87S20798 CXP-F
 
  By: Huberty H.B. No. 181
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the funding of projects by the Texas Water Development
  Board to promote utility reliability, resiliency, efficiency,
  conservation, and demand reduction; authorizing the issuance of
  revenue bonds.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  (a)  The legislature recognizes the importance
  of providing for the reliability and resiliency of this state's
  utilities, broadband providers, and power generation companies.
  The purpose of this Act is to ensure that proper funding in the form
  of meaningful and adequate financial assistance is available to
  enhance the reliability and resiliency of water, electric, and
  natural gas utilities, broadband providers, and power generation
  companies in this state, including by supporting projects to
  weatherize facilities, provide resilience, and reduce demand
  during periods of high demand.
         (b)  To accomplish that purpose, this Act creates the state
  utilities reliability fund. The fund is intended to serve as an
  infrastructure funding source in order to enhance the financing
  capabilities of the Texas Water Development Board under a
  constitutionally created program and a revenue bond program. Money
  in the fund will be available to provide any financial assistance,
  including market rate, low-interest, and no-interest loans, longer
  repayment terms for loans, deferral of loan payments, interest rate
  rebates and subsidies, loan guarantees, grants, or other financial
  assistance that meets the needs of this state, the recipients, and
  the purposes of this Act, as provided by Sections 49-d-15 and
  49-d-16, Article III, Texas Constitution.  In addition, this Act
  creates the state utilities reliability revenue fund for use in
  managing revenue bonds issued by the Texas Water Development Board
  that are supported by the state utilities reliability fund.  The
  state utilities reliability fund and the state utilities
  reliability revenue fund are not intended to be used to pay for new,
  dispatchable sources of electricity to be built by private
  entities.
         SECTION 2.  Chapter 447, Government Code, is amended by
  adding Section 447.014 to read as follows:
         Sec. 447.014.  ENERGY EFFICIENCY, NATURAL GAS CONSERVATION,
  AND WATER CONSERVATION LOAN PROGRAM. (a) Using money available
  from the state utilities reliability fund established under Chapter
  202, Utilities Code, the comptroller and the State Energy
  Conservation Office jointly by rule shall establish and administer
  a program that issues or guarantees loans to be used for
  improvements that increase the energy efficiency of and promote
  conservation of natural gas and water by residences and businesses
  that are not newly constructed.
         (b)  The rules adopted under this section must establish
  eligibility requirements for receipt of a loan issued or guaranteed
  under the program, including emissions reduction
  cost-effectiveness criteria.
         (c)  The State Energy Conservation Office annually shall
  submit to the Public Utility Commission of Texas and the Energy
  Systems Laboratory of the Texas A&M Engineering Experiment Station
  a report that:
               (1)  evaluates the effectiveness of the program; and
               (2)  quantifies energy savings and emissions
  reductions that result from the program for consideration in the
  state implementation plan, as described by Section 382.0173, Health
  and Safety Code, for emissions reduction credits.
         SECTION 3.  Title 4, Utilities Code, is amended by adding
  Subtitle C to read as follows:
  SUBTITLE C.  RELIABILITY AND RESILIENCY OF UTILITIES, BROADBAND
  PROVIDERS, AND POWER GENERATORS
  CHAPTER 201.  GENERAL PROVISIONS
         Sec. 201.001.  DEFINITIONS. In this subtitle:
               (1)  "Advisory committee" means the State Utilities
  Reliability Fund Advisory Committee.
               (2)  "Board" means the Texas Water Development Board.
               (3)  "Broadband provider" means any person,
  corporation, municipality or other political subdivision, or
  agency that owns or operates for compensation in this state
  facilities to provide broadband telecommunications capability and
  Internet access in this state.
               (4)  "Commission" means the Public Utility Commission
  of Texas.
               (5)  "Electric utility" has the meaning assigned by
  Section 31.002, except that the term includes an electric
  cooperative organized under Chapter 161 and a municipally owned
  utility.
               (6)  "Executive administrator" means the executive
  administrator of the Texas Water Development Board.
               (7)  "Facilities" means all of the property, plants,
  and equipment of an electric, natural gas, or water utility, a
  broadband provider, or a power generation company.  The term
  includes tangible property owned, operated, leased, used,
  controlled, or supplied for, by, or in connection with the business
  of the electric, natural gas, or water utility, the broadband
  provider, or the power generation company in this state.
               (8)  "Fund" means the state utilities reliability fund.
               (9)  "Historically underutilized business" has the
  meaning assigned by Section 2161.001, Government Code.
               (10)  "Natural gas utility" means a person who owns or
  operates for compensation in this state facilities to transmit or
  distribute combustible hydrocarbon natural gas or synthetic
  natural gas for sale or resale in a manner not subject to the
  jurisdiction of the Federal Energy Regulatory Commission under the
  Natural Gas Act (15 U.S.C. Section 717 et seq.).
               (11)  "Power generation company" has the meaning
  assigned by Section 31.002.
               (12)  "Railroad commission" means the Railroad
  Commission of Texas.
               (13)  "Revenue fund" means the state utilities
  reliability revenue fund.
               (14)  "State Energy Conservation Office" means a unit
  of the comptroller of public accounts.
               (15)  "Trust company" means the Texas Treasury
  Safekeeping Trust Company.
               (16)  "Water utility" means a person operating,
  maintaining, or controlling in this state facilities for providing
  potable water service or wastewater service, or both, for
  compensation.
  CHAPTER 202.  STATE UTILITIES RELIABILITY FUND
         Sec. 202.001.  FUND. (a)  The state utilities reliability
  fund is a special fund in the state treasury outside the general
  revenue fund to be used by the board as authorized by this chapter
  without further legislative appropriation.  The board may establish
  separate accounts in the fund and may transfer funds between
  accounts. The board may invest, reinvest, and direct the
  investment of money in the fund.  The fund and the fund's accounts
  may be kept and held by the trust company for and in the name of the
  board. The board has legal title to money and investments in the
  fund until money is disbursed from the fund as provided by this
  chapter and board rules.
         (b)  Money deposited to the credit of the fund may be used
  only as provided by Section 202.003.
         (c)  The fund consists of:
               (1)  money appropriated to the fund;
               (2)  money transferred or deposited to the credit of
  the fund by law, including money from any source transferred or
  deposited to the credit of the fund at the board's discretion as
  authorized by law;
               (3)  the proceeds of any fee or tax imposed by this
  state that by statute is dedicated for deposit to the credit of the
  fund;
               (4)  any other revenue that the legislature by statute
  dedicates for deposit to the credit of the fund;
               (5)  investment earnings and interest earned on amounts
  credited to the fund;
               (6)  repayments of loans made from the fund; and
               (7)  money transferred to the fund from another fund or
  account to which money from the fund was transferred.
         Sec. 202.002.  MANAGEMENT AND INVESTMENT OF FUND. (a)  The
  board or the trust company may hold and invest the fund, and any
  accounts established in the fund, for and in the name of the board,
  taking into account the purposes for which money in the fund may be
  used.  The fund may be invested with the state treasury pool.
         (b)  The overall objectives for the investment of the fund
  are, in order of precedence:
               (1)  preservation and safety of the fund principal;
               (2)  liquidity; and
               (3)  investment yield.
         (c)  The board or the trust company, as directed by the
  board, has any power necessary to accomplish the purposes of
  managing and investing the assets of the fund. In managing the
  assets of the fund, through procedures and subject to restrictions
  the board or the trust company considers appropriate, the board or
  the trust company may acquire, exchange, sell, supervise, manage,
  or retain any kind of investment that a prudent investor,
  exercising reasonable care, skill, and caution, would acquire or
  retain in light of the purposes, terms, distribution requirements,
  and other circumstances of the fund then prevailing, taking into
  consideration the investment of all the assets of the fund rather
  than a single investment.
         (d)  If the fund is managed by the trust company, the trust
  company may charge fees to cover its costs incurred in managing and
  investing the fund. The fees must be consistent with the fees the
  trust company charges other state and local governmental entities
  for which the trust company provides investment management
  services. The trust company may recover fees the trust company
  charges under this subsection only from the earnings of the fund.
         (e)  If the fund is managed by the trust company, the trust
  company annually shall provide a report to the board and to the
  advisory committee with respect to the investment of the fund. The
  trust company shall contract with a certified public accountant to
  conduct an independent audit of the fund annually and shall present
  the results of each annual audit to the board and to the advisory
  committee. This subsection does not affect the state auditor's
  authority to conduct an audit of the fund under Chapter 321,
  Government Code.
         (f)  The board or trust company shall adopt a written
  investment policy that is appropriate for the fund. If the fund is
  managed by the trust company:
               (1)  the trust company shall present the investment
  policy to the board and the investment advisory board established
  under Section 404.028, Government Code; and
               (2)  the board and investment advisory board shall
  submit to the trust company recommendations regarding the policy.
         (g)  If the fund is managed by the trust company, the board
  annually shall provide to the trust company a forecast of the cash
  flows into and out of the fund. The board shall provide updates to
  the forecasts as appropriate to assist the trust company in
  achieving the objectives specified by Subsection (b).
         (h)  If the fund is managed by the trust company, the company
  shall disburse money from the fund as directed by the board.  The
  board shall direct disbursements from the fund on a schedule
  specified by the board.  If any applicable revenue bonds are
  outstanding, the board shall direct disbursements from the fund not
  more frequently than twice in any state fiscal year.
         (i)  An investment-related contract entered into under this
  section is not subject to Chapter 2260, Government Code.
         Sec. 202.003.  USE OF FUND; PAYMENTS TO AND FROM OTHER FUNDS
  OR ACCOUNTS. (a)  The board or the trust company at the direction of
  the board shall make disbursements from the fund to the revenue fund
  in the amounts the board determines are needed for disbursement
  through the financing structures developed to meet the goals of the
  fund, including transfer of those amounts to other board programs
  or funds as necessary, or for debt service payments on or security
  provisions of the board's revenue bonds, after considering all
  other sources available for those purposes.
         (b)  The fund may be used only to:
               (1)  enhance the reliability and resiliency of water,
  electric, and natural gas utilities, broadband providers, and power
  generation companies for this state by supporting projects,
  including projects to weatherize facilities and reduce demand, in
  order to provide resilience and continuous service during periods
  of high demand;
               (2)  pay the necessary and reasonable expenses of the
  board in administering the fund; and
               (3)  transfer funds to other board programs or funds.
         (c)  Notwithstanding any other provision of this chapter,
  the use of the fund may be prioritized based on a statewide utility
  reliability and resiliency plan adopted under Section 202.010.
         (d)  The board may provide financial assistance from the fund
  for:
               (1)  a water utility project;
               (2)  an electric utility project;
               (3)  a natural gas utility project;
               (4)  a power generation company project;
               (5)  a water utility, electric utility, or natural gas
  utility project to reduce demand; or
               (6)  a broadband provider to provide matching funds to
  enable the broadband provider to participate in a federal program
  for broadband facilities.
         (e)  Financial assistance under Subsection (d) may be
  provided in any form as determined by the board, including a market
  rate, low-interest, or no-interest loan, a loan guarantee, an
  equity ownership in a public or private entity, a joint venture with
  a public or private entity, a grant, an interest rebate, or an
  interest subsidy.
         (f)  In providing financial assistance under Subsection (d),
  the board may make, enter into, and enforce contracts, agreements,
  including management agreements, for the management of any of the
  board's property, leases, indentures, mortgages, deeds of trust,
  security agreements, pledge agreements, credit agreements,
  overrides or other revenue sharing mechanisms, repurchase
  agreements, and other instruments with any person, including any
  lender and any federal, state, or local governmental agency, and to
  take other actions as may accomplish any of its purposes.
         (g)  The board may contract with and provide for the
  compensation of consultants and agents, including engineers,
  attorneys, management consultants, financial advisors, indexing
  agents, and other experts, as the business of the board under this
  chapter may require.
         (h)  The fund may not be used to subsidize or finance the
  construction of facilities that the board determines, in the
  board's sole discretion, will result in new electric generation
  capacity.
         (i)  Money in the fund may not be used for the purposes of
  certification under Section 403.121, Government Code.
         Sec. 202.004.  PRIORITIZATION OF PROJECTS BY BOARD. (a)  The
  board, for the purpose of providing financial assistance under this
  chapter, shall prioritize projects that enhance the reliability and
  resiliency of water, electric, and natural gas utilities, broadband
  providers, and power generation companies in this state.
         (b)  The board shall establish a point system for
  prioritizing projects for which financial assistance is sought from
  the board. The system must include a standard for the board to
  apply in determining whether a project qualifies for financial
  assistance at the time the application for financial assistance is
  filed with the board.
         (c)  The board shall give the highest consideration in
  awarding points to projects that will have a substantial effect,
  including projects that will:
               (1)  harden facilities to protect against extreme
  weather and fuel supply disruptions;
               (2)  enhance resiliency of existing facilities during
  periods of high demand;
               (3)  enhance the availability of fuel or water to
  existing power generation companies and electric utilities to
  improve the reliability of those companies and utilities to provide
  continuous and adequate electric service during periods of high
  demand;
               (4)  improve local resiliency by reducing demand
  through energy efficiency measures, advanced metering
  infrastructure deployment, and demand response technology
  deployment; and
               (5)  provide broadband service in low-income and rural
  communities.
         (d)  In addition to the criteria provided by Subsection (c),
  the board may also consider the following criteria in prioritizing
  projects:
               (1)  other funding sources secured by the applicant for
  the project, including any capital to be provided by the applicant;
               (2)  the financial capacity of the applicant to repay
  the financial assistance provided; and
               (3)  the ability of the applicant to timely leverage
  state financing with local, federal, or private funding.
         (e)  The board shall consider federal tax subsidies in
  prioritizing projects.
         Sec. 202.005.  ADVISORY COMMITTEE. (a)  The State Utilities
  Reliability Fund Advisory Committee is composed of the following
  members:
               (1)  the comptroller, or a person designated by the
  comptroller;
               (2)  three members of the senate appointed by the
  lieutenant governor, including:
                     (A)  a member of the committee of the senate
  having primary jurisdiction over matters relating to finance; and
                     (B)  a member of the committee of the senate
  having primary jurisdiction over natural resources;
               (3)  three members of the house of representatives
  appointed by the speaker of the house of representatives,
  including:
                     (A)  a member of the committee of the house of
  representatives having primary jurisdiction over appropriations;
  and
                     (B)  a member of the committee of the house of
  representatives having primary jurisdiction over natural
  resources;
               (4)  the chief executive of the Office of Public
  Utility Counsel, or a person designated by the chief executive of
  the Office of Public Utility Counsel;
               (5)  the presiding officer of the commission, or a
  person designated by the presiding officer of the commission; 
               (6)  the chair of the Texas Reliability Entity board of
  directors, or a person designated by a public vote of the Texas
  Reliability Entity; and
               (7)  an unaffiliated board member of the Electric
  Reliability Council of Texas, appointed in a public meeting of the
  Electric Reliability Council of Texas.
         (b)  The board shall provide staff as necessary to assist the
  advisory committee.
         (c)  An appointed member of the advisory committee serves at
  the will of the officer who appointed the member.
         (d)  The lieutenant governor shall appoint a co-presiding
  officer of the advisory committee from among the members appointed
  by the lieutenant governor, and the speaker of the house of
  representatives shall appoint a co-presiding officer of the
  committee from among the members appointed by the speaker.
         (e)  The advisory committee shall hold public hearings,
  formal meetings, or work sessions in a location with audio and video
  capacity. The board shall broadcast over the Internet live video
  and audio of each public hearing, formal meeting, or work session of
  the advisory committee and provide access to each broadcast on the
  board's Internet website.  Either co-presiding officer of the
  advisory committee may call a public hearing, formal meeting, or
  work session of the advisory committee after issuing a public
  notice not later than the seventh day before the date of the public
  hearing, formal meeting, or work session. The public notice must
  include an agenda with formal actions included. The advisory
  committee may not take formal action at a public hearing, formal
  meeting, or work session unless a quorum of the committee is
  present. The board shall provide access on the board's Internet
  website to the public notices, recordings of the live broadcasts,
  and minutes of public hearings, formal meetings, and work sessions.
         (f)  Except as otherwise provided by this subsection, a
  member of the advisory committee is not entitled to receive
  compensation for service on the committee or reimbursement for
  expenses incurred in the performance of official duties as a member
  of the committee.  Service on the advisory committee by a member of
  the senate or house of representatives is considered legislative
  service for which the member is entitled to reimbursement and other
  benefits in the same manner and to the same extent as for other
  legislative service.
         (g)  The advisory committee shall submit comments and
  recommendations to the board regarding the use of money in the fund
  and in the revenue fund for use by the board in adopting rules under
  Section 202.006 and in adopting policies and procedures under
  Section 202.008. The submission must include:
               (1)  comments and recommendations on rulemaking
  related to the prioritization of projects in accordance with
  Section 202.004;
               (2)  comments and recommendations on rulemaking
  related to establishing standards for determining whether projects
  meet the criteria provided by Section 202.003;
               (3)  an evaluation of the available programs for
  providing financing for projects authorized by this chapter and
  guidelines for implementing those programs;
               (4)  an evaluation of the lending practices of the
  board and guidelines for lending standards;
               (5)  an evaluation of the use of funds by the board to
  provide support for financial assistance for projects that enhance
  the reliability and resiliency of water, electric, and natural gas
  utilities, broadband providers, and power generation companies for
  this state, including support for the purposes described by Section
  202.003(b);
               (6)  an evaluation of methods for encouraging
  participation in the programs established under this chapter by
  companies domiciled in this state or that employ a significant
  number of residents of this state; and
               (7)  an evaluation of the overall operation, function,
  and structure of the fund.
         (h)  The advisory committee shall review the overall
  operation, function, and structure of the fund at least
  semiannually and may provide comments and recommendations to the
  board on any matter.
         (i)  The advisory committee may adopt rules, procedures, and
  policies as needed to administer this section and implement its
  responsibilities.
         (j)  Chapter 2110, Government Code, does not apply to the
  size, composition, or duration of the advisory committee.
         (k)  The advisory committee is subject to Chapter 325,
  Government Code (Texas Sunset Act). Unless continued in existence
  as provided by that chapter, the advisory committee is abolished
  and this section expires September 1, 2035.
         (l)  The advisory committee shall make recommendations to
  the board regarding information to be posted on the board's
  Internet website under Section 202.007(b).
         (m)  The advisory committee shall evaluate and may provide
  comments or recommendations on the feasibility of the state owning,
  constructing, and operating water, electric, natural gas, power
  generation, or broadband facilities related to the purposes
  described by Section 202.003(b).
         (n)  The executive administrator shall provide an annual
  report to the advisory committee on:
               (1)  the board's compliance with statewide annual goals
  relating to historically underutilized businesses; and
               (2)  the participation level of historically
  underutilized businesses in projects that receive funding under
  this chapter.
         (o)  If the aggregate level of participation by historically
  underutilized businesses in projects that receive funding under
  this chapter does not meet statewide annual goals adopted under
  Chapter 2161, Government Code, the advisory committee shall make
  recommendations to the board to improve the participation level.
         Sec. 202.006.  RULES. (a)  The board shall adopt rules
  providing for the use of money in the fund that are consistent with
  this subchapter, including rules:
               (1)  establishing standards for determining whether
  projects meet the criteria provided by Section 202.003;
               (2)  providing for public access to information on
  financing assistance applications and providing for consideration
  of public comment before financing decisions are made; and
               (3)  specifying the manner for prioritizing projects
  for purposes of Section 202.004.
         (b)  The board shall give full consideration to the
  recommendations of the advisory committee before adopting rules
  under this chapter.
         Sec. 202.007.  REPORTING AND TRANSPARENCY REQUIREMENTS. (a)  
  Not later than December 1 of each even-numbered year, the board
  shall provide a report to the governor, lieutenant governor,
  speaker of the house of representatives, and members of the
  legislature regarding the use of the fund.
         (b)  The board shall post the following information on the
  board's Internet website regarding the use of the fund and
  regularly update the information posted:
               (1)  the progress made in enhancing critical water,
  electric, natural gas, and broadband infrastructure to withstand
  periods of high demand; and
               (2)  a description of each project funded through the
  fund, including the expected date of completion of the project.
         Sec. 202.008.  POLICIES AND PROCEDURES TO MITIGATE OR
  MINIMIZE ADVERSE EFFECTS OF CERTAIN FEDERAL LAWS. The board shall
  adopt, and may amend from time to time at the board's discretion,
  policies and procedures for the purpose of mitigating or minimizing
  the adverse effects, if any, of federal laws and regulations
  relating to income taxes, arbitrage, rebates, and related matters
  that may restrict the board's ability to freely invest all or part
  of the fund or to receive and retain all the earnings from the fund.
         Sec. 202.009.  COOPERATION WITH OTHER STATE AGENCIES. (a)
  The commission, railroad commission, the State Energy Conservation
  Office, and other state agencies shall provide resources to the
  board that the board determines are necessary to carry out the
  board's duties and responsibilities under this chapter.
         (b)  The board may require the commission to review and
  recommend for approval electric utility, power generation company,
  and broadband provider projects for board assistance under this
  chapter and inspect electric utility, power generation company, and
  broadband provider projects after board financial assistance.
         (c)  The board may require the railroad commission to review
  and recommend for approval natural gas utility and power generation
  projects for board assistance under this chapter and inspect
  natural gas utility and power generation company projects after
  board financial assistance.
         (d)  The board may require any other state agency to provide
  services to the board to ensure the goals of the fund and this
  chapter are met.
         Sec. 202.010.  RELIABILITY AND RESILIENCY STUDY AND PLAN.
  (a)  The board may, at any time, develop and conduct a study of the
  needs, causes, and methods to address reliability and resiliency of
  the industries affected by this chapter and may develop a statewide
  reliability and resiliency plan.
         (b)  The board may, at any time, use money from the fund to
  contract and engage outside entities to develop a study or plan
  considered necessary by the board.
         Sec. 202.011.  CHANGES TO INDUSTRY STRUCTURE NOT IN CONFLICT
  WITH CHAPTER.  Any reconstruction or changes to the regulatory
  market structures of the industries identified in this chapter are
  not in conflict with the purpose of this chapter.
         Sec. 202.012.  PUBLIC PRIVATE PARTNERSHIPS. Money from the
  fund may be used to make payments under a public and private entity
  agreement to design, develop, finance, or construct a project
  described by this chapter.
         Sec. 202.013.  METHODOLOGY AND STANDARDS FOR POWER
  GENERATION FACILITY WEATHERIZATION. (a)  The commission shall
  develop a statistical methodology to determine the ambient
  conditions to which each power generation facility must be
  weatherized to comply with winter operations reliability
  standards.
         (b)  A methodology or standard developed under Subsection
  (a) may be used only to determine whether to provide financial
  assistance or support to a project to weatherize a power generation
  facility under this subtitle.
  CHAPTER 203. STATE UTILITIES RELIABILITY REVENUE FUND
         Sec. 203.001.  REVENUE FUND. (a)  The state utilities
  reliability revenue fund is a special fund in the state treasury
  outside the general revenue fund to be used by the board as
  authorized by this chapter without further legislative
  appropriation. The board may establish separate accounts in the
  revenue fund and may transfer money between accounts. The board has
  legal title to money and investments in the revenue fund until the
  money is disbursed as provided by this chapter and board rules.
         (b)  Money deposited to the credit of the revenue fund may be
  used only as provided by Section 203.003.
         (c)  The revenue fund consists of:
               (1)  money appropriated to the revenue fund;
               (2)  money transferred or deposited to the credit of
  the revenue fund by law, including money from any source
  transferred or deposited to the credit of the revenue fund at the
  board's discretion as authorized by law;
               (3)  the proceeds of any fee or tax imposed by this
  state that by statute is dedicated for deposit to the credit of the
  revenue fund;
               (4)  any other revenue that the legislature by statute
  dedicates for deposit to the credit of the revenue fund;
               (5)  investment earnings and interest earned on amounts
  credited to the revenue fund;
               (6)  the proceeds from the sale of revenue bonds issued
  by the board under this chapter that are designated by the board for
  the purpose of providing money for the revenue fund;
               (7)  repayments of loans made from the revenue fund;
  and
               (8)  money disbursed to the revenue fund from the state
  utilities reliability fund as authorized by Section 202.003.
         Sec. 203.002.  MANAGEMENT AND INVESTMENT OF REVENUE FUND.
  (a)  Money deposited to the credit of the revenue fund shall be
  invested as determined by the board. The revenue fund may be
  invested with the state treasury pool.
         (b)  The revenue fund and any accounts established in the
  revenue fund shall be kept and maintained by or at the direction of
  the board.
         (c)  At the direction of the board, the revenue fund and any
  accounts established in the revenue fund may be managed by the
  board, the comptroller, or a corporate trustee that is a trust
  company or a bank that has the powers of a trust company for and on
  behalf of the board and, pending use of the revenue fund and
  accounts for the purposes provided by this chapter, may be invested
  as provided by an order, resolution, or rule of the board.
         (d)  The board, comptroller, or corporate trustee shall
  manage the revenue fund in strict accordance with this chapter and
  the orders, resolutions, and rules of the board.
         Sec. 203.003.  USE OF REVENUE FUND. (a)  Money in the
  revenue fund may be used by the board only to provide financial
  assistance under terms specified by the board for projects that
  enhance the reliability and resiliency of water, electric, natural
  gas, broadband, and power generation facilities in this state,
  including:
               (1)  projects that enhance the ability of facilities to
  withstand periods of high demand;
               (2)  projects that reduce demand during periods of high
  demand; and
               (3)  projects to weatherize facilities.
         (b)  Financial assistance for projects under Subsection (a)
  may be provided in any form determined by the board that meets the
  needs and goals of this state and the applicants, including a market
  rate, low-interest, or no-interest loan, loan guarantee, equity
  ownership in a public or private entity, a joint venture with a
  public or private entity, a grant, an interest rebate, or an
  interest subsidy.
         (c)  In providing financial assistance under Subsection (a),
  the board may:
               (1)  make, enter into, and enforce contracts and
  agreements, including management agreements, for the management of
  any of the board's property, leases, indentures, mortgages, deeds
  of trust, security agreements, pledge agreements, credit
  agreements, overrides or other revenue sharing mechanisms,
  repurchase agreements, and other instruments with any person,
  including any lender and any federal, state, or local governmental
  agency;
               (2)  contract with and provide for the compensation of
  consultants and agents, including engineers, attorneys, management
  consultants, financial advisors, indexing agents, and other
  experts, as the business of the board may require; and
               (3)  take other actions to accomplish any of the board's
  purposes.
         (d)  The board may use money in the revenue fund:
               (1)  as a source of revenue or security for the payment
  of the principal of and interest on revenue bonds issued by the
  board under this chapter;
               (2)  to pay the necessary and reasonable expenses of
  paying agents, bond counsel, and financial advisory services and
  similar costs incurred by the board in administering the revenue
  fund; or
               (3)  to transfer money to the fund as necessary.
         (e)  The board, comptroller, or corporate trustee managing
  the revenue fund at the direction of the board shall withdraw from
  the revenue fund and pay to a person any amounts, as determined by
  the board, for the timely payment of:
               (1)  the principal of and interest on bonds described
  by Subsection (d)(1) that mature or become due; and
               (2)  any cost related to bonds described by Subsection
  (d)(1) that become due, including payments under related credit
  agreements.
         (f)  Money in the revenue fund may not be used for the purpose
  of certification under Section 403.121, Government Code.
         Sec. 203.004.  ISSUANCE OF REVENUE BONDS. (a)  The board may
  issue revenue bonds for the purpose of providing money for the
  revenue fund.
         (b)  The board may issue revenue bonds to refund revenue
  bonds or bonds and obligations issued or incurred in accordance
  with other provisions of law.
         (c)  Revenue bonds issued under this chapter are special
  obligations of the board payable only from and secured by
  designated income and receipts of the revenue fund, or of one or
  more accounts in the revenue fund, including principal of and
  interest paid and to be paid on revenue fund assets or income from
  accounts created within the revenue fund by the board, as
  determined by the board.
         (d)  Revenue bonds issued under this chapter do not
  constitute indebtedness of the state as prohibited by the
  constitution.
         (e)  The board may require revenue fund participants to make
  charges, levy taxes, or otherwise provide for sufficient money to
  pay acquired obligations.
         (f)  Revenue bonds issued under this chapter must be
  authorized by resolution of the board and must have the form and
  characteristics and bear the designations as the resolution
  provides.
         (g)  Revenue bonds issued under this chapter may:
               (1)  bear interest at the rate or rates payable
  annually or otherwise;
               (2)  be dated;
               (3)  mature at the time or times, serially, as term
  revenue bonds, or otherwise in not more than 50 years from their
  dates;
               (4)  be callable before stated maturity on the terms
  and at the prices, be in the denominations, be in the form, either
  coupon or registered, carry registration privileges as to principal
  only or as to both principal and interest and as to successive
  exchange of coupon for registered bonds or one denomination for
  bonds of other denominations, and successive exchange of registered
  revenue bonds for coupon revenue bonds, be executed in the manner,
  and be payable at the place or places inside or outside the state,
  as provided by the resolution;
               (5)  be issued in temporary or permanent form;
               (6)  be issued in one or more installments and from time
  to time as required and sold at a price or prices and under terms
  determined by the board to be the most advantageous reasonably
  obtainable; and
               (7)  be issued on a parity with and be secured in the
  manner as other revenue bonds authorized to be issued by this
  chapter or may be issued without parity and secured differently
  than other revenue bonds.
         (h)  Section 17.955, Water Code, applies to revenue bonds
  issued under this chapter in the same manner as that section applies
  to water financial assistance bonds.
         (i)  All proceedings relating to the issuance of revenue
  bonds issued under this chapter shall be submitted to the attorney
  general for examination. If the attorney general finds that the
  revenue bonds have been authorized in accordance with law, the
  attorney general shall approve the revenue bonds, and the revenue
  bonds shall be registered by the comptroller. After the approval
  and registration, the revenue bonds are incontestable in any court
  or other forum for any reason and are valid and binding obligations
  in accordance with their terms for all purposes.
         (j)  The proceeds received from the sale of revenue bonds
  issued under this chapter may be deposited or invested in any manner
  and in such investments as may be specified in the resolution or
  other proceedings authorizing those obligations. Money in the
  revenue fund or accounts created by this chapter or created in the
  resolution or other proceedings authorizing the revenue bonds may
  be invested in any manner and in any obligations as may be specified
  in the resolution or other proceedings.
         Sec. 203.005.  CHAPTER CUMULATIVE OF OTHER LAWS. (a)  This
  chapter is cumulative of other laws on the subject, and the board
  may use provisions of other applicable laws in the issuance of bonds
  and other obligations, but this chapter is wholly sufficient
  authority for the issuance of bonds and other obligations and the
  performance of all other acts and procedures authorized by this
  chapter.
         (b)  In addition to other authority granted by this chapter,
  the board may exercise the authority granted to the governing body
  of an issuer with regard to the issuance of obligations under
  Chapter 1371, Government Code.
         SECTION 4.  Section 15.102(b), Water Code, is amended to
  read as follows:
         (b)  The loan fund may also be used by the board to provide:
               (1)  grants or loans for projects that include
  supplying water and wastewater services in economically distressed
  areas or nonborder colonias as provided by legislative
  appropriations, this chapter, and board rules, including projects
  involving retail distribution of those services; [and]
               (2)  grants for:
                     (A)  projects for which federal grant funds are
  placed in the loan fund;
                     (B)  projects, on specific legislative
  appropriation for those projects; or
                     (C)  water conservation, desalination, brush
  control, weather modification, regionalization, and projects
  providing regional water quality enhancement services as defined by
  board rule, including regional conveyance systems; and
               (3)  loans or grants to water utilities, as that term is
  defined by Section 201.001, Utilities Code, for projects that
  enhance the reliability and resiliency of those water utilities by
  weatherizing facilities or reducing water demand through water
  conservation and water demand reduction efforts.
         SECTION 5.  (a) The terms used in this section have the
  meanings assigned by Section 201.001, Utilities Code, as added by
  this Act.
         (b)  The executive administrator of the Texas Water
  Development Board, in coordination with the Public Utility
  Commission of Texas, the Texas Commission on Environmental Quality,
  the Railroad Commission of Texas, the State Energy Conservation
  Office, and the independent organization certified under Section
  39.151, Utilities Code, for the ERCOT power region, shall conduct a
  study regarding:
               (1)  the need for financial assistance from the state
  to weatherize:
                     (A)  water utility facilities;
                     (B)  electric utility facilities;
                     (C)  natural gas utility facilities;
                     (D)  power generation companies; and
                     (E)  broadband provider facilities;
               (2)  the need for financial assistance from the state
  to provide adequate capacity during periods of high demand for
  electric utilities and natural gas utilities, including by reducing
  electric and natural gas demand; and
               (3)  the financing structures desirable to potential
  applicants for the categories listed in Subdivisions (1) and (2) of
  this subsection.
         (c)  The costs of the report, including any external
  management or consulting services considered necessary, may be paid
  from the state utilities reliability fund.
         (d)  The executive administrator shall submit the report to
  the State Utilities Reliability Fund Advisory Committee not later
  than March 1, 2023.
         (e)  This section expires September 1, 2023.
         SECTION 6.  As soon as practicable after the effective date
  of this Act, the lieutenant governor and the speaker of the house of
  representatives shall appoint the initial appointive members of the
  State Utilities Reliability Fund Advisory Committee as provided by
  Section 202.005, Utilities Code, as added by this Act.
         SECTION 7.  (a)  Not later than June 1, 2023, the State
  Utilities Reliability Fund Advisory Committee shall submit
  recommendations to the Texas Water Development Board on the rules
  to be adopted by the board under Section 202.006(a), Utilities
  Code, as added by this Act.
         (b)  Not later than December 1, 2023, the board shall propose
  rules under Section 202.006, Utilities Code, as added by this Act.
         SECTION 8.  The Texas Water Development Board shall post the
  information described by Section 202.007(b), Utilities Code, as
  added by this Act, on the board's Internet website not later than
  March 1, 2022.
         SECTION 9.  (a)  Except as provided by Subsection (b) of this
  section:
               (1)  this Act takes effect on the date on which the
  constitutional amendment proposed by the 87th Legislature, 2nd
  Called Session, 2021, creating the state utilities reliability fund
  and the state utilities reliability revenue fund to provide
  financial support for projects that enhance the reliability and
  resiliency of water, electric, and natural gas utilities, broadband
  providers, and power generation companies in this state takes
  effect; or
               (2)  if the amendment described by Subdivision (1) of
  this subsection is not approved by the voters, this Act has no
  effect.
         (b)  Regardless of whether the constitutional amendment
  described by Subsection (a) of this section is approved by the
  voters, Section 5 of this Act takes effect:
               (1)  immediately, if this Act receives a vote of
  two-thirds of all the members elected to each house, as provided by
  Section 39, Article III, Texas Constitution; or
               (2)  on the 91st day after the last day of the
  legislative session, if this Act does not receive the vote
  necessary for immediate effect.