AN ACT

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

 1-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-3           SECTION 1.  Sections 2305.031 through 2305.039, Government

 1-4     Code, are repealed.

 1-5           SECTION 2.  Subdivision (3), Section 2305.002, Government

 1-6     Code, is amended to read as follows:

 1-7                 (3)  "Energy office" means the state energy

 1-8     conservation office of the General Services Commission.

 1-9           SECTION 3.  Section 2305.011, Government Code, is amended to

1-10     read as follows:

1-11           Sec. 2305.011.  ADMINISTRATION BY GENERAL SERVICES COMMISSION

1-12     [GOVERNOR] AND ENERGY OFFICE.  (a)  The energy office shall

1-13     [Subject to Section 2305.013, the governor may:]

1-14                 [(1)  finance a project under this chapter; and]

1-15                 [(2)]  oversee and monitor the administration of

1-16     programs [a program] prescribed by this chapter.

1-17           (b)  The governor and the energy office may establish direct

1-18     grant programs and competitive grant programs in addition to the

1-19     programs provided by this chapter.

1-20           (c)  The energy office [governor] shall[:]

1-21                 [(1)  determine the supervising state agency for each

1-22     competitive grant program and for each direct grant program

1-23     established by the governor; and]

 2-1                 [(2)]  establish programs and criteria and evaluate a

 2-2     proposal in accordance with applicable federal guidelines.

 2-3           (d)  The energy office shall send to the appropriate federal

 2-4     entity all information required under applicable federal

 2-5     guidelines.

 2-6           (e)  Criteria established under this section may apply

 2-7     generally to all programs or specifically to one or more programs.

 2-8           SECTION 4.  Sections 2305.022 and 2305.023, Government Code,

 2-9     are amended to read as follows:

2-10           Sec. 2305.022.  USE OF ACCOUNT.  Money in the account may be

2-11     used only by the governor and the General Services Commission to

2-12     implement and operate the programs authorized by this chapter.

2-13           Sec. 2305.023.  ACCOUNT RECORDS; ENERGY OFFICE REPORT.

2-14     (a)  The comptroller shall establish records of the money in the

2-15     account that are sufficient to identify the source of each

2-16     particular amount in the account to facilitate a determination of

2-17     compliance with applicable federal guidelines relating to the use

2-18     of money derived from each particular source.

2-19           (b)  Not later than January 15 of each odd-numbered year, the

2-20     energy office shall submit to the governor and the legislature a

2-21     biennial report that shows the expenditures from the account during

2-22     the previous biennium and the amount remaining in the account on

2-23     the date of the report.

2-24           SECTION 5.  Subchapter D, Chapter 2305, Government Code, is

2-25     amended by amending the subchapter heading and adding Section

 3-1     2305.031 to read as follows:

 3-2            SUBCHAPTER D.  OIL OVERCHARGE [DIRECT GRANT] PROGRAMS

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

 3-4     shall maintain a revolving loan program for the benefit of state

 3-5     agencies, universities, and political subdivisions.  The energy

 3-6     office shall use oil overcharge funds for the programs and purposes

 3-7     in this subchapter.

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

 3-9     amended by transferring Section 2305.065 from Subchapter E,

3-10     redesignating Section 2305.065 as Section 2305.032, and amending

3-11     that section to read as follows:

3-12           Sec. 2305.032 [2305.065].  LOANSTAR REVOLVING LOAN PROGRAM.

3-13     (a)  The energy office [governor] under the loanstar revolving loan

3-14     program may approve and finance [demonstration] projects that

3-15     provide loans to eligible applicants for energy-saving capital

3-16     improvements.  Projects [(b)  The supervising state agency of the

3-17     program may distribute competitive grant money under the program to

3-18     finance energy conservation projects] approved by the energy office

3-19     should [governor for the] benefit [of]:

3-20                 (1)  a state agency or institution of higher education;

3-21                 (2)  a public school;

3-22                 (3)  a political subdivision of the state;

3-23                 (4)  [a transportation provider;]

3-24                 [(5)  an agricultural producer;]

3-25                 [(6)]  a small to medium-sized business; and

 4-1                 (5)  a public or nonprofit hospital or health care

 4-2     facility [(7)  an individual of low or moderate income].

 4-3           (b) [(c)]  The energy office [governor] shall determine the

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

 4-5     set the interest rate for a loan at a low rate that the energy

 4-6     office [governor] determines is sufficient to recover the cost of

 4-7     administering the loan program.

 4-8           (c)  At least 85 percent of the loans made under this section

 4-9     shall be awarded to state agencies, institutions of higher

4-10     education, public schools, or political subdivisions.

4-11           (d)  Any borrower that [A person who] receives a loan under

4-12     this section shall repay the principal of and interest on the loan

4-13     from the value of energy savings that accrues as the result of the

4-14     energy conservation measure implemented with the borrowed money.

4-15           (e)  An [A state agency or] institution that receives a loan

4-16     under this section shall repay the loan from the amount budgeted

4-17     for the agency's or institution's energy costs.  Until the loan is

4-18     repaid, the legislature may not reduce the amount budgeted for

4-19     those energy costs to reflect the value of energy savings that

4-20     accrues as a result of the energy conservation measure implemented

4-21     with the borrowed money.

4-22           (f)  The energy office shall allocate at least $95 million,

4-23     including loan commitments and cash on hand, to the loanstar

4-24     program and shall administer the funds under its control in a

4-25     manner that assures that funds available to the loanstar program

 5-1     equal or exceed $95 million at all times.

 5-2           SECTION 7.  Subchapter D, Chapter 2305, Government Code, is

 5-3     amended by redesignating Section 2305.041 as Section 2305.033 and

 5-4     amending that section to read as follows:

 5-5           Sec. 2305.033 [2305.041].  STATE ENERGY [CONSERVATION]

 5-6     PROGRAM.  (a)  The energy office is the supervising state agency

 5-7     for the state energy [conservation] program.

 5-8           (b)  In accordance with Part B, Energy Policy and

 5-9     Conservation Act (42 U.S.C. Sec. 6321 et seq.), the energy office,

5-10     under the program, shall[:]

5-11                 [(1)]  distribute funds [direct grant money] for

5-12     projects that save measurable quantities of energy[; and]

5-13                 [(2)  finance the operation of the Energy Management

5-14     Center for Texas Schools, in accordance with Section 88A, Public

5-15     Utility Regulatory Act (Article 1446c, Vernon's Texas Civil

5-16     Statutes)].

5-17           (c)  A project under Subsection (b) [(b)(1)] must be

5-18     implemented primarily by institutions or private sector energy

5-19     consumers.

5-20           (d)  A proposal under Subsection (b) [(b)(1)] must:

5-21                 (1)  promote the conservation of energy; and

5-22                 (2)  improve the efficient use of energy through

5-23     activities that result in quantifiable energy savings, including:

5-24                       (A)  energy audits of buildings;

5-25                       (B)  technical assistance in reducing energy

 6-1     bills; [and]

 6-2                       (C)  [providing] training to building operators

 6-3     and fiscal officers on various energy issues such as utility bill

 6-4     analysis and energy management techniques; and

 6-5                       (D)  other technical assistance to programs for

 6-6     which funds are appropriated.

 6-7           [(e)  A public school may not receive a grant or the benefits

 6-8     of a grant under Subsection (b)(2) unless the governor approves the

 6-9     school's energy conservation plan.]

6-10           SECTION 8.  Subchapter D, Chapter 2305, Government Code, is

6-11     amended by adding Sections 2305.034 and 2305.035 to read as

6-12     follows:

6-13           Sec. 2305.034.  STATE AGENCIES PROGRAM.  The energy office is

6-14     the supervising agency for the state agencies program that may

6-15     distribute funds through Chapter 447.  Projects funded under this

6-16     section may include:

6-17                 (1)  energy manager training;

6-18                 (2)  performance contracting services described by

6-19     Section 51.927, Education Code;

6-20                 (3)  energy-efficient design assistance for new

6-21     facilities, including major renovation;

6-22                 (4)  projects for state building design standards

6-23     compliance;

6-24                 (5)  projects to create awareness of model energy codes

6-25     at the local and state levels;

 7-1                 (6)  projects to develop and maintain the state's

 7-2     utility database; and

 7-3                 (7)  other appropriate energy and information

 7-4     applications.

 7-5           Sec. 2305.035.  ALTERNATIVE FUELS PROGRAM.  (a)  The energy

 7-6     office is the supervising state agency for the alternative fuels

 7-7     program.

 7-8           (b)  The energy office shall provide funds under the program

 7-9     to promote, facilitate, and support the use of alternative fuels in

7-10     this state.

7-11           (c)  Among the projects that may be funded under this section

7-12     are:

7-13                 (1)  clean air projects;

7-14                 (2)  educational projects;

7-15                 (3)  demonstration and conversion projects; and

7-16                 (4)  technical research and training projects.

7-17           SECTION 9.  Subchapter D, Chapter 2305, Government Code, is

7-18     amended by transferring Section 2305.064 from Subchapter E,

7-19     redesignating Section 2305.064 as Section 2305.036, and amending

7-20     that section to read as follows:

7-21           Sec. 2305.036 [2305.064].  HOUSING PARTNERSHIP PROGRAM.

7-22     (a)  The energy office is the supervising state agency for [of] the

7-23     housing partnership program [shall distribute competitive grant

7-24     money under the program for residential energy conservation

7-25     projects that reduce the amount of energy consumed for space

 8-1     heating, space cooling, water heating, refrigeration, or other

 8-2     residential energy uses].

 8-3           (b)  The energy office shall promote the efficient use of

 8-4     energy in Texas residential housing through grants, partnerships,

 8-5     and loans.

 8-6           (c)  Projects funded under this program [section] may

 8-7     include:

 8-8                 (1)  projects to demonstrate [demonstration of]

 8-9     commercially available cost-effective energy-saving techniques and

8-10     technologies;

8-11                 (2)  training and technical assistance in

8-12     energy-efficient construction, design, or remodeling;

8-13                 (3)  projects to provide energy education workshops or

8-14     seminars for consumers [providing information to occupants]; [and]

8-15                 (4)  financing [incentives] for energy [energy-saving]

8-16     designs and [or] improvements, energy-efficient appliances, and

8-17     energy management systems; and

8-18                 (5)  funding of a weatherization assistance program

8-19     through  the Texas Department Of Housing and Community Affairs to

8-20     benefit individuals of low income.

8-21           (d) [(c)]  The ultimate beneficiaries of the program shall be

8-22     residential energy consumers, primarily targeting low-to-moderate

8-23     income households [a grant under this section must be low-income or

8-24     moderate-income consumers].

8-25           (e)  Nonprofit organizations, community action agencies,

 9-1     local governments, regional government councils, universities,

 9-2     utility companies, public housing authorities, community-based

 9-3     organizations, social service agencies, and other service-related

 9-4     organizations may serve as leads in establishing partnerships with

 9-5     the agency.

 9-6           (f) [(d)  A local government, public housing agency, or other

 9-7     public or nonprofit organization serving the housing needs of low

 9-8     and moderate income individuals may apply for a grant under this

 9-9     section.]

9-10           [(e)]  The energy office [supervising state agency] may

9-11     require grant recipients to match  a grant in a ratio determined by

9-12     the energy office [from other sources at least the total amount of

9-13     the grants awarded under this section].

9-14           SECTION 10.  Subchapter D, Chapter 2305, Government Code, is

9-15     amended by transferring Section 2305.067 from Subchapter E,

9-16     redesignating Section 2305.067 as Section 2305.037, and amending

9-17     that section to read as follows:

9-18           Sec. 2305.037 [2305.067].  RENEWABLE [ALTERNATIVE] ENERGY

9-19     DEMONSTRATION PROGRAM.  (a)  The energy office is the supervising

9-20     state agency of the renewable [alternative] energy demonstration

9-21     program and shall distribute [competitive] grant money under the

9-22     program for demonstration projects that develop sustainable and

9-23     renewable [alternative] energy resources, including:

9-24                 (1)  photovoltaic, biomass, wind, and solar

9-25     applications; and

 10-1                (2)  other appropriate renewable and sustainable

 10-2    [alternative] energy applications.

 10-3          (b)  The energy office [governor] may require a grant

 10-4    recipient to match a grant in a ratio determined by the energy

 10-5    office [governor].

 10-6          SECTION 11.  Subchapter D, Chapter 2305, Government Code, is

 10-7    amended by transferring Section 2305.069 from Subchapter E,

 10-8    redesignating Section 2305.069 as Section 2305.038, and amending

 10-9    that section to read as follows:

10-10          Sec. 2305.038 [2305.069].  LOCAL GOVERNMENT ENERGY PROGRAM.

10-11    (a)  The energy office is the supervisory agency for the local

10-12    government energy program to provide energy management assistance

10-13    to public schools, health care institutions, and other local

10-14    governments.

10-15          (b)  Projects funded under this section may include:

10-16                (1)  energy management training workshops that address

10-17    current energy issues and state-of-the-art building energy

10-18    technologies;

10-19                (2)  energy-efficient partnerships with school

10-20    districts or health care facilities to identify building energy

10-21    performances, set up customized utility tracking systems, establish

10-22    operation and maintenance procedures to curtail energy waste,

10-23    identify capital energy projects that will yield a high return on

10-24    investment, and locate appropriate sources of retrofit financing;

10-25                (3)  assistance in analyzing alternative methods of

 11-1    financing energy-saving projects and negotiating contracts with

 11-2    power suppliers;

 11-3                (4)  technical support in designing new facilities,

 11-4    building additions, and renovations for energy-efficient operation;

 11-5    and

 11-6                (5)  colonias as defined by Section 2306.581.  [The

 11-7    supervising state agency of the local government energy program

 11-8    shall distribute competitive grant money under the program for

 11-9    energy-saving projects that benefit local governments in this

11-10    state.]

11-11          [(b)  Proposals funded under this section may include:]

11-12                [(1)  energy audits of a local government facility;]

11-13                [(2)  traffic light synchronization;]

11-14                [(3)  fleet management; and]

11-15                [(4)  fuel-efficient transit routing.]

11-16          [(c)  The governor may require a grant recipient to match a

11-17    grant in a ratio determined by the governor.]

11-18          SECTION 12.  Subchapter D, Chapter 2305, Government Code, is

11-19    amended by transferring Section 2305.070 from Subchapter E,

11-20    redesignating Section 2305.070 as Section 2305.039, and amending

11-21    that section to read as follows:

11-22          Sec. 2305.039 [2305.070].  TRANSPORTATION ENERGY PROGRAM.

11-23    (a)  The energy office is the supervising state agency of the

11-24    transportation energy program and shall distribute funds

11-25    [competitive grant money] under the program for projects relating

 12-1    to mass transit and other transportation services.

 12-2          (b)  A project may:

 12-3                (1)  assist a service provider in providing services

 12-4    such as:

 12-5                      (A)  traffic light synchronization;

 12-6                      (B)  fleet management;

 12-7                      (C)  computerized transit routing that is energy

 12-8    efficient;

 12-9                      (D)  car-care clinics;

12-10                      (E)  vanpooling or ridesharing efforts;

12-11                      (F)  public education related to mass transit;

12-12                      (G)  driver training in energy conservation

12-13    awareness; and

12-14                      (H)  transportation services for the elderly or

12-15    persons with a disability; and

12-16                (2)  include studies to improve existing systems and

12-17    plan for future transportation systems in this state.

12-18          (c)  The energy office [governor] may require a grant

12-19    recipient to match a grant in a ratio determined by the energy

12-20    office [governor].

12-21          SECTION 13.  Sections 2305.013, 2305.040, 2305.061, 2305.062,

12-22    2305.063, 2305.066, 2305.068, 2305.071, and 2305.072, Government

12-23    Code, are repealed.

12-24          SECTION 14.  (a)  This Act takes effect September 1, 1997.

12-25          (b)  The change in law made by this Act does not apply to a

 13-1    contract entered into before the effective date of this Act.

 13-2          SECTION 15.  The importance of this legislation and the

 13-3    crowded condition of the calendars in both houses create an

 13-4    emergency and an imperative public necessity that the

 13-5    constitutional rule requiring bills to be read on three several

 13-6    days in each house be suspended, and this rule is hereby suspended.

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I hereby certify that S.B. No. 1906 passed the Senate on

         May 5, 1997, by the following vote:  Yeas 31, Nays 0; and that the

         Senate concurred in House amendment on May 16, 1997, by a viva-voce

         vote.

                                             _______________________________

                                                 Secretary of the Senate

               I hereby certify that S.B. No. 1906 passed the House, with

         amendment, on May 14, 1997, by a non-record vote.

                                             _______________________________

                                                 Chief Clerk of the House

         Approved:

         _______________________________

                     Date

         _______________________________

                   Governor