H.B. No. 4492
AN ACT
relating to financing certain costs associated with electric
markets; granting authority to issue bonds; authorizing fees.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 404.0241, Government Code, is amended by
adding Subsections (b-1), (b-2), (b-3), (b-4), and (b-5) to read as
follows:
(b-1) Notwithstanding any other law, directly or indirectly
through a separately managed account or other investment vehicle,
the comptroller shall invest not more than $800 million of the
economic stabilization fund balance to finance the default balance
as defined by Section 39.602, Utilities Code, to be repaid by ERCOT
market participants through default charges established by the
Public Utility Commission of Texas. The interest rate charged in
connection with the debt obligations must be calculated by adding
the rate determined by the Municipal Market Data Municipal Electric
Index, as published by Refinitiv TM3, based on the credit rating of
the independent organization, as defined by Section 39.602,
Utilities Code, plus 2.5 percent. The term of the debt obligations
may not exceed 30 years.
(b-2) A person may not bring a civil action against this
state, the Texas Treasury Safekeeping Trust Company, or an
employee, independent contractor, or official of this state,
including the comptroller, for any claim, including breach of
fiduciary duty or violation of any constitutional, statutory, or
regulatory requirement, in connection with any action, inaction,
decision, divestment, investment, report, or other determination
made or taken in connection with Subsections (b-1), (b-4), and
(b-5).
(b-3) A person who brings an action described by Subsection
(b-2) is liable to the defendant for the defendant's costs and
attorney's fees resulting from the action.
(b-4) The comptroller shall manage the investments required
by Subsection (b-1) as a separate investment portfolio. The
comptroller shall provide separate accounting and reporting for the
investments in that portfolio. The comptroller shall credit to that
portfolio all payments, distributions, interest, and other
earnings on the investments in that portfolio.
(b-5) The comptroller has any power necessary to accomplish
the purposes of managing and investing the assets of the portfolio
described by Subsection (b-4). In managing the assets of that
portfolio, through procedures and subject to restrictions the
comptroller considers appropriate, the comptroller may acquire,
sell, transfer, or otherwise assign the investments as appropriate,
taking into consideration the purposes, terms, distribution
requirements, and other circumstances of that portfolio then
prevailing.
SECTION 2. Section 39.002, Utilities Code, is amended to
read as follows:
Sec. 39.002. APPLICABILITY. This chapter, other than
Sections 39.151, 39.1516, 39.155, 39.157(e), 39.159, 39.203,
39.904, 39.9051, 39.9052, and 39.914(e), and Subchapters M and N,
does not apply to a municipally owned utility or an electric
cooperative. Sections 39.157(e), 39.203, and 39.904, however,
apply only to a municipally owned utility or an electric
cooperative that is offering customer choice. If there is a
conflict between the specific provisions of this chapter and any
other provisions of this title, except for Chapters 40 and 41, the
provisions of this chapter control.
SECTION 3. Section 39.151, Utilities Code, is amended by
adding Subsection (j-1) to read as follows:
(j-1) Notwithstanding Subsection (j) of this section,
Section 39.653(c), or any other law, the independent system
operator in the ERCOT power region may not reduce payments to or
uplift short-paid amounts to a municipally owned utility that
becomes subject to the jurisdiction of that independent system
operator on or after May 29, 2021, and before December 30, 2021,
related to a default on a payment obligation by a market participant
that occurred before May 29, 2021.
SECTION 4. Subchapter D, Chapter 39, Utilities Code, is
amended by adding Section 39.159 to read as follows:
Sec. 39.159. AMOUNTS OWED TO INDEPENDENT ORGANIZATION BY
MARKET PARTICIPANTS. (a) The commission shall require that all
market participants fully and promptly pay to the independent
organization certified under Section 39.151 for the ERCOT power
region all amounts owed to the independent organization, or provide
for the full and prompt payment of those amounts owed, which must
be calculated solely according to the protocols of the independent
organization in effect during the period of emergency and subject
to the jurisdiction of the commission, to qualify, or to continue
to qualify, as a market participant in the ERCOT power region.
(b) The independent organization shall report to the
commission that a market participant is in default for the failure
to pay, or provide for the full and prompt payment of, all amounts
owed to the independent organization as calculated in accordance
with this section. The commission may not allow the defaulting
market participant to continue to be a market participant in the
ERCOT power region for any purpose or allow the independent
organization to accept the defaulting market participant's loads or
generation for scheduling in the ERCOT power region until all
amounts owed to the independent organization by the market
participant as calculated in this section are fully paid.
(c) The commission and the independent organization shall
pursue collection in full of amounts owed to the independent
organization by any market participant to reduce the costs that
would otherwise be borne by other market participants or their
customers.
SECTION 5. Chapter 39, Utilities Code, is amended by adding
Subchapters M and N to read as follows:
SUBCHAPTER M. WINTER STORM URI DEFAULT BALANCE FINANCING
Sec. 39.601. PURPOSE. (a) The purpose of this subchapter is
to address the Winter Storm Uri default balance, as defined by
Section 39.602, in a manner that benefits the public interest by:
(1) enabling the independent organization to finance
the payment of the default balance with debt obligations; and
(2) authorizing the commission to contract with the
comptroller under Section 404.0241, Government Code, to finance the
payment of the default balance with debt obligations.
(b) Financing the default balance in the manner provided by
this subchapter will:
(1) allow wholesale market participants that are owed
money to be paid in a more timely manner;
(2) replenish financial revenue auction receipts
temporarily used by the independent organization to reduce the
Winter Storm Uri-related amounts short-paid to the wholesale market
participants; and
(3) allow the wholesale market to repay the default
balance over time.
(c) The legislature finds that the financing authorized by
this subchapter serves the public purpose of preserving the
integrity of the electricity market in the ERCOT power region.
(d) The proceeds of debt obligations issued under this
subchapter must be used solely for the purpose of financing default
balances that otherwise would be or have been uplifted to the
wholesale market.
(e) The commission shall ensure that the structuring and
pricing of debt obligations issued under this subchapter result in
the lowest financing costs consistent with market conditions and
the terms of the commission's order. The present value calculation
must use a discount rate equal to the proposed interest rate on the
debt obligations.
Sec. 39.602. DEFINITIONS. In this subchapter:
(1) "Default balance" means an amount of money of not
more than $800 million that includes only:
(A) amounts owed to the independent organization
by competitive wholesale market participants from the period of
emergency that otherwise would be or have been uplifted to other
wholesale market participants;
(B) financial revenue auction receipts used by
the independent organization to temporarily reduce amounts
short-paid to wholesale market participants related to the period
of emergency; and
(C) reasonable costs incurred by a state agency
or the independent organization to implement a debt obligation
order under Sections 39.603 and 39.604, including the cost of
retiring or refunding existing debt.
(2) "Default charges" means charges assessed to
wholesale market participants to repay amounts financed under this
subchapter to pay the default balance.
(3) "Independent organization" means the independent
organization certified under Section 39.151 for the ERCOT power
region.
(4) "Period of emergency" means the period beginning
12:01 a.m., February 12, 2021, and ending 11:59 p.m., February 20,
2021.
Sec. 39.603. DEBT OBLIGATION ORDER. (a) On application by
the independent organization, the commission by order may authorize
the independent organization to establish a debt financing
mechanism to finance the default balance if the commission finds
that the debt obligations are needed to preserve the integrity of
the wholesale market and the public interest, after considering:
(1) the need to timely replenish financial revenue
auction receipts used by the independent organization to reduce
amounts short-paid to wholesale market participants;
(2) the interests of wholesale market participants
that are owed balances; and
(3) the potential effects of uplifting those balances
to the wholesale market without a financing vehicle.
(b) The order must state:
(1) the default balance to be financed; and
(2) the period over which the default charges must be
assessed to repay the debt obligations, which may not exceed 30
years.
(c) The order must include an adjustment mechanism
requiring the independent organization to adjust default charges to
refund, over the remaining period of the default charges, any
payments made by a market participant toward unpaid obligations
from the period of emergency that were included in the financed
default balance.
(d) The independent organization shall collect from and
allocate among wholesale market participants the default charges
using the same allocated pro rata share methodology under which the
charges would otherwise be uplifted under the protocols in effect
on March 1, 2021. The default charges must be assessed on all
wholesale market participants, including market participants who
are in default but still participating in the wholesale market and
who enter the market after a debt obligation order is issued under
this subchapter, and may be based on periodically updated
transaction data to prevent market participants from engaging in
behavior designed to avoid the default charges.
(e) Not later than the 30th day after the date the
independent organization receives a default charge payment from a
wholesale market participant, the independent organization shall
remit the payment to the comptroller toward repayment of debt
obligations in which the comptroller made an investment under
Section 404.0241(b-1), Government Code, if applicable.
(f) Notwithstanding another provision of this subchapter,
default charges may not be collected from or allocated to a market
participant that:
(1) otherwise would be subject to a default charge
solely as a result of acting as a central counterparty
clearinghouse in wholesale market transactions in the ERCOT power
region; and
(2) is regulated as a derivatives clearing
organization, as defined by Section 1a, Commodity Exchange Act (7
U.S.C. Section 1a).
(g) Not later than the 90th day after the date the
independent organization files an application for an order under
Subsection (a), the commission shall issue an order described by
Subsection (a) or an order denying the application. The order
becomes effective in accordance with its terms and the order,
together with the default charges authorized in the order, shall be
irrevocable and not subject to reduction, impairment, or adjustment
by further action of the commission after the order takes effect.
Notwithstanding this requirement, the commission may refinance any
debt obligations created by an order issued under this subchapter
if the commission determines that the refinancing is in the public
interest, considering the interest of both the ERCOT market and the
state's interest in the economic stabilization fund, and otherwise
meets the requirements of this subchapter.
(h) An order described by Subsection (a) or (g) is not
subject to rehearing by the commission. The order may be reviewed by
appeal by a party to the proceeding to a Travis County district
court that is filed not later than the 15th day after the date the
order is signed by the commission. The judgment of the district
court may be reviewed only by a direct appeal to the Supreme Court
of Texas that is filed not later than the 15th day after the date of
the entry of judgment. All appeals shall be heard and determined by
the district court and the Supreme Court of Texas as expeditiously
as possible with lawful precedence over other matters. Review on
appeal shall be based solely on the record before the commission and
briefs to the court and shall be limited to whether the order
conforms to the constitution and laws of this state and the United
States and is within the authority of the commission under this
chapter.
(i) A debt obligation issued under this section is a
nonrecourse debt secured solely by the default charges explicitly
assessed to repay the obligation. The independent organization's
obligations authorized under this section do not create personal
liability for the independent organization.
Sec. 39.604. COMMISSION-AUTHORIZED FINANCING. (a) The
commission may contract with another state agency with expertise in
public financing to establish a debt financing mechanism for the
payment of the default balance as defined in this subchapter, under
an order that meets the requirements of Section 39.603. This
section does not apply to a default balance securitized under
Subchapter D, Chapter 41.
(b) The contracted state agency and any issuer, along with
the independent organization, must be a party to the commission's
proceedings that address the issuance of an order.
(c) In addition to the other applicable requirements of this
subtitle, an order issued under this section must:
(1) require the sale, assignment, or other transfer to
the contracted state agency of default charges created by the order
and, following that sale, assignment, or transfer, require that
default charges paid under any order be created, assessed, and
collected as the property of the contracted state agency, subject
to subsequent sale, assignment, or transfer by the contracted state
agency as authorized under this subchapter;
(2) authorize:
(A) the issuance of debt obligations by the
contracted state agency secured by a pledge of default charge
revenue, and the application of the proceeds of those debt
obligations, net of issuance costs, to the independent
organization; or
(B) the acquisition of default charge revenue
from the independent organization by the contracted state agency,
financed:
(i) by a loan by an issuer to the contracted
state agency of the proceeds of debt obligations, net of issuance
costs; or
(ii) by the acquisition by an issuer from
the contracted state agency of the default charge revenue and in
each case the pledge of the revenue to the repayment of the loan or
other debt obligation, as applicable; and
(3) authorize the independent organization to serve as
collection agent to collect the default charges and transfer the
collected default charges to the contracted state agency or the
issuer, as appropriate.
(d) After issuance of the order, the contracted state agency
shall arrange for the issuance of debt obligations, as specified by
the order, by the contracted state agency or another issuer
selected by the contracted state agency and approved by the
commission.
(e) Debt obligations issued pursuant to an order issued
under this section are secured only by the default charge revenue
and any other funds pledged under the bond documents. No assets of
the state or the independent organization are subject to claims by
the holders of the debt obligations. Following assignment of the
default charge revenue, the independent organization does not have
any beneficial interest or claim of right in the revenue.
(f) Effective on the date the first debt obligations are
issued under this subchapter, if any provision of this title or
portion of this title is held to be invalid or is invalidated,
superseded, replaced, or repealed, or expires for any reason, that
occurrence does not affect the validity or continuation of this
subchapter or any other provision of this title that is relevant to
the issuance, administration, payment, retirement, or refunding of
debt obligations authorized under this subchapter or to any actions
of the independent organization, its successors, an assignee, a
collection agent, the contracted state agency, or an issuer and
those provisions shall remain in full force and effect.
Sec. 39.605. DEFAULT CHARGES NONBYPASSABLE. An order
issued under Section 39.603 or 39.604 must:
(1) include terms ensuring that the imposition and
collection of default charges authorized in the order shall be
nonbypassable by wholesale market participants; and
(2) authorize the independent organization to
establish appropriate fees and other methods for pursuing amounts
owed from entities exiting the wholesale market.
Sec. 39.606. TRUE-UP MECHANISM. An order issued under
Section 39.603 or 39.604 must include a mechanism requiring that
default charges be reviewed and adjusted at least annually, not
later than the 45th day after the anniversary date of the issuance
of the order, to:
(1) correct over-collections or under-collections
over the preceding 12 months; and
(2) ensure the expected recovery of amounts sufficient
to timely provide all payments of debt service.
Sec. 39.607. TAX EXEMPTION. The transfer and receipt of
default charges are exempt from state and local sales and use,
franchise, and gross receipts taxes.
Sec. 39.608. PROPERTY RIGHTS. (a) The rights and interests
of the independent organization or its successor under a debt
obligation order issued under this subchapter, including the right
to impose, collect, and receive default charges, shall be only
contract rights until they are first transferred to an assignee or
pledged in connection with an investment agreement entered into
under Section 404.0241, Government Code, or the issuance of debt
obligations, at which time they will become default property, as
described by Subsection (b).
(b) Default property shall constitute a present property
right for purposes of contracts concerning the sale or pledge of
property, even though the imposition and collection of default
charges depends on further acts of the independent organization or
others that have not yet occurred. A debt obligation order issued
under this subchapter shall remain in effect and the property shall
continue to exist for the same period as the pledge of the state
described by Section 39.609.
(c) All revenues and collections resulting from default
charges shall constitute proceeds only of the default property
arising from the debt obligation order.
Sec. 39.609. PLEDGE OF STATE. Debt obligations issued
pursuant to this subchapter, including any bonds, are not a debt or
obligation of the state and are not a charge on its full faith and
credit or taxing power. The state pledges, however, for the benefit
and protection of financing parties and the independent
organization that it will not take or permit any action that would
impair the value of default property, or reduce, alter, or impair
the default charges to be imposed, collected, and remitted to
financing parties, until the principal, interest and premium, and
any other charges incurred and contracts to be performed in
connection with the related debt obligations have been paid and
performed in full. Any party issuing a debt obligation under this
subchapter is authorized to include this pledge in any
documentation relating to the obligation.
SUBCHAPTER N. WINTER STORM URI UPLIFT FINANCING
Sec. 39.651. PURPOSE; USE OF PROCEEDS. (a) The purpose of
this subchapter is to address the Winter Storm Uri uplift balance
by:
(1) enabling the independent organization certified
under Section 39.151 for the ERCOT power region to finance the
uplift balance on behalf of wholesale market participants through
debt obligations; and
(2) authorizing the commission to contract with
another state agency to finance the payment of the uplift balance
with debt obligations or use any another financial mechanism
consistent with this subchapter for that purpose.
(b) Financing the uplift balance in the manner provided by
this subchapter will allow wholesale market participants who were
assessed extraordinary uplift charges due to consumption during the
period of emergency to pay those charges over a longer period of
time, alleviating liquidity issues and reducing the risk of
additional defaults in the wholesale market.
(c) The legislature finds that authorizing financing under
this subchapter serves the public purpose of allowing the
commission to stabilize the wholesale electricity market in the
ERCOT power region.
(d) The proceeds of debt obligations issued under this
subchapter must be used solely for the purpose of financing
reliability deployment price adder charges and ancillary service
costs that exceeded the commission's system-wide offer cap and were
uplifted to load-serving entities based on consumption during the
period of emergency. A load-serving entity that receives proceeds
from the debt obligations may use the proceeds solely for the
purposes of fulfilling payment obligations directly related to such
costs and refunding such costs to retail customers who have paid or
otherwise would be obligated to pay such costs.
(e) The commission shall ensure that the structuring and
pricing of the debt obligations results in the lowest uplift
charges consistent with market conditions and the terms of the
order issued under this subchapter. The present value calculation
must use a discount rate equal to the proposed interest rate on the
debt obligations.
Sec. 39.652. DEFINITIONS. In this subchapter:
(1) "Independent organization" means the independent
organization certified under Section 39.151 for the ERCOT power
region.
(2) "Load-serving entity" means a municipally owned
utility, an electric cooperative, or a retail electric provider.
(3) "Period of emergency" means the period beginning
12:01 a.m., February 12, 2021, and ending 11:59 p.m., February 20,
2021.
(4) "Uplift balance" means an amount of money of not
more than $2.1 billion that was uplifted to load-serving entities
on a load ratio share basis due to energy consumption during the
period of emergency for reliability deployment price adder charges
and ancillary services costs in excess of the commission's
system-wide offer cap, excluding amounts securitized under
Subchapter D, Chapter 41. The term does not include amounts that
were part of the prevailing settlement point price during the
period of emergency.
(5) "Uplift charges" means charges assessed to
load-serving entities to repay amounts financed under this
subchapter to pay the uplift balance and reasonable costs incurred
by a state agency or the independent organization to implement a
debt obligation order under Section 39.653, 39.654, or 39.655,
including the cost of retiring or refunding existing debt.
Sec. 39.653. DEBT OBLIGATION ORDER. (a) The independent
organization shall file an application with the commission to
establish a debt financing mechanism for the payment of the uplift
balance if the commission finds that such financing will support
the financial integrity of the wholesale market and is necessary to
protect the public interest, considering the impacts on both
wholesale market participants and retail customers.
(b) An order issued under this section must:
(1) state the uplift balance to be financed;
(2) state the period over which the uplift charges
must be assessed to repay the debt obligations, which may not exceed
30 years; and
(3) provide the process for remitting the proceeds of
the financing to load-serving entities who were exposed to the
costs included in the uplift balance, including a requirement for
the load-serving entities to submit documentation of their
exposure.
(c) The independent organization shall assess uplift
charges to all load-serving entities on a load ratio share basis,
which may be translated to a kWh charge, including load serving
entities who enter the market after an order has been issued under
this subchapter, but excluding the load of entities that opt out
under Subsection (d).
(d) The commission shall develop a one-time process that
allows municipally owned utilities, electric cooperatives, river
authorities, a retail electric provider that has the same corporate
parent as each of the provider's customers, a retail electric
provider that is an affiliate of each of the provider's customers,
and transmission-voltage customers served by a retail electric
provider to opt out of the uplift charges by paying in full all
invoices owed for usage during the period of emergency.
Load-serving entities and transmission-voltage customers that opt
out under this subsection shall not receive any proceeds from the
uplift financing.
(e) An order issued under this section must include a
requirement that any load-serving entity that receives proceeds
from the financing that exceed the entity's actual exposure to
uplift charges from consumption during the period of emergency
notify the independent organization and remit any excess receipts.
Any payments received under this subsection must be credited
against the uplift balance to reduce the remaining uplift charges.
(f) Not later than the 90th day after the date the
independent organization files an application for an order under
Subsection (a), the commission shall issue an order described by
Subsection (a) or an order denying the application. The order
becomes effective in accordance with its terms and the order,
together with the uplift charges authorized in the order, shall be
irrevocable and not subject to reduction, impairment, or adjustment
by further action of the commission after it takes effect.
Notwithstanding this requirement, the commission may refinance any
debt obligations created by an order under this subchapter if the
commission determines that the refinancing is in the public
interest and otherwise meets the requirements of this subchapter.
(g) An order issued under this section is not subject to
rehearing by the commission. An order may be reviewed by appeal by a
party to the proceeding to a Travis County district court filed not
later than the 15th day after the date the order is signed by the
commission. The judgment of the district court may be reviewed only
by direct appeal to the Supreme Court of Texas filed not later than
the 15th day after the date of the entry of judgment. All appeals
shall be heard and determined by the district court and the Supreme
Court of Texas as expeditiously as possible with lawful precedence
over other matters. Review on appeal shall be based solely on the
record before the commission and briefs to the court and shall be
limited to whether the order conforms to the constitution and laws
of this state and the United States and is within the authority of
the commission under this chapter.
(h) A debt obligation issued under this section is a
nonrecourse debt secured solely by the uplift charges explicitly
assessed to repay the obligation. The independent organization's
obligations authorized under this section do not create personal
liability for the independent organization.
(i) This section does not apply to any balance securitized
under Subchapter D, Chapter 41.
Sec. 39.654. COMMISSION-AUTHORIZED FINANCING. (a) The
commission may contract with another state agency with expertise in
public financing to establish a debt financing mechanism to finance
the payment of the uplift balance under an order that meets the
requirements of Section 39.653.
(b) The contracted state agency and any issuer must be a
party to the commission's proceedings that address the issuance of
an order along with the independent organization.
(c) In addition to the other applicable requirements of this
subtitle, an order issued under this section must:
(1) require the sale, assignment, or other transfer to
the contracted state agency of uplift charges created by the order
and, following that sale, assignment, or transfer, require that
uplift charges paid under any order be created, assessed, and
collected as the property of the contracted state agency, subject
to subsequent sale, assignment, or transfer by the contracted state
agency as authorized under this subchapter;
(2) authorize:
(A) the issuance of debt obligations by the
contracted state agency secured by a pledge of uplift charge
revenue, and the application of the proceeds of those debt
obligations, net of issuance costs, to the independent
organization; or
(B) the acquisition of uplift charge revenue from
the independent organization by the contracted state agency,
financed:
(i) by a loan by an issuer to the contracted
state agency of the proceeds of debt obligations, net of issuance
costs; or
(ii) by the acquisition by an issuer from
the contracted state agency of the uplift charge revenue and in each
case the pledge of the revenue to the repayment of the loan or debt
obligations, as applicable; and
(3) authorize the independent organization to serve as
collection agent to collect the uplift charges and transfer the
collected uplift charges to the contracted state agency or the
issuer, as appropriate.
(d) After issuance of the order, the contracted state agency
shall arrange for the issuance of debt obligations, as specified by
the order, by the contracted state agency or another issuer
selected by the contracted state agency and approved by the
commission.
(e) Debt obligations issued pursuant to an order issued
under this section are secured only by the uplift charge revenue and
any other funds pledged under the bond documents. No assets of the
state or the independent organization are subject to claims by the
holders of the debt obligations. Following assignment of the
uplift charge revenue, the independent organization does not have
any beneficial interest or claim of right in the revenue.
Sec. 39.655. OTHER FINANCIAL MECHANISM. The commission may
use a financial mechanism other than the mechanisms described by
Sections 39.653 and 39.654 that meets the requirements of this
subchapter to accomplish the purposes of this subchapter.
Sec. 39.656. UPLIFT CHARGES NONBYPASSABLE. An order issued
under Section 39.653, 39.654, or 39.655 must:
(1) include terms ensuring that the imposition and
collection of uplift charges authorized in the order shall be
nonbypassable, except for entities excluded under Section
39.653(d); and
(2) authorize the independent organization to
establish appropriate fees and other methods for pursuing amounts
owed from entities exiting the wholesale market.
Sec. 39.657. TRUE-UP. An order shall include a mechanism
requiring that uplift charges be reviewed and adjusted at least
annually, not later than the 45th day after the anniversary date of
the issuance of the debt obligations, to:
(1) correct over-collections or under-collections
over the preceding 12 months; and
(2) ensure the expected recovery of amounts sufficient
to timely provide all payments of debt service and other required
amounts and charges in connection with the debt obligations.
Sec. 39.658. TAX EXEMPTION. Transactions involving the
transfer and ownership of uplift property and the receipt of uplift
charges are exempt from state and local income, sales, franchise,
gross receipts, and other taxes or similar charges.
Sec. 39.659. SEVERABILITY. Effective on the date the first
debt obligations are issued under this subchapter, if any provision
in this title or portion of this title is held to be invalid or is
invalidated, superseded, replaced, repealed, or expires for any
reason, that occurrence does not affect the validity or
continuation of this subchapter or any other provision of this
title that is relevant to the issuance, administration, payment,
retirement, or refunding of debt obligations or to any actions of
the independent organization, its successors, an assignee, a
collection agent, or a financing party, which shall remain in full
force and effect.
Sec. 39.660. CUSTOMER CHARGES. All load-serving entities
that receive offsets to specific uplift charges from the
independent organization under this subchapter must adjust
customer invoices to reflect the offsets for any charges that were
or would otherwise be passed through to customers under the terms of
service with the load-serving entity, including by providing a
refund for any offset charges that were previously paid. An
electric cooperative, including an electric cooperative that
elects to receive offsets, shall not otherwise become subject to
rate regulation by the commission and receipt of offsets does not
affect the applicability of Chapter 41 to an electric cooperative.
Sec. 39.661. ENFORCEMENT. The commission may use any
enforcement mechanism established by Chapter 15 or this chapter,
including revocation of certification by the commission, against
any entity that fails to remit excess receipts from the uplift
balance financing under Section 39.653(e) or otherwise
misappropriates or misuses amounts received from the uplift balance
financing this subchapter.
Sec. 39.662. PROPERTY RIGHTS. (a) The rights and interests
of the independent organization or its successor under a debt
obligation order issued under this subchapter, including the right
to impose, collect, and receive uplift charges authorized in a debt
obligation order under this subchapter, shall be only contract
rights until they are first transferred to an assignee or pledged in
connection with the issuance of a financing agreement entered into
under Section 39.654(a) or the issuance of debt obligations, at
which time they will become uplift property, as described by
Subsection (b).
(b) Uplift property shall constitute a present property
right for purposes of contracts concerning the sale or pledge of
property, even though the imposition and collection of uplift
charges depends on further acts of the independent organization or
others that have not yet occurred. A debt obligation order issued
under this subchapter shall remain in effect and the property shall
continue to exist for the same period as the pledge of the state
described by Section 39.663.
(c) All revenues and collections resulting from uplift
charges shall constitute proceeds only of the uplift property
arising from the debt obligation order.
Sec. 39.663. PLEDGE OF STATE. Debt obligations issued
pursuant to this subchapter, including any bonds, are not a debt or
obligation of the state and are not a charge on its full faith and
credit or taxing power. The state pledges, however, for the benefit
and protection of financing parties and the independent
organization that it will not take or permit any action that would
impair the value of uplift property, or reduce, alter, or impair the
uplift charges to be imposed, collected, and remitted to financing
parties, until the principal, interest and premium, and any other
charges incurred and contracts to be performed in connection with
the related debt obligations have been paid and performed in full.
Any party issuing a debt obligation under this subchapter is
authorized to include this pledge in any documentation relating to
the obligation.
Sec. 39.664. LEGAL ACTIONS INVOLVING PRICING OR UPLIFT
ACTIONS. A load-serving entity that receives proceeds from the
financing under this subchapter shall return an amount of the
proceeds equal to any amount of money received by the entity due to
litigation seeking judicial review of pricing or uplift actions
taken by the commission or the independent organization in
connection with the period of emergency.
SECTION 6. The independent organization to which Section
39.653(a), Utilities Code, applies shall file the application
required by that section not later than the 30th day after the
effective date of this Act.
SECTION 7. Sections 404.0241(b-2) and (b-3), Government
Code, as added by this Act, apply only to a cause of action that
accrues on or after the effective date of this Act.
SECTION 8. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2021.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 4492 was passed by the House on May 6,
2021, by the following vote: Yeas 129, Nays 15, 1 present, not
voting; that the House refused to concur in Senate amendments to
H.B. No. 4492 on May 28, 2021, and requested the appointment of a
conference committee to consider the differences between the two
houses; and that the House adopted the conference committee report
on H.B. No. 4492 on May 30, 2021, by the following vote: Yeas 116,
Nays 18, 2 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 4492 was passed by the Senate, with
amendments, on May 26, 2021, by the following vote: Yeas 31, Nays
0; at the request of the House, the Senate appointed a conference
committee to consider the differences between the two houses; and
that the Senate adopted the conference committee report on H.B. No.
4492 on May 30, 2021, by the following vote: Yeas 25, Nays 6.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor