Texas 2021 - 87th Regular

Texas Senate Bill SB1580 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	S.B. No. 1580
	1	+	By: Hancock, et al. S.B. No. 1580
	2	+	(Paddie)
2	3
3	4
	5	+	A BILL TO BE ENTITLED
4	6		AN ACT
5	7		relating to the use of securitization by electric cooperatives to
6		-	address certain weather-related extraordinary costs and expenses
7		-	and to the duty of electric utility market participants to pay
8		-	certain amounts owed.
	8	+	address certain weather-related extraordinary costs and expenses.
9	9		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10		SECTION 1. Chapter 41, Utilities Code, is amended by adding
11	11		Subchapter D to read as follows:
12		-	SUBCHAPTER D. ~~MARKET PARTICIPATION AND~~ SECURITIZATION
13		-	Sec. 41.151. PURPOSE. ~~(a)~~ The purpose of this subchapter
14		-	~~is to~~ enable electric cooperatives to use securitization financing
15		-	to recover extraordinary costs and expenses incurred due to the
	12	+	SUBCHAPTER D. SECURITIZATION
	13	+	Sec. 41.151. PURPOSE. The purpose of this subchapter is to
	14	+	enable electric cooperatives to use securitization financing to
	15	+	recover extraordinary costs and expenses incurred due to the
16	16		abnormal weather events that occurred in this state in the period
17	17		beginning 12:00 a.m., February 12, 2021, and ending at 11:59 p.m.,
18	18		February 20, 2021. This type of debt will reduce the cost of
19	19		financing the extraordinary costs and expenses relative to the
20	20		costs that would be incurred using conventional electric
21	21		cooperative financing methods. The proceeds of the securitized
22	22		bonds shall be used solely for the purposes of financing or
23	23		refinancing the extraordinary costs and expenses, including costs
24	24		relating to consummation and administration of the securitized
25	25		financing. The board of each electric cooperative involved in the
26	26		financing shall ensure that securitization provides tangible and
27	27		quantifiable benefits to its members, greater than would have been
28	28		achieved absent the issuance of securitized bonds. Each board that
29	29		chooses to securitize under this subchapter shall ensure that the
30	30		structuring and pricing of the securitized bonds are consistent
31	31		with market conditions and the terms of the financing order. This
32	32		subchapter may be used by a group of electric cooperatives to issue
33	33		securitized bonds in a combined securitization transaction.
34		-	(b) A cooperative that owes the independent organization
35		-	certified under Section 39.151, Utilities Code, for the ERCOT power
36		-	region amounts incurred as a result of operations during the period
37		-	beginning 12:01 a.m., February 12, 2021, and ending at 11:59 p.m.,
38		-	February 20, 2021, shall:
39		-	(1) use all means necessary to securitize the amount
40		-	owed the independent organization, calculated solely according to
41		-	the protocols of the independent organization in effect during the
42		-	period of emergency promulgated subject to the approval of the
43		-	commission; and
44		-	(2) fully repay the amount described by Subdivision
45		-	(1) immediately upon receipt of the securitized amount along with
46		-	any additional amounts necessary to fully satisfy the amount owed.
47	34		Sec. 41.152. DEFINITIONS. In this subchapter:
48	35		(1) "Assignee" means any individual, corporation, or
49	36		other legally recognized entity, including a special purpose
50	37		entity, to which an interest in securitized property is
51	38		transferred, other than as security.
52	39		(2) "Board" means the governing body of an electric
53	40		cooperative.
54	41		(3) "Combined securitization transaction" means the
55	42		issuance of securitized bonds under this subchapter in a
56	43		transaction involving at least two electric cooperatives acting
57	44		together.
58	45		(4) "Extraordinary costs and expenses" means:
59	46		(A) costs and expenses incurred by an electric
60	47		cooperative for electric power and energy purchased during the
61	48		period of emergency in excess of what would have been paid for the
62	49		same amount of electric power and energy at the average rate
63	50		incurred by the electric cooperative for electric power and energy
64	51		purchased during the month of January 2021;
65	52		(B) costs and expenses incurred by an electric
66	53		cooperative to generate and transmit electric power and energy
67	54		during the period of emergency, including fuel costs, operation and
68	55		maintenance expenses, overtime costs, and all other costs and
69	56		expenses that would not have been incurred but for the abnormal
70	57		weather events; and
71	58		(C) any charges imposed on the electric
72	59		cooperative or on a power supplier to the electric cooperative that
73	60		were passed on to the electric cooperative by the applicable
74	61		regional transmission organization or independent system operator,
75	62		resulting from defaults by other market participants of the
76	63		regional transmission organization or independent system operator
77	64		for costs relating to the period of emergency.
78	65		(5) "Financing order" means an order of a board
79	66		approving the issuance of securitized bonds, which may be through
80	67		participation in a combined securitization transaction, and the
81	68		creation of securitized charges for the recovery of qualified
82	69		costs.
83	70		(6) "Financing party" means a holder of securitized
84	71		bonds, including trustees, collateral agents, and other persons
85	72		acting for the benefit of the holder.
86	73		(7) "Qualified costs" means up to 100 percent of an
87	74		electric cooperative's:
88	75		(A) extraordinary costs and expenses;
89	76		(B) costs of issuing, supporting, repaying,
90	77		servicing, and refinancing the securitized bonds, whether incurred
91	78		or paid upon issuance of the securitized bonds or over the life of
92	79		the securitized bonds or the refunded securitized bonds, whether
93	80		incurred directly or allocated in a combined securitization
94	81		transaction; and
95	82		(C) any costs of retiring and refunding the
96	83		electric cooperative's existing debt securities initially issued
97	84		to finance the extraordinary costs and expenses including interest
98	85		accrued on debt securities over their term, whether incurred
99	86		directly or allocated in a combined securitization transaction.
100	87		(8) "Period of emergency" means the period beginning
101	88		12:00 a.m., February 12, 2021, and ending 11:59 p.m., February 20,
102	89		2021.
103	90		(9) "Securitized bonds" means bonds, debentures,
104	91		notes, certificates of participation or of beneficial interest, or
105	92		other evidences of indebtedness or ownership that are issued by an
106	93		electric cooperative, its successors, or an assignee of the
107	94		electric cooperative or group of electric cooperatives under a
108	95		financing order or financing orders, that have a term not longer
109	96		than 30 years, and that are secured by or payable, primarily, from
110	97		securitized property and the proceeds thereof and, in a combined
111	98		securitization transaction, securitized property contributed by
112	99		other electric cooperatives. If certificates of participation,
113	100		beneficial interest, or ownership are issued, references in this
114	101		subchapter to principal, interest, or premium shall refer to
115	102		comparable amounts under those certificates.
116	103		(10) "Securitized charges" means nonbypassable
117	104		amounts to be charged for the use or availability of electric
118	105		services, approved by the board under a financing order to recover
119	106		qualified costs, that shall be collected by an electric
120	107		cooperative, its successors, an assignee, or other collection
121	108		agents as provided for in the financing order.
122	109		(11) "Securitized property" means the property right
123	110		created under this subchapter, including the right, title, and
124	111		interest of the electric cooperative or its assignee:
125	112		(A) in and to the securitized charges established
126	113		under a financing order, including all rights to obtain adjustments
127	114		in accordance with Section 41.157 and the financing order;
128	115		(B) to be paid the amount that is determined in a
129	116		financing order to be the amount that the electric cooperative or
130	117		its transferee is lawfully entitled to receive under this
131	118		subchapter and the proceeds thereof; and
132	119		(C) in and to all revenue, collections, claims,
133	120		payments, money, or process of or arising from the securitized
134	121		charges that are the subject of a financing order.
135	122		Sec. 41.153. FINANCING ORDERS; TERMS. (a) The board shall
136	123		adopt a financing order to recover the electric cooperative's
137	124		qualified costs consistent with the standards in Section 41.151.
138	125		(b) The financing order shall detail the amount of qualified
139	126		costs to be recovered and the period over which the nonbypassable
140	127		securitized charges shall be recovered, which period may not exceed
141	128		30 years.
142	129		(c) Securitized charges shall be collected and allocated
143	130		among customers in the manner provided by the financing order.
144	131		(d) A financing order becomes effective in accordance with
145	132		its terms, and the financing order, together with the securitized
146	133		charges authorized in the order, after it takes effect, is
147	134		irrevocable and not subject to denial, recission, reduction,
148	135		impairment, adjustment, or other alteration by further action of
149	136		the board or by action of any regulatory or other governmental body
150	137		of this state, except as permitted by Section 41.157. A financing
151	138		order issued under this subchapter has the same force and effect of
152	139		a financing order issued under Chapter 39.
153	140		(e) A financing order may be reviewed by appeal by a member
154	141		of the electric cooperative to a district court in the county where
155	142		the electric cooperative is domiciled, filed not later than the
156	143		15th day after the date the financing order is adopted by the board.
157	144		The judgment of the district court may be reviewed only by direct
158	145		appeal to the Supreme Court of Texas filed not later than the 15th
159	146		day after the date of the entry of judgment. All appeals shall be
160	147		heard and determined by the district court and the Supreme Court of
161	148		Texas as expeditiously as possible with lawful precedence over
162	149		other matters. Review on appeal shall be based solely on the
163	150		financing order adopted by the board, other information considered
164	151		by the board in adopting the resolutions, and briefs to the court
165	152		and shall be limited to whether the financing order conforms to the
166	153		constitution and laws of this state and the United States and is
167	154		within the authority of the board under this subchapter.
168	155		(f) The board or, in a combined securitization transaction,
169	156		the boards of all participating electric cooperatives, may adopt a
170	157		financing order or financing orders providing for retiring and
171	158		refunding securitized bonds on making a finding that the future
172	159		securitized charges required to service the new securitized bonds,
173	160		including transaction costs, will be less than the future
174	161		securitized charges required to service the securitized bonds being
175	162		refunded. After the indefeasible repayment in full of all
176	163		outstanding securitized bonds and associated financing costs, the
177	164		board shall adjust the related securitized charges accordingly.
178	165		Sec. 41.154. PROPERTY RIGHTS. (a) The rights and interests
179	166		of an electric cooperative or its subsidiary, affiliate, successor,
180	167		financing party, or assignee under a financing order, including the
181	168		right to impose, collect, receive, and enforce the payment of
182	169		securitized charges authorized in the financing order, shall be
183	170		only contract rights until the property is first transferred or
184	171		pledged to an assignee or financing party, as applicable, in
185	172		connection with the issuance of securitized bonds, at which time
186	173		the property becomes securitized property.
187	174		(b) Securitized property that is specified in the financing
188	175		order constitutes a present vested property right for all purposes,
189	176		including for purposes of Sections 16 and 17, Article I, Texas
190	177		Constitution, Section 10, Article I, United States Constitution,
191	178		and the Fifth Amendment to the United States Constitution, and the
192	179		laws of this state and the United States, even if the imposition and
193	180		collection of securitized charges depend on further acts of the
194	181		electric cooperative or others that may not have yet occurred.
195	182		(c) Securitized property shall exist regardless of whether
196	183		securitized charges have been billed, have accrued, or have been
197	184		collected and notwithstanding the fact that the value or amount of
198	185		the property is dependent on the future provision of service to
199	186		customers by the electric cooperative or its successors or assigns.
200	187		(d) On the issuance of the securitized bonds and the
201	188		financing order, and when the requirements of Section 41.159 are
202	189		met, the securitized charges, including their nonbypassability,
203	190		are irrevocable, final, nondiscretionary, and effective without
204	191		further action by the electric cooperative or any other person or
205	192		governmental authority. The financing order shall remain in effect
206	193		and the property shall continue to exist for the same period as the
207	194		pledge of the state described in Section 41.160.
208	195		(e) All revenue, collections, claims, payments, money, or
209	196		proceeds of or arising from or relating to securitized charges
210	197		shall constitute proceeds of the securitized property arising from
211	198		the financing order.
212	199		Sec. 41.155. NO SETOFF. The interest of an assignee or
213	200		pledgee in securitized property and in the revenues and collections
214	201		arising from that property are not subject to setoff, counterclaim,
215	202		surcharge, recoupment, or defense by the electric cooperative or
216	203		any other person or in connection with the bankruptcy of the
217	204		electric cooperative or any other entity. A financing order shall
218	205		remain in effect and unabated notwithstanding the bankruptcy of the
219	206		electric cooperative, its successors, or assignees.
220	207		Sec. 41.156. NO BYPASS. (a) A financing order shall
221	208		include terms ensuring that the imposition and collection of
222	209		securitized charges authorized in the order shall be nonbypassable
223	210		and apply to all customers connected to the electric cooperative's
224	211		system assets and taking service, regardless of whether the system
225	212		assets continue to be owned by the electric cooperative.
226	213		(b) The electric cooperative, its servicer, any entity
227	214		providing electric transmission or distribution services, and any
228	215		retail electric provider providing services to a retail customer in
229	216		the electric cooperative's certificated service area as it existed
230	217		on the date of enactment of this subchapter are entitled to collect
231	218		and must remit, consistent with this subchapter and any financing
232	219		order adopted under this subchapter, the securitized charges from
233	220		the retail customers and from retail customers that switch to new
234	221		on-site generation. Such retail customers are required to pay the
235	222		securitized charges.
236	223		Sec. 41.157. TRUE-UP. (a) A financing order shall be
237	224		reviewed and adjusted promptly if after its adoption there are
238	225		additional charges, reductions, or refunds of extraordinary costs
239	226		and expenses, to:
240	227		(1) ensure that there is not an over-collection or an
241	228		under-collection of extraordinary costs and expenses; and
242	229		(2) ensure that collections on the securitized
243	230		property will be sufficient to timely make all periodic and final
244	231		payments of principal, interest, fees, and other amounts and to
245	232		timely fund all reserve accounts, if any, related to the
246	233		securitized bonds.
247	234		(b) A financing order shall also include a mechanism
248	235		requiring that securitized charges be reviewed by the board and
249	236		adjusted at least annually, not later than the 45th day after the
250	237		anniversary date of the issuance of the securitized bonds, to:
251	238		(1) correct over-collections or under-collections of
252	239		the preceding 12 months; and
253	240		(2) ensure the expected recovery of amounts sufficient
254	241		to timely provide all payments of debt service and other required
255	242		amounts and charges in connection with the securitized bonds.
256	243		(c) The electric cooperatives that are members of a
257	244		generation and transmission cooperative may include in their
258	245		financing orders the ability to allocate any true-up amounts over
259	246		the retail customers of all electric cooperatives that are members
260	247		of the same generation and transmission cooperative.
261	248		(d) In a combined securitization transaction, each
262	249		generation and transmission cooperative may calculate all
263	250		adjustments and determinations relevant to each true-up by each
264	251		electric cooperative member of the generation and transmission
265	252		cooperative participating in the securitization transaction, with
266	253		the adjustments being allocated across the electric cooperatives in
267	254		the manner agreed to by all of the participating electric
268	255		cooperatives under their financing orders.
269	256		(e) A governmental authority may not disapprove of or alter
270	257		any adjustments made or proposed to be made under this subchapter
271	258		other than to correct computation or other manifest errors.
272	259		Sec. 41.158. TRUE SALE. An agreement by an electric
273	260		cooperative or assignee to transfer securitized property that
274	261		expressly states that the transfer is a sale or other absolute
275	262		transfer signifies that the transaction is a true sale and is not a
276	263		secured transaction and that title, legal and equitable, has passed
277	264		to the entity to which the securitized property is transferred. The
278	265		transaction shall be treated as an absolute sale regardless of
279	266		whether the purchaser has any recourse against the seller, or any
280	267		other term of the parties' agreement, including the seller's
281	268		retention of an equity interest in the securitized property, the
282	269		fact that the electric cooperative acts as the collector of
283	270		securitized charges relating to the securitized property, or the
284	271		treatment of the transfer as a financing for tax, financial
285	272		reporting, or other purposes.
286	273		Sec. 41.159. SECURITY INTERESTS; ASSIGNMENT; COMMINGLING;
287	274		DEFAULT. (a) Securitized property does not constitute an account
288	275		or general intangible under Section 9.106, Business & Commerce
289	276		Code. The transfer, sale, or assignment, or the creation,
290	277		granting, perfection, and enforcement of liens and security
291	278		interests in securitized property are governed by this section and
292	279		not by the Business & Commerce Code. Securitized property shall
293	280		constitute property for all purposes, including for contracts
294	281		securing securitized bonds, regardless of whether the securitized
295	282		property revenues and proceeds have accrued.
296	283		(b) A valid and enforceable transfer, sale, or assignment,
297	284		or lien and security interest, as applicable, in securitized
298	285		property may be created only by a financing order and the execution
299	286		and delivery of a transfer, sale, or assignment, or security
300	287		agreement, as applicable, with a financing party in connection with
301	288		the issuance of securitized bonds. The transfer, sale, assignment,
302	289		or lien and security interest, as applicable, shall attach
303	290		automatically from the time that value is received for the
304	291		securitized bonds and, on perfection through the filing of notice
305	292		with the secretary of state in accordance with the rules prescribed
306	293		under Subsection (d), shall be a continuously perfected transfer,
307	294		sale, and assignment, or lien and security interest, as applicable,
308	295		in the securitized property and all proceeds of the property,
309	296		whether accrued or not, shall have priority in the order of filing
310	297		and take precedence over any subsequent judicial or other lien
311	298		creditor. If notice is filed before the 10th day after the date
312	299		value is received for the securitized bonds, the transfer, sale, or
313	300		assignment, or security interest, as applicable, shall be perfected
314	301		retroactive to the date value was received. Otherwise, the
315	302		transfer, sale, or assignment, or security interest, as applicable,
316	303		shall be perfected as of the date of filing.
317	304		(c) Transfer, sale, or assignment of an interest in
318	305		securitized property to an assignee shall be perfected against all
319	306		third parties, including subsequent judicial or other lien
320	307		creditors, when the financing order becomes effective, transfer
321	308		documents have been delivered to the assignee, and a notice of that
322	309		transfer has been filed in accordance with the rules prescribed
323	310		under Subsection (d). However, if notice of the transfer has not
324	311		been filed in accordance with this subsection before the 10th day
325	312		after the delivery of transfer documentation, the transfer of the
326	313		interest is not perfected against third parties until the notice is
327	314		filed.
328	315		(d) The secretary of state shall implement this section by
329	316		establishing and maintaining a separate system of records for the
330	317		filing of notices under this section and prescribing the rules for
331	318		those filings based on Chapter 9, Business & Commerce Code, adapted
332	319		to this subchapter and using the terms defined in this subchapter.
333	320		(e) The priority of a lien and security interest perfected
334	321		under this section is not impaired by any later modification of the
335	322		financing order under Section 41.157 or by the commingling of funds
336	323		arising from securitized charges with other funds, and any other
337	324		security interest that may apply to those funds shall be terminated
338	325		when they are transferred to a segregated account for the assignee
339	326		or a financing party. If securitized property has been transferred
340	327		to an assignee, any proceeds of that property shall be held in trust
341	328		for the assignee.
342	329		(f) Securitized bonds shall be secured by a statutory lien
343	330		on the securitized property in favor of the owners or beneficial
344	331		owners of securitized bonds. The lien shall automatically arise on
345	332		issuance of the securitized bonds without the need for any action or
346	333		authorization by the electric cooperative or the board. The lien
347	334		shall be valid and binding from the time the securitized bonds are
348	335		executed and delivered. The securitized property shall be
349	336		immediately subject to the lien, and the lien shall immediately
350	337		attach to the securitized property and be effective, binding, and
351	338		enforceable against the electric cooperative, its creditors, their
352	339		successors, assignees, and all others asserting rights therein,
353	340		regardless of whether those persons have notice of the lien and
354	341		without the need for any physical delivery, recordation, filing, or
355	342		further act. The lien is created by this subchapter and not by any
356	343		security agreement, but may be enforced by any financing party or
357	344		their representatives as if they were secured parties under Chapter
358	345		9, Business & Commerce Code. On application by or on behalf of the
359	346		financing parties, a district court in the county where the
360	347		electric cooperative is domiciled may order that amounts arising
361	348		from securitized charges be transferred to a separate account for
362	349		the financing parties' benefit.
363	350		(g) The statutory lien is a continuously perfected security
364	351		interest and has priority over any other lien, created by operation
365	352		of law or otherwise, that may subsequently attach to that
366	353		securitized property or proceeds thereof unless the owners or
367	354		beneficial owners of securitized bonds as specified in the trust
368	355		agreement or indenture have agreed in writing otherwise. The
369	356		statutory lien is a lien on the securitized charges and all
370	357		securitized charge revenues or other proceeds that are deposited in
371	358		any deposit account or other account of the servicer or other person
372	359		in which securitized charge revenues or other proceeds have been
373	360		commingled with other funds.
374	361		(h) The statutory lien is not adversely affected or impaired
375	362		by, among other things, the commingling of securitized charge
376	363		revenues or other proceeds from securitized charges with other
377	364		amounts regardless of the person holding those amounts.
378	365		(i) The electric cooperative, any successor or assignee of
379	366		the electric cooperative, or any other person with any operational
380	367		control of any portion of the electric cooperative's system assets,
381	368		whether as owner, lessee, franchisee, or otherwise, and any
382	369		successor servicer of collections of the securitized charges shall
383	370		be bound by the requirements of this subchapter and shall perform
384	371		and satisfy all obligations imposed under this subchapter in the
385	372		same manner and to the same extent as did its predecessor, including
386	373		the obligation to bill, adjust, and enforce the payment of
387	374		securitized charges.
388	375		(j) If a default or termination occurs under the securitized
389	376		bonds, the financing parties or their representatives may foreclose
390	377		on or otherwise enforce their lien and security interest in any
391	378		securitized property as if they were secured parties under Chapter
392	379		9, Business & Commerce Code, and on application by the electric
393	380		cooperative or by or on behalf of the financing parties, a district
394	381		court in the county where the electric cooperative is domiciled may
395	382		order that amounts arising from securitized charges be transferred
396	383		to a separate account for the financing parties' benefit, to which
397	384		their lien and security interest shall apply. On application by or
398	385		on behalf of the financing parties, a district court in the county
399	386		where the electric cooperative is domiciled shall order the
400	387		sequestration and payment to them of revenues arising from the
401	388		securitized charges.
402	389		Sec. 41.160. PLEDGE OF STATE. Securitized bonds are not a
403	390		debt or obligation of the state and are not a charge on its full
404	391		faith and credit or taxing power. The state pledges, however, for
405	392		the benefit and protection of assignees, financing parties, and the
406	393		electric cooperative, that it will not take or permit, or permit any
407	394		agency or other governmental authority or political subdivision of
408	395		the state to take or permit, any action that would impair the value
409	396		of securitized property, or, except as permitted by Section 41.157,
410	397		reduce, alter, or impair the securitized charges to be imposed,
411	398		collected, and remitted to financing parties, until the principal,
412	399		interest and premium, and any other charges incurred and contracts
413	400		to be performed in connection with the related securitized bonds
414	401		have been paid and performed in full. Any party issuing securitized
415	402		bonds is authorized to include this pledge in any documentation
416	403		relating to those bonds.
417	404		Sec. 41.161. TAX EXEMPTION. Transactions involving the
418	405		transfer and ownership of securitized property and the receipt of
419	406		securitized charges are exempt from state and local income, sales,
420	407		franchise, gross receipts, and other taxes or similar charges.
421	408		Sec. 41.162. NOT PUBLIC UTILITY. An assignee or financing
422	409		party may not be considered to be a public utility, electric
423	410		cooperative, or person providing electric service solely by virtue
424	411		of the transactions described in this subchapter.
425	412		Sec. 41.163. SEVERABILITY. Effective on the date the first
426	413		securitized bonds are issued under this subchapter, if any
427	414		provision in this title or portion of this title is held to be
428	415		invalid or is invalidated, superseded, replaced, repealed, or
429	416		expires for any reason, that occurrence does not affect the
430	417		validity or continuation of this subchapter or any other provision
431	418		of this title that is relevant to the issuance, administration,
432	419		payment, retirement, or refunding of securitized bonds or to any
433	420		actions of the electric cooperative, its successors, an assignee, a
434	421		collection agent, or a financing party, which shall remain in full
435	422		force and effect.
436		-	SECTION 2. Section 39.002, Utilities Code, is amended to
437		-	read as follows:
438		-	Sec. 39.002. APPLICABILITY. This chapter, other than
439		-	Sections 39.1516, 39.155, 39.157(e), 39.159, 39.160, 39.203,
440		-	39.904, 39.9051, 39.9052, and 39.914(e), does not apply to a
441		-	municipally owned utility or an electric cooperative. Sections
442		-	39.157(e), 39.203, and 39.904, however, apply only to a municipally
443		-	owned utility or an electric cooperative that is offering customer
444		-	choice. If there is a conflict between the specific provisions of
445		-	this chapter and any other provisions of this title, except for
446		-	Chapters 40 and 41, the provisions of this chapter control.
447		-	SECTION 3. Subchapter D, Chapter 39, Utilities Code, is
448		-	amended by adding Sections 39.159 and 39.160 to read as follows:
449		-	Sec. 39.159. CHARGES FOR CERTAIN MARKET PARTICIPANTS.
450		-	Notwithstanding any other law, no default or uplift charge or
451		-	repayment may be allocated to or collected from a market
452		-	participant that:
453		-	(1) otherwise would be subject to an uplift charge
454		-	solely as a result of acting as a central counterparty
455		-	clearinghouse in wholesale market transactions in the ERCOT power
456		-	region; and
457		-	(2) is regulated as a derivatives clearing
458		-	organization, as defined by the Commodity Exchange Act (7 U.S.C.
459		-	Section 1a).
460		-	Sec. 39.160. DEFAULT OF MARKET PARTICIPANT. (a) The
461		-	commission shall require that all market participants pay or make
462		-	provision for the full and prompt payment of amounts owed
463		-	calculated solely according to the protocols in effect during the
464		-	period of emergency to the independent organization certified under
465		-	Section 39.151 for the ERCOT power region to qualify, or to continue
466		-	to qualify, as a market participant in the ERCOT power region.
467		-	(b) If a market participant has failed to fully repay all
468		-	amounts calculated solely under the protocols in effect during the
469		-	period of emergency of the independent organization certified under
470		-	Section 39.151 for the ERCOT power region, the independent
471		-	organization shall report the market participant as in default to
472		-	the commission. The commission may not allow the independent
473		-	organization to accept the defaulting market participant's loads or
474		-	generation for scheduling in the ERCOT power region, or allow the
475		-	defaulting market participant to be a market participant in the
476		-	ERCOT power region for any purpose, until all amounts owed to the
477		-	independent organization by the market participant as calculated
478		-	under the protocols are paid in full.
479		-	(c) The commission and the independent organization
480		-	certified under Section 39.151 for the ERCOT power region shall
481		-	pursue collection in full of amounts owed to the independent
482		-	organization by the defaulting market participant.
483		-	SECTION 4. This Act takes effect immediately if it receives
	423	+	SECTION 2. This Act takes effect immediately if it receives
484	424		a vote of two-thirds of all the members elected to each house, as
485	425		provided by Section 39, Article III, Texas Constitution. If this
486	426		Act does not receive the vote necessary for immediate effect, this
487	427		Act takes effect September 1, 2021.
488		-	______________________________ ______________________________
489		-	President of the Senate Speaker of the House
490		-	I hereby certify that S.B. No. 1580 passed the Senate on
491		-	April 28, 2021, by the following vote: Yeas 31, Nays 0; and that
492		-	the Senate concurred in House amendment on May 28, 2021, by the
493		-	following vote: Yeas 31, Nays 0.
494		-	______________________________
495		-	Secretary of the Senate
496		-	I hereby certify that S.B. No. 1580 passed the House, with
497		-	amendment, on May 25, 2021, by the following vote: Yeas 144,
498		-	Nays 0, one present not voting.
499		-	______________________________
500		-	Chief Clerk of the House
501		-	Approved:
502		-	______________________________
503		-	Date
504		-	______________________________
505		-	Governor