S.B. No. 513
                                        AN ACT
    1-1  relating to regional organizations to promote the coexistence of
    1-2  air quality improvement and economic development in nonattainment
    1-3  areas of the state.
    1-5        SECTION 1.  Subtitle C, Title 5, Health and Safety Code, is
    1-6  amended by adding Chapter 384 to read as follows:
    1-8        Sec. 384.001.  DEFINITIONS.  In this chapter:
    1-9              (1)  "Board" means the Texas Air Control Board or its
   1-10  successor agency.
   1-11              (2)  "Emission reduction credit" means a credit
   1-12  recognized by the Texas Air Control Board and the United States
   1-13  Environmental Protection Agency for reductions in emissions of air
   1-14  pollutants.
   1-15              (3)  "Nonattainment area" means an area so designated
   1-16  within the meaning of Section 107(d) of the federal Clean Air Act
   1-17  (42 U.S.C. Section 7407).
   1-18              (4)  "Organization" means an area emission reduction
   1-19  credit organization in this state.
   1-20              (5)  "Regional council of governments" means a council
   1-21  of governments designated as the metropolitan planning organization
   1-22  or a metropolitan planning organization in the event the council of
   1-23  governments is not so designated.
    2-1        Sec. 384.002.  PURPOSE.  The purpose of an area emission
    2-2  reduction credit organization shall be to promote the coexistence
    2-3  of the improvement of air quality and economic development within
    2-4  the region through the acquisition and distribution of emission
    2-5  reduction credits.  Its activities may include the use of emission
    2-6  reduction credits to help meet federal reasonable further progress
    2-7  requirements as well as using emission reduction credits to
    2-8  facilitate the issuance of permits.
    2-9        Sec. 384.003.  ESTABLISHMENT OF ORGANIZATION.  A regional
   2-10  council of governments whose area of jurisdiction contains a
   2-11  nonattainment area may establish an organization on approval by the
   2-12  board of its creation petition as provided by Section 384.015.
   2-13        Sec. 384.004.  FUNCTIONS; ORGANIZATION.  An organization
   2-14  created under this chapter shall:
   2-15              (1)  represent all counties within a nonattainment
   2-16  area;
   2-17              (2)  have a board of directors appointed in accordance
   2-18  with the provisions of this chapter;
   2-19              (3)  have the power, authority, and limitations
   2-20  provided by this chapter; and
   2-21              (4)  have bylaws setting forth its organization and
   2-22  procedures, including provisions for conflicts of interest.
   2-23        Sec. 384.005.  OFFSET REQUIREMENTS.  All transactions of an
   2-24  organization involving emission reduction credits shall be subject
   2-25  to the offset requirements of the federal Clean Air Act (42 U.S.C.
    3-1  Section 7401 et seq.).
    3-2        Sec. 384.006.  LOCATION RESTRICTION.  There shall not be more
    3-3  than one organization within a metropolitan statistical area or
    3-4  consolidated metropolitan statistical area.
    3-5        Sec. 384.007.  STAFF.  The regional council of governments
    3-6  may provide staff to an organization created under this chapter.
    3-7        Sec. 384.008.  BOARD OF DIRECTORS.  (a)  The board of
    3-8  directors of an organization shall consist of not less than six and
    3-9  not more than 21 appointed members, provided, however, that the
   3-10  number of appointed members is divisible by three.  The appointed
   3-11  members are appointed by and may be removed for cause by the
   3-12  governing body of the regional council of governments.  The
   3-13  appointed members serve three-year terms, with one-third of the
   3-14  members' terms expiring each year.  In order to stagger the terms,
   3-15  the initial appointees of a board of directors shall draw lots to
   3-16  determine which one-third serves for one year, which one-third
   3-17  serves for two years, and which one-third serves for three years.
   3-18  In addition, the board of directors shall have one ex officio
   3-19  nonvoting member from the board, designated by the executive
   3-20  director of the board to act as a liaison between the board and the
   3-21  area emission reduction credit organization.
   3-22        (b)  The appointed members of the board of directors shall
   3-23  represent the general public, large industrial sources of
   3-24  emissions, small regulated businesses, and environmental and
   3-25  economic development interests.  Each county in the nonattainment
    4-1  area shall be represented on the board of directors, and other
    4-2  areas in the region shall be represented in a manner that reflects
    4-3  the relative contributions of each area to total emissions or
    4-4  potential emission reductions.
    4-5        Sec. 384.009.  REMOVAL FOR CAUSE.  The regional council of
    4-6  governments appointing a member of the board of directors of an
    4-7  organization may remove such member for cause if the member:
    4-8              (1)  cannot discharge the member's duties for a
    4-9  substantial portion of the term for which the member is appointed
   4-10  because of illness or disability; or
   4-11              (2)  is absent from more than half of the regularly
   4-12  scheduled meetings that the member is eligible to attend during a
   4-13  calendar year unless the absence is excused by a majority vote of
   4-14  the board of directors.
   4-15        Sec. 384.010.  CONFLICT OF INTEREST.  A member of a board of
   4-16  directors may not vote on a matter in which the member or the
   4-17  member's employer has a direct financial interest.
   4-18        Sec. 384.011.  AUTHORITY.  The board of directors of an
   4-19  organization shall have independent decision-making authority and
   4-20  shall not be required to have its decisions reviewed by the
   4-21  governing body of the regional council of governments.  A regional
   4-22  council of governments shall not have any liability under any
   4-23  contracts entered into by an organization.
   4-24        Sec. 384.012.  POWERS AND DUTIES.  An organization shall have
   4-25  the authority to:
    5-1              (1)  receive and use funds;
    5-2              (2)  have an account at the Texas Air Control Board Air
    5-3  Emission Reduction Credit Bank;
    5-4              (3)  acquire emission reduction credits through
    5-5  purchase, donation, or other means;
    5-6              (4)  transfer emission reduction credits by sale or
    5-7  other means;
    5-8              (5)  identify, evaluate, promote, initiate, and
    5-9  facilitate potential projects and strategies to generate emission
   5-10  reduction credits;
   5-11              (6)  provide financial assistance for projects to
   5-12  generate emission reduction credits;
   5-13              (7)  employ staff;
   5-14              (8)  enter into contracts; and
   5-15              (9)  consider sustainability of projects.
   5-16        Sec. 384.013.  PROHIBITIONS.  An organization created under
   5-17  this chapter shall have no regulatory or taxing authority.
   5-18        Sec. 384.014.  ANNUAL REPORT.  By March 1 of each year each
   5-19  area organization shall file with the board and the regional
   5-20  council of governments an annual report for the preceding calendar
   5-21  year.  The annual report shall contain a financial accounting, an
   5-22  accounting of emission reduction credits, and a listing of all
   5-23  emission reduction credit transactions entered into by the
   5-24  organization.
    6-1  (a)  A regional council of governments may authorize by resolution
    6-2  the submission of a petition to the board requesting the creation
    6-3  of an organization under this chapter.
    6-4        (b)  The petition shall contain sufficient information to
    6-5  permit a determination of compliance with the provisions of this
    6-6  chapter and shall include a copy of the proposed bylaws and a plan
    6-7  for ensuring compliance with the requirements of this chapter.
    6-8        (c)  The board shall review the petition for compliance with
    6-9  this chapter and hold a hearing in the region to obtain public
   6-10  comment on the petition.
   6-11        (d)  The board shall approve the petition and creation of the
   6-12  organization if, after hearing, it finds that the requirements of
   6-13  this chapter are met and that such creation would be in the public
   6-14  interest.
   6-15        Sec. 384.016.  AUDIT.  The board shall have the authority to
   6-16  audit any organization created under this chapter.
   6-17        Sec. 384.017.  WITHDRAWAL OF APPROVAL.  The board shall have
   6-18  the authority to withdraw its approval of an organization created
   6-19  under this chapter and to dissolve such organization if it finds,
   6-20  after notice and hearing, that the organization has failed to
   6-21  comply with the provisions of this chapter.
   6-22        Sec. 384.018.  DISSOLUTION.  An organization created under
   6-23  this chapter shall be dissolved by the board 12 years after its
   6-24  creation unless the board approves a petition, submitted and
   6-25  approved in accordance with Section 384.015, for an additional
    7-1  12-year term.  The board may continue to approve successive 12-year
    7-2  terms for the organization as long as the need for the organization
    7-3  exists.
    7-4        SECTION 2.  The importance of this legislation and the
    7-5  crowded condition of the calendars in both houses create an
    7-6  emergency and an imperative public necessity that the
    7-7  constitutional rule requiring bills to be read on three several
    7-8  days in each house be suspended, and this rule is hereby suspended,
    7-9  and that this Act take effect and be in force from and after its
   7-10  passage, and it is so enacted.