1-1  By:  Ellis, Parker                                     S.B. No. 513
    1-2        (In the Senate - Filed March 1, 1993; March 1, 1993, read
    1-3  first time and referred to Committee on Natural Resources;
    1-4  March 3, 1993, rereferred to Committee on Economic Development;
    1-5  March 30, 1993, reported favorably by the following vote:  Yeas 11,
    1-6  Nays 0; March 30, 1993, sent to printer.)
    1-7                            COMMITTEE VOTE
    1-8                          Yea     Nay      PNV      Absent 
    1-9        Parker             x                               
   1-10        Lucio              x                               
   1-11        Ellis              x                               
   1-12        Haley              x                               
   1-13        Harris of Dallas   x                               
   1-14        Harris of Tarrant  x                               
   1-15        Leedom             x                               
   1-16        Madla              x                               
   1-17        Rosson             x                               
   1-18        Shapiro            x                               
   1-19        Wentworth          x                               
   1-20                         A BILL TO BE ENTITLED
   1-21                                AN ACT
   1-22  relating to regional organizations to promote the coexistence of
   1-23  air quality improvement and economic development in nonattainment
   1-24  areas of the state.
   1-26        SECTION 1.  Subtitle C, Title 5, Health and Safety Code, is
   1-27  amended by adding Chapter 384 to read as follows:
   1-29        Sec. 384.001.  DEFINITIONS.  In this chapter:
   1-30              (1)  "Board" means the Texas Air Control Board or its
   1-31  successor agency.
   1-32              (2)  "Emission reduction credit" means a credit
   1-33  recognized by the Texas Air Control Board and the United States
   1-34  Environmental Protection Agency for reductions in emissions of air
   1-35  pollutants.
   1-36              (3)  "Nonattainment area" means an area so designated
   1-37  within the meaning of Section 107(d) of the federal Clean Air Act
   1-38  (42 U.S.C. Section 7407).
   1-39              (4)  "Organization" means an area emission reduction
   1-40  credit organization.
   1-41              (5)  "Regional council of governments" means a regional
   1-42  planning commission established under Chapter 391, Local Government
   1-43  Code.
   1-44        Sec. 384.002.  PURPOSE.  The purpose of an area emission
   1-45  reduction credit organization shall be to promote the coexistence
   1-46  of the improvement of air quality and economic development within
   1-47  the region through the acquisition and distribution of emission
   1-48  reduction credits.  Its activities may include the use of emission
   1-49  reduction credits to help meet federal reasonable further progress
   1-50  requirements as well as using emission reduction credits to
   1-51  facilitate the issuance of permits.
   1-52        Sec. 384.003.  ESTABLISHMENT OF ORGANIZATION.  A regional
   1-53  council of governments whose area of jurisdiction contains a
   1-54  nonattainment area may establish an organization on approval by the
   1-55  board of its creation petition as provided by Section 384.015.
   1-56        Sec. 384.004.  FUNCTIONS; ORGANIZATION.  An organization
   1-57  created under this chapter shall:
   1-58              (1)  represent all counties within a nonattainment
   1-59  area;
   1-60              (2)  have a board of directors appointed in accordance
   1-61  with the provisions of this chapter;
   1-62              (3)  have the power, authority, and limitations
   1-63  provided by this chapter; and
   1-64              (4)  have bylaws setting forth its organization and
   1-65  procedures, including provisions for conflicts of interest.
   1-66        Sec. 384.005.  OFFSET REQUIREMENTS.  All transactions of an
   1-67  organization involving emission reduction credits shall be subject
   1-68  to the offset requirements of the federal Clean Air Act (42 U.S.C.
    2-1  Section 7401 et seq.).
    2-2        Sec. 384.006.  LOCATION RESTRICTION.  There shall not be more
    2-3  than one organization within a metropolitan statistical area or
    2-4  consolidated metropolitan statistical area.
    2-5        Sec. 384.007.  STAFF.  The regional council of governments
    2-6  may provide staff to an organization created under this chapter.
    2-7        Sec. 384.008.  BOARD OF DIRECTORS.  (a)  The board of
    2-8  directors of an organization shall consist of not less than six and
    2-9  not more than 21 appointed members, provided, however, that the
   2-10  number of appointed members is divisible by three.  The appointed
   2-11  members are appointed by and may be removed for cause by the
   2-12  governing body of the regional council of governments.  The
   2-13  appointed members serve three-year terms, with one-third of the
   2-14  members' terms expiring each year.  In order to stagger the terms,
   2-15  the initial appointees of a board of directors shall draw lots to
   2-16  determine which one-third serves for one year, which one-third
   2-17  serves for two years, and which one-third serves for three years.
   2-18  In addition, the board of directors shall have one ex officio
   2-19  nonvoting member from the board, designated by the executive
   2-20  director of the board to act as a liaison between the board and the
   2-21  area emission reduction credit organization.
   2-22        (b)  The appointed members of the board of directors shall
   2-23  represent the general public, large industrial sources of
   2-24  emissions, small regulated businesses, and environmental and
   2-25  economic development interests.  Each county in the nonattainment
   2-26  area shall be represented on the board of directors, and other
   2-27  areas in the region shall be represented in a manner that reflects
   2-28  the relative contributions of each area to total emissions or
   2-29  potential emission reductions.
   2-30        Sec. 384.009.  REMOVAL FOR CAUSE.  The regional council of
   2-31  governments appointing a member of the board of directors of an
   2-32  organization may remove such member for cause if the member:
   2-33              (1)  cannot discharge the member's duties for a
   2-34  substantial portion of the term for which the member is appointed
   2-35  because of illness or disability; or
   2-36              (2)  is absent from more than half of the regularly
   2-37  scheduled meetings that the member is eligible to attend during a
   2-38  calendar year unless the absence is excused by a majority vote of
   2-39  the board of directors.
   2-40        Sec. 384.010.  CONFLICT OF INTEREST.  A member of a board of
   2-41  directors may not vote on a matter in which the member or the
   2-42  member's employer has a direct financial interest.
   2-43        Sec. 384.011.  AUTHORITY.  The board of directors of an
   2-44  organization shall have independent decision-making authority and
   2-45  shall not be required to have its decisions reviewed by the
   2-46  governing body of the regional council of governments.  A regional
   2-47  council of governments shall not have any liability under any
   2-48  contracts entered into by an organization.
   2-49        Sec. 384.012.  POWERS AND DUTIES.  An organization shall have
   2-50  the authority to:
   2-51              (1)  receive and use funds;
   2-52              (2)  have an account at the Texas Air Control Board Air
   2-53  Emission Reduction Credit Bank;
   2-54              (3)  acquire emission reduction credits through
   2-55  purchase, donation, or other means;
   2-56              (4)  transfer emission reduction credits by sale or
   2-57  other means;
   2-58              (5)  identify, evaluate, promote, initiate, and
   2-59  facilitate potential projects and strategies to generate emission
   2-60  reduction credits;
   2-61              (6)  provide financial assistance for projects to
   2-62  generate emission reduction credits;
   2-63              (7)  employ staff;
   2-64              (8)  enter into contracts; and
   2-65              (9)  consider sustainability of projects.
   2-66        Sec. 384.013.  PROHIBITIONS.  An organization created under
   2-67  this chapter shall have no regulatory or taxing authority.
   2-68        Sec. 384.014.  ANNUAL REPORT.  By March 1 of each year each
   2-69  area organization shall file with the board and the regional
   2-70  council of governments an annual report for the preceding calendar
    3-1  year.  The annual report shall contain a financial accounting, an
    3-2  accounting of emission reduction credits, and a listing of all
    3-3  emission reduction credit transactions entered into by the
    3-4  organization.
    3-6  (a)  A regional council of governments may authorize by resolution
    3-7  the submission of a petition to the board requesting the creation
    3-8  of an organization under this chapter.
    3-9        (b)  The petition shall contain sufficient information to
   3-10  permit a determination of compliance with the provisions of this
   3-11  chapter and shall include a copy of the proposed bylaws and a plan
   3-12  for ensuring compliance with the requirements of this chapter.
   3-13        (c)  The board shall review the petition for compliance with
   3-14  this chapter and hold a hearing in the region to obtain public
   3-15  comment on the petition.
   3-16        (d)  The board shall approve the petition and creation of the
   3-17  organization if, after hearing, it finds that the requirements of
   3-18  this chapter are met and that such creation would be in the public
   3-19  interest.
   3-20        Sec. 384.016.  AUDIT.  The board shall have the authority to
   3-21  audit any organization created under this chapter.
   3-22        Sec. 384.017.  WITHDRAWAL OF APPROVAL.  The board shall have
   3-23  the authority to withdraw its approval of an organization created
   3-24  under this chapter and to dissolve such organization if it finds,
   3-25  after notice and hearing, that the organization has failed to
   3-26  comply with the provisions of this chapter.
   3-27        Sec. 384.018.  DISSOLUTION.  An organization created under
   3-28  this chapter shall be dissolved by the board 12 years after its
   3-29  creation unless the board approves a petition, submitted and
   3-30  approved in accordance with Section 384.015, for an additional
   3-31  12-year term.  The board may continue to approve successive 12-year
   3-32  terms for the organization as long as the need for the organization
   3-33  exists.
   3-34        SECTION 2.  The importance of this legislation and the
   3-35  crowded condition of the calendars in both houses create an
   3-36  emergency and an imperative public necessity that the
   3-37  constitutional rule requiring bills to be read on three several
   3-38  days in each house be suspended, and this rule is hereby suspended,
   3-39  and that this Act take effect and be in force from and after its
   3-40  passage, and it is so enacted.
   3-41                               * * * * *
   3-42                                                         Austin,
   3-43  Texas
   3-44                                                         March 30, 1993
   3-45  Hon. Bob Bullock
   3-46  President of the Senate
   3-47  Sir:
   3-48  We, your Committee on Economic Development to which was referred
   3-49  S.B. No. 513, have had the same under consideration, and I am
   3-50  instructed to report it back to the Senate with the recommendation
   3-51  that it do pass and be printed.
   3-52                                                         Parker,
   3-53  Chairman
   3-54                               * * * * *
   3-55                               WITNESSES
   3-56                                                  FOR   AGAINST  ON
   3-57  ___________________________________________________________________
   3-58  Name:  Kirk Watson                               x
   3-59  Representing:  Texas Air Control Board
   3-60  City:  Austin
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   3-62  Name:  Larry Feldcamp                            x
   3-63  Representing:  Greater Houston Partnership
   3-64  City:  Houston
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   3-66                                                  FOR   AGAINST  ON
   3-67  ___________________________________________________________________
   3-68  Name:  Sheila Jennings                           x
   3-69  Representing:  Tx Assoc. of Regional Council
   3-70  City:  Austin
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    4-2  Name:  Wade Thomason                             x
    4-3  Representing:  American Lung Assn. of Tx
    4-4  City:  Austin
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    4-6  Name:  James E. Dodds                            x
    4-7  Representing:  Texas Air Control Board
    4-8  City:  Austin
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