By Eiland                                             H.B. No. 3471

         Substitute the following for H.B. No. 3471:

         By Merritt                                        C.S.H.B. No. 3471

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the administration of oil overcharge funds.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Sections 2305.031 through 2305.039, Government

 1-5     Code, are repealed.

 1-6           SECTION 2.  Section 2305.002(3), Government Code, is amended

 1-7     to read as follows:

 1-8                 (3)  "Energy office" means the state energy

 1-9     conservation office of the General Services Commission.

1-10           SECTION 3.  Section 2305.011, Government Code, is amended to

1-11     read as follows:

1-12           Sec. 2305.011.  ADMINISTRATION BY GENERAL SERVICES COMMISSION

1-13     [GOVERNOR] AND ENERGY OFFICE.  (a)  The energy office shall

1-14     [Subject to Section 2305.013, the governor may:]

1-15                 [(1)  finance a project under this chapter; and]

1-16                 [(2)]  oversee and monitor the administration of

1-17     programs [a program] prescribed by this chapter and may charge a

1-18     fee for the purpose of cost recovery.

1-19           (b)  The governor and the energy office may establish direct

1-20     grant programs and competitive grant programs in addition to the

1-21     programs provided by this chapter.

1-22           (c)  The energy office [governor] shall[:]

1-23                 [(1)  determine the supervising state agency for each

1-24     competitive grant program and for each direct grant program

 2-1     established by the governor; and]

 2-2                 [(2)]  establish programs and criteria and evaluate a

 2-3     proposal in accordance with applicable federal guidelines.

 2-4           (d)  The energy office shall send to the appropriate federal

 2-5     entity all information required under applicable federal

 2-6     guidelines.

 2-7           (e)  Criteria established under this section may apply

 2-8     generally to all programs or specifically to one or more programs.

 2-9           SECTION 4.  Sections 2305.022 and 2305.023, Government Code,

2-10     are amended to read as follows:

2-11           Sec. 2305.022.  USE OF ACCOUNT.  Money in the account may be

2-12     used only by the governor and the General Services Commission to

2-13     implement and operate the programs authorized by this chapter.

2-14           Sec. 2305.023.  ACCOUNT RECORDS; ENERGY OFFICE REPORT.

2-15     (a)  The comptroller shall establish records of the money in the

2-16     account that are sufficient to identify the source of each

2-17     particular amount in the account to facilitate a determination of

2-18     compliance with applicable federal guidelines relating to the use

2-19     of money derived from each particular source.

2-20           (b)  Not later than January 15 of each odd-numbered year, the

2-21     energy office shall submit to the governor and the legislature a

2-22     biennial report that shows the expenditures from the account during

2-23     the previous biennium and the amount remaining in the account on

2-24     the date of the report.

2-25           SECTION 5.  Subchapter D, Chapter 2305, Government Code, is

2-26     amended by amending the subchapter heading and adding Section

2-27     2305.031 to read as follows:

 3-1            SUBCHAPTER D.  OIL OVERCHARGE [DIRECT GRANT] PROGRAMS

 3-2           Sec. 2305.031.  OIL OVERCHARGE PROGRAMS.  The energy office

 3-3     shall maintain a revolving loan program for the benefit of state

 3-4     agencies, universities, and political subdivisions.  The energy

 3-5     office shall use oil overcharge funds for the programs and purposes

 3-6     in this subchapter.

 3-7           SECTION 6.  Subchapter D, Chapter 2305, Government Code, is

 3-8     amended by transferring Section 2305.065 from Subchapter E,

 3-9     Government Code, redesignating Section 2305.065 as Section

3-10     2305.032, and amending that section to read as follows:

3-11           Sec. 2305.032 [2305.065].  LOANSTAR REVOLVING LOAN PROGRAM.

3-12     (a)  The energy office [governor] under the loanstar revolving loan

3-13     program may approve and finance [demonstration] projects that

3-14     provide loans to eligible applicants for energy-saving capital

3-15     improvements.  Projects [(b)  The supervising state agency of the

3-16     program may distribute competitive grant money under the program to

3-17     finance energy conservation projects] approved by the energy office

3-18     should [governor for the] benefit [of]:

3-19                 (1)  a state agency or institution of higher education;

3-20                 (2)  a public school;

3-21                 (3)  a political subdivision of the state;

3-22                 (4)  [a transportation provider;]

3-23                 [(5)  an agricultural producer;]

3-24                 [(6)]  a small to medium-sized business; or [and]

3-25                 (5)  a public or nonprofit hospital or health care

3-26     facility [(7)  an individual of low or moderate income].

3-27           (b) [(c)]  The energy office [governor] shall determine the

 4-1     terms under which a loan may be made under this section and shall

 4-2     set the interest rate for a loan at a low rate that the energy

 4-3     office [governor] determines is sufficient to recover the cost of

 4-4     administering the loan program.

 4-5           (c)  At least 85 percent of the loans made under this section

 4-6     shall be awarded to state agencies, institutions of higher

 4-7     education, public schools, or political subdivisions.

 4-8           (d)  Any borrower that [A person who] receives a loan under

 4-9     this section shall repay the principal of and interest on the loan

4-10     from the value of energy savings that accrues as the result of the

4-11     energy conservation measure implemented with the borrowed money.

4-12           (e)  An [A state agency or] institution that receives a loan

4-13     under this section shall repay the loan from the amount budgeted

4-14     for the agency's or institution's energy costs.  Until the loan is

4-15     repaid, the legislature may not reduce the amount budgeted for

4-16     those energy costs to reflect the value of energy savings that

4-17     accrues as a result of the energy conservation measure implemented

4-18     with the borrowed money.

4-19           (f)  The energy office shall allocate at least $95 million,

4-20     including loan commitments and cash on hand, to the loanstar

4-21     program and shall administer the funds under its control in a

4-22     manner that assures that funds available to the loanstar program

4-23     equal or exceed $95 million at all times.

4-24           SECTION 7.  Subchapter D, Chapter 2305, Government Code, is

4-25     amended by redesignating Section 2305.041, Government Code, as

4-26     Section 2305.033 and amending that section to read as follows:

4-27           Sec. 2305.033 [2305.041].  STATE ENERGY [CONSERVATION]

 5-1     PROGRAM.  (a)  The energy office is the supervising state agency

 5-2     for the state energy [conservation] program.

 5-3           (b)  In accordance with Part B, Energy Policy and

 5-4     Conservation Act (42 U.S.C. Sec. 6321 et seq.), the energy office,

 5-5     under the program, shall[:]

 5-6                 [(1)]  distribute funds [direct grant money] for

 5-7     projects that save measurable quantities of energy[; and]

 5-8                 [(2)  finance the operation of the Energy Management

 5-9     Center for Texas Schools, in accordance with Section 88A, Public

5-10     Utility Regulatory Act (Article 1446c, Vernon's Texas Civil

5-11     Statutes)].

5-12           (c)  A project under Subsection (b) [(b)(1)] must be

5-13     implemented primarily by institutions or private sector energy

5-14     consumers.

5-15           (d)  A proposal under Subsection (b) [(b)(1)] must:

5-16                 (1)  promote the conservation of energy; and

5-17                 (2)  improve the efficient use of energy through

5-18     activities that result in quantifiable energy savings, including:

5-19                       (A)  energy audits of buildings;

5-20                       (B)  technical assistance in reducing energy

5-21     bills; [and]

5-22                       (C)  [providing] training to building operators

5-23     and fiscal officers on various energy issues such as utility bill

5-24     analysis and energy management techniques; and

5-25                       (D)  other technical assistance to programs for

5-26     which funds are appropriated.

5-27           [(e)  A public school may not receive a grant or the benefits

 6-1     of a grant under Subsection (b)(2) unless the governor approves the

 6-2     school's energy conservation plan.]

 6-3           SECTION 8.  Subchapter D, Chapter 2305, Government Code, is

 6-4     amended by adding Sections 2305.034 and 2305.035 to read as

 6-5     follows:

 6-6           Sec. 2305.034.  STATE AGENCIES PROGRAM.  The energy office is

 6-7     the supervising agency for the state agencies program that may

 6-8     distribute funds through Chapter 447.  Projects funded under this

 6-9     section may include:

6-10                 (1)  energy manager training;

6-11                 (2)  performance contracting services described by

6-12     Section 51.927, Education Code;

6-13                 (3)  energy-efficient design assistance for new

6-14     facilities, including major renovation;

6-15                 (4)  projects for state building design standards

6-16     compliance;

6-17                 (5)  projects to create awareness of model energy codes

6-18     at the local and state levels;

6-19                 (6)  projects to develop and maintain the state's

6-20     utility database; and

6-21                 (7)  other appropriate energy and information

6-22     applications.

6-23           Sec. 2305.035.  ALTERNATIVE FUELS PROGRAM.  (a)  The energy

6-24     office is the supervising state agency for the alternative fuels

6-25     program.

6-26           (b)  The energy office shall provide funds under the program

6-27     to promote, facilitate, and support the use of alternative fuels in

 7-1     this state.

 7-2           (c)  Among the projects that may be funded under this section

 7-3     are:

 7-4                 (1)  clean air projects;

 7-5                 (2)  educational projects;

 7-6                 (3)  demonstration and conversion projects; and

 7-7                 (4)  technical research and training projects.

 7-8           SECTION 9.  Subchapter D, Chapter 2305, Government Code, is

 7-9     amended by transferring Section 2305.064 from Subchapter E,

7-10     Government Code, redesignating Section 2305.064 as Section

7-11     2305.036, and amending that section to read as follows:

7-12           Sec. 2305.036 [2305.064].  HOUSING PARTNERSHIP PROGRAM.

7-13     (a)  The energy office is the supervising state agency for [of] the

7-14     housing partnership program [shall distribute competitive grant

7-15     money under the program for residential energy conservation

7-16     projects that reduce the amount of energy consumed for space

7-17     heating, space cooling, water heating, refrigeration, or other

7-18     residential energy uses].

7-19           (b)  The energy office shall promote the efficient use of

7-20     energy in Texas residential housing through grants, partnerships,

7-21     and loans.

7-22           (c)  Projects funded under this program [section] may

7-23     include:

7-24                 (1)  projects to demonstrate [demonstration of]

7-25     commercially available cost-effective energy-saving techniques and

7-26     technologies;

7-27                 (2)  training and technical assistance in

 8-1     energy-efficient construction, design, or remodeling;

 8-2                 (3)  projects to provide energy education workshops or

 8-3     seminars for consumers [providing information to occupants]; [and]

 8-4                 (4)  financing [incentives] for energy [energy-saving]

 8-5     designs and [or] improvements, energy-efficient appliances, and

 8-6     energy management systems; and

 8-7                 (5)  funding of a weatherization assistance program to

 8-8     benefit individuals of low or moderate income.

 8-9           (d) [(c)]  The ultimate beneficiaries of the program shall be

8-10     residential energy consumers, primarily targeting low-to-moderate

8-11     income households [a grant under this section must be low-income or

8-12     moderate-income consumers].

8-13           (e)  Nonprofit organizations, community action agencies,

8-14     local governments, regional government councils, universities,

8-15     utility companies, public housing authorities, community-based

8-16     organizations, social service agencies, and other service-related

8-17     organizations may serve as leads in establishing partnerships with

8-18     the agency.

8-19           (f) [(d)  A local government, public housing agency, or other

8-20     public or nonprofit organization serving the housing needs of low

8-21     and moderate income individuals may apply for a grant under this

8-22     section.]

8-23           [(e)]  The energy office [supervising state agency] may

8-24     require grant recipients to match  a grant in a ratio determined by

8-25     the energy office [from other sources at least the total amount of

8-26     the grants awarded under this section].

8-27           SECTION 10.  Subchapter D, Chapter 2305, Government Code, is

 9-1     amended by transferring Section 2305.067 from Subchapter E,

 9-2     Government Code, redesignating Section 2305.067 as Section

 9-3     2305.037, and amending that section to read as follows:

 9-4           Sec. 2305.037 [2305.067].  RENEWABLE [ALTERNATIVE] ENERGY

 9-5     DEMONSTRATION PROGRAM.  (a)  The energy office is the supervising

 9-6     state agency of the renewable [alternative] energy demonstration

 9-7     program and shall distribute [competitive] grant money under the

 9-8     program for demonstration projects that develop sustainable and

 9-9     renewable [alternative] energy resources, including:

9-10                 (1)  photovoltaic, biomass, wind, and solar

9-11     applications; and

9-12                 (2)  other appropriate renewable and sustainable

9-13     [alternative] energy applications.

9-14           (b)  The energy office [governor] may require a grant

9-15     recipient to match a grant in a ratio determined by the energy

9-16     office [governor].

9-17           SECTION 11.  Subchapter D, Chapter 2305, Government Code, is

9-18     amended by transferring Section 2305.069 from Subchapter E,

9-19     Government Code, redesignating Section 2305.069 as Section

9-20     2305.038, and amending that section to read as follows:

9-21           Sec. 2305.038 [2305.069].  LOCAL GOVERNMENT ENERGY PROGRAM.

9-22     (a)  The energy office is the supervisory agency for the local

9-23     government energy program to provide energy management assistance

9-24     to public schools, health care institutions, and other local

9-25     governments.

9-26           (b)  Projects funded under this section may include:

9-27                 (1)  energy management training workshops that address

 10-1    current energy issues and state-of-the-art building energy

 10-2    technologies;

 10-3                (2)  energy-efficient partnerships with school

 10-4    districts or health care facilities to identify building energy

 10-5    performances, set up customized utility tracking systems, establish

 10-6    operation and maintenance procedures to curtail energy waste,

 10-7    identify capital energy projects that will yield a high return on

 10-8    investment, and locate appropriate sources of retrofit financing;

 10-9                (3)  assistance in analyzing alternative methods of

10-10    financing energy-saving projects and negotiating contracts with

10-11    power suppliers;

10-12                (4)  technical support in designing new facilities,

10-13    building additions, and renovations for energy-efficient operation;

10-14    and

10-15                (5)  colonias as defined by Section 2306.581.  [The

10-16    supervising state agency of the local government energy program

10-17    shall distribute competitive grant money under the program for

10-18    energy-saving projects that benefit local governments in this

10-19    state.]

10-20          [(b)  Proposals funded under this section may include:]

10-21                [(1)  energy audits of a local government facility;]

10-22                [(2)  traffic light synchronization;]

10-23                [(3)  fleet management; and]

10-24                [(4)  fuel-efficient transit routing.]

10-25          [(c)  The governor may require a grant recipient to match a

10-26    grant in a ratio determined by the governor.]

10-27          SECTION 12.  Subchapter D, Chapter 2305, Government Code, is

 11-1    amended by transferring Section 2305.070 from Subchapter E,

 11-2    Government Code, redesignating Section 2305.070 as Section

 11-3    2305.039, and amending that section to read as follows:

 11-4          Sec. 2305.039 [2305.070].  TRANSPORTATION ENERGY PROGRAM.

 11-5    (a)  The energy office is the supervising state agency of the

 11-6    transportation energy program and shall distribute funds

 11-7    [competitive grant money] under the program for projects relating

 11-8    to mass transit and other transportation services.

 11-9          (b)  A project may:

11-10                (1)  assist a service provider in providing services

11-11    such as:

11-12                      (A)  traffic light synchronization;

11-13                      (B)  fleet management;

11-14                      (C)  computerized transit routing that is energy

11-15    efficient;

11-16                      (D)  car-care clinics;

11-17                      (E)  vanpooling or ridesharing efforts;

11-18                      (F)  public education related to mass transit;

11-19                      (G)  driver training in energy conservation

11-20    awareness; and

11-21                      (H)  transportation services for the elderly or

11-22    persons with a disability; and

11-23                (2)  include studies to improve existing systems and

11-24    plan for future transportation systems in this state.

11-25          (c)  The energy office [governor] may require a grant

11-26    recipient to match a grant in a ratio determined by the energy

11-27    office [governor].

 12-1          SECTION 13.  Sections 2305.013, 2305.040, 2305.061, 2305.062,

 12-2    2305.063, 2305.066, 2305.068, and 2305.071 through 2305.076,

 12-3    Government Code, are repealed.

 12-4          SECTION 14.  (a)  This Act takes effect September 1, 1997.

 12-5          (b)  The change in law made by this Act does not apply to a

 12-6    contract entered into before the effective date of this Act.

 12-7          SECTION 15.  The importance of this legislation and the

 12-8    crowded condition of the calendars in both houses create an

 12-9    emergency and an imperative public necessity that the

12-10    constitutional rule requiring bills to be read on three several

12-11    days in each house be suspended, and this rule is hereby suspended.