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.