BILL ANALYSIS S.B. 219 By: Armbrister (Saunders) April 18, 1995 Committee Report (Unamended) BACKGROUND Current law authorizes the legislature to provide for the creation of programs and for loans and grants of public money for the development and diversification of the state's economy. River authorities engaged in the distribution and sale of electricity to the public are authorized to employ staff and expend resources to encourage participation in economic development activities. However, because the statute authorizing participation lacks any definition or example of "economic development," such river authorities have been unable to pursue many community assistance efforts that would benefit their service areas. PURPOSE S.B. 219 authorizes the formation of economic development programs by river authorities that distribute and sell electricity to the public; authorizes the programs to involve grants or loans of money, services, or equipment to persons or certain organizations involved in economic development activities. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 3, Article 717p, V.C.T.S., as follows: (a) Applies this section to a river authority that generates at least a 55 million KWH average annually and is engaged in the distribution and sale of electric energy to the public. (b) Authorizes a river authority to sponsor and participate in economic development programs. Limits programs to the river authority's statutory district and electric or water service areas. Prohibits participation from requiring receiving of electricity from the authority. (c) Requires each program to be established by formal action of the river authority board of directors and to include program goals, budget limits, requirements on program beneficiaries, and other appropriate restrictions and procedures. (d) Authorizes programs to include grants or loans of money, services, or equipment to a person engaged in economic development activity, including public fire-fighting organizations, governmental entities, regional development councils, and nonprofit groups. (e) Authorizes a river authority to employ staff and expend resources to further economic development programs. Prohibits use of ad valorem tax funds or direct legislative appropriations in such programs. Authorizes river authority to apply for and receive money, grants, and other assistance from any source for a program under this section. (f) Authorizes a river authority to enter into agreements with any other public or private entity for economic development programs. (g) Requires a river authority to establish specific guidelines for scholarships, grants, or assistance provided to public fire-fighting organizations. Guidelines should include: eligibility, limits, and uses. (h) Provides that a determination by the river authority's governing body is conclusive as to whether a program is intended to carry out the program's purposes and whether the program satisfies the purposes of Section 3. (i) Prohibits a river authority from making receiving a benefit from an economic development program conditional on receiving electricity from the river authority. Also prohibits use of an economic development program to promote fuel switching from another fuel source to electric power or to promote the use of electric power over other types of fuel. (j) States that Subsection (i) does not limit a river authority's power to promote use of electricity or switching from another power source to electricity granted by other laws including other sections of this Act. (k) Provides that an economic development program does not include promotion of retail wheeling of electric power and energy. (l) Defines an economic development program as: encouraging economic diversification; contributing to the health and development of a community; and, improving the quality and quantity of essential services such as: education, transportation, recreation, and employment. SECTION 2. Makes a legislative finding that the economic development programs authorized by Section 3, Article 717p, V.T.C.S., are specific public purposes and governmental functions of river authorities in accordance with Sections 52-a and 51-a-1, Article 3, of the Texas Constitution. SECTION 3. Validates and ratifies previous economic development actions of river authorities undertaken pursuant to the current Section 3, Article 717p, V.T.C.S. SECTION 4. Emergency Clause. Effective Date: Upon passage. SUMMARY OF COMMITTEE ACTION S.B. 219 was considered by the Energy Resources Committee in a public hearing on April 18, 1995. Thomas Mason of the Lower Colorado River Authority testified neutrally on the bill. The bill was reported favorably without amendment, with the recommendation that it do pass and be printed, by a record vote of 6 ayes, 0 nays, 0 PNV, and 3 absent.