By:  Ellis, Parker                                     S.B. No. 513
                                 A BILL TO BE ENTITLED
                                        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 7407(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.
   1-20              (5)  "Regional council of governments" means a regional
   1-21  planning commission established under Chapter 391, Local Government
   1-22  Code.
   1-23        Sec. 384.002.  PURPOSE.  The purpose of an area emission
    2-1  reduction credit organization shall be to promote the coexistence
    2-2  of the improvement of air quality and economic development within
    2-3  the region through the acquisition and distribution of emission
    2-4  reduction credits.  Its activities may include the use of emission
    2-5  reduction credits to help meet federal reasonable further progress
    2-6  requirements as well as using emission reduction credits to
    2-7  facilitate the issuance of permits.
    2-8        Sec. 384.003.  ESTABLISHMENT OF ORGANIZATION.  A regional
    2-9  council of governments whose area of jurisdiction contains a
   2-10  nonattainment area may establish an organization on approval by the
   2-11  board of its creation petition as provided by Section 384.015.
   2-12        Sec. 384.004.  FUNCTIONS; ORGANIZATION.  An organization
   2-13  created under this chapter shall:
   2-14              (1)  represent all counties within a nonattainment
   2-15  area;
   2-16              (2)  have a board of directors appointed in accordance
   2-17  with the provisions of this chapter;
   2-18              (3)  have the power, authority, and limitations
   2-19  provided by this chapter; and
   2-20              (4)  have bylaws setting forth its organization and
   2-21  procedures, including provisions for conflicts of interest.
   2-22        Sec. 384.005.  OFFSET REQUIREMENTS.  All transactions of an
   2-23  organization involving emission reduction credits shall be subject
   2-24  to the offset requirements of the federal Clean Air Act (42 U.S.C.
   2-25  Section 7401 et seq.).
    3-1        Sec. 384.006.  LOCATION RESTRICTION.  There shall not be more
    3-2  than one organization within a metropolitan statistical area or
    3-3  consolidated metropolitan statistical area.
    3-4        Sec. 384.007.  STAFF.  The regional council of governments
    3-5  may provide staff to an organization created under this chapter.
    3-6        Sec. 384.008.  BOARD OF DIRECTORS.  (a)  The board of
    3-7  directors of an organization shall consist of not less than six and
    3-8  not more than 21 appointed members, provided, however, that the
    3-9  number of appointed members is divisible by three.  The appointed
   3-10  members are appointed by and may be removed for cause by the
   3-11  governing body of the regional council of governments.  The
   3-12  appointed members serve three-year terms, with one-third of the
   3-13  members' terms expiring each year.  In order to stagger the terms,
   3-14  the initial appointees of a board of directors shall draw lots to
   3-15  determine which one-third serves for one year, which one-third
   3-16  serves for two years, and which one-third serves for three years.
   3-17  In addition, the board of directors shall have one ex officio
   3-18  nonvoting member from the board, designated by the executive
   3-19  director of the board to act as a liaison between the board and the
   3-20  area emission reduction credit organization.
   3-21        (b)  The appointed members of the board of directors shall
   3-22  represent the general public, large industrial sources of
   3-23  emissions, small regulated businesses, and environmental and
   3-24  economic development interests.  Each county in the nonattainment
   3-25  area shall be represented on the board of directors, and other
    4-1  areas in the region shall be represented in a manner that reflects
    4-2  the relative contributions of each area to total emissions or
    4-3  potential emission reductions.
    4-4        Sec. 384.009.  REMOVAL FOR CAUSE.  The regional council of
    4-5  governments appointing a member of the board of directors of an
    4-6  organization may remove such member for cause if the member:
    4-7              (1)  cannot discharge the member's duties for a
    4-8  substantial portion of the term for which the member is appointed
    4-9  because of illness or disability; or
   4-10              (2)  is absent from more than half of the regularly
   4-11  scheduled meetings that the member is eligible to attend during a
   4-12  calendar year unless the absence is excused by a majority vote of
   4-13  the board of directors.
   4-14        Sec. 384.010.  CONFLICT OF INTEREST.  A member of a board of
   4-15  directors may not vote on a matter in which the member or the
   4-16  member's employer has a direct financial interest.
   4-17        Sec. 384.011.  AUTHORITY.  The board of directors of an
   4-18  organization shall have independent decision-making authority and
   4-19  shall not be required to have its decisions reviewed by the
   4-20  governing body of the regional council of governments.  A regional
   4-21  council of governments shall not have any liability under any
   4-22  contracts entered into by an organization.
   4-23        Sec. 384.012.  POWERS AND DUTIES.  An organization shall have
   4-24  the authority to:
   4-25              (1)  receive and use funds;
    5-1              (2)  have an account at the Texas Air Control Board Air
    5-2  Emission Reduction Credit Bank;
    5-3              (3)  acquire emission reduction credits through
    5-4  purchase, donation, or other means;
    5-5              (4)  transfer emission reduction credits by sale or
    5-6  other means;
    5-7              (5)  identify, evaluate, promote, initiate, and
    5-8  facilitate potential projects and strategies to generate emission
    5-9  reduction credits;
   5-10              (6)  provide financial assistance for projects to
   5-11  generate emission reduction credits;
   5-12              (7)  employ staff;
   5-13              (8)  enter into contracts; and
   5-14              (9)  consider sustainability of projects.
   5-15        Sec. 384.013.  PROHIBITIONS.  An organization created under
   5-16  this chapter shall have no regulatory or taxing authority.
   5-17        Sec. 384.014.  ANNUAL REPORT.  By March 1 of each year each
   5-18  area organization shall file with the board and the regional
   5-19  council of governments an annual report for the preceding calendar
   5-20  year.  The annual report shall contain a financial accounting, an
   5-21  accounting of emission reduction credits, and a listing of all
   5-22  emission reduction credit transactions entered into by the
   5-23  organization.
   5-25  (a)  A regional council of governments may authorize by resolution
    6-1  the submission of a petition to the board requesting the creation
    6-2  of an organization under this chapter.
    6-3        (b)  The petition shall contain sufficient information to
    6-4  permit a determination of compliance with the provisions of this
    6-5  chapter and shall include a copy of the proposed bylaws and a plan
    6-6  for ensuring compliance with the requirements of this chapter.
    6-7        (c)  The board shall review the petition for compliance with
    6-8  this chapter and hold a hearing in the region to obtain public
    6-9  comment on the petition.
   6-10        (d)  The board shall approve the petition and creation of the
   6-11  organization if, after hearing, it finds that the requirements of
   6-12  this chapter are met and that such creation would be in the public
   6-13  interest.
   6-14        Sec. 384.016.  AUDIT.  The board shall have the authority to
   6-15  audit any organization created under this chapter.
   6-16        Sec. 384.017.  WITHDRAWAL OF APPROVAL.  The board shall have
   6-17  the authority to withdraw its approval of an organization created
   6-18  under this chapter and to dissolve such organization if it finds,
   6-19  after notice and hearing, that the organization has failed to
   6-20  comply with the provisions of this chapter.
   6-21        Sec. 384.018.  DISSOLUTION.  An organization created under
   6-22  this chapter shall be dissolved by the board 12 years after its
   6-23  creation unless the board approves a petition, submitted and
   6-24  approved in accordance with Section 384.015, for an additional
   6-25  12-year term.  The board may continue to approve successive 12-year
    7-1  terms for the organization as long as the need for the organization
    7-2  exists.
    7-3        SECTION 2.  The importance of this legislation and the
    7-4  crowded condition of the calendars in both houses create an
    7-5  emergency and an imperative public necessity that the
    7-6  constitutional rule requiring bills to be read on three several
    7-7  days in each house be suspended, and this rule is hereby suspended,
    7-8  and that this Act take effect and be in force from and after its
    7-9  passage, and it is so enacted.