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.