BILL ANALYSIS
By: Straus
BACKGROUND AND PURPOSE
The Public Funds Investment Act, Chapter 2256 Government Code, authorizes state agencies and political subdivisions to invest funds under their control in accordance with standards laid out in the Act. Section 2256.0201, added by the 76th Legislature, authorizes a municipal electric utility to enter into hedging contracts in relation to fuel oil, natural gas, and electric energy to protect against loss due to price fluctuations. All such transactions must comply with the regulations of the Commodity Futures Trading Commission and the Securities and Exchange Commission. The purpose of H.B. 1217 is to authorize a municipal electric utility to also use hedging contracts related to coal and nuclear fuel, prices for which have become increasingly volatile. The bill also allows hedging contracts related to transportation costs for these commodities.
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.
ANALYSIS
H.B. 1217 amends Sections 2256(a) and (d), Government Code, to expand the list of items that a municipal electric utility may address through hedging contracts to include coal, nuclear fuel, and related transportation costs.
EFFECTIVE DATE
The effective date is September 1, 2007 or immediately if approved by two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution.