81R3605 JTS-F

By: Strama H.B. No. 1391

A BILL TO BE ENTITLED

AN ACT

relating to the creation and authority of certain special districts to promote the use of renewable energy systems and energy efficiency improvements; authorizing the issuance of bonds.

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

SECTION 1. Section 386.051(b), Health and Safety Code, is amended to read as follows:

(b) Under the plan, the commission and the comptroller shall provide grants or other funding for:

(1) the diesel emissions reduction incentive program established under Subchapter C, including for infrastructure projects established under that subchapter;

(2) the motor vehicle purchase or lease incentive program established under Subchapter D;

(3) the new technology research and development program established under Chapter 387; [and]

(4) the clean school bus program established under Chapter 390; and

(5) emissions management districts under Chapter 391.

SECTION 2. Section 386.252(c), Health and Safety Code, is amended to read as follows:

(c) Money in the fund may be allocated to the clean school bus program and emissions management districts only if:

(1) the money is available for that purpose after money is allocated for the other purposes of the fund as required by the state implementation plan; or

(2) the amount of money deposited to the credit of the fund in a state fiscal year exceeds the amount the comptroller's biennial revenue estimate shows as the comptroller's estimated amount to be deposited to the credit of the fund in that year.

SECTION 3. Subtitle C, Title 5, Health and Safety Code, is amended by adding Chapter 391 to read as follows:

CHAPTER 391. EMISSIONS MANAGEMENT PROJECT FINANCING THROUGH

CONTRACTUAL ASSESSMENTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 391.001. DEFINITIONS. In this chapter:

(1) "Board" means a district's board of directors.

(2) "Director" means a board member.

(3) "District" means an emissions management district created under this chapter.

(4) "Emissions management project" means:

(A) a renewable energy system; or

(B) an energy efficiency improvement.

(5) "Energy efficiency improvement" means an installation or modification that is designed to reduce energy consumption in a residential or commercial building, including:

(A) insulation in walls, roofs, floors, and foundations and in heating and cooling distribution systems;

(B) storm windows and doors, multiglazed windows and doors, heat-absorbing or heat-reflective glazed and coated window and door systems, additional glazing, reductions in glass area, and other window and door system modifications that reduce energy consumption;

(C) automatic energy control systems;

(D) heating, ventilating, or air conditioning and distribution system modifications or replacements in a building or central plant;

(E) caulking and weather-stripping;

(F) replacement or modification of lighting fixtures to increase the energy efficiency of the system;

(G) energy recovery systems; and

(H) systems to increase the use of natural daylight for interior lighting.

(6) "Local government" mean a municipality or a county.

(7) "Renewable energy system" means a fixture, product, device, or interacting group of fixtures, products, or devices that produces or uses energy from renewable resources and is capable of being installed for use in a commercial or residential building, including a system designed to generate electricity for use in the building and to be installed on the customer's side of the electric utility meter. The term includes:

(A) a photovoltaic generating system;

(B) a solar thermal system;

(C) a small wind generation system;

(D) a biomass energy system; and

(E) a geothermal energy system.

[Sections 391.002-391.050 reserved for expansion]

SUBCHAPTER B. CREATION OF DISTRICT

Sec. 391.051. ORDINANCE OR ORDER CREATING DISTRICT. (a) The governing body of a local government by ordinance or order may establish a district under this chapter.

(b) The ordinance or order establishing the district must designate:

(1) the district's territory as a defined area inside the local government's boundaries in which property owners are eligible to participate in contractual assessment agreements with the district, which area may include all or any portion of the area inside the local government's boundaries;

(2) five individuals to be the initial directors;

(3) the kinds of emissions management projects eligible for financing by the district; and

(4) the date and time of a hearing on the creation of the district.

Sec. 391.052. NATURE OF DISTRICT. A district is a special district and a political subdivision of the state.

[Sections 391.053-391.100 reserved for expansion]

SUBCHAPTER C. GOVERNANCE

Sec. 391.101. BOARD OF DIRECTORS. The district is governed by the board of five directors appointed by the governing body of the local government.

Sec. 391.102. TERMS. Directors serve staggered two-year terms, with two or three directors' terms expiring June 1 of each year.

Sec. 391.103. QUALIFICATIONS OF DIRECTOR. To be qualified to serve as a director, a person must be at least 18 years old and be a resident of the district.

Sec. 391.104. VACANCIES; QUORUM. (a) A board vacancy is filled in the same manner as the original appointment.

(b) A vacant board position is not counted for the purposes of establishing a quorum of the board.

Sec. 391.105. CONFLICTS OF INTEREST. Chapter 171, Local Government Code, governs conflicts of interest for directors.

Sec. 391.106. COMPENSATION. (a) For purposes of this section, "performs the duties of a director" means substantial performance of the management of the district's business, including participation in board and committee meetings and other activities involving the substantive deliberation of district business and in pertinent educational programs, but does not include routine or ministerial activities such as the execution of documents or self-preparation for meetings.

(b) A local government is authorized to compensate a director when the director performs the duties of a director. The local government shall compensate a director not more than $50 a day for each day the director performs the duties of a director.

Sec. 391.107. DIRECTOR'S BOND AND OATH. (a) As soon as practicable after a director is appointed, the director shall execute a $10,000 bond payable to the district and conditioned on the faithful performance of the director's duties.

(b) Each director's bond must be approved by the board, and each director shall take the oath of office prescribed by the constitution for public officers.

(c) The bond and oath shall be filed with the district and retained in its records.

Sec. 391.108. OFFICERS. After directors are appointed and have qualified by executing a bond and taking the oath, they shall organize by electing a president, a vice president, a secretary, and any other officers the board considers necessary.

Sec. 391.109. RULES. The board may adopt rules to administer and operate the district.

[Sections 391.110-391.150 reserved for expansion]

SUBCHAPTER D. POWERS AND DUTIES

Sec. 391.151. GENERAL POWERS AND DUTIES. A district may:

(1) guarantee or otherwise secure loans for the purchase and installation of an emissions management project;

(2) enter into contractual assessment agreements under Section 391.152 to finance the purchase and installation of an emissions management project;

(3) make other innovative arrangements to finance the purchase and installation of an emissions management project;

(4) lease equipment and materials for an emissions management project to a property owner;

(5) issue bonds to finance district purposes under Subchapter E; and

(6) apply for grants or other funding under the Texas emissions reduction plan under Chapter 386.

Sec. 391.152. CONTRACTUAL ASSESSMENT AGREEMENTS. (a) A district may enter into a contractual assessment agreement with an owner of property in the area designated by the local government in an order or ordinance under Section 391.051 to finance the purchase and installation of an emissions management project for the owner's property.

(b) The board by rule shall establish the terms of an agreement under this chapter, including:

(1) the term of the assessments; and

(2) the rate of interest on the assessments.

(c) A contract under this section may allow the property owner to directly:

(1) purchase the equipment and materials for the installation of a renewable energy system or an energy efficiency improvement; and

(2) contract for the installation of a renewable energy system or energy efficiency improvement.

Sec. 391.153. ASSESSMENT ROLL. After the district and a property owner enter into a contractual assessment agreement, the board shall levy the assessments against the property. The board shall have an assessment roll prepared showing the assessments against each property. The assessment roll shall be filed with the secretary of the board or other officer who performs the function of secretary and be open for public inspection.

Sec. 391.154. INTEREST ON ASSESSMENTS; LIEN. (a) Assessments bear interest at a rate specified by the board that may not exceed the interest rate permitted under Chapter 1204, Government Code.

(b) Interest on an assessment between the effective date of the contract and the date the first installment and any related penalty is payable shall be added to the first installment. The interest or penalties on all unpaid installments shall be added to each subsequent installment until paid.

(c) An assessment and any interest and penalties on that assessment is a lien against the property until paid.

(d) The owner of any property assessed may at any time pay the entire assessment against any lot or parcel with interest accrued to the date of the payment.

Sec. 391.155. SUPPLEMENTAL ASSESSMENTS. After notice and hearing in the manner required for original assessments, the board may make supplemental assessments to correct an omission or mistake in an assessment:

(1) relating to the total cost of the improvement project or services; or

(2) covering delinquencies or costs of collection.

Sec. 391.156. NO EMINENT DOMAIN. A district may not exercise the power of eminent domain.

[Sections 391.157-391.200 reserved for expansion]

SUBCHAPTER E. BONDS

Sec. 391.201. GENERAL OBLIGATION AND REVENUE BONDS. For the payment of all or part of the costs of financing the purchase and installation of emissions management projects, the board may issue bonds in one or more series payable from and secured by assessments, Texas emissions reduction plan grants or other funding, revenues, grants, gifts, contracts, leases, or any combination of those funds. Bonds may be liens on all or part of the revenue derived from improvements authorized under this chapter, including installment payments of special assessments, or from any other source pledged to the payment of the bonds.

Sec. 391.202. TERMS AND CONDITIONS OF BONDS. (a) Bonds may be issued to mature serially or otherwise not more than 40 years from their date of issue. Provision may be made for the subsequent issuance of additional parity bonds or subordinate lien bonds under terms or conditions that may be stated in the order or resolution authorizing the issuance of the bonds.

(b) The bonds are negotiable instruments within the meaning and for purposes of the Business & Commerce Code.

(c) The bonds may be issued registrable as to principal alone or as to both principal and interest, shall be executed, may be made redeemable before maturity, may be issued in the form, denominations, and manner and under the terms, conditions, and details, may be sold in the manner, at the price, and under the terms, and shall bear interest at the rates as determined and provided in the order or resolution authorizing the issuance of the bonds.

(d) Bonds may bear interest and may be issued in accordance with Chapters 1201, 1204, and 1371, Government Code, and Subchapters A-C, Chapter 1207, Government Code.

(e) If provided by the bond order or resolution, the proceeds from the sale of bonds may be used to pay interest on the bonds during and after the period of the acquisition or construction of any emissions management project to be provided through the issuance of the bonds, to pay administrative and operation expenses to create a reserve fund for the payment of the principal of and interest on the bonds, and to create any other funds. The proceeds of the bonds may be placed on time deposit or invested, until needed, in securities in the manner provided by the bond order or resolution.

Sec. 391.203. PLEDGES. (a) The board may pledge all or part of the income or assessments from emissions management projects financed under this chapter or from any other source to the payment of the bonds, including the payment of principal, interest, and any other amounts required or permitted in connection with the bonds. The pledged income shall be set and collected in amounts that will be at least sufficient, with any other pledged resources, to provide for all payments of principal, interest, and any other amounts required in connection with the bonds and, to the extent required by the order or resolution authorizing the issuance of the bonds, to provide for the payment of expenses in connection with the bonds and to pay operation, maintenance, and other expenses in connection with the emissions management projects authorized under this chapter.

(b) Bonds may be additionally secured by a mortgage or deed of trust on real property relating to the emissions management projects authorized under this chapter owned or to be acquired by the district and by chattel mortgages, liens, or security interests on personal property appurtenant to that real property. The board may authorize the execution of trust indentures, mortgages, deeds of trust, or other forms of encumbrance to evidence the indebtedness.

(c) The board may pledge to the payment of the bonds all or any part of any grant, donation, revenues, or income received or to be received from the United States government or any other public or private source.

Sec. 391.204. REFUNDING BONDS. (a) Bonds issued under this chapter may be refunded or otherwise refinanced by the issuance of refunding bonds under terms or conditions determined by order or resolution of the board. Refunding bonds may be issued in amounts necessary to pay the principal of and interest and redemption premium, if any, on bonds to be refunded, at maturity or on any redemption date, and to provide for the payment of costs incurred in connection with the refunding.

(b) The refunding bonds shall be issued in the manner provided by this chapter for other bonds.

Sec. 391.205. APPROVAL BY ATTORNEY GENERAL; REGISTRATION. (a) The district shall submit bonds and the appropriate proceedings authorizing their issuance to the attorney general for examination.

(b) If the bonds recite that they are secured by a pledge of assessments, revenues, or rentals from a contract or lease, the district also shall submit to the attorney general a copy of the pledge, contract, or lease and the proceedings relating to it.

(c) If the attorney general finds that the bonds have been authorized and any assessment, contract, or lease has been made in accordance with law, the attorney general shall approve the bonds and the assessment, contract, or lease, and the bonds shall be registered by the comptroller.

(d) After approval and registration, the bonds and any assessment, contract, or lease relating to them are incontestable in any court or other forum for any reason and are valid and binding obligations for all purposes in accordance with their terms.

Sec. 391.206. AUTHORIZED INVESTMENTS; SECURITY. (a) District bonds are legal and authorized investments for:

(1) banks, trust companies, and savings and loan associations;

(2) insurance companies;

(3) fiduciaries, trustees, and guardians; and

(4) all interest and sinking funds and other public funds of the state and agencies, subdivisions, and instrumentalities of the state, including counties, municipalities, towns, villages, school districts, and all other kinds and types of districts, public agencies, and bodies politic.

(b) District bonds are eligible and lawful security for deposits of counties, municipalities, towns, villages, school districts, and all other kinds and types of districts, public agencies, and bodies politic, to the extent of the market value of the bonds, when accompanied by any unmatured interest coupons appurtenant to the bonds.

Sec. 391.207. LOCAL GOVERNMENT APPROVAL. (a) A district must obtain the approval of the governing body of the local government in which it is located for bond issues for emissions management projects.

(b) Except as provided by Section 391.253, a local government is not obligated to pay any bonds, notes, or other obligations of the district.

[Sections 391.208-391.250 reserved for expansion]

SUBCHAPTER F. DISSOLUTION

Sec. 391.251. DISSOLUTION BY BOARD VOTE. Except as limited by Section 391.253, the board by majority vote may dissolve the district at any time.

Sec. 391.252. DISSOLUTION BY LOCAL GOVERNMENT. (a) Except as limited by Section 391.253, the governing body of a local government that created the district, by a vote of not less than two-thirds of its membership, may by official action dissolve the district.

(b) On the adoption of the ordinance or order, the district is dissolved, and the local government succeeds to the property and assets of the district and assumes all bonds, debts, obligations, and liabilities of the district.

Sec. 391.253. LIMITATION. A district may not be dissolved by its board or by a local government if the district has any outstanding bonded indebtedness until that bonded indebtedness has been repaid or defeased in accordance with the order or resolution authorizing the issuance of the bonds.

SECTION 4. Section 372.003(b), Local Government Code, is amended to read as follows:

(b) A public improvement project may include:

(1) landscaping;

(2) erection of fountains, distinctive lighting, and signs;

(3) acquiring, constructing, improving, widening, narrowing, closing, or rerouting of sidewalks or of streets, any other roadways, or their rights-of-way;

(4) construction or improvement of pedestrian malls;

(5) acquisition and installation of pieces of art;

(6) acquisition, construction, or improvement of libraries;

(7) acquisition, construction, or improvement of off-street parking facilities;

(8) acquisition, construction, improvement, or rerouting of mass transportation facilities;

(9) acquisition, construction, or improvement of water, wastewater, or drainage facilities or improvements;

(10) the establishment or improvement of parks;

(11) projects similar to those listed in Subdivisions (1)-(10);

(12) acquisition, by purchase or otherwise, of real property in connection with an authorized improvement;

(13) special supplemental services for improvement and promotion of the district, including services relating to advertising, promotion, health and sanitation, water and wastewater, renewable energy and energy efficiency, public safety, security, business recruitment, development, recreation, and cultural enhancement; [and]

(14) payment of expenses incurred in the establishment, administration, and operation of the district; and

(15) acquisition, installation, or improvement of renewable energy and energy efficiency improvements.

SECTION 5. Section 375.112(a), Local Government Code, is amended to read as follows:

(a) An improvement project or services provided by the district may include the construction, acquisition, improvement, relocation, operation, maintenance, or provision of:

(1) landscaping; lighting, banners, and signs; streets and sidewalks; pedestrian skywalks, crosswalks, and tunnels; seawalls; marinas; drainage and navigation improvements; pedestrian malls; solid waste, water, sewer, and power facilities, including electrical, gas, steam, cogeneration, and chilled water facilities; renewable energy and energy efficiency improvements; parks, plazas, lakes, rivers, bayous, ponds, and recreation and scenic areas; historic areas; fountains; works of art; off-street parking facilities, bus terminals, heliports, and mass transit systems; and the cost of any demolition in connection with providing any of the improvement projects;

(2) other improvements similar to those described in Subdivision (1);

(3) the acquisition of real property or any interest in real property in connection with an improvement, project, or services authorized by this chapter, Chapter 54, Water Code, or Chapter 365 or 441, Transportation Code;

(4) special supplemental services for advertising, economic development, promoting the area in the district, health and sanitation, public safety, maintenance, security, business recruitment, development, elimination or relief of traffic congestion, recreation, and cultural enhancement; and

(5) expenses incurred in the establishment, administration, maintenance, and operation of the district or any of its improvements, projects, or services.

SECTION 6. This Act takes effect September 1, 2009.