By Ellis                                               S.B. No. 708
       74R6574 GCH-D
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to state energy efficiency and conservation programs;
    1-3  granting the authority to issue revenue bonds.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  The State Purchasing and General Services Act
    1-6  (Article 601b, Vernon's Texas Civil Statutes) is amended by adding
    1-7  Article 16 to read as follows:
    1-8     ARTICLE 16.  TEXAS ENERGY EFFICIENCY AND CONSERVATION PROGRAM
    1-9        Sec. 16.01.  POLICY.  It is the policy of this state to
   1-10  promote energy efficiency and conservation within the state.
   1-11  Implementation of the program provided by this article will be in
   1-12  furtherance of that policy by making financial and technical
   1-13  assistance available to authorized borrowers to enable the
   1-14  borrowers to undertake energy efficiency and conservation projects.
   1-15        Sec. 16.02.  DEFINITIONS.  In this article:
   1-16              (1)  "Authority" means the Texas Public Finance
   1-17  Authority.
   1-18              (2)  "Program" means the Texas energy efficiency and
   1-19  conservation program provided by this article.
   1-20              (3)  "Revenue bonds" means bonds, notes, commercial
   1-21  paper, or other obligations.
   1-22              (4)  "Revolving fund" means the Texas energy efficiency
   1-23  and conservation revolving fund.
   1-24        Sec. 16.03.  TEXAS ENERGY EFFICIENCY AND CONSERVATION
    2-1  REVOLVING FUND.  (a)  The Texas energy efficiency and conservation
    2-2  revolving fund is established in the state treasury.
    2-3        (b)  The revolving fund consists of the proceeds of revenue
    2-4  bonds issued as provided by this article, fees collected as
    2-5  provided by Section 16.06 of this article, federal grants, direct
    2-6  appropriations, income from investment or deposit of amounts in the
    2-7  fund, grants from private sources, and repayments of financial
    2-8  assistance made from the fund.
    2-9        (c)  The commission may provide for the establishment and
   2-10  maintenance of separate accounts within the revolving fund,
   2-11  including program accounts, and, at the direction of the authority,
   2-12  shall provide for interest and sinking accounts and reserve
   2-13  accounts relating to revenue bonds.  The state treasurer shall hold
   2-14  the assets of the revolving fund in trust for the program and the
   2-15  repayment of bonds issued for the program.  The revolving fund is a
   2-16  trust fund for all purposes, including the application of Sections
   2-17  403.094, 403.095, and 404.071, Government Code.
   2-18        (d)  Money in the revolving fund may be appropriated only for
   2-19  the repayment of bonds issued for the program, the payment of costs
   2-20  of issuance of the bonds, and making loans under and paying
   2-21  expenses for the administration of the program.  The use of money
   2-22  from the fund must be consistent with Section 18, Article III,
   2-23  Texas Constitution.
   2-24        (e)  The commission and the authority shall jointly
   2-25  administer the revolving fund.
   2-26        Sec. 16.04.  AUTHORIZED BORROWERS AND ELIGIBLE PROJECTS.
   2-27  (a)  An agency or governmental entity of the state and any
    3-1  political subdivision or other type of local governmental entity in
    3-2  the state, including a county, municipality, special purpose
    3-3  district, or corporation held by a governmental entity, is
    3-4  authorized to be a borrower under the program provided by this
    3-5  article.
    3-6        (b)  Any energy efficiency or conservation project undertaken
    3-7  by an authorized borrower involving the acquisition, construction,
    3-8  fabrication, installation, or maintenance of improvements,
    3-9  buildings, facilities, or equipment determined by the authorized
   3-10  borrower to promote the conservation or efficient use of energy
   3-11  sources is an eligible project for assistance under the program
   3-12  provided by this article, including a project involving the
   3-13  conversion of motor vehicles or other sources of substantial energy
   3-14  use to alternative fuels and engine-driven applications and a
   3-15  project involving the acquisition, construction, fabrication,
   3-16  installation, or maintenance of fueling stations supplying
   3-17  alternative fuels or equipment enhancing the use of engine-driven
   3-18  technology to support motor vehicles or other energy applications
   3-19  that use alternative fuels.
   3-20        Sec. 16.05.  TEXAS ENERGY EFFICIENCY AND CONSERVATION
   3-21  PROGRAM.  (a)  The commission shall establish and administer the
   3-22  Texas energy efficiency and conservation program, shall administer
   3-23  all loans made under the program, and shall collect loan payments
   3-24  and deposit them in the revolving fund.  The commission shall adopt
   3-25  rules governing the application for financial assistance under the
   3-26  program and establish criteria for determining which authorized
   3-27  borrowers may participate in the program.  In establishing criteria
    4-1  for participation in the program, the commission shall adopt
    4-2  requirements to ensure the full repayment of all financial
    4-3  assistance and the solvency of the program.
    4-4        (b)  The commission may adopt other rules it considers
    4-5  necessary to administer the program or considers in the best
    4-6  interests of the program.
    4-7        Sec. 16.06.  FEES.  The commission shall set and collect,
    4-8  from applicants and borrowers under the program, fees the
    4-9  commission considers sufficient to cover the expenses of
   4-10  administering the program or considers in the best interest of the
   4-11  program.  The commission shall deposit the fees in the revolving
   4-12  fund and shall apply the fees in accordance with the commission's
   4-13  resolutions and rules.
   4-14        Sec. 16.07.  ISSUANCE OF REVENUE BONDS.  (a)  The commission
   4-15  by resolution may periodically apply for the issuance of revenue
   4-16  bonds for the purpose of providing money for the revolving fund by
   4-17  submission to the authority of a request for financing that
   4-18  describes the projects to be financed.  The total amount of bonds
   4-19  issued for the revolving fund and the program may not exceed $100
   4-20  million.  The commission shall submit each such resolution it
   4-21  adopts to the authority, and the authority is responsible for
   4-22  issuing the bonds for the commission.
   4-23        (b)  Proceeds of revenue bonds issued as provided by this
   4-24  article shall be deposited in the revolving fund and applied in
   4-25  accordance with the resolution applying for issuance of the bonds:
   4-26              (1)  to provide financial assistance to authorized
   4-27  borrowers; and
    5-1              (2)  to pay costs of issuance of those revenue bonds.
    5-2        (c)  Revenue bonds issued as provided by this article are
    5-3  obligations solely of the authority and are payable solely from
    5-4  money in the revolving fund, which is pledged to the repayment of
    5-5  the revenue bonds.  The authority's revenue bonds under this
    5-6  article are not and do not create or constitute a pledge, giving,
    5-7  or lending of the faith, credit, or taxing power of the state.
    5-8  Each revenue bond issued under this article must contain a
    5-9  statement to the effect that the state is not obligated to pay the
   5-10  principal of or any premium or interest on the revenue bond and
   5-11  that neither the faith or credit nor the taxing power of the state
   5-12  is pledged, given, or loaned to such a payment.
   5-13        (d)  Revenue bonds of the authority shall be payable as to
   5-14  principal, interest, and redemption premium, if any, from and
   5-15  secured by a first lien or a subordinate lien on and pledge of all
   5-16  or any part of the property, revenues, income, or other resources
   5-17  in the revolving fund, and may be further secured by all or part of
   5-18  the net revenues dedicated under the loan documents by the borrower
   5-19  for payment of the revenue bonds, by taxes levied by the borrower
   5-20  for that purpose, or by a combination of taxes and net revenue from
   5-21  other available sources, as specified in the commission's
   5-22  resolution applying for issuance of those revenue bonds.  The
   5-23  authority may require that the loans made under the program be
   5-24  supported both by taxes and by net revenue from the operation of
   5-25  the project in any ratio the authority considers necessary to fully
   5-26  secure the loans.  The authority shall establish other conditions
   5-27  and requirements it considers to be consistent with sound
    6-1  investment practices and in the public interest.
    6-2        (e)  The commission may provide in a resolution applying for
    6-3  the issuance of revenue bonds a request for the issuance of
    6-4  additional revenue bonds to be equally and ratably secured by lien
    6-5  on the revenues and receipts or for the issuance of subordinate
    6-6  lien revenue bonds.
    6-7        (f)  Revenues of the commission that may be used as a source
    6-8  of payment for the revenue bonds or to establish a reserve account
    6-9  to secure the payment of debt service on the revenue bonds include
   6-10  repayments of financial assistance, money appropriated by the
   6-11  legislature to the commission for the purpose of paying or securing
   6-12  the payment of debt service on the revenue bonds, fees collected
   6-13  under Section 16.06 of this article, and federal or private money
   6-14  allocated to the program.
   6-15        Sec. 16.08.  DEFAULT.  In the event of a default in payment
   6-16  of the principal of or interest on any loan made under the program
   6-17  or any other default with respect to the loan, the attorney general
   6-18  shall institute appropriate proceedings by mandamus or other legal
   6-19  remedies to compel the borrower or its officers, agents, and
   6-20  employees to cure the default by performing those duties that they
   6-21  are legally obligated to perform.  These proceedings shall be
   6-22  brought and venue shall be in a district court of Travis County.
   6-23        Sec. 16.09.  GENERAL PROVISIONS RELATING TO BONDS.  (a)  The
   6-24  authority's revenue bonds under this article may be issued by the
   6-25  authority from time to time in one or more series or issues, in
   6-26  bearer, registered, or any other form, which may include registered
   6-27  uncertified obligations not represented by written instruments and
    7-1  commonly known as book-entry obligations, the registration of
    7-2  ownership and transfer of which shall be provided for by the
    7-3  authority under a system of books and records maintained by the
    7-4  authority.  Bonds may mature serially or otherwise not more than 40
    7-5  years from their date of issuance.  Bonds may bear no interest or
    7-6  may bear interest at any rate or rates, fixed, variable, floating,
    7-7  or otherwise, determined by the authority or determined pursuant to
    7-8  any contractual arrangements approved by the authority, not to
    7-9  exceed the maximum net effective interest rate allowed by Chapter
   7-10  3, Acts of the 61st Legislature, Regular Session, 1969 (Article
   7-11  717k-2, Vernon's Texas Civil Statutes).  Interest on the bonds may
   7-12  be payable at any time, and the rate of interest on the bonds may
   7-13  be adjusted at such time as may be determined by the authority or
   7-14  as may be determined pursuant to any contractual arrangement
   7-15  approved by the authority.  In connection with the issuance of
   7-16  bonds as provided by this article, the authority may exercise the
   7-17  powers granted to the governing body of an issuer in connection
   7-18  with the issuance of obligations under Chapter 656, Acts of the
   7-19  68th Legislature, Regular Session, 1983 (Article 717q, Vernon's
   7-20  Texas Civil Statutes).
   7-21        (b)  The bonds issued under this article and interest
   7-22  coupons, if any, are investment securities under the terms of
   7-23  Chapter 8, Business & Commerce Code.  The bonds are exempt
   7-24  securities under The Securities Act (Article 581-1 et seq.,
   7-25  Vernon's Texas Civil Statutes), and unless specifically provided
   7-26  otherwise, under any subsequently enacted securities law.  Any
   7-27  contract, guaranty, or other document executed in connection with
    8-1  the issuance of bonds pursuant to this article is not a security
    8-2  under The Securities Act (Article 581-1 et seq., Vernon's Texas
    8-3  Civil Statutes), and unless specifically provided otherwise, any
    8-4  subsequently enacted securities law.  The authority may do all
    8-5  things necessary to qualify the bonds for offer and sale under the
    8-6  securities laws and regulations of the United States and of the
    8-7  states and other jurisdictions in the United States as the
    8-8  authority determines.
    8-9        (c)  The bonds may be issued in the form and denominations
   8-10  and executed in the manner and under the terms, conditions, and
   8-11  details determined as provided by the authority in the resolution
   8-12  authorizing their issuance.  If any officer whose manual or
   8-13  facsimile signature appears on the bonds ceases to be an officer,
   8-14  the signature is still valid and sufficient for all purposes as if
   8-15  the officer had remained in office.
   8-16        (d)  The bonds may be sold at public or private sale with or
   8-17  without public bidding in the manner, at such rate or rates, price
   8-18  or prices, and on such terms as may be determined by the authority
   8-19  or determined as provided in any contractual arrangement approved
   8-20  by the authority.  The authority also may enter into any
   8-21  contractual arrangement under which the bonds are to be sold from
   8-22  time to time, or subject to purchase, at such prices and rates,
   8-23  interest rate or payment periods, and terms as determined pursuant
   8-24  to that contractual arrangement approved by the authority.
   8-25        (e)  The authority may provide procedures for the replacement
   8-26  of a mutilated, lost, stolen, or destroyed bond or interest coupon.
   8-27        (f)  The resolutions of the authority issuing bonds may
    9-1  contain other provisions and covenants as the authority may
    9-2  determine.  The authority may adopt and have executed any other
    9-3  proceedings or instruments necessary and convenient in the issuance
    9-4  of bonds as provided by this article, including entering into
    9-5  financing agreements with the commission.
    9-6        Sec. 16.10.  APPLICATION OF TEXAS PUBLIC FINANCE AUTHORITY
    9-7  ACT.  Section 10A, as added by Chapter 896, Acts of the 71st
    9-8  Legislature, Regular Session, 1989, and Sections 10B, 15, 16, 17,
    9-9  18, 19, and 20, Texas Public Finance Authority Act (Article 601d,
   9-10  Vernon's Texas Civil Statutes), apply to revenue bonds issued by
   9-11  the authority under this article as if the bonds were issued under
   9-12  that Act for the construction of a building.
   9-13        SECTION 2.  (a)  Section 2305.065, Government Code, is
   9-14  repealed.
   9-15        (b)  On the effective date of this Act, all obligations and
   9-16  records of the revolving loan program created under Section
   9-17  2305.065, Government Code, are transferred to the General Services
   9-18  Commission and become property and obligations under the Texas
   9-19  energy efficiency and conservation program established under
   9-20  Article 16, State Purchasing and General Services Act (Article
   9-21  601b, Vernon's Texas Civil Statutes), as added by this Act, and all
   9-22  obligations to the former program become obligations to the Texas
   9-23  energy efficiency and conservation program.
   9-24        (c)  If revenue bonds are issued under Article 16, State
   9-25  Purchasing and General Services Act (Article 601b, Vernon's Texas
   9-26  Civil Statutes), as added by this Act, and the bond proceeds are
   9-27  used to replace money appropriated from the oil overcharge account,
   10-1  the oil overcharge money that is replaced by those proceeds may be
   10-2  used only to finance projects under Chapter 2305, Government Code,
   10-3  for low-income individuals and low-wealth school districts.
   10-4        SECTION 3.  This Act takes effect September 1, 1995.
   10-5        SECTION 4.  The importance of this legislation and the
   10-6  crowded condition of the calendars in both houses create an
   10-7  emergency and an imperative public necessity that the
   10-8  constitutional rule requiring bills to be read on three several
   10-9  days in each house be suspended, and this rule is hereby suspended.