By Danburg                                            H.B. No. 2151
         77R6889 CBH-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the authority of local governments to aggregate,
 1-3     purchase, and sell energy and natural gas.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Chapter 303, Local Government Code, as added by
 1-6     Chapter 405, Acts of the 76th Legislature, Regular Session, 1999,
 1-7     is redesignated as Chapter 304, Local Government Code, and amended
 1-8     to read as follows:
 1-9          CHAPTER 304 [303].  ENERGY AND NATURAL GAS [AGGREGATION]
1-10                       MEASURES FOR LOCAL GOVERNMENTS
1-11           Sec. 304.001 [303.001].  AGGREGATION, PURCHASE, AND OTHER
1-12     ACTIONS BY POLITICAL SUBDIVISIONS. (a)  In this chapter, "political
1-13     subdivision" means a county, municipality, school district,
1-14     hospital district, special district, or any other political
1-15     subdivision [receiving electric service from an entity that has
1-16     implemented customer choice, as defined in Section 31.002,
1-17     Utilities Code].
1-18           (b)  A political subdivision may join with another political
1-19     subdivision or subdivisions to form a political subdivision
1-20     corporation or corporations to:
1-21                 (1)  [act as an agent to] negotiate the purchase of
1-22     electricity, or [to] likewise aid or act on behalf of the political
1-23     subdivisions for which the corporation is created, with respect to
1-24     their own electricity use for their respective public facilities;
 2-1                 (2)  negotiate the purchase of natural gas, or likewise
 2-2     aid or act on behalf of the political subdivisions for which the
 2-3     corporation is created, with respect to their own natural gas use
 2-4     for their respective public facilities, in accordance with all
 2-5     applicable laws and rules; and
 2-6                 (3)  provide education and information services for the
 2-7     political subdivisions for which the corporation is created,
 2-8     including education and information related to:
 2-9                       (A)  aggregation of electricity and natural gas;
2-10                       (B)  the purchase, sale, use, and management of
2-11     electricity and natural gas; and
2-12                       (C)  the operation of facilities dependent on
2-13     electricity or natural gas.
2-14           (c)  The articles of incorporation and the bylaws of a
2-15     political subdivision corporation must be approved by ordinance,
2-16     resolution, or order adopted by the governing body of each
2-17     political subdivision for which the corporation is created.
2-18           (d)  A political subdivision corporation may:
2-19                 (1)  negotiate on behalf of its incorporating political
2-20     subdivisions for the purchase of electricity;
2-21                 (2)  [,] make contracts for the purchase of
2-22     electricity[,] ;
2-23                 (3)  purchase electricity[,] ;
2-24                 (4)  obtain certification as a retail electric provider
2-25     in accordance with Section 39.352, Utilities Code, and related
2-26     rules adopted by the Public Utility Commission of Texas, and sell
2-27     electricity as a retail electric provider; and
 3-1                 (5)  take any other action necessary to purchase or
 3-2     sell electricity for use in the public facilities of the political
 3-3     subdivision or subdivisions represented by the political
 3-4     subdivision corporation.
 3-5           (e)  To the extent authorized by Subsection (f), a political
 3-6     subdivision corporation may:
 3-7                 (1)  negotiate on behalf of its incorporating political
 3-8     subdivisions for the purchase of natural gas;
 3-9                 (2)  make contracts for the purchase of natural gas;
3-10                 (3)  purchase natural gas; and
3-11                 (4)  take any other action necessary to purchase or
3-12     sell natural gas for use in the public facilities of the political
3-13     subdivision or subdivisions represented by the political
3-14     subdivision corporation.
3-15           (f)  A political subdivision corporation may take an action
3-16     described by Subsection (e) only to the same extent its
3-17     incorporating political subdivisions have the authority to take
3-18     that action under other law.  This section does not create new or
3-19     additional authority for an incorporating political subdivision to
3-20     take an action described by Subsection (e).
3-21           (g)  In Subsections (d), (e), and (f):
3-22                 (1)  "Electricity" [this subsection, "electricity"]
3-23     means electric energy, capacity, energy services, ancillary
3-24     services, or other electric services for retail or wholesale
3-25     consumption by the political subdivisions.
3-26                 (2)  "Natural gas" means capacity, natural gas
3-27     services, ancillary services, or other natural gas services for
 4-1     retail or wholesale consumption by the political subdivisions.
 4-2           (h) [(e)]  A political subdivision corporation may recover
 4-3     the expenses of the political subdivision corporation through:
 4-4                 (1)  the assessment of dues to the incorporating
 4-5     political subdivisions;
 4-6                 (2)  [or through] an aggregation fee charged per
 4-7     kilowatt hour or charged according to any other appropriate formula
 4-8     determined by the political subdivision corporation; or
 4-9                 (3)  [, or] a combination of dues and an aggregation
4-10     fee [both].
4-11           (i)  A political subdivision corporation may only aggregate
4-12     the purchasing of electricity for the facilities of political
4-13     subdivisions that receive electric service from an entity that has
4-14     implemented customer choice, as defined by Section 31.002,
4-15     Utilities Code.
4-16           (j) [(f)]  A political subdivision corporation may appear on
4-17     behalf of its incorporating political subdivisions before the
4-18     Public Utility Commission of Texas, the Railroad Commission of
4-19     Texas, the Texas Natural Resource Conservation Commission, any
4-20     other governmental agency or regulatory authority, the Texas
4-21     Legislature, and the courts.
4-22           (k) [(g)]  A political subdivision corporation has the powers
4-23     of a corporation created and incorporated pursuant to the
4-24     provisions of the Texas Non-Profit Corporation Act (Article
4-25     1396-1.01 et seq., Vernon's Texas Civil Statutes) and such other
4-26     powers as specified in Section 39.3545, Utilities Code.
4-27           (l) [(h)]  The provisions of the Texas Non-Profit Corporation
 5-1     Act (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes)
 5-2     relating to powers, standards of conduct, and interests in
 5-3     contracts apply to the directors and officers of a political
 5-4     subdivision corporation.
 5-5           (m) [(i)]  A member of the board of directors of a political
 5-6     subdivision corporation:
 5-7                 (1)  is not a public official by virtue of that
 5-8     position; and
 5-9                 (2)  unless otherwise ineligible, may be elected to
5-10     serve as an official of a political subdivision or be employed by a
5-11     political subdivision.
5-12           Sec. 304.002 [303.002].  AGGREGATION BY POLITICAL SUBDIVISION
5-13     FOR CITIZENS. (a)  A political subdivision aggregator may negotiate
5-14     for the purchase of electricity and energy services on behalf of
5-15     the citizens of the political subdivision.  The citizens must
5-16     affirmatively request to be included in the aggregation services by
5-17     the political subdivision aggregator.
5-18           (b)  A political subdivision may contract with a third party
5-19     or another aggregator to administer the aggregation of electricity
5-20     and energy services purchased under Subsection (a).
5-21           (c)  The political subdivision aggregator may use any mailing
5-22     from the subdivision to invite participation by its citizens.
5-23           SECTION 2.  Section 39.354(b), Utilities Code, is amended to
5-24     read as follows:
5-25           (b)  In this section, "municipal aggregator" means a person
5-26     authorized by two or more municipal governing bodies to join the
5-27     bodies into a single purchasing unit to negotiate the purchase of
 6-1     electricity from retail electric providers or aggregation by a
 6-2     municipality under Chapter 304 [303], Local Government Code.
 6-3           SECTION 3.  Section 39.3545(b), Utilities Code, is amended to
 6-4     read as follows:
 6-5           (b)  In this section, "political subdivision aggregator"
 6-6     means a person or political subdivision corporation authorized by
 6-7     two or more political subdivision governing bodies to join the
 6-8     bodies into a single purchasing unit or multiple purchasing units
 6-9     to negotiate the purchase of electricity from retail electric
6-10     providers for the facilities of the aggregated political
6-11     subdivisions or aggregation by a person or political subdivision
6-12     under Chapter 304 [303], Local Government Code.
6-13           SECTION 4.  This Act takes effect immediately if it receives
6-14     a vote of two-thirds of all the members elected to each house, as
6-15     provided by Section 39, Article III, Texas Constitution.  If this
6-16     Act does not receive the vote necessary for immediate effect, this
6-17     Act takes effect September 1, 2001.