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A BILL TO BE ENTITLED
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AN ACT
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relating to the assessment of generation market-share of power |
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generation companies. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 39.152(a) and (d), Utilities Code, are |
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amended to read as follows: |
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(a) The commission shall certify a power region if: |
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(1) a sufficient number of interconnected utilities in |
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the power region fall under the operational control of an |
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independent organization as described by Section 39.151; |
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(2) the power region has a generally applicable tariff |
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that guarantees open and nondiscriminatory access for all users to |
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transmission and distribution facilities in the power region as |
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provided by Section 39.203; and |
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(3) no person owns or [and] controls, or any |
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combination of owning or controlling, more than 20 percent of the |
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installed generation capacity located in or capable of delivering |
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electricity to a power region, as determined according to Section |
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39.154. |
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(d) For a power region outside of ERCOT, a power generation |
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company that is affiliated with an electric utility may elect to |
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demonstrate that it meets the requirements of Subsection (a)(3) by |
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showing that it does not own or [and] control, or any combination of |
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owning or controlling, more than 20 percent of the installed |
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capacity in a geographic market that includes the power region, |
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using the guidelines, standards, and methods adopted by the Federal |
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Energy Regulatory Commission. |
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SECTION 2. Sections 39.154(a), (c), and (e), Utilities |
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Code, are amended to read as follows: |
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(a) Beginning on the date of introduction of customer |
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choice, a power generation company may not own or [and] control, or |
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any combination of owning or controlling, more than 20 percent of |
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the installed generation capacity located in, or capable of |
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delivering electricity to, a power region. |
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(c) In determining the percentage shares of installed |
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generation capacity under this section, the commission shall |
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combine capacity owned or [and] controlled by a power generation |
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company and any entity that is affiliated with that power |
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generation company within the power region, reduced by the |
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installed generation capacity of those facilities that are made |
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subject to capacity auctions under Sections 39.153(a) and (d). |
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(e) In determining the percentage shares of installed |
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generation capacity owned or [and] controlled by a power generation |
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company under this section and Section 39.156, the commission |
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shall, for purposes of calculating the numerator, reduce the |
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installed generation capacity owned or [and] controlled by that |
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power generation company by the installed generation capacity of |
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any "grandfathered facility" within an ozone nonattainment area as |
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of September 1, 1999, for which that power generation company has |
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commenced complying or made a binding commitment to comply with |
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Section 39.264. This subsection applies only to a power generation |
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company that is affiliated with an electric utility that owned and |
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controlled more than 27 percent of the installed generation |
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capacity in the power region on January 1, 1999. |
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SECTION 3. Section 39.155(a), Utilities Code, is amended to |
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read as follows: |
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(a) Each person, municipally owned utility, electric |
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cooperative, and river authority that owns or controls generation |
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facilities and offers electricity for sale in this state shall |
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report to the commission its installed generation capacity, the |
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total amount of capacity available for sale to others, the total |
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amount of capacity under contract to others, the total amount of |
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capacity dedicated to its own use, its annual wholesale power sales |
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in the state, its annual retail power sales in the state, and any |
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other information necessary for the commission to assess market |
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power or the development of a competitive retail market in the |
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state. The commission shall by rule prescribe the nature and detail |
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of the reporting requirements and shall administer those reporting |
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requirements in a manner that ensures the confidentiality of |
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competitively sensitive information. |
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SECTION 4. Sections 39.156(a) and (b), Utilities Code, are |
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amended to read as follows: |
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(a) In this section, "market power mitigation plan" or |
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"plan" means a written proposal by an electric utility or a power |
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generation company for reducing its ownership or [and] control of |
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installed generation capacity as required by Section 39.154. |
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(b) An electric utility or power generation company owning |
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or [and] controlling, or any combination of owning or controlling, |
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more than 20 percent of the generation capacity located in, or |
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capable of delivering electricity to, a power region shall file a |
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market power mitigation plan with the commission not later than |
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December 1, 2000. |
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SECTION 5. Section 39.157(b), Utilities Code, is amended to |
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read as follows: |
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(b) Beginning on the date of introduction of customer |
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choice, a person that owns or controls generation facilities may |
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not own transmission or distribution facilities in this state |
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except for those facilities necessary to interconnect a generation |
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facility with the transmission or distribution network, a facility |
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not dedicated to public use, or a facility otherwise excluded from |
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the definition of "electric utility" under Section 31.002. |
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However, nothing in this chapter shall prohibit a power generation |
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company affiliated with a transmission and distribution utility |
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from owning or controlling generation facilities. |
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SECTION 6. Section 39.158(a), Utilities Code, is amended to |
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read as follows: |
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(a) A person who owns or controls [An owner of] electric |
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generation facilities that offers electricity for sale in the state |
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and proposes to merge, consolidate, or otherwise become affiliated |
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with another person who owns or controls [owner of] electric |
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generation facilities that offers electricity for sale in this |
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state shall obtain the approval of the commission before closing if |
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the electricity offered for sale in the power region by the merged, |
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consolidated, or affiliated entity will exceed one percent of the |
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total electricity for sale in the power region. The approval shall |
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be requested at least 120 days before the date of the proposed |
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closing. The commission shall approve the transaction unless the |
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commission finds that the transaction results in a violation of |
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Section 39.154. If the commission finds that the transaction as |
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proposed would violate Section 39.154, the commission may condition |
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approval of the transaction on adoption of reasonable modifications |
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to the transaction as prescribed by the commission to mitigate |
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potential market power abuses. |
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SECTION 7. Section 39.407(a), Utilities Code, is amended to |
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read as follows: |
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(a) If an electric utility chooses on or after January 1, |
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2007, to participate in customer choice, the commission may not |
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authorize customer choice until the applicable power region has |
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been certified as a qualifying power region under Section |
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39.152(a). Except as otherwise provided by this subsection, the |
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commission shall certify that the requirements of Section |
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39.152(a)(3) are met for electric utilities subject to this |
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subchapter only upon a finding that the total capacity owned or |
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[and] controlled, or any combination of owned or controlled, by |
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each such electric utility and its affiliates does not exceed 20 |
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percent of the total installed generation capacity within the |
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constrained geographic region served by each such electric utility |
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plus the total available transmission capacity capable of |
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delivering firm power and energy to that constrained geographic |
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region. Not later than May 1, 2002, each electric utility subject |
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to this subchapter shall submit to the electric utility |
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restructuring legislative oversight committee an analysis of the |
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needed transmission facilities necessary to make the electric |
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utility's service area transmission capability comparable to areas |
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within the ERCOT power region. On or after September 1, 2003, each |
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electric utility subject to this subchapter shall file the |
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utility's plans to develop the utility's transmission |
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interconnections with the utility's power region or other adjacent |
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power regions. The commission shall review the plan and not later |
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than the 180th day after the date the plan is filed, determine the |
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additional transmission facilities necessary to provide access to |
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power and energy that is comparable to the access provided in areas |
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within the ERCOT power region; provided, however, that if a hearing |
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is requested by any party to the proceeding, the 180-day deadline |
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will be extended one day for each day of hearings. The commission |
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shall, as a part of the commission's approval of the plan, approve a |
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rate rider mechanism for the recovery of the incremental costs of |
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those facilities after the facilities are completed and in-service. |
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A finding of need under this subsection shall meet the requirements |
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of Sections 37.056(c)(1), (2), and (4)(E). The commission may |
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certify that the requirements of Section 39.152(a)(3) are met for |
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electric utilities subject to this subchapter if the commission |
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finds that: |
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(1) each such utility has sufficient transmission |
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facilities to provide customers access to power and energy from |
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capacity controlled by suppliers not affiliated with the incumbent |
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utility that is comparable to the access to power and energy from |
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capacity controlled by suppliers not affiliated with the incumbent |
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utilities in areas of the ERCOT power region; and |
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(2) the total capacity owned or [and] controlled, or |
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any combination of owned or controlled, by each such electric |
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utility and its affiliates does not exceed 20 percent of the total |
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installed generation capacity within the power region. |
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SECTION 8. Section 39.453(b), Utilities Code, is amended to |
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read as follows: |
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(b) The commission shall certify that the requirement of |
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Section 39.152(a)(3) is met for an electric utility subject to this |
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subchapter only if the commission finds that the total capacity |
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owned or [and] controlled, or any combination of owned or |
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controlled, by the electric utility and the utility's affiliates |
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does not exceed 20 percent of the total installed generation |
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capacity within the power region of that utility. |
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SECTION 9. This Act takes effect September 1, 2007. |