Texas 2021 - 87th Regular

Texas Senate Bill SB1682 Compare Versions

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1	1	By: Hancock S.B. No. 1682
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the funding of utility reliability projects by the
7	7	Texas Water Development Board and other entities; authorizing the
8	8	issuance of revenue bonds, granting rulemaking authority, and
9	9	making an appropriation.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. (a) The legislature recognizes the importance
12	12	of providing for the reliability of this state's public utilities.
13	13	The purpose of this Act is to ensure that proper funding in the form
14	14	of meaningful and adequate financial assistance is available to
15	15	enhance the reliability of water, electricity, natural gas and
16	16	broadband utilities for this state by supporting projects to
17	17	weatherize facilities and to provide adequate capacity during
18	18	periods of high demand.
19	19	(b) To accomplish that purpose, this Act creates the state
20	20	utilities reliability fund. The fund is intended to serve as a
21	21	utility infrastructure bank in order to enhance the financing
22	22	capabilities of the Texas Water Development Board under a
23	23	constitutionally created program and a revenue bond program. Money
24	24	in the fund will be available immediately to provide support for
25	25	market rate loans, low-interest loans, longer repayment terms for
26	26	loans, and deferral of loan payments. Money in the fund may not be
27	27	used to make grants. In addition, this Act creates the state
28	28	utilities reliability revenue fund for use in managing revenue
29	29	bonds issued by the board that are supported by the state utilities
30	30	reliability fund.
31	31	SECTION 2. Title 2, Water Code, is amended by adding
32	32	Subtitle G to read as follows:
33	33	SUBTITLE G. RELIABILITY OF STATE UTILITIES
34	34	CHAPTER 38 GENERAL PROVISIONS
35	35	Sec. 38.001. DEFINITIONS. In this subtitle:
36	36	(1) "Advisory committee" means the State Utilities
37	37	Reliability Fund Advisory Committee.
38	38	(2) "Board" means the Texas Water Development Board.
39	39	(3) "Broadband utility" means any person,
40	40	corporation, municipality, political subdivision or agency that
41	41	owns or operates for compensation in this state equipment or
42	42	facilities to provide broadband telecommunications capability and
43	43	Internet access in this state.
44	44	(4) "Electric utility" means any person, corporation,
45	45	municipality, political subdivision or agency that owns or operates
46	46	for compensation in this state equipment or facilities to produce,
47	47	generate, transmit, distribute, sell, or furnish electricity in
48	48	this state.
49	49	(5) "Executive administrator" means the executive
50	50	administrator of the Texas Water Development Board.
51	51	(6) "Facilities" means all of the plant and equipment
52	52	of an electric, natural gas, water, or broadband utility and
53	53	includes the tangible and intangible property, without limitation,
54	54	owned, operated, leased, licensed, used, controlled, or supplied
55	55	for, by, or in connection with the business of the electric, natural
56	56	gas, water or broadband utility in this state.
57	57	(7) "Fund" means the state utilities reliability fund.
58	58	(8) "Historically underutilized business" has the
59	59	meaning assigned by Section 2161.001, Government Code.
60	60	(9) "Natural gas utility" means any person,
61	61	corporation, municipality, political subdivision or agency that
62	62	owns or operates for compensation in this state equipment or
63	63	facilities to transmit or distribute combustible hydrocarbon
64	64	natural gas or synthetic natural gas for sale or resale in a manner
65	65	not subject to the jurisdiction of the Federal Energy Regulatory
66	66	Commission under the Natural Gas Act (15 U.S.C. Section 717 et
67	67	seq.).
68	68	(10) "Revenue fund" means the state utilities
69	69	reliability revenue fund.
70	70	(11) "Trust company" means the Texas Treasury
71	71	Safekeeping Trust Company.
72	72	(12) "Water utility" means any person, corporation,
73	73	municipality, political subdivision or agency operating,
74	74	maintaining, or controlling in this state facilities for providing
75	75	potable water service or sewer service, or both, for compensation.
76	76	CHAPTER 39. STATE UTILITIES RELIABILITY FUND
77	77	Sec. 39.001. FUND. (a) The state utilities reliability
78	78	fund is a special fund in the state treasury outside the general
79	79	revenue fund to be used by the board, without further legislative
80	80	appropriation, for the purpose of financing projects that enhance
81	81	the reliability of water, electricity, natural gas and broadband
82	82	utilities in this state by supporting projects to weatherize
83	83	facilities and to provide adequate capacity during periods of high
84	84	demand. The board may establish separate accounts in the fund. The
85	85	fund and the fund's accounts are kept and held by the trust company
86	86	for and in the name of the board. The board has legal title to money
87	87	and investments in the fund until money is disbursed from the fund
88	88	as provided by this chapter and board rules. It is the intent of the
89	89	legislature that the fund will never be used:
90	90	(1) for a purpose other than the support of projects
91	91	that enhance the reliability of water, electricity, natural gas and
92	92	broadband utilities in this state and to pay expenses authorized by
93	93	section 39.003; or
94	94	(2) to certify that appropriations from the treasury
95	95	are within the amount estimated to be available in a fund of the
96	96	treasury affected by the appropriation.
97	97	(b) Money deposited to the credit of the fund may be used
98	98	only as provided by this chapter.
99	99	(c) The fund consists of:
100	100	(1) money transferred or deposited to the credit of
101	101	the fund by law, including appropriations and money from any source
102	102	transferred or deposited to the credit of the fund at the board's
103	103	discretion as authorized by law;
104	104	(2) the proceeds of any fee or tax imposed by this
105	105	state that by statute is dedicated for deposit to the credit of the
106	106	fund;
107	107	(3) any other revenue that the legislature by statute
108	108	dedicates for deposit to the credit of the fund;
109	109	(4) investment earnings and interest earned on amounts
110	110	credited to the fund; and
111	111	(5) money transferred to the fund under a bond
112	112	enhancement agreement from another fund or account to which money
113	113	from the fund was transferred under a bond enhancement agreement,
114	114	as authorized by Section 39.004.
115	115	Sec. 39.002. MANAGEMENT AND INVESTMENT OF FUND. (a) The
116	116	trust company shall hold and invest the fund, and any accounts
117	117	established in the fund, for and in the name of the board, taking
118	118	into account the purposes for which money in the fund may be used.
119	119	The fund may be invested with the state treasury pool.
120	120	(b) The overall objective for the investment of the fund is
121	121	to maintain sufficient liquidity to meet the needs of the fund while
122	122	striving to preserve the purchasing power of the fund.
123	123	(c) The trust company has any power necessary to accomplish
124	124	the purposes of managing and investing the assets of the fund. In
125	125	managing the assets of the fund, through procedures and subject to
126	126	restrictions the trust company considers appropriate, the trust
127	127	company may acquire, exchange, sell, supervise, manage, or retain
128	128	any kind of investment that a prudent investor, exercising
129	129	reasonable care, skill, and caution, would acquire or retain in
130	130	light of the purposes, terms, distribution requirements, and other
131	131	circumstances of the fund then prevailing, taking into
132	132	consideration the investment of all the assets of the fund rather
133	133	than a single investment.
134	134	(d) The trust company may charge fees to cover its costs
135	135	incurred in managing and investing the fund. The fees must be
136	136	consistent with the fees the trust company charges other state and
137	137	local governmental entities for which it provides investment
138	138	management services. The trust company may recover fees it charges
139	139	under this subsection only from the earnings of the fund.
140	140	(e) The trust company shall provide an annual report to the
141	141	board and to the advisory committee with respect to the investment
142	142	of the fund. The trust company shall contract with a certified
143	143	public accountant to conduct an independent audit of the fund
144	144	annually and shall present the results of each annual audit to the
145	145	board and to the advisory committee. This subsection does not
146	146	affect the state auditor's authority to conduct an audit of the fund
147	147	under Chapter 321, Government Code.
148	148	(f) The trust company shall adopt a written investment
149	149	policy that is appropriate for the fund. The trust company shall
150	150	present the investment policy to the investment advisory board
151	151	established under Section 404.028, Government Code. The investment
152	152	advisory board shall submit to the trust company recommendations
153	153	regarding the policy.
154	154	(g) The board shall provide to the trust company -an
155	155	annualforecast of the cash flows into and out of the fund. The
156	156	board shall provide updates to the forecasts as appropriate to
157	157	ensure that the trust company is able to achieve the objective
158	158	specified by Subsection (b).
159	159	(h) The trust company shall disburse money from the fund as
160	160	directed by the board. The board shall direct disbursements from
161	161	the fund on a semiannual schedule specified by the board and not
162	162	more frequently than twice in any state fiscal year.
163	163	(i) An investment-related contract entered into under this
164	164	section is not subject to Chapter 2260, Government Code.
165	165	Sec. 39.003. USE OF FUND; PAYMENTS TO AND FROM OTHER FUNDS
166	166	OR ACCOUNTS. (a) At the direction of the board, the trust company
167	167	shall make disbursements from the fund to the state utilities
168	168	reliability revenue fund pursuant to a bond enhancement agreement
169	169	authorized by Section 39.004 in the amounts the board determines
170	170	are needed for debt service payments on or security provisions of
171	171	the board's revenue bonds, after considering all other sources
172	172	available for those purposes.
173	173	(b) The fund may be used only:
174	174	(1) to enhance the reliability of water, electricity,
175	175	natural gas and broadband utilities for this state by supporting
176	176	projects to weatherize facilities and to provide adequate capacity
177	177	to ensure continuous and adequate service during periods of high
178	178	demand; and
179	179	(2) to pay the necessary and reasonable expenses of
180	180	the board in administering the fund.
181	181	(c) notwithstanding any other provision in this chapter,
182	182	the use of the fund may be prioritized based on future legislative
183	183	directives, including any statewide utility reliability plan
184	184	required in the future.
185	185	Sec. 39.004. BOND ENHANCEMENT AGREEMENTS. (a) A bond
186	186	enhancement agreement entered into under this section is an
187	187	agreement for professional services. A bond enhancement agreement
188	188	must contain terms that are consistent with Section 39.002(h), and
189	189	the agreement, including the period covered by the agreement and
190	190	all other terms and conditions of the agreement, must be approved by
191	191	the board. An obligation to disburse money from the fund, or from a
192	192	special account established by the board, in accordance with a bond
193	193	enhancement agreement is a special obligation of the board payable
194	194	solely from designated income and receipts of the fund or of the
195	195	account, as determined by the board. An obligation to disburse
196	196	money from the fund, or from a special account established by the
197	197	board, in accordance with a bond enhancement agreement does not
198	198	constitute indebtedness of the state.
199	199	(b) To facilitate the use of the fund for the purposes of
200	200	this chapter, the board may direct the trust company to enter into
201	201	bond enhancement agreements to:
202	202	(1) provide a source of revenue or security for the
203	203	payment of the principal of and interest on revenue bonds issued by
204	204	the board to finance, or
205	205	(2) refinance projects authorized by chapter 40 of
206	206	this title.
207	207	(c) If the trust company enters into a bond enhancement
208	208	agreement under Subsection (b), the board may direct the trust
209	209	company to make disbursements from the fund to provide financial
210	210	assistance for a project authorized by this chapter or by chapter 40
211	211	of this title in the form of:
212	212	(1) a loan bearing an interest rate of not less than 50
213	213	percent of the then-current market rate of interest available to
214	214	the board;
215	215	(2) a loan to finance a facility under repayment terms
216	216	similar to the terms of debt customarily issued by the entity
217	217	requesting assistance but not to exceed the lesser of:
218	218	(A) the expected useful life of the facility; or
219	219	(B) 30 years;
220	220	(3) a deferral of loan repayment, including deferral
221	221	of the repayment of:
222	222	(A) principal and interest; or
223	223	(B) accrued interest; or
224	224	(4) a combination of the methods of financing
225	225	described by Subdivisions (1)-(3).
226	226	(d) The board may direct the trust company to enter into
227	227	bond enhancement agreements with respect to refunding bonds issued
228	228	by the board to refund bonds issued by the board the proceeds of
229	229	which have been or are to be used for projects authorized by this
230	230	chapter and which otherwise satisfied the requirements of
231	231	Subsections (b) and (c).
232	232	(f) The board may not direct the trust company to enter into
233	233	a bond enhancement agreement with respect to bonds issued by the
234	234	board the proceeds of which have been or are to be used to make
235	235	grants.
236	236	(g) The board may not direct the trust company to enter into
237	237	a bond enhancement agreement with respect to bonds issued by the
238	238	board the proceeds of which may be used to provide financial
239	239	assistance to an applicant if at the time of the request the
240	240	applicant has failed to satisfactorily complete a request by the
241	241	executive administrator for information relevant to the project for
242	242	which the financial assistance is sought.
243	243	(h) The board may not direct the trust company to enter into
244	244	a bond enhancement agreement with respect to bonds issued by the
245	245	board the proceeds of which may be used to provide financial
246	246	assistance to an applicant unless at the time of the request the
247	247	applicant has acknowledged its legal obligation to comply with any
248	248	applicable requirements of:
249	249	(1) federal law relating to contracting with
250	250	disadvantaged business enterprises; and
251	251	(2) state law relating to contracting with
252	252	historically underutilized businesses.
253	253	(i) The board may not approve a bond enhancement agreement
254	254	unless the agreement contains a provision to the effect that if the
255	255	trust company makes a disbursement under the bond enhancement
256	256	agreement from the fund to the credit of the state utilities
257	257	reliability revenue fund as provided by Section 39.003(a), the
258	258	board may direct the comptroller to transfer an amount not to exceed
259	259	that amount from the state utilities reliability revenue fund back
260	260	to the fund if:
261	261	(1) money is certified by the executive director to be
262	262	a surplus balance in the state utilities reliability revenue fund
263	263	for that purpose; and
264	264	(2) the money transferred back to the fund will not
265	265	cause bonds that are payable from the state utilities reliability
266	266	revenue fund to rate below the highest rating category for any
267	267	bonds outstanding.
268	268	(j) For purposes of Subsection (i)(1), the surplus balance
269	269	of the state utilities reliability revenue fund is the amount of
270	270	money on deposit in the fund, as determined by the board, that is
271	271	attributable to the revenue bonds, including money received from
272	272	the sale or other disposition of the board's rights to receive
273	273	repayment of financial assistance, money received from the sale of
274	274	utilities associated with a modified facility, and related
275	275	investment earnings, that exceeds the amount required to pay annual
276	276	debt service on the bonds and any other amounts specified in the
277	277	resolution or other proceedings authorizing the bonds and any
278	278	related obligations.
279	279	(k) The board shall submit each bond enhancement agreement
280	280	and the record relating to the agreement to the attorney general for
281	281	examination as to the validity of the agreement. If the attorney
282	282	general finds that the agreement has been made in accordance with
283	283	the constitution and other laws of this state, the attorney general
284	284	shall approve the agreement and the comptroller shall register the
285	285	agreement. If the agreement is not submitted at the same time that
286	286	the bonds to which it relates are submitted, the agreement shall be
287	287	treated as a public security solely for the purposes of Section
288	288	1202.004, Government Code.
289	289	(l) After a bond enhancement agreement has been approved and
290	290	registered as provided by Subsection (k),
291	291	the agreement is valid and is incontestable for any cause.
292	292	(m) At the direction of the board, the trust company shall
293	293	make disbursements from the fund, or from a special account
294	294	established by the board, in accordance with a bond enhancement
295	295	agreement in the amounts the board determines are needed for debt
296	296	service payments on, or for security provisions of, revenue bonds
297	297	issued by the board the proceeds of the sale of which have been
298	298	deposited in the state utilities reliability revenue fund, or in an
299	299	account in that fund, for use in accordance with this chapter, after
300	300	the board considers all other sources available for those purposes
301	301	in that fund or account. Money transferred under this subsection
302	302	may be deposited into that fund or into a special account
303	303	established by the trust company or a corporate trustee that is a
304	304	trust company or a bank that has the powers of a trust company, as
305	305	determined by the board.
306	306	Sec. 39.005. PRIORITIZATION OF PROJECTS BY BOARD. (a) The
307	307	board, for the purpose of providing financial assistance under this
308	308	chapter, shall prioritize projects that enhance the reliability of
309	309	water, electricity, natural gas and broadband utilities for this
310	310	state.
311	311	(b) The board shall establish a point system for
312	312	prioritizing projects for which financial assistance is sought from
313	313	the board. The system must include a standard for the board to
314	314	apply in determining whether a project qualifies for financial
315	315	assistance at the time the application for financial assistance is
316	316	filed with the board.
317	317	(c) The board shall give the highest consideration in
318	318	awarding points to projects that will have a substantial effect,
319	319	including projects that will:
320	320	(1) weatherize facilities to protect against cold
321	321	weather; and
322	322	(2) create excess capacity that will be used during
323	323	periods of high demand to provide continuous and adequate electric,
324	324	natural gas, water and broadband service.
325	325	(d) In addition to the criteria provided by Subsection (c),
326	326	the board must also consider at least the following criteria in
327	327	prioritizing projects:
328	328	(1) other contributions to be made to finance the
329	329	project, including the up-front capital to be provided by the
330	330	applicant;
331	331	(2) the financial capacity of the applicant to repay
332	332	the financial assistance provided;
333	333	(3) the ability of the board and the applicant to
334	334	timely leverage state financing with local, federal or private
335	335	funding;
336	336	(4) whether there is an emergency need for the
337	337	project, taking into consideration whether federal funding for
338	338	which the project is eligible has been used or sought; and
339	339	(5) whether the applicant is ready to proceed with the
340	340	project at the time of the application, including whether:
341	341	(A) all preliminary planning and design work
342	342	associated with the project has been completed;
343	343	(B) the applicant has acquired any necessary
344	344	rights associated with the project;
345	345	(C) the applicant has secured funding for the
346	346	project from other sources; and
347	347	(D) the applicant is able to begin implementing
348	348	or constructing the project.
349	349	Sec. 39.006. ADVISORY COMMITTEE. (a) The State Utilities
350	350	Reliability Fund Advisory Committee is composed of the following
351	351	seven members:
352	352	(1) the comptroller, or a person designated by the
353	353	comptroller;
354	354	(2) three members of the senate appointed by the
355	355	lieutenant governor, including:
356	356	(A) a member of the committee of the senate
357	357	having primary jurisdiction over matters relating to finance; and
358	358	(B) a member of the committee of the senate
359	359	having primary jurisdiction over natural resources; and
360	360	(3) three members of the house of representatives
361	361	appointed by the speaker of the house of representatives,
362	362	including:
363	363	(A) a member of the committee of the house of
364	364	representatives having primary jurisdiction over appropriations;
365	365	and
366	366	(B) a member of the committee of the house of
367	367	representatives having primary jurisdiction over natural
368	368	resources.
369	369	(b) Board staff shall provide staff support for the advisory
370	370	committee.
371	371	(c) An appointed member of the advisory committee serves at
372	372	the will of the person who appointed the member.
373	373	(d) The lieutenant governor shall appoint a co-presiding
374	374	officer of the advisory committee from among the members appointed
375	375	by the lieutenant governor, and the speaker of the house of
376	376	representatives shall appoint a co-presiding officer of the
377	377	committee from among the members appointed by the speaker.
378	378	(e) The advisory committee may hold public hearings, formal
379	379	meetings, or work sessions. Either co-presiding officer of the
380	380	advisory committee may call a public hearing, formal meeting, or
381	381	work session of the advisory committee at any time. The advisory
382	382	committee may not take formal action at a public hearing, formal
383	383	meeting, or work session unless a quorum of the committee is
384	384	present.
385	385	(f) Except as otherwise provided by this subsection, a
386	386	member of the advisory committee is not entitled to receive
387	387	compensation for service on the committee or reimbursement for
388	388	expenses incurred in the performance of official duties as a member
389	389	of the committee. Service on the advisory committee by a member of
390	390	the senate or house of representatives is considered legislative
391	391	service for which the member is entitled to reimbursement and other
392	392	benefits in the same manner and to the same extent as for other
393	393	legislative service.
394	394	(g) The advisory committee shall submit comments and
395	395	recommendations to the board regarding the use of money in the fund
396	396	and in the revenue fund for use by the board in adopting rules under
397	397	Section 39.007 and in adopting policies and procedures under
398	398	Section 39.009. The submission must include:
399	399	(1) comments and recommendations on rulemaking
400	400	related to the prioritization of projects in accordance with
401	401	Section 39.005;
402	402	(2) comments and recommendations on rulemaking
403	403	related to establishing standards for determining whether projects
404	404	meet the criteria provided by Section 39.003(b);
405	405	(3) an evaluation of the available programs for
406	406	providing financing for projects authorized by this chapter and
407	407	guidelines for implementing those programs;
408	408	(4) an evaluation of the lending practices of the
409	409	board and guidelines for lending standards;
410	410	(5) an evaluation of the use of funds by the board to
411	411	provide support for financial assistance for projects that enhance
412	412	the reliability of water, electricity, natural gas and broadband
413	413	utilities for this state, including support for the purposes
414	414	described by Section 39.004(c);
415	415	(6) an evaluation of whether premium financing
416	416	programs should be established within the funds described by
417	417	Section 39.004 to serve the purposes of this chapter, especially in
418	418	connection with projects described by Section 39.003(b);
419	419	(7) an evaluation of methods for encouraging
420	420	participation in the procurement process by companies domiciled in
421	421	this state or that employ a significant number of residents of this
422	422	state; and
423	423	(8) an evaluation of the overall operation, function,
424	424	and structure of the fund.
425	425	(h) The advisory committee shall review the overall
426	426	operation, function, and structure of the fund at least
427	427	semiannually and may provide comments and recommendations to the
428	428	board on any matter.
429	429	(i) The advisory committee may adopt rules, procedures, and
430	430	policies as needed to administer this section and implement its
431	431	responsibilities.
432	432	(j) Chapter 2110, Government Code, does not apply to the
433	433	size, composition, or duration of the advisory committee.
434	434	(k) The advisory committee is subject to Chapter 325,
435	435	Government Code (Texas Sunset Act). Unless continued in existence
436	436	as provided by that chapter, the advisory committee is abolished
437	437	and this section expires September 1, 2035.
438	438	(l) The advisory committee shall make recommendations to
439	439	the board regarding information to be posted on the board's
440	440	Internet website under Section 39.008(b).
441	441	(m) The advisory committee shall evaluate and may provide
442	442	comments or recommendations on the feasibility of the state owning,
443	443	constructing, and operating water, electricity, natural gas or
444	444	broadband utilities.
445	445	(n) The executive administrator shall provide an annual
446	446	report to the advisory committee on:
447	447	(1) the board's compliance with statewide annual goals
448	448	relating to historically underutilized businesses; and
449	449	(2) the participation level of historically
450	450	underutilized businesses in projects that receive funding related
451	451	to a bond enhancement agreement under this chapter.
452	452	(o) If the aggregate level of participation by historically
453	453	underutilized businesses in projects that receive funding related
454	454	to a bond enhancement agreement under this chapter does not meet
455	455	statewide annual goals adopted under Chapter 2161, Government Code,
456	456	the advisory committee shall make recommendations to the board to
457	457	improve the participation level.
458	458	Sec. 39.007. RULES. (a) The board shall adopt rules
459	459	providing for the use of money in the fund that are consistent with
460	460	this chapter, including rules:
461	461	(1) establishing standards for determining whether
462	462	projects meet the criteria provided by Section 39.003(b); and
463	463	(2) specifying the manner for prioritizing projects
464	464	for purposes of Section 39.005.
465	465	(b) The board shall give full consideration to the
466	466	recommendations of the advisory committee before adopting rules
467	467	under this chapter.
468	468	Sec. 39.008. REPORTING AND TRANSPARENCY REQUIREMENTS. (a)
469	469	Not later than December 1 of each even-numbered year, the board
470	470	shall provide a report to the governor, lieutenant governor,
471	471	speaker of the house of representatives, and members of the
472	472	legislature regarding the use of the fund.
473	473	(b) The board shall post the following information on the
474	474	board's Internet website regarding the use of the fund and
475	475	regularly update the information posted:
476	476	(1) the progress made in enhancing the reliability of
477	477	water, electricity, natural gas and broadband utilities for this
478	478	state; and
479	479	(2) a description of each project funded through bonds
480	480	supported by a bond enhancement agreement entered into under
481	481	Section 39.004, including:
482	482	(A) the expected date of completion of the
483	483	project; and
484	484	(B) the current status of the project.
485	485	Sec. 39.009. POLICIES AND PROCEDURES TO MITIGATE OR
486	486	MINIMIZE ADVERSE EFFECTS OF CERTAIN FEDERAL LAWS. The board shall
487	487	adopt, and may amend from time to time at the board's discretion,
488	488	policies and procedures for the purpose of mitigating or minimizing
489	489	the adverse effects, if any, of federal laws and regulations
490	490	relating to income taxes, arbitrage, rebates, and related matters
491	491	that may restrict the board's ability to freely invest all or part
492	492	of the fund or to receive and retain all the earnings from the fund.
493	493	CHAPTER 40. STATE UTILITIES RELIABILITY REVENUE FUND
494	494	Sec. 40.001. FUND. (a) The state utilities reliability
495	495	revenue fund is a special fund in the state treasury outside the
496	496	general revenue fund to be a revolving finance program used by the
497	497	board, without further legislative appropriation, only for the
498	498	purpose of providing financing for projects that enhance the
499	499	reliability of water, electricity, natural gas and broadband
500	500	utilities for this state by supporting projects to weatherize
501	501	facilities and to provide adequate capacity during periods of high
502	502	demand. The board may establish separate accounts in the revenue
503	503	fund. The board has legal title to money and investments in the
504	504	revenue fund until the money is disbursed as provided by this
505	505	chapter and board rules. It is the intent of the legislature that
506	506	the revenue fund will never be used:
507	507	(1) for a purpose other than the support of projects
508	508	that enhance the reliability of water, electricity, natural gas and
509	509	broadband utilities for this state; or
510	510	(2) to certify that appropriations from the treasury
511	511	are within the amount estimated to be available in a fund of the
512	512	treasury affected by the appropriation.
513	513	(b) Money deposited to the credit of the revenue fund may be
514	514	used only as provided by this chapter.
515	515	(c) The revenue fund consists of:
516	516	(1) money transferred or deposited to the credit of
517	517	the revenue fund by law, including appropriations and money from
518	518	any source transferred or deposited to the credit of the revenue
519	519	fund at the board's discretion as authorized by law;
520	520	(2) the proceeds of any fee or tax imposed by this
521	521	state that by statute is dedicated for deposit to the credit of the
522	522	revenue fund;
523	523	(3) any other revenue that the legislature by statute
524	524	dedicates for deposit to the credit of the revenue fund;
525	525	(4) investment earnings and interest earned on amounts
526	526	credited to the revenue fund;
527	527	(5) the proceeds from the sale of revenue bonds,
528	528	issued by the board under this chapter, that are designated by the
529	529	board for the purpose of providing money for the revenue fund;
530	530	(6) repayments of loans made from the revenue fund;
531	531	and
532	532	(7) money disbursed to the revenue fund from the state
533	533	utilities reliability fund as authorized by Section 39.003.
534	534	Sec. 40.002. MANAGEMENT AND INVESTMENT OF REVENUE FUND.
535	535	(a) Money deposited to the credit of the revenue fund shall be
536	536	invested as determined by the board. The revenue fund may be
537	537	invested with the state treasury pool.
538	538	(b) The revenue fund and any accounts established in the
539	539	revenue fund shall be kept and maintained by or at the direction of
540	540	the board.
541	541	(c) At the direction of the board, the revenue fund and any
542	542	accounts established in the revenue fund may be managed by the
543	543	comptroller or a corporate trustee that is a trust company or a bank
544	544	that has the powers of a trust company for and on behalf of the board
545	545	and pending their use for the purposes provided by this chapter may
546	546	be invested as provided by an order, resolution, or rule of the
547	547	board.
548	548	(d) The comptroller or corporate trustee shall manage the
549	549	revenue fund in strict accordance with this chapter and the orders,
550	550	resolutions, and rules of the board.
551	551	Sec. 40.003. USE OF REVENUE FUND. (a) Except as provided
552	552	by Subsection (c), money in the revenue fund may be used by the
553	553	board only to provide financing or refinancing, under terms
554	554	specified by the board, for projects that enhance the reliability
555	555	of water, electricity, natural gas and broadband utilities for this
556	556	state by weatherizing facilities or by providing adequate capacity
557	557	during periods of high demand.
558	558	(b) Financing or refinancing of projects described by
559	559	Subsection (a) may be provided by using money in the revenue fund to
560	560	make loans to eligible water, electric, natural gas and broadband
561	561	utilities or to purchase bonds or other obligations of eligible
562	562	water, electric, natural gas and broadband utilities bearing
563	563	interest at a rate or rates determined by the board, including a
564	564	rate at or rates below prevailing market rates.
565	565	(c) The board may use money in the revenue fund:
566	566	(1) as a source of revenue or security for:
567	567	(A) the payment of the principal of and interest
568	568	on revenue bonds issued by the board under this chapter; or
569	569	(B) a bond enhancement agreement; or
570	570	(2) to pay the necessary and reasonable expenses of
571	571	paying agents, bond counsel, and financial advisory services and
572	572	similar costs incurred by the board in administering the revenue
573	573	fund.
574	574	(d) The board, or comptroller or corporate trustee managing
575	575	the revenue fund at the direction of the board as provided by
576	576	Section 40.003(c), shall withdraw from the revenue fund and forward
577	577	to another person any amounts, as determined by the board, for
578	578	timely payment of:
579	579	(1) the principal of and interest on bonds described
580	580	by Subsection (c)(1)(A) of this section that mature or become due;
581	581	and
582	582	(2) any cost related to bonds described by Subsection
583	583	(c)(1)(A) of this section that become due, including payments under
584	584	related credit agreements or bond enhancement agreements.
585	585	Sec. 40.004. ISSUANCE OF REVENUE BONDS. (a) The board may
586	586	issue revenue bonds for the purpose of providing money for the
587	587	revenue fund.
588	588	(b) The board may issue revenue bonds to refund revenue
589	589	bonds or bonds and obligations issued or incurred in accordance
590	590	with other provisions of law.
591	591	(c) Revenue bonds issued under this chapter are special
592	592	obligations of the board payable only from and secured by
593	593	designated income and receipts of the revenue fund, or of one or
594	594	more accounts in the revenue fund, including principal of and
595	595	interest paid and to be paid on revenue fund assets or income from
596	596	accounts created within the revenue fund by the board, as
597	597	determined by the board.
598	598	(d) Revenue bonds issued under this chapter do not
599	599	constitute indebtedness of the state as prohibited by the
600	600	constitution.
601	601	(e) The board may require revenue fund participants to make
602	602	charges, levy taxes, or otherwise provide for sufficient money to
603	603	pay acquired obligations.
604	604	(f) Revenue bonds issued under this chapter must be
605	605	authorized by resolution of the board and must have the form and
606	606	characteristics and bear the designations as the resolution
607	607	provides.
608	608	(g) Revenue bonds issued under this chapter may:
609	609	(1) bear interest at the rate or rates payable
610	610	annually or otherwise;
611	611	(2) be dated;
612	612	(3) mature at the time or times, serially, as term
613	613	revenue bonds, or otherwise in not more than 50 years from their
614	614	dates;
615	615	(4) be callable before stated maturity on the terms
616	616	and at the prices, be in the denominations, be in the form, either
617	617	coupon or registered, carry registration privileges as to principal
618	618	only or as to both principal and interest and as to successive
619	619	exchange of coupon for registered bonds or one denomination for
620	620	bonds of other denominations, and successive exchange of registered
621	621	revenue bonds for coupon revenue bonds, be executed in the manner,
622	622	and be payable at the place or places inside or outside the state,
623	623	as provided by the resolution;
624	624	(5) be issued in temporary or permanent form;
625	625	(6) be issued in one or more installments and from time
626	626	to time as required and sold at a price or prices and under terms
627	627	determined by the board to be the most advantageous reasonably
628	628	obtainable; and
629	629	(7) be issued on a parity with and be secured in the
630	630	manner as other revenue bonds authorized to be issued by this
631	631	chapter or may be issued without parity and secured differently
632	632	than other revenue bonds.
633	633	(h) Section 17.955 applies to revenue bonds issued under
634	634	this chapter in the same manner as that section applies to water
635	635	financial assistance bonds.
636	636	(i) All proceedings relating to the issuance of revenue
637	637	bonds issued under this chapter shall be submitted to the attorney
638	638	general for examination. If the attorney general finds that the
639	639	revenue bonds have been authorized in accordance with law, the
640	640	attorney general shall approve the revenue bonds, and the revenue
641	641	bonds shall be registered by the comptroller. After the approval
642	642	and registration, the revenue bonds are incontestable in any court
643	643	or other forum for any reason and are valid and binding obligations
644	644	in accordance with their terms for all purposes.
645	645	(j) The proceeds received from the sale of revenue bonds
646	646	issued under this chapter may be deposited or invested in any manner
647	647	and in such investments as may be specified in the resolution or
648	648	other proceedings authorizing those obligations. Money in the
649	649	revenue fund or accounts created by this chapter or created in the
650	650	resolution or other proceedings authorizing the revenue bonds may
651	651	be invested in any manner and in any obligations as may be specified
652	652	in the resolution or other proceedings.
653	653	Sec. 40.005. CHAPTER CUMULATIVE OF OTHER LAWS. (a) This
654	654	chapter is cumulative of other laws on the subject, and the board
655	655	may use provisions of other applicable laws in the issuance of bonds
656	656	and other obligations and the execution of bond enhancement
657	657	agreements, but this chapter is wholly sufficient authority for the
658	658	issuance of bonds and other obligations, the execution of bond
659	659	enhancement agreements, and the performance of all other acts and
660	660	procedures authorized by this chapter.
661	661	(b) In addition to other authority granted by this chapter,
662	662	the board may exercise the authority granted to the governing body
663	663	of an issuer with regard to the issuance of obligations under
664	664	Chapter 1371, Government Code.
665	665	SECTION 3. Section 15.978, Water Code, is amended by adding
666	666	subsection (c-1) to read as follows:
667	667	(c-1) Notwithstanding other provisions of this chapter, the
668	668	board may sell to the Texas Water Resources Finance Authority or to
669	669	the state utilities reliability fund any political subdivision
670	670	bonds purchased with money in the state utilities reliability
671	671	revenue fund and may apply the proceeds of a sale in the manner
672	672	provided by Chapter 40 of this title.
673	673	SECTION 4. CONTINGENCY APPROPRIATION. (a) Contingent on
674	674	passage and adoption by an election of the voters of legislation
675	675	relating to proposing constitutional amendments creating the State
676	676	Utilities Reliability Fund and the State Utilities Reliability
677	677	Revenue Fund by the 87th Legislature, Regular Session, 2021,
678	678	$2,000,000,000 is appropriated out of the economic stabilization
679	679	fund to the state utilities reliability fund to implement the
680	680	provisions of the legislation.
681	681	(b) The appropriation made in this section shall be
682	682	available to the Water Development Board for the purposes described
683	683	in legislation to finance projects that enhance the reliability of
684	684	water, electricity, natural gas and broadband utilities for this
685	685	state according to the provisions of the legislation.
686	686	SECTION 5. As soon as practicable after the effective date
687	687	of this Act, the lieutenant governor and the speaker of the house of
688	688	representatives shall appoint the initial appointive members of the
689	689	State Utilities Reliability Fund Advisory Committee as provided by
690	690	Section 39.006, Water Code, as added by this Act.
691	691	SECTION 6. (a) Not later than September 1, 2022, the State
692	692	Utilities Reliability Fund Advisory Committee shall submit
693	693	recommendations to the Texas Water Development Board on the rules
694	694	to be adopted by the board under Sections 39.007(a)(1) and (2),
695	695	Water Code, as added by this Act.
696	696	(b) Not later than the later of the 90th day after the date
697	697	the Texas Water Development Board receives the recommendations
698	698	described by Subsection (a) of this section or March 1, 2023, the
699	699	board shall propose rules under Section 39.007, Water Code, as
700	700	added by this Act.
701	701	SECTION 7. The Texas Water Development Board shall post the
702	702	information described by Section 39.008(b), Water Code, as added by
703	703	this Act, on the board's Internet website not later than March 1,
704	704	2022.
705	705	SECTION 8. This Act takes effect on the date on which the
706	706	constitutional amendment proposed by the 87th Legislature, Regular
707	707	Session, 2021, adding Sections 49-d-15 and 49-d-16, Article III,
708	708	Texas Constitution, creating the state utilities reliability fund
709	709	and the state utilities reliability revenue fund takes effect. If
710	710	that amendment is not approved by the voters, this Act has no
711	711	effect.