88R6588 JXC-D
 
  By: Bettencourt S.B. No. 2070
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the funding of projects by the Public Utility
  Commission of Texas to promote the reliability and resiliency of
  the power grid in this state; authorizing the issuance of revenue
  bonds.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Title 4, Utilities Code, is amended by adding
  Subtitle C to read as follows:
  SUBTITLE C.  RELIABILITY AND RESILIENCY OF POWER GRID
  CHAPTER 201.  GENERAL PROVISIONS
         Sec. 201.001.  DEFINITIONS. In this subtitle:
               (1)  "Advisory committee" means the utilities
  reliability fund advisory committee.
               (2)  "Commission" means the Public Utility Commission
  of Texas.
               (3)  "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.
               (4)  "Fund" means the utilities reliability fund.
               (5)  "Historically underutilized business" has the
  meaning assigned by Section 2161.001, Government Code.
               (6)  "Power generation company" has the meaning
  assigned by Section 31.002.
               (7)  "Revenue fund" means the utilities reliability
  revenue fund.
               (8)  "Trust company" means the Texas Treasury
  Safekeeping Trust Company.
  CHAPTER 202.  UTILITIES RELIABILITY FUND
         Sec. 202.001.  FUND. (a)  The utilities reliability fund is
  a special fund in the state treasury outside the general revenue
  fund to be used by the commission as authorized by this chapter
  without further legislative appropriation.  The commission may
  establish separate accounts in the fund and may transfer funds
  between accounts. The commission 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 commission. The commission has legal title to money and
  investments in the fund until money is disbursed from the fund as
  provided by this chapter and commission 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 commission'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
  commission or the trust company may hold and invest the fund, and
  any accounts established in the fund, for and in the name of the
  commission, 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 commission or the trust company, as directed by the
  commission, 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 commission or the trust company considers appropriate, the
  commission 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 commission 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 commission 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 commission 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 commission and the investment advisory board
  established under Section 404.028, Government Code; and
               (2)  the commission 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
  commission annually shall provide to the trust company a forecast
  of the cash flows into and out of the fund. The commission 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 commission.  
  The commission shall direct disbursements from the fund on a
  schedule specified by the commission.  If any applicable revenue
  bonds are outstanding, the commission 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 commission or the trust company at the
  direction of the commission shall make disbursements from the fund
  to the revenue fund in the amounts the commission determines are
  needed for disbursement through the financing structures developed
  to meet the goals of the fund, including transfer of those amounts
  to other commission programs or funds as necessary, or for debt
  service payments on or security provisions of the commission'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 the
  power grid in this state by installing dispatchable generation
  capacity;
               (2)  pay the necessary and reasonable expenses of the
  commission in administering the fund; and
               (3)  transfer funds to other programs or funds.
         (c)  The commission may provide financial assistance from
  the fund for:
               (1)  an electric utility project; or
               (2)  a power generation company project.
         (d)  Financial assistance under Subsection (c) may be
  provided in any form as determined by the commission, 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.
         (e)  In providing financial assistance under Subsection (c),
  the commission may make, enter into, and enforce contracts,
  agreements, including management agreements, for the management of
  any of the commission'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.
         (f)  The commission 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 commission under
  this chapter may require.
         (g)  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 COMMISSION.
  (a)  The commission, for the purpose of providing financial
  assistance under this chapter, shall prioritize projects that
  enhance the reliability and resiliency of the power grid in this
  state.
         (b)  The commission shall establish a point system for
  prioritizing projects for which financial assistance is sought from
  the commission. The system must include a standard for the
  commission to apply in determining whether a project qualifies for
  financial assistance at the time the application for financial
  assistance is filed with the commission.
         (c)  The commission may 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.
         (d)  The commission shall consider federal tax subsidies in
  prioritizing projects.
         Sec. 202.005.  ADVISORY COMMITTEE. (a)  The 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 commission 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 commission 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 commission'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 commission shall provide access on
  the commission'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 commission regarding the use of money in the
  fund and in the revenue fund for use by the commission 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
  commission and guidelines for lending standards;
               (5)  an evaluation of the use of funds by the commission
  to provide support for financial assistance for projects that
  enhance the reliability and resiliency of the power grid in this
  state;
               (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
  commission 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 commission regarding information to be posted on the
  commission's Internet website under Section 202.007(b).
         (m)  The commission shall provide an annual report to the
  advisory committee on:
               (1)  the commission'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.
         (n)  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 commission to improve the participation
  level.
         Sec. 202.006.  RULES. (a)  The commission 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 commission 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
  commission 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 commission shall post on the commission's Internet
  website 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 commission
  shall adopt, and may amend from time to time at the commission'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 commission'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.  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.
  CHAPTER 203. UTILITIES RELIABILITY REVENUE FUND
         Sec. 203.001.  REVENUE FUND. (a)  The utilities reliability
  revenue fund is a special fund in the state treasury outside the
  general revenue fund to be used by the commission as authorized by
  this chapter without further legislative appropriation. The
  commission may establish separate accounts in the revenue fund and
  may transfer money between accounts. The commission has legal
  title to money and investments in the revenue fund until the money
  is disbursed as provided by this chapter and commission 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
  commission'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 commission under this chapter that are designated by the
  commission 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
  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 commission. 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 commission.
         (c)  At the direction of the commission, the revenue fund and
  any accounts established in the revenue fund may be managed by the
  commission, 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 commission 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 commission.
         (d)  The commission, comptroller, or corporate trustee shall
  manage the revenue fund in strict accordance with this chapter and
  the orders, resolutions, and rules of the commission.
         Sec. 203.003.  USE OF REVENUE FUND. (a)  Money in the
  revenue fund may be used by the commission only to provide financial
  assistance under terms specified by the commission for projects
  that enhance the reliability and resiliency of the power grid in
  this state by installing dispatchable generation capacity.
         (b)  Financial assistance for projects under Subsection (a)
  may be provided in any form determined by the commission 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 commission may:
               (1)  make, enter into, and enforce contracts and
  agreements, including management agreements, for the management of
  any of the commission'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 commission may require; and
               (3)  take other actions to accomplish any of the
  commission's purposes.
         (d)  The commission 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
  commission 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 commission in administering the
  revenue fund; or
               (3)  to transfer money to the fund as necessary.
         (e)  The commission, comptroller, or corporate trustee
  managing the revenue fund at the direction of the commission shall
  withdraw from the revenue fund and pay to a person any amounts, as
  determined by the commission, 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
  commission may issue revenue bonds for the purpose of providing
  money for the revenue fund.
         (b)  The commission 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 commission 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 commission, as
  determined by the commission.
         (d)  Revenue bonds issued under this chapter do not
  constitute indebtedness of the state as prohibited by the
  constitution.
         (e)  The commission 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 commission 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 commission 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)  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.
         (i)  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
  commission 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 commission 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 2.  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
  utilities reliability fund advisory committee as provided by
  Section 202.005, Utilities Code, as added by this Act.
         SECTION 3.  (a)  Not later than June 1, 2025, the utilities
  reliability fund advisory committee shall submit recommendations
  to the Public Utility Commission of Texas on the rules to be adopted
  by the commission under Section 202.006(a), Utilities Code, as
  added by this Act.
         (b)  Not later than December 1, 2025, the commission shall
  adopt rules under Section 202.006, Utilities Code, as added by this
  Act.
         SECTION 4.  The Public Utility Commission of Texas shall
  post the information described by Section 202.007(b), Utilities
  Code, as added by this Act, on the commission's Internet website not
  later than March 1, 2024.
         SECTION 5.  This Act takes effect on the date on which the
  constitutional amendment proposed by the 88th Legislature, Regular
  Session, 2023, creating the utilities reliability fund and the
  utilities reliability revenue fund to provide financial support for
  projects that enhance the reliability and resiliency of the power
  grid in this state takes effect.  If that amendment is not approved
  by the voters, this Act has no effect.