80R5604 PAM-F

By: Morrison H.B. No. 1749

A BILL TO BE ENTITLED

AN ACT

relating to the authority of political subdivisions to negotiate contracts for electricity.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 304, Local Government Code, is amended by adding Section 304.0015 to read as follows:

Sec. 304.0015. CONTRACT TERMS; AUTHORITY TO DELEGATE. (a) A contract between a political subdivision and a political subdivision corporation described by Section 304.001 for the purchase of electricity, in whole or in part, authorized under Subchapter A, Chapter 271:

(1) may be for a term not to exceed 30 years;

(2) is a security agreement within the meaning of Section 1208.001, Government Code; and

(3) is exempt from Chapter 252 or 262, as appropriate, or other law that establishes a competitive purchasing process that, otherwise, would apply to the contract.

(b) In authorizing a political subdivision corporation to negotiate a contract, the governing body of each political subdivision that forms the political subdivision corporation may:

(1) authorize the maximum amount of any payment and the maximum rate of interest under the contract;

(2) authorize the maximum amount of electricity to be purchased under the contract; and

(3) delegate to any officer or employee of the political subdivision the authority to:

(A) determine the payment terms of the contract;

(B) determine the specific amount of electricity purchased; and

(C) complete and execute the contract.

(c) In exercising the authority delegated under Subsection (b)(3), the officer or employee may establish the terms to complete and execute the contract, including:

(1) the form of the contract;

(2) the payment terms of the contract, including the price paid, payment amounts, and interest rate under the contract;

(3) the relevant contract dates, including payment dates;

(4) the redemption or prepayment provisions; and

(5) any other details relating to completing and executing the contract specified by the governing body of the political subdivision in a proceeding authorizing the contract.

(d) A finding or determination made by an officer or employee exercising the authority delegated under Subsection (b)(3) has the same force and effect as a finding or determination made by the governing body of the political subdivision.

(e) A political subdivision that enters into a contract under this section has the same contracting authority as a municipality contracting with a utility system under Section 1502.002, Government Code.

(f) A political subdivision that enters into a contract under this section is not required to submit the contract to a public official of this state, including the attorney general, for review and approval. A political subdivision may submit the contract to a public official for review and approval if authorized by law. A contract under this section may not be contested after the contract is executed and delivered except for fraud or forgery.

SECTION 2. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2007.