By: Hancock S.B. No. 1682
 
 
 
   
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the funding of utility reliability projects by the
  Texas Water Development Board and other entities; authorizing the
  issuance of revenue bonds, granting rulemaking authority, and
  making an appropriation.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  (a) The legislature recognizes the importance
  of providing for the reliability of this state's public utilities.
  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 of water, electricity, natural gas and
  broadband utilities for this state by supporting projects to
  weatherize facilities and to provide adequate capacity 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 a
  utility infrastructure bank 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 immediately to provide support for
  market rate loans, low-interest loans, longer repayment terms for
  loans, and deferral of loan payments. Money in the fund may not be
  used to make grants. In addition, this Act creates the state
  utilities reliability revenue fund for use in managing revenue
  bonds issued by the board that are supported by the state utilities
  reliability fund.
         SECTION 2.  Title 2, Water Code, is amended by adding
  Subtitle G to read as follows:
         SUBTITLE G. RELIABILITY OF STATE UTILITIES
         CHAPTER 38 GENERAL PROVISIONS 
         Sec. 38.001.  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 utility" means any person,
  corporation, municipality, political subdivision or agency that
  owns or operates for compensation in this state equipment or
  facilities to provide broadband telecommunications capability and
  Internet access in this state.
               (4)  "Electric utility" means any person, corporation,
  municipality, political subdivision or agency that owns or operates
  for compensation in this state equipment or facilities to produce,
  generate, transmit, distribute, sell, or furnish electricity in
  this state.
               (5)  "Executive administrator" means the executive
  administrator of the Texas Water Development Board.
               (6)  "Facilities" means all of the plant and equipment
  of an electric, natural gas, water, or broadband utility and
  includes the tangible and intangible property, without limitation,
  owned, operated, leased, licensed, used, controlled, or supplied
  for, by, or in connection with the business of the electric, natural
  gas, water or broadband utility in this state.
               (7)  "Fund" means the state utilities reliability fund.
               (8)  "Historically underutilized business" has the
  meaning assigned by Section 2161.001, Government Code.
               (9)  "Natural gas utility" means any person,
  corporation, municipality, political subdivision or agency that
  owns or operates for compensation in this state equipment or
  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.).
               (10)  "Revenue fund" means the state utilities
  reliability revenue fund.
               (11)  "Trust company" means the Texas Treasury
  Safekeeping Trust Company.
               (12)  "Water utility" means any person, corporation,
  municipality, political subdivision or agency operating,
  maintaining, or controlling in this state facilities for providing
  potable water service or sewer service, or both, for compensation.
         CHAPTER 39. STATE UTILITIES RELIABILITY FUND 
         Sec. 39.001.  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, without further legislative
  appropriation, for the purpose of financing projects that enhance
  the reliability of water, electricity, natural gas and broadband
  utilities in this state by supporting projects to weatherize
  facilities and to provide adequate capacity during periods of high
  demand. The board may establish separate accounts in the fund. The
  fund and the fund's accounts are 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. It is the intent of the
  legislature that the fund will never be used:
               (1)  for a purpose other than the support of projects
  that enhance the reliability of water, electricity, natural gas and
  broadband utilities in this state and to pay expenses authorized by
  section 39.003; or
               (2)  to certify that appropriations from the treasury
  are within the amount estimated to be available in a fund of the
  treasury affected by the appropriation.
         (b)  Money deposited to the credit of the fund may be used
  only as provided by this chapter.
         (c)  The fund consists of:
               (1)  money transferred or deposited to the credit of
  the fund by law, including appropriations and money from any source
  transferred or deposited to the credit of the fund at the board's
  discretion as authorized by law;
               (2)  the proceeds of any fee or tax imposed by this
  state that by statute is dedicated for deposit to the credit of the
  fund;
               (3)  any other revenue that the legislature by statute
  dedicates for deposit to the credit of the fund;
               (4)  investment earnings and interest earned on amounts
  credited to the fund; and
               (5)  money transferred to the fund under a bond
  enhancement agreement from another fund or account to which money
  from the fund was transferred under a bond enhancement agreement,
  as authorized by Section 39.004.
         Sec. 39.002.  MANAGEMENT AND INVESTMENT OF FUND. (a) The
  trust company shall 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 objective for the investment of the fund is
  to maintain sufficient liquidity to meet the needs of the fund while
  striving to preserve the purchasing power of the fund.
         (c)  The trust company 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 trust company considers appropriate, 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)  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 it provides investment
  management services. The trust company may recover fees it charges
  under this subsection only from the earnings of the fund.
         (e)  The trust company shall provide an annual 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 trust company shall adopt a written investment
  policy that is appropriate for the fund. The trust company shall
  present the investment policy to the investment advisory board
  established under Section 404.028, Government Code. The investment
  advisory board shall submit to the trust company recommendations
  regarding the policy.
         (g)  The board shall provide to the trust company -an
  annualforecast of the cash flows into and out of the fund. The
  board shall provide updates to the forecasts as appropriate to
  ensure that the trust company is able to achieve the objective
  specified by Subsection (b).
         (h)  The trust company shall disburse money from the fund as
  directed by the board. The board shall direct disbursements from
  the fund on a semiannual schedule specified by the board and 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. 39.003.  USE OF FUND; PAYMENTS TO AND FROM OTHER FUNDS
  OR ACCOUNTS. (a) At the direction of the board, the trust company
  shall make disbursements from the fund to the state utilities
  reliability revenue fund pursuant to a bond enhancement agreement
  authorized by Section 39.004 in the amounts the board determines
  are needed 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:
               (1)  to enhance the reliability of water, electricity,
  natural gas and broadband utilities for this state by supporting
  projects to weatherize facilities and to provide adequate capacity
  to ensure continuous and adequate service during periods of high
  demand; and 
               (2)  to pay the necessary and reasonable expenses of
  the board in administering the fund.
         (c)  notwithstanding any other provision in this chapter,
  the use of the fund may be prioritized based on future legislative
  directives, including any statewide utility reliability plan
  required in the future. 
         Sec. 39.004.  BOND ENHANCEMENT AGREEMENTS. (a) A bond
  enhancement agreement entered into under this section is an
  agreement for professional services. A bond enhancement agreement
  must contain terms that are consistent with Section 39.002(h), and
  the agreement, including the period covered by the agreement and
  all other terms and conditions of the agreement, must be approved by
  the board. An obligation to disburse money from the fund, or from a
  special account established by the board, in accordance with a bond
  enhancement agreement is a special obligation of the board payable
  solely from designated income and receipts of the fund or of the
  account, as determined by the board. An obligation to disburse
  money from the fund, or from a special account established by the
  board, in accordance with a bond enhancement agreement does not
  constitute indebtedness of the state.
         (b)  To facilitate the use of the fund for the purposes of
  this chapter, the board may direct the trust company to enter into
  bond enhancement agreements to:
               (1)  provide a source of revenue or security for the
  payment of the principal of and interest on revenue bonds issued by
  the board to finance, or 
               (2)  refinance projects authorized by chapter 40 of
  this title.
         (c)  If the trust company enters into a bond enhancement
  agreement under Subsection (b), the board may direct the trust
  company to make disbursements from the fund to provide financial
  assistance for a project authorized by this chapter or by chapter 40
  of this title in the form of:
               (1)  a loan bearing an interest rate of not less than 50
  percent of the then-current market rate of interest available to
  the board;
               (2)  a loan to finance a facility under repayment terms
  similar to the terms of debt customarily issued by the entity
  requesting assistance but not to exceed the lesser of:
                     (A)  the expected useful life of the facility; or
                     (B)  30 years;
               (3)  a deferral of loan repayment, including deferral
  of the repayment of:
                     (A)  principal and interest; or
                     (B)  accrued interest; or
               (4)  a combination of the methods of financing
  described by Subdivisions (1)-(3).
         (d)  The board may direct the trust company to enter into
  bond enhancement agreements with respect to refunding bonds issued
  by the board to refund bonds issued by the board the proceeds of
  which have been or are to be used for projects authorized by this
  chapter and which otherwise satisfied the requirements of
  Subsections (b) and (c).
         (f)  The board may not direct the trust company to enter into
  a bond enhancement agreement with respect to bonds issued by the
  board the proceeds of which have been or are to be used to make
  grants.
         (g)  The board may not direct the trust company to enter into
  a bond enhancement agreement with respect to bonds issued by the
  board the proceeds of which may be used to provide financial
  assistance to an applicant if at the time of the request the
  applicant has failed to satisfactorily complete a request by the
  executive administrator for information relevant to the project for
  which the financial assistance is sought.
         (h)  The board may not direct the trust company to enter into
  a bond enhancement agreement with respect to bonds issued by the
  board the proceeds of which may be used to provide financial
  assistance to an applicant unless at the time of the request the
  applicant has acknowledged its legal obligation to comply with any
  applicable requirements of:
               (1)  federal law relating to contracting with
  disadvantaged business enterprises; and
               (2)  state law relating to contracting with
  historically underutilized businesses.
         (i)  The board may not approve a bond enhancement agreement
  unless the agreement contains a provision to the effect that if the
  trust company makes a disbursement under the bond enhancement
  agreement from the fund to the credit of the state utilities
  reliability revenue fund as provided by Section 39.003(a), the
  board may direct the comptroller to transfer an amount not to exceed
  that amount from the state utilities reliability revenue fund back
  to the fund if:
               (1)  money is certified by the executive director to be
  a surplus balance in the state utilities reliability revenue fund
  for that purpose; and
               (2)  the money transferred back to the fund will not
  cause bonds that are payable from the state utilities reliability
  revenue fund to rate below the highest rating category for any
  bonds outstanding.
         (j)  For purposes of Subsection (i)(1), the surplus balance
  of the state utilities reliability revenue fund is the amount of
  money on deposit in the fund, as determined by the board, that is
  attributable to the revenue bonds, including money received from
  the sale or other disposition of the board's rights to receive
  repayment of financial assistance, money received from the sale of
  utilities associated with a modified facility, and related
  investment earnings, that exceeds the amount required to pay annual
  debt service on the bonds and any other amounts specified in the
  resolution or other proceedings authorizing the bonds and any
  related obligations.
         (k)  The board shall submit each bond enhancement agreement
  and the record relating to the agreement to the attorney general for
  examination as to the validity of the agreement. If the attorney
  general finds that the agreement has been made in accordance with
  the constitution and other laws of this state, the attorney general
  shall approve the agreement and the comptroller shall register the
  agreement. If the agreement is not submitted at the same time that
  the bonds to which it relates are submitted, the agreement shall be
  treated as a public security solely for the purposes of Section
  1202.004, Government Code.
         (l)  After a bond enhancement agreement has been approved and
  registered as provided by Subsection (k),
  the agreement is valid and is incontestable for any cause.
         (m)  At the direction of the board, the trust company shall
  make disbursements from the fund, or from a special account
  established by the board, in accordance with a bond enhancement
  agreement in the amounts the board determines are needed for debt
  service payments on, or for security provisions of, revenue bonds
  issued by the board the proceeds of the sale of which have been
  deposited in the state utilities reliability revenue fund, or in an
  account in that fund, for use in accordance with this chapter, after
  the board considers all other sources available for those purposes
  in that fund or account. Money transferred under this subsection
  may be deposited into that fund or into a special account
  established by the trust company or a corporate trustee that is a
  trust company or a bank that has the powers of a trust company, as
  determined by the board.
         Sec. 39.005.  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 of
  water, electricity, natural gas and broadband utilities for 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)  weatherize facilities to protect against cold
  weather; and
               (2)  create excess capacity that will be used during
  periods of high demand to provide continuous and adequate electric,
  natural gas, water and broadband service.
         (d)  In addition to the criteria provided by Subsection (c),
  the board must also consider at least the following criteria in
  prioritizing projects:
               (1)  other contributions to be made to finance the
  project, including the up-front capital to be provided by the
  applicant;
               (2)  the financial capacity of the applicant to repay
  the financial assistance provided;
               (3)  the ability of the board and the applicant to
  timely leverage state financing with local, federal or private
  funding;
               (4)  whether there is an emergency need for the
  project, taking into consideration whether federal funding for
  which the project is eligible has been used or sought; and
               (5)  whether the applicant is ready to proceed with the
  project at the time of the application, including whether:
                     (A)  all preliminary planning and design work
  associated with the project has been completed;
                     (B)  the applicant has acquired any necessary
  rights associated with the project;
                     (C)  the applicant has secured funding for the
  project from other sources; and
                     (D)  the applicant is able to begin implementing
  or constructing the project. 
         Sec. 39.006.  ADVISORY COMMITTEE. (a) The State Utilities
  Reliability Fund Advisory Committee is composed of the following
  seven 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; and
               (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.
         (b)  Board staff shall provide staff support for the advisory
  committee.
         (c)  An appointed member of the advisory committee serves at
  the will of the person 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 may hold public hearings, formal
  meetings, or work sessions. Either co-presiding officer of the
  advisory committee may call a public hearing, formal meeting, or
  work session of the advisory committee at any time. 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.
         (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 39.007 and in adopting policies and procedures under
  Section 39.009. The submission must include:
               (1)  comments and recommendations on rulemaking
  related to the prioritization of projects in accordance with
  Section 39.005;
               (2)  comments and recommendations on rulemaking
  related to establishing standards for determining whether projects
  meet the criteria provided by Section 39.003(b);
               (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 of water, electricity, natural gas and broadband
  utilities for this state, including support for the purposes
  described by Section 39.004(c);
               (6)  an evaluation of whether premium financing
  programs should be established within the funds described by
  Section 39.004 to serve the purposes of this chapter, especially in
  connection with projects described by Section 39.003(b);
               (7)  an evaluation of methods for encouraging
  participation in the procurement process by companies domiciled in
  this state or that employ a significant number of residents of this
  state; and
               (8)  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 39.008(b).
         (m)  The advisory committee shall evaluate and may provide
  comments or recommendations on the feasibility of the state owning,
  constructing, and operating water, electricity, natural gas or
  broadband utilities.
         (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 related
  to a bond enhancement agreement under this chapter.
         (o)  If the aggregate level of participation by historically
  underutilized businesses in projects that receive funding related
  to a bond enhancement agreement 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. 39.007.  RULES. (a) The board shall adopt rules
  providing for the use of money in the fund that are consistent with
  this chapter, including rules:
               (1)  establishing standards for determining whether
  projects meet the criteria provided by Section 39.003(b); and
               (2)  specifying the manner for prioritizing projects
  for purposes of Section 39.005.
         (b)  The board shall give full consideration to the
  recommendations of the advisory committee before adopting rules
  under this chapter.
         Sec. 39.008.  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 the reliability of
  water, electricity, natural gas and broadband utilities for this
  state; and
               (2)  a description of each project funded through bonds
  supported by a bond enhancement agreement entered into under
  Section 39.004, including:
                     (A)  the expected date of completion of the
  project; and
                     (B)  the current status of the project.
         Sec. 39.009.  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.
         CHAPTER 40. STATE UTILITIES RELIABILITY REVENUE FUND 
         Sec. 40.001.  FUND. (a) The state utilities reliability
  revenue fund is a special fund in the state treasury outside the
  general revenue fund to be a revolving finance program used by the
  board, without further legislative appropriation, only for the
  purpose of providing financing for projects that enhance the
  reliability of water, electricity, natural gas and broadband
  utilities for this state by supporting projects to weatherize
  facilities and to provide adequate capacity during periods of high
  demand. The board may establish separate accounts in the revenue
  fund. 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. It is the intent of the legislature that
  the revenue fund will never be used:
               (1)  for a purpose other than the support of projects
  that enhance the reliability of water, electricity, natural gas and
  broadband utilities for this state; or
               (2)  to certify that appropriations from the treasury
  are within the amount estimated to be available in a fund of the
  treasury affected by the appropriation.
         (b)  Money deposited to the credit of the revenue fund may be
  used only as provided by this chapter.
         (c)  The revenue fund consists of:
               (1)  money transferred or deposited to the credit of
  the revenue fund by law, including appropriations and money from
  any source transferred or deposited to the credit of the revenue
  fund at the board's discretion as authorized by law;
               (2)  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;
               (3)  any other revenue that the legislature by statute
  dedicates for deposit to the credit of the revenue fund;
               (4)  investment earnings and interest earned on amounts
  credited to the revenue fund;
               (5)  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;
               (6)  repayments of loans made from the revenue fund;
  and
               (7)  money disbursed to the revenue fund from the state
  utilities reliability fund as authorized by Section 39.003.
         Sec. 40.002.  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
  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 their use for the purposes provided by this chapter may
  be invested as provided by an order, resolution, or rule of the
  board.
         (d)  The 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. 40.003.  USE OF REVENUE FUND. (a) Except as provided
  by Subsection (c), money in the revenue fund may be used by the
  board only to provide financing or refinancing, under terms
  specified by the board, for projects that enhance the reliability
  of water, electricity, natural gas and broadband utilities for this
  state by weatherizing facilities or by providing adequate capacity
  during periods of high demand.
         (b)  Financing or refinancing of projects described by
  Subsection (a) may be provided by using money in the revenue fund to
  make loans to eligible water, electric, natural gas and broadband
  utilities or to purchase bonds or other obligations of eligible
  water, electric, natural gas and broadband utilities bearing
  interest at a rate or rates determined by the board, including a
  rate at or rates below prevailing market rates.
         (c)  The board may use money in the revenue fund:
               (1)  as a source of revenue or security for:
                     (A)  the payment of the principal of and interest
  on revenue bonds issued by the board under this chapter; or
                     (B)  a bond enhancement agreement; or
               (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.
         (d)  The board, or comptroller or corporate trustee managing
  the revenue fund at the direction of the board as provided by
  Section 40.003(c), shall withdraw from the revenue fund and forward
  to another person any amounts, as determined by the board, for
  timely payment of:
               (1)  the principal of and interest on bonds described
  by Subsection (c)(1)(A) of this section that mature or become due;
  and
               (2)  any cost related to bonds described by Subsection
  (c)(1)(A) of this section that become due, including payments under
  related credit agreements or bond enhancement agreements.
         Sec. 40.004.  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 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. 40.005.  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 and the execution of bond enhancement
  agreements, but this chapter is wholly sufficient authority for the
  issuance of bonds and other obligations, the execution of bond
  enhancement agreements, 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 3.  Section 15.978, Water Code, is amended by adding
  subsection (c-1) to read as follows:
         (c-1)  Notwithstanding other provisions of this chapter, the
  board may sell to the Texas Water Resources Finance Authority or to
  the state utilities reliability fund any political subdivision
  bonds purchased with money in the state utilities reliability
  revenue fund and may apply the proceeds of a sale in the manner
  provided by Chapter 40 of this title.
         SECTION 4.  CONTINGENCY APPROPRIATION. (a) Contingent on
  passage and adoption by an election of the voters of legislation
  relating to proposing constitutional amendments creating the State
  Utilities Reliability Fund and the State Utilities Reliability
  Revenue Fund by the 87th Legislature, Regular Session, 2021,
  $2,000,000,000 is appropriated out of the economic stabilization
  fund to the state utilities reliability fund to implement the
  provisions of the legislation.
         (b)  The appropriation made in this section shall be
  available to the Water Development Board for the purposes described
  in legislation to finance projects that enhance the reliability of
  water, electricity, natural gas and broadband utilities for this
  state according to the provisions of the legislation.
         SECTION 5.  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 39.006, Water Code, as added by this Act.
         SECTION 6.  (a) Not later than September 1, 2022, 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 Sections 39.007(a)(1) and (2),
  Water Code, as added by this Act.
         (b)  Not later than the later of the 90th day after the date
  the Texas Water Development Board receives the recommendations
  described by Subsection (a) of this section or March 1, 2023, the
  board shall propose rules under Section 39.007, Water Code, as
  added by this Act.
         SECTION 7.  The Texas Water Development Board shall post the
  information described by Section 39.008(b), Water Code, as added by
  this Act, on the board's Internet website not later than March 1,
  2022.
         SECTION 8.  This Act takes effect on the date on which the
  constitutional amendment proposed by the 87th Legislature, Regular
  Session, 2021, adding Sections 49-d-15 and 49-d-16, Article III,
  Texas Constitution, creating the state utilities reliability fund
  and the state utilities reliability revenue fund takes effect. If
  that amendment is not approved by the voters, this Act has no
  effect.