MBN C.S.H.B. 3471 75(R)BILL ANALYSIS ENERGY RESOURCES C.S.H.B. 3471 By: Eiland 4-23-97 Committee Report (Substituted) BACKGROUND The State Energy Conservation Office (SECO) of the General Services Commission administrates several programs which are funded with Petroleum Violation Escrow (PVE), also known as oil overcharge funds. The payments are from federal court settlements of alleged violations of price controls in effect for crude oil and refined petroleum products between 1973 and 1981. The courts ruled that these dollars should be returned to the states and used to fund energy-related programs which provide indirect restitution to the consumers aggrieved by the price violations. Since 1987, Texas has received over $300 million, the third largest oil overcharge allotment nationally. The aim is to return those funds to the citizens of Texas in a meaningful and effective manner. However, the funds are dwindling as the settlements have run out. Therefore, some existing programs that rely on oil overcharge funds have run their course. PURPOSE To consolidate programs that receive oil overcharge funding. 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. Repeals Sections 2305.031 through 2305.039, Government Code. SECTION 2. Amends Section 2305.002 (3), Government Code to redefine "Energy office" to mean the state energy conservation office of the General Services Commission. SECTION 3. Amends Section 2305.011, Government Code, by moving the administration of programs under this chapter from the governor to the General Services Commission and the energy office. Allows the energy office to charge a fee for the cost of programs administered under this chapter. Allows the energy office, with the governor, to establish grants programs. Removes the governor's authority to establish a supervising state agency for grant programs administered under this chapter. Makes conforming changes. SECTION 4. Amends Section 2305.022 and 2305.023, Government Code to allow the General Services Commission to use account money authorized under this chapter. Provides that the energy office shall submit a report to the governor and the legislature by January 15 of each oddnumbered year. SECTION 5. Amends Subchapter D, Chapter 2305, Government Code, by adding Section 2305.031 requiring the energy office to maintain a revolving loan program with oil overcharge funds. SECTION 6. Amends Subchapter D, Chapter 2305, Government Code, by transferring Section 2305.065 from Subchapter E, Government Code, and redesignating it Section 2305.032 to transfer the administration of the loanstar revolving loan program from the governor to the energy office. Names revolving loan program as the loanstar revolving loan program. Removes authority of the supervising state agency to distribute grant money and sets forth guidelines for projects to be approved by the energy office. Deletes requirement that energy office projects should benefit transportation and agricultural providers and low to moderate income individuals and inserts medium sized businesses and public/non-profit hospitals or health care facilities into the category. Requires that at least 85% of the loans be awarded to state agencies, institutions of higher education, public schools, or political subdivisions. Replaces reference to a person who receives a loan under this section with any borrower receiving a loan under this section. Deletes reference to state agency receiving a loan under subsection (e). Provides that the energy office shall allocate at least $95 million to the loanstar program. SECTION 7. Amends Subchapter D, Chapter 2305, Government Code, by redesignating Section 2305.041, Government Code, Section 2305.033 to delete the reference to conservation in the type of programs the energy office supervises. Subsection (b) names the energy office and allows for the distribution of funds. Reference to direct grant money and financing operation of Energy Management Center for Texas Schools are deleted. Adds requirement that improved energy efficient savings activity include other technical assistance to programs for which funds are appropriated. Deletes provision that a public school may not receive a grant unless approved by the governor. Makes conforming changes. SECTION 8. Amends Subchapter D, Chapter 2305, Government Code, by adding Section 2305.034 and 2305.035. Sec. 2305.034 States that the energy office is the supervising agency for state agency programs that may distribute funds through Chapter 447. List types of projects which may be funded by this section. Sec. 2305.035 States that the energy office is the supervising state agency for the alternative fuels program. The energy office shall provide funds to promote alternative fuels including clean air projects, educational projects, demonstration and conversion projects, and technical research and training projects. SECTION 9. Amends Subchapter D, Chapter 2305, Government Code, by transferring Section 2305.064 from Subchapter E, Government Code, redesignating it Section 2305.036. (a) states that the energy office is the supervising state agency for the housing partnership programs. Deletes requirement that the supervising state agency shall distribute grant money for residential energy conservation projects (b) states that the energy office shall promote the efficient use of energy in Texas residential housing through grants, partnerships, and loans. (c) states that projects funded under this program shall include: (1) projects demonstrating energy efficiency; (2) projects training and assistance in energy efficient design, construction or remodeling; (3) projects to provide energy education workshops or seminars for consumers; (4) financing for energy designs and improvements, energy efficient appliances and management systems; (5) funding of a weatherization assistance program to benefit low to moderate income individuals; Makes conforming changes. (d) states that the beneficiaries of the program shall be residential energy consumers, primarily low to moderate income households. Makes conforming changes. (e) states that nonprofit organizations, community action agencies, local governments, regional government councils, universities, utility companies, public housing authorities, and similar groups may serve as leads in establishing partnerships with the agency. Makes a conforming change. (f) deletes language allowing a local government, public housing agency, or other public or nonprofit organization from applying for a grant under this section. States that the energy office may require grant recipients to match a grant in a ratio determined by the energy office. Deletes language allowing supervising state agency to require recipients to match grants awarded by other sources in at least the total amount of the grant awarded under this section. Makes conforming changes. SECTION 10. Amends Subchapter D, Chapter 2305, Government Code, by transferring Section 2305.067 from Subchapter E, Government Code, redesignating it Section 2305.037 to change the alternative energy program to the renewable energy demonstration program. States that the energy office will be the supervising state agency of the renewable energy program and shall distribute grant money for projects to develop sustainable and renewable energy. Transfers the ability to require grant recipients to match a grant from the governor to the energy office. SECTION 11. Amends Subchapter D, Chapter 2305, Government Code, by transferring Section 2305.069 from Subchapter E, Government Code, redesignating it Section 2305.038 to state that the energy office is the supervisory agency for the local government energy management program. Includes energy management training, energy efficient partnerships, analyzing alternative financing methods for energy savings, technical support, and colonias as projects to be funded under this section. Deletes energy audits, traffic light synchronization, fleet management, and fuel efficient transit routing as proposals funded under this section. Deletes language allowing governor to require grant recipients to match a grant. Makes conforming changes. SECTION 12. Amends Subchapter D, Chapter 2305, Government Code, by transferring Section 2305.070 from Subchapter E, Government Code, redesignating it Section 2305.039 stating that the energy office is the supervising state agency of the transportation energy program and shall distribute funds for projects relating to mass transit and other transportation services. Deletes language allowing for the distribution of competitive grant money. Transfers ability to require grant recipients to match a grant from the governor to the energy office. Makes conforming changes. SECTION 13. Repeals Sections 2305.013, 2305.040, 2305.061, 2305.062, 2305.063, 2305.066, 2305.068., and 2305.071 through 2305.076, Government Code. SECTION 14. Emergency clause COMPARISON OF ORIGINAL TO SUBSTITUTE H.B. 3471 relates to the administration of the oil overcharge fund by deleting Subchapter D and E, Chapter 2305, Government Code, and creating a new Subchapter D to create grant programs funded with oil overcharge monies and administered by the governor and energy office. The grant programs would include energy savings projects, alternative fuels programs, housing partnership program to promote residential energy efficiency, the loanstar revolving loan program, renewable energy demonstration programs, transportation energy programs, and other similar programs for which the oil overcharge fund could be used. C.S.H.B. 3471 relates to the administration of the oil overcharge fund by amending Section 2305, Government Code, relating to the General Services Commission and the energy office. The substitute removes most references to the governor and clarifies the role of the energy office in energy related management, supervising authority, and use of oil overcharge funds. The substitute provides for the production of a report by the energy office to be submitted to the governor and legislature. C.S.H.B. 3471 details what types of programs the energy office shall engage in and what projects and programs the oil overcharge funds shall be utilized for. Subchapter E, Chapter 2305, Government Code, is amended and transferred into Subchapter D to consolidate energy related grants and projects funded and managed by the energy office. The substitute also repeals Sections 2305.013, 2305.040, 2305.061, 2305.062, 2305.063, 2305.066, 2305.068, and 2305.071 through 2305.076, Government Code.