SRC-JRN S.B. 1811 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 1811
By: Nelson
Education 
4-8-97
As Filed


DIGEST 

In 1992, the legislature authorized higher education institutions to enter
into performance contracts to reduce energy consumption and operating
costs at institution facilities.  Such contracts enable an institution to
improve energy facilities without additional state appropriations; the
contract debt is repaid through energy savings over the life of the
contract. 

Currently, state law prohibits an institution's contract payment from
exceeding total energy and operating cost savings at any point during the
life of the contract.  Institutions are limited to traditional commercial
fixed-rate financing for their contracts.  This bill allows eligible
institutions of higher education to seek financing through the Texas
Public Finance Authority Master Lease Program, which offers short-term
variable rate financing to eligible borrowers. 

PURPOSE

As proposed, S.B. 1811 allows eligible institutions of higher education to
seek financing through the Texas Public Finance Authority Master Lease
Program, which offers short-term variable rate financing to eligible
borrowers. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 51.927, Education Code, by amending Subsections
(e) and (f), to prohibit a contractual obligation of a governing board in
any year during the term of the contract beginning after the final date of
installation from exceeding a certain amount of cost savings, if the term
of a contract for energy conservation measures exceeds one year.
Authorizes a contract for energy conservation measures to be a certain
lease/purchase contract, with a term not to exceed 10 years after final
date of installation.  Authorizes the Master Lease Program operated by the
Texas Public Finance Authority to be utilized by an agency to fund a
contract for energy conservation measures so long as certain costs of
energy conservation measures and debt service requirements do not exceed
the total energy and operating cost savings as described in Subsection (e)
of this section beginning after the final date of installation.  Makes
conforming changes. 

SECTION 2. Emergency clause.
  Effective date: upon passage.