundaries of each participating public
65	65	entity;
66	66	(3) designate the name of the agency; and
67	67	(4) designate the number, place, terms, and manner of
68	68	appointment of directors, as provided by Section 163.078.
69	69	(c) The public entities may not add or remove a public
70	70	entity if the addition or removal will impair an agency obligation.
71	71	Sec. 163.077. ELECTION FOR ADDITION OF PUBLIC ENTITY. (a)
72	72	Public entities may not adopt concurrent ordinances under Section
73	73	163.076 adding a participating public entity unless the addition
74	74	has been approved by a majority of the qualified voters of the
75	75	additional public entity at an election called and held for that
76	76	purpose.
77	77	(b) Notice of an election under this section shall be given
78	78	in accordance with Section 1251.003, Government Code. The election
79	79	shall be called and held in accordance with:
80	80	(1) the Election Code;
81	81	(2) Chapter 1251, Government Code; and
82	82	(3) this subchapter.
83	83	Sec. 163.078. BOARD OF DIRECTORS. (a) The agency shall be
84	84	governed by a board of directors.
85	85	(b) The board is responsible for the management, operation,
86	86	and control of the property belonging to the agency.
87	87	(c) The board may by resolution delegate management or
88	88	operational authority to an officer, employee, or committee of the
89	89	agency, except that the delegation may not include legislative
90	90	functions, including the sale or purchase of agency properties, the
91	91	exercise of the power of eminent domain, the adoption or amendment
92	92	of budgets and rates, or the issuance of debt. The board may repeal
93	93	a resolution delegating management or operational authority:
94	94	(1) if the board is composed of six or more directors,
95	95	by the affirmative vote of six directors, including the affirmative
96	96	vote of at least one director appointed by each participating
97	97	public entity; or
98	98	(2) if the board is composed of fewer than six
99	99	directors, by the affirmative vote of at least one director
100	100	appointed by each participating public entity.
101	101	(d) The board must include at least four directors. Each
102	102	director must be appointed by place by the governing bodies of the
103	103	participating public entities. Each participating public entity is
104	104	entitled to appoint at least one director.
105	105	(e) Directors must serve staggered terms. Successor
106	106	directors are appointed in the same manner as the original
107	107	appointees.
108	108	(f) To qualify to serve as a director, when the person takes
109	109	the constitutional oath of office, the person must be:
110	110	(1) a qualified voter and reside in the boundaries of
111	111	the appointing public entity;
112	112	(2) an employee, officer, or member of the governing
113	113	body of the appointing public entity; or
114	114	(3) a retail electric customer of the appointing
115	115	public entity.
116	116	(g) Except as provided by Subsections (h) and (i), an
117	117	employee, officer, or member of the governing body of a
118	118	participating public entity serving as a director may not have a
119	119	personal interest in a contract executed by the agency other than as
120	120	an employee, officer, or member of the governing body of the public
121	121	entity.
122	122	(h) An employee, officer, or member of the governing body of
123	123	a participating public entity serving as a director is considered
124	124	to be a local public official for the purposes of Chapter 171, Local
125	125	Government Code.
126	126	(i) An agency and a participating public entity are
127	127	considered to be political subdivisions for the purposes of Section
128	128	131.903, Local Government Code.
129	129	(j) Directors serve without compensation. A director who is
130	130	an employee, officer, or member of the governing body of a
131	131	participating public entity may continue to receive from the public
132	132	entity the compensation associated with the office or employment.
133	133	(k) A director serves at the discretion of the appointing
134	134	public entity. The governing body of a public entity that appoints a
135	135	director may remove the director from office at any time with or
136	136	without cause. The governing body shall promptly appoint a new
137	137	director to serve the remainder of the unexpired term of the removed
138	138	director.
139	139	Sec. 163.079. SEPARATE BOARDS OF DIRECTORS. (a) The public
140	140	entities that created or re-created an agency may amend the
141	141	creating concurrent ordinances to provide for the agency to be
142	142	governed by one board of directors for the agency's generation
143	143	system and another board of directors for the agency's transmission
144	144	system.
145	145	(b) The concurrent ordinances as amended must contain
146	146	identical provisions.
147	147	(c) Section 163.078 applies to the separate boards and to
148	148	the directors of the separate boards, except that:
149	149	(1) there is no minimum number of directors for a board
150	150	established under this section;
151	151	(2) each participating public entity is not entitled
152	152	to appoint a director to each board of an agency; and
153	153	(3) the repeal of a resolution under Section
154	154	163.078(c) does not require approval by at least one director
155	155	appointed by each participating public entity.
156	156	(d) Separate boards established under this section are not
157	157	required to have the same number of directors.
158	158	Sec. 163.080. POWERS. (a) An agency may not engage in any
159	159	utility business other than:
160	160	(1) the generation and sale or exchange of electric
161	161	energy to:
162	162	(A) a participating public entity; or
163	163	(B) a private entity that owns jointly with the
164	164	agency an electric generating facility in this state; or
165	165	(2) the provision of wholesale transmission service
166	166	under Chapter 35.
167	167	(b) The agency may:
168	168	(1) perform any act necessary to the full exercise of
169	169	the agency's powers;
170	170	(2) enter into a contract, lease, or agreement with or
171	171	accept a grant or loan from a:
172	172	(A) department or agency of the United States;
173	173	(B) department, agency, or political subdivision
174	174	of this state; or
175	175	(C) public or private person;
176	176	(3) use the uniform system of accounts prescribed for
177	177	utilities and licenses by the Federal Energy Regulatory Commission;
178	178	and
179	179	(4) adopt rules to govern the operation of the agency
180	180	and its employees, facilities, and service.
181	181	(c) The agency may sell, lease, convey, or otherwise dispose
182	182	of any right, interest, or property of the agency, including its
183	183	electric facilities. A sale, lease, conveyance, or other
184	184	disposition having a value of more than $10 million shall require
185	185	prior approval of each participating public entity, unless the
186	186	public entities have agreed otherwise by written contract or the
187	187	property was purchased by the agency for mining purposes.
188	188	Sec. 163.081. CONSTRUCTION CONTRACTS. (a) Except as
189	189	provided by Subsection (c), an agency may award a contract for
190	190	construction of an improvement that involves the expenditure of
191	191	more than $20,000 only on the basis of competitive bids.
192	192	(b) The agency shall publish notice of intent to receive
193	193	bids once a week for two consecutive weeks in a newspaper of general
194	194	circulation in this state. The first publication must appear
195	195	before the 14th day before the date bids are to be received.
196	196	(c) An entity that has joint ownership of the improvement to
197	197	be constructed or that is an agent of a joint owner shall award a
198	198	contract using the entity's contracting procedures.
199	199	Sec. 163.082. SALE OR EXCHANGE OF ELECTRIC ENERGY. (a) An
200	200	agency may participate through appropriate contracts in power
201	201	pooling and power exchange agreements with other entities through
202	202	direct or indirect system interconnections.
203	203	(b) An entity that participates with an agency under this
204	204	section may:
205	205	(1) purchase electric energy from the agency;
206	206	(2) sell or dispose of electric energy to the agency;
207	207	or
208	208	(3) exchange electric energy with the agency.
209	209	(c) An entity payment for electric energy purchased from the
210	210	agency is an operating expense of the entity's electric system.
211	211	(d) An agency contract to sell or exchange electric energy
212	212	may require the purchaser to pay for the electric energy regardless
213	213	of whether the electric energy is produced or delivered.
214	214	Sec. 163.083. RATES AND CHARGES. (a) An agency may
215	215	establish and maintain rates and charges for electric power and
216	216	energy the agency delivers, transmits, or exchanges. The rates and
217	217	charges must:
218	218	(1) be reasonable and in accordance with prudent
219	219	utility practices;
220	220	(2) be based on periodic cost of service studies and
221	221	subject to modification, unless such a basis for rates and charges
222	222	is waived by the purchaser by contract; and
223	223	(3) be developed to recover the agency's cost of
224	224	producing and transmitting the electric power and energy, as
225	225	applicable, which cost must include the amortization of capital
226	226	investment.
227	227	(b) Notwithstanding Subsection (a), this state reserves its
228	228	power to regulate an agency's rates and charges for electric energy
229	229	supplied by the agency's facilities.
230	230	(c) Until obligations issued under this chapter have been
231	231	paid and discharged, with all interest on the obligations, interest
232	232	on unpaid interest installments on the obligations, and other
233	233	connected and incurred costs or expenses, this state pledges to and
234	234	agrees with the purchasers and successive holders of the
235	235	obligations that it will not:
236	236	(1) limit or alter the power of an agency to establish
237	237	and collect rates and charges under this section sufficient to pay:
238	238	(A) necessary operational and maintenance
239	239	expenses;
240	240	(B) interest and principal on obligations issued
241	241	by the agency;
242	242	(C) sinking funds and reserve fund payments; and
243	243	(D) other charges necessary to fulfill the terms
244	244	of any agreement; or
245	245	(2) take any action that will impair the rights or
246	246	remedies of the holders of the obligations.
247	247	Sec. 163.084. REVENUE BONDS. (a) The agency may issue
248	248	revenue bonds to accomplish the purposes of the agency.
249	249	(b) The agency may pledge to the payment of the obligations
250	250	the revenues of all or part of its electric facilities, including
251	251	facilities acquired after the obligations are issued. However,
252	252	operating and maintenance expenses, including salaries and labor,
253	253	materials, and repairs of electric facilities necessary to render
254	254	efficient service constitute a first lien on and charge against the
255	255	pledged revenue.
256	256	(c) The agency may set aside from the proceeds from the sale
257	257	of the obligations amounts for payment into the interest and
258	258	sinking fund and reserve fund, and for interest and operating
259	259	expenses during construction and development, as specified in the
260	260	proceedings authorizing the obligations.
261	261	(d) Obligation proceeds may be invested, pending their use,
262	262	in securities, interest-bearing certificates, or time deposits as
263	263	specified in the authorizing proceedings.
264	264	(e) Agency obligations are authorized investments for:
265	265	(1) a bank;
266	266	(2) a savings bank;
267	267	(3) a trust company;
268	268	(4) a savings and loan association; and
269	269	(5) an insurance company.
270	270	(f) The obligations, when accompanied by all appurtenant,
271	271	unmatured coupons and to the extent of the lesser of their face
272	272	value or market value, are eligible to secure the deposit of public
273	273	funds of this state, a political subdivision of this state, and any
274	274	other political corporation of this state.
275	275	Sec. 163.085. REFUNDING BONDS. The agency may issue
276	276	refunding bonds.
277	277	Sec. 163.086. ISSUANCE, FORM, AND PROVISIONS OF BONDS. (a)
278	278	Agency bonds that are payable from agency revenues or anticipated
279	279	bond proceeds and the records relating to their issuance must be
280	280	submitted to the attorney general for examination before delivery.
281	281	(b) The bonds:
282	282	(1) must mature serially or otherwise not more than 50
283	283	years after the date of issuance;
284	284	(2) may be made redeemable before maturity at the time
285	285	and at the price or prices set by the agency; and
286	286	(3) may be sold at public or private sale under the
287	287	terms and for the price the agency determines to be in the best
288	288	interest of the agency.
289	289	(c) The bonds must be signed by the presiding officer or
290	290	assistant presiding officer of the agency, be attested by the
291	291	secretary, and bear the seal of the agency. The signatures may be
292	292	printed on the bonds if authorized by the agency, and the seal may
293	293	be impressed or printed on the bonds. The agency may adopt or use
294	294	for any purpose the signature of an individual who has been an
295	295	officer of the agency, regardless of whether the individual has
296	296	ceased to be an officer at the time the bonds are delivered to the
297	297	purchaser.
298	298	Sec. 163.087. NONNEGOTIABLE PURCHASE MONEY NOTES. (a) The
299	299	agency may issue nonnegotiable purchase money notes to acquire land
300	300	or fuel resources.
301	301	(b) Nonnegotiable purchase money notes are:
302	302	(1) payable in installments;
303	303	(2) secured by the property acquired with the notes or
304	304	other collateral the agency substitutes; and
305	305	(3) not a security or agency obligation.
306	306	(c) Nonnegotiable purchase money notes may be further
307	307	secured by a promise to issue bonds or bond anticipation notes to
308	308	pay the purchase money notes.
309	309	Sec. 163.088. BOND ANTICIPATION NOTES. (a) The agency may
310	310	issue bond anticipation notes:
311	311	(1) for any purpose for which the agency may issue
312	312	bonds; or
313	313	(2) to refund previously issued bond anticipation
314	314	notes or nonnegotiable purchase money notes.
315	315	(b) Bond anticipation notes are subject to the limitations
316	316	and conditions prescribed by this subchapter for bonds.
317	317	(c) The agency may contract with purchasers of bond
318	318	anticipation notes that the proceeds of one or more series of bonds
319	319	will be used to pay or refund the notes.
320	320	Sec. 163.089. PUBLIC SECURITIES. (a) It is a public purpose
321	321	for a public entity that has participated in the creation of an
322	322	agency to pay costs of planning, acquisition, construction,
323	323	ownership, operation, and maintenance of electric facilities.
324	324	(b) A public entity may issue public securities, as defined
325	325	by Section 1201.002(2), Government Code, including bonds, notes, or
326	326	other forms of indebtedness, in the principal amount approved by
327	327	the governing body of the public entity, for the purpose of
328	328	financing electric facilities or improvements to electric
329	329	facilities to be owned or operated by the agency or otherwise in
330	330	furtherance of a purpose described by this section.
331	331	(c) A public entity and an agency may agree in a contract, or
332	332	by other official action of the public entity and agency, to terms
333	333	and conditions governing the use by the agency of the proceeds of
334	334	the public securities issued by a public entity for a purpose
335	335	described by this section.
336	336	(d) A contract or other official action described by
337	337	Subsection (c) may include provisions with respect to, and
338	338	conclusively establish sufficient consideration for, the use of the
339	339	proceeds. The consideration may include the right to:
340	340	(1) use the financed facilities or portions of the
341	341	facilities;
342	342	(2) receive output from the financed facilities; or
343	343	(3) receive an ownership interest in the financed
344	344	facilities upon the dissolution of the agency or an undivided
345	345	interest in the financed facilities at the time a public entity
346	346	funds facility improvements.
347	347	(e) A contract or other official action described by
348	348	Subsection (c) may contain other terms and extend for any period on
349	349	which all of the parties agree.
350	350	(f) A public security issued for the purposes described by
351	351	this section may include:
352	352	(1) debt obligations issued in accordance with Chapter
353	353	1207, 1331, 1371, 1431, or 1502, Government Code, or Chapter 271,
354	354	Local Government Code; or
355	355	(2) other types or forms of debt that the public entity
356	356	is authorized to issue.
357	357	(g) Each participating public entity may exercise any power
358	358	of an issuer under Chapter 1371, Government Code.
359	359	Sec. 163.090. DISSOLUTION. (a) The participating public
360	360	entities of an agency may by concurrent ordinance dissolve the
361	361	agency.
362	362	(b) Concurrent ordinances dissolving an agency must:
363	363	(1) contain identical provisions;
364	364	(2) state that the agency will be dissolved upon the
365	365	winding up of agency affairs;
366	366	(3) direct the board or boards of the agency to wind up
367	367	the business and affairs of the agency and to inform the
368	368	participating public entities by resolution when the winding up of
369	369	the business and affairs of the agency is complete; and
370	370	(4) state the date on which the dissolution takes
371	371	effect, provided that the date provides sufficient time for the
372	372	board or boards of the agency to wind up agency affairs.
373	373	(c) The participating public entities may not dissolve an
374	374	agency if the dissolution will impair the rights or remedies of
375	375	holders of obligations issued by the agency.
376	376	(d) The dissolved agency continues to exist to:
377	377	(1) satisfy existing liabilities or obligations;
378	378	(2) collect, distribute, or liquidate its assets; and
379	379	(3) take any other action required to adjust and wind
380	380	up its business and affairs.
381	381	(e) The assets of the dissolved agency that remain after all
382	382	liabilities or obligations of the agency have been satisfied shall
383	383	be distributed to the public entities that created the agency. The
384	384	public entities shall establish the method of distribution by
385	385	agreement.
386	386	(f) An agreement between a public entity and an agency
387	387	entered into before September 1, 2015, regarding the distribution
388	388	of the agency's assets after dissolution is enforceable according
389	389	to the terms of the agreement, regardless of a provision to the
390	390	contrary in this subchapter.
391	391	SECTION 2. This Act takes effect September 1, 2015.